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Debt crisis: Stock markets take fright over health of global economy

Heavy selling in London and Europe as trading begins, while investors head for ‘safe haven’ assets Stock markets took fright on Wednesday as fears grew over the health of the global economy and the ongoing European debt crisis . There was heavy selling in London when trading began, sending the blue-chip FTSE 100 index falling by 91 points, or 1.6%, to 5626. There were also heavy losses across Europe, The French CAC and German DAX indices were down 1.6% and 1.1% respectively. The European markets took their cue from Tuesday’s 2.2% fall in the US Dow Jones index. Overnight, the Japanese Nikkei fell 2.1%, its biggest daily loss since the rout that followed Japan’s March earthquake. Investors again headed for “safe haven” assets, with the price of gold hitting a new record high of $1,664.9 an ounce on Wednesday morning. The Swiss Franc also rallied to fresh highs, prompting the Swiss central bank to announce it will “take measures” to drive the currency down. In France, shares in Société Générale were briefly suspended following a profits warning, after the bank slashed the value of its Greek debt. Traders warned that any optimism following the resolution of the US debt ceiling crisis had now vanished, in the face of a stream of disappointing economic news. “Equity markets are thundering lower,” said Cameron Peacock, market analyst at IG Markets. “With the US economy still incredibly fragile, the [US debt] compromise that was reached seems unlikely to provide much new stimulus and arguably if the US flounders then other nations will struggle too. Arguably now that the US hasn’t defaulted the attention can swing back to the finer points, but each piece of data that falls short is likely to hit markets again.” Italian and Spanish government debt remained under pressure. The yields, or interest rates, demanded by traders to hold their 10-year bonds remained near the euro-ero highs reachedon tuesday . In contrast, the yield on Britain’s 10-year bonds remained near the record lows reached on Tuesday, as Britain became a safe haven. China also piled pressure on America, with the Chinese central bank governor urging the US to take “responsible” measures to deal with its debt issues. Economic woes On Monday stock markets had rallied after the announcement of a deal to resolve the US debt crisis, but fears that the global economic recovery is faltering now appear to be uppermost in investors’ minds. US consumer spending fell in June for the first time in nearly two years, and incomes barely rose, data released on Tuesday said. Manufacturing data released on Monday showed renewed weakness around the world. The bad news came even as the major credit ratings agencies re-affirmed the United States’ triple-A credit rating. Moody’s and Fitch both maintained the top rating for the US government, while warning that the situation was still under review. Moody’s has assigned a negative outlook to its AAA rating, suggesting a downgrade is possible in the next year to 18 months. Fitch is to carry out a more detailed review of the US position by the end of the month. Standard & Poor’s, which has been tougher on the US than the other two agencies, has yet to decide whether to downgrade. Global economy Economics European debt crisis Alex Hawkes guardian.co.uk

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Egypt, Syria, Libya and Middle East unrest – live updates

