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George Osborne ‘out of touch’ on economic growth, says Labour

Shadow treasury minister David Hanson seizes on admission by OBR that UK now unlikely to meet growth forecast of 1.7% Labour has seized on an admission by the head of the Office for Budget Responsibility of Britain’s slow economic growth to make a renewed attack on the chancellor, George Osborne, for being “out of touch”. Robert Chote, the OBR chief, said the British economy was now unlikely to meet his office’s growth forecast, already downgraded thrice, of 1.7 % for this year. David Hanson, the shadow treasury minister, said: “The government’s independent budget watchdog has now admitted what our complacent and out-of-touch chancellor refuses to acknowledge. “It’s now increasingly likely that the government will miss its growth forecasts for 2011 which is bad news for families and businesses and will put the government’s borrowing targets this year at serious risk. “Osborne must now recognise that his tax rises and spending cuts which go too far and too fast have choked off last year’s recovery.” Although the OBR is independent of the government, it is unusual for the office to admit that the growth forecast will be downgraded in advance of its official publication date. The OBR will give its latest forecast in the autumn statement probably in November, by which time the third-quarter growth figures will have been published. Speaking to the Independent, Chote said: “As a simple matter of arithmetic, in order to get to 1.7% now you’d be looking for quarter-on-quarter growth rates of 1% in the second and third quarters of 2011, and there aren’t many people out there expecting that.” He added: “Looking forward to the next quarter, in the March forecast we had 0.5% for the third quarter. Now there are various indicators saying the third quarter will be relatively weak, but on the other hand there were special factors in the second quarter so there may be bounce-back there. There are potential pressures in both directions.” Chote was sceptical that the cut in growth will necessarily mean the government will not meet its borrowing forecasts. He said: “If you do have a combination of somewhat weaker growth and higher inflation, that potentially may explain why you haven’t seen much impact of weaker output growth on tax revenues and on public finances, but it’s very early in the financial year to take a view on that.” There have been signs that public finances have held up better than expected. Chote also said he would be publishing the “blue book” of national statistics later in the year, which will tell the UK much more about what happened in the recession and the size of the structural deficit, the target identified by the chancellor. The smaller the output gap, the larger the structural element of the deficit and the harder the task facing Osborne. “It’s the old joke about the past being more difficult to predict than the future,” the OBR chief said. His warning comes ahead of the Bank of England’s interest rate announcement on Thursday. The monetary policy committee will also decide whether the worsening economic outlook requires a fresh round of quantitative, or monetary, easing. The business secretary, Vince Cable, has been pushing for a fresh round of easing, but the chancellor is not willing to be seen to be interfering with the independence of the bank, although he and the prime minister have preached the virtues of monetary activism. George Osborne Government borrowing Labour Economic growth (GDP) Economics Economic policy Conservative and Liberal Democrat cabinet Conservatives Liberal Democrats Liberal-Conservative coalition Office for Budget Responsibility Budget deficit Patrick Wintour guardian.co.uk

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Phone hacking: Piers Morgan has questions to answer, says Harman

