International Monetary Fund head Christine Lagarde says, 'bolster demand before low growth becomes entrenched'
The chancellor, George Osborne, came under pressure on Tuesday after the International Monetary Fund warned that Britain should prepare a Plan B to prevent the economy from diving further into recession.
In its annual review of the UK's economic record, the IMF said the Treasury should be ready to make temporary tax cuts to kickstart the economy because the weak recovery may be "more protracted than previously anticipated".
Christine Lagarde, IMF managing director, said: "Growth is too slow and unemployment, including youth unemployment, is too high. Policies to bolster demand before low growth becomes entrenched are needed."
She added: "If the economy turns out to be significantly weaker than forecast, fiscal easing should be considered."
The warning comes only weeks after the UK slid into its second recession in three years amid a host of surveys that showed declining business and consumer confidence.
Rising mortgage rates have recently hit household incomes and sparked concerns that predictions of a recovery later in the year will prove unfounded.
Fears that mortgage costs will continue to rise as the eurozone crisis hits bank lending are also expected to undermine consumer confidence and attempts to spur recovery.
The IMF said there was scope for the government to boost growth through higher spending on infrastructure projects, which would increase employment and demand within the economy and could be funded within existing budgets by imposing further public-sector wage restraint or reforming property taxes.
Labour said the IMF report showed Britain needed to act to prevent the economy falling further into recession. Ed Balls, the shadow chancellor, said: "If we fail to do so, and we see years of slow growth and high unemployment being entrenched, Britain will pay a heavy long-term price."
The IMF urged the Bank of England to make the first move and cut borrowing costs, along with further quantitative easing and measures to make credit more readily available. It warned that without swift action from the central bank and initiatives from the Treasury to direct loans to small businesses tax cuts may become necessary.
The Bank of England has resisted following the European Central Bank's programme of cheap three-year loans to banks, which has boosted the European banking sector. It has also been unwilling to buy corporate bonds, which amounts to direct lending to businesses.
Lagarde praised the Bank of England's £325bn quantitative-easing scheme, which she said had proved a key support for the UK economy, but urged it to go further and consider further base rate cuts, more QE and a wider range of credit schemes to boost direct lending.
She said policies designed to stimulate growth obviously came with risks, but she added: "These risks need to be weighted against the risk of lost years of growth. To this end, further monetary easing is required."
The Treasury is developing schemes to use its historically low borrowing costs to support a wide range of commercial projects, mainly in infrastructure.
Government spending on infrastructure has fallen by a quarter over the last year and the Treasury is under pressure to devise plans that will increase spending without adding to the UK's debts.
Osborne said schemes to support infrastructure projects and lending to small businesses would be ready over the next few months.
The Washington-based lender, which is supporting financial rescue plans in Ireland, Portugal and Greece, also warned the UK to prepare for an escalation of the eurozone crisis that would deliver a "substantial contractionary shock" to the economy.
Its report identified uncertainty over the future of the euro as the main danger to recovery and warned: "Risks are large and tilted clearly to the downside."
Chris Mahlangu, 29, is convicted of bludgeoning the white supremacist to death at his farmhouse in South Africa
A black farmworker has been found guilty of murdering Eugene Terre'Blanche, the white supremacist whose death rocked South Africa.
Chris Mahlangu, 29, was convicted in a court in the small town of Ventersdorp. His co-accused, Patrick Ndlovu, 18, was found guilty of housebreaking.
Terre'Blanche, co-founder of the far-right Afrikaner Resistance Movement (AWB), who wanted to overthrow South Africa's black majority government, was bludgeoned to death at his farmhouse in Ventersdorp on 3 April 2010.
Mahlangu and Ndlovu had pleaded not guilty to murder, housebreaking and robbery with aggravating circumstances.
Mahlangu claimed he acted in self-defence. Ndlovu denied involvement in the crime. He was 15 at the time of the killing and was tried as a minor. The trial has been held behind closed doors to protect his identity.
Last month the judge, John Horn, ruled that most evidence against the teenager was inadmissible because police failed to follow South Africa's child protection law in handling the case.
Terre'Blanche was found on his bed with his underwear pulled down to reveal his genitals. Initial testimony revealed that there was semen on his body, but the substance was never analysed.
Claims that Terre'Blanche sodomised one of his killers were rejected by Horn. He asked why it was only mentioned towards the end of the trial, and only through other witnesses.
"Sodomy is such a personal intrusion, I can't believe [Chris Mahlangu] would not have raised it immediately," he said.
On Tuesday scores of AWB members wearing military fatigues set up camp outside court, with their red, white and black, swastika-style flags planted in the ground.
Nearby, supporters of the two black farmworkers sang anti-apartheid songs and the police set up cordons to keep the two sides apart.
BMA conference hears 'misguided' and 'odious' reforms will prompt GPs to retire early, risking shortage of family doctors
The NHS is heading towards "operational and financial meltdown" due to a financial squeeze, misguided government policies and rising demand from patients, the leader of the UK's 44,000 GPs has warned.
Family doctors are so disillusioned by changes being foisted on them and the direction of the NHS that the health service could "run out" of GPs, Dr Laurence Buckman, chairman of the British Medical Association's GPs committee, said.
Buckman told the BMA's annual GPs conference on Tuesday morning that many family doctors in England feel they have no real say in the clinical commissioning groups (CCGs) of local GPs that will assume significant powers from next April as a result of health secretary Andrew Lansley's controversial NHS shakeup.
Buckman described the previous 12 months as "a very eventful year". He added: "A year full of events we don't like or think are a waste of time, money and effort. As the NHS in all four countries lurches towards the buffers of financial and operational meltdown, we find that instead of the clear thinking the NHS desperately needs right now, we have regulation, bullying micromanagement and disssipated effort."
The radical restructuring of England's NHS in the Health and Social Care Act would lead to profit-making private healthcare firms cherrypicking which NHS services to run and the "odious" sight of the health service having to compete with them to deliver patient care, Buckman told the 400 GP representatives at the BMA conference.
"Make no mistake: this act risks endangering the NHS in England. Even before it became law, changes were coming that have fragmented care. Now private organisations have the green light to pick off the best bits," he said, adding that while ministers claimed the reforms would make the NHS a one-stop shop for patients, "under these reforms patients will be lucky if they can get it in five visits".
While the vast majority of GPs support the central plank of the act – putting them in charge of commissioning services for patients – Buckman said "those GPs [also] see the insistence of ministers that the NHS has to spend its money competing with the private sector as odious".
His wideranging critique of Department of Health policy in England also included a warning that plans to let patients register with a GP anywhere, rather than near their home, by getting rid of traditional practice boundaries, "is madness". While the BMA has agreed to help ministers pilot the scheme before it potentially becomes common practice across England, "their version will destabilise [GP] practices for little benefit and ruin continuity of care and record".
Turning to coalition plans to change NHS staff pensions, Buckman accused ministers of alienating the UK's 44,000 family doctors: "The government wants us to pay more, work longer and have a smaller pension. They will pay the price for this, whatever the result of the ballot [for possible industrial action]. They have recklessly squandered GPs' goodwill.
"For a scheme that is in surplus, that was only sorted out four years ago, that was structured to give more money to lower paid NHS workers, to be thrown away so that we can all pay more to Treasury as a tax – for that's what this is – is so wilful I cannot believe that anyone sensible would do it," he added.
Ministers are determined to press ahead with the reforms, which have been opposed by almost every group of health professionals, who point out that the NHS pension scheme already generates a surplus of £2bn a year.
The reforms – which would force GPs to retire later before they picked up a lower pension – are so unpopular that they are prompting worrying numbers of GPs to retire earlier than planned, Buckman added. "GPs are retiring because not only are they getting older but the work is getting harder and the pension reforms are making those in their 50s rush for the exit.
"Trainee GPs see an uncertain future and go abroad, or take on short-term posts from which they can escape. Workforce problems need sophisticated solutions. Please, someone listen before we run out of GPs," Buckman added.
Alesha Ahmed told police she watched Iftikhar and Farzana Ahmed suffocate their daughter to death, jury hears
A teenager told police she watched her parents suffocate her sister to death by forcing a carrier bag into her mouth so she could not breathe and placing their hands over her face, a court heard on Tuesday.
Alesha Ahmed, now 23, said she watched her parents "acting together" during the murder of her older sister, Shafilea Ahmed, 17, on 11 September 2003, Chester crown court heard. She said that later that night she saw her father with a large object wrapped in binbags and brown tape – which she assumed was Shafilea – and which he drove off with in a car.
Alesha's parents, Iftikhar Ahmed, 52, a taxi driver, and his wife, Farzana, 49, deny murdering Shafilea, whose badly decomposed remains were found near a flooded Cumbrian river five months later in February 2004. The couple sat impassively in the wood panelled courtroom, with Farzana occasionally dabbing her nose.
The prosecution barrister, Andrew Edis QC, said Alesha watched as her parents suffocated her sister at their home in Warrington, Cheshire on the night she went missing. He said: "Both parents acting together got a carrier bag that they forced into her mouth. Their hands were over her face, closing her airways so she couldn't breathe."
In the immediate aftermath of Shafilea's murder, Alesha "talks about looking into the kitchen and seeing her mother sorting through a pile of blankets and sheets. She saw her mother with black binbags and two rolls of wide brown tape and some black tape," Edis said.
Then she looked out of the kitchen window and saw her father with a large object wrapped in binbags and brown tape, "which she assumed was the body of her sister", said Edis. Soon after, at around 10pm, she is said to have heard a car driving off with her father at the wheel and her mother remaining in the house.
The following evening, there was a sighting of a white van in Sedgwick – where Shafilea's remains were eventually discovered the following year – when Alesha was "telling her mates in Warrington that her father had killed her sister and chopped up the body", Edis said.
He told the jury that in November 2003, a covert listening device was placed in the Ahmeds' house and the couple were recorded discussing evidence and talking about using the press to get away with murder.
Edis argues it was an odd thing to be doing if their daughter was alive and well, with Iftikhar Ahmed heard to say: "What are they going to find in the car?" and Farzana heard "discussing about bodily fluids and said, 'No, and even if they find saliva in the car, it's not as if she didn't sit in the car.'"
Iftikhar Ahmed was said to be recorded saying: "By getting the support of newspapers you can get away with murder." A friend is heard giving them advice about the press and how to manage them, the prosecution said, and later urged Iftikhar: "Do not think about dishonour."
The device, Edis told the jury, recorded Iftikhar saying that the UK system works on proof, adding: "Without any proof even if you sisterfuckers kill 40 people, until it is found, they can't do anything to you."
Edis said from summer 2002 Shafilea was trying to form relationships with young men from her own ethnic and cultural background, but it was causing trouble with her family. In October, she was seen to have bruising around her neck and a cut lip. Around that time when she was absent from school, a teacher at Great Sankey high school, Joanne Code, phoned Shafilea and asked if she needed to be worried about her. "She got the answer 'yes'," Edis said.
He said in August 2010 a serious robbery took place at the family home in Liverpool Road. Three men entered the house and tied everyone up, apart from Alesha. "The reason she was not tied up was she was involved," Edis said. She has pleaded guilty to her role in the robbery and will be sentenced at a later date.
"There are two possibilities – either she is telling the truth about the death of her sister which she has kept under wraps for years for family loyalty and eventually, perhaps, because that relationship with her parents has become toxic she allowed herself to become involved in the robbery," he said. Edis said it had released a blockage preventing her from speaking which indicated how "serious and dysfunctional the family had become".
"Is it the truth or is it a wicked lie?" Edis asked. He described her revelation as a bombshell and questioned why she would make it up for fun.
He said Alesha Ahmed now found herself estranged from the family as a result of what she had said and done and her life had turned upside down.
PC Alex MacFarlane chooses to be tried by crown court jury over allegations of racially aggravated harassment
A Scotland Yard officer has denied racially abusing a suspect after the summer riots.
PC Alex MacFarlane elected to be tried by a crown court jury as he appeared before magistrates.
The 52-year-old was granted bail to appear again at Southwark crown court on 29 June.
Suited MacFarlane, wearing black glasses with tinted lenses, chose not to stand in the dock at Westminster magistrates court as he entered a not guilty plea to a racially aggravated harassment offence.
He confirmed his date of birth and gave his address as Forest Gate police station as the charge against him was read out.
He was accused of telling 21-year-old Mauro Demetrio: "The problem with you is you will always be a nigger, yeah?"
The indictment detailed that he intended to cause "harassment, alarm or distress" to his victim and "used threatening, abusive or insulting words or behaviour".
District Judge Daphne Wickham told him: "On this one charge you have elected trial by jury.
"At Southwark crown court on 29 June at 9.45, you are to return for a plea and case management hearing.
"You are on bail until that time."
Alison Saunders, chief prosecutor for London, charged MacFarlane last month after a U-turn by prosecutors.
The charging decision hinged on mobile phone footage, allegedly taken by Demetrio, from Beckton, east London, last August.
Demetrio was held on suspicion of drug-driving but no action was taken.
The Crown Prosecution Service announcement came after the police watchdog announced a review of a string of complaints about racism at the Metropolitan police.
Coroner says poor co-ordination among units in Afghanistan led to death of Michael Pritchard, but says it was an accident
A British soldier was shot by a sniper in a friendly fire accident that was caused by a series of misunderstandings and failures in military procedure, an inquest has heard.
The coroner, Alan Craze, blamed poor communication and lack of organisation for the death of Lance Corporal Michael Pritchard, who was killed by a gunshot wound to the chest and abdomen in the "blue on blue" incident in Helmand province.
Speaking after the verdict, Pritchard's family said the 22-year-old had died because of "a shocking chain of events". His death had been entirely preventable, relatives said.
"After reading all the evidence and sitting through the inquest we remain convinced that the consequences were tragically all too predictable," said his mother, Helen Perry. "The grief we feel at the loss of our beautiful boy is all too much to bear and we hope that this never happens to another soldier, another family. Michael is missed so very much."
Pritchard, from Eastbourne, East Sussex, died on 20 December 2009, when he was on duty on the roof of an observation post on a road in the Sangin area.
Pritchard, a Royal Military Police officer, and colleagues had been sent there to ensure the Taliban did not plant improvised explosive devices (IEDs) on an access road, Route 611, which was used by the British for transporting supplies.
But the inquest heard other UK soldiers were also in the area at another remote observation post, known as "Sangar". Believing he was firing at a suspected insurgent, Lance Corporal Malcolm Graham, of the Royal Scots Borderers, 1st Battalion, fired the shot that is thought to have killed Pritchard, the inquest was told.
During the hearings, a colleague of Pritchard's, Rifleman Jeffrey Stanley, said he had heard over the radio that soldiers at Sangar could see people on the road. He said he then heard permission being given to fire warning shots. Stanley said he radioed in to say he and Pritchard were coming under fire, but was told no shots had been fired anywhere near them. Pritchard was hit shortly after. Other witnesses said no such warnings were received.
Graham told the inquest: "I had no doubt in my mind I was shooting at insurgents. It was a terrible situation. I feel really bad about being involved." Others who gave evidence suggested no specific order was even given to fire shots.
Delivering his verdict after a week-long inquest, Craze said Pritchard's death was an accident, albeit an avoidable one. "I am inclined to the view that there were no insurgents there at all. If that is the case, how did this fatal misunderstanding come about?"
Although he said he did not believe there had been a "gung-ho or snap-happy attitude", he said the soldiers at Sangar were tired and there was "an overriding sense that they had arrived in a hornets' nest in a war zone and that they had to win".
He said it would never be known if important messages were sent and not received but that he could not blame the tragedy entirely on a communications failure. Craze said an inadequate briefings system and lack of understanding about a restricted firing line had also confused the situation.
Pritchard's father, Gary, said: "We hope and trust that the army will take steps to ensure that this does not happen again."
In a statement, his mother added: "Michael was the epitome of a first class Royal Military Police officer. We kept in regular contact via emails and he telephoned home [from Afghanistan] every week and always tried to remain his upbeat self. During the week before he died, he telephoned three times and I could sense the fear in his voice as he said: 'I'm moving mum, the communications will be bad and I won't be able to call you for a while'.
"Little did we know that would be the last time we would hear from our beautiful boy. My precious son's life and very promising career cut tragically and cruelly short in the most unexpected of circumstances.
"During the course of this inquest we have heard that a series of errors relating to command and control, communication and identification resulted in Michael's death, when most information and the best information available would have made Michael's death avoidable. Nobody in command took any action to rectify the situation and subsequently nobody has taken any responsibility for Michael's death."
Geraldine McCool, a solicitor representing the family of Michael Pritchard, said the tragedy could not be blamed on "the fog of war". She said: "We have heard a lot of evidence but one point kept emerging. Michael's location wasn't known about to the soldiers that mattered. That piece of information would have altered the wider picture from the remote Sangar. It would have saved Michael's life."
Lieutenant Colonel Nadine Parks, the commanding officer of 4th Regiment Royal Military Police, said Pritchard had "made a huge impact on our regiment in the short time he served with us … all our thoughts and prayers remain with Lieutenant Corporal Pritchard's family through this traumatic time."
Deputy prime minister says there is no evidence that allowing staff to be fired at will would be a good way of creating jobs
Nick Clegg has made a significant intervention in the row over proposals for "no fault dismissal", which are awaiting the results of a government consultation.
Conservatives have also indicated that Downing Street will drop the policy, which would allow employers to fire workers at will. However, some Tories are pushing strongly for the measure, saying it will encourage employers to start hiring.
"I don't support [the proposal] and I never have, for the simple reason I have not seen any evidence that creating industrial-level insecurity for workers is a good way of creating new jobs," said Clegg.
The Lib Dem leader said he would take seriously any evidence that emerged from the consultation, due to end in June, but continued to sound sceptical. "So far there just is no evidence," he added.
On Tuesday, Cable all but confirmed that the controversial proposals were to be ditched by the government. As Tory sources said that David Cameron was preparing to shelve the plans, Cable attacked the proposals from the Tory party donor Adrian Beecroft.
"British workers are very co-operative and they are very flexible," the business secretary told the BBC. "So we don't need to scare the wits out of workers with threats to dismiss them. It is completely the wrong approach."
It is understood No 10 is planning to ditch the proposal when a "call for evidence" ends next month on Beecroft's most controversial recommendation – that employers should be allowed to sack unproductive staff without explanation in a scheme known as no fault dismissal.
Under a compromise between the coalition parties, Cable agreed to a six-month "call for evidence" last year to see whether companies employing fewer than 10 people favoured the idea. One source said: "The no fault dismissal idea is unlikely to see the light. It will be rather a relief when we never have to talk about it again."
Cable spoke out after Mark Prisk, the Conservative business minister, was forced to answer an emergency question in the Commons granted to the shadow business secretary Chuka Umunna. John Bercow, the Speaker, summoned Prisk after a copy of the report was leaked to the Daily Telegraph, and the Sunday Telegraph reported that Downing Street was preparing to endorse the Beecroft report.
Mazher Mahmood, who now works for Sunday Times, appears to have commissioned surveillance of phone-hacking critic
The News of the World journalist Mazher Mahmood commissioned surveillance on its chief phone-hacking critic, the Labour politician Tom Watson, in the hope of finding him having an affair, according to email evidence Watson has obtained.
News International's internal investigating group, the management and standards committee, belatedly turned over the emails to a parliamentary committee of which Watson was a member. They implicate Mahmood and two former NoW executives, the assistant editor Ian Edmondson and news editor James Mellor.
This latest revelation of methods at the now-closed NoW will present difficulties for John Witherow, the editor of the Sunday Times. Mahmood, the so-called "fake sheikh" who specialised in controversial undercover investigations, was rehired by the Sunday Times after its sister paper was closed down by Rupert Murdoch, and is still working there.
Witherow has not so far commented on the disclosures.
The attempt by NoW journalists to gain evidence of sexual indiscretions by its arch-critic was launched on the morning of Saturday 26 September 2009, at the start of the Labour party conference. Mahmood claimed in an email to Mellor, copied to Edmondson, that he had received a tip that married Watson was "shagging" a fellow activist, and that he was "creeping into her hotel" at Brighton. The information, from a so-far unknown purported informant, appears to have been completely false.
Mahmood described the MP as a "close lackey" of the then prime minister, Gordon Brown, and noted he was "anti-Blair". It was agreed that a private detective, the former police officer Derek Webb, known as "Silent Shadow", would be hired to stalk Watson through the conference, from 28 September to 2 October, in what proved to be a vain hope of getting confirmation. Had the story been substantiated and published, it would have destroyed his reputation.
According to the emails in Watson's possession, Edmondson described the prospect as a "great story" and added: "You might want to check his recent cutts [cuttings], v interesting!"
Watson at the time believed he was on News International's "enemies list". He was pursuing a libel suit against the Sun for falsely accusing him of involvement in organising online smears against the Conservatives. He was also vigorously pursuing News International on the culture, media and sport committee, where a series of Murdoch executives were mounting an ultimately unsuccessful cover-up of phone-hacking.
Peter Mandelson told the Leveson inquiry on Monday how Rebekah Brooks would "come on to me and complain" that Watson and his colleagues were "hounding" them, and demand: "Couldn't they be pulled away, pulled off?" Brooks, editor of the Sun at the time of the libel, had taken over as chief executive of NI at the beginning of September, in control of both Murdoch tabloids.
On the evening of 29 September, while Derek Webb was still shadowing Watson at his conference hotel, the Sun revealed it was switching political sides, and published a dramatic anti-Brown front page. From then on, it embarked on a ferocious campaign against Gordon Brown and his supporters.
Watson is due to give evidence to Leveson on Tuesday.
