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So Bachmann was playing with House money , huh? I’m sure the same fine media organizations that saw Rep. Weiner punished for his sins will jump right on this. Right? On Nov. 5, 2009, at the behest of Rep. Michele Bachmann, thousands of tea party activists descended on the Capitol to vent their rage over the health care overhaul bill pending before Congress. The assembled activists chanted, “Kill the bill! Kill the bill!” and waved signs opposing a government takeover of health care — but they may not have known that the same government was paying for the event. According to House expense reports, Bachmann and three conservative GOP colleagues — Reps. Tom Price (Ga.), Steve King (Iowa) and Todd Akin (Mo.) — each paid $3,407.50 that day, a total of $13,630, to a sound and stage company called National Events, apparently for the sound system used at the rally. The money came from the Members’ taxpayer-funded office accounts, despite House rules prohibiting the use of these funds for political activities . Bachmann’s office insists the expense was a proper use of official funds. Bachmann billed the event as a “press conference,” which can be funded from official accounts. But no questions were taken from the press and, unlike most press conferences, it opened with a prayer, the national anthem and a recitation of the Pledge of Allegiance. A few days earlier, the Minnesota Republican had appeared on a Fox News talk show and made an appeal for activists to come to D.C. for the event, promising to help them lobby Congress against the bill. This isn’t the first time Bachmann has been, shall we say, somewhat irregular in her use of staffing funds. She did it even when she was a state senator , too.

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So Bachmann was playing with House money , huh? I’m sure the same fine media organizations that saw Rep. Weiner punished for his sins will jump right on this. Right? On Nov. 5, 2009, at the behest of Rep. Michele Bachmann, thousands of tea party activists descended on the Capitol to vent their rage over the health care overhaul bill pending before Congress. The assembled activists chanted, “Kill the bill! Kill the bill!” and waved signs opposing a government takeover of health care — but they may not have known that the same government was paying for the event. According to House expense reports, Bachmann and three conservative GOP colleagues — Reps. Tom Price (Ga.), Steve King (Iowa) and Todd Akin (Mo.) — each paid $3,407.50 that day, a total of $13,630, to a sound and stage company called National Events, apparently for the sound system used at the rally. The money came from the Members’ taxpayer-funded office accounts, despite House rules prohibiting the use of these funds for political activities . Bachmann’s office insists the expense was a proper use of official funds. Bachmann billed the event as a “press conference,” which can be funded from official accounts. But no questions were taken from the press and, unlike most press conferences, it opened with a prayer, the national anthem and a recitation of the Pledge of Allegiance. A few days earlier, the Minnesota Republican had appeared on a Fox News talk show and made an appeal for activists to come to D.C. for the event, promising to help them lobby Congress against the bill. This isn’t the first time Bachmann has been, shall we say, somewhat irregular in her use of staffing funds. She did it even when she was a state senator , too.

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On Fox News this weekend, Jon Stewart famously denied that the New York Times pushes a liberal agenda. Perhaps the man from Comedy Central sees the paper as “moderate.” After all, the Times itself apparently doesn't believe there are any liberals on the Supreme Court.

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Greek debt crisis: ratings agency raises default fears over bonds

Fitch’s warning came just hours ahead of a crucial confidence vote that could bring down the Greek government Europe’s hopes of preventing Greece defaulting on its debts were knocked on Tuesday as ratings agency Fitch declared that it will declare the country to be in default if commercial banks agree to roll their loans over, as EU finance ministers are planning. European leaders, led by France and the European Central Bank, argue that Greek lenders could choose to buy new, longer maturing bonds when their existing debts mature, as part of a second Greek rescue package. They say that lenders would be under no compulsion to make the swap, rather than cashing the bond in, so Greece would not be defaulting on its debts. Fitch, though, refuses to accept this. “Fitch would regard such a debt exchange or voluntary debt rollover as a default event and would lead to the assignment of a default rating to Greece,” Andrew Colquhoun, head of Asia-Pacific sovereign ratings with Fitch, told a conference in Singapore early on Tuesday. Fitch had previously signalled its opposition to lenders exchanging their debts for longer-dated securities – which had been Germany’s favoured plan, until Angela Merkel accepted defeat last Friday . Like the other agencies, it believes that any deal where lenders receive securities on worse terms than the original contractual terms of the existing debt should be classed as a “distressed” debt exchange. Colquhoun’s comments “further cast doubt on the ability of Greece to avoid a default, or credit event,” according to Michael Hewson of CMC Markets . The warning came just hours ahead of a crucial confidence vote that could bring down the Greek government, as it struggles to pass a new raft of austerity measures to qualify for €12bn in aid. Without this money, Greece will probably be unable to repay debts that mature in July and August. Negotiations over the second rescue package, worth an estimated €120bn (£106bn), are continuing after EU ministers failed to reach agreement at a meeting in Luxembourg on Monday. The lack of progress has tested the patience of both the financial markets and the International Monetary Fund, which warned that the lack of decisive action risked another global financial meltdown . EU ministers hope to reach agreement in July. They stated on Monday that second bailout is to be “financed through both official and private sources … in the form of informal and voluntary roll-overs of existing Greek debt at maturity for a substantial reduction of the required year-by-year funding within the programme, while avoiding a selective default for Greece.” If the ratings agencies declare that Greece has defaulted, then banks would be forced to write down the value of their Greek debt. This would also prevent them from using it as collateral. Analysts fear that a Greek default could trigger panic across the sector, with some comparing it to the collapse of Lehman Brothers in 2008. IMF flies into Athens European stock markets opened higher on Tuesday morning, driven by optimism that a rescue deal can be agreed. The FTSE 100 index had gained 40 points by midday, to 5733. The vote of confidence in Geoge Papandreou’s reshuffled government is expected to take place at 10pm BST. John Hydeskov, chief analyst at Danske Markets in London, warned there could be disatrous consequences if the Greek parliament does not approve the new package of spending cuts, in the face of widespread public opposition. “The alternative of not getting the money is so frightening that we don’t have another choice,” he told CNBC. Officials from the International Monetary Fund and the European Union are flying into Athens on Tuesday, a sign of the importance of the vote. “Without more austerity Greece may not see further EU funding, which would bring default closer,” said Jane Foley of Rabobank. Opponents of a second bailout argue that it would only ratchet up the economic and political cost of the crisis, without providing a solution. “A second Greek bailout is almost certain to result in outright losses for taxpayers further down the road because, even with the help of additional money, Greece remains likely to default within the next few years,” said Raoul Ruparel, analyst at the Open Europe think tank. “Another bailout will also increase the cost of a Greek default, transferring a far bigger chunk of the burden from private investors to taxpayers,” Ruparel added. Open Europe estimates that each household in the eurozone underwrites €535 in Greek debt, through the existing loan guarantees. By 2014, if a second bailout is agreed, this will increase to €1,450 per household, it claimed. European debt crisis Ratings agencies Greece Europe Europe Bonds Graeme Wearden guardian.co.uk