Labour deputy leader Harriet Harman says former Daily Mirror editor Piers Morgan needs to answer the phone-hacking allegations by Heather Mills Labour deputy leader Harriet Harman said on Thursday that former Daily Mirror editor Piers Morgan “has got to answer” questions about phone hacking at the paper during the period he was editor. Harman told Sky News: “Morgan … said he heard a ‘heart-breaking’ phone message, which clearly gives rise to the assumption that he’d heard a tape-recorded message.” Morgan wrote in the Mail on Sunday five years ago that he had once been played a message left by Sir Paul McCartney on the mobile phone of his then-girlfriend Heather Mills, in which the former Beatle sounded “lonely, miserable and desperate”. Harman said: “It is not good enough for him to say – or for someone to say on his behalf – ‘I always complied with the law and the Press Complaints Commission code of conduct’. He’s got to answer now we’ve got these allegations from Heather Mills.” Mills claimed on Wednesday that a senior journalist at one of the Mirror Group titles told her in 2001 they had hacked into her mobile phone messages. She told the BBC the unidentified journalist read out parts of a message left by her then-boyfriend Sir Paul McCartney to her and, when challenged, admitted it had been obtained by listening to her phone messages. The reporter in question is not thought to have worked for the Daily Mirror, which was edited by Morgan from 1995 to 2004. Its parent company, Trinity Mirror, also owns two other national titles, the Sunday Mirror and the People. In a 2006 Mail on Sunday article, Morgan seems to be referring to a similar phone message to the one Mills claimed had been hacked by the senior Mirror Group journalist. Mills said the message read out to her had been left by McCartney while she was in India, following a row the couple had back in London. According to Mills, the journalist rang her and “started quoting verbatim the messages from my machine”. She said she challenged the journalist, saying: “You’ve obviously hacked my phone and if you do anything with this story … I’ll go to the police.” Mills said he responded: “OK, OK, yeah, we did hear it on your voice messages, I won’t run it.” Trinity Mirror said: “Trinity Mirror’s position is clear: all our journalists work within the criminal law and the PCC code of conduct.” Morgan issued a statement through CNN, for whom he records a chat show, Tonight with Piers Morgan, late on Wednesday reiterating he had no knowledge of phone hacking at the Mirror. He added: “Heather Mills has made unsubstantiated claims about a conversation she may or may not have had with a senior executive from a Trinity Mirror newspaper in 2001. The BBC has confirmed to me that this executive was not employed by the Daily Mirror. “I have no knowledge of any conversation any executive from other newspapers at Trinity Mirror may or may not have had with Heather Mills. “What I can say and have knowledge of is that Sir Paul McCartney asserted that Heather Mills illegally intercepted his telephones, and leaked confidential material to the media. This is well documented, and was stated in their divorce case.” Phone hacking Newspapers & magazines National newspapers Newspapers Piers Morgan Harriet Harman Paul McCartney Trinity Mirror James Robinson guardian.co.uk

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Premier League preview No8: Liverpool | Andy Hunter

