Tagged: UK

Defence cuts will shrink UK armed forces

BBC NEWS | 2010/01/13 | 09:40:31 GMT

The British armed forces could be forced to shrink by up to a fifth because of a lack of money, a military think tank has predicted. The Royal United Services Institute said the number of trained military personnel could fall from 175,000 to little more than 140,000 by 2016. Its report said the cost of troops and equipment was rising, and major cuts were “inevitable.” The Ministry of Defence said budgets would not be cut at all next year.

Defence review

The report’s author, defence expert Professor Malcolm Chalmers, warned hard choices lay ahead and efficiency savings would not be enough to put Britain’s defences on a sustainable footing. He said even being “cautiously optimistic,” intense pressure on government finances meant the MoD’s budget was likely to fall by 11% in real terms by 2017. And he said a much deeper reduction of about 15% over the next three years could not be ruled out. Professor Chalmers warned the problem would be made worse because the costs of employing troops and civilian personnel have been rising in real terms, as has buying and running equipment. Cuts to the available budget combined with growing costs meant the next six years were likely to see a reduction of about 20% in the number of service personnel, the report said.     Continue reading

Net around Israeli war crimes suspects tightens

Adri Nieuwhof and Ziyaad Lunat | Electronic Intifada | 18 December 2009

Efforts by human rights organizations, lawyers and activists in Palestine and Europe to hold Israeli war crimes suspects to account have gained momentum over the past few years. Last week, former Israeli Foreign Minister Tzipi Livni cancelled a visit to the UK over threats of a lawsuit under the country’s universal jurisdiction laws. The Goldstone report on the UN Fact Finding Mission on the Gaza Conflict, published in September, favors universal jurisdiction as a tool for enforcing international law, preventing impunity and promoting international accountability.

The purpose of universal jurisdiction is to hold accountable in third-party states individuals suspected of war crimes from states that do not fulfill their obligations under international humanitarian law. The events of World War II showed the horrific consequences of the absence of the protection of civilians, leading to the adoption of the Fourth Geneva Convention in 1949 dealing with the laws of armed conflict. State signatories to the Convention are obliged to enforce and ensure the respect of international humanitarian law, or the law of armed conflict.     Continue reading

Jewish school loses appeal in UK

Guardian | Wednesday 16 December 2009 | 11.27 GMT

One of Britain’s most successful faith schools lost its appeal today to overturn a ruling that it had racially discriminated against a 12-year-old boy. In a landmark legal decision, judges at the Supreme Court found the Jewish Free School, a comprehensive in north-west London, had broken the law by refusing to admit the boy, known as M. It had denied the boy, who is a practising Jew, a place because it has twice as many applicants as it can take and prioritises children whose mothers are recognised as Jewish by the chief rabbi. M’s mother converted from Catholicism to Judaism under a non-Orthodox authority, which means she is not recognised as Jewish by the chief rabbi. The chief rabbi only recognises children as Jewish if he recognises their mothers as Jewish.

M’s father took the school to court claiming racial discrimination. In June, the court of appeal ruled in his favour. It said the school’s policy amounted to racial discrimination because it prioritised applications from children with Jewish mothers. But the school appealed and took the case to the Supreme Court. Critics say today’s ruling has meant secular jurists are deciding who is Jewish and who is not. The ruling will      Continue reading

Jobs could go to fund Afghan war

BBC NEWS | 2009/12/15 | 08:28:39 GMT

The defence secretary is due to outline how he plans to pay for extra equipment for British operations in Afghanistan by making cuts elsewhere. An RAF base could be shut and thousands of defence jobs lost in Whitehall and also within the armed forces. Bob Ainsworth is expected to tell MPs more than 20 Chinook helicopters are being ordered over the next 10 years. It comes as a report accuses the MoD of driving up projects’ overall budgets through short-term cost-cutting. The BBC understands parts of RAF Kinloss, in Moray, could be mothballed as part of the spending cuts.

Tough negotiations

The government is expected to announce it is buying the Chinooks from Boeing after months of criticism over the number of helicopters in operation in Helmand, in Afghanistan. An extra C17 transport plane could also be on the cards. But the money will have to come out of the Ministry of Defence’s existing budget, which is already overspent. Mr. Ainsworth is likely to announce cuts to the existing Harrier and Tornado fighter jet fleet, and a cutback of Nimrod reconnaissance aircraft. The final decision will end months of tough negotiations over the 2010 spending round. But there is more pain ahead in defence, with a public spending squeeze still to come.     Continue reading

Treasury ‘had urged tougher cuts’

BBC NEWS | 2009/12/11 | 08:43:31 GMT

The Treasury wanted tougher action in the pre-Budget report to tackle the UK deficit but was persuaded otherwise by Gordon Brown, the BBC has learned. Treasury officials wanted to announce more spending cuts in order to lend credibility to their plan to halve the £178bn deficit within four years. However, months before an election, the prime minister wanted existing pledges to boost spending by £30bn maintained. The Tories have said the plans were “designed for electioneering purposes.” The government is compelled to halve the post-war record deficit within four years, under the Fiscal Responsibility Bill. Wednesday’s pre-Budget report (PBR) announced belt-tightening measures including a public sector pay cap and a rise in National Insurance, but both of these come in from 2011.

‘Tougher package’

Mr. Darling is broadly sticking to existing plans for next year, with public spending set to increase by £31bn. This disagreement between the Treasury and No 10 was not about the speed at which the budget deficit should be reduced, the BBC understands, but about how to ensure the government appeared to have a convincing plan to cut the deficit. BBC political editor Nick Robinson said: “The Treasury wanted a tougher package, mindful as it was of the need to start restoring the finances – and to be seen to be doing so. But, with an election just months away, Ed Balls, the schools secretary, and Gordon Brown, his close ally, argued passionately for an increase in the schools budget – a concession some      Continue reading

Brown and Sarkozy seek to end EU row

BBC NEWS | 2009/12/10 08:03:38 GMT

British Prime Minister Gordon Brown and French President Nicolas Sarkozy have issued a joint call for urgent global reform of financial markets. The joint letter comes ahead of talks on the sidelines of an EU conference, where they will try to brush off a row over an EU appointment. Mr. Sarkozy appeared to boast that a Frenchman’s appointment to oversee European banking was a British defeat. The EU summit will also address climate change and financing. Mr. Brown and Mr. Sarkozy had cancelled a meeting scheduled to be held last week, amid speculation of a row over EU posts. Mr. Sarkozy had told Le Monde newspaper the British were “the big losers” in the share-out of EU jobs after former French agriculture minister Michel Barnier was given the role of supervising Europe’s internal market for financial services, most of which is in the City of London.

‘No fuss’

But European diplomats tried to brush rumours of a disagreement between the two leaders to one side. “I think it’ll be fine. In two years, you’ll be wondering what the fuss was about,” one unnamed source told Reuters. Mr. Brown’s spokesman too said the meeting had a broader agenda than fixing bruised ties. “It’s not specifically focused on any one issue. There are lots of things going on,” he said. In a show of unity ahead of the talk, the leaders issued a joint call for the urgent global reform of financial markets. Writing in the Wall Street Journal, they say a one-off      Continue reading

European Banks Growing Bigger ‘Sowing the Seeds’ of Next Crisis

Bloomberg | December 2, 2009 | 19:01 EST

European banks are emerging from the credit crisis bigger than before, posing more risk to their national economies. BNP Paribas SA, Barclays Plc and Banco Santander SA are among at least 353 European lenders that have increased in size since the beginning of 2007, according to data compiled by Bloomberg. Fifteen European banks now have assets larger than their home economies, compared with 10 lenders three years ago. While the European Union has grabbed headlines for breaking up bailed-out banks, regulators haven’t reined in firms that shunned state aid and are too big to fail. European bank assets have grown 25 percent since the start of 2007, compared with a 20 percent increase at U.S. lenders, Bloomberg data show.

“We are sowing the seeds for the next crisis,” said David Lascelles, senior fellow at the London-based Centre for the Study of Financial Innovation, a research group. “What we have been doing in the last two years is making banks much bigger. It really goes against the currents of the time.” Banks expanded their balance sheets during the credit bubble, borrowing cheap money in the wholesale market to fund loans and investments. Royal Bank of Scotland Group Plc’s assets ballooned 2,914 percent in the 10 years through 2008 as it made acquisitions, boosted trading and increased lending. Edinburgh- based RBS spent $140 billion on takeovers during the period, culminating in the purchase of ABN Amro Holding NV in 2007 that triggered the world’s biggest bank bailout.       Continue reading

UK Recession ‘worse than estimated’

BBC NEWS | 2009/11/27 | 11:46:02 GMT

Chancellor Alistair Darling will say in his pre-Budget report that the economy performed worse in 2009 than he first predicted, Treasury sources have said. Mr. Darling is expected to say that the UK economy shrank by 4.75% this year – more than the 3.5% originally forecast in the Budget in March. The adjustment follows the economy’s unexpectedly poor performance in the first three months of the year. But he is likely to stick to 2010 forecasts of growth between 1-1.5%.

Return to growth

On Thursday, Mr. Darling said that since the Budget forecasts were made, “new data has shown that most economies, ours included, suffered a severe shock in the first quarter of this year”. He added that he still expected a return to growth around the turn of the year. The UK economy has contracted for the past six quarters, but the economies of the US, Japan, France and Germany have all started growing again. Recent UK economic figures, such as retail sales and manufacturing output, have indicated signs of recovery. October’s retail sales were up 0.4% from September, according to the Office for National Statistics. And the latest Purchasing Managers Index showed manufacturing output increased at its fastest rate for almost two years in October.

Britain opens inquiry into Iraq war

ABC News | Wed Nov 25, 2009 | 11:16am AEDT

A long-awaited public inquiry has heard the British Government tried to distance itself from Washington’s talk of overthrowing Saddam Hussein as early as February 2001, two years before the Iraq invasion. Britain’s biggest investigation into the Iraq war has begun hearing evidence in London. The invasion is considered the most controversial foreign and military policy decision in 50 years. One of the first witnesses was Sir Peter Ricketts, a top intelligence official in the years before and during the invasion. He said that in 2001 it was assumed that overthrowing Saddam Hussein was not British policy, despite growing talk in the US about regime change in Iraq.

US priorities after September 11 remained Al Qaeda and Afghanistan. But Sir Peter said it became clear by the end of 2001 that the ‘war on terror’ had moved into a second phase involving Iraq, even though there had been no evidence of a link between Baghdad and the terror attack. Sir William Patey, who was the chief of the Middle East department of the UK’s foreign office, also said he and his colleagues in London and Washington had discussed the overthrow of Saddam Hussein as early as February 2001. “I made a note that on February 22, 2001 … [that] our policy should be to keep a long way from the regime change end of the spectrum,” Sir William told the inquiry. “We were aware of these drum beats from Washington.”           Continue reading

UK Economy Shrank Less Than Previously Estimated

Bloomberg | November 25, 2009 | 05:12 EST

The U.K. economy shrank less than previously estimated in the third quarter as consumer spending stopped falling and the service industries slump eased, bringing the longest recession on record closer to an end. Gross domestic product fell 0.3 percent from the previous three months, compared with a prior measurement of a 0.4 percent drop, the Office for National Statistics said today in London. The result matched the median prediction of 28 economists in a Bloomberg News survey. Prime Minister Gordon Brown this week called for stimulus to stay in place to avoid “choking off recovery” as an election looms within six months. The Bank of England has expanded its bond-purchase plan three times since March to ensure Britain’s escape from recession and Governor Mervyn King said yesterday the pickup isn’t “particularly strong.”

“Over the coming quarters the economy will accelerate pretty sharply,” said Nick Kounis, chief European economist at Fortis Bank Nederland NV in Amsterdam and a former U.K. Treasury official. “In third quarter the U.K. was one of the sick men of Europe but it’s going to step up a few gears and will be one of the stronger performers in Europe next year.” The pound erased gains against the dollar and was trading at $1.6702 as of 10:05 a.m. in London. U.K. government bonds extended gains, pushing yields lower. The yield on the 2-year gilt fell 5 basis points to 1.17 percent.         Continue reading

King Says BOE Has ‘Open Mind’ on More Bond Purchases

Bloomberg | November 11, 2009 | 10:23 EST

Bank of England Governor Mervyn King said the U.K. economy faces a “hard path” back to health and he has an “open mind” on further bond purchases, signaling officials aren’t ready to withdraw stimulus yet. “Even if we get significant positive growth rates in the future, we have a long way to go to get back to where we were,” King told reporters in London today. Deputy Governor Charles Bean said credit is still tight and there are signs some companies are turning away orders because of a lack of capital. The pound fell and bonds rose after King unveiled the central bank’s quarterly forecasts. The Bank of England last week expanded the bond-purchase plan to 200 billion pounds ($335 billion) and the governor said today “the U.K. faces a prolonged period of balance sheet adjustment. We have a completely open mind as to whether to do more asset purchases or not,” King said. The pound fell against all 16 of its most-traded peers tracked by Bloomberg and government bonds erased earlier declines. The British currency fell as much as 0.5 percent today and traded at $1.6653 as of 3:22 p.m. in London. The yield on the two-year U.K. government bond slipped five basis points to 0.7 percent. “It was very important that he did not rule out further asset purchases,” said Colin Ellis, an economist at Daiwa Securities SMBC in London and a former Bank of England official. “That could suggest one or two people wanted to do more last week. The bank’s been surprised on the downside several times on this recession. King’s very conscious he doesn’t want to rule out further action.”      Continue reading

British Airways to cut 1,200 jobs amid losses

BBC NEWS | 06/11/2009 | 17:10:45 GMT

British Airways says it plans to cut a further 1,200 jobs after reporting a first-half loss for the first time. The job loss announcement means the airline will have shed a total of 4,900 positions by March 2010. The company suffered a loss before tax of £292m ($485m) for the six months to the end of September, compared with profits of £52m a year earlier. The first half of BA’s financial year is usually stronger because it covers the summer holiday season. BA said revenue over the six-month period was down 13.7% to £4.1bn, compared with £4.75bn in 2008. “Aviation remains in recession with revenue likely to be £1bn lower this year,” said BA chief executive Willie Walsh. He told the BBC that this had been the “most difficult year in the history of the aviation industry”. “All airlines are facing the same pressure. Operational changes at British Airways are absolutely necessary to improve the performance of the business,” he said. BA has already achieved 1,900 global job reductions by natural wastage, voluntary redundancies and reduced overtime.

Strike ballot

BA is currently in a battle with unions over changes to jobs and pay. It wants to cut the number of cabin crew staff on its long-haul flights from 15 to 14, with the change coming into effect on 16 November. The company is also proposing a two-year pay freeze. It says the changes are essential to its survival. On Thursday, the Unite union said it would continue with a strike ballot of British Airways cabin staff over the    Continue reading

Growth in UK unemployment slows

BBC NEWS 2009/10/14 10:17:49 GMT

The latest official UK unemployment figure has risen once again, but the rate of increase has slowed. nemployment increased 88,000 to 2.47 million in the three months to August, from the three months to May. The jobless rate rose to 7.9% from 7.6%. The rise in the number of unemployed was the lowest since July 2008, said the Office for National Statistics. The number of people claiming unemployment benefit grew in September by 20,800 to 1.63 million. While the number of people claiming the benefit is now the highest since 1997, the rise compared with the previous month was the least since May 2008. The number of young unemployed people – those aged between 16 and 24 – continued to rise, totaling 946,000 in the three months to August. This compares with 927,000 for the three months to July.

‘Fragile recovery’

Despite fears of another rise in youth unemployment, this actually fell in the three months to August, declining to 946,000 from 947,000 in the three months to July. “Although unemployment isn’t as high today as many feared it would be at the time of the Budget, it remains a serious problem, which is why we must keep increasing support and advice to get people back into jobs,” said Work and Pensions Secretary Yvette Cooper. Paul Kenny, general secretary of the GMB union said the latest figures showed “some tentative signs of a very fragile recovery in the economy”. Investec chief economist Philip Shaw agreed that the numbers suggested “the pace of deterioration in the jobs market is easing quite sharply”. The latest unemployment data comes a week before the ONS releases its first estimate for how the UK economy performed between July and September. Despite some signs of economic improvement, analysts remain unsure as to whether the economy will post growth and therefore exit recession. If the economy contracts again, it will be the first time that the UK has endured six successive quarters without economic expansion.

UK growth falls less than thought

BBC NEWS | 2009/09/29 09:36:32 GMT

The rate of contraction of the UK economy in the three months from April to June has been reduced again. Gross domestic product fell by 0.6% compared with the previous quarter, better than the previous estimate of a 0.7% contraction. The original estimate produced by the Office for National Statistics had indicated a 0.8% decline. The latest improvement came mostly from the manufacturing and construction sectors of the economy. The ONS figures showed manufacturing fell 0.1% in the second quarter, which was half the amount previously estimated. The rate of decline in construction was 0.8% instead of 2.2%, the ONS said.

Recovery hopes

Several other countries, including Germany and Japan, emerged from recession in the second quarter. Chancellor Alistair Darling suggested this week that the UK was approaching the end of its recession. “Germany, France and Japan are showing signs of growth. Many independent forecasters now believe the UK too is coming out of recession,” Mr. Darling said on Monday. “I think it is too early to say so with total confidence. But I stick with my Budget prediction that, as long as we continue to support the economy, recovery will be underway in the UK by the turn of the year,” he said at the Labour Party conference in    Continue reading

UK economy contracts 0.7% -FT

August 28 2009 10:12 | FT

The UK economy shrank by 0.7 per cent in the second quarter, marginally less than the 0.8 per cent initially estimated, according to official figures published on Friday. That is much slower than the 2.4 per cent decline seen in the first quarter of the year, although it is still a weaker performance than many economists originally expected. Compared with a year earlier, the economy contracted 5.5 per cent, the largest year-on-year decline since records began, but also slightly less than the 5.6 per cent decline reported in the Office of Continue reading