uly 29 (Reuters) – British finance minister George Osborne on Thursday said there was no tacit agreement with the Bank of England’s governor Mervyn King on keeping interest rates low. (Reporting by Sumeet Desai)
(Reuters) – The following were the top stories in The Wall Street Journal on Wednesday. Reuters has not verified these stories and does not vouch for their accuracy.
Stocks | Global Markets
* U.S. President Barack Obama used his first Oval Office address Tuesday to outline a plan for an oil spill “assaulting our shores and our citizens” that looked beyond containing the gusher to securing full restitution from BP Plc (BP.L), refashioning federal supervision of the oil industry and tackling the U.S. “addiction” to fossil fuels.
* A Senate panel asked the Securities and Exchange Commission’s inspector general to review the agency’s “revolving door,” which shuttles many SEC staffers into jobs with the companies they once regulated.
* The Securities and Exchange Commission is investigating whether generic-drug maker Mylan Inc (MYL.O) disclosed confidential information about its coming earnings to a group of handpicked investors, allowing them to snap up the shares before a big rally, people familiar with the matter said.
* U.K. Chancellor of the Exchequer George Osborne is expected to announce Wednesday a radical overhaul of the country’s regulatory structure that could involve moving a key function of the Financial Services Authority to the Bank of England.
* The euro zone’s trade balance swung to a surplus in April, indicating that a weak euro and strong demand in overseas markets such as the U.S. and China are offsetting strains in trouble spots along Europe’s southern fringe.
* British Sky Broadcasting Group Plc (BSY.L) rebuffed News Corp’s (NWSA.O) proposal for the remaining 60.9 percent of the U.K. satellite-TV company and pushed for at least $1.65 billion more, setting in motion a likely lengthy regulatory review followed by price negotiation over a final deal.
* Electric-car maker Tesla Motors Inc is scheduling its initial public offering to trade on June 29, and hopes to raise as much as $178 million through the deal.
* Goldman Sachs Group Inc (GS.N) Chairman and Chief Executive Lloyd Blankfein assured the firm’s retired partners at a meeting Tuesday that clients are standing behind the company, adding that the two month’s since the Securities and Exchange Commission accused Goldman of fraud have been “very difficult.”
* Spain’s largest two unions on Tuesday agreed to call a general strike for Sept. 29 against government budget cuts and plans to overhaul labor laws.
* Rising labor costs in China are forcing U.S. apparel and accessories retailers, such as AnnTaylor Stores Corp (ANN.N) and Coach Inc (COH.N), to consider relocating at least some of their production to countries with cheaper work forces. But doing so could risk increasing other expenses, such as shipping.
* Switzerland’s lower house of parliament approved a bill that would allow the government to hand over the names of thousands of alleged U.S. tax dodgers to American authorities.
* Boeing Co (BA.N) on Tuesday said it would increase production rates of its best-selling 737 passenger jet, aiming to produce 35 of the planes per month by early 2012, up from its current rate of 31.5 per month.
* Swiss food giant Nestle SA (NESN.VX) has sued Sara Lee Corp (SLE.N) in France, claiming coffee capsules sold by the U.S. company violate patents on Nespresso, Nestle’s popular at-home coffee maker.
LONDON, June 14 (Reuters) – Britain’s new fiscal policy watchdog is expected on Monday to pour cold water on the previous Labour government’s hopes for a powerful recovery when it unveils its first growth and state borrowing forecasts.
That, in turn, will hint at the scale of spending cuts and tax hikes needed for the Conservative-Liberal Democrat coalition to rein in a record budget deficit running close to 11 percent of national output and among the highest in the developed world.
The figures from the independent Office for Budget Responsibility, created by the coalition that took over from the 13-year-old Labour administration in May, are intended to clarify the fiscal picture ahead of this month’s budget.
“The emergency budget on 22 June and the comprehensive spending review this autumn is not going to be pleasant for anyone as further major spending cuts and tax hikes are inevitable,” said Howard Archer, an economist at Global Insight.
Archer said the coalition had been preparing “the public to take the nasty medicine that the UK economy has to take for a long time to get back to long-term fiscal health”.
The new forecasts arrive after revised official data showed borrowing coming in lower than expected for the fiscal year 2009/10 at 156 billion pounds ($227.2 billion), but still at previously unseen levels.
Britain’s economy also appears to have pulled safely out of an 18-month recession but market turbulence over the euro zone’s fiscal crisis and a continued lack of credit availability have cast a shadow over future prospects for growth.
Investors can expect the OBR to cut Labour’s forecast for growth above 3 percent next year and beyond.
As such, while near-term borrowing could look better, it may not fall as fast as previously hoped over the next few years — potentially providing further support for the hefty spending cuts planned by Conservative finance minister George Osborne.