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Politics live blog – Tuesday 21 June 2011

Rolling coverage of all the day’s political developments as they happen 12.01pm: Cameron takes his last question, from a Welsh journalist. Q: Will you give more powers to the Welsh assembly? And will you review the Barnett formula? Cameron says he will consider devolving more power to Wales on a case by case basis. On the Barnett formula, he says this is a complicated issue. But the government is going to set up a Calman-style commission for Wales. Cameron says he has now got to ask the journalists to leave because he has “particularly exciting” lunch guests (ie, the Queen). That’s it. I’ll post a summary soon. 11.53am: Cameron takes a question from a Scottish paper. Q: Alex Salmond wants two questions on an independence referendum ballot paper? And is it right for Scotland to have to wait three years for this vote? Cameron says he respects Alex Salmond’s mandate. But he won’t have an “endless situation” where it is just about getting to a referendum situation to meet Salmond’s needs. If the Scottish parliament votes for a referendum, he will let that happen. Q: The head of the navy and the head of the RAF have questioned how long the Libya operation should last. How long will it last? Cameron says the military chiefs have told him that Britain can carry on the mission for as long as necessary. “Time is on our side,” he says. The pressure is turning up all the time. Q: The health bill will get just 10 days of debate in the Commons. Is that enough? Cameron says 10 days is plenty. The Tories did not get this long when they were in opposition. Sir George Young, the leader of the Commons, is a genuine reformer, he says. Q: Will there be a reshuffle this summer? Cameron says journalists love reshuffles. He is going to disappoint them, and carry on disappointing them for some time yet. Q: Your jail plans sound expensive. And they sound like “the chain gang”. Cameron says he is not proposing chain gangs. But he wants to see community sentences that contain an element of punishment. There are not enough of those at the moment. 11.49am: Cameron takes a question from the FT. Q: Are you confident that British banking system can withstand any shock from Greece? Cameron says British banks have done a “huge amount” to strengthen their capital ratios. Q: Do you think the eurozone will survive? Cameron says he was strongly opposed to Britain joining the euro. But the countries that joined the euro have an “enormous amount” invested in it. They will not let it fail. Q: In opposition you gave the “hug a hoodie” speech. Today you have adopted a much harder line. Which is the real you? Cameron says he never said “hug a hoodie”. In that speech he advocated a tough response to people who “cross a line”. But, before then, people did need more “love”. The state is being a “bad parent” to children in care. 11.46am: Cameron is asked about immigration. Q: Can you clarify the remark you made yesterday about the Lib Dems blocking your immigration plans? Cameron says the government has a good policy. He cares about this. He would like it to “drop off’ the agenda, as happened in the 1980s. Damian Green, the immigration minister, is doing a very good job. He is one of the “unsung heroes” of the government. Q: Would Britain suffer if Greece left the euro? Cameron says Britain suffers when the eurozone suffers. Turbulence in the eurozone is bad for Britain. Cameron says Britain should not be involved in any fresh Greek bailout. It was not involved in the original Greek bailout. The EU financial stability mechanism (which would oblige Britain to pay) should not be used to help Greece, he says. 11.41am: Cameron takes a question from Michael Crick from Newsnight. Q: These measures will add to MoJ costs, won’t they? Isn’t this a huge “kick in the teeth” to Clarke? Cameron says he and Clarke have had a “very good discussion” about this. Clarke knows more than most ministers about how to get savings from a department. Clarke is “happy” with the proposals. Q: What about legal aid? Cameron says there are big plans for reducing the cost of legal aid. Britain currently has the most generous legal aid system in the world. Q: Damilola Taylor’s father has said Clarke should be sacked. Will you sack him? Cameron says he has huge respect for Richard Taylor. But he does not agree with him about Clarke. Clarke has “no problems” dropping a plan and coming up with a better one. Q: Have you dropped your plan to jail anyone caught carrying a knife? Cameron says today’s plan is an improvement. You cannot necessarily do everything you want. 11.36am: Cameron says the government started very quickly when it came to office. On sentencing, he says the Ministry of Justice will save the £130m it will not get from 50% sentence discounts from other parts of its £8bn budget. Today he has made “the right choice”. Q: How will the “defend your property” law work? Cameron says this law will make it clear that people can use “reasonable force” to protect their property. Q: What did you think of “that oaf of a [hospital] consultant” who shouted at you at a hospital last week? Cameron says the doctor was worried about hygiene. Someone in the ward thought the event had been staged deliberately. Q: Will the probation service be affected by the new need to find cuts from the MoJ budget? Cameron says up to now the probation service has not been hit as hard as other parts of the department. But it has not had its budget ringfenced. 11.34am: Cameron is still taking questions. Q: Is U-turning too often a sign of indecisive government? Cameron says he does not accept that. The government has acted decisively, he says, citing cutting the deficit, welfare reform and academies. Often people say the government is trying to do too many things. I don’t make any apology for listening as you go along and making sure that you get things right … Being strong is about being prepared to admit that you did not get everything right first time. If you were told how to improve a policy, but did not respond out of fear, that would not be leadership. It would be the opposite, he says. 11.30am: Cameron is taking questions now. Q: Are you making too many U-turns? Cameron says he takes responsibility for what has happened. He does not think it is a sign of weakness to listen. In fact, it’s a sign of strength. Q: Why did you get sentencing wrong? Cameron says the government produced a green paper with “interesting ideas” in it. It was right to explore the 50% sentence discount idea. “As an idea, it failed – and it rightly failed.” There would be no point having a green paper if you were not willing to listen to the responses, he says. Q: What changed your mind? Cameron says his mind changed when he realised cutting sentences was being driven by the need to cut costs, not to speed up the justice system. 11.29am: The opening statement is over. Cameron seems to have ripped up the sentencing plans, and launched an entirely new consultation. The government’s law and order policy has suddenly become rather hardline. 11.26am: Cameron is still talking. He says people do not understand indeterminate sentences. This system will be reviewed, with a view to replacing it with a tougher system. • There will be more life sentences. Cameron says these are well understood. • Serious offenders will no longer be eligible for release after serving half their sentence, Cameron says. Cameron says he is announcing a new review covering this today. Legislative proposals will be brought forward later this year. The public need to know that dangerous offenders will be locked up for a long time. Cameron says he is “returning confidence to the system”. 11.20am: David Cameron is opening his press conference. He starts by saying it’s a proud day because he is hosting a lunch for the Queen. It’s to mark the Duke of Edinburgh’s 90th birthday. He turns to sentencing. He wants to make sure that people are safe, that the police are accountable and that prisons are effective. Half of prisoners reoffend within a year of leaving. Around 10% are foreigners. It’s a “hugely expensive” system and it does not work. The government wants to make prison work. Three principles lay behind this. First, prison must protect the public. Second, serious criminals should go to prison for a long time. Third, breaking the cycle of re-offending should be at the heart of the system. People who run prisons should be paid according to their success at cutting re-offending rates. Anyone who thinks tackling re-offending is going “soft” on crime “couldn’t be more wrong”. Ken Clarke’s legislative proposals are one part of this approach. There will be tough action on knife crime. • There will be a compulsory jail term for anyone threatening someone with a knife. • Squatting will be turned into a criminal offence. • Homeowners who use reasonable force to protect themselves will not be prosecuted. Cameron confirms that the 50% sentence discount plan has been dropped. People working in the system said a 50% discount was too high. The money that would have been saved through this will be saved through “greater efficiency” in other parts of the budget. 