Tories’ Liberal Democrat partners in coalition would fight for measures to offset effect of 5p cut David Cameron and George Osborne could cut the 50p tax rate as soon as next April, it has been reported. Within the year, the prime minister and chancellor may move to cut 5p off tax for high earners, although the Liberal Democrat partners in the coalition will fight for measures that offset the effect of the cut at a time of when most people are having to tighten their belts. A succession of newspaper stories quoting often unnamed Conservative and government sources culminated when the Independent said a Treasury analysis suggests the 50p rate – introduced by Labour in 2009 – was generating only marginal returns for the exchequer. The paper said the difference between the 50p tax and a 45p tax might only be £750m a year. Rightwing Tories want the government to go further and reduce the rate to 40p, as it was until 2009. The Liberal Democrat chief secretary to the Treasury, Danny Alexander, has previously claimed wanting such a cut was living “in cloud-cuckoo land”, and the Independent report confirms that Lib Dems remain wary of the political consequences of sanctioning the move. According to the paper, Treasury projections suggest that up to 70% of the expected £2.4bn revenue generated from the 50p rate would still be collected at the 45p rate. At 50p, the incentive increases to retire earlier, emigrate, contribute more to a pension or invest in tax avoidance schemes, the report said. The Treasury is still waiting for the details of an assessment by HM Revenue and Customs into the amount actually raised in the first year to April 2011. A senior Conservative source said: “The decision is not about whether to do it, it’s about when to do it. One option is 2012, depending on the state of the economy, or 2013 at the latest. We want it to have come into effect by the time of the next election.” The source added that the move was likely to be sold as part of a “tax simplification package”. Another source, close to Osborne, is said to have sought to dampen the speculation. “We have no plans and no timetable,” he said. “We don’t like the tax, but we are not going to decide anything until we have seen the numbers.” Senior Liberal Democrat sources told the paper that any attempt to cut the tax burden of the very wealthy would be opposed by the party. “At a time when we are asking everyone to make sacrifices, this sends out totally the wrong signal,” one said. “The 50p rate was never our policy and we are not wedded to it – but any cut must be offset by other measures.” Tax and spending George Osborne David Cameron Conservatives Liberal-Conservative coalition Tax Income tax James Meikle guardian.co.uk
Continue reading …Leader of India’s ruling Congress party is recovering in intensive care unit after surgery for undisclosed ailment in US India’s ruling Congress party says its leader Sonia Gandhi has undergone successful surgery abroad for an undisclosed ailment. A party statement released on Friday said that Gandhi had the surgery Thursday and “the surgeon indicated that the operation was successful.” The statement said that Gandhi was recovering in an intensive care unit. It gave no details of her illness or the location of the hospital. News reports have said the operation took place in the US. Italian-born Gandhi, 64, is the widow of prime minister Rajiv Gandhi, who was asssassinated in 1989. She declined the premiership despite leading the party to win 2004 elections. In her absence the party is being run by a four-member committee including her son, Rahul , who is seen as a prime minister-in-waiting. Sonia Gandhi India guardian.co.uk
Continue reading …• Almost £50bn wiped off leading FTSE shares on Thursday • Huge sell-off on Wall Street hits Dow Jones • Turmoil sweeps through Asian stock exchanges My colleague Jill Treanor reports that Stephen Hester, chief executive of Royal Bank of Scotland, urged markets to stay “calm” in the face of market turbulence as the bailed out bank slumped to a £794m first half loss. Results were impacted by a £733m hit on Greek bonds and a £850m provision for payment protection insurance. RBS shares slumped nearly 14% to 26.05p this morning. 8.12am: In Italy, shares in the country’s biggest bank Unicredit have been suspended for excessive losses after falling nearly 6%. Shares in Intesa Sanpaolo, which is due to report first-half figures later today, were also suspended after falling 7.7%. Europe’s banking stock index tumbled 3.6%. Bond markets are going crazy too with yields hitting new record highs. The interest rate, or yield, on 10-year Italian government bonds has spiked 15 basis points to 6.38% while the Spanish yield is up 10 points at 6.42% and the Portuguese yield is 16 points higher at 13.1%. 8.04am: The FTSE 100 tumbled more than 170 points in early trading, a drop of 3.3%, to 5217. The interest rate on UK ten-year government bonds, known as gilts, fell to a record low of 2.59%. France’s CAC lost 3.1%, Spain’s Ibex 2.2% and Italy’s FTSE MIB 3.3%. 