Monday’s forecasts are also likely to suggest much of Britain’s borrowing is structural — pointing to sweeping changes to the way the state budget is financed and run. The OBR, expected to restore some credibility to UK fiscal policy, will change the way estimates are made public, giving a fan chart of likely outcomes for growth with one “most likely” central forecast that will feed into borrowing projections.
Under Labour, the finance minister would outline two forecasts: a headline one and a more cautious estimate that was used for public finances calculations.
The range of possibilities for the economy, similar to that issued by the Bank of England each quarter, will be based on government policy at the time the coalition took power in May, excluding the 6.2 billion pounds of cuts introduced since then.
The OBR, headed up by former Treasury official and ex-BoE policymaker Alan Budd, will also go into some detail alongside the headline figures for borrowing and growth.
Estimates for growth will include quarterly forecasts for the near-term, sub-sector breakdowns for growth will be given for several years and the OBR will reveal more of the factors underpinning its judgements.
The document will also include a study of into the sustainability of long-term government liabilities such as public sector pensions and big public-private sector contracts. (Editing by Matthew Jones)
LONDON, May 31 (Reuters) – British Prime Minister David Cameron’s new coalition government is committed to cutting a gaping budget deficit despite the resignation of a finance minister over his expenses claims, officials said on Monday.
They said the loss of Chief Treasury Secretary David Laws, number two at the finance ministry, would have no impact on the Conservative-led government’s plans to push through tough austerity measures in an emergency budget on June 22.
“I think in the first three weeks the government has now clearly demonstrated its commitment to getting on with tackling the deficit and debt,” Justice Secretary Ken Clarke told the BBC in an interview.
Clarke, a former Conservative finance minister, said it was obvious around the cabinet table that there was no division of opinion between Cameron’s Conservatives and their Liberal Democrat partners.
At the weekend Cameron appointed Danny Alexander, a former close aide to Liberal Democrat leader Nick Clegg, to replace Laws as number two to Conservative Chancellor of the Exchequer George Osborne.
“Danny has all the intelligence, ability, potential, required for the task,” said Clarke.
The Financial Times quoted an unnamed aide to Cameron as saying: “I can safely say the strategy and direction (of the coalition government) will not change at all.”
The coalition is drawing up cuts to rein in Britain’s record peacetime budget deficit, which exceeds 11 percent of gross domestic product.
Laws resigned on Saturday within 24 hours of a newspaper reporting the Liberal Democrat politician had claimed tens of thousands of pounds in parliamentary expenses for rent he passed on to his long-term male partner.
The loss of Laws occurred less than three weeks after the formation of Britain’s first coalition for 65 years. The coalition took power after a May 6 election ousted the Labour Party from 13 years in office.
Laws, an economist with a background in London’s financial services industry, was a key player in striking the coalition accord and appeared to have struck up an effective relationship with Osborne.
He had won the respect of his Conservative colleagues and his willingness to make cuts had reassured markets worried about a deficit forecast to top 160 billion pounds this year.
Alexander will now take over the role of seeing through a series of tough austerity measures needed to save Britain billions of pounds.
The loss of Laws is an unwelcome distraction for a new government eager to focus on the economic challenges and to start a new chapter after a scandal over parliamentary expenses that dogged the final months of the previous Labour government.
Cameron had promised a new, open administration that abides by strict rules of conduct.
Alexander, who is 38, was little known outside parliament before the election. [ID:nLDE64S0IE]
He rose to prominence during the election campaign as Clegg’s chief of staff and as a negotiator in the days of talks that led to the formation of Britain’s first coalition government since World War Two.
The coalition agreement is a delicate balance of the two parties’ policy priorities. By appointing another Liberal Democrat to replace Laws, Cameron has been careful not to upset the party balance in the coalition cabinet.
(Editing by Ralph Gowling)
U.S. Treasury Secretary Timothy Geithner said on Wednesday that financial markets want to see euro zone countries put into action their $1 trillion standby package designed to stabilise the European currency.
Geithner, on a visit to London, also urged Europeans to work for a globally consistent approach to financial reform as the European Union said it might go it alone with a crisis levy on banks.
After talks with his British counterpart, George Osborne, Geithner said of the EU plan to support indebted states: “It’s a good programme (and) has got all the right elements. What markets want to see is action.”
The fund would provide heavily conditioned loans to euro zone governments that had difficulty borrowing on capital markets after a separate bailout for Greece failed to calm fears of a sovereign debt default in southern European countries.
European shares rallied by 3 percent from Tuesday’s nine-month lows and Wall Street was more than 1 percent up but the euro remained under pressure amid continuing signs of banks’ reluctance to lend to euro zone counterparts exposed to south European sovereign debt.