Government's draft energy bill will replace current subsidies with complex new support system that may favour larger suppliers
A dash for gas, a major fillip for nuclear power and blows to renewable energy – these are widely expected to be the contents of the government's much-anticipated draft energy bill, the main contents of which will be outlined by ministers in the afternoon.
The nuclear industry is expected to be one of the big winners, with a set of policies designed to favour low-carbon power – which will, controversially, include atomic energy as well as renewable sources such as wind and solar.
But renewable companies are concerned that they will lose out, because the current system of subsidies will be replaced with a complex new system of support that could favour big companies over their smaller rivals.
This new system – known as contracts for difference – would allow companies to sign long-term contracts to supply electricity. But the prices on such contracts could be higher or lower than the price of electricity in the wholesale market – the attraction to companies is supposed to be that the long-term nature of the contracts gives them the stability and certainty they need to invest.
However, several renewables companies told the Guardian they thought the contracts would push smaller suppliers out of the market. Dale Vince, founder of Ecotricity, called for an exemption for small suppliers in order to encourage competition in the market.
"This is a complex subsidy mechanism designed to artificially raise the price of electricity and make it more attractive for big companies to build new nuclear plants, but as a result no suppliers will be able to accurately predict the cost or volume of electricity that must be budgeted for at the start of each year," he said.
"The level of risk in getting that prediction wrong will be a big problem for the big six energy companies, so imagine how much the risk is magnified for small energy suppliers. This risk does not exist under the current support mechanism for renewables."
The Department of Energy and Climate Change said its research showed the contracts for difference would provide good value for money for consumers.
Gas will also be a major focus of the new policy. It is seen as a relatively easy option to "keep the lights on" as many of the UK's ageing coal-fired power stations and nuclear reactors are due to be taken out of service by 2020. Renewable energy, such as offshore wind, is not being built fast enough to close the potential "energy gap" between supply and demand.
Gas-fired power stations, by contrast, can be built very quickly – within less than two years on average – and relatively cheaply, so if there is a threat of energy shortages they can be a stopgap, and they produce less carbon than coal.
A new "dash for gas", however, would be fatal to the hopes of building a low-carbon economy in the UK, according to green campaigners, and could leave consumers hooked on an increasingly expensive fossil fuel, with the soaring price rises that could entail. The UK's own supplies of natural gas in the North Sea are being rapidly depleted, making consumers heavily dependent on imports and the price volatility that brings. As any new gas-fired power stations would be expected to carry on operating – and producing CO2 – for at least 25 years, this would also make the UK's climate change targets in the 2020s increasingly hard to meet.
John Sauven, the executive director of Greenpeace UK, said: "This is a looming energy omnishambles. The energy bill could be a huge opportunity to get energy bills and carbon emissions under control, and to bring security to our power supplies. But ministers seem hell-bent on scuppering all of these aims by encouraging a big increase in our dependence on burning expensive gas to generate electricity.
"This would increase the burden on families and businesses, and see money from bills going to countries like Qatar and Norway instead of back into the British economy."
Much of the content of the new policy has already been discussed, but there could still be surprises in the form of some of the details, which have still to be set out, and in the timing. Two years into the coalition, the government has come under fire for failing to tackle energy issues sooner – and any further delays will be greeted with dismay by sections of the industry and investors who have repeatedly said that policy certainty is essential if the hundreds of billions in investment needed to revamp the UK's creaking energy infrastructure are to be flow.
Renewable energy companies believe there is still time for the government to show them more support in its energy plans. Gaynor Hartnell, chief executive of the Renewable Energy Association, said: "The government needs to enrich its understanding of the benefits of renewable energy investment. There is frustration that government leadership is missing in practice … Several countries, from America to Japan to Germany, have realised that taking the long-term view and investing in renewables is a significant step on the route out of economic malaise."
Ed Davey, the secretary of state for energy and climate change, said the reforms were needed in order to bring forward the estimated £110bn that will be needed for new low-carbon energy capacity, and said they could generate as many as 250,000 new jobs. He said: "Leaving the electricity market as it is would not be in the national interest. If we don't secure investment in our energy infrastructure, we could see the lights going out, consumers hit by spiralling energy prices and dangerous climate change. These reforms will ensure we can keep the lights on, bills down and the air clean." Davey said the reforms would reduce the UK's vulnerability to rising global energy prices: "By reforming the market, we can ensure security of supply for the long term, reduce the volatility of energy bills by reducing our reliance on imported gas and oil, and meet our climate change goals by largely decarbonising the power sector during the 2030s."
'We need an open society, in which people choose their place,' says Liberal Democrat deputy prime minister
Class snobbery is holding Britain back by creating a society divided between those born with a sense of entitlement to succeed and others who are "permanently excluded", the deputy prime minister has warned.
Nick Clegg quoted the historian Frank Harris saying 80 years ago that "snobbery is the religion of England", adding: "I think that statement still has more than a ring of truth today."
He said: "We end up with entitlement at one end and exclusion at the other. A closed society, in which people know their place. We need an open society, in which people choose their place. As a nation we have to shake off the outdated, snobbish attitudes of class that are cramping our society and hobbling our economy."
Clegg was speaking on the second day of a conference in London on social mobility, organised by the Sutton Trust foundation, an event which has already heard speeches from Ed Miliband, and the education secretary, Michael Gove.
The Sutton Trust also published international research on Tuesday showing children from poorer families in Australia and Canada have a "much greater" chance of doing well at school, getting into university and earning more in later life than their peers in the UK and the US. This was despite similar income gaps in all four countries, and higher spending on education in the US and UK, said the report. One important link identified in the UK was between similar education success – or lack of it – from one generation to the next, said the trust.
Quoting similar statistics to the report, Clegg said the lack of social mobility was shown by facts such as: one in five pupils were on free school meals but only one in 100 Oxbridge entrants were, and 7% of children attend independent schools, but public schools provide more than half the chief executives of Britain's top companies and 70% of high court judges.
"This is a legacy we cannot afford. Morally, economically, socially, whatever your justification, the price is simply too high to pay," said Clegg. "We must create a more dynamic society. One where what matters most is the person you become, not the person you were born."
He continued: "For liberals, this is core stuff. It gets to the very heart of our politics. We are a party and a creed that is defined by our belief in a fairer, more open society. For me, it's the reason I do this job."
Miliband's speech on Monday addressed what he said was an often overlooked issue: the snobbery attached to university education, and called for changes to the education system and culture to give more respect to vocational qualifications as a route to improvement.
Clegg said class was another issue too often "in the shadows" and "the ghost in the machine", because politicians – especially those from privileged backgrounds, among whom he included himself – were reluctant to discuss it. "I was lucky, but it should not be a question of luck," he said.
He also attacked claims that making allowances for social background, for example when deciding university admissions, was "dumbing down" as one of what he called the "pernicious myths" of the debate.
"At one end of the spectrum, there's almost a sense of entitlement," he said. "Entitlement to the best schools, universities and professions. Advantages are handed down almost automatically, generation to generation. The most fortunate see the horizons of their opportunities stretched far in all directions. And so from day one, they hear a clear, self-confident message. One that says: 'The world is yours. Go for it.'
"I think everyone should hear that message. But too many children from less advantaged homes look at certain qualifications, educational institutions, or jobs and think: 'That's not for people like me.' Because all too often, that's the message they've heard, over and over again."