7.55am: Richard Hunter, head of UK equities at Hargreaves Lansdown stockbrokers, said markets could fall further today, especially if key jobs data from the US reveals a further slowdown in the economy. Hunter said: Investors are pessimistic at the moment, the general market mood is to try to prepare for the worst. It’s difficult to see anything positive coming from the data today unless they reveal absolutely barnstorming figures. Non-farm payrolls for July, released at 1.30pm London time, are expected to show weak job growth in the US (a rise of 85,000 jobs after June’s dire 18,000 increase) while the unemployment rate is expected to stay at 9.2%. On this side of the pond, French President Nicolas Sarkozy will hold crisis talks discussing financial markets with German Chancellor Angela Merkel and Spanish Prime Minister Jose Luis Rodriguez Zapatero. 7.35am: Good morning. We will bring you the latest news and commentary today as stock markets are braced for further falls amid fears that the world economy could slide back into recession. Thursday was a day of global stock market mayhem, which saw the FTSE 100 index suffering its worst daily fall since March 2009 as the eurozone and US debt crises took their toll. Nearly £50bn was wiped off the value of Britain’s 100 biggest companies and traders said the atmosphere was ominously reminiscent of the banking crisis of autumn 2008. In Asia, Japan’s Nikkei lost 3.7% to 9299.88 overnight while Hong Kong’s Hang Seng tumbled 5.1% to 20,761.98 and the Taiwanese stock market was down 5.6% at 7853.13. To recap: The FTSE 100 in London lost 191.37 points , or 3.4%, to 5393.14 yesterday. On Wall Street, the Dow Jones closed more than 500 points , or 4.3% lower at 11,383 – the biggest single-day loss since 2008. Comments from the president of the European commission, José Manuel Barroso, did little to calm markets. “We are no longer managing a crisis just in the euro area periphery,” he said yesterday. “Euro area financial stability must be safeguarded.” He urged European leaders to review “all elements” of the €440bn (£382bn) European financial stability facility and its €500bn replacement, the European stability mechanism. Stock markets United States US economy Economics European debt crisis Julia Kollewe guardian.co.uk
Continue reading …They were showered with gifts and money, but a year after the collapse, many of ‘Los 33′ are facing poverty When the San Jose copper mine collapsed on 5 August last year, the 33 men trapped underground were convinced that they would slowly starve to death. But two months later, a drill broke through to their refuge 700 metres below ground, and, after a painstaking rescue operation, they were eventually hauled to the surface before television cameras from around the world. For a brief, glorious, moment, “Los 33″ became a symbol of unity and faith, their rescue an almost unbelievable parable of survival against the odds. The men became superstars: they were cheered by 75,000 football fans at Wembley and invited on all-expenses-paid trips to Disneyland, Israel and Greece. One year after the cave-in, however, most have been returned to poverty, and some are even worse off than before the disaster. Several are struggling with the psychological and physical trauma of their ordeal, and all are struggling with the mixed blessings brought by instant – and unsought – fame. “We were like rock stars. People climbed trees to see us,” said Samuel Avalos, who had only been working at the mine for a few months before the collapse, and has now returned to selling pirate CDs on the street. After the rescue, all 33 received free motorbikes from the Kawasaki corporation, and around $15,000 (£9,000) from Chilean businessman Leonardo Farkas, but the money has long since run out. Avalos’s only regular income is a $500 monthly medical leave cheque, less than half his salary at the mine. “Will you buy my motorbike?” he asks, mid-interview. “Or I have a flag signed by all 33 miners. How much is that worth?” Another miner, Osman Araya used part of his $15,000 to buy a van and now sells vegetables in Copiapo market. Dario Segovia, a former drill operator, sells fruit in the same market. Araya was recently critical of his fellow miners and launched a deliberate call for help when he told Chilean newspaper La Tercera, that “all is not well with the 33″. Many have psychological and medical problems, said Dr Jean Romagnoli, a lead doctor in the rescue operation. “They are taking uppers, downers, stabilisers, I think they are over prescribed … They don’t understand why they are taking them but they are fed up with pills,” he said. “It is not pills they need, but the tools to deal with fame and the tools to renovate themselves.” Psychological treatment has been co-ordinated by the government and a private health insurance company, but many miners find the treatment insufficient, and family members say they