Geithner’s stress on coordination of new regulation appeared aimed chiefly at Germany, Europe’s biggest economy, which stunned markets and angered EU partners by unilaterally banning some speculative financial trades last week.
He is due to meet German Finance Minister Wolfgang Schaeuble in Berlin on Thursday after dinner in Frankfurt with European Central Bank President Jean-Claude Trichet.
On his flight to Europe from China, Geithner told reporters he would “emphasise the importance of a carefully designed global approach” to the next stage of financial reform.
Business television channel CNBC said he would also urge the Europeans to stress test their banks to identify those that need new capital and restore market confidence in the banking system.
The executive European Commission outlined a framework on Wednesday for a levy on banks’ assets, liabilities or profits to pay in advance for the cost of future crises, setting the stage for a showdown on the tax at G20 summit in Toronto next month.
“On this question, we can go forward by ourselves, on our own,” Barnier told Reuters. “It is not up to the United States to pay for the financial stability of Europe.”
The Commission said the proceeds of a bank levy should be ring-fenced for national bank resolution funds, putting Brussels at odds with France and Britain, which want the money to help strapped national budgets.
Fears that Europe’s debt crisis could engulf some banks have made them reluctant to lend to each other as happened during the 2007-2009 financial crisis.
The costs for banks to borrow dollars from each other crept up to a new 10-month high on Wednesday.
Money markets are “pricing in for a credit crunch”, said Michael Pond, Treasury strategist at Barclays Capital in New York. “A crisis of confidence is developing once again.”
For a graphic on Greek bailout, click http://link.reuters.com/rad45k
For a graphic on the euro zone, click http://link.reuters.com/fyw72j
The Paris-based Organisation for Economic Co-operation and Development said the global economy was recovering faster than expected from recession with Asia leading the way but remained at risk from huge debts in developed countries.
The OECD survey was relatively upbeat about the euro zone, forecasting growth of 1.2 percent this year and 1.8 percent in 2011 — a more optimistic forecast than the European Commission’s 0.9 and 1.5 percent respectively.
The OECD also said banks remained vulnerable, noting the high price of credit default swaps to protect bond investments.
European regulators conducted a confidential assessment of the solvency of national banking systems last September, but their reassuring conclusion failed to dispel doubts because they did not test individual banks or publish detailed findings.
Any European stress tests would have to differ from those conducted by U.S. regulators early last year, because Europe lacks a huge bailout fund like the $700 billion Troubled Asset Relief Program to plug any capital deficiencies found.
GERMAN BAN “COUNTER-PRODUCTIVE”
A senior U.S. Treasury official said Washington was unhappy with Berlin’s “counter-productive” decision to go it alone in banning naked shorting of shares in top financial companies and sovereign euro bonds and related transactions in sovereign credit default swaps.
Geithner has also criticised European Union proposals to regulate hedge funds and private equity, warning that they could discriminate against non-European funds.
Far from yielding to widespread criticism, Berlin proposed on Tuesday extending restrictions on such speculative trades to include all shares, a government source said.
In the latest move in a German-inspired Europe-wide austerity drive meant to restore market confidence, Italy’s cabinet approved a multibillion-euro package of budget cuts designed to slash the government’s deficit to beneath the EU ceiling of 3.0 percent of GDP by 2012.
The 24 billion euro ($29.49 billion) plan includes a four-year freeze on public sector salaries, and a reduction in state personnel by replacing only one in five leavers.
EU Economic and Monetary Affairs Commissioner Olli Rehn said Italy’s budget cuts were “very significant” and would help restore confidence in the euro zone. Credit ratings agencies Standard and Poor’s and Moody’s both said the package put Italy’s finances on a sounder footing and should assure markets.
Italy’s largest trade union, CGIL, with about five million members, said it would decide on a national strike after evaluating the measures to be presented by Prime Minister Silvio Berlusconi later on Wednesday.
(Additional reporting by Sumeet Desai in London, Daniel Flynn and Deepa Babington in Rome; writing by Paul Taylor, editing by Mike Peacock/Toby Chopra)
British Finance Minister George Osborne detailed 6.2 billion pounds ($8.92 billion) of spending cuts on Monday in the latest bout of EU belt-tightening, warning much worse lay ahead in an emergency budget next month.
Analysts said the cuts, which were largely as expected, were a useful downpayment on tackling the record budget deficit but would be dwarfed by additional austerity measures that would be needed to safeguard Britain’s triple-A credit rating.
Osborne’s deputy David Laws warned the cuts were intended to “send a shockwave through government departments”, and unions said they would hit services, damage the economy and put thousands of jobs at risk.