Clegg also announced the publication of a Cabinet Office strategy for social mobility, updating progress in the last year on 17 different indicators from the birth weight of babies born into poor families to how far low earners progress in the labour market. For many measures it was too soon to publish statistics, but three appeared to show progress.
The report also set out policies aimed at encouraging more equality of opportunity, including free nursery places for 40% of two-year-olds and £1.25bn for the pupil premium fund to help children from poorer families.
In a heartfelt speech Miliband had said: "The foundation for my politics is the equal worth of every citizen. From that flows the idea that everyone should have equal chances to get on and make a better life."
3.04pm:Yemen: Today's National Day commemorates the unification of north and south Yemen in 1990 – though many in the south do not regard it as a cause for celebration. Separatist activism in the south revived during the last few years of President Saleh's rule.
In an article for Comment is free, Abubakr al-Shamahi cautions against separatism, saying that the crimes committed against the people of the south were committed by the Saleh regime, and not by "the north". He continues:
It is also undeniable that Yemenis share a common bond as one people. Initially, unification was incredibly popular, and to this day most secessionists will only say that it was betrayed. Those who reject a Yemeni identity, and claim a "South Arabian" one, seem to ignore that the term, in its political sense, only came about with the British occupation of the region.
Yemenis from every part of the country have intermarried, and live in all parts of the country. Any secession would split families and friends, and ruin the already depleted economy. Once the current anger at the apparent northern hegemony subsides, only regret would remain, akin to the lament the two Koreas express.
2.55pm:Syria: Syrian police killed two people when they opened fire on a crowd who came out to welcome UN observers in the eastern province of Deir Ezzor, a rebel official told Reuters.
"As soon as the UN convoy entered al-Busaira, a jubilant crowd of hundreds came out to welcome them. It was not minutes before they came under fire," Abu Laila, a Free Syrian Army official, said by phone from the town.
"The observers immediately left al-Busaira. We called them to come back but they refused," he said, adding that fighting ensued between President Bashar al-Assad's forces and rebels based in the town.
There was no independent confirmation of the incident.
Another opposition source in the province said that government forces surrounding al-Busaira had begun firing anti-aircraft guns at the town.
The activist group the Local Co-ordination Committees in Syria named one of those killed as Mashaal Moustapha Idriss.
2.37pm:Lebanon: Foreign Policy magazine has a dramatic firsthand account of the weekend's violence between pro and anti-Syrian groups in Beirut.
Beirut-based journalist Mitch Prothero writes:
I was on the corner of Beirut's Tareeq Jdeideh neighborhood when things turned bonkers. Attackers opened fire with multiple automatic weapons on a group of arguing men and soldiers. The soldiers ducked for cover along with the civilians: A young soldier and I fell behind a Volkswagen sedan for cover as scores of kids sprinted down the street away from the gunfire. Several were hit in the back as they fled.
Prothero has this summary of the causes of the violence:
Sunday night seemed more about revenge toward the army for the earlier shootings [of two Sunni clerics] months of pent-up frustration from being saddled with a government perceived to be doing Syria's bidding, and an effort to cleanse Sunni neighbourhoods of proxy parties aligned with the Syrians and Hezbollah.
And, this gloomy assessment of the future:
It's only going to get worse: The government's response to the violence will almost certainly be the tightening of pro-Assad forces' control over the Army, police and intelligence services. There's already been a quiet movement within the ministries to stack the bureaucracy with those sympathetic to Hezbollah and its allies, and the arrests of Sunday night's partisans had already begun by Monday morning. But as Lebanon drifts further into Syria's orbit, a large community of very angry people began rebelling Sunday night. And the path ahead is neither clear nor safe.
Syria: The explosion that reportedly killed five people in the Qaboun district of Damascus last night (see 10.44am) remains rather puzzling. The Associated Press says:
It was not clear what the exact target of the blast was, although authorities in Damascus said it appeared to be a police station. But photos of the scene released by the state news agency, Sana, showed what looked like a restaurant.
The area was considered too dangerous for journalists to access.
2.08pm:Syria/Turkey: The Turkish police have foiled a suspected plot to abduct the head of the Free Syrian Army Colonel Riad al-Asaad, according to Turkish press reports.
Hatay chief public prosecutor Adem Yazar said in a statement on Monday that an investigation was launched after a tip-off that a Syrian colonel currently residing in a tent city in the village of Apaydin, located in Hatay province, was going to be abducted and handed over to Syrian authorities.
1.57pm:Egypt: The authorities have finally allowed presidential election observers to start work – though it's too late for them to draw a full picture, Reuters reports, citing monitoring groups.
Many international monitors arrived in April but waited weeks for the necessary paperwork, forcing them to miss most of an election campaign enlivened by mass rallies, vigorous canvassing and Egypt's first televised presidential debates.
"We could not really assess the pre-electoral period as we did not have the accreditation," said Justin Doua, field director for the Electoral Institute for Sustainable Democracy in Africa (EISA), one of three foreign groups checking the vote.
Another, the Carter Center, said last week the delay in getting badges meant its monitors could not observe candidate and voter nominations or campaigning, which ended on Sunday.
The Center, founded by former US President Jimmy Carter with a remit to promote peace, democracy and public health, said on Tuesday it had now received its monitoring badges.
But a network of Arab monitors named Maat - after an ancient Egyptian goddess who personified truth, morality and justice - said some of its staff had still not received theirs.
EISA has sent its 33 witnesses out to 15 provinces and they reported some minor disorder during electoral meetings but no major clashes between rival campaigns, Doua said.
The Carter Center has also complained of state election committee rules limiting the time monitors can spend in polling stations and barring them from commenting on the process until results are announced.
Fewer international groups will be monitoring the vote than during a parliamentary election, whose final stage in January was overshadowed by a judicial crackdown on several civil society groups accused of receiving illegal foreign funds.
The election committee has accredited 9,700 monitors from 54 foreign and local groups for the presidential election, said Hazem Mounir of the election unit at Egypt's National Council for Human Rights, far fewer than in the parliamentary vote.
• Guardian journalist Ian Black, who is in Egypt for the election, is answering readers' questions here.
1.29pm: Here's a roundup of the latest developments:"
• UN monitors have helped negotiate the release of two detainees in exchange for a damaged tank, according video from activists. It is unclear why the Syrian government agreed to release the two men in exchange for a tank that appeared to be totally destroyed (see 12.30pm).
Yemen
• The annual National Day parade has gone ahead peacefully in Sana'a today, despite the bomb attack during yesterday's rehearsal. Its venue was hurriedly switched to the grounds of the air force academy and President Hadi watched from behind a bulletproof glass screen (see 10.12 am).
• Ian Black will be answering questions about the elections live from 2pm BST today. Please post a question here.
• Abul Fotouh's presidential campaign has complained about irregularities in electoral procedures for Egyptians in the Saudi city of Jeddah (see 12.49pm).
Bahrain
• Jailed activist Abdul Hadi al-Khawaja has appeared in court in a wheelchair for his retrial in a civilian court. The case has now been adjourned until 29 May, according to his wife (see 11.13am).
• In a move that could reduce the tension in Lebanon, a military prosecutor today ordered the release of Shadi Mawlawi, an outspoken Lebanese critic of Syrian president Bashar Assad (see 1.06pm).
1.06pm:Lebanon: In a move that could reduce the tension in Lebanon, a military prosecutor today ordered the release of Shadi Mawlawi, an outspoken Lebanese critic of Syrian president Bashar Assad, the Associated Press reports.