The toppled Egyptian president, Hosni Mubarak, is due to go on trial to face charges of corruption and unlawful killing 9.07am: The judge begins by calling out the names of the accused. They reply in turn “I am present, your honour.” 9.03am: Hosni Mubarak’s two sons, Gamal and Alaa, have arrived in the metal cage in the Egyptian courtroom as has the former dictator, lying on a stretcher. He appeared to be picking his nose. The judge is opening the proceedings. 8.59am: I just spoke to the Guardian’s Jack Shenker , who is in downtown Cairo. Jack covered the Egyptian revolution and was initially granted permission to be one of the few foreign journalists inside the courtroom before being access by the security services. He said the headlines in Egyptian papers this morning included “Judgement day” and “The awaited day”. There’s been a real sense as to whether he would actually turn up in his white prison overalls in this specially constructed metal cage which all Egyptian criminal defendants are supposed to stand in when they’re in court. And the sight of this once mighty dictator so publicly humiliated and so brought down to earth is one which a huge amount of Egyptians are relishing. Usually in important criminal cases there’s an adjournment early on once the trial starts. The first day is given over to procedural matters, technical arguments by both the derence and prosecution. The lawyers usually ask for an adjournment to review the evidence and the judge will often adjourn the case for a month. Now, this judge has promised that this won’t happen…Obviously any dealys will be very politically sensitive. Protesters have already complained that the ruling army general have been delaying this trial for too long, putting off holding Mubarak to account so there’s a lot of pressure to get this trial underway. _ 8.29am: A picture has been posted online that is said to be the first of the former Egyptian president, Hosni Mubarak, outside the ambulance, arriving for his trial. 8.25am: There is a large screen outside the courtroom where supporters and opponents of the former Egyptian president are currently throwing stones at each other. The two appear to be separated by barriers. Early in the morning, some 50 of Mubarak’s supporters chanting slogans and holding portraits of the former leader gathered outside the venue, AP reports. “We will demolish and burn the prison if they convict Mubarak,” they screamed at hundreds of police and army troops backed by armored personnel carriers. 8.19am: Welcome to Middle East Live. It is an historic day in Egypt where Hosni Mubarak, who ruled Egypt with an iron fist for 30 years, goes on trial to face charges of corruption and unlawful killing. He was brought down by a revolution that started just over six months ago and today will appear in the dock behind the bars of a specially constructed metal cage. An ambulance believed to be carrying Mubarak has arrived outside the court, where crowds are gathering to witness this momentous event. We will be bringing you updates on the trial as well as news from the rest of the Middle East. Middle East Arab and Middle East unrest Egypt Hosni Mubarak Syria Bashar Al-Assad Libya Muammar Gaddafi Yemen Haroon Siddique guardian.co.uk

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Tom Watson: ‘Phone hacking is only the start. There’s a lot more to come out’

