Gas Stockpile Drain Prompts Price Rise Fears

Britain has drained its gas reserves so much after weeks of bad weather that fears have been raised of a looming spike in energy prices.

Households have been forced to increase their heating usage as the freezing weather continues, pushing the demand for gas to 20% higher than normal in March.

Gas stocks were reportedly just 10% full at Britain's largest storage facility on Thursday night, compared to 49% this time last year.

Energy prices will soar if Britain is forced to make up the shortfall by importing more liquefied natural gas from elsewhere, an energy expert has warned.

Graphical comparison year-on-year of gas in the UK (graph: Utilyx)

Andrew Horstead of the energy consultancy Utilyx told the Times: "There is immense pressure on the existing infrastructure.

"We are almost maxed out from imports through pipelines. The big concern is that there is very little flexibility left in the system."

He added that Britain would struggle to cope if a technical problem caused an unscheduled North Sea gas field to shut down.

Matt Osborne, risk manager at energy consultancy and brokerage firm Inenco, told Sky News that wholesale prices had spiked about 20% overnight, prompting the industry to respond quickly.

County Durham after the latest batch of snow

On Friday morning gas prices for within-day delivery then jumped more than 50% above Thursday's close following the closure of the pipeline linking Belgium to Britain after a pump failed at Bacton, Norfolk.

Downing Street said Prime Minister David Cameron is "confident" that the UK's gas needs will continue to be met.

A spokesman said:  "The absolute key thing on this is that supplies are not running out.

It was so warm last March people flocked to beaches and parks

"The gas market is how we source our supplies and that market continues to function well.

"The Prime Minister's key concern is that gas supplies continue. It is absolutely clear that supplies are not running out."

Asked if the Prime Minister was confident that this would remain the case, the spokesman replied: "Absolutely confident."

Scrub fires near Newport in Wales last March

Britain is more vulnerable than other countries to gas shortages because of its limited storage capacity, which holds just 15 days' worth of energy supplies.

But a Department of Environment and Climate Change (DECC) spokesperson insisted that "gas supplies are not running out".

The Chancellor's Budget revealed further gas fracking support

The spokesperson said: "Storage levels are low at the moment - as you'd expect towards the end of winter - and the UK gas market is tight.

"But the market is responding as it is designed to do - gas prices are rising and supply is being maintained accordingly.

"Gas storage would never be the sole source of gas meeting our needs, so it is misleading to talk purely about how many days' supply is in storage."

However, the gas fears come as the head of the energy giant SSE warned of the "very real risk" of the lights going out in Britain.

Ian Marchant said the Government was underestimating the problem, as he announced plans to cut back on power generation at five sites because the stations are either uneconomic or coming to the end of their lives.

He said: "It appears the Government is significantly underestimating the scale of the capacity crunch facing the UK in the next three years and there is a very real risk of the lights going out as a result."

He said the energy watchdog Ofgem had recently expressed real concern about the reduction of the UK's generation capacity margin that would follow expected plant closures in the next few years, predicting a 1-in-12 chance of the lights going out.

Mr Marchant added: "It is unlikely that the majority of the reductions in generation capacity and the delays to new investment we have announced today will have been included in this analysis.

"(This) highlights that the situation is likely to be even more critical than even they have predicted."

The DECC spokesperson added: "We are in close contact with National Grid, who are able to step into the market to source gas and increase incentives on gas suppliers if they think there is a risk of a supply shortfall."

14.47 | 0 komentar | Read More

City Titans Back Crunch Stock Market Probe

By Mark Kleinman, City Editor

The City's most powerful investor group is launching a probe into the effectiveness of Britain's stock markets amid deepening concern that 'short-termism' is damaging the country's wider economic interests.

I have learnt that the Association of British Insurers (ABI), whose members own about 20% of the blue-chip FTSE-100 index, has begun consulting with leading City firms over what is set to be one of the most important inquiries in its history.

People close to the ABI said the investigation would examine a string of issues which have provoked controversy in the City in recent years, including the functioning of the market for new share sales.

The number of initial public offerings (IPOs) has dwindled since the financial crisis of 2008, partly because of mistrust between the private equity groups attempting to sell their portfolio companies and stock market investors.

The ABI inquiry is being headed by Robert Talbut, chairman of its investment committee and a senior fund manager at Royal London Asset Management, and Robert Hingley, the group's director of investment affairs.

Sky News understands that the ABI has drafted in Angus Bogle, a former executive at Citi, the investment bank, and Fidelity, the fund management giant, to oversee the probe.

Meetings have been scheduled with leading fund managers and investment banks in the coming weeks, with the aim of producing a series of recommendations in a report later this year.

The ABI, whose largest members include Legal & General, Prudential and Standard Life, will also look at the tax treatment of debt and equity; assess ways to improve the market for equity investment in support of longer term growth; and examine shifts in the composition of investors' portfolios in recent years.

Perceptions of investor short-termism have become a hotly-debated political issue, particularly after a spate of foreign takeovers of major listed UK companies, culminating in the takeover of Cadbury by Kraft Foods of the US in 2010.

Last year, John Kay, an economist, published a report commissioned by Vince Cable, the Business Secretary, in which he recommended an end to quarterly company reporting and the establishment of an investor forum to encourage more effective engagement with public companies.

Mr Cable said at the time: "Many of us feel that in the past, our public companies and investors have focused on short-term profit at the expense of long-term value.

"The behaviour of many banks in the run up to the financial crisis is an extreme example of this quick buck mentality, but there is clearly a wider problem."

Some senior ABI figures are understood to have felt that Professor Kay's review did not go far enough, prompting the lobbying group to launch its own probe.

Earlier this month, Labour published a separate review which recommended reforms to executive pay packages and changing the rules governing overseas takeovers of British companies.

The ABI, which declined to comment on its investigation, is one of the most influential lobbying groups in British business. Late last year it published a report in which it warned that reforms to the regulation of the banking industry risked making the UK's biggest lenders uninvestable.

14.47 | 0 komentar | Read More

Cyprus Bailout: MPs Stumble Towards Deal

Cyprus Bailout: Threat To Savings

Updated: 7:36am UK, Saturday 23 March 2013

By Ashish Joshi, Sky News Correspondent

Finally late into Friday night - an agreement on Plan B, meaning Cyprus has moved one giant step towards securing a Brussels bailout.

It includes a solidarity fund pooling together state assets and the granting of power to the Government to control bank capital.

The latter move is to prevent a run on the banks when their doors finally open on Tuesday.

There will also be a restructuring of the country's banks and a savings tax on Cypriot savers.