11.16am: Nick Clegg was on Kenneth Clarke’s side over sentencing. But Clegg didn’t say so in public. James Forsyth has posted a good blog on this at Coffee House. Clegg’s circle believes that the Tories want to put them on the wrong side of the public on a whole bunch of populist issues: notably, welfare, immigration and crime. Their response is to fight in private when the public is against them and in public when it is with them—as it was on the NHS. 11.01am: David Cameron (left) will be giving his news conference too. It’s an open news conference – journalists can ask about anything that they want – but obviously it has been timed for today so that Cameron can personally announce the government’s new sentencing policy. After the rape row, Cameron may be worried about letting Kenneth Clarke take the lead on this issue (although Clarke will be making a formal statement in the Commons later). But Cameron will also have to address concerns that his government is now incapable of facing down any opposition to a policy. Here’s Tim Montgomerie on the subject in a recent post on ConservativeHome. Talking to a Conservative MP last night, however, he warned that the Coalition’s dizzying inability to stick to a course was threatening backbench discipline. One day, he said, the whips are asking us to write letters to constituents defending the government’s plans to reform school sports funding, the EMA, forestry privatisation, the NHS… and the next day they are abandoning or diluting those plans. “Ten times bitten, eleventh time shy,” he said. Tory MPs simply won’t get up in the Commons and defend controversial reforms if they are going to be made to look silly. And here’s Jonathan Isaby at ConservativeHome making a similar point. Over the last few days I have been talking to a number of Tory MPs to ascertain the gravity of these issues, and I certainly sense a lot of concern among usually loyal backbenchers along exactly the same lines as those outlined by Tim’s source. “When I get a torrent of emails about a controversial issue now, I leave them for seven days before replying, because there’s an increasing chance that the line is going to change, ” said one MP with whom I discussed the matter. Another is using a longer timescale: “I let the letters and emails on anything where there’s a hint of U-turn pile up for thirty days. Frankly I don’t want to make myself look stupid by defending a policy only for it to change a few days later”. Cameron will have to show that he’s still got a grip. We’ll hear from him soon. 10.43am: You can read all today’s Guardian politics stories here. And all the politics stories filed yesterday, including some in today’s paper, are here. As for the rest of the papers, here are some stories and articles that are particularly interesting. • Thomas Harding in the Daily Telegraph says the head of the Air Force’s combat operations has told MPs that, if the Libya operation continues beyond the summer, the RAF’s ability to carry out future missions will be under threat. Air Chief Marshal Sir Simon Bryant has told MPs that intense air operations in Afghanistan and the Middle East are placing a “huge” demand on equipment and personnel. In a briefing paper delivered to senior politicians and obtained by The Daily Telegraph, the RAF’s second in command said morale among airmen was “fragile” and their fighting spirit was threatened by being overworked. Many areas of the RAF were “running hot”, he warned, while the servicemen’s sense that the nation valued their efforts was being undermined by the Coalition’s defence cuts. • Helen Warrell in the Financial Times (subscription) says an academic study suggests that government policies will fail to get net migration down to below 100,000 a year. Net migration stands at 242,000 so would have to come down by more than 142,000 over the next four years if the coalition was to meet its pledge by 2015. But analysts at the Migration Observatory at the University of Oxford have calculated that Home Office’s policies – reducing immigration for workers, students and their families from outside the European Union and making it harder for migrants to settle in the UK – would cut net migration by a total of 75,000, leaving a deficit of 67,000. • Mary Riddell in the Daily Telegraph says Labour’s family policy review has identified support for a “kinship” allowance. Last week, however, I spent an afternoon with a citizens’ jury of mothers convened to finalise the ideas on family that will now go forward for consultation. These women, from a political cross-spectrum, had been asked to bring an object symbolising their daily lives. The most popular were their children’s games consoles, symbolising an atomised society, and stories about rising gas and energy prices they had clipped from newspapers … Of the ideas they discussed, including community centres for all ages and extra citizenship teaching, the most popular was a scheme to give grandparents the right to take paternity leave to cover for an absent father as well as pay and leave entitlements for those who care full-time for their grandchildren. A “kinship allowance” is now likely to be a key part of Labour’s policy. • Bruce Anderson in the Financial Times (subscription) says that Steve Hilton is Thatcher’s heir in Number 10. The two are both outsiders, with the impatience that brings. She was not only the first woman PM, at a time when that seemed equally improbable; she also had an implacably restless temperament. So too does Mr Hilton, whose father fled Hungary in 1956, and who is even more impatient than she was. He is driven to fury by the waste in Britain of vast sums on social projects that only add to social misery. No socialist can fulminate more pyrotechnically about the destruction of life chances under the present system and the need for fundamental change to liberate human potential. An old-fashioned Tory will assume that human endeavours often end. By those criteria, Mr Hilton is not a Tory. His eccentricity of deportment makes him conspicuous, and others suspicious. People are simply not used to discalced Conservatives. In the Middle Ages, those who were uneasy about events but did not want to criticise the monarch often denounced the king’s evil counsellors. Some Tories who are unhappy about aspects of government policy have cast Mr Hilton in that role. But in Downing Street, his restlessness is greatly valued. 10.10am: Ed Miliband was speaking at the Times CEO summit this morning, in front of an audience that included the News Corporation chairman Rupert Murdoch. According to the Press Association, the Labour leader said those at the top had to show “responsibility” on the issue of pay. Here are the main points. • Miliband condemned excessive salaries in the City. Those at the top had to show “responsibility”, he said. For the system of free enterprise and the system of wealth creation to continue to command credibility, we do need to make sure that pay and performance are linked. The excesses we have seen at the top in parts of the financial services industry in the past do none of us any good. Just as it is right to say that those at the bottom of society should show responsibility, so it is right that those at the top show responsibility too. We have got to make sure that reward is in proportion to effort in what we do. • He said that scrapping the 50% top rate tax rate was not a priority for Labour. But he did not rule out proposing its abolition in the party’s 2015 election manifesto either. How do we sustain support for the free enterprise system that we all believe in? Partly, you don’t do it by cutting taxes for those right at the top when other people are facing real economic hardship. • But he ruled out returning to the “penal” tax rates for high earners of the 1970s. New Labour brought about a number of innovations for the Labour Party. One of them I intend to keep is that strong relationship with business. I want to celebrate wealth creation in this country. We are not going to go back to the penal tax rates of the 1970s under a future Labour government. That is not what we are about, because we must be a country that celebrates enterprise and rewards those who work hard and do well. 9.59am: Nick Clegg (left) is in Brazil today and he’s making a speech. According to the text I’ve just received from the Cabinet Office, the deputy prime minister will be saying that Brazil should have a permanent seat on the UN security council. Our institutions must be more nimble. Better equipped to guard against risk, respond to crises, enforce rules and norms that advance our shared success. That will be impossible until those institutions are reformed to suit the modern world. Until they reflect today’s geography of power, with all of the major powers properly heard. Nations – like Brazil – who should be shaping the agenda, offering unique insights, being part of the big decisions, and then using your power to see those decisions through. Huge strides have been taken in establishing multilateral cooperation over the last sixty years, but the reality is, unless new actors are brought fully into the multilateral system, they will increasingly look for other ways to operate and our international institutions will become increasingly defunct. The UK doesn’t want to see that happen. That’s why we actively support a permanent seat for Brazil at the UN Security Council. 