Extravagant spending has raised expectations at Anfield that a return to Champions League football can be attained Guardian writers’ prediction 4th (This is not Andy Hunter’s prediction, but the average of our writers’ tips) Last season’s position 6th Odds to win the league 10-1 The voice of reason is often muted at Liverpool pre-season by improbable title predictions (except when the club stares into the financial abyss and asks Roy Hodgson to steady the ship) and this summer’s extravagant spending has fuelled a revival. Praise be then for John W Henry, the man who has so far sanctioned over £100m of investment in Kenny Dalglish’s squad since January yet did his manager another, cheaper favour this week by confirming common sense prevails at the top at Anfield. “It’s too early for us to talk about winning the league,” Liverpool’s principal owner said, while backing Manchester United as favourites to retain their title. ” Our main goal is to qualify for the Champions League . If we don’t, it would be a major disappointment.” A reasonable ambition from someone behind the biggest spending spree in Liverpool’s history – even taking into account the £50m banked for Fernando Torres and no doubt with a copy of Moneyball burning in the bin – but it will require sustained improvement and further additions to distinguish Dalglish’s team from a crowded market. Henry’s vision was portrayed as an ultimatum to Dalglish, as though he leapt from the stands during the 3-3 draw with Valerenga on Monday and slapped Liverpool’s manager about the face with a glove. Liverpool officials and management are acutely aware of the need to reclaim a place among the European elite after two seasons on the margins, and have bought realistically – if not in terms of transfer fees then certainly transfer targets – to get there. They also discovered the cost of the club’s recent regression along the way. Liverpool’s obvious need to strengthen led them to Phil Jones, Gaël Clichy and Ashley Young this summer, with interest developing further in the then Blackburn Rovers and Arsenal defenders than Aston Villa’s former spark. Each player provided a pertinent reminder of Liverpool’s position by choosing the champions, FA Cup winners and the Champions League football on offer at Old Trafford and Manchester City instead. Pre-season, in which experimental teams have conceded a total of 15 goals in five friendlies, has merely reinforced where Liverpool’s main weakness lies. Interest in the Newcastle United left-back José Enrique and a central defender, possibly Scott Dann of Birmingham City, is expected to develop before the season opens. Handicapped in direct competition with certain rivals, Liverpool demolished the field to ensure they landed Jordan Henderson for £16m from Sunderland (who insist the fee can rise to £20m) and Stewart Downing for £20m from Aston Villa. The imagination on both deals has been fired more by the sums involved than the player concerned – though one or two former Liverpool managers would argue it is about time the club paid the going-rate – but the two midfielders, plus Charlie Adam for an initial £7m rising to £8.5m, unquestionably improve the balance of the squad, the supply to Andy Carroll and the options available to Dalglish. They are also unlikely to complain about finding it hard to settle on Merseyside. Adam is arguably Liverpool’s most intriguing capture of the summer given the contrast in his influence at Rangers and Blackpool where, unlike at Ibrox, it was maximised by the team and in particular the underrated David Vaughan. He may not prove to be a Xabi Alonso in tartan but he offers a passing range Liverpool have lacked since the Spain international was sold to Real Madrid, plus invaluable accuracy from set pieces. Providing he takes them. Shoulders shrugged when Downing signed yet Liverpool have required a consistent, natural wide player for several years. Along with Adam, he ensures there can be few excuses for Carroll not developing into the centre-forward Dalglish believes he can be but who, due to injury and with the exception of a rampaging display against Manchester City last season, Anfield has yet to see. The summer recruits so far suggest a concentration on Carroll’s strengths when, of course, it is the outstanding Luis Suárez who holds the key to where Liverpool finish this season. Four goals since his £22.8m arrival from Ajax in January does not begin to describe the impact of a striker who reminded Liverpool that, despite the revulsion over Torres wanting to leave, the club goes on and can go upwards. His performances during Uruguay’s triumphant Copa América campaign last month, when Suárez was named player of the tournament, underlined that he possesses a ruthless winning mentality to match his talent. Again, another recent deficiency in Liverpool’s armour has been addressed. Expensive deadwood has still to be cleared and Liverpool’s Champions League prospects are not only shaped by the revival Dalglish oversaw in the second half of last season, the emergence of young talent such as John Flanagan and the largesse of Fenway Sports Group, but what may or may not happen at the Emirates, White Hart Lane and Stamford Bridge this month. Dalglish was irked at Danny Murphy’s suggestion last season that he had inherited a team playing without pressure and that the situation would be radically different this term. The Liverpool manager may not have appreciated the slight or where it was coming from, but Murphy was right. Liverpool Premier League 2011-12 Premier League Andy Hunter guardian.co.uk

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Lloyds insists branch sales on track after posting £3.3bn loss