The details of the tax have still to be finalised, but the framework is in place.

It could mean savings over 100,000 euros held in Bank of Cyprus accounts being taxed up to 20%, according to one source close to the negotiations.

The same source said if that proposal is rejected there will be a plan to impose a tax of around 10% on all Cypriot bank accounts over 100,000 euros.

The threat of savers being hit hangs over the heads of people like Loizos Michael.

The 60-year-old tailor worked hard for 35 years, building up a good business.

He was looking forward to a wealthy retirement. Not anymore. Times are hard.

Speaking from his small tailor's shop in central Nicosia, Mr Michael said: "With the banks being closed, it is hard because I don't have a credit card and so cash flow is a problem.

"Even filling your car with petrol needs thinking about.

"Cypriots have always been workers by nature and nobody could have imagined that unemployment would be so high.

"This has hit us hard in the pockets."

Cyprus is weathering a storm - the likes of which this Mediterranean island has never faced in her young history.

Mr Michael said he knew things were getting bad, but expected solutions to be found to avoid ordinary people having to suffer.

"I expected something better. But now, it looks like the problem has been brewing for some time," he said.

"There used to be some people talking about the crisis, but now everyone's talking about it.

"I think things are harder now than just after the war. After the war of '74 people could still find work. Now, there is just no work so people have no money. What can we do?"

In the 1990s, Cyprus boasted a dynamic, booming economy, but it grew and unchecked.

An overbloated banking sector exposed to Greek debt has crippled the country's economy.

Now people like Loizos Michael must pay the price. He and the rest of Cyprus will soon find out exactly how much that is going to be.

14.47 | 0 komentar | Read More

Retail Sales Rebound In February

Strong demand for tablets has helped retail sales increase by more than expected in February.

Excluding fuel, they rebounded by 1.9% when compared to January, and by 3.3% on the year, according to the Office for National Statistics (ONS).

The jump in both volume and amount spent follows subdued year-on-year retail sales growth rates since September 2012.

Strong sales at computer equipment retailers and department stores helped drive February's rise, and online also performed well, the ONS said.

Spending online accounted for 9.7% of all retail spending, excluding fuel, in February. The average weekly spend on the internet was £540m - an increase of over 10% when compared with February 2012.

It comes after a disappointing start to 2013, when sales plunged as a result of heavy snow across swathes of the UK.

Deloitte's UK head of retail, Ian Geddes, said February's figures were good news for the sector - but warned that caution should be exercised because New Year sales often continue into February.

He added: "The period measured does not include the last week of February when poor weather hit, so next month's figures may be affected."

The data comes a day after Chancellor George Osborne unveiled his Budget - but Mr Geddes said it provided "little respite" for the troubled high street.

"Any retailer expecting consumers to have more money in their pockets as a result of this Budget may be disappointed," he said.

But he added that the reduction of the corporation tax rate would "significantly benefit" UK-based retailers, which represent some of the largest UK corporation tax payers.

The data also came as clothing retailers Next and Ted Baker reported full-year financial results.

Both companies said sales had increased in 2012, and joined a number of other companies - including Zara, Sports Direct and Asos - in reporting strong figures despite the difficult economic conditions.

14.47 | 0 komentar | Read More

Budget: George Osborne Defends Economic Plans

George Osborne has defended his flagship Budget plan to boost the housing market, amid warnings it is already "unravelling" and risks pushing up prices.

The Chancellor put a "Help-to-Buy" scheme and mortgage guarantees at the heart of his financial statement in the hope they will kick-start an economic recovery.

People without a large deposit will have loans underwritten by the state, with interest-free loans also available for new-build properties.

The scheme will be open to those with as little as a 5% deposit and worth up to 20% of the value of a property costing up to £600,000.

George Osborne visiting a housing development on Thursday

Amid fears the moves could spark a new debt-fuelled boom, Mr Osborne was forced to deny they will encourage people to buy homes they cannot afford.

Speaking on Sky News, he insisted: "It doesn't mean a return to five or six years ago when you had those big 125% Northern Rock mortgages.

"It is just saying to people if you can get together a decent deposit, we are going to help you buy a home. People are being robbed of that at the moment because of the problems in our financial markets."

Amid confusion about the limits of the scheme, shadow chancellor Ed Balls claimed it could help the rich buy a subsidised second home worth up to £600,000.

He asked: "Surely people struggling to get a mortgage and those who want to own their first home must be the priority for help, not the small number who can afford to buy a second one?

"We will only tackle the housing crisis and help first time buyers if we finally build the new affordable homes we have said should be at the heart of any proper plan for jobs and growth."

Earlier on Sky News, he warned: "The devil is in the detail."

George Osborne and Ed Balls bumping into each other in Millbank

Housing minister Mark Prisk later clarified people would have to sell their existing home before taking part and that buy-to-let mortgages would be excluded.

"You would first have to divest your existing property prior to being able to proceed with any Help to Buy sale. This is about family homes. It is not about second homes," he said.

But there was fresh confusion about how this would work in practice because people would not usually be able to sell their existing home before starting to buy a new property.

Meanwhile, Tory MP Kwasi Kwarteng expressed concern that flooding the mortgage market would increase house prices because there would still be little stock.

"Obviously if the amount of supply remains the same and you are making credit easier, the tendency would be for the prices to go up," he said.

Former Bank of England economist Erik Britton, of Fathom Consulting, said: "I think it's nuts. I think it's the opposite of the right solution.

"What I fear will happen is that house prices will go up from an already overvalued position and households will take on even more debt from a position where they are vastly over-extended already.

Mr Osborne with a couple who bought their flat via shared equity

"We will be back on the addiction to cheap credit which was the whole problem that pushed us into the crisis that we are already in."

New figures showing public borrowing fell to £2.8bn in February - the lowest for the month since 2008 - provided a chink of light for Mr Osborne.

And during a string of interviews to defend his Budget, he insisted Britain's problems "could be a lot worse" - pointing to Cyprus.

On Sky News, he claimed his drastic austerity measures had the public's support despite the recovery taking far longer than expected.

"I think the British public understand there is not a simple or easy answer to our country's problems but just the painstaking work of putting right what went wrong," he said.

However, research for consumer group Which? carried out immediately after the Budget showed 59% want the Government to rethink its economic plan.

Alongside the radical mortgage plans, Mr Osborne also cut the price of beer and cancelled a fuel duty hike in a bid to ease the cost-of-living.

He moved to boost small businesses by creating a new employment allowance which will save employers £2,000 on their National Insurance bills.