9.50am: Here’s Ed Miliband (left) on the sentencing announcement. The public were rightly appalled that the government was proposing that people who committed rape should see their sentences cut by 50% and be let out within as little as fifteen months. Now the prime minister has to ask how did he get himself into the position of making a proposal which hasn’t thought through. It is yet another example of this government not being in touch with people and making proposals which they then have to abandon. 9.34am: According to Kenneth Clarke (left), the government is not performing a U-turn. This is what the justice secretary told BBC News this morning. I’ve taken the quote from PoliticsHome . I’m going to the Cabinet and we’re publishing the Bill and later this morning and today, the prime minister and I will be announcing our response to all the consultation. We’ve changed parts of it, both on legal aid and on sentencing. It’s not another U-turn it’s a perfectly balanced package of radical reform, which is very necessary, and obviously I have to first of all discuss it in Cabinet and then explain it to my parliamentary colleagues. Technically, Clarke has a point. The government floated the 50% sentence discount idea last year in a green paper, Breaking the Cycle (pdf), and that made it clear that this was only a proposal. “We want to ensure that defendants are encouraged to plead guilty at the earliest opportunity by reducing the sentence given for an early guilty plea (the “sentence discount”),” the green paper says (in paragraph 216). “We are considering whether this could be better achieved by introducing a maximum discount of up to 50 per cent that would be reserved for those who plead guilty at the earliest stage.” But Clarke defended the idea in the Commons. When Labour’s Sadiq Khan urged him last month during justice questions to drop the plan, Clarke replied: We are going to give the outcome of our consultation shortly, but I think that that proposal is likely to survive. This was a proposal with clear government support. To my mind, describing today’s announcement as a U-turn seems perfectly fair. 9.07am: Here’s some reaction that has already come in to the forthcoming announcement from the Ministry of Justice, which will include cuts to legal aid as well as changes to the sentencing rules. I’ve taken the quotes from the Press Association and PoliticsHome. From Sadiq Khan , the shadow justice secretary We’re in danger of blaming all this on Ken Clarke. We’ve been expressing concerns about these plans for the last six months, since December, and what Ken Clarke has been saying consistently – I’ve asked this on the floor of the House, ‘do you have the support of the Cabinet in these plans?’ – he said consistently ‘the cabinet is behind me, the prime inister is behind me.’ What has happened at the eleventh hour is David Cameron has realised that his government is appearing to be out of touch with ordinary people around the country. From Richard Taylor , the father of Damilola Taylor Ken Clarke does not know what is going on in the streets, he does not know what criminality is about. He is taking decisions about what he does not know about. David Cameron’s decision to abandon the Ken Clarke statement is right. From Des Hudson , chief executive of the Law Society What we have yet to hear from the government is how they are proposing you and I will get access to justice if we can’t get legal aid. We are in the time of austerity; I note however that the Atlee government was also in a time of austerity back in 1949 and principles and values that they saw as important and worth paying for still it seems to me apply today. From Conservative MP Ben Gummer We are a fiscally challenged country here, we’ve got to find savings across the board, and 15% cuts or 16% cuts to legal aid really is – it will still be the most expensive legal system in the world, and we will be getting to a system where we will have comparable levels of access as in other European countries and common law jurisdiction. Sweden have had family mediation trials for many years and they do it very successfully. What we’re doing adopting the best practice for better mediation and actually it’s just what the Lord Chief Justice supported himself into our jurisdiction, it’s better for families. 8.54am: Dave Prentis (left), the Unison general secretary, told the Guardian last week that the strike his union was planning over cuts to public sector pensions would be “the biggest since the general strike”. Today he said it could go on indefinitely. According to PoliticsHome , this is what Prentis told BBC News from Manchester, where Unison is holding a conference. When we move to industrial action, we’ve got over 1.1m workers, mainly low paid, mainly women, covered by our pension schemes and they will be asking to take action. It will be the biggest strike since 1926. It will be indefinite until we get an agreement … It’s quite clear that this coalition will not move if we take one day of action and have a demonstration. It will take sustained action. We’re not going to be starved back to work like the miners were. We’re talking about women workers, mainly low paid workers, and we will look after them in that action. 8.36am: Another day, another U-turn. Kenneth Clarke, the justice secretary, is publishing his revised sentencing plans today and, as the Guardian and others papers are reporting prominently, he has abandoned plans to give a 50% sentence discount to people who plead guilty early. By my count, this is the third U-turn in this area. Two weeks ago, on the morning of PMQs , Downing Street let it be know that there would be no 50% sentence discount for rapists. Then, at the end of last week, after the Sun ran a story under the headline: “Ken Clarke … the paedophiles’ pal” (on the grounds that paedophiles would still qualify for the 50% discount, the Ministry of Justice said they were being excluded from the 50% plan . Ministers thought it might be possible to keep the scheme for less serious offenders, but today Clarke will confirm that the idea has been dropped completely. David Cameron is giving a press conference this morning and, with his government now getting a reputation for performing U-turns at a rate that makes one giddy just watching, one of his main tasks will be to show that he still has a clear sense of direction. That’s the main news, but there are other things going on too. Here’s a full list. 9am: The cabinet meets. 10.15am: A range of experts give evidence to the Commons transport committee about the High Speed Rail project. 10.30am: Keir Starmer , the director of public prosecutions, and others give evidence to a Commons committee on terrorism prevention and investigation measures (TPIMs), the replacement for control orders. Around 11am: The Ministry of Justice is publishing its justice bill , alongside a written statement on “proposals for the reform of punishment, rehabilitation, sentencing and legal aid”. 11.15am: David Cameron hosts a press conference in Downing Street. 1pm: Cameron hosts a lunch for the Queen and the Duke of Edinburgh at Downing Street to celebrate the Duke’s 90th birthday. 2.30pm: George Osborne , the chancellor, takes questions in the Commons. Around 3pm: Peers start a two-day debate on reform of the House of Lords. More than 100 peers have put their names down to speak . 3.30pm: Kenneth Clarke , the justice secretary, makes a statement in the Commons about his justice bill. As usual, I’ll be covering all the breaking political news, as well as looking at the papers and bringing you the best politics from the web. I’ll post a lunchtime summary at around 1pm and and an afternoon one at about 4pm. House of Commons Kenneth Clarke Sentencing David Cameron Andrew Sparrow guardian.co.uk