Mawlawi's arrest earlier this month sparked clashes between pro- and anti-Syrian groups in the northern city of Tripoli that killed eight people. Judicial officials said Mawlawi was released on about $333 bail and will not be allowed to leave the country.
Following his release, Mawlawi – who was accused of belonging to a terrorist organisation – said he had confessed "under psychological pressure", in remarks quoted by the Daily Star.
Mawlawi, who wore a black headband bearing the Muslim profession of faith, insisted that his confession was null and void due to the manner in which it was extracted.
"I confessed to many things but only under pressure and any person would have confessed to those things when placed under such psychological pressure ... I later disavowed my confession."
Soon after Military Investigating Judge Nabil Wehbi approved his release, Mawlawi was whisked away from the Beirut Military Court in a dark Peugeot belonging to Safadi.
12.49pm:Egypt: Abul Fotouh's presidential campaign has complained about irregularities in electoral procedures for Egyptians in the Saudi city of Jeddah. Al-Masri al-Youm reports:
In a statement, the campaign claimed it detected certain irregularities, saying that the consulate closed its doors after voting and asked the supervisors to leave and start the vote count the next day.
It also claimed that certain political forces collected ID cards from voters and voted on their behalf, and duplicate ballots were sent by mail.
Muslim Brotherhood candidate Mohammed Morsi is reportedly in the lead among Saudi-based Egyptians, with almost 50% of the vote.
12.30pm:Syria: UN monitors have helped negotiate the release of two detainees in exchange for a damaged tank, according to video from activists.
It is unclear why the Syrian government agreed to release the two men, named by activists as Salaheddine al-Saleh and Walid Ma'amoun, in exchange for a tank that appeared to be totally destroyed.
But in the crudely edited film, senior UN monitor Ahmet Himmiche, from Morocco, appears to negotiate for the release of the two men.
"We will hand over the two detainees from our vehicle and the tank will be pulled out," Himmiche says according to our colleague Mona Mahmood.
Himmiche made reference to the incident in the latest video. He said: "We will assess how to move them [the detainees] from here, and Khan Sheikhoun will go down in history. We will say that Khan Sheikhoun is able to protect the monitors and their cars."
Later in the clip Khan Sheikhoun activist Abu Hammam appears in a striped shirt (we spoke to him last week).
In the clip he says: "An agreement has been reached to exchange detainees for a tank which has been destroyed. The UN has intervened to sought out this problem, with the people of Khan Sheikhoun who have protected the UN."
The detainees are later shown emerging from a UN vehicle. A damaged tank is also shown being taken away by what appear to be government soldiers.
The footage cannot be independently verified. The UN has yet to respond to queries about the apparent exchange.
11.49am:Syria: An activist leader in Homs has accused the Assad regime of involvement in terrorism, writes Imogen Blake.
Speaking through an interpreter he said: "We are working within the context of humanity, security and freedom. It is the other side that is [responsible] for relationships with terrorist groups and for various incidents which have occurred, including the assassination of Hariri [a reference to the killing of Lebanon's prime minister in 2005]."
He said: "I worked with the journalists during their presence in Syria, especially Marie Colvin and Remi Ochlik. After the unfortunate deaths of these journalists, I want to make known that... the relationship between the activists and the international journalists was strong."
11.30am: Syria: Rebels have been filmed celebrating after capturing and setting alight a government tank in the north-west province of Idlib.
The unverified footage was uploaded to the Syria-registered YouTube account idlib4all, which features videos in and around Idlib,
Khawaja staged a hunger strike after being sentenced to life imprisonment by a military court on charges of plotting to overthrow the government. He is now being retried in a civilian court.
Khawaja's wife, Khadija, tweets that the hearing was adjourned until 29 May:
#Bahrain The court is adjourned to 29th May. Hadi was accompanied by a doctor and two nurses.
11.01am:Libya: Interesting development in Benghazi following the local elections on Saturday. Brown Moses (in the discussion thread below) highlights the success of a female candidate, Najat Rashid Mansur al-Kikhia, who defeated male contenders in the al-Birka district.
She secured 7,784 votes – more than any other candidate in the city. Asma Magariaf has been tweeting about her background, and here is a photo:
— Nahla Elsubeihi ☪ (@StayStrongLibya) May 21, 2012
10.44am:Syria: The government news agency, Sana, has published photographs from the scene of last night's explosion in al-Qaboun district of Damascus.
It says: "An explosive device, planted by an armed terrorist group, went off causing the martyrdom of the civilians who were at the site of explosion." There are no details about the building where the explosion occurred.
10.12am:Yemen: The annual National Day ceremony has gone ahead peacefully this morning in Sana'a, despite the bomb attack during yesterday's rehearsal.
Fazil Corman, the Turkish ambassador in Yemen, has been tweeting from the ceremony. He says the venue was changed at the last minute but he thinks it was the "right decision" to go ahead with it.
President Hadi arrives at the Yemen National Day ceremony. Solemn atmosphere but good participation in solidarity. twitter.com/FazliCorman/st…
Reuters adds that President Abd-Rabbu Mansour Hadi, who replaced President Saleh earlier this year, watched the parade from behind a bulletproof glass screen at the hastily rearranged and heavily protected new location – the air force academy in Sana'a.
9.56am:Yemen: "Covert" strikes by American drones in Yemen are not as covert as they used to be – thanks to Twitter. The Bureau of Investigative Journalism (BIJ) has documented what is thought to be the first-ever drone strike monitored in real time on Twitter.
It started when Haykal Bafana (@BaFana3) reported drone sightings:
#Yemen | Hearing multiple claims of drone sightings in Hadhramaut, especially in Shibam/Qatn directorates (KSA route). No attacks so far.
When the deadly attack finally came in the early hours of Thursday morning, the target itself was hardly a secret.
Earlier, Arabic-language online media in the provincial capital of al-Mukalla had reported that a convoy of alleged al-Qaida rebels was heading north. That news was also swiftly tweeted.
Others were clearly also charting the convoy's progress. As the vehicles approached Shibam at around 1am local time, at least one car, a Toyota Hilax, was destroyed by missiles from above.
A few minutes later, after receiving a phone call from relatives who witnessed the explosion, Sana'a-based lawyer Bafana was tweeting the news:
#Yemen NOW | Missile strike on car in Wadi Hadhramaut. Near city of Shibam. Suspected US drone attack.
A centre is formed when two opposing forces of equal power and clearly different ideologies are fighting for control, thus creating the political balance that allows a centre to emerge. This doesn't exist in Egypt, which is why Abul Fotouh is turning more and more Islamist to appease his new Salafi supporters, and Moussa is finding himself up in shit-creek without a paddle.
One achievement of the Egyptian presidential election, he says, is that it has killed all ideologies:
We have leftists supporting an Islamist candidate, liberals supporting a Nasserite leftists, A revolutionary workers-rights crusader candidate who didn't get the support of the workers and ended up only getting nominated by MP signatures from parties that he considered anti-revolutionary ...
It's a fine mess that will surely leave analysts and pundits scratching their head for years to come to make any sense of its one million and one questions, where ironically all the answers so far are as clear as grey.
Another Egyptian blogger, Zeinobia, discusses the wildly varying opinion polls. One, for example, places Moussa on 31.7%, another on 14.6%. She wonders how accurately their sampling reflects Egypt's social and geographical make-up.