ought to be included in the sessions. A handful of the miners – including the gregarious Mario Sepulveda, who acted as the miners’ spokesmen in videos they recorded underground – have built careers giving speeches and public appearances, but most are suffering from financial and psychological problems. “They are about to hit very, very hard times,” said Romagnoli, who is in close contact with many of them. “They do not know how they are going to get through the next month.” Yonni Barrios, the miner who served as a doctor to his companions – and gained notoriety when both his wife and lover showed up at the rescue – now has silicosis, an irreversible lung disease. Last month, producer Mike Medavoy announced that he had bought the rights to their story. The deal’s details have not been released, but filming is expected to begin in 2012. Medavoy has said he will focus on just a few of the 33 men, but a contract that the miners signed with their lawyers last December stipulates that they will all share certain revenues – including any authorised book, movie or collective testimony. Meanwhile, the men are hoping to receive settlements from two lawsuits: one against the government for allowing the unsafe mine to remain open after years of warnings, and one against the mine owners. They are seeking $541,000 each from the government and an undetermined amount from the company. When the news broke last month that the miners planned to sue the same government that had organised the estimated $11m rescue operation, they were denounced as money grabbers. They shot back that they only had to be rescued because the mine was so outdated, with unsafe working conditions long recognised by the government. That argument has been echoed by local politicians such as Brunilda Gonzalez, mayor of Caldera, who said the government was still not paying enough attention to safety regulations. She has promised to boycott a commemorative ceremony organised by President Sebastian Piñera on Friday in Copiapo. “We as a municipality are not going to participate because this is all a media and political show,” she said. Araya has also said he will not attend official ceremonies, because the other survivors have failed to honour a pact to share revenue from speaking engagements and motivational talks. “I want to separate myself from all this. I am not participating in anything because it pains me to see how [the other survivors] have behaved. They’re just looking for the TV cameras,” he said. Romagnoli lamented that the men had not been converted into ambassadors for workers’ safety. “In any other country they would have been national heroes … building up the country’s image around the world. Why have they been abandoned?” Living proof fame is a double-edged sword Mario Sepulveda The charismatic leader who acted as a spokesman for the 33 in their underground video has taken his show above ground. “Super Mario” now lectures around the world. In Chile, he volunteers at schools in poor areas, giving motivational lectures. Criticised by other miners for taking the lion’s share of the cash, he seems a natural in his new role as showman. Omar Reygadas The calm mining veteran led one of the three shifts underground, has been nominated official spokesman for the 33 men, and has travelled widely to deliver speeches. A former union leader, Reygadas has been key in organising the miners’ financial affairs. Franklin Lobos A former professional footballer, Lobos was the only one of the 33 to have an inkling of the double-edged sword that is fame. Wisely limiting his exposure to the media, he has chosen to rebuild his life with his first love – football. Today Lobos travels abroad as invited guest of Fifa and works full time at a Chilean football club. Edison Pena The jogger who ran the New York marathon and briefly appeared on the Letterman show is torn between his high-voltage renditions of Elvis songs and the trauma of the ordeal. Volatile in interviews, Pena has suffered deeply from the psychological effects of his entrapment. Mario Gomez At 63, Gomez was the oldest of the miners and had difficulty breathing even before a massive rock collapse trapped him in the bottom of the San Jose mine. Today he is diagnosed with more advanced silicosis and will probably be placed on full medical pension shortly. Despite more than 50 years working as a miner, Gomez can no longer avoid the flashbacks from the collapse. His family stays close, allowing Gomez the support he needs. Yonni Barrios Ridiculed by the press for having a lover and a wife waiting for him topside, Barrios has been besieged by bizarre offers to capitalise on his infidelity, including a $100,000 offer if he would dump his lover and return to his wife. As well as the paparazzi, Barrios is stalked by encroaching lung problems. Diagnosed with silicosis, he is now banned from working in the mines and runs a business from his home in Copiapo, the city near the collapsed mine. Chilean miners rescue Chile Jonathan Franklin guardian.co.uk