Given some breathing room by debt figures for 2009/10 that undercut estimates, Osborne said the new Conservative/Liberal Democrat coalition government, in office for less than two weeks, would not shirk from its top priority of cutting the deficit, running at close to 11 percent of GDP.
Britain’s announcement comes on the heels of emergency austerity measures in other European Union countries weighed down by hefty deficits, including Spain and Portugal, as the region’s policymakers look to prevent a debt crisis from spreading beyond Greece. Italy’s cabinet meets to approved deficit-cutting measures on Tuesday.
Debt servicing costs in the euro zone periphery states have ballooned this year, while they have held at relatively low levels in the UK. UK government bonds rose by midsession on Monday as traders welcomed news of Osborne’s breakdown of where the cuts would fall, with the June gilt future rising 24 ticks to 120.21.
Sterling was mixed, rising against the euro but losing ground against the dollar.
“This is the first time this government has announced difficult decisions on spending. It will not be the last,” Osborne said at a news conference flanked by Laws.
Osborne’s Conservative Party had pledged before the May 6 election to start spending cuts in the current fiscal year. The Lib Dems had said such a move would endanger the recovery but have now signed up to the immediate cuts.
“This action is designed to send a shock-wave through Government departments, to focus ministers and civil servants on whether spending in these areas is really a priority in the difficult times we are now facing,” said Laws.”
“… The years of public sector plenty are over. But the more decisively we act, the more quickly and strongly we can come through these tough times.”
END TO WASTE
In a concession to the Lib Dems, 500 million pounds of the 6.2 billion pounds in reductions will be reinvested in further education and social housing.
But the rest would be used to bring down the deficit. Government advisory bodies — known as “quangos” — would lose 513 million pounds in funding. There would be a hiring freeze across the civil service and almost all departments would have to find savings.
The business ministry, for example, will have its budget cut by more 800 million pounds.
“The new government deserves credit for identifying these cuts on a department-by-department basis in the space of less than two weeks,” said Hetal Mehta, senior economic advisor to the Ernst & Young ITEM Club.
“But we must remember that 6 billion pounds is still a drop in the ocean compared with the scale of tightening that will be required over the course of the parliament. The emergency Budget and the subsequent Comprehensive Spending Review remain the crucial junctures for assessing how credible the deficit reduction programme will be.”
While the task ahead is clearly massive, figures released last week suggested that at least the worst may be over for public finances, with tax receipts up sharply.
Borrowing for 2009/10 was revised lower by 7.5 billion pounds. Excluding financial sector interventions, it stood at 156.1 billion pounds, some 10 billion pounds lower than predicted in the budget in March.
But there is no escaping the fact government spending will have to come down significantly, putting the coalition on a collision course with increasingly militant unions.
“We do not accept that huge spending cuts are necessary or desirable, and we do not believe it is credible for the government to say it can protect public sector jobs and services while taking the axe to departments in this way,” said Public and Commercial Services Union general secretary Mark Serwotka.
Bank of England Monetary Policy Committee member Kate Barker said she thought extra fiscal tightening would act as a headwind to growth but said that markets might take fright if nothing was done to bring down the deficit.
“So it is very important that the … (June 22 budget) is something which is going to avoid further rises in gilt yields. And this tells us that fiscal policy faces some really very difficult choices,” Barker told the Financial Times in an interview published on Monday.
(Additional reporting by Estelle Shirbon, Fiona Shaikh, David Milliken, Peter Griffiths and Kylie MacLellan; editing by John Stonestreet)
Britain’s Conservative-Liberal Democrat coalition government will on Monday get to work cutting spending to reduce a record budget deficit as it seeks to ease fears of contagion spreading from Europe’s fiscal crisis.
The new coalition, formed after the May 6 election produced no outright victor, will also announce its first programme of law-making this week, including political reforms and tighter banking regulation.
Conservative finance minister George Osborne and his Lib Dem deputy David Laws will on Monday announce how government departments will share the burden of an initial 6 billion pounds ($8.62 billion) of savings in 2010.
Government advisory bodies — known as quangos — are expected to lose about 500 million pounds in funding and the sprawling business ministry may have to shoulder upwards of 700 million pounds of savings.
The coalition says cutting Britain’s budget deficit, which is running above 11 percent of gross domestic product, is its top priority, especially since Greece’s debt crisis has rattled investor confidence the euro zone.
“I don’t think we anticipated … quite how sharply the economic conditions in the euro zone would have deteriorated and the need to show that we need to get to grips with this suddenly became much greater,” Lib Dem Deputy Prime Minister Nick Clegg told BBC television on Sunday.
An emergency budget on June 22 will outline the scale of spending cuts and tax rises needed to achieve the coalition’s aim of cutting the deficit faster than the previous Labour government, which wanted to halve borrowing over four years.
