MPs awarded 2.33% salary increase

MPs are to receive a pay rise of 2.33% from 1 April, bringing their annual salary to about £64,766.

Rules introduced last year fixed the increase at the average received over the previous year by 15 different groups of public sector workers.

The Westminster salary rise comes at a time when many workers are facing no pay rise, or even reductions.

Gordon Brown has announced a freeze in ministerial salaries, calling it the "right thing to do".

Those ministers who are MPs will also forego the £1,500 rise in their parliamentary pay to which they are entitled, the prime minister's spokesman said.

The Conservatives announced they would match that ministerial pay freeze for David Cameron and shadow Lords leader Lord Strathclyde - and pledged to impose a pay freeze for ministers in 2010/11 if they are in government.

Liberal Democrat leader Nick Clegg and his deputy, Vince Cable, will also not take up the rise, the party said.

Last week figures revealed that inflation, judged by the Consumer Prices Index, had risen to 3.2% in February this year.

“The Westminster salary rise comes at a time when many workers are facing no pay rise, or even reductions.”

Allowances

But the Retail Prices Index, which includes mortgage costs, fell to zero in the same month.

MPs' basic pay is topped up by expenses and allowances worth up to around £180,000 a year to pay for their offices, staff and travel and the cost of spending time away from home while working at Westminster.

Ministers also receive pay on top of their MPs' salary.

Mr Brown, speaking at a Downing Street press conference, said: "Last year and this year ministers will have no pay rise.

"Their pay has been frozen. That's the right thing to do when people are suffering in the economy.

"I made that decision myself and ministers have supported that decision because it's the right thing to do."

Mr Brown's spokesman said all cabinet ministers consulted on the freeze had agreed to it on behalf of themselves and their more junior ministerial colleagues.

An inquiry has been ordered into the whole question of MPs' pay and expenses following a series of controversies, including allegations relating to claims for second home allowances from Home Secretary Jacqui Smith and work minister Tony McNulty.

The chairman of the Senior Salaries Review Body, Bill Cockburn, wrote to Commons Speaker Michael Martin on Friday to inform him that he had calculated this year's average at 2.33%. continues here

British Gas leak reveals customers are being charged different prices for the same package

British Gas has been charging customers different amounts for the same 'fixed-price' package. 

An internal memo reveals that some families on the company's Fixed Price August 2010 offer have unknowingly been paying four per cent more a year. 

Fixed-price deals ensure customers are not affected by the rise and fall of energy prices over a set period. Consumers normally pay a small premium on their existing rate.



Some British Gas customers were offered a zero per cent premium - a free switch - but others were charged four per cent. For an average household, the difference in bills would be around £53 a year.

Many customers were not even told the zero per cent rate was available and the leaked document tells sales staff to switch customers from the four per cent rate only if they specifically ask for it.

British Gas claims the different rates are a market test and says the zero per cent deal is a discount for high energy users.

But a second memo to staff states: 'The testing of premium rates is market sensitive information, please do not share this with customers. If [a] customer is adamant and wants to know why they were not offered the zero per cent premium, escalate your call to Team Management.'

Labour MP Kate Hoey said: 'This is outrageous. It's just another underhand way for British Gas to make money off families who are struggling with their bills. This is the kind of tactic that the Government must clamp down on to help households across Britain.'

A report by the Business and Enterprise Committee last week estimated up to 5.5million households are living in fuel poverty.

This means they spend more than 10 per cent of their income on power bills, with many forced to choose between heating and eating.

Many of these are pensioners, with 20,000 expected to die this winter because they cannot afford to heat their homes.

British Gas's 15.9million users were hit with a massive 35 per cent price hike last summer with bosses blaming global rising energy prices.

Parent company Centrica is expected to make record profits of almost £1.9billion this year. continues here

Gas and electric bills rising twice as fast in Britain as in Europe

Energy bills are rising more than twice as fast in the UK as in neighbouring nations, it emerged yesterday.

The figures raise fresh questions about foreign firms 'picking the pocket' of UK consumers.

Gas and electricity prices in Britain have risen by 29.7 per cent in the past year, the Organisation for Economic Cooperation and Development revealed.

This compares with the European average of 14 per cent and just 8.1 per cent in Portugal.

The OECD, made up of the world's 30 richest nations, is one of the most prestigious economic bodies in the world.

It found that Norway is the only other developed nation facing higher price rises than Britain.