Continue reading …• Asian markets plunge on back of Dow and FTSE falls • Worst sell-off for two years • Analysts predict more losses on back of US jobless data Financial markets were in turmoil after a collapse in share prices around the world. Fears that the the world economy could slip back into recession led London’s benchmark FTSE 100 Index to lose 50bn billion of its value – its biggest fall of the year. Asian stock markets also plummeted as investors sold riskier assets amid fears the US is heading back into recession and Europe’s debt crisis is worsening. Japan’s Nikkei 225 stock average slid 3.4% to 9,328.74 and Hong Kong’s Hang Seng dropped 4.4 % to 20,912.60. South Korea’s Kospi index shed 3.6 % to 1,945 and Taiwan’s benchmark slumped 4.4 % to 7,952.98. Australia’s benchmark dropped 4% to 4,103.10. The slump in the far east came after the US stock market suffered one of its worst days ever on Thursday, with the Dow Jones Index plummeting 4.3%. The plunge in share prices came amid rising fears that Italy and Spain, the eurozone’s third and fourth largest economies, may need bailouts and widespread worries over the US’ economic recovery. Richard Hunter, head of UK equities at Hargreaves Lansdown stockbrokers, said markets could continue to fall on Friday, particularly if closely-watched jobs data from the US reveals a further slowdown in the economy. He said: “Investors are pessimistic at the moment, the general market mood is to try to prepare for the worst. “It’s difficult to see anything positive coming from the data today unless they reveal absolutely barnstorming figures.” Worried traders are waiting for today’s release of US unemployment figures for July, which is expected to show weak job growth and a rise in the unemployment rate. The plunge in global markets is further bad news for Chancellor George Osborne, who has faced increasing pressure over the pace of Britain’s economic recovery. Robert Chote, chairman of the Office for Budget Responsibility, on Thursday said the watchdog’s growth forecast of 1.7% – made in March – was likely to be missed. GDP increased by a lacklustre 0.2% in the second quarter of 2011 after consumers reined in spending. The growth fears led the Bank of England to hold interest rates at their record low of 0.5%. It is understood that the government is monitoring the global markets closely and the chancellor is receiving regular updates. A Treasury spokesman said: “This is a time of uncertainty in the international economy. Because of our difficult decisions to reduce the deficit and tackle our debts, Britain has been stable during this time. “The economy is growing and creating jobs.” The collapse of shares in Europe was sparked after the cost of borrowing for the Spanish government rose sharply in a debt auction – indicating lenders have lost confidence in the country’s ability to handle its debts and avoid a bailout. European Commission president Jose Manuel Barroso urged European leaders to rapidly reassess “all elements” of the eurozone’s bailout fund, known as the European Financial Stability Facility (EFSF), including its size. The EFSF was equipped with new pre-emptive powers last month, including the ability to buy up distressed government bonds to support their prices or extending credit lines to countries before they are in full-blown crisis mode. That was a recognition that rescue packages like the ones given to Greece, Ireland and Portugal would be far too expensive for big economies like Italy and Spain. But analysts have said the fund will not be able to properly use these new powers at its current size of €440bn(£383bn). The FTSE 100 Index closed down 3.4%, or 191.4 points, at 5393.1 – its biggest daily drop since March 2009. It follows a fall of 2.3% yesterday, which means that �85 million has been wiped off its value in the past two days. It is now at its lowest point for nearly a year. The Dow Jones lost 512.76 points which was the steepest points fall since December 2008. It was the ninth worst fall by points for the Dow. Stock markets European debt crisis European banks US economy Economics guardian.co.uk
Continue reading …Police and demonstrators clash in Santiago as students lead unrest against policies of President Sebastián Pinera Protesters have clashed violently with police in Chile’s capital to decry President Sebastián Pinera’s policies, as a poll showed him to be the least popular leader in two decades since the Augusto Pinochet dictatorship. Demonstrators led by students demanding cheaper and better state education blocked roads and lit fires as police used water cannons and tear gas to quell the latest outcry against the conservative billionaire. Some protesters in Santiago and as far afield as Copiapo in the far north started banging pots and pans in a “cacerolazo”, a popular form of protest in Latin America reminiscent of Chile’s 1973-1990 dictatorship. The term cacerolazo was the world’s top trending topic on