And plans to raise the income tax threshold have been brought forward to 2014, meaning earnings up to £10,000 will be tax-free.

But those announcements could not disguise the dismal economic figures and forecasts that showed the austerity era will last a decade.

Official growth forecasts for this year have been cut in half to 0.6% because the recovery is so weak, and next year's figure has also been downgraded.

The independent watchdog the Office for Budget Responsibility (OBR) also warned that the decline in borrowing seen in the first years of the coalition "no appears to have stalled".

Public borrowing predictions for every year to 2017/18 have been revised upwards, putting the total £55.7bn higher than it was just three months ago.

The OBR expects Britain to narrowly escape an unprecedented triple-dip recession, predicting a small increase in GDP in the first quarter of this year.

But debt is not set to fall as share of national income until two years after Mr Osborne's original 2014 target.

It is due to peak at 85.6% of GDP - equal to a massive £1.58tn - in 2016/17 - an increase of 6.4% on previous forecasts.

14.47 | 0 komentar | Read More

Cyprus Bank Limits Cash Withdrawals Amid Crisis

Russian Money Talks In Cyprus Bailout

Updated: 12:52pm UK, Thursday 21 March 2013

By Tim Marshall, Foreign Affairs Editor

Even allowing for inflation, 10 billion euros can still buy you quite a lot these days.

For example, if you were Russia, and you used your 10 billion to bail out Cyprus, you could buy another few decades of European dependence on you for energy.

You might also get a dent in people's confidence in the EU thrown in. If you invested it all wisely, in the longer term you could even get a warm-water naval port out of it.

Not bad a return.

The Russian offer to better the terms of the EU bailout for Cyprus is not just commercial. It is an attempt to regain influence in a region of growing energy importance.

Russia had already lost power in the Mediterranean and Middle East when Egypt was flipped and turned towards the USA.

After the implosion of the Soviet empire in 1989, Moscow lost any chance of a quick return to the region and was left only with a small port on the coast of Syria to play with.

But Russia is now back on its feet, and the discovery of the potentially huge gas field in the eastern Mediterranean has given it an opportunity to again engage in the region.

It has already done a deal via Gazprom with the Israeli's over its gas fields, and is now trying to get in on Cyprus's potential gold pot.

Europe has for years been looking for a way to wean itself off energy dependency on Russia, and Cyprus was one route.

However, if Gazprom secures the rights to explore the Cypriot gas fields, this will give Moscow massive influence there.

Influence is power and that power could feasibly result, down the line, in Cyprus suggesting that the British bases on their island close.

From there, the possibility of a Russian base might emerge in what is a key part of Nato's Mediterranean strategy and an intelligence gathering post.

The UK, Greece, Turkey, and the US - all Nato members - might object. But money talks and we have seen in the last decade that Russia wins some and loses some. 

The ties between Cyprus and Russia are not just commercial and political.

We should not underestimate the cultural ties between the two, which are based on Russia's perception of itself as the guardian of Orthodox Christianity.

Whether Russia wins this geopolitical fight or not, it will continue to watch with interest the political and social fallout of the euro crisis and the democratic deficit which has been part of it.

The EU has crossed an intellectual line in Cyprus. Previous bailouts of other countries may have required austerity measures, but now unelected Eurocrats, in consultation with Cypriot leaders, have told the people that they are going to take up to 10% of their money without asking them. In Cyprus they have a word for this - theft.

This has been noticed across the European Union. If it might happen in Cyprus then it might happen in Greece, or Spain, or Italy. The raison d'etre of the Union is to ensure prosperity and the safety of its peoples, not to take money from their bank accounts.

The Cypriot politicians fear they could become the target of retribution from the people and so have hot-footed their way to Russia.

Not only might they get what in the short term looks a much better deal from Moscow, but, and this might be really what's going on, they might force Brussels to offer a much better deal to prevent Cyprus from "falling" to the Russians.

Either way - terms and conditions apply.

14.47 | 0 komentar | Read More

Budget: 2013 Growth Forecast Is Cut In Half

George Osborne has unveiled tax breaks for beer drinkers, drivers and first time buyers as he admitted the economy is still struggling.

The Chancellor's Budget contained a string of moves designed to ease the cost-of-living, including a 1p cut in the price of beer and the cancellation of a planned fuel duty hike.

A £130bn mortgage guarantee scheme will help people without big deposits buy homes, with interest-free loans worth 20% of the value of a new build property also available.

And in what he called a Budget for "the aspiration nation", Mr Osborne said the income tax threshold will rise to £10,000 in 2014, a year earlier than planned.

The Chancellor also gave small businesses a boost by unveiling a new employment allowance which will save employers £2,000 on their National Insurance bills.

But he was forced to admit that the recovery was taking far longer than expected as he confirmed growth forecasts for this year have been cut in half to just 0.6%.

Ed Miliband called George Osborne a "downgraded Chancellor"

The independent Office for Budget Responsibility does expect Britain to avoid a triple-dip recession but public borrowing will be higher because of the floundering recovery.

It is now forecast to hit £114bn this year instead of £108bn before eventually falling to £42bn in 2017/18.

Driving home the problems facing Britain, figures released hours before the Budget showed the first rise in unemployment for a year - up 7,000 to 2.52m.

But despite growing calls to change course from his austerity regime, Mr Osborne insisted there could be no turning back.

"It is taking longer than anyone hoped but we must hold to the right track," he said.

Labour leader Ed Miliband claimed: "All he offers is more of the same - higher borrowing and lower growth - a more of the same Budget from a downgraded Chancellor.

"He is the wrong man in the wrong place at the worst possible time for the country."

The Chancellor leaving Number 11 Downing Street with his Budget

But Mr Osborne declared: "This is a Budget that doesn't duck our nation's problems. It confronts them head on. It is a Budget for an aspiration nation. It is a Budget for a Britain that wants to be prosperous, solvent and free."

He fleshed out plans for a further £2.5bn in Whitehall cuts over the next two years to fund capital spending projects.

And he confirmed plans to help working parents with tax-free childcare support and to introduce a flat rate pension by 2016.

The Capital Gains Tax holiday will also be extended and corporation tax cut further by 1% to 20% in April 2015.

But there will be anger at the extension of the 1% public sector pay cap to 2015/16, which came as civil servants staged a 24-hour strike.

There will also be further cuts in the spending review for 2015/16, up from £10bn to £11.5bn.

And the Chancellor announced that the Bank of England's remit was being overhauled but that it will keep its inflation target of 2%.

The House of Commons was extremely rowdy as Mr Osborne delivered one of the most important speeches of his career.