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Martin Lewis answers your money questions

The cash-saving guru from moneysavingexpert.com tells us why he thinks what he does matters, and answers your questions He’s our favourite financial anorak (well, not everyone’s, but we’ll come to that later), Britain’s evangelist of thrift. His message: they’re out to screw you – don’t let them. Every year, he helps millions save millions on everything from credit cards to mobile phone contracts; thanks in no small part to his campaigning, Britain’s banks have paid out more than £1bn in unfairly levied overdraft charges (and set aside another £6bn for mis-sold payment protection insurance). Now Martin Lewis, founder of the phenomenally popular website moneysavingexpert.com , is here to answer your questions. First, though, a couple of mine. Last week it was announced that Lewis was to head up a new task force to “combat the myths and misunderstandings” around university tuition fees. Could this be the first step towards the people’s champion – the crusading campaigner whose battle-cry has always been “consumer revenge” – selling out, getting co-opted? In the bar of the west London office complex he shares, he shoots me a withering look. Dapper, fast-talking, alarmingly numerate, at times genuinely impassioned (he really does seem outraged at the idea of anyone paying a penny more than they have to, for anything), he explains that no, this isn’t a government body (it doesn’t even have the government’s formal blessing); he’s not being paid a penny to do it; and of course it fits in with everything he’s about. “Look, I don’t support the changes in tuition fees, and I wouldn’t have introduced them,” he says. “But if we’re going to have them, then people have to understand them. For 20 years now we’ve educated students into debt when they go to university, but we’ve never educated them about debt. Now tuition fees are about to treble; it’s essential students understand what they’re getting into, and what they’re not – that somebody explains the system. The crossfire of political spittle has caused massive confusion.” It’s “incredible”, Lewis says, that in the wake of a major financial crisis triggered by massive corporate and public debt, “we still don’t have financial education in schools: we still don’t teach financial literacy”. He was recently involved in the formation of a huge all-party parliamentary group, more than 200 MPs now, calling for precisely that: “I’ve spent my career trying to navigate people through systems I don’t believe in. How is this different?” But if Lewis hasn’t yet joined the establishment, he does admit to wanting a change of roles. Asked where moneysavingexpert goes from here – the site is now visited by an astonishing eight million of us every month, and another six million receive Lewis’s monthly email – he says it is “in a very good place. It does an incredible job and I’m amazingly proud of it. But personally, I have about five full-time jobs. It’s quite tough. Certainly 10 years from now, I’d like not to be in day-to-day control of the site. I’d like to be in policy, on financial education and mental health and debt, the two issues that really drive me. Not in parliament, no. But in policy.” Because it’s a bit wearing, being the nation’s financial family doctor. “At lunch today, I did seven photos and had to answer six questions,” Lewis says. “I recently had 10 people queuing up to speak to me when I was buying a burger in McDonald’s; I had to say to them, I just can’t do this. No more. On the tube once, a woman threatened to kill herself if I didn’t sort out her financial problems. Our primary task is to help people, and I genuinely believe – though I’m not a social entrepreneur, we’re not non-profit – that we have a real public service remit. But it would be nice just to have a clear desk from time to time. To think. To do things on a less day-to-day level.” But enough of the general; on to the specific. Here is a selection of the questions G2 readers sent in. I’ve grouped some by topic, and edited all for reasons of space. Some readers asked not to be named, so I’ve used initials. Can I reclaim past overdraft charges? After the 2009 court decision in favour of banks on overdraft charges, is there any chance or way of getting some compensation for past overdraft charges in the future? And if so, how? Christine Young ML: The day the supreme court ruled, on a technicality, not that overdraft charges were fair but that they didn’t have to be fair was one of the worst in my career. Some say, why should people get overdraft charges back – effectively, this was just stealing from the banks? I’d make two points: first, I believe these charges are unfair under the law. If I tell you I’m going to punch you, then I punch you, it doesn’t make it legal; the fact that bank charges are in the terms and conditions doesn’t make them legal. Second, in the old days, if you overdrew, the bank simply wouldn’t let you have the money. Then they let you have the money, but charged you 35% for the pleasure. That earned them £3.6bn a year – so who’s stealing from whom? But where are we now? Bank charges have come down, which is good. We have a guide to reclaiming and we still do get successes. But I think we have to recognise that most of them are now people who have been put in real difficulties: hardship cases. Are charging orders on homes fair? Increasingly, credit card companies and banks are taking out charging orders on homes to recover their original loans. When these banks and credit card companies sold these loans they were unsecured. Do you think it fair that creditors can use this route to make an unsecured loan secured? Richard Hardistry ML: I’m no supporter of charging orders. To be fair, it’s very rare for them to press you to actually sell your home. But yes, certainly, we have real issues in this country with credit regulation, and I agree: if lending is unsecured, it should be unsecured. It subverts the whole system to behave otherwise. The general point is, when a loan is secured, it means the lender gets security, not you – if there are problems, they can repossess your home. All things being equal, it’s better to take unsecured. How about a campaign for car park ticket machines to give change? Car-park ticket machines unapologetically give no change, despite the technology working fine in other sectors. Can NCP and the like be convinced to either use this revenue to install change-giving machines, or donate this unfairly gained profit to charity, or stored as credit for the next ticket buyer? Jim Medway ML: It’s not really big enough to become a new campaign, but I have a lot of sympathy with this. Companies should not need to be told that this kind of tactic really pisses people off. We have a thing called the 50 words Moneyfesto in which we ask people to suggest to the government the small changes that would make a difference, and I think this would absolutely be