Bank’s £3.2bn provision for compensating customers missold payment protection insurance hit bottom line Lloyds Banking Group insisted on Thursday it had “credible” bidders for the 632 branches it has up for sale as it confirmed that a £3.2bn provision for compensating customers who were missold payment protection insurance drove the bank into the red the first half. As the loss of £3.3bn was announced, chief executive Antonio Horta-Osorio, who took the helm on 1 March, said Lloyds remained in talks with the independent commission on banking (ICB) to try to avoid being forced to sell even more branches when the final report by the commission is published on 12 September. “We have had a good and engaging process with [the ICB],” said Horta-Osorio, whose bank is 41% owned by the taxpayer. “It is a useful and productive dialogue.” The costs associated with the branch sale, which has been demanded by the EU in return for £20bn of state aid, were £47m in the first half. The sale comprises about 4.6% of the UK current account market although the ICB, chaired by Sir John Vickers, has indicated even more branches could be sold to bolster competition on the high street. Lloyds is the dominating force since its rescue takeover of HBOS during the 2008 banking crisis. Horta-Osorio, who has code-named the disposal programme Verde, insisted the 632 branch sales would be enough to bolster competition as the operation is same size of the Halifax business it bought during the crisis. “The Verde business will have strong brands, a branch network of a similar size to that of the Halifax and a full product range including savings, loans, credit cards and mortgages as well as current accounts. We believe that Verde will be a strong competitor in UK retail banking,” he said. He hopes to find a buyer by the end of the year but has not ruled out flotation if a buyer cannot be found. He said bidders could ask for the number of mortgages that are being included in the sale to change to make it easier to complete a sale. The City has been concerned that National Australia Bank, regarded as the most credible bidder, does not appear to have submitted an indicative offer and neither has Virgin Money. In the red, as expected Horta-Osorio announced 15,000 job cuts in June when he used a strategy day to pledge an extra £1.5bn of annual savings in 2014, on top of £2bn of savings achieved through integration. The bank will have to spend £2.3bn to achieve the cost cuts, which include pulling out of half of the 30 countries where Lloyds has operations by 2014. The loss of £3.3bn was expected by the City because of the previously announced £3.2bn provision for PPI . With that stripped out, and using the “combined business basis” of accounting, the bank has been using since the HBOS deal, the profits were £1.1bn, down on the £1.6bn of profit announced a year ago when the bank had heralded a return to the black. It is prohibited from paying dividends by the EU until next year. The shares were up 1.5% in early trading at 40p but quickly reversed early gains to slump 7% and become one the largest fallers in the FTSE 100 by 9am. The figures showed a 17% fall in the impairment charge to £5.4bn even though there was a deterioration in its loans in Ireland. The impairment charge was higher than analysts had been expecting and the bank warned there was “material downside risks” to the size of the charge. “These include, in the UK, fragile consumer and business confidence, potential interest rate and inflation rises and reduced consumer spending. A ‘double-dip’ scenario – a second, shallower recession following closely the one from which the economy is just emerging – also remains a downside risk,” the bank said. Some 64.1% of the Irish portfolio is now impaired, meaning the borrower has missed at least one repayment, after a further 11% of the £27.6bn loan book became impaired. The impairment charge for Ireland pushed the international business to report a £2.1bn loss. Horta-Osorio admitted he was continuing to “closely monitor and control our exposures” to certain European countries. The direct exposure to national and local governments of Spain, Italy, Portugal, Ireland, Greece and Belgium was £189m. However, he stressed that the tensions in the money markets should not affect the bank’s own funding needs as it weens itself off the government support that has kept it afloat since the crisis. In the first half, £75bn of government funding was replaced, leaving only £37bn of government support left to refinance. Lloyds Banking Group Banking European debt crisis European banks Global economy Economics Payment protection insurance Insurance Jill Treanor guardian.co.uk

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Human rights groups to boycott inquiry into British torture and rendition