Shadow chancellor Ed Balls was singled out by the deputy speaker for barracking from Labour's front bench.

The Office for Budget Responsibility (OBR) now predicts growth of 2.3% for 2015, 2.7% in 2016 and 2.8% in 2017.

A Twitpic shows George Osborne at work

This means the Chancellor is now set to borrow £55.7bn more over the next five years than he was planning as little ago as in December.

Figures do show that the deficit has fallen from 11.2% of GDP in 2009/10 to 7.4% this year and is set to continue dropping until it reaches 2.2% in 2017/18.

But the OBR confirms Mr Osborne will miss his target for total public sector debt to start falling as a percentage of national income by 2015/16.

It now forecasts this will rise to a peak of 85.6% of GDP or a staggering £1.58tn in 2016/17 - an increase of 6.4% on its previous figures.

There was consternation as the speech began when the London Evening Standard newspaper posted its front page, complete with full details of the Budget, on Twitter.

The paper suspended the person behind the tweet and launched an investigation as it issued a fulsome apology for breaking the embargo.

Editor Sarah Sands said: "We have immediately reviewed our procedures. We are devastated that an embargo was breached and offer our heartfelt apologies."

John Longworth, director general of the British Chambers of Commerce, criticised Mr Osborne for not going far enough to support business and boost growth.

"We are at an unprecedented moment in economic history, and the Government should be doing everything in its power to get the economy moving", he said.

But Simon Walker, director general of the Institute of Directors, said: "We applaud this Budget. The Chancellor has stuck to his guns and held his nerve - which is exactly what we wanted to see.

"Deficit reduction is not an optional policy, it is an absolute necessity, and he is right to reject the siren calls to abandon it."

14.47 | 0 komentar | Read More

Budget: Labour Attacks Evening Standard Leak

Labour has called for an investigation after the Evening Standard published details of the Budget before the Chancellor stood up in the Commons.

The front page, photocopies of which were being scrutinised by the Opposition front bench as the speech began, detailed several aspects of the Budget relating to duty changes, tax and macroeconomic figures.

Labour leader Ed Miliband said George Osborne "almost need not have bothered coming" to the Commons "because the whole Budget, including the market-sensitive fiscal forecasts, were in the Standard".

"To be fair to the Chancellor of the Exchequer, I'm sure he didn't intend the whole of the Budget to be in the Standard before he rose to his feet," he said as he responded to Mr Osborne's speech.

Details of the Budget were handed to journalists ahead of the speech but the content was not to be published until after the Chancellor had addressed MPs.

The front page was published on Twitter

Evening Standard editor Sarah Sands apologised, saying she was "devastated" that the paper had broken the embargo.

"An investigation is immediately under way into how this front page was made public and the individual who tweeted the page has been suspended while this takes place," she said in a statement.

"We have immediately reviewed our procedures. We are devastated that an embargo was breached and offer our heartfelt apologies."

The newspaper's political editor, Joe Murphy, also issued an apology during the Chancellor's speech.

He tweeted: "I wish to apologise for a very serious mistake by the Evening Standard earlier which resulted in our front page being tweeted.

"We are so sorry to the House of Commons, to the Speaker and to the Chancellor for what happened. We shall be apologising to them."

Shadow Chancellor Ed Balls told Sky News: "The idea the Treasury was giving market-sensitive information about the borrowing numbers to the Evening Standard before the Chancellor has said it to the Commons, that is very unusual ... that is a big, big mistake."

When questioned about whether similar briefings had been given under a Labour Government, he said: "What Governments do is they shape the agenda. We have seen lots of leaks in the last few days but to give out the fiscal numbers, market-sensitive in advance, I've never heard of that before." 

In 1947, Labour Chancellor Hugh Dalton was forced to quit when the Budget was leaked before it was delivered in the chamber.

14.47 | 0 komentar | Read More

Cyprus Outlines 'Plan B' To Avert Bankruptcy

The president of Cyprus is due to present a 'plan B' aimed at securing a bailout after parliament rejected demands for a controversial tax on savings.

The near-bankrupt member of the eurozone has closed its banks until Tuesday March 26 while new proposals are debated among political leaders.

President Nicos Anastasiades set a deadline of Thursday for a new rescue plan to be agreed after Finance Minister Michalis Sarris failed to make any progress on possible Russian aid during talks in Moscow.

The proposals, which might still include the controversial bank levy in some form, could also contain "the creation of a structural investment fund, reinforced by various provident funds, real estate," government sources suggested.

They also told the official CNA news agency that the fund "will also be linked with a bond issue and natural gas prospects."

Germany's Angela Merkel favours Cyprus taxing only wealthy depositors

The troika of lenders - the European Union, European Central Bank and International Monetary Fund agreed a bailout deal last Saturday on condition Cyprus raised another 5.8 billion euros through a tax on savings.

The resulting backlash has meant that banks will have been closed for 10 straight days under the crisis measures implemented to avert a run on deposits.

The move has inevitably dealt another blow to Cyprus's debt-laden economy, which contracted by 2.3% in 2012, having taken a battering from the global financial crisis and its exposure to Greece.

"We cannot buy, we cannot sell," said Costakis Sophoclides, the director of a frozen goods company in Nicosia.

"A lot of my customers are hotels and restaurants... and we cannot supply them."

Cash machines still have money available but an overall lack of liquidity has seen petrol stations close their credit card facilities and many stores refuse to accept cheques.

US Federal Reserve chief Ben Bernanke commented on the crisis late on Wednesday and said that, so far, "we are not seeing a major risk to the US financial system or the US economy."

14.47 | 0 komentar | Read More

Budget: Osborne's Hopes Of Rescuing Economy

By Jon Craig, Chief Political Correspondent

George Osborne will today unveil a Budget with the twin aims of attempting to rescue both the British economy and the political fortunes of the Conservative Party.

The Chancellor will announce a raft of measures he hopes will not only kick-start economic growth but also reverse a Tory slump that began with his Budget a year ago.

Many Conservative MPs blame last year's so-called "Omni-shambles" Budget - containing a series of blunders that required embarrassing U-turns - for the collapse in support for the party over the past 12 months.

This year Mr Osborne has already promised help for pensioners, working couples and homebuyers.

But to avoid another onslaught from critics he will also need to provide help for motorists on fuel duty and businesses with incentives to invest.

On tax, the Chancellor is tipped to help the low paid by accelerating raising the income tax threshold to £10,000, a move championed by the Tories' LibDem Coalition partners.