Ed Mayo, chief executive officer of the new super-watchdog Consumer Focus said: 'The UK energy consumer is being clobbered faster and harder than those in Europe.

'Other countries may be doing more to keep their prices down and we should learn from them.

'The UK has a relatively free market, but the freedom to cut prices in the early years seems now to be the freedom to raise prices with impunity.

'Of course, those least able to afford it suffer most.'

Earlier this year MPs revealed the massive increases are down to European power monopolies refusing to sell our own gas back to us and effectively holding the UK to ransom.


Britain is no longer self-sufficient in gas from the North Sea and has become reliant on imports during the winter.

Foreign power firms are buying cheap British gas in the summer, storing it, then refusing to pipe it back when it is needed in the winter, effectively rationing supplies and pushing up prices.

The UK is vulnerable because it only has enough storage to supply the country with gas for 13 days, compared with 99 days in Germany and 122 in France.

Britain is also more reliant on the gas market, unlike France which obtains 37 per cent of energy from nuclear power. continues here

Shares plunge as pound buckles

Sterling plunged again against the dollar this morning, having fallen through $1.60 for the first time in five years on Friday. The pound lost a further 3 cents to $1.542 amid mounting fears of a prolonged UK recession. 

The same fears forced down the FTSE 100, which plunged 185 points, or 4.7 per cent, after the opening with banks and insurance companies leading the way. European stock markets were also down around 5 per cent, following big falls in Asia with Hong Kong's Hang Seng down more than 10 per cent and the Nikkei in Tokyo losing 6 per cent. 

Friday's GDP figures showed that the British economy shrank by 0.5 per cent in the three months to the end of September, the first time quarterly GDP has fallen in more than 16 years. 

Sterling has fallen 12 per cent from $1.72 in a week and was put under pressure when Mervyn King, Governor of the Bank of England, admitted it was likely that the country was heading for a prolonged and painful recession.  

Gordon Brown piled further pressure on sterling by reiterating Mr King's comments. 

The Bank of England is being pressured to cut interest rates further and the Government is attempting to stem fears about the falling currency. On Friday Stephen Timms, Financial Secretary, said the fall in the pound was not a condemnation of the country’s economic policy. 

“I don’t think it’s a vote of no confidence,” Mr Timms said. “We don’t have a target for exchange rates. Exchange rates are volatile and go up and down. And, of course, there are exporting companies in the UK that will benefit from what has happened. And I don’t know what will happen in the future.”  continues here

Economy shrinks as Britain enters recession

Britain’s economy is shrinking for the first time in 16 years, official figures showed yesterday, confirming that the country is in recession.

The toll from the credit crisis and housing crash has ended Britain’s longest unbroken run of growth since quarterly records began in 1955. City analysts gave a warning that the economy could shrink at an even faster pace in coming months.

Figures for gross domestic product revealed a worse-than-expected fall of 0.5 per cent over the past three months. A recession is defined as two consecutive quarters of negative growth, but a further contraction is inevitable.

The response on the financial markets was swift and brutal. The pound plummeted against the dollar and nearly £49 billion was wiped off the value of Britain’s leading companies. Alistair Darling, the Chancellor, sought to shore up confidence among fearful families and businesses. “It’s obvious now that our economy, other economies across the world, are moving into recession,” he said. “Yes, it’s going to be difficult, yes it’s going to be tough, but we can get through it.”

Charlie Bean, the deputy governor of the Bank of England, said that Britain was only “in the early days” of the fallout from unprecedented global financial convulsions. “This is a once-in-a-lifetime crisis, and possibly the largest crisis of its kind in human history,” Professor Bean said.

Shares in London slumped in response. The FTSE 100 closed down a further 204.5 points, or 5 per cent.The pound suffered one of its worst batterings since it was floated in 1971. At one point it was down by 8 cents against the dollar, before closing a little over 3.5 cents down on the day at $1.5837. In Europe, leading shares also fell by 5 per cent, while US blue-chips fell almost 4 per cent in a day of wild swings in financial markets. continues here

Worst financial crisis in human history': Bank boss's warning as pound suffers biggest fall for 37 years

• Economy outstrips forecasts to shrink by 0.5%

• Pound suffers worst fall against dollar for 37 years

• FTSE plunges 9% before rallying to close down 5%

• Asian markets tumble for a third day amid global fears
  
  Consumers face higher shop prices, dearer fuel and more expensive holidays after the pound slumped yesterday.
  