The Labour MP has won the admiration of fellow politicians for doggedly investigating the phone-hacking scandal. What has the experience taught him, how has it changed his life – and what revelations are still to come? A month ago, Tom Watson received word that the Guardian was about to expose the hacking of Milly Dowler’s phone by the News of the World. With 72 hours to go, he cleared his diary; a few days later, he was averaging three hours sleep a night, as he and his staff picked through leaked documents, newspaper archives, personal testimony from phone-hacking victims, and more. As the MP who had been obsessively trying to cut through the murk surrounding News International for two years, he well knew that the most dramatic chapter in the two-year phone-hacking saga had arrived – and the imperative now was to work harder than ever. So how have the last few weeks been? “Sleep-deprived, totally crazy,” he says, sitting in his parliamentary office during what seems to be a rare moment of calm. “But also, there’s been a great sense of relief. I think I said something to David Cameron about a month before: that there were powerful forces trying to cover this story up. At some points over the last two years, I thought it might blow. But I’ve also thought that the lid could be welded back on. But when Nick Davies broke the Milly Dowler story, that was the point where I knew they’d never get the lid back on.” And has he been surprised by what’s happened since? “Yeah. I guess two years ago, I felt that all this would probably cost Rebekah Brooks her job. I thought the scale of wrongdoing was so great that somebody on the UK side of the company would have to take responsibility. And I was absolutely convinced that there was a cover-up. But I didn’t know that it would all travel abroad. I didn’t know it would get to America and Australia, and everywhere that it has.” The closure of the News of the World, he says, came as “a genuine shock” to him, but he says that the same applied to News International: “There was a huge consumer boycott, there was going to be no advertising . . . I don’t think they had a choice.” Raised in Kidderminster in a family split between communists and passionate Labour supporters, Watson has been the MP for West Bromwich East since 2001. In the eyes of his parliamentary colleagues, he has undoubtedly been one of the heroes of the phone-hacking story – so much so, that when he speaks on the subject in the House of Commons, he is now greeted with a reverential hush. But three or four years ago, his reputation was very different: he was routinely described as a “bruiser”, and known as one of a small circle of insiders that linked Gordon Brown’s coterie to some of the most powerful elements in the trade unions. In 2006, he was a junior defence minister, but resigned as part of the so-called “curry-house plot”: the attempt at toppling Tony Blair that placed fatal cracks in his premiership, and led to his departure the following year. Six months after Gordon Brown’s arrival in Downing Street, Watson became a minister in the cabinet office with a focus on “digital engagement”, though this phase of his progress did not last long. In 2009, he was falsely accused of involvement in the infamous plan to set up an unseemly website for anti-Tory political gossip known as “Red Rag”, and returned from a trip to Cornwall to find his next-door neighbour upset after the latter’s bins had been rooted through. This, he says, was time of “constant anxiety” and “sleepless nights”: he considered standing down as an MP, but settled for returning to the backbenches. In response to the Red Rag accusations, he took legal action against the Sun and the Mail on Sunday. In short order, the Mail on Sunday apologised for the Red Rag story and paid him damages (the Sun soon followed suit), Watson joined the culture, media and sport select committee, and the Guardian broke the first stories about phone hacking at the News of the World running wider than a “rogue reporter”, and big pay-offs to victims – all of which fed into a watershed select committee hearing on 21 July 2009. That day, Watson and his colleagues interviewed four key people: Stuart Kuttner, who had just resigned as managing editor of the News of the World (and who yesterday became the latest NI figure to be arrested as part of Operation Weeting), former editor Andy Coulson (by then Cameron’s head of communications), the then News of the World editor Colin Myler, and the company’s legal head Tom Crone (who left the company three weeks ago). The latter had tried to have Watson excluded from the hearing on account of his legal action against the Sun, which gave the proceedings an additional charge. Watson’s key questions focused on the £700,000 payment NI had made to Gordon Taylor, chief executive of footballers’ union the PFA, though by his own admission, he wasn’t quite sure what he was doing. “When Myler and Crone first turned up, my knowledge was novice-level,” he says. “I knew about three facts. But what I knew was that in any great scandal, you’ve got to follow the money. They were hick, amateur questions: I think I opened with: ‘When did you tell Rupert Murdoch [about the payment]?’ I thought that you might as well start at the top. “They said: ‘Oh no – we didn’t tell Rupert Murdoch.’ Then it was, ‘Well, who did you tell? Who authorised it?’ Myler got frustrated me with me, because I came back to this four or five times. He ranted. And don’t forget: Crone had already tried to get me off the committee. So at that point, I thought: ‘You’re rude, you’ve tried to remove me from this committee, you’ve put me under extreme pressure for a number of years – there’s more to this, and I’m getting to the bottom of it.’ “When Myler was so over the top . . . it was like there was a big neon light behind his head, saying, ‘Dig here.’” So began two years of dogged work. In the build-up to last year’s general election, the select committee’s drive to investigate hacking temporarily faded – but Watson was already talking to hacking victims, dealing with “one killer insider at News International” who was secretly sending him material, and piecing together evidence already in the public domain. At one point, he and his staff went through five years of News of the World back-issues. (“You learn a lot about Kerry Katona,” he says.) He was also liaising with his fellow Labour MP – and phone-hacking victim – Chris Bryant, and a small handful of journalists. There is one fascinating subtext to the whole story: Watson’s claim that Brooks has long been driven to damage him, which he says dates back to his move against Blair. “I had one particular chilling conversation in 2006,” he says, “when I was told that she would never forgive me for doing what I did to ‘her Tony’. When I was made an assistant whip under Brown, the Sun did a story saying it was an outrageous I’d been awarded a job. Whenever I moved, there was a dig. It’s painful and it’s not easy, but that’s the job, and the culture we operated in. It’s when it’s scaled up that those attack pieces take on a greater significance.” How was it scaled up? “Well, there was the Red Rag week, where they ran stories for six or seven days, accusing me of lying and worse, on the basis of a story that wasn’t true. And then things like . . . people coming back to me, reporting conversations. Bob Ainsworth [then Labour defence secretary] met Brooks for a lunch