And after the furore in the Conservative Party over gay marriage, the Chancellor may boost the married couples' allowance to cheer up disgruntled Tory backbenchers. A cut in corporation tax from 21p to 20p would also delight business leaders.

Mr Osborne is also expected to agree to unlock £4.8bn in child trust funds and allow parents to transfer their investments into more generous Junior ISAs. This move could leave some children up to £34,000 richer.

He will also announce that thousands of elderly people who lost up to half of their life savings when Equitable Life came close to collapse a decade ago will receive compensation.

But in a bleak message to MPs and voters on the state of the economy, there will be no U-turn on spending cuts or unfunded tax cuts and some grim economic forecasts.

Speaking at the weekend, the Chancellor rejected calls from Lib Dem Cabinet colleague Vince Cable and former Tory defence secretary Liam Fox to change course and abandon his so-called "Plan A".

Warning that economic recovery would be a slow process, he said: "There is no easy answer to Britain's problems. There is no miracle cure, because of course if there was a miracle cure it would have been deployed.

"It is just a lot of hard work dealing with Britain's debts, helping businesses create jobs and helping families who work hard and want to get on."

It has been revealed the Chancellor will unveil another £2.5bn of cuts to fund capital spending, although health, schools, overseas aid and HM Revenue and Customs will be shielded from the latest round of savings.

Osborne warned there would be no U-turn on spending cuts

Mr Osborne told the Cabinet other departments would have to find 1% savings on day-to-day budgets for each of 2013/14 and 2014/15.

But the move was attacked by Labour. Shadow Treasury Minister Chris Leslie MP said: "An increase in capital spending of just £2.5bn compares to deep cuts of £12.8bn to infrastructure investment in the last three years on the plans George Osborne inherited.

"If this is the only additional investment in infrastructure in the Budget it will be a huge disappointment. Business groups, the IMF and even Vince Cable have all said now is the right time to invest, at record low interest rates, in building homes, road and schools to create jobs now and strengthen our economy for the future.

"The test for the Budget is whether it delivers bold action to kickstart our flat-lining economy and significant tax cuts for middle and low income families, not a £3bn tax cut for the very richest and more of the same failing policies."

But only weeks after Britain lost its AAA credit rating and slipped into a double dip recession with the risk of a triple dip, Mr Osborne is expected to have to deliver more gloomy news about the country's finances.

The Office for Budget Responsibility is expected to raise borrowing forecasts and lower those for growth.

Confirmation of Mr Osborne's unpopularity comes in a survey suggesting that more than four out of 10 voters (44%) think he should be sacked as Chancellor.

Fewer than one in five (18%) of those questioned said Mr Osborne should keep his job, while 38% did not know.

Favourite to replace him is Mr Cable, favoured by 12%, followed by Foreign Secretary William Hague (5%) and Home Secretary Theresa May (3%).

14.47 | 0 komentar | Read More

Facebook Scheme: Man 'Stole' $8M From Clients

A Florida investment adviser has been charged in New York in an $8m securities fraud scheme that exploited demand for shares of the social networking site Facebook.

Craig L Berkman, 71, was arrested on Tuesday at his home in Florida and detained pending a hearing set for Thursday.

He was charged with falsely claiming in December 2010 to own shares of Facebook Inc, well before the company went public last year.

In reality Berkman did not directly own shares, and prosecutors say he stole much of $8m (£5.3m) that more than 50 investors entrusted to him.

The US Securities and Exchange Commission has also announced separate civil charges.

The government said Berkman operated a private company called Ventures Trust II LLC.

Facebook went public in May with its much-hyped $104bn (£65bn) IPO.

But the company's value dropped soon after, with shares quickly falling from their debut price of $38 (£25.16).

On Tuesday the stock's value closed at $26.55 (£17.58).

14.47 | 0 komentar | Read More

Cyprus Looks To Russia Amid Bailout Chaos

Sacrificing Trust In The Banks

Updated: 6:54pm UK, Tuesday 19 March 2013

By Ed Conway, Economics Editor

I'm rather glad that the Pope managed to mention Abraham in his inaugural mass today.

After all, of all the Old Testament, the tale of Abraham and Isaac is probably about the most comparable to the current imbroglio in Cyprus.

The father and guardian takes his son to the top of the mount, binds him and is on the point of sacrificing him when, at the last minute, God sends down an angel to stop him.

In an analogous way, the Cypriot government, on orders from on high (the eurogroup in this case, not God) has come to the brink of gouging an unprecedented tax out of its peoples' savings, and, at the last minute, seems to have been offered a reprieve.*

Now, if this were the Bible, the story would end there. Abraham's faith was tested, and he passed the test. Conveniently, the ancients glossed over the question of what this incident did to the father-son relationship.

However, this is not the Bible, and so we're left unpicking a relationship that has gone very wrong indeed. There is clearly a widespread sense of betrayal in Nicosia, and one can understand why.

Even if, as is the current plan, small savers with less than 20,000 euros in their accounts are let off the deposit tax, this episode will leave a lasting scar in place.

After all, the Government had spent the past few years insisting to savers that any deposits below 100,000 euros would be safe, protected by its deposit insurance scheme.

That it could subsequently play fast and loose with the bank accounts is unlikely to be forgotten.

Even if the Government were to stop short of a deposit tax, it's hard to see why savers wouldn't simply withdraw all their cash in droves when the banks reopen (whenever that is) – even if it's simply to put it underneath a mattress at home.

This episode has fatally undermined the element of trust in the banking system – something which is fundamental to the way capitalist economy functions in its current form.

Whether this triggers chaos elsewhere is difficult to predict. Markets have become more unsteady as the situation in Cyprus has deteriorated, but we haven't yet seen any kind of depositor panic elsewhere, for instance in Portugal and Spain.

However, the story in Cyprus is far from over. Anger is mounting, the parliamentary system is creaking under the weight of the demands coming over from Brussels, and the threats from Frankfurt to cut off emergency funding to the banks if the country doesn't co-operate haven't made them any more willing.

Short of a papal intervention, it's hard to imagine how to get a happy ending out of this story.

*Yes I know there are some inconsistencies. For instance, it's debatable whether the eurocrats have ditched the plan or whether it's simply being rejected by the government, the latter of which would be akin to Isaac breaking free of his bindings and escaping.

Plus, Isaac had not borrowed himself so far into penury that he was facing bankruptcy. Nor had he become a go-between for Russian tax avoiders but let's leave that aside for the time being.