right for that. And there’s no doubt parking is a major issue. The fact that private companies can kidnap your car by clamping it, and dress an invoice up as a fine, and that we have no independent appeal mechanism – we urgently need a formal review of the whole sector. How much should I pay into my pension? I am in my mid-30s, earning in the mid-30Ks. I have a company pension that pays 6% into the scheme. How much would I need to supplement this pension by in order to ensure an adequate standard of living upon retirement? DC ML: Hmmm. As much as you possibly can, as soon as you possibly can. There’s an old rule: take your age when you start contributing, halve it, and that’s the percentage of your salary you should be putting in. And if your company offers a matching scheme, pay as much as you can into it or you’re just throwing your salary away. Will we ever be able to trust our banks again? At 62, I can easily remember when it seemed reasonable to trust my bank and building society do their best for me as a customer. Around 10 years ago, the right of customers to expect fair, or even efficient, service seems to have been totally dismissed. Do you see this ever changing? Or is the concept of “trust” outmoded? Ellen Kelly ML: No, I don’t see it changing. People need to understand now that a bank is a sales institution, not an advice institution. Banks are product sellers. It follows that there is no best or worst bank, just best and worst products. Santander may offer the best savings product, Barclays the best credit card. We have to forget loyalty: buying everything from one bank is like saying, I only buy records from Polydor. Assuming Polydor still make records. How can I reduce my car insurance premium? I’m 25, have been driving for a few years and have built up a four-years no claims bonus. I’ve never had an accident that was my fault, and consider myself a safe, careful driver. This year I am cutting my mileage to 3,000, and will not be commuting. I drive a one-litre Nissan Micra, stored in the garage of a quiet location overnight, and I am the only driver. Yet my quoted premiums are £200 more than last year, and this is third party, fire and theft. Is there anything I can do? David Smith ML: Average car insurance has gone up by 40%. Some tips: it’s interesting David quotes third party, fire and theft because, counter-logically, it’s not always the cheapest. Because insurance is all about assumed risk, selecting comprehensive may put you in a lower risk – therefore cheaper – category. Also, never auto-renew; use more than one comparison site, and don’t forget to add in Aviva and Direct Line, who aren’t included; check you’ve got the most suitable policy; and when you’ve found the cheapest, go to a cashback site and see if you can’t get some cashback. How can I invest better? I am a teacher in my 30s with a mortgage and an ability to save. I have £15,000 in an ISA and am chucking a grand a month into a savings account. Everything is with HSBC as it’s easier that way. Should I be investing better, and what goals can I set myself? Claire Finkel ML: I don’t do investment advice. Risk prediction, crystal balls, all that – there are far better people out there than me for that. That said, if Claire was here now I’d be slapping her wrist. How can you ask what to do, then tell me you’ve got everything with the bank because it’s easiest? You’re almost certainly getting crap rates on your savings. If you have a mortgage, and there are no penalties for overpaying, the most effective, risk-free use of most people’s cash is to overpay on their mortgage. You need to keep an emergency fund available, but if your mortgage is at 5%, paying it off is equivalent to earning 6.2% in a savings account for a basic rate taxpayer, and 8% for a higher rate taxpayer. How can I improve my credit rating? What advice would you give to someone whose credit rating is at rock bottom after a sustained period of unemployment which led to mortgage, insurance and utilities arrears? If you are not able to switch providers, how do you save money and/or get yourself out of a financial hole? Angela McNulty ML: Most debt problems are not to do with overspending, but with a sudden and unexpected change in circumstances. It can be very difficult when you had money and then no longer do, because you’re locked into certain spending patterns. But not every provider requires you to have a good credit rating, and there are many other things you can save money on. If you are still in debt, see one of the non-profit debt counselling services. If you’re not in debt and are employed, there are things you can do to improve your credit rating: get a high interest-rate credit card, don’t spend much, and pay it off in full at the end of every month. Credit scores are about predicting future behaviour, and paying off a small amount in full every month will gradually raise your rating. And there are other deals: pre-pay energy and mobile phones, for example. The bottom line is, make sure you’re paying the least possible, and then cut back if it’s still not enough. How much do you make on referrals? How much money goes directly to you every time someone clicks on a link on your site? Why does your email now virtually never highlight items you don’t get a referral commission for? It used to be impartial and independent. You can usually get a better deal by going to quidco.com or other referral commission kickback sites – but you’re not telling people that. Abbie Case, Kenton Price and assorted others ML: Look, I have 35 staff. I have server costs and legal costs in the hundreds of thousands. There has to be a balance. We will always tell you what the best deals are, whether we get referral commission or not. We will never compromise on that. But we will sometimes mention some products a little more often than we otherwise would. That’s the only commercial weapon in my armoury. And when we do that, we tell you so: when a product has a star beside it, it’s a referral. The only reason people can spot that is because we tell them! I’m trying to spot the best deals, I’m trying to be clean and transparent. But this kind of criticism annoys me because it’s fundamentally not true. Look at this week’s email. The main article is on student fees: no referral link. The top product lead is the Newcastle Building Society’s 4.2% one-year fixed savings loophole, an unbelievable best buy: no referral link. And on the cashback sites, it’s just nonsense: if you ask quidco or topcashback and the others who generates most of their traffic, they’ll tell you we’re one of the biggest. Polls show fewer than a quarter of people are interested in cashback, and my view is that it’s best to go for the best product, not the best cashback deal. But we have a cashback site checker on our website. It’s just not true that we don’t tell people about them. Family finances Personal loans Personal pensions Borrowing & debt Pensions Consumer affairs Jon Henley guardian.co.uk