Twitter on Thursday night. Television footage showed a La Polar department store in downtown Santiago ablaze amid the unrest, though firemen said it was too early to determine the cause. Retailer La Polar is embroiled in the biggest financial scandal the country has seen in years, which has piled additional pressure on former business magnate Pinera, who critics accuse of failing on oversight. La Polar has admitted that it unilaterally refinanced the credit of hundreds of thousands of clients. Violence also flared in the port city of Valparaiso, and the government said police detained 552 people across the country and that 29 officers and two protesters were injured. Hundreds of thousands of people have protested in Santiago and Chile’s other main cities in recent weeks and miners and environmentalists have rallied against Pinera, who is less than half way through his four-year term. Pinera, who took power a year and a half ago and appointed a cabinet filled with technocrats in a perceived bid to make government run like a business, has alienated many Chileans with his policies. Pollster CEP said on Thursday just 26% of Chileans approved of his leadership of the world’s top copper producer. Chile guardian.co.uk
Continue reading …Drug gangs blamed as 20-strong squad resigns in Ascension after series of targeted attacks on new force An entire 20-man police force has resigned in a northern Mexican town after a series of attacks that killed the police chief and five officers over the last three months, state officials confirmed. The officers’ resignation on Thursday night left the 13,000 people of Ascension without local police services, Chihuahua state chief prosecutor Carlos Manuel Salas said. State and federal police have moved in to take over police work, he said. The mass resignation appeared to be connected to a Tuesday attack by gunmen that killed three of the town’s officers, Salas said. But it wasn’t the first deadly attack on the police department this year. In mid-May, police chief Manuel Martínez, who had been in office just seven months, was gunned down with two other officers on a nearby highway. The three had been kidnapped a day before police found their bodies riddled with bullets in the back seat of a sedan. The town’s police force was relatively new. Angry residents had led authorities to replace the entire force last September after the mob killings of two teenagers who had allegedly kidnapped a girl from a seafood restaurant. People claimed police officers were aiding drug gangs. Martínez, with his new police force, had said he wanted to end the kidnappings and extortions that have terrorised the town where people grow green chili and cotton. The new police in Ascension had installed a telescopic camera in the town’s plaza that rotated, giving officers at the station the ability to zoom on a site as far as the outskirts of town. In addition, townspeople helped police dig a broad ditch around the town to prevent criminals from escaping on back roads. Ascension is south-west of Ciudad Juarez, the border city across from El Paso, Texas, that is one of Mexico’s most violent cities. The state of Chihuahua has had the most homicides blamed on organised crime and drug trafficking since the government’s anti-drug offensive began in December 2006. Elsewhere, the defence department announced that a 19-day offensive in northern states against the Zetas drug cartel had resulted in the shooting deaths of 30 alleged criminals and a soldier. The army said that among those killed was Jorge Luis de la Pena, the Zetas boss for Nuevo Laredo, the city across the Rio Grande from Laredo, Texas. Troops also detained 196 people in different cities during operation “North Lynx.” The Zetas gang, known for its viciousness, has been fighting its former ally, the Gulf cartel, in Mexico’s north since early 2010. Mexico Drugs trade guardian.co.uk
Continue reading …Police watchdog gathers information on fatal shooting of man and wounding of officer in Tottenham Hale The Independent Police Complaints Commission is investigating a shooting in north London on Thursday in which a man was killed and a police officer injured. According to Scotland Yard, the man was pronounced dead at the scene in Ferry Lane, Tottenham Hale, and the officer was taken to hospital. The IPCC said it understood the dead man had been shot by police, and that the officer had been shot and wounded. It later said that an adult male had been fatally shot but said that it did not know how old he was. The officer was subsequently discharged from hospital. In a statement the IPCC said: “It is understood that the shooting followed a [Metropolitan police service] operation. “The IPCC can confirm that a firearm has been recovered from the scene. “The IPCC will issue a further statement tomorrow once we have gathered more information.” Independent Police Complaints Commission London Police David Batty guardian.co.uk
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