It is important to keep in mind that it is not possible at this point to develop a good predictive model of electoral behaviour in Egypt, as the experiment is new, coalitions are still forming, and little information is available about likely voters. Therefore, polls ... can give a hint of the trends in public opinion about the presidential candidates but cannot provide accurate predictions ...
We know that political machinery is essential in getting out the vote and that the political environment in Egypt is changing almost by the day.
9.01am:Syria: There's been another bomb near the capital Damascus, Reuters reports:
Five people were killed when an explosive device detonated at a restaurant in the Syrian capital Damascus on Tuesday, Syrian state media and activists said.
The northern Damascus neighborhood of Qaboun where the bomb went off has been a centre of protests demanding the end of President Bashar al-Assad's rule and has also seen fighting between Assad loyalists and rebels.
State television blamed the explosion on "terrorists," a term the Syrian government uses when referring to the armed opposition. It said the bomb exploded in a restaurant and showed footage of a burnt-out kitchen and a room full of debris.
He was referring to extremist groups, but didn't name any specific one. Ladsous affirmed that the focus in the Syrian crisis now "should be on building dialogue and confidence between the parties".
- Rebels admitted that the government had succeed in exacerbating the the sectarian nature of the crisis. Mohammed Faisal, a defector from Aleppo, said: "There is no escaping that this has become sectarian in nature, but it's not what we want, it's what the regime wants. I have Alawite friends. I can't talk to them since I have left, even though I think I can still trust them. I just have to be careful now. A valley is between us and there is nothing we can do."
- The rebels were poorly armed. Due to scarcity rifles are worth $4,000, bullets $4 each, and RPG heads $1,000 each.
- Rebels bristle at regime claims that they are linked with al-Qaida but are frustrated that the regime's narrative is starting to prevail.
- The fighters don't expect help from the international community. One said: "Nothing will happen before the American elections, will it? And the French are too busy at home. Turkey and Saudi Arabia will do nothing without America, so it will come down to us."
Yemen's newly installed president, Abd-Rabbu Mansour Hadi, who was due to attend the celebrations, responded to the bomb attack by firing two senior commanders, both allies of his predecessor, Saleh. One of them, a nephew of Saleh's, was the head of national security, an elite intelligence gathering unit that works closely with the CIA.
Egyptian journalists shook their heads in despair as Morsi finally spoke – only to utter a catalogue of unquotable platitudes. The hope is that ideology and discipline will win out over personality ...
"In football can't a substitute come on with 10 minutes to go and score the winning goal?" asked Sheikh Mohammed Abdel-Maqsud.
The men travelled to one of dozens of houses that are scattered throughout this island nation, where a secret and growing network of caregivers — doctors, first-aid medics or people with no medical experience at all — wait daily for the casualties from the protests. The houses are not really field hospitals, but rather sitting rooms, often equipped with nothing more than bandages and gauze.
UN nuclear head Yukiya Amano says he and chief Iranian negotiator Saeed Jalili are determined to reach a deal
The head of the UN nuclear agency, Yukiya Amano, has said an agreement would be signed "quite soon" with Iran to allow an investigation into claims it had tried to develop nuclear weapons.
Amano, the director general of the International Atomic Energy Agency (IAEA), was speaking on his return to the agency's Vienna headquarters after a day of talks in Tehran. He described the talks as an "important development" and said he and the chief Iranian negotiator, Saeed Jalili, were determined to reach a deal, but it was also clear a final agreement had not been reached.
"The decision was made by me and Mr Jalili to reach agreement on the structured approach. An agreement will be signed quite soon," Amano said, but did not give a date.
Amano had flown from Vienna to Tehran at short notice on Sunday in the hope his presence would seal an agreement on a framework for a long-running IAEA investigation into evidence that Iran may have carried out research and development work on warhead design.
The investigation had been stalled for four years, but Iran has in recent years shown willingness to consent to site visits and interviews with its scientists as long as the investigation followed what it called a 'structured approach'.
In particular, Tehran wanted assurances the investigation should not continue indefinitely but should have a timetable and end point to aim for. For his part, Herman Nackaerts, the chief IAEA inspector, had insisted his inspectors should be able to follow leads wherever they led without tying their hands in advance. Amano was seeking a compromise and it remains unclear how close he has come.
Nackaerts, who accompanied Amano to Tehran, has made his first priority to visit a military site at Parchin, south-east of Tehran, where the IAEA says it has been given evidence that, at some point after 2000, Iranian scientists may have tested the high-explosive elements of an implosion device needed for the construction of a warhead small enough to put on a missile.
Iran has denied carrying out such an experimentation, or any work on weaponisation. Tehran had said access to Parchin was dependent on reaching a agreement on the 'structured approach' framework.
If an agreement is signed and leads to broader Iranian co-operation it could be seen as a vindication of Amano's tougher approach to Iran compared with his predecessor, Mohamed ElBaradei.
Amano has published more evidence collected by his inspectors pointing towards Iranian work on nuclear weapons, and has been more outspoken in his criticism of Tehran for its reluctance to co-operate with the investigation.
It is unclear what effect the outcome of Sunday's talks will have for negotiations due on Wednesday in Baghdad between Iran and representatives from six world powers on the broader issue of Tehran's uranium enrichment, which the UN security council has demanded be suspended.
Western officials said an IAEA deal could improve the atmosphere in Baghdad, or conversely, damage prospects for those negotiations if Iran presents progress on an IAEA inspections framework as its sole concession.
The six-nation negotiating group (comprising the US, China, Russia, the UK, France and Germany) wants Iran to stop production of 20%-enriched uranium, which lies between the low-enriched uranium for use in nuclear power stations and highly enriched uranium used in warheads. The west also wants a deeply buried enrichment plant called Fordow to be taken out of operation.
In return, Iran could be offered nuclear fuel for its research reactor in Tehran and safety advice and equipment for the Tehran reactor and its nuclear power station at Bushehr, on Iran's Gulf coast.
"If Amano's presence in Tehran can produce something, it will play into this week's talks in Baghdad," a senior European diplomat said. "If Iran can indicate it is ready to respond to international concerns over its nuclear programme, that will be positive. But there will be no reward for simply turning up and the key issue for building confidence is still uranium enriched to 20% … If we are going to continue talking in good faith, there has to be something put forward by Iran."
The acting US representative at the IAEA in Vienna, Robert Wood, issued a statement on Tuesday urging Iran to do more to co-operate with the IAEA investigation.
"We urge Iran to take this opportunity to resolve all outstanding concerns about the nature of its nuclear programme," Wood said. "Full and transparent co-operation with the IAEA is the first logical step."
OFT seeks to make clear that businesses musn't adopt aggressive or misleading practices with customers
Payday loan company Wonga has been told by the Office of Fair Trading (OFT) it must improve its debt collection practices, after it emerged it had sent letters to customers accusing them of committing fraud.
The OFT said it had seen letters sent out to borrowers who were struggling with repayments suggesting they may be guilty of fraud, and that Wonga would consider contacting the police if the customer did not act as it requested.
The letters were sent to people who had made a payment to Wonga and then contacted their bank to ask it to retract the payment, and to people who had fallen behind on repayments and entered a debt management plan.
The OFT said it had also seen a call script used by Wonga which told customers working in the public or financial sectors that their terms of employment said they should not be in debt.