and said she spent 15 minutes slagging me off before they could talk about defence policy. Those things end up coming back to you.” Of late, there have been reports that she told Labour insiders she would pursue Watson “for the rest of his life” – a story he dates to the Labour party conference of 2006. When the Red Rag story broke, he claims Brooks texted Labour cabinet ministers, demanding that he was sacked. At one point, he says, a senior editor at the Sun made a point of sending him a message via another Labour MP: “Tell that fat bastard Watson we know about his little planning matter.” This, he says, was a reference to his application to put a conservatory on his family home in the Midlands: a typical “non-newsy, low-level thing” that played its part in making him “start to think like a conspiracy theorist”. From a credible source, he has just discovered that in 2009, all of this turned completely pantomimic. “There were always people outside my flat, and I felt pursued,” he says. “But then last Thursday, the home affairs correspondent of the BBC told me they had a story that they [the News of the World] hired private investigators to follow me around Labour party conference in 2009, when we were right in the middle of the first select committee enquiry. “I laughed at that, because they’d have basically followed me around drinking Guinness with a load of fat blokes. If you’re an ex-minister, it’s a bit of a holiday. It wouldn’t have been very productive. But in all seriousness, at that point the pressure was immense. There were little conversations with people: ‘We’ve had News International on the phone, how aggressive are you going to be on this committee? What are you going to ask?’” Who was asking that? “People who worked at No 10. People I’d worked with before. In conversations, these things were dropped in.” On 10 July, his old friends at the Mail on Sunday ran a story claiming that Tony Blair had urged Brown to get him to back off News International. How much truth does he think there is in that? “Er . . . They’ve both denied it. But if Rupert Murdoch were to phone Blair to ask him to get me to back off, it wouldn’t surprise me. They’re very close.” What does that mean? That he may well have done? “Well, he’s denied it. Two or three people in the party have told me that happened, but I can’t stand it up.” Two weeks ago, Watson played his part in the select committee’s questioning of James Murdoch, Rupert Murdoch and Brooks, which was followed by Myler and Crone’s claim that a crucial part of James Murdoch’s evidence had been “mistaken”. Watson pushed for him to be issued with an immediate summons to return and give evidence, but was outvoted: the committee has now written to James Murdoch seeking further explanation, and its chairman, the Tory MP John Whittingdale, says it’s “very likely” that he will eventually be recalled in person. Meanwhile, the story about the targeting of Sara Payne has broken (“I didn’t think it could get any lower, and it has,” he tells me), there are regular stories about the Metropolitan police (their reputation, says Watson, is “in tatters”) and new information about the deletion of thousands of News International emails. So how much more is there to come? “I think we’re probably only about halfway through the number of revelations. I’m pretty certain there will be quite detailed stuff on other uses of covert surveillance. I suspect that emails will be the next scandal. And devices that track people moving around. That’s just starting to come out.” Does he expect confirmation of the targeting of 9/11 victims? “I don’t know that. I want the prime minister to put pressure on as far as that’s concerned, because it’s internationally significant. What we know from the evidence we took in 2009 is that Glenn Mulcaire worked exclusively for the News of the World from 2001. He was on a £10,000-a-month contract. So if he was prepared to hack Milly Dowler’s phone . . . you know . . . it’s entirely conceivable that he would have been told to hack the phones of victims, and families of victims, of 9/11. What we need is certainty, so people can move on from there.” What other things will become public? “People who aren’t household names, but who are associated with people who have been the victims of high-profile crimes . . . I think there’s a lot more of them to come out. Ordinary people whose lives have been turned inside out.” Ten days ago, Watson said he had seen no evidence that implicated any newspaper group other than News International in phone hacking – since when, there has been news of prospective cases against Trinity Mirror , the publisher of titles including the Sunday Mirror – and the barrage of accusation and denial surrounding Piers Morgan. A copy of Morgan’s diaries, I notice, is sitting on the coffee table in front of us. “I’m doing my research now,” he says. “There are a lot of people on Twitter who are raising different points of fact with me. The good that I want to come from this is the industry recognising that it’s got to reform and change. Everyone’s got to play their role in that. And that probably requires other media groups, if there was wrongdoing, to get it out there and be honest about it.” Hanging over just about everything we talk about is a slightly awkward implied presence: the politician Watson used to be, a man happy enough to play his part in New Labour’s often moronic dances with the Murdoch press, and issue shrill messages either aimed at, or inspired by, the red-tops. Not for the first time, he says he’s “totally ashamed” about an occasion in 2001 when he called for Kate Adie to be sacked by the BBC after she was alleged to have revealed the details of a trip by Blair to Middle East: his quote was given at the behest of Downing Street and used for a characteristic BBC-bashing splash in the Sun. He acknowledges the Blair and Brown governments’ neurotic focus on “media management”, and their cynical fondness for dishing out “populist messages to the newspapers”. On the latter count, he again has form: in 2004, he ran Labour’s infamous by-election campaign in the Birmingham seat of Hodge Hill, among whose choicest messages was: “Labour is on your side – the Lib Dems are on the side of failed asylum seekers.” That sounds, I tell him, like the kind of rhetoric that Labour copied from the tabloids. “It’s not a great line,” he says. “I don’t think I’d write that again.” By way of underlining another kind of repentance, he reminds me that though he voted for the Iraq war in 2003, he recently abstained when it came to the UK intervention in Libya, “because I’d never again vote for a war on the promise of a prime minister.” So, he has changed. “I have changed. This has been a profoundly life-changing event for me, in many ways. It’s certainly changed my politics. When I was first elected, I was a completely naive and gauche politician. You look at the pillars of the state: politics, the media, police, lawyers – they’ve all got their formal role, and then nestling above that is that power elite who are networked in through soft, social links, that are actually running the show. Why didn’t I know that 10 years ago, and why didn’t I rail against it? Why did I become part of it? I was 34. I’m 44 now. I was naive. But I’ll never let that happen again.” Tom Watson Phone hacking News International News of the World Rupert Murdoch Rebekah Brooks John Harris James Murdoch guardian.co.uk

