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| David Bailey's Bastion Photographer captures daily life of UK troops in the Afghan war news.bbc.co.uk |
Polish bear 'that fought Nazis' to be commemorated £200,000 monument commemorates "Private Wojtek", a 500lb brown bear. telegraph.co.uk |
Spending review axe falls on the poor George Osborne claims sweeping cuts will take the country back from the brink of bankruptcyGeorge Osborne drove his axe deep into the heart of the British state today, with a range of sweeping cuts to welfare, higher education, social housing, policing and local government that he claims will draw the country back from the brink of bankruptcy.Outlining his long-awaited comprehensive spending review, which will cut £81bn from government spending, Osborne vowed to restore "sanity to our public finances and stability to our economy". Perhaps the most striking of the new cuts announced was a package of £7bn in extra welfare cuts on top of the £11bn already made in the last budget. This will include the withdrawal of £50 a week from the million people claiming incapacity benefit for more than a year.Osborne told MPs: "Today is the day when Britain steps back from the brink, when we confront the bills from a decade of debt. It is a hard road, but it leads to a better future." His gamble rests on the assumption that the private sector and exports will fill the gap caused by the loss of nearly 500,000 public sector jobs that will result from the cuts, mostly through natural wastage.In a rapid-fire speech to the Commons, Osborne slashed £350m from the legal aid budget, reduced the police budget by 20% over four years, and hacked two-thirds off the £9bn communities department budget, including more than halving the support for social housing over four years. The pension age will rise to 66 from 2018.Rail fares will be allowed to increase by 3% above RPI inflation from 2012, higher education spending will be cut by 40% – £2.9bn – by 2014/15, and flood defences by 15%. Further education will be cut by £1.1bn by 2014/15 and the "poorly targeted" education maintenance allowance for 16- to 19-year-olds is abolished.In the isolated splashes of good news in the speech, Osborne claimed to be sparing health, schools and international development from the brunt of the cuts, and said he would set aside £2bn for the work and pensions secretary Iain Duncan Smith's plans to unify tax and credits.He also announced extra spending on adult apprenticeships, raised spending on schools from £35bn to £39bn, confirmed £1bn of funding for a new green investment bank, and said the science budget would be frozen at £4.6bn.Attempting to wrongfoot Labour politically, he claimed that the extra £7bn savings on tax credits and a range of other welfare benefits had enabled him to limit the overall reductions in the budgets of Whitehall spending departments to 19% over the next four years – less than the 20% pencilled in by the Labour chancellor, Alistair Darling, to cope with the UK's record peacetime deficit.Labour said the Osborne comparisons were bogus, however, and took no account of the fact that Labour also planned to make cuts in welfare that would have the effect of reducing the average size of departmental cuts it would have imposed to well below 20%. The Tories were cutting £20bn more over the parliament than Labour had planned, shadow Treasury sources said.Alan Johnson, the shadow chancellor, rounded on Conservative MPs for cheering Osborne's statement as the chancellor sat down. "We have seen people cheering the deepest cuts to public spending in living memory," he said. "For some people opposite this is their ideological objective. For many of them, not all of them, this is what they came into politics for."Labour also said the extra cash for the £2.5bn pupil premium was a con as it was coming from within the schools budget, a point disputed by the education secretary, Michael Gove. A confidential internal projection by officials predicted 40,000 teachers could end up losing their jobs.Nick Clegg, the deputy prime minister, held a teleconference with hundreds of Lib Dem parliamentary candidates and faced tough questions on why he had reneged on the Lib Dem pledge not to raise university tuition fees. He told the callers that he felt wretched about signing the pledge and then reneging on it.Amid signs that public anxiety over the severity of the spending review has affected both consumer and business confidence, Osborne said the pain would help Britain to a better future of lower interest payments on the national debt. The chancellor also announced that he was prepared to borrow an extra £2bn a year to limit the cut in investment on infrastructure, following concerns raised by business that the slashing of the capital budget would affect the economy's long-term growth potential.Many City economists were, however, sceptical of the central economic claim made by the chancellor – that the paring back of state spending by more than £80bn over the next four years could be more than offset by a thriving private sector. The impact of the squeeze on spending will be to reduce growth by 0.5 percentage points in each of the next four years at a time when the economy is still struggling to recover from its deepest and longest postwar recession.Osborne said 490,000 jobs would go in the public sector during the rest of the parliament, but said redundancies were "unavoidable when the country has run out of money". He also signalled that public sector workers would have to increase substantially their contributions to pensions, the issue that has drawn people onto the streets of Dublin and Paris.Carl Emmerson, acting director of the Institute for Fiscal Studies, said it remained to be seen whether the government could achieve its ambitious objectives. He said: "A key lesson from the last Labour government and the last Conservative government is that the public finances often do not behave as expected."Official figures out today showed net borrowing in the current financial year to be little changed on the £156bn amassed last year, but Osborne is relying on stronger growth to help him reduce the deficit.Andrew Smith, chief economist at KPMG, said the government's economic assumptions were "heroic", warning growth would be hit by consumers repaying debt, businesses delaying investment, and a tougher climate for exporters. Cuts at a glanceWhat we got yesterday£46bn cut from departments, including 27% from local government, 29% from the environment and 23% from the Home Office£7bn from welfare, including £2.5bn in child benefit changesPlus£11bn from welfare announced in the budget in June£6bn announced in May when the coalition took power£10bn saved in lower debt interest payments£1bn of other savingsMaking a total of£81bn total cutsSpending review 2010George OsborneAlan JohnsonTax and spendingEconomic policyWelfareLiberal-Conservative coalitionConservativesLabourPublic sector cutsPublic services policyPublic financeEconomicsBudget deficitState benefitsState pensionsPatrick WintourLarry Elliottguardian.co.uk © Guardian News & Media Limited 2010 | Use of this content is subject to our Terms & Conditions | More Feeds guardian.co.uk |