  Sterling took a hammering as economic figures showed the UK approaching full-blown recession.
  
  Bank of England deputy governor Charlie Bean warned that the pain is just beginning, calling the situation the 'largest financial crisis of its kind in human history'.
  
  
  
  On the 79th anniversary of the Great Crash of 1929:
  
  • Britain's economic output slid 0.5 per cent - more than twice the decline expected by the City;
  
  • Markets tumbled around the world, with leading UK shares losing almost £50billion;
  
  • Sterling had its worst-ever week against the dollar since 1971 and hit a record low against the euro;
  
  • The oil cartel Opec cut production, a move likely to increase petrol prices up to 5p a litre;
  
  • Experts warned that hedge funds are facing disaster, with billions likely to be wiped off savings and pension funds;
  
  • Hundreds of jobs were axed in the insurance, cosmetics, haulage and textile industries.
  
  The plunge was prompted by the worst set of UK growth figures for 18 years, recording the first time that the economy has officially contracted since 1992.
  
  The Office for National Statistics reported UK output dropping 0.5 per cent between July and September.
  
  Another fall in the final three months of the year would propel Britain into the first official recession since the days of John Major.
  
  Tory leader David Cameron declared: 'This is the day the recession became real.
  
  'We have had ten years of a Government saying no more boom and bust. We have had ten years of a Government not putting aside money for a rainy day. Well, that rainy day has now come.'
  
  At one stage, the pound was worth as little as $1.52, prompting speculation that the UK was on the brink of a currency crisis.
  
  Although it later rallied, it has lost a quarter of its value against the dollar over the past year.
  
  Foreign investors are less willing to finance the UK because of its record debt burden and slumping economic output. The rush to sell sterling means prices of imports like clothing and electronic goods will rise, holidays will cost more and overall living standards will suffer.
  
  The Tories said sterling's decline proves Mr Brown has left Britain ill-equipped to face the banking crisis.
  
  Shadow Chancellor George Osborne said: 'Once again, under Labour, the pound in your pocket is worth less. Indeed Gordon Brown has set a new record for Labour Governments, but it's not one he's likely to boast about.
  
  'The 25 per cent fall in the value of the pound over the last year is even greater than the devaluations under Jim Callaghan and Harold Wilson. It's a sign that international investors think Britain is badly prepared as boom turns to bust.'
  
  Analysts warned that the nation faces an extended period of austerity, as unemployment soars and families are forced to save on even basic essentials.
  
  Professor Andrew Clare, of Cass Business School, said Britain has amassed a record debt burden that must now be paid off.
  
  The economist added: 'We are going to have to wear a hair shirt as a nation. If this turns out to be recession lasting five or six quarters, which looks possible, we are not going to see the slightest upturn until 2010. And even then we can expect at least five years of muted growth.' continues here
  

India, China new African colonialists

Hungry for oil and minerals, India and China have become Africa's new colonialists, exploiting the world's poorest continent in the same way as its old European masters, billionaire financier George Soros said.
European nations' scramble for resources, from slaves to diamonds and gold, led them to subjugate Africa's peoples under colonialism.

After independence swept the continent in the 1950s and 1960s, they often supported corrupt and dictatorial regimes.
Over the last decade, amid concern over minerals funding wars from Angola to Democratic Republic of Congo, Western governments and multinationals have largely accepted the need for accountability and transparency in extractive industries.
But India and China, which are pumping billions of dollars of loans and investment into Africa, have not, Soros said.
"They are in the process of repeating the mistakes that the colonial powers have made," Soros said in the Senegalese capital, Dakar.

"There's a certain irony of the old colonialists recognising their past mistakes and trying to correct them, and the new colonialists then repeating those mistakes."
Soros, whose charitable foundations disbursed $45 million in Africa last year, hoped that Chinese firms would toughen their criteria for investment, although he said Chinese demand for raw materials had brought benefits to the continent, underpinning its strongest growth in four decades.
"It's the basis on which the economic outlook for Africa is somewhat exempt from the current global downturn," he said, assessing Africa outlook as "quite good".
"I don't expect a global recession. I expect a recession in the developed economies but there are some very positive dynamics for the developing world, particularly resource-rich areas," said Soros, who was ranked as the world's 80th richest man by Forbes magazine last year with a fortune of $8.5 billion......Article conts (-)