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Biggest series of cyber-attacks in history uncovered

Hackers infiltrated networks of 72 world organisations including the United Nations, security company McAfee discovers Security experts have discovered the biggest series of cyber attacks to date, involving the infiltration of the networks of 72 organisations including the United Nations, governments and companies around the world. The security company McAfee, which uncovered the intrusions, said it believed there was one “state actor” behind the attacks but declined to name it. One security expert who has been briefed on the hacking said the evidence pointed to China. The long list of victims in the five-year campaign includes the governments of the US, Taiwan, India, South Korea, Vietnam and Canada; the Association of South-east Asian Nations ; the International Olympic Committee (IOC); the World Anti-Doping Agency; and an array of companies from defence contractors to high-tech enterprises. In the case of the UN the hackers broke into the computer system of the secretariat in Geneva in 2008, hid there unnoticed for nearly two years and quietly combed through reams of secret data, according to McAfee. “Even we were surprised by the enormous diversity of the victim organisations and were taken aback by the audacity of the perpetrators,” McAfee’s vice-president of threat research, Dmitri Alperovitch, wrote in a 14-page report released on Wednesday. “What is happening to all this data … is still largely an open question. However, if even a fraction of it is used to build better competing products or beat a competitor at a key negotiation (due to having stolen the other team’s playbook), the loss represents a massive economic threat.” McAfee learned of the extent of the hacking campaign in March this year when its researchers discovered logs of the attacks while reviewing the contents of a “command and control” server that they had discovered in 2009 as part of an investigation into security breaches at defence companies. Alperovitch said McAfee had notified all the 72 victims of the attacks, which are under investigation by law enforcement agencies around the world. He declined to give more details, such as the names of the companies hacked. Jim Lewis, a cyber expert with the Centre for Strategic and International Studies, was briefed on the discovery by McAfee. He said it was very likely that China was behind the campaign because some of the targets had information that would be of particular interest to Beijing. The systems of the IOC and several national Olympic committees were breached in the run-up to the 2008 Beijing Games, for example. And China views Taiwan as a renegade province – political issues between them remain contentious even as economic ties have strengthened in recent years. “Everything points to China. It could be the Russians but there is more that points to China than Russia,” Lewis said. He added that the US and Britain were capable of pulling off this kind of campaign but “we wouldn’t spy on ourselves and the Brits wouldn’t spy on us”. Hacking Internet guardian.co.uk