The Independent on Sunday newspaper said Treasury officials were looking into a tax or combination of measures on banks, possibly worth up to 8 billion pounds a year. There has also been speculation of a rise in the rate of VAT sales tax.
The Treasury declined to comment on the report but the Conservatives have said they would be prepared to introduce a bank tax even before international agreement had been reached. Policymakers from leading economies will discuss proposals for such taxes early next month.
Even with such a hefty tax income from the financial sector, the size of Britain’s budget deficit, forecast to hit 163 billion pounds this year, means far harsher spending cuts are needed in years to come than those announced for 2010.
Putting those tough decisions into action and negotiating which public services should be cut could put pressure on relations within the coalition, which has been keen to stress so far that it intends to serve a full five-year term.
Parts of both parties have voiced concerns about the compatibility of the two parties in Britain’s first coalition government since World War Two — and both sides have already made significant concessions so far.
The Lib Dems had been opposed to spending cuts this year for fear they could derail Britain’s frail economic recovery from the worst recession in at least 60 years.
The Conservatives, opposed to any changes to the electoral system, have said they are prepared to give voters the chance to change how they elect party candidates to parliament — a coup for the reform-hungry Lib Dems.
Political reforms, including a switch to fixed-term parliaments and cutting the number of members of parliament, are likely to form part of the coalition’s first legislative programme due to be announced by the Queen at the state opening of parliament on Tuesday.
Two Sunday newspapers said they had obtained drafts of that speech, which outlined an ambitious aim to introduce more than 20 new bills to parliament over 18 months but contained few surprises on top of the already agreed coalition policy plan.
(Editing by Elizabeth Fullerton)
Britain’s Liberal Democrats will pursue a deal on Tuesday to form a government with one of the two larger political parties after an inconclusive election that forced Prime Minister Gordon Brown to say he would resign.
Brown’s announcement, designed to keep his Labour Party in power, disrupted efforts by the centre-right Conservatives to broker a power-sharing deal with the Liberal Democrats after the country’s first election producing no clear winner since 1974.
With markets and voters keen for an end to the political uncertainty that followed last Thursday’s close-fought poll, Liberal Democrat lawmaker Simon Hughes said his party hoped it could reach an agreement later on Tuesday.
“We are determined to make sure this process is concluded very soon, if it can be today then it will be, certainly very soon indeed,” he told Sky News. “We would like to do it today.”
The Conservatives emerged as the largest party in parliament in the election but fell 20 seats short of an outright majority in the 650-seat parliament, leading to a bidding war between the three main political blocs.
They quickly began talks with the centre-left Liberal Democrats, or Lib Dems, on a government alliance. However, the smaller party wanted clarity on issues such as electoral reform.
The Conservatives responded to Brown’s statement by offering the Lib Dems a place in a coalition and a referendum on limited reform of the voting system that falls short of their demand for a genuinely proportional system.
“That is our last offer in that area,” George Osborne, Conservative finance spokesman and election co-ordinator, told the BBC. “But I am very willing to discuss with the Liberal Democrats how we create that strong, secure government and deal with this massive economic problem.”
BROWN TO STEP DOWN
Sensing a hesitancy on the part of the Lib Dems, Brown said he would step down by the time Labour holds its annual party meeting in September.
Lib Dem leader Nick Clegg had said during the campaign that he was reluctant to work with Brown and the prime minister’s departure could smooth the path to a deal.
Sterling and British government bonds fell on the uncertainty, with markets taking fright at the prospect of prolonged political uncertainty in a country struggling with a record budget deficit.
Clegg, 43, finds himself in a difficult situation. His party has more in common with Labour in terms of policy, but the two parties combined would be unable to command a majority and would need to enlist the support of smaller parties in a potentially more unstable “rainbow coalition”.
An alliance with the Conservatives would offer a more stable formation, with a strong majority but a more difficult political compromise. Activists on one Lib Dem website were leaning towards a deal with the Conservatives, rather than Labour.
“How can anyone with any gumption call for stable government and then propose allying with a party which is going to spend the next four months in a bitter leadership contest?” said one blogger on Liberal Democrat Voice.
Britain is unfamiliar with coalition negotiations and the talks cannot drag on for weeks as they do in some of its continental European neighbours.
David Laws, one of the Lib Dem party’s negotiating team, said there would a further meeting on Tuesday “to have discussions about where we are and see if we can resolve the existing issues that are outstanding”.
Parliament is due to resume sitting on May 18 and the new government will present its programme on May 25.
(Additional reporting by Kylie MacLellan and Jodie Ginsberg; Editing by Charles Dick)
Britain’s political parties faced increasing pressure on Wednesday to be more honest about the scale of cuts that will be needed after next week’s election to get a record budget deficit under control.
The economy was back in the fore after a think-tank criticised all parties for the lack of detail in their fiscal plans ahead of Thursday’s final television leaders’ debate, which will focus on economic policy.
Repairing the public finances will be the biggest domestic policy challenge for whichever party wins the May 6 election, but the parties have been reluctant to risk voters’ wrath by clearly identifying the extent of cuts.
The Institute for Fiscal Studies said on Tuesday the impending spending squeeze would be the sharpest in at least 30 years and warned the parties would likely have to raise taxes more than they are prepared to admit.
British government debt notched 62 percent of GDP in the financial year to March, the highest level since comparable records began in 1974/75.
All three major parties agree tough fiscal tightening is needed but they differ over when the pain should start and how to share the burden.
Opposition Conservative finance spokesman George Osborne, his Liberal Democrat counterpart Vince Cable, and the ruling Labour party’s Business Minister Peter Mandelson will come under scrutiny over their respective plans for the economy as they face questions from business leaders in London.
In an interview with the Times newspaper, Lib Dem leader Nick Clegg said Labour, in power for 13 years, lacked energy, and the election had now become a choice between “two competing pitches for change”.
“This is now a two-horse race between the Conservative Party and the Lib Dems,” he said.
Opinion polls on Wednesday continued to point to a hung parliament, in which no one party wins an overall majority, but showed the Conservatives and Labour had regained some ground from the Lib Dems, who have enjoyed a ratings boost since the first TV leaders’ debate.
Clegg faces Prime Minister Gordon Brown and Conservative leader David Cameron on Thursday in the third and final TV debate.
(Editing by Janet Lawrence)
His party may have no chance of winning Britain’s coming election, but Liberal Democrat economics spokesman Vince Cable won the plaudits in Monday’s first live debate between possible finance ministers.
Ruling Labour Party finance minister Alistair Darling went head to head with Conservative rival George Osborne and Cable in an hour-long televised programme called “Ask the Chancellor” that is a forerunner for live debates between party leaders, a first in British politics.
With an election expected on May 6, opinion polls are pointing to a hung parliament where no one party has a majority, leaving the possibility that the two big parties, Labour and the Conservatives, try to form a government with the smaller opposition Liberal Democrats.
All three main candidates for the post of Chancellor of the Exchequer admitted that spending cuts to bring down the record budget deficit would be the deepest in more than 20 years but offered no new detail and fell back on well-rehearsed lines.
“I am not sure we got to the heart of the debate but it was quite watchable,” said Philip Shaw, chief economist at Investec.
The youthful Osborne, 38, was the first to speak on the Channel 4 programme broadcast in a prime evening slot.
He said that people knew early action on the deficit was needed and repeated his pledge made earlier in the day to cut wasteful government spending to reverse a planned rise in payroll tax for most people.
Darling, who has been finance minister since 2007, hit back that premature action could tip the country back into recession following the worst financial crisis for decades.
Cable, a former economist with Shell who has raised his public profile during the credit crisis, slammed Osborne for denouncing Labour efficiency savings as fiction and then using the same trick to fund his tax cut.
Britain’s first past-the-post parliamentary system means the centrist Liberal Democrats have no chance of coming out victorious in the election but commentators have said that the higher profile from the TV debates might help them to maintain a bloc of around 60 seats in the 650-member parliament.
Channel 4′s own online poll said 36 percent thought Cable performed best, with the other two level on 32 percent.
Denouncing Labour for causing the crisis, Cable said the Conservatives now wanted another turn “to get their noses in the trough and reward their rich backers” to cheering from the studio audience.
“Overall it was a win for Cable — he pretty much dominated the other two, which was not unexpected. In terms of choosing between Osborne and Darling, it’s hard to say who came out best. They just got so overshadowed by the other guy,” said David Lea, Western Europe analyst, Control Risks.
(additional reporting by Peter Apps)
London, Apr 19 (ANI): Natalie Rowe, a vice madam at the centre of the Smeargate scandal, is set to reveal the names of four high-flying Tories who enjoyed “degrading” sex sessions.
In an explosive tome, Rowe will reveal how the men got themselves whipped and handcuffed while high on cocaine.
Two of Rowe’s ex clients are in Tory leader David Cameron’s top team today, while the other two are former Tory ministers – one was in the Cabinet.
Her memoir, worth a million pounds, has been snapped up by a major publisher.
Natalie, 45, is the woman at the heart of the Smeargate emails over her relationship with shadow Chancellor George Osborne.
“It’s time the truth was told about some of the men who could end up running the country. Men who have been on all fours before me, crying like babies, taking massive amounts of drugs as I whip them senseless,” The Mirror quoted her, as saying.
The book details Natalie’s venture into vice – from her days as a teenage runaway to her life as madam of her own high-class escort agency in fashionable Chelsea.
