Julia Gillard to travel to Indonesia
Prime minister will meet President Yudhoyono and discuss ways of combating people-smuggling and terrorism
Julia Gillard will travel to Indonesia next month to discuss ways of combating people-smuggling and terrorism.
The prime minister will meet President Susilo Bambang Yudhoyono on 5 July to discuss a number of political, security and commercial issues.
The talks, which are part of the annual Indonesia-Australia leaders' meeting, will canvas issues around education, trade, climate change and transnational crimes such as drug trafficking.
They will also cover ways of stopping people-smuggling and counter-terrorism.
The deputy opposition leader, Julie Bishop, on Wednesday urged Gillard to travel to Indonesia and hold discussions with Yudhoyono on ways of combating people smugglers.
The prime minister said she had already held a number of meetings with him and accused the opposition of insulting Indonesia with its policy of towing back asylum seeker boats.
Gillard will be in Indonesia on 4 and 5 July and will visit Jakarta and Bogor.
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US races to mollify Hamid Karzai over plans for peace talks with Taliban
Afghan president suspends long-term security talks with Americans amid anger over Taliban press conference in Qatar
The US was scrambling to salvage a plan to open peace talks with the Taliban on Wednesday amid a diplomatic row between Washington and the Afghan president Hamid Karzai over how the process was announced.
Repeated phone calls by John Kerry, the US secretary of state, appeared not to have mollified Karzai, who accused the Obama administration of duplicity. Irritated by a press conference in Qatar at which the Taliban effectively portrayed itself as a government in exile, Karzai suspended talks on a long-term security deal to keep US troops in Afghanistan after Nato leaves in 2014.
News on Tuesday that American diplomats would sit down with Taliban leaders – the first direct talks since the US helped oust the group from power in 2001 – prompted speculation that real progress towards a negotiated end to the war in Afghanistan might be in sight.
But while the Taliban hinted at meeting US demands of a break with al-Qaida – saying Afghan soil should not be used to harm other countries – there was only the barest of nods to the Afghan government's request that they talk to the current administration and respect the constitution. They infuriated Karzai by displaying a white Taliban flag and repeatedly referring to the "Islamic Emirate of Afghanistan", the name the group used when they ruled from Kabul.
The Taliban also claimed responsibility for a rocket attack on the Bagram air base that killed four Americans on the same day that the tentative deal about talks was announced.
On Wednesday the US suspended plans to attend the talks, which were due to begin in Doha, the capital of Qatar, this week. Ambassador James Dobbins, its special representative for Afghanistan and Pakistan, will now remaining in Washington until further notice.
A state department spokeswoman said the US had also asked the Qatari government to remove a sign from outside a new Taliban office in Doha that proclaimed it as representing the "Islamic Emirate of Afghanistan".
However, wider tensions remain, particularly over the US role in the newly announced peace talks. "We are still in discussion with the Afghan government about the appropriate next steps," said state department spokeswoman Jen Psaki, who confirmed Dobbins would remain in the US for now. "I don't have any updates on if and when he will travel."
Earlier on Wednesday, the Associated Press reported president Karzai would not now continue peace talks with the Taliban unless the US stepped out of the negotiations. He also suspended talks with the US about handing over security to Afghan forces, citing the Taliban naming of its office as one of Kabul's concerns.
In a statement Karzai said the office was "totally contradictory to the guarantees that were made by the USA to Afghanistan".
The US says all four parties, including Qatar, had agreed that the Taliban would describe their office in Doha as "the political office of the Afghan Taliban" rather than anything that would hint at diplomatic recognition of Taliban sovereignty claims over Afghanistan.
The BBC reported later that the subsequent removal of the sign in Doha might have placated Karzai somewhat and that he may be willing to continue with security handover talks at least.
Nevertheless, the affair has cast a shadow over what Washington had hoped would prove to be breakthrough peace negotiations with the Taliban after 12 years of fighting in the country.
The State Department said the US remained committed to making the talks happen, but acknowledged it had been a shaky start. "We always knew there would be bumps in the road," said spokeswoman Psaki. "Clearly this has been challenging."
She denied that Washington had been partly to blame for the breakdown in relations after conflicting messages about the US role appeared to be relayed to Kabul on Tuesday. "I am not going to place fault," said Psaki. "The conditions were agreed by all four parties."
The US had pledged the Taliban would only be able to use the Doha as base for talks, not as a political platform, and Karzai felt the Tuesday press conference was a clear violation of that promise, an official Afghan source told the Guardian.
More significant than the name of the Taliban office is the insistence of the US in taking part in broad negotiations at all. The Afghan government would prefer the US to restrict its role to fringe issues such as the fate of prisoners held by the Taliban.
Washington concedes that the process has to be "Afghan-led" to be successful, but the state department repeated claims made by unnamed administration officials on Tuesday that the US wishes to discuss broader issues with the Taliban such as renouncing violence, links with al-Qaida and women's rights in the country.
Psaki also rejected criticism that the US had caved in by agreeing to meet with the Taliban before it severed links with al-Qaida.