A spokesman for the regulator said he was not able to say how many customers had received these communications, but "it was not a one-off letter". Wonga has now been told it must not send such letters again and could face a fine of up to £50,000 for every instance of it breaking the rule.
Evidence of the practice first emerged in October 2010, and the OFT proposed a requirement on Wonga in July 2011 not to send the letters again, but the lengthy legal processes involved mean it has only now been able to make public the requirement.
David Fisher, OFT Director of Consumer Credit, said: "We have acted to ensure that Wonga does not behave this way again. I would like to make it clear to businesses that they must not adopt aggressive or misleading practices with their customers."
However, the controversial lender said it believed the requirement was "unnecessary on two grounds" and it would appeal the decision.
In a statement it said: "Although Wonga believes it had grounds for suspecting dishonest conduct by the specific customers to whom letters were sent, they were sent on isolated occasions more than 18 months ago and have not been sent since that time. As we made clear during the adjudication, the tone of these letters fell below our usual high standards."
Wonga said it had put in place procedures to make sure similar problems did not occur in future, and that it now referred cases of suspected fraud to an in-house team to investigate. The phone scripts had not been used since January 2010, it said.
The statement added: "In these circumstances, it is unnecessary to impose a requirement on Wonga to no longer use the communications or the script. Wonga has already demonstrated these were isolated incidents and there is no risk of it communicating with customers in a manner which might infringe the requirement."
Tesco said Philip Clarke, who took home in the region of £1.7m, had 'decided earlier this year' not to take his 2012 annual bonus
Tesco boss Philip Clarke has turned down his annual bonus worth nearly £400,000 after disappointing sales at the UK chain sparked the supermarket's first profit warning in 20 years.
Its top 5,000 managers received an annual cash bonus worth just 17% of the maximum while executive directors got 13.5%, reflecting that "some performance targets in the UK were not met", according to the retailer's annual report. Although the grocer made "record" group profits of £3.8bn in the year to 25 February, the success of its international business masked a 1% fall in UK profits to £2.5bn.
The Tesco board has traditionally been one of the best paid in the FTSE but remuneration committee chairman Stuart Chambers said the profitability threshold for the annual bonus - which accounts for 70% of the possible award - had not been achieved, triggering a substantial reduction in pay for the company's top directors.
This meant that the pay of all bar one of the executive directors - US head and deputy chief executive Tim Mason - fell below £2m. Directors received 46.5% of long-term awards tied to earnings and return on capital invested, according to the report.
Tesco said Clarke, who still took home in the region of £1.7m, had "decided earlier this year" not to take his 2012 annual bonus which was worth £372,000 due to the "weaker than expected performance in the UK". In the report Clarke admits it "has been a tough year to be a Tesco shareholder". "Whilst the year gave us many things to be proud of, overall it was not the most pleasing performance," he said, adding. "My team and I are resolved to get Tesco back to winning, particularly at home."
Last year Tesco overhauled its pay policy for top executives after an embarrassing shareholder revolt at its 2010 annual meeting, when almost half its investors failed to back its remuneration report. The new "collegiate" approach saw Tesco's current four long-term incentive plans merged into one single plan. The shakeup also involved scrapping a controversial incentive scheme previously enjoyed by Mason.
Clarke earned less than Mason, who runs loss-making US start-up Fresh & Easy and took home a pay and shares package worth £2.1m, half the previous year's haul. California-based Mason's pay was boosted by a benefits package worth £555,000. The four-year-old US chain made a loss of £153m on sales of £638m.
The annual report shows Richard Brasher, who was ousted as UK head in March, earned roughly £1.6m last year. Brasher, who had worked at Tesco for 25 years, owns shares worth nearly £5m. Details of his payoff will appear in next year's annual report.
Shop-floor staff will share £110m from the all-employee cash bonus scheme which vests in 2015. All staff can participate in the plan but payouts for directors are capped at £3,000.
Andrew Dominik's immensely gripping and brutal world of recession-hit criminals, starring Brad Pitt, is smart and nasty, with a political dimension, too
The adverb is horribly inappropriate. Andrew Dominik's Killing Them Softly is a slick ensemble-nightmare of middle-management mobster brutality and incompetence in the tradition of Goodfellas and Casino, Pulp Fiction and TV's The Sopranos, with something of the opening voiceover monologue from the Coens' Blood Simple: the one about being on your own.
It is outstandingly watchable, superbly and casually pessimistic, a world of slot-mouthed professional and semi-professional criminals always complaining about cleaning up the mess made by other screwups. The movie delivers the classic mob "betrayal" trope: someone shoots someone else, at close range, suddenly and terrifyingly, having lulled his victim – and us – into a false sense of security with a long pointless conversation about what they were going to do later.
The movie is adapted by Dominik from novelist George V Higgins's 1974 thriller Cogan's Trade, updated to the Bush/Obama handover era of 2008, albeit with some automobiles that seem to belong to that earlier era. It is a time of financial anxiety, which Dominik applies cleverly, if not entirely subtly, to the world of crime. American taxpayers were being asked to bail out banks for the sake of confidence and prestige – and these taxpayers also had to tighten their belts. Here, local wiseguy Markie (Ray Liotta) has to be whacked for robbing some other wiseguys' poker game: he didn't do it, but someone has to be seen to get killed for the sake of confidence and prestige. And the hit-men will have to accept a reduced fee in the current economic climate.
The assassin in question is Cogan, played with suavity and shrewd style by Brad Pitt, a killer who prefers to shoot people at long range, because he detests the screaming and pleading of victims who realise they are going to die – what he calls "killing them softly". He is called in to help out with a mixed-up situation. As well as Markie, others have to be addressed. The poker hit was actually carried out by two ridiculous young jerks, Frankie and Russell, brilliantly played by Scoot McNairy and Ben Mendelsohn, hired by another mobster whom Cogan feels delicately unable to rub out because he is personally acquainted with the man, so he subcontracts this wet job to a second assassin.
And here is where Cogan himself is guilty of incompetence; he calls an old friend Mickey, hilariously played by James Gandolfini, who's in need of the cash but instantly reveals himself to be nowadays quite unequal to the demanding task of contract killing: a heavy drinker and prostitute addict (he calls it his "hobby") who is, moreover, morosely in unrequited love with one of the girls he despises, and on the verge of a breakdown. To Cogan's dismay, Mickey is exhibiting precisely those messy and undignified emotions he hates in his own murder victims.
Killing Them Softly is a reminder of what Tom Wolfe wrote about crime in his novel The Bonfire of the Vanities: it is not the dramatic or romantic notion of some brilliant desperado who knows what he wants and is prepared to go outside the law to get it. It is more a question of ruthless, greedy, stupid people who get themselves into a progressively worsening, violent mess.
Dominik controls the scenario and the cast tremendously well. Admittedly, slo-mo hit scenes to the accompaniment of ironically romantic music, and pre-crime banter and squabbling between robbers, are not entirely original, but these scenes are executed with flair, with a regular supply of dialogue zingers. There are some outstanding set pieces – the moment when Russell and a fellow criminal try to destroy a car by setting it on fire is a surreal moment of dismay.
The political dimension to the movie, emphasised with continually recurring glimpses of the outgoing and incoming presidents on the TV news, is restated with a grandstanding monologue from Cogan. Perhaps it's too emphatic to count as satire, but it gives an extra edge to a smart, nasty, gripping movie.
View Channel