Liberty says Gibson torture inquiry will be ‘waste of time and money’ because it lacks credibility and transparency Lawyers and human rights groups are to boycott the inquiry into the UK’s alleged role in torture and rendition since the 9/11 terror attacks because they say it lacks credibility and transparency and arrangements for it are “secretive, unfair and deeply flawed”. Key sessions will be held in secret and the cabinet secretary will have the final say over what information is made public. Those who alleged they were subject to torture and rendition will not be able to question MI5 or MI6 officers, nor will foreign intelligence agencies be questioned. The decision not to participate, reported by the Guardian last month , was confirmed in a joint letter to the solicitor for the inquiry , which will be run by the retired judge Sir Peter Gibson. Ten groups including Liberty , Reprieve and Amnesty International said they did not intend to submit any evidence or attend any further meetings with the inquiry team. They said the inquiry’s protocol and terms of reference showed it would not have the “credibility or transparency” to ensure “the truth about allegations that UK authorities were involved in the mistreatment of detainees held abroad” was brought to light. The human rights groups said the inquiry would not comply with the government’s international obligations to investigate torture. Lawyers representing former detainees have also complained about the nature of the inquiry, which was initially welcomed when it was announced by David Cameron last year. Former detainees and their lawyers will not be able to question intelligence officials and all evidence from current or former members of the security and intelligence agencies, below the level of head, will be heard in private. The inquiry will not start until the end of a current police investigation. The human rights groups say in their letter: “We are particularly disappointed that the issue of what material may be disclosed to the public will not be determined independently of government and, further, that there will be no meaningful participation of the former and current detainees and other interested third parties. “As you know, we were keen to assist the inquiry in the vital work of establishing the truth about allegations that UK authorities were involved in the mistreatment of detainees held abroad. Our strong view, however, is that the process currently proposed does not have the credibility or transparency to achieve this.” A second letter, written jointly by Imran Khan and other lawyers representing former Guantánamo Bay detainees, said: “We consider it impossible to advise those whom we represent that the structure and protocols now confirmed for the Gibson inquiry can achieve what are essential ingredients for a public inquiry into grave state crimes,” Detainees would not even know “if the individuals being questioned are the right ones”. The lack of input for detainees, “simply serves to demonstrate that there is no comprehension on the part of the government of the gravity of the crimes which representatives of the state may have committed”, they said. “We had hoped as lawyers to assist in a transparent exercise of vital importance. It is a matter of profound regret that our assessment is that the inquiry does not provide the means by which this can be realised. “In the absence of there being any alteration to the protocols, our advice is compelled to be that it is inappropriate for our clients to submit evidence.” Several high-profile human rights lawyers signed the letter, including Louise Christian, Irene Nembhard, Gareth Peirce, Tayab Ali and Imran Khan. Amnesty’s UK policy advisor, Tara Lyle, said: “This is a desperately needed inquiry into extremely serious allegations but the arrangements for it are secretive, unfair and deeply flawed. We need an inquiry that is as open and effective as possible, not this semi-secret process that lacks scope and ambition. “Those that suffered terrible abuse are set to be let down by this inquiry, while the general public is likely to be denied the opportunity to learn what went wrong during this dark chapter in our history.” Shami Chakrabarti, director of Liberty, said: “If this inquiry proceeds without the participation of the victims it will be nothing more than a waste of time and public money. Until a credible, independent process is established this shameful chapter of the war on terror continues.” Sir Malcolm Rifkind, the former foreign secretary who chairs the intelligence and security committee appointed by the prime minister, denied the inquiry was secretive and said the campaigners were being unrealistic. He told BBC Radio 4′s Today programme: “I cannot recollect an inquiry that’s been proposed to be so open as we’re having in this particular case. When was the last time the head of MI5 and the head of MI6 – the prime minister has made quite clear – can be summoned to this inquiry and be required to give evidence?” There had to be “some element of trust” when the authorities were dealing with top secret information, he said. A statement from the inquiry said the decision by solicitors and human rights groups was regrettable and said it was hoped they would reconsider. “The inquiry will go ahead,” the statement said. “It will examine the relevant documentation held by government. It will hear the key government witnesses. The inquiry offers the detainees and anyone else with evidence relevant to its terms of reference the only opportunity for them to give evidence to an independent inquiry. “The detainees and the NGOs have alleged the involvement or awareness of the UK government and its security and intelligence services in relation to the mistreatment and rendition of detainees held by other countries. The inquiry would welcome such evidence.” Torture Human rights Global terrorism Terrorism policy UK security and terrorism CIA rendition Guantánamo Bay Amnesty International James Meikle guardian.co.uk

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The hunt for the former Yugoslavia’s war criminals: mission accomplished

Until last month, Goran Hadžíc, once leader of Croatia’s Serb minority, was the last free man on the list of 161 people indicted for war crimes in the former Yugoslavia. His capture has brought an end to one of the

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Facebook and Twitter fuel iPhone and BlackBerry addiction, says Ofcom

Regulator says half of British teenagers and 25% of adults now have smartphones as sales outstrip regular mobiles Britons’ appetite for Facebook and social networks on the go is driving a huge demand for smartphones – with 60% of teenagers describing themselves as “highly addicted” to their device – according to new research by the media regulator, Ofcom. Almost half of teenagers and more than a quarter of adults now own a smartphone, with most using their iPhone or BlackBerry to browse Facebook and email. The study, published on Thursday, also shows that smartphones have begun to intrude on our most private moments, with 47% of teenagers admitting to using their device in the toilet. Only 22% of adults confessed to the same habit. Unsurprisingly, mobile-addicted teens are more likely than adults to be distracted by their phones over dinner and in the cinema – and more would answer their phone if it woke them up. Separate figures shared exclusively with the Guardian show that, for the first time, smartphone sales outstripped sales of regular mobiles in the first half of this year as the enormous demand continues to rise. Just over half of the total 13.6m mobile sales from January to June 2011 were smartphones, according to research by GfK Retail and Technology UK. Of the new generation of smartphone users, 60% of teenagers classed themselves as “highly addicted” to their device, compared to 37% of adults. Ofcom surveyed 2,073 adults and 521 children and teenagers in March this year. The regulator defines teenagers as aged between 12 and 15, with adults 16-years-old and above. “Ofcom’s report shows the influence that communications technology now has on our daily lives, and on the way we behave and communicate with each other,” said James Thickett, Ofcom’s director of research. “Our research into the use of smartphones, in particular, reveals how quickly people become reliant on new technology – to the point of feeling addicted. As more and more people acquire smartphones, they are becoming an essential tool in peoples’ social lives whether they are out with friends socialising or using Facebook on the move.” Facebook remains far and away the most popular website for mobile users, with users spending almost four times the amount of time socialising online than using Google or any other website. Unsurprisingly, multi-tasking teenagers said they were less likely to read books if they owned a smartphone. But they also said that owning a smartphone made them more likely to ditch games consoles like the PS3 and the computer, in favour of their pocket-sized handset. The huge boost in smartphone sales has led to a 67% increase in mobile data use as phone users watched videos and sent emails on the go. Mobile operators, such as O2 and Vodafone, have been put under huge strain by the new load. But Thickett said the carriers are coping with the enormous demand. “The research is saying that people are keeping their phones on longer and becoming addicted to them. This isn’t a problem now but something we need to be aware of. Operators have responded by upgrading their networks so it is being coped with,” Thickett said. Despite being a nation of mobile addicts, Ofcom found that truisms still apply when it comes to traditional media like TV and radio. Other findings show: • Britons are spending more time in front of the TV (four hours a day last year, compared to 3.8 hours in 2009). This is partly due to the rise of on-demand viewing, most notably Sky+, and an increase in the number of homes with high-definition TVs. Two newcomers to the HD market, Freeview HD and Freesat HD, have established themselves as more-affordable competitors to Virgin Media and Sky. • The new generation of broadband, delivered by fibre-optic cables, is now available for 57% of UK households – though just 500,000 have adopted it. Four in five of those with superfast broadband said they were satisfied with the service, compared to 57% satisfaction with their previous broadband. • Aside from offline gaming, Brits who own games consoles are most likely to use it for watching video content (22%), online gaming (22%), and watching DVDs (19%). Just over one in 10 said they browse the web via their games console, while 9% use it to watch BBC iPlayer. • Britons sent an average of five text messages a day last year, contributing to a total of 129bn texts sent – up by 24% in 2009. • Nearly 10m TV sets were sold in 2010, almost all of which were HD ready. The rise of internet-enabled TVs continued, with 1m sales last year, and 3D living room viewing remained a marginal activity, with 125,000 sales of 3D TVs. However, Ofcom warned that older Britons risked being left behind in the “digital revolution”. While 90% of adults aged 35-44 have the internet at home, this falls to just a quarter of over 75s. The survey showed that 51% of over 75s own a mobile phone, compared to 99% of 25-34-year-olds. Ofcom said that, for the first time, more than half of 65- to 74-year-olds have access to the internet at home, while just over three quarters own a mobile phone. More findings: mobile phones • 47% of British teenagers and 27% of adults own a smartphone • Sixty per cent of adults and 37% percent of smartphone owners describe themselves as “highly addicted” to their device • Nearly half (47%) of teenage smartphone owners admit using their device in the toilet, compared to 22% of adults. TV • Brits watched an average of four hours of TV a day last year, up from 3.8 hours in 2009. • Almost all (93%) of homes had multi-channel TV, with 4% sticking to analogue terrestrial TV. • Nearly 10m TVs were sold in 2010, almost all of which were HD ready. There were 1m internet-enabled TV sales during 2010, and 125,000 sales of 3D TVs. Radio • 91.6% of Brits listened to the radio in the first quarter of 2011 – up from 90.6% in 2010. • Just over a quarter (26.5%) of radio listening is digital, while analogue accounts for 65% of all listening. • One in five households (18%) households use the internet to listen to the radio. Internet • Around 57% of UK households had access to superfast broadband by the end of June 2011. • Nearly half (48%) of UK adults said they used social networking sites in first three months of 2011 – up from 40% in 2010. • On average, internet users spent around 50 hours at their computer in April 2011, equivalent to 1 hours and 40 minutes a day. Smartphones BlackBerry Mobile phones Facebook Internet Social networking Twitter Ofcom Television industry Social media Digital media Internet, phones & broadband Social trends Television iPhone Apple Telecoms Email Computing Consumer affairs Josh Halliday guardian.co.uk

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Bomb hoax teenager ‘in good spirits’ after ordeal in Sydney

Madeleine Pulver freed unhurt after 10 hours strapped to fake bomb in case prime minister said was ‘like a Hollywood script’ The parents of an Australian teenager who was trapped for about 10 hours with what turned out to be a fake bomb strapped round her neck said she was “a little tired, a little sore” after her ordeal in the wealthy Sydney suburb of Mosman. Madeleine Pulver, 18, was freed unhurt from the device late on Wednesday by bomb squad specialists. Police later said there had been no explosive, but confirmed that there was a note making demands. Det Supt Luke Moore, of New South Wales police would not reveal the note’s contents, but said: “We are treating this as an attempted extortion, a very serious attempted extortion.” As police launched a manhunt for a masked man said to have broken in to the family home, Madeleine’s father Bill Pulver, a wealthy business executive, fought back tears as he talked about his daughter’s horrifying ordeal. “We as parents are extraordinarily proud of Maddy,” he said, his wife Belinda at his side. “I think she has woken up this morning in pretty good spirits. She’s a little tired, a little sore, from holding this damned device in place for about 10 hours.” Pulver said his daughter was “incredibly grateful” to officers who spent hours with her “showing little regard for their own personal safety”. The drama began on Wednesday afternoon when the family contacted police saying Madeleine had been attacked and a strange device attached to her. Nearby homes were evacuated and streets cleared. The teenager told police a man wearing a mask broke into her home and confronted her while she was in the kitchen. The man forced her to stay still while he fitted the device to her neck, before fleeing the house. Moore said they had not identified a prime suspect and were trying to establish how the man got into the house. “We are treating this as an individual incident,” Moore said. “We have absolutely no information to suggest this is linked to any other crime.” New South Wales police’s assistant commissioner, Mark Murdoch, said the device was sophisticated and was designed to look like a bomb as part of a “very, very elaborate hoax”. Australia’s prime minister, Julia Gillard, said she was shocked when she heard about the case. “When I looked at it this morning, the first thing I said was, ‘It’s like a Hollywood script – the kind of thing you would see at the cinema or on TV’,” she told Fairfax Radio. Australia James Meikle guardian.co.uk

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Apple using ‘bogus’ patents to make Android more expensive, says Google