In 2011, former secretary of state Hillary Clinton had described the issue as an "unambiguous red line for reconciliation with the insurgents", without which the Taliban would not be allowed to be part of a political peace process.
This apparent precondition is now a US negotiating aim instead. "We don't expect that they would decry Al-Qaeda and denounce terrorism immediately off the top – this is the end goal," said Psaki on Wednesday.
Kerry rang Karzai on Tuesday night after the initial announcement of talks began to rattle the Kabul government and again on Wednesday following the angry Afghan statement in response. "I don't think there was any confusion but this is a fluid process and it is not unusual for them to be speaking regularly," said Psaki.
Additional reporting by the Associated Press in Kabul
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Japanese leader defends economic policy during London speech
Shinzo Abe hit back at critics, saying that 'Abenomics represents a win-win' for both his country and the global economy
Japanese prime minister Shinzo Abe has delivered a robust defence of his strategy to jolt the world's third largest economy out of almost two decades of stagnation – dubbed Abenomics – as he insisted in a speech in London on Wednesday night that there was no alternative.
He also dismissed criticisms that Japan was stoking a potentially damaging currency war by launching a three-pronged policy comprised of radical monetary easing, fiscal stimulus and pro-growth measures. "I would like you to understand that for Japan at this juncture – to echo the approach of the late Baroness Thatcher – this is a case of 'TINA': there is no alternative," he told an audience in the City of London.
Abe dismissed criticisms that he was pursuing a policy designed to deflate the yen in order to boost exports at a cost to competitor economies. "Abenomics represents a win-win for both the global economy and the Japanese economy," he said.
The leader pointed out that the Japanese economy had grown by 4.1% in the first quarter of the year. "Should the economy extend this rate across the whole year, it will have the same effect as a country larger than Israel suddenly emerging." Abe insisted that an expanding Japan was "a necessity – a sine qua non" for the wider world, noting: "What if such a country were to experience negative growth? That would likely be the ultimate recipe for 'beggar thy neighbour'." To allow that to happen "would be a cardinal sin", he said.
Earlier in the week he told a post-G8 press conference that the leaders of other major economies were highly supportive of Japan's efforts. "I had a chance to explain [Japan's] economic policy, and G8 leaders showed strong expectations and high appreciation," he said. Abe's defence of his economic policies came after fresh trade figures earlier on Wednesday showed Japanese exports rising in May at the fastest annual rate for more than two years. Calculated in yen, exports rose 10.1% in the year to May, compared with analysts' 6.5% forecast in a Reuters poll, rising for a third straight month and at the fastest pace since December 2010.
The figures were seized upon by supporters of Abe supporters as signs of continued progress. They followed a period during which investor doubts appeared to be creeping in, as fear emerged that Abe's talk of economic shock treatment might not be fully matched in substance. A sharp retrenchment in the Nikkei share index and a strengthening yen in recent weeks have given rise to questions about Abe's radical approach. Suggestions that the US Federal Reserve is about to reduce its economic stimulus also added to market volatility.
But Abe used his Guildhall speech on Wednesday to underline his determination to press ahead with bold reform. He stressed that growth must come before "fiscal reconstruction", as he referred to Japan's huge national debt which runs at 170% of GDP. He told the audience: "In rebuilding our public finances, which options should we pursue? Again it's clear. There is no way forward other than growth."
Galvanising consumer sentiment in Japan is seen as crucial to spurring consumption and investment as policymakers aim to pull Japan out of its so-called lost decades of economic stagnation and deflation.
Abe likened deflation to having "your body temperature drop continuously, bit by bit. Should you fail to address this deflation, you will find that consumers are no longer interested in acquiring things," he said.
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Greek coalition holds emergency meeting over state broadcaster ERT
Talks to resume on Thursday as PM stages high-stakes attempt to avoid snap election and to appease country's creditors
The spectre of Greece reigniting the eurozone crisis hung over an emergency meeting of the country's coalition leaders on Wednesday as the prime minister, Antonis Samaras, sought to defuse the turmoil that followed hisdecision to shut down ERT, the nation's state-run broadcaster.
After 48 hours of high-stakes brinkmanship by his junior partners, Samaras, whose centre-right New Democracy party narrowly won elections last June, went into the talks in reportedly conciliatory mood.
With the alternative being a potentially disastrous snap poll for Greece, aides said it was vital a solution was found. "The other option, putting Greece through fresh elections, would be mad," said one. "A compromise has to be found."
However after three hours of talks ended, Evangelos Venizelos, leader of the Socialist PASOK party, emerged to say the three leaders would reconvene on Thursday at 6.30pm, and sought to dismiss fears of a new crisis over the issue. "It was a long and tough discussion among the three leaders, a discussion that will be continued and in any event completed tomorrow," he said.
"In addition to this discussion, we are concluding a series of issues. Therefore I want to reassure every Greek that our stance is a responsible stance."
But the row over ERT, closed by Samaras in a bid to get 4,000 employees off the public payroll by the end of the year, has increasingly dominated headlines.
Instead of agreeing with a move that was aimed at placating the EU and IMF, the international creditors on which the debt-stricken country depends, his two junior leftwing allies have stringently opposