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BBC News 2007/08
#11
Government to Nationalise Northern Rock

Northern Rock is to be nationalised as a temporary measure, Chancellor Henry Lockhart has said. None of the five private proposals to take over the beleaguered bank offered "sufficient value for money to the taxpayer", he said. He went on to say that the public would gain if the government held on to Northern Rock until market conditions improved. Ron Sandler, nominated by the government to run Northern Rock, said savers' deposits would be secure.

A consortium led by the Virgin group was leading bids to run the beleaguered bank, while a management buyout had also been considered. But ministers have decided that nationalisation - the first such move since the 1970s - was the only option. Virgin boss Sir Richard Branson criticised the government's decision: "We believe we had a very strong proposal, an experienced team and one of Britain's best brands. We believe nationalisation is not the right answer and that a commercial solution would have been the best way forward."

Northern Rock got itself into financial difficulties last year because its business model left it ill-prepared for the global credit crunch. It was forced to ask the Bank of England for emergency funding, triggering the first run on a British bank in more than a century. Nationalisation will be pushed though parliament with emergency legislation on Monday. Shares in Northern Rock will be suspended on Monday morning. Under nationalisation rules, shareholders will be offered compensation for their holding, at a level set by a Government-appointed panel. Investors could begin legal action if they are unhappy with the amount offered, with BBC Business Editor Robert Peston saying that it was "inevitable" that the government would be sued by shareholders who felt they had been "fleeced".

UK taxpayers are now subsidising the bank in loans and guarantees to other lenders to the tune of about £60bn. The Treasury now feels that nationalisation offers the most certainty of securing these guarantees, Mr Peston said. It is thought that the business model it proposes will be similar to those put forward by the Virgin Group and the in-house management consortium. These were likely to see a downsizing of the bank, with job cuts among its 4,300 employees likely, observers say. The Treasury had already recruited Mr Sandler, the former boss of the Lloyd's of London insurance market, to lead Northern Rock, in case it were nationalised. Mr Sandler is widely regarded as having restored confidence in Lloyd's after its years in financial disarray. He said the changes would have no impact on the guarantees made to lenders, or the government-backed support for savers' deposits. "It is business as usual," he said. Mr Sandler is well known to former Prime Ministerial hopeful Gordon Brown, and worked for the Treasury in developing the so-called stakeholder pension and investment products that were intended to help those on lower incomes save for retirement. 

The Chairman of the Commons Treasury Select Committee John McFall said that he welcomed the Government's decision to nationalise. "They have explored every avenue. At the end of the day the biggest issue is the safeguarding of taxpayers' money. If nationalisation saves that money, that has to be the correct step in the long term."
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#12
Labour ballot box ‘tampered with’
16 July, 2007

The Labour Party has, according to sources, found that a ballot box used in the recent selection of a parliamentary candidate for Sedgefield, had been tampered with.

According to sources from Labour Party Headquarters, Sedgefield CLP officials are “keenly aware” that a ballot box used in the selection of Marcus Philby as the Parliamentary candidate for Sedgefield, had been “tampered with.”

An official involved in the selection vote last week informed the BBC that “it was a suspected by the higher-ups. I called to let them know that there were broken seals on the boxes, and they told me to keep the election going. We didn't know it was a part of a broader plan until our recent investigation”

Philby, widely seen as an ally of former Foreign Secretary Caroline Blakesley, was elected in a “tight” vote, supposedly with party activist and Blair ally Phil Wilson coming in second.
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#13
3 By-Elections Yield Mixed Results

Tonight the nation reels from three by-elections that have shaken it to its core. In Sedgefield, Kirkcaldy and Cowedenbeath, and Norwich South there have been three radically different messages sent to our three main political parties. In Sedgefield the prevailing message was one of anger at politics as usual with the BNP surging into second place beating the Tories and the Liberal Democrats as Labour lost votes, in Kirkcaldy the message was one of Scottish Nationalism on the surge with Gordon Brown's old seat being the home of a major swing to the SNP at the expense mostly of the Tories and Liberal Democrats, and in Norwich South the message is one of a desire for change with the Conservatives dethroning Labour in Charles Clarke's old seat on a swing of nearly 9% from 2005. The results have fascinating implications for the rest of the United Kingdom, if the Kirkcaldy swing is replicated across Scotland the SNP get to within striking distance on a litany of Labour and Lib Dem seats with the Lib Dems themselves in prime position for a number of Labour seats, notably Edinburgh South and Aberdeen South. The Tories meanwhile are within a 1pt swing of losing Dumfriesshire, and Scotland, entirely wilst needing a near 5pt swing from Labour to them to retake Dumfries and Galloway, allowing them to double up north of the wall.

In response to the results polling has been mixed. The Conservatives are down somewhat in Scotland putting even more question marks over Dumfriesshire, Clydesdale, and Tweedale whilst having an ever so slight swing against them to Labour in the rest of the UK. Labour are also down in absolute terms whilst minor parties such as Respect and the British National Party are surging. Current polls put Respect on up to 3 Westminster seats after the next election in a welcome boost for George Galloway's immediate prospects whilst the BNP rose by nearly a point to nearly 3% nationally, overtaking UKIP and leaving the Green Party in the dust. In Northern Ireland there were no by-elections but the polls show a resurgence for moderation parties the UUP and the SDLP, both up since the last election, although no seats are currently forecast to change hands in Ulster.

It is thought that the main reason the Conservative Party were able to so outperform the polls in Norwich is because of their excellent ground game. The Conservatives hit Norwich with absolutely everything that they had sending their leader and many senior Shadow Cabinet officials into the constituency along with major spending on advertisements and other materials. The Liberal Democrats performed well to regain much of the ground lost nationally and come in at almost the exact same percentage as they got in 2005 indicating another strong local ground game on their part. Meanwhile Labour fell back by over 5% on 2005 indicating that the people may want something a little bit different in the face of a much refreshed opposition being offered by the Tories and Lib Dems. The results are available below:

Kirkcaldy and Cowdenbeath

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Sedgefield

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Norwich South

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#14
UK Growth hits 0% Last Quarter

Economics is a funny business, it can often take weeks (even months) to establish economic data, but the initial surveys of the economy taken suggest very clearly that economic growth has stalled down to 0%. Although this figure is subject to revision it is quite clear that the economy is performing less well now than it was half a year ago when it grew by some 0.75% in Q3. The global news is equally poor, US growth has also stalled to 0% having initially rebounded slightly following the 0.75% interest rate cut by the Federal Reserve, Eurozone growth falling to well under a projected 1% for the year, and emerging economies slowing. In response to the news the Bank of England announced a further 0.5% cut in the Base Rate reducing it to 4.75%. 

A spokesman for the Government said: "The economic news both at home and abroad has concerned the government. However, we can assure the British people that we will continue to monitor the situation and we will be prioritising pro-growth policies in the upcoming budget to guarantee the long term health of the economy."
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#15
Former Pakistani Prime Minister Bhutto survives suicide bombing

RAWALPINDI-- While leaving a rally in Rawalpindi, Punjab earlier today former Pakistani Prime Minister Benazir Bhutto was the target of an assassination attempt. Her vehicle came under heavy small arms fire, before a man wearing a suicide vest detonated the bomb next to the car. Early reports from the scene suggested that the car flipped over, but the heavy armour provided sufficient protection for Ms Bhutto and her entourage.

“We will not succumb to the terrorists or the government that seek to bring down our movement,” said Ms Bhutto in a statement after the attack. Her return to Pakistan after years living in exile increased pressure on the government of General Pervez Musharraf, which faces claims of illegitimacy following an election that many regarded as rigged. The Pakistani People’s party, which Ms Bhutto heads, organised a number of rallies and demonstrations throughout the country in preparation for upcoming elections.

Still, despite the surge in popularity for the PPP, Pakistan remains a state widely believed to be under military control. The ISI, Pakistan’s main intelligence agency, wields a great deal of clout and could tip the scales in favour of the military’s preferred candidate. Dr Ashara Ali, a South Asia expert from the London School of Economics, comments that there is virtually no line between civilian and military control in Pakistan.

“Terrorism has no place in Pakistan,” said Ms Bhutto upon returning to her party’s offices in Karachi. Sources within the PPP speculate that, as the security situation deteriorates in Punjab and Balochistan, senior officials from the PPP would likely remain in their electoral stronghold of Sindh, of which Karachi is the capital. “Their main priority is to win the election, but in order to win they need to survive - and unfortunately I mean that quite literally,” said Dr Ali.
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#16
Government Unveil Mixed Budget

Today in the House of Commons the Chancellor of the Exchequer unveiled a mixed budget with lower taxes and higher spending. Tax cuts have been focused around individuals and small corporations whilst the spending hikes have largely rested on infrastructure and one-off payments. The Budget is good news for people earning £5800 who will now pay £0 of Income Tax, a £300 increase in the threshold which will save those earning £35,000 £60/yr. Businesses are expected to rejoice at the slight decrease of National Insurance contributions they will be expected to make. On the whole taxes either went down or were kept level in real terms with only Stamp Duty bucking that trend in any meaningful way due to spiralling house prices. Among the less popular measures announced by the Government there was a double-whammy for motorists as both Vehicle Excise Duty and Fuel Duty are increased in this budget and the various sin taxes are also kept on the so-called inflation escalator with all alcohol and tobacco duties increasing by at least inflation.

The Budget includes many public spending commitments, proportionally the bulk of this spending goes to transport which sees a 17% increase this year as the Government seeks to get the economy moving including measures to spend £300mn this year as part of a £1.5bn package to widen the A1 from Durham to Edinburgh and nearly £2bn to spend on rail infrastructure. Some groups have been quick to criticise however with one FTSE 100 CEO telling this programme that at a time where Government intervention has failed so dramatically to stop the housing crisis, the banking crisis, and the impending economic crisis the Government should have focused on giving business the tools to succeed rather than simply reshuffling deck chairs on the Titanic saying "it will take years for many of these measures to have a meaningful impact on our economy, we need results now to stave off the worst of what is to come". With the analysis here is our economics correspondent Robert Peston

Quote:This is an interesting budget for many reasons, on the face of it it is the first open admission from the Government that we will indeed be facing a recession at some point in the near future which means green lights were given to try and get these projects working asap, thus reducing the lag factor and allowing the economic benefits to be felt during the recession. But there may be more to the story than this. The tax cuts, whilst nice, are rather small and do not affect some of the larger determinants of consumer spending such as VAT. £60/yr equates to £5/month which whilst invaluable to some would prove barely able to afford a luxury item for many. This has led to some speculation that we could be staring down the barrel of a 2008 General Election before the recession begins to get truly underway which, if Labour won, would allow them to govern for five years and maybe (they hope) get the recession out of the way before 2013.

The headline figures for the Budget are equally interesting. Real growth has evaporated with the UK economy now due to grow by less than the rate of inflation, unemployment is beginning what many believe to be a sharp upward swing, up by 0.72% since this time last year, and the deficit has increased by £17bn, or nearly 1% of GDP. The current cost of Northern Rock, estimated by the budget, appears to be in the region of £50 to 70 billion. House prices grew by 10% making the average home now worth £183,000.
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#17
Democrats fear contested convention as Republicans return to the runner-up
June 2008

As the US presidential primary season draws to a close, there are two distinct results that will influence America's choice this November.

In the Republican Primary, John McCain is the presumptive Republican nominee. The Arizona Senator who was the runner up to George Bush in 2000, McCain eeked out a win in New Hampshire over former Governor Mitt Romney, who finished in second place in the delegate count. Former Senator and actor Fred Thompson finished third. While McCain on his own did not have enough delegates to win at the Convention, he was endorsed by Governor Romney the day after the primaries finished, bringing him past the 1,191 delegate barrier. Senator McCain's shortlist for Vice President includes the following people: Senator Joe Lieberman (I-CT); Governors Haley Barbour (MS), Sarah Palin (AK), and Tim Pawlenty (MS), and former Secretary Tom Ridge (PA).

At the close of the Democratic Party primaries, no candidate has received the 2,028 delegates needed to clinch the nomination at the convention. Senator Barack Obama has 1,771 delegates, former Vice President Al Gore has 1,399, and Senator Hillary Clinton has 511. Clinton, who has already withdrawn, is seen as the kingmaker in this decision and has said that she does not wish to be considered for Vice President or a cabinet position to avoid any thoughts of impropriety. Obama's shortlist is said to include Representative Chet Edwards, Senator Joe Biden, Governor Tim Kaine, and Governor Kathleen Sebelius. Gore's is said to include Governor Bill Richardson, Senator Evan Bayh, Senator Jim Webb, and Governor Ed Rendell.
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