Google lawyer accuses rival companies including Apple, Oracle and Microsoft of running an anti-competitive strategy to stifle innovation and push up prices Google has accused Apple, Microsoft, Oracle and “other companies” of trying to make Android smartphones more expensive to consumers by running a “hostile, organised campaign” against it by using “bogus patents” acquired from the bankrupt Canadian company Nortel and their existing patent holdings. Its chief legal officer, David Drummond, alleges that the companies are effectively imposing a “tax” to push up the price of Android devices. “Microsoft and Apple have always been at each other’s throats, so when they get into bed together you have to start wondering what’s going on,” Drummond wrote in a blog post . But Microsoft has hit back, with its general counsel Brad Smith claiming on Twitter that Microsoft invited Google to bid jointly for the Nortel patents – and was turned down. Representatives from Apple and Oracle declined to comment. Drummond alleges that the rival companies are using an “anti-competitive strategy [which] is also escalating the cost of patents way beyond what they’re actually worth” and using them to stifle innovation. Drummond writes that “in this instance we thought it was important to speak out and make it clear that we’re determined to preserve Android as a competitive choice for consumers, by stopping those who are trying to strangle it”. He asserts that: “Microsoft and Apple’s winning $4.5bn (£2.7bn) for Nortel’s patent portfolio was nearly five times larger than the pre-auction estimate of $1bn. Fortunately, the law frowns on the accumulation of dubious patents for anti-competitive means – which means these deals are likely to draw regulatory scrutiny, and this patent bubble will pop.” A consortium including Microsoft, Apple and RIM won the bid for the Nortel patents , which cover a number of communications technologies, against a consortium of Google and Intel. Google had made a preliminary bid of $900m before the auction, but was eventually outbid despite having large reserves of cash. Drummond says: “A smartphone might involve as many as 250,000 (largely questionable) patent claims, and our competitors want to impose a ‘tax’ for these dubious patents that makes Android devices more expensive for consumers. They want to make it harder for manufacturers to sell Android devices. Instead of competing by building new features or devices, they are fighting through litigation.” Microsoft has sued HTC, Motorola, Samsung and Barnes & Noble, claiming that their use of Android infringes patents that it holds, while Apple has filed a number of similar suits asserting patent claims against other companies. HTC has admitted that it is paying Microsoft a set amount for each Android device it sells. The amount has not been disclosed but it believed to be between $5 and $15. Apple recently won a ruling in the US that HTC infringes patents covering the iPhone. And Oracle is currently suing Google in a multi-billion-dollar lawsuit alleging that Android infringes copyright relating to its Java programming language, acquired through the purchase of Sun Microsystems. Google launched its Android mobile operating system at the end of 2007, with the first phones appearing about a year later. It makes it available for free to handset makers, unlike companies like Microsoft which charges around $15 per handset using its Windows Phone software. Android phones have exploded in popularity, making more than a third of all smartphones sold around the world. The platform has displaced the former leader Nokia, which is abandoning its Symbian operating system in favour of Windows Phone. Apple and RIM have their own mobile operating systems which they do not license. Google has been hampered by a lack of intellectual property in wireless telephony, which has exposed it to patent-infringement lawsuits from rivals such as Oracle. Drummond says Google is looking to strengthen its patent portfolio; it recently bought more than 1,000 patents from IBM. It is also in talks to buy InterDigital, a key holder of wireless patents valued at more than $3bn, according to the Wall Street Journal. The most valuable patent that it uses covers its “PageRank” search algorithm used for organising its search results: it has an exclusive license on that from Stanford University, where Sergey Brin and Larry Page developed it. Though the PageRank patent is now available for licensing, Google has the rights to determine who can license it. Patent acquisitions are expected to accelerate, with IBM and Kodak often mentioned as shopping intellectual property on the market. Google Apple Computing Oracle Software Microsoft Smartphones Mobile phones Android Telecommunications industry Charles Arthur guardian.co.uk

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Japan drives down yen as crisis grips world financial markets

Bank of Japan sells more than one trillion yen to stem currency’s value Japan has followed in Switzerland’s footsteps and intervened to stem the strength of its currency, which has been boosted by investors seeking safe-haven investments. The Bank of Japan had spent more than one trillion yen (£7.7bn) before the close of trading in Tokyo on Thursday, according to local reports, in an effort to drive down the value of the yen. It sold yen heavily on the foreign exchanges, and also eased monetary policy by expanding its asset purchasing scheme and offering more cheap loans to financial firms to encourage them to keep lending. The latest move in the crisis that is gripping the financial markets came as shares in London and Europe were expected to rebound, following Wednesday’s widespread heavy losses . Financial spreadbetters expect the FTSE 100 index in London to open some 30 points higher, while Germany’s Dax is seen opening 70 points higher and France’s CAC up 40 points. The intervention came after days of official warnings that the yen had risen so much that it threatened to derail Japan’s recovery from the devastating tsunami and earthquake in March. On Wednesday, Swiss authorities moved to stem what the national bank called the “massive overvaluation” of the Swiss franc. The Swiss National Bank announced a surprise interest rate cut to ease buying pressure on its currency. Japan’s intervention pushed the yen beyond a two-week low of 79 yen, from 77.10 yen. Finance minister Yoshihiko Noda said Japan had consulted its international partners but acted on its own. “Japan is just in the process of recovering from a natural disaster so these currency moves are certain to have a negative impact on the economy and financial markets,” he said. Global economy Japan Economics Julia Kollewe guardian.co.uk

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