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Ash cloud’s return causes flight chaos in Australia

Ash from Chile’s Cordón Caulle volcano grounds domestic flights in and out of Sydney, Melbourne and Canberra Australia faces air transport chaos after ash from Chile’s Cordón Caulle volcano shut the country’s busiest airports. Thousands of travellers were stranded after Qantas cancelled all domestic flights in and out of Sydney, Melbourne and Canberra on Tuesday afternoon, until at least Thursday. International flights have also been affected, with all Qantas planes due to land on Wednesday diverted or delayed until Thursday. Virgin has also cancelled flights out of Sydney and Melbourne until further notice. “The ash plume is at a very low level and we’re not comfortable flying at those levels,” said Virgin Australia spokeswoman Danielle Keighery. The ash cloud from the volcano is circling Earth for a second time, after last week delaying about 700 flights across Australia and New Zealand . Passengers have been using whatever means possible to get to their destinations. Extra bus services have been put on, while three men paid a taxi driver A$1,200 (£770) to drive them for 10 hours from Melbourne to Sydney. The bureau of meteorology’s volcanic ash advisory centre says the plume has travelled more than 2,500 miles (4,000km) in the past 24 hours and is “clearly visible on satellite imagery”. It is hovering at between 5 and 8 miles. Hundreds of thousands of passengers have been disrupted across the country, according to Australia’s Civil Aviation Safety Authority. “When you take out major centres like Sydney and Melbourne, the knock-on effects of that are huge and that’s unfortunate, but safety has to come first,” said its spokesman, Peter Gibson. Australia Air transport Chile Sydney Australia Australasia Melbourne Alison Rourke guardian.co.uk

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Repossession hotspots revealed

Shelter report shows link between house repossessions and unemployment More than 60 areas have been dubbed “repossession hotspots” in a report by housing charity Shelter , with Corby in the east Midlands named the place with the highest proportion of homeowners at serious risk of losing the roof over their head. The research shows the local authority areas in England with the highest proportion of homeowners issued with a possession order, and therefore at serious risk of repossession. Rising unemployment during the recession has led to a steep increase in repossession orders against homeowners this year. Shelter said the blackspot for repossessions was in Corby, which had the highest rate of “at risk” homeowners – 7.56 per 1,000, nine times higher than the lowest rate in West Dorset of 0.83. It was closely followed by Barking and Dagenham (6.62 per 1,000), Thurrock in Essex (6.16 per 1,000), Knowsley in Merseyside (5.68 per 1,000), and Newham in London (5.57 per 1,000). Shelter warned that the figures reflected a need for homeowners across the country to prepare for higher mortgage repayments if interest rates rise as expected later this year. Repossessions rocketed by 15% in the first quarter of the year , and the charity has found that unemployment rose by 3.3% on average in local authority areas with the highest levels of repossession orders. In comparison, unemployment rose by an average of 1.4% in areas with the lowest rates of repossession. Shelter analysed Ministry of Justice figures for repossession orders in the first three months of the year to identify the hotspots, with most grouped across the north of England, around the Wash, and the east of London leading out to the north Kent and Essex coast. Other hotspots include: • Fenland, next to the Wash (5.04 at-risk homeowners per 1,000) • Harlow in Essex (4.85 per 1,000) • Manchester (4.63 per 1,000) • Peterborough (4.57 per 1,000). However, Corby confounds the trend: while it is England’s top hotspot for repossession orders, unemployment is relatively low at 6.4%, rising by just 0.9% in the thee years to last September. Lenders have faced heavy criticism for enabling ill-disciplined and inexperienced borrowers to take on too much debt. But Shelter’s findings indicate that the root cause of people losing their homes is loss of income through reduced earnings and unemployment. Shelter’s findings are supported by data from the Consumer Credit Counselling Service , which advises struggling debtors. Of the mortgage borrowers calling the CCCS for help with their debts last year, 19% were unemployed, 28% were suffering reduced income and just 8% were over-committed on credit. Lenders applied for a total of 13,520 repossession orders in England from January to the end of March – a rate of 0.73 claims per 1,000 households – while unemployment rose by 2.9% to an average of 7.8% during the three years to September 2010, according to the latest unemployment figures by local authority published by the Office for National Statistics. Although the unemployment rate dropped slightly in England to 7.7% for the three months to April, it is expected to rise sharply later this year as public sector job cuts feed through, with a further rise in repossessions anticipated. Campbell Robb, chief executive of Shelter, said: “This research paints a frightening picture of repossession hotspots across the country where homeowners are on the brink of losing the roof over their head. “We know only too well that the combined pressures of high inflation, increased living costs and stagnant wages are really taking a toll on people. All it takes is one thing like job loss to tip people over the edge and into the spiral of debt, repossession and ultimately homelessness.” Repossessions Property Borrowing & debt Unemployment Social exclusion Housing market Housing Communities Jill Insley guardian.co.uk

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Security and intelligence agencies to give evidence in public for first time