Two of the four prominent Tories are currently serving in David Cameron’s inner circle. She says she had repeated sex sessions with them over a year-long period when they paid to be sex slaves. One snorted copious amounts of cocaine during the sessions.
“I had them barking like dogs and begging for mercy. Quite often they would take me wholly in their confidence, discussing deep, personal matters about their past and their thoughts on other politicians. Most of them are desperately insecure and at war with their own egos.
“Now every time I see them on TV or in the newspaper, I just think, ‘How long are you going to be able to keep all this secret?’ Well, the answer is-not for much longer,” she said. (ANI)
London, Apr.19 (ANI): A new e-mail shows that Labour’s General Secretary Ray Collins chaired a secret meeting to create the Red Rag website now ensnared in the Smear Gate scandal.
The e-mail’s existence links the dirty tricks site to the very top of the Labour Party, and it exposes the lie put out by Downing Street, and repeated by government ministers this week, that the smears were just a minor aberration cooked up by a couple of renegades acting alone-and which would never have seen light of day.
According to News of the World, the new e-mail, written by Labour’s then Internet campaign chief Derek Draper, proves that the meeting took place. It shows that Collins travelled across Westminster for a summit in the offices of trade union bigwig Charlie Whelan. Whelan, one of Gordon Brown’s closest friends and his former chief spin doctor, was described last night by a Labour insider as the Prime Minister’s “unofficial Mr. Fix-It”.
Joining Collins and Whelan at the meeting were the two men whose leaked smear e-mails later brought the scandal to light: Damian McBride and Draper.
McBride, another of the Prime Minister’s closest aides, was forced to resign last week after it emerged that he and Draper conspired to spread false and sinister stories about Tory leader David Cameron, Shadow Chancellor George Osborne and other Tories.
Draper has since been cold-shouldered by the party, too.
Also in the room was the man who was to be the public face of Red Rag, Unite press officer Andrew Dodgshon, as well as political journalist Kevin Maguire, who was there in a private capacity.
News of the meeting, and the presence at it of the Labour Party’s General Secretary, will horrify and appall senior party workers and Labour MPs who have already been disgusted by the smear campaign.
The e-mail reveals the meeting took place on December 1 last year at Unite’s London HQ, on King’s Street, Westminster, seven weeks before McBride sent an explosive e-mail to Draper outlining “stories” for the site. (ANI)
London, Apr.13 (ANI): Damian McBride, Downing Street’s head of strategy and planning, sent e-mails in January to the Labour blogger Derek Draper suggesting a smear campaign against the Tories using a proposed new website, RedRag.
In the first e-mail, sent on 13 January, McBride writes: “Gents, a few ideas I have been working on for RedRag. For ease, I’ve written all the below as I’d write them for the site.”
The ideas contained in the e-mail include spreading several false rumours: that David Cameron had an embarrassing medical condition; that George Osborne took drugs with a prostitute – an old allegation in the public domain which Osborne has flatly denied; allegations of a sexual nature about the Tory backbencher Nadine Dorries, which she vehemently denies and has consulted her lawyers about; and about a Tory MP allegedly getting publicity for a firm run by his partner. There is no evidence that any of the claims are true.
Draper responded 20 minutes later: “Absolutely totally brilliant Damian. I’ll think about timing and sort out the technology this week so we can go as soon as possible.”
McBride sent a second e-mail later the same month, offering “a couple more thoughts on stories”.
On the false rumour of Cameron’s medical condition, McBride suggests challenging Cameron to publish his “full financial and medical records”, and to spread gossip that he may have suffered from a sexually transmitted disease. He suggested, “inserting [a] picture of Dr Christian Jessen”, who appears on the Channel 4 programme Embarrassing Bodies. There is no suggestion that the two men know each other.
McBride’s other idea is to falsely hint at the existence of embarrassing photographs of Osborne from his university days.
According to The Guardian, in a reference to pictures published in 2005 of Osborne with a prostitute, Natalie Rowe, taken 12 years earlier, and a notorious Bullingdon Club photograph of Osborne taken when he was at Oxford, McBride writes: “Embarrassing photos have followed George Osborne around throughout his career: posing in his Bullingdon Club uniform at Oxford, lying on the carpet at home in his permed mullet playing Monopoly with his fellow viscounts and standing in an … embrace with a prostitute at a party in London. But he knows that the most embarrassing photos from his past have yet to emerge.”
McBride suggests that the website spread false rumours that pictures exist of Osborne “posing in a bra, knickers and suspenders” and “with his face ‘blacked up’”.
“He wouldn’t be the first student to do some cross-dressing at university. But … why would a student in the late 1980s black up his face for the amusement of friends in their private college rooms? This in the era when young Tories wore ‘Hang Mandela’ T-shirts.”