14.47 | 0 komentar | Read More

Cyprus Urged To Protect Savings Under 100k

Eurozone finance ministers have urged Cyprus to protect savers with less than 100,000 euros (£86,000) in their accounts from a proposed tax on bank deposits.

Under a bailout deal agreed with the EU, Cyprus planned to impose a levy of 6.7% on all savings below that level.

The scheme was then changed to a 6.7% tax on all savings between 20,000 and 100,000 euros and 9.9% on all savings over 100,000 euros.

But the finance ministers, known as the Eurogroup, said they favoured a higher, 15.6% tax on richer savers in order to protect those with smaller deposits.

A statement from the group's president Jeroen Dijsselbloem said: "The Eurogroup continues to be of the view that small depositors should be treated differently from large depositors and reaffirms the importance of fully guaranteeing deposits below 100,000 euros."

Sparing more modest savers in favour of the higher rate on bigger deposits, would not impact on the overall amount of the bailout - 10bn euros (£8.6bn) - the group said.

Protesters gathered outside the parliament in Nicosia

On Saturday the Eurogroup told debt-ridden Cyprus it would not give it a bailout unless it recouped some of the money it needed from savers.

The scheme had the potential to affect thousands of Britons who had either moved to Cyprus to live or had money saved in Cypriot accounts.

Russia, whose citizens are thought to have up to $30bn of their cash tied up in Cypriot accounts, was left furious by the proposal.

Cyprus may still ignore the advice from the Eurogroup and its parliament is expected to vote on a plan to save its economy on Tuesday.

Foreign Secretary William Hague said Britain had been "separated" from contributing towards the bailout, adding that 3,000 Britons in the country would not suffer in the proposed raid on bank savings.

Large numbers of Russian millionaires have stashed savings in Cypriot banks

It is believed, however, that many British Cypriots may have millions in accounts that are not protected by UK rules.

It was also unclear whether British troops serving in Cyprus who had set up large savings accounts would be able to escape the tax.

Cyprus had been due to vote on the levy on Sunday but it was first pushed back until Monday and then Tuesday.

Banks were closed in the country on Monday because of a bank holiday, which prevented people withdrawing their money but cash machines across the island were emptied.

Branches will stay shut for another two days - Tuesday and Wednesday - to prevent people removing all their cash while the authorities decide what to do.

A large amount of cash was withdrawn from Cypriot banks on Monday

The decision to target bank accounts stunned Cypriots, and police sealed off parliament as about 400 people staged a noisy protest outside, aggrieved that their small island of one million people should be singled out for such treatment.

It is the first time within the EU that it has been proposed to tax savers in a country to pay for the failings of their government.

The euro and stock markets fell on concern that developments in tiny Cyprus could reignite the financial crisis in the 17-nation eurozone.

If Cyprus does tax large savers heavily there are fears that money could flood out of the country as two thirds of deposits are from abroad.

14.47 | 0 komentar | Read More

Nuisance Phone Calls: Which? Demands Action

Campaigners have demanded "tougher regulation" to clamp down on companies who plague people with unwanted phone calls and nuisance text messages.

Consumer group Which? found seven out of 10 consumers had been cold-called in the last three months, while two-fifths had received unsolicited texts.

The majority of calls and messages came from claims management companies (CMCs) offering to take up payment protection insurance (PPI) and personal injury cases.

Which? urged regulators including Ofcom and the Office of Fair Trading (OFT) to set up a joint taskforce to pull the plug on "intrusive and distressing" calls and texts.

It said offenders should receive fines and be put out of business.

"Unwanted calls or texts are not just a nuisance, they can be intrusive and distressing," executive director Richard Lloyd said.

"Many of us have been bombarded with spurious claims of PPI or injury compensation. People are telling us they are totally fed up with this nuisance and want to see action.

"Our research once again shows the behaviour of unscrupulous claims management companies must be tackled to stop them exploiting consumers who could claim compensation for free themselves.

"We want to see tougher regulation from the Government to clean up the CMC industry."

Which? said that a quarter of its members who made a claim on their car insurance were contacted by a CMC within three months.

Many of them were then bombarded by repeated messages. More than a fifth said they were sent at least 10 texts and one in eight received 10 or more phone calls.

The Transport Committee is currently investigating the extent to which bogus and exaggerated whiplash claims push up the cost of car insurance. False claims are estimated to add around £90 to the cost of every premium.

From next month, insurers will be banned from receiving money in exchange for the details of customers who make personal injury claims.

However, Which? said the rules will not cover non-injury claims such as car repairs.

It urged people to register their details with the Telephone Preference Service and to avoid opting into third party marketing when taking out an insurance policy.

It also said consumers should not respond to spam texts, even to text "stop", as this alerts the sender to the phone number being active and in use.

14.47 | 0 komentar | Read More

Budget: Childcare Boost For Working Families

Working families will receive up to £1,200 per child a year under major plans to slash the cost of childcare.

More than two million families stand to benefit from the tax-free childcare plans, which have been announced ahead of Wednesday's Budget.

Eligible families will be given up to £1,200-a-year for each child, up to a maximum of 20% of their total childcare costs.

To qualify, both parents - or one parent if they are raising children alone - will have to be in work and each must earn less than £150,000.

But the scheme, which will replace the existing employer supported childcare programme (ESC) will not come into effect until late 2015, after the next general election.

Initially the measures will cover children up to five years old, but the level of support will build up "over time" to include children under 12.

Ministers say to start with, 1.3 million families will benefit, compared to 450,000 under ESC, eventually rising to around 2.5 million.

The leaders promised to boost childcare support in their mid-term review

The Government is set to invest £1.4bn in the plans - half-funded by abolishing the current childcare vouchers scheme and with the rest of the cash diverted from other departments.

Under the current scheme, parents get vouchers worth up to £55-a-week, deducted from their salary before tax is paid.

Prime Minister David Cameron and Deputy Prime Minister Nick Clegg pledged in their January mid-term review that they would act to help working families with childcare costs.

The move appears designed to appease many parents furious at losing their child benefit after cuts to what was once a universal handout.

Mr Cameron said: "Too many families find paying for childcare tough and are often stopped from working the hours they'd like.

"This is a boost direct to the pockets of hard-working families in what will be one of the biggest measures ever introduced to help parents with childcare costs."

Deputy Prime Minister, Nick Clegg added: "The rising cost of childcare is one of the biggest challenges parents face and it means many mums and dads simply can't afford to work.

"This not only hurts them financially, but is bad for the economy too."

Ministers have already announced plans to let childminders look after more children, which they hope will reduce costs and make more nursery places available.