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Hosni Mubarak on way to face trial, says Egyptian official

People assemble at trial venue in Cairo where ex-president faces charges of corruption and ordering the killing of protesters An Egyptian security official says former President Hosni Mubarak has left the hospital in a Red Sea resort and is on his way to trial in Cairo. The official says Mubarak has been taken from the hospital in Sharm el-Sheikh to the airport in the Red Sea resort, from where he is to be flown to the Egyptian capital for trial. The official spoke on condition of anonymity because he was not authorised to talk to the media. Outside the police academy in Cairo, where the trial is to take place, hundreds of police and army troops backed by armoured personnel carriers are keeping about 50 Mubarak supporters at bay. The ailing, 83-year-old former president has lived in Sharm since he was toppled in February and has been under arrest in a hospital there since April. Doctors say he suffers from heart problems. There had been scepticism up to the moment Mubarak left the hospital that he would actually appear for the opening of his trial in the capital. Hosni Mubarak Egypt Middle East Africa guardian.co.uk

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Cross-party committee attacks defence cuts

Defence select committee warns Britain’s influence will decline unless the armed forces get adequate resources Spending cuts will prevent the armed forces from carrying out military operations and lead to a decline in Britain’s influence and role in the world, a hard-hitting report by a cross-party group of MPs warns. Concluding that the armed services cannot do what ministers want them to without adequate resources, the report questions whether the government’s rhetoric and ambitions are realistic. In a stinging attack, MPs say that by deploying British forces to Libya while cutting the defence budget “we can only conclude that the government has postponed the sensible aspiration of bringing commitments and resources into line.” They point to a government promise to “confront the legacy of overstretch”, with British troops never again having to undertake such a breadth of operations simultaneously. “The government should indicate if this is the case,” say the MPs, making clear they are not convinced the government has learned lessons from campaigns in Iraq and Afghanistan. The report, by the Commons defence select committee, undermines repeated claims by ministers that cuts will have no effect on what the armed forces can do. “We are not convinced, given the financial climate and the drawdown of capabilities arising form the SDSR [strategic defence and security review] that from 2015 the armed forces will maintain the capability to undertake all that is being asked of them,” warns the report. Jim Murphy, the shadow defence secretary, said on Tuesday night: “As the report makes clear, and as Labour has repeatedly said, events have exposed the mismatch between policy ambition and the resources provided by ministers.” However, the defence secretary, Liam Fox, defended the government’s policy, saying cuts were not just a problem for the armed forces in the UK. He said: “As we have seen in the US, no country is immune to the global financial problems and even the world’s biggest military power is now grappling with how to make defence cuts and reform for the future.” In the report MPs refer to mounting concern that Britain’s armed forces will not be able to continue performing tasks they are undertaking now, let alone those they may face after 2015, and question the forces’ ability to carry out specified tasks – called “defence assumptions” – after 2020. According to last October’s defence review, British forces should then be able to conduct a series of simultaneous smaller operations or a single operation deploying about 30,000 troops – about two-thirds of the force used in the 2003 invasion of Iraq. To achieve even this the defence budget would have to rise in real terms – over and above the rate of inflation – after 2015. Fox recently announced a 1% real terms increase every year between 2015 and 2021 in the defence equipment budget. The report says: “We are concerned that this increase is simply a reallocation of resources and does not represent the real terms increase in funding required to deliver Future Force 2020.” The report also refers to personal backing for real-terms defence budget increases from both Fox and David Cameron, adding: “[Such support] is meaningless without a concrete commitment that these increases will be delivered … If the ambition of a real-term funding increase is not realised, we will have failed our armed forces.” The promised increases in the defence budget will coincide with the withdrawal of all British forces from a combat role in Afghanistan. “[We] anticipate that the UK public, whilst being passionate in their support for the armed forces, will question this decision,” says the report. Attacking Cameron’s claim at a recent meeting with senior backbenchers that Britain’s armed forces could fight on all fronts, it adds: “We dispute the prime minister’s assertion that the UK has a full spectrum defence capability.” The prime minister’s claim also contradicts evidence given to the committee by the heads of the navy, army, and air force. MPs conclude that a shrinking of Britain’s influence is inevitable. In response to the report, the chief of the defence staff, General Sir David Richards, said: “We will remain a formidable fighting force on the world stage.” The report voices considerable concern that this will not be the case. It states: “We note the declared aspiration of the [National Security Council] NSC that Britain’s national interest requires the rejection of any notion of the shrinkage of UK influence. We acknowledge that influence should not only be measured in military hardware or even military capability. “However, given the government’s declared priority of deficit reduction we conclude that a period of strategic shrinkage is inevitable. The government appears to believe that the UK can maintain its influence while reducing spending, not just in the area of defence but also at the Foreign Office. We do not agree. “There is a clear contradiction in the short to medium term between the NSC’s statement ‘that Britain’s national interest requires the rejection of any notion of the shrinkage of UK influence in the world’ and the government’s overriding strategic aim of reducing the UK’s budget deficit. “Strategies must have as their starting point a policy baseline that is a realistic understanding of the world and the UK’s role and status in it.” Defence policy Military Ministry of Defence Public finance Public sector cuts Richard Norton-Taylor guardian.co.uk