Malcolm Rifkind plans to beef up Intelligence and Security Committee and give parliament influence over its membership The heads of MI5, MI6,and GCHQ, will give evidence in public for the first time under plans to beef up the Intelligence and Security Committee, which is responsible for monitoring their activities. Also for the first time, parliament will have a say in deciding the committee’s membership. These are among proposals being drawn up in what Sir Malcolm Rifkind, chairman of the ISC, describes as a “root and branch inquiry” into the future of the committee, which has come under increasing scrutiny. Rifkind, Conservative MP for Kensington and former defence and foreign secretary, was appointed chairman after last year’s general election. Other issues also need to be addressed, he said in an interview with the Guardian. “Should [the security and intelligence agencies] have the power to decline to give information? The agencies accept that is no longer appropriate.” Further, it was for ministers to decide what information should be kept secret, not the agencies. The agencies having that power amounts to a conflict of interest. “It can’t be right,” Rifkind said. The ISC at present can only request information, not require it. And it meets only in private. “There is a serious discussion, including among the agencies, whether [the ISC could have] public sessions as well”, Rifkind said. “There is a reasonable prospect next year they will probably want to do that,” he added, pointing to previous speeches by public intelligence chiefs, including Jonathan Evans, director general of MI5, and Sir John Sawers, head of MI6. The ISC reports to the prime minister, who can censor its reports, rather than to parliament. And members of the ISC, a mixture of peers and MPs, are handpicked by the prime minister and indoctrinated within a “ring of secrecy”. Rifkind suggests the ISC should become a “committee of parliament”. Prospective members would be chosen on the assumption they would “know how to handle top secret information” and have the confidence of the security and intelligence agencies. In future, a list of names would emerge and be published in the parliamentary order paper. There would not be open elections but individuals could be voted down, suggests Rifkind. Rifkind said when the ISC was set up under the 1994 Intelligence Services Act, there was “intense nervousness” among the agencies that parliament should be subject to some kind of oversight. Even ministers were concerned. Yet the act had become out of date, he observed. The ISC’s remit had extended to cover the Defence Intelligence Staff, the Joint Intelligence Committee and the new National Security Council. It also conducted investigations into operations – something not envisaged in the 1994 act – for example, into the government’s connivance in the secret rendition by the US of terror suspects, what MI5 knew about the 7/7 London suicide bombers, and the use of intelligence in the runup to the 2003 invasion of Iraq. The ISC reports into Iraq shed fresh light on how the Blair government was warned by the Joint Intelligence Committee that military action against Iraq would increase the risk of terrorist attacks in Britain. But the failure of the security agencies to provide the ISC with information about the 7/7 terror plotters and what they knew about rendering and abusing terror suspects has contributed to increasingly widespread criticism that the committee lacks muscle. The ISC’s reports will still be vetted and passages redacted before they are published and it will continue to meet mainly in private. Its members will also in effect be vetted, though MPs could object to them. Parliament’s role in scrutinising the activities of the security and intelligence agencies is far behind that of the US Congress. Rifkind makes clear he believes there is a need to reassure the public. The test will be whether his reforms go beyond appearance and take on substance. MI5 MI6 Richard Norton-Taylor guardian.co.uk

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Security and intelligence agencies to give evidence in public for first time

Malcolm Rifkind plans to beef up Intelligence and Security Committee and give parliament influence over its membership The heads of MI5, MI6,and GCHQ, will give evidence in public for the first time under plans to beef up the Intelligence and Security Committee, which is responsible for monitoring their activities. Also for the first time, parliament will have a say in deciding the committee’s membership. These are among proposals being drawn up in what Sir Malcolm Rifkind, chairman of the ISC, describes as a “root and branch inquiry” into the future of the committee, which has come under increasing scrutiny. Rifkind, Conservative MP for Kensington and former defence and foreign secretary, was appointed chairman after last year’s general election. Other issues also need to be addressed, he said in an interview with the Guardian. “Should [the security and intelligence agencies] have the power to decline to give information? The agencies accept that is no longer appropriate.” Further, it was for ministers to decide what information should be kept secret, not the agencies. The agencies having that power amounts to a conflict of interest. “It can’t be right,” Rifkind said. The ISC at present can only request information, not require it. And it meets only in private. “There is a serious discussion, including among the agencies, whether [the ISC could have] public sessions as well”, Rifkind said. “There is a reasonable prospect next year they will probably want to do that,” he added, pointing to previous speeches by public intelligence chiefs, including Jonathan Evans, director general of MI5, and Sir John Sawers, head of MI6. The ISC reports to the prime minister, who can censor its reports, rather than to parliament. And members of the ISC, a mixture of peers and MPs, are handpicked by the prime minister and indoctrinated within a “ring of secrecy”. Rifkind suggests the ISC should become a “committee of parliament”. Prospective members would be chosen on the assumption they would “know how to handle top secret information” and have the confidence of the security and intelligence agencies. In future, a list of names would emerge and be published in the parliamentary order paper. There would not be open elections but individuals could be voted down, suggests Rifkind. Rifkind said when the ISC was set up under the 1994 Intelligence Services Act, there was “intense nervousness” among the agencies that parliament should be subject to some kind of oversight. Even ministers were concerned. Yet the act had become out of date, he observed. The ISC’s remit had extended to cover the Defence Intelligence Staff, the Joint Intelligence Committee and the new National Security Council. It also conducted investigations into operations – something not envisaged in the 1994 act – for example, into the government’s connivance in the secret rendition by the US of terror suspects, what MI5 knew about the 7/7 London suicide bombers, and the use of intelligence in the runup to the 2003 invasion of Iraq. The ISC reports into Iraq shed fresh light on how the Blair government was warned by the Joint Intelligence Committee that military action against Iraq would increase the risk of terrorist attacks in Britain. But the failure of the security agencies to provide the ISC with information about the 7/7 terror plotters and what they knew about rendering and abusing terror suspects has contributed to increasingly widespread criticism that the committee lacks muscle. The ISC’s reports will still be vetted and passages redacted before they are published and it will continue to meet mainly in private. Its members will also in effect be vetted, though MPs could object to them. Parliament’s role in scrutinising the activities of the security and intelligence agencies is far behind that of the US Congress. Rifkind makes clear he believes there is a need to reassure the public. The test will be whether his reforms go beyond appearance and take on substance. MI5 MI6 Richard Norton-Taylor guardian.co.uk

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