Britain has some of the most expensive childcare costs in the world - with fees rising at more than twice the rate of inflation, according to the Daycare Trust.

A report by the trust recently found that a place at the UK's most expensive nursery cost £42,000 - some 25% more than a place at a top public school such as Charterhouse, which charges £30,574 a year.

14.47 | 0 komentar | Read More

Lloyds Paid 30 Staff £1m Last Year

By Mark Kleinman, City Editor

The state-backed lender Lloyds Banking Group paid dozens of staff more than a million pounds last year, taking the number of UK-based bankers earning seven-figure sums to more than 750.

I understand that Lloyds will disclose in its annual report next week that roughly 30 of its staff were awarded pay packages of more than £1m.

The figure will be the first time that Lloyds, which is 39% owned by taxpayers, has disclosed the number of millionaires in its ranks.

It threatens to re-ignite anger among critics of banking sector pay after a year in which Lloyds lost more than £500m as it continued to deal with the massive financial penalties associated with mis-selling payment protection insurance (PPI).

The Lloyds millionaires largely work in its corporate and investment banking division, according to insiders.

Among those receiving £1m-plus packages was Antonio Horta-Osorio, the chief executive. His £1.48m bonus will vest depending on either the bank's share price performance or the Government's disposal of part of its shareholding.

In total, Lloyds paid out £375m in bonuses, lower than the other state-backed bank, Royal Bank of Scotland (RBS), which forked out £607m.

RBS, which has a larger investment bank than Lloyds, awarded £1m-plus pay deals to 95 staff, while Barclays handed the sums to 428 employees. The two banks were fined a collective £680m for manipulating the interbank borrowing rate, Libor.

HSBC paid 204 of its staff at least £1m last year, making a total for the big four UK banks - including Lloyds' approximately 30 employees - of 757.

Lloyds declined to comment.

14.47 | 0 komentar | Read More

HMRC Tax Helpline Is 'Disgraceful', MPs Say

A "disgraceful" tax helpline run by HM Revenue and Customs (HMRC) costs callers £136m a year through delays in answering calls, a spending watchdog has said.

The Commons Public Accounts Committee found a quarter of the 79 million annual calls to the HMRC phone line go unanswered, despite a £900m investment in customer service.

It said a new target to answer 80% of calls within five minutes was "woefully inadequate and unambitious" and questioned whether waiting times would increase if staff numbers are cut.

HMRC plans to close 281 tax inquiry centres in favour of a targeted "mobile" system in homes, businesses or community locations, claiming the move will save customers £12m a year in lost time and travel costs.

But Margaret Hodge, the Labour MP who chairs the committee, said changes to the way companies report payments to employees, as well as a shake-up of tax and benefit systems, would "drive up the number of phone calls to the department".

"Just how the department is going to improve standards of customer service, given the prospect of it having fewer staff and receiving a higher volume of calls, is open to question," she said, adding that HMRC should be aiming to answer the majority of calls within 20 seconds.

A spokesman for HMRC said it had "already recovered" from its "previous poor standard of service".

"In the past three months, we have been answering more than 90% of calls to our contact centres," he said.

"During the current year we have replied to 84.5% of the 16 million pieces of post we have received within 15 working days.

"We are investing an extra £34m in our contact centres to maintain this industry-standard level of performance.

"To make it cheaper for customers to call us, we have already transferred our Tax Credits phone lines from 0845 to 0345 numbers, and will begin to move our remaining lines to 03 numbers from April.

"We will continue to build on these improvements until we deliver the consistent quality of service that our customers are entitled to expect."

14.47 | 0 komentar | Read More

Cyprus Bailout: Savings Tax Could Be Cut

Officials in Cyprus are reportedly trying to renegotiate a eurozone bailout deal in order to soften the impact of a levy on smaller savers.

Authorities had planned a 6.7% tax on deposits under 100,000 euros (£85,454), triggering queues at cash machines as people in Cyprus rushed to withdraw their money.

But the country's government is thought to be discussing cutting the tax rate to 3% while raising the rate for deposits over 100,000 euros from 9.9% to 12.5%.

In exchange for the levy, Cyprus will receive 10bn euros (£8.54bn) in aid to help recapitalise banks.

Cypriot President Nicos Anastasiades held talks with his cabinet

Cypriot President Nicos Anastasiades, who was elected just three weeks ago, said the island had to accept a painful compromise or face bankruptcy.

In a televised address, he said the bailout "will eventually stabilise the economy and lead it to recovery".

Monday is a national holiday in Cyprus and measures need to be approved before banks open again on Tuesday.

Depositors in the eurozone's weaker economies have been unnerved by the levy, with investors fearing it will set a precedent that could reignite market turmoil.

Their uncertainty could be reflected when European markets open later, with the euro having already seen sharp falls in Asia.

British government and military personnel in Cyprus will be protected from any levy on their bank deposits.

Foreign Secretary William Hague told Sky News that Britain had been "separated" from contributing towards the bailout, adding that 3,000 Britons in the country would not suffer in the proposed raid on bank savings.

The tax on deposits in Cyprus, which accounts for only 0.2% of the eurozone's economy, is expected to raise up to 6bn euros (£5bn).

Those affected will include rich Russians with deposits in Cyprus and Europeans who have retired to the island, as well as Cypriots themselves.

Savers have queued to withdraw their money from cash machines across Cyprus

The size of foreign deposits in Cyprus - estimated at 37% of the total - was one reason the eurozone agreed to the tax on savings.

It will apply to all deposits held in banks within Cyprus, including an estimated 2bn euros (£1.75bn) of British money, according to the European Central Bank.

It will not affect deposits held in the UK branches of Cypriot banks, such as Bank of Cyprus, whose UK subsidiary is regulated by the Financial Services Authority.

However, Laiki Bank UK said on its website: "Your eligible deposits with Laiki Bank UK are protected up to a total of 100,000 euro (£87,000) by the Cyprus Deposit Protection Scheme and are not protected by the UK Financial Services Compensation Scheme.

"Any deposits you hold above the 100,000 euro limit are not covered."

Cypriot banks lost 4.5bn euros (£3.8bn) - equal to a quarter of the island's gross domestic product - when eurozone leaders decided to write off Greek debt last year.

As part of its bailout deal, corporate tax will rise from 10% to 12.5%, while state assets will be sold off to help balance the public finances.

Cuts to government worker salaries and pensions have already been approved.

14.47 | 0 komentar | Read More

Clegg Launches £1bn Aerospace Pledge

By Mark Kleinman, City Editor

The Government will next week commit hundreds of millions of pounds of public money to Britain's aerospace industry as it attempts to accelerate the rebalancing of the flagging economy.