Live - Carling Cup Newcastle host Arsenal, Stoke visit West Ham and Burnley travel to Aston Villa in the Carling Cup fourth round. news.bbc.co.uk |
Private pensions to become compulsory for workers Companies will be forced to enrol staff into private pension schemes from 2012 in a bid to make the UK save moreThe coalition government is to press ahead with a Labour scheme to force all UK firms, regardless of size, to automatically enrol their staff into a pension scheme from 2012.Companies will be told pay in a minimum of 1% of every worker's salary into a pension, rising to 3% by 2017. Workers will have to pay in a portion of their salary, phased in over five years, starting at 1% of pay and rising to 4% by 2017.Every employer, large and small, will have to participate, although not the self-employed. It will mean that hundreds of thousands of small firms that currently do not offer or pay into a pension scheme will have to begin making payments. Many are expected to opt to use a new government-run pension scheme, called "Nest" (National Employment Savings Trust), which promises low costs and charges.But pensions minister Steve Webb has stepped back from earlier proposals to make workers pay in from the first day of employment. Instead there will be a "waiting period" of three months before an employee is automatically enrolled, unless they ask to join earlier.The level of earnings at which employees will be enrolled will also rise from Labour's proposed figure of £5,035, to £7,475 (the personal allowance for income tax from April 2011).Webb said that the reforms will "end decades of decline of membership in workplace pension schemes." He estimated that an additional four to eight million people will start to build up savings for retirement, but dismissed critics who warn of a "levelling down" of existing corporate provision.Employers currently pay an average of 6.1% of workers' salaries into their pensions. Critics say the changes may lead to some employers reducing their contributions to a minimum, with the norm dropping towards 3%.There are also fears that low-income earners will simply lose means-tested pension benefits, such as pension credit, as they are forced to accumulate a small pot of money for retirement. Webb said: "We will be trying to make sure that saving is rewarded and we want to make sure that the issues around making it worthwhile to save are tackled."Earlier this week plans for a new universal pension worth £140 a week per head were leaked, but Webb would not be drawn on details of the scheme, which will be published in a green paper in November.But there is speculation that once Britain moves towards a higher basic state pension, plus greater private saving through Nest, there may be the progressive withdrawal of other schemes such as pension credit and the state second pension, formerly known as Serps.Pensions will also be paid later, with the government already committed to raising the state retirement age to 66 in 2020.John Lawson, head of pensions policy at Standard Life said he welcomed the introduction of a three-month waiting period, which will significantly cut administration costs."Under the old rules employers and employees would have had to pay contributions from their first day of eligibility, even if they subsequently decided to opt out. This would have meant hundreds of thousands of savings accounts being created every year that would have been cancelled within weeks of being opened. This huge inefficiency has now been removed."It is expected that Nest will grow to become one of the biggest pension funds in the country. Nest officials project that it will grow to between £50bn-£100bn in size within thirty years.The money will be invested in shares and bonds, although Nest says it will be a low-risk fund, largely invested in 'passive' instruments such as index-tracking funds.Employers who fail to make payments on behalf of their workers will face sanctions from the Pensions Regulator, which will have the power to fine recalcitrant companies.Employees will still have the right to opt out of the pension arrangements, but officials believe that auto-enrollment will mean that many more will start saving than at present."Around 20% of people choose to opt out of auto-enrollment, but that compares to more than twice that number that don't take out a pension if they have to opt-in," said Nest Corporation chief executive Tim Jones.But the Institute of Directors said that forcing micro-firms to enrol staff may backfire. "While we understand the reasoning behind this, the reality will be that very few employees of micro-businesses will actually be auto-enrolled. It is going to place a huge burden on the Pensions Regulator to attempt to police hundreds of thousand of micro-businesses whose employees may well choose not to engage with pension's saving."But financial advisers welcomed the proposals. Andrew Strange, policy director at the Association of Independent Financial Advisers, said: "We support the use of societal nudges to encourage the restoration of a savings culture in the UK, and we are therefore pleased to see the roll out of the requirement for all employers to automatically enrol staff into pension arrangements."Building a more widespread savings culture is absolutely essential to prepare people for their financial future. The UK has the second lowest savings rate of all OECD countries, with 13 million people in the UK saving inadequately. Nest will provide a crucial component in the development of more prudent and financially protected consumers."PensionsSavingsBanks and building societiesWork & careersSmall businessPatrick Collinsonguardian.co.uk © Guardian News & Media Limited 2010 | Use of this content is subject to our Terms & Conditions | More Feeds guardian.co.uk |