McBride writes: “If you think these work, let’s think about how to sequence them in with the others.” He admits that one of his ideas “is a bit of poetic licence” but is based on “what we know” about the prostitute with whom Osborne was pictured.
“It will put the fear of God into Osborne,” he adds. He suggests spreading rumours that “secret tapes” exist containing evidence that Osborne had sex with the prostitute. The shadow chancellor has always denied having any physical relationship with Rowe or taking any drugs with her.
Apart from targeting Tory leaders, McBride suggests running stories of a sexual nature about Nadine Dorries, a Tory backbench MP.(ANI)
London, Apr.13 (ANI): British Prime Minister Gordon Brown’s close aide, Damian McBride, plotted to cripple Tory election hopes with a vile campaign of unfounded and obscene rumours.
McBride, Brown’s strategy chief, quit after e-mails detailing his sinister smear plan were leaked.
A furious Conservative party leader, David Cameron, however, demanded a personal apology from Brown, saying that he was championing corruption and sleaze in Downing Street.
McBride, dubbed “McPoison” by his political victims, planned to unleash his campaign of slurs on the Internet in the run-up to the next general election, reports The Sun.
McBride, 34, listed the slurs in e-mails to ex-Labour spin doctor and blogger Derek Draper.
They included four viz. (1) Cameron suffers from an embarrassing medical condition; (2) Shadow Chancellor George Osborne had sex and took drugs with a hooker and that an ex-girlfriend has pictures of him in a bra, knickers and suspenders; (3) That Tory MP Nadine Dorries had a one-night stand with a fellow MP and (4) A secretly gay Tory MP used his position to get publicity for a firm run by his partner.
The existence of these e-mails was revealed by political blogger Paul Staines, who writes the Guido Fawkes website.
Downing Street has tried to dismiss the scandal as an exchange of “juvenile” emails.
A spokesman said: “Neither the Prime Minister, nor anybody else in Downing Street, had knowledge of these emails. It is the Prime Minister’s view there is no place in politics for the dissemination of material of this kind. Mr McBride and Mr Draper took the decision not to publish this.” (ANI)
London, Apr 12 (ANI): One of British Prime Minister Gordon Brown’s closest lieutenant has been forced to resign for sending “inappropriate and juvenile” emails about David Cameron and his team using a Number 10 account.
The private missives, written by special adviser Damian McBride, are said to feature ideas for potential smear stories about private lives of senior Conservative Party leaders. They were apparently sent to Derek Draper, who runs a Labour-supporting political blog
McBride quit his post after landing the Government in a row after high-level calls for him to be sacked, The Telegraph reported.
Former Home Secretary Charles Clarke said that McBride had brought shame on the Labour Party by planning a smear campaign against Cameron.
Downing Street issued a statement saying that McBride had resigned. A spokesman said it was Brown’s view that there was “no place in politics for the dissemination or publication of material of this kind”.
McBride had earlier apologised for the “juvenile and inappropriate” comments, and insisted that no one else at No.10 had been involved. But the row showed little signs of abating as details emerged of the emails’ contents.
The emails contained a number of innuendo-laden suggestions about the personal lives of Tory MPs including Cameron and George Osborne, the shadow chancellor.
Paul Staines, a Tory blogger who runs an Internet site called Guido Fawkes, obtained the emails. They were offered to newspapers including The Daily Telegraph, which declined to buy them. However, several other newspapers were preparing to publish the material.
McBride had been in charge of strategic planning at No 10 since last October, when he was moved from his position as Brown’s spokesman. (ANI)
London, Apr 11 (ANI): A senior aide of British Prime Minister Gordon Brown has been forced to apologize for sending inappropriate juvenile emails from a Number 10 account.
The private missives, written by special adviser Damian McBride, are said to feature ideas for potential smear stories about senior Conservatives.
They were apparently sent to Derek Draper, who runs a Labour-supporting political blog, the Daily Express reported.
They have now come into the possession of Paul Staines, however, whose ‘Guido Fawkes’ blog is hostile towards the Government and the Labour Party in general.
“Neither the Prime Minister nor anybody else in Downing Street, except the author, knew anything about any of these private emails. The author of these emails has apologised for their juvenile and inappropriate nature and for the embarrassment caused. All staff will be reminded of the appropriate use of Number 10 resources,” Brown’s spokesman said.
McBride has been in charge of strategic planning at Downing Street since last October, when he was moved from his position as Brown’s political spokesman.
His emails have apparently been touted around newspapers, although none have yet published them.
According to the Daily Telegraph, the emails feature unfounded claims about Tory leader David Cameron and shadow chancellor George Osborne. (ANI)