I understand that Nick Clegg, the Deputy Prime Minister, will make the pledge on Monday when he unveils the latest phase of the Aerospace Growth Partnership (AGP).

Similar to initiatives already launched in the automotive and defence industries, the AGP will involve money committed by the major companies in the sector - including Airbus, Bombardier and Rolls-Royce - being match-funded by the Government.

Insiders said on Saturday that the total funding under the AGP could reach £1bn within a few years.

Unusually for an industrial initiative of this kind, Mr Clegg will commit to resourcing the AGP well beyond the lifetime of the Coalition Government by saying that the commitment will run for 10 years.

The longer duration of the pledges to support the aerospace industry are designed to counter accusations that the Government is too short-term in its industrial outlook and should enable big companies to make longer-term investment decisions, officials said.

The focus of the new funding will go towards supporting the infrastructure on which the aerospace industry depends, such as research and development activity, and protecting and enhancing the sector's supply chain.

Aerospace is one of the UK's most important industries, directly employing more than 100,000 people and recording more than £24bn in annual earnings, according to a document published by the Government last week.

"The UK's current strength is the result of significant public and private investment in research and technology in the late last century.

"The UK aerospace industry is faced with increasing competition globally, not only from traditional aerospace manufacturing nations but also from developing aerospace nations," it said.

"We can't stand still. To stay at the forefront of the increasingly global aerospace industry, the UK needs to secure strategic work packages on the new programmes, as those we are currently working on come to the end of production and support over the next few years.

"Action is needed now to ensure that public and private investment is increased to globally competitive levels."

Mr Clegg's announcement will come two days ahead of a Budget in which George Osborne, the Chancellor, is under pressure to provide much greater stimulus for industrial growth.

14.47 | 0 komentar | Read More

Cyprus Politicians Decide On Bailout Demands

Cyprus's parliament will decide later today whether savers must pay a levy on bank deposits under terms for an international bailout to avert bankruptcy.

The eurozone demand that savers pay up to 10% of deposits as a condition for the 10bn euro (£8.6bn) bailout has drawn criticism and anger in the eastern Mediterranean island.

Queues of people gathered at its cash machines on Saturday as they tried to withdraw their money ahead of the move.

And the country's cooperative banks had to shut their doors after seeing a rush of savers keen to protect their money.

Savers could apparently withdraw money but were not able to carry out electronic transfers.

Newly-elected Cypriot President Nicos Anastasiades said refusing the bailout would have led to the collapse of the island's two largest banks, badly burnt by their exposure to bailed out neighbour Greece.

The tax on deposits in Cyprus, which accounts for only 0.2% of the eurozone's economy, is expected to raise up to 6bn euros (£5bn) as a condition for the bailout, mainly needed to recapitalise banks.

Those affected will include rich Russians with deposits in Cyprus and Europeans who have retired to the island as well as Cypriots themselves.

The size of foreign deposits in Cyprus - estimated at 37% of the total - was one reason the eurozone agreed to the tax on savings, to take effect when banks reopen on Tuesday.

Nicos Anastasiades with Angela Merkel in Brussels

The tax will apply to all deposits held in banks within Cyprus, including an estimated 2bn euros (£1.75bn) of British money, according to the European Central Bank.

However, it will not affect deposits held in the UK branches of Cypriot banks, such as Bank of Cyprus, whose UK subsidiary is regulated by the Financial Services Authority.

The country has a large British expatriot community, among them David Symonds who lives in Limassol.

He told Sky News: "Everybody was surprised. We were assured only a few days ago that the haircut on the deposits was a red line for the government.

"When we learned that it might become a possibility we were told it would only be on deposits above 100,000 euros. Now of course we know it affects everybody."

Cyprus was badly hit by the Greek financial crisis because of its close links to the country.

Its two largest banks saw combined losses of 4.5bn euros (£3.8bn) - equal to a quarter of the island's gross domestic product.

The rescue package was agreed after 10 hours of talks in Brussels and was significantly less than the 17bn euros (£14.7bn) asked for.

As part of the deal, the government will also have to hike corporate tax to 12.5% from 10% and sell off state assets to help balance the public finances.

14.47 | 0 komentar | Read More

Chancellor Warns Of 'More Tough Choices'

George Osborne has warned the country of "more tough choices" and says there are no "miracle cures" for the UK economy, as he prepares to deliver Wednesday's Budget.

The Chancellor is under mounting pressure to change course and kick start growth as the UK faces an increased risk of falling into a triple-dip recession.

An opinion poll suggests most voters - including more than a quarter of Conservative supporters - think his policies are failing.

But Mr Osborne dismissed calls for extra borrowing to cut taxes or finance a "spending spree" and insisted that abandoning his austerity programme would be a "disaster".

Writing in The Sun on Sunday, Mr Osborne hinted he would do more to help homebuyers, business start-ups, apprentices and people saving for retirement.

Helping create jobs would mean "cutting tax rates and red tape, backing scientific advance, building new roads and broadband" and making the UK an attractive investment option, he said.

However he warned of "more tough choices" to be made on further slashing public spending from 2015 - with the scale of the squeeze to be unveiled in his statement.

"It won't be easy," he warned, amid rows between ministers over where the axe should fall.

Hopes the economy could grow in this quarter and thus avoid returning to recession were dealt a blow this week by a 1.5% fall in manufacturing output in January.

The Chancellor will deliver his Budget on Wednesday

Former cabinet minister Liam Fox is leading Tory calls for a change of course - suggesting Corporation Tax be reduced to zero and far bigger cuts to public spending, notably welfare.

Other prominent backbench demands include cancelling a fuel duty rise due in the autumn and scrapping the beer duty escalator that automatically ups the price of a pint.

Mr Osborne is tipped to announce extra investment in housebuilding and road projects - called for by leading business groups - and help for people to buy homes.

But he will not abandon "Plan A" by increasing borrowing to fund it - a move being mooted within the coalition by Liberal Democrat Business Secretary Vince Cable.

Shadow chancellor Ed Balls said he would welcome extra borrowing to fund a cut in the basic rate of income tax to put more money into people's pockets.

But Mr Osborne hit back: "I think the British people know there are no easy answers in today's world. They aren't fooled by the miracle cures peddled by the same snake oil politicians who got us into this mess.

"Labour's answer to Britain's borrowing problems is to borrow even more - that simply doesn't make sense. If there were easy options and miracle cures then of course I would take them, but sadly there aren't."

14.47 | 0 komentar | Read More