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NHS medical records project shows little benefit, say MPs

Department of Health has so far spent £6.4bn on the programme, including £2.7bn on patient records The Department of Health will not deliver the £11bn programme intended to create electronic records for all 55 million NHS patients in England and has been “unable to demonstrate” any benefits for the taxpayer, according to a scathing report from MPs. The Commons public accounts committee said parts of the national programme for IT have proved to be unworkable. The Department of Health has so far spent £6.4bn on the programme, which was launched in 2002, including £2.7bn on patient records. MPs said the intention of creating electronic records was a “worthwhile aim” but one “that has proved beyond the capacity of the department to deliver”. The IT project has floundered almost since the day it was conceived. The national scheme was broken up into five administrative areas, with each region handing out a contract – often worth billions – to big private players, which, it was envisaged, would commission software houses to write computer code. However, the scale of the project has caused companies to walk away, leaving just two groups holding contracts: BT, which is working to put NHS London online; and CSC, which is supposed to have created the computer system for everywhere but the south of the country. CSC has bought iSoft, the company responsible for a large base of installed systems in the NHS that failed to produce a working electronic patient record system, raising the prospect of the health service being tied to one software house. The committee said: “Implementation of alternative up-to-date IT systems has fallen significantly behind schedule and costs have escalated. The [health]department could have avoided some of the pitfalls and waste if they had consulted at the start of the process with health professionals.” The report said officials were “unable to show what has been achieved for the £2.7bn spent to date on care records systems”, adding that taxpayers were “clearly overpaying BT”. The company was receiving £9m for every NHS site, yet the same systems had been sold for just £2m to other hospitals. Richard Bacon, a Conservative MP on the committee who has followed the project since its launch, said there had been “deliberate concealment by the Department of Health”. He said that when Christine Connelly, the department’s director-general for informatics, and Sir David Nicholson, chief executive of the NHS, came before the committee, they failed to mention that they had just paid contractors £200m for the project. “The department had told us no private company gets paid until the project gets delivered,” said Bacon. “Then it emerged they paid them £2.5bn in advance payments. A week later we realised that they had given contractors another £200m. Some might say it’s deception.” Connelly left the department a few weeks after her appearance. “I think Sir David carries some responsibility. I think he should stick around so that there is a clear line of accountability for the mess,” Bacon said. The health department of Health has argued that breaking the contract would cost too much money, Bacon said, but this has been contradicted by statements given by CSC to the US stock exchange regulator, where the company admitted it “may receive materially less than the net asset value” of the NHS work if it were to lose the project. “It’s time for the department to tell the truth and stop propping up failing suppliers,” said Bacon. A spokesman for the department said: “We have already taken action to improve value for money in the NHS IT programme.The findings of the public accounts committee, alongside the outcome of the major project review authority, will contribute to the planning currently under way for future informatics support to the modernised NHS.” NHS Health Conservatives Tax and spending Randeep Ramesh guardian.co.uk

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Italy approves draft law to ban burqa

Law moves country closer to joining France, Belgium and parts of Spain in outlawing face-covering in public An Italian parliamentary commission has approved a draft law banning women from wearing veils that cover their faces in public. The draft, which was passed by the constitutional affairs commission on Tuesday, would prohibit women from wearing a burqa, naqib or any other garment that covers the face in such circumstances. It would expand a decades-old law that for security reasons prohibits people from wearing face-covering items such as masks in public places. Women who violate the ban would face fines, while third parties who force women to cover their faces in public would be fined and face up to 12 months in jail. Italy is the latest European country to act against the burqa. France and Belgium have banned the wearing of burqa-style Islamic dress in public, as has a city in Spain. The Belgium law cited security concerns. The Italian law was sponsored by Souad Sbai, a Moroccan-born member of Silvio Berlusconi’s conservative Freedom People party, who said she wanted to help Islamic women integrate more into Italian society. “Five years ago, no one wore the burqa [in Italy]. Today, there is always more. We have to help women get out of this segregation … to get out of this submission,” Sbai said in a telephone interview. “I want to speak for those who don’t have a voice, who don’t have the strength to yell and say, ‘I am not doing well.’” The spokesman of an Islamic group said banning the Islamic veil “is unjust and touches individual liberty”. “This topic continues to be a sort of criminalisation and media dramatisation. In Italy, there aren’t even 100 women who wear the niqab, and not even one who wears the burqa,” Roberto Hamza Piccard, spokesman for the Union of Islamic Communities in Italy, was quoted by the news agency Ansa as saying. He said such a ban would isolate devout Muslim women, who would not be able to leave their homes. Ansa said the main opposition party voted against the law. The draft will be forwarded after the summer recess to parliament, where Berlusconi’s governing coalition has a narrow majority. The preliminary approval was welcomed by lawmaker Barbara Saltamartini, vice-president of the Freedom People party caucus in the lower house. “Final approval will put an end to the suffering of many women who are often forced to wear the burqa or niqab, which annihilates their dignity and gets in the way of integration,” Saltamartini said. Italy Europe Islam Religion guardian.co.uk

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Talking Points Memo reports that Nancy Pelosi is drawing a line in the sand on what cuts the upcoming debt ceiling commission can make: At a pre-recess press conference Tuesday afternoon, TPM asked House Minority Leader Nancy Pelosi (D-CA) whether the people she appoints to the committee will make the same stand she made during the debt limit fight — that entitlement benefits — as opposed to provider payments, waste and other Medicare spending — should be off limits. In short, yes. “That is a priority for us,” Pelosi said. “But let me say it is more than a priority – it is a value… it’s an ethic for the American people. It is one that all of the members of our caucus share. So that I know that whoever’s at that table will be someone who will fight to protect those benefits.” The question now becomes, “Will Harry Reid follow suit”? If he does then Social Security, Medicare and Medicaid will be protected. If even one of his selections, as TPM author Brian Beutler points out, doesn’t hold firm to the same standard as Pelosi, then cuts are almost certain to come.

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Susie Sampson interviews people on the street about the debt ceiling and “what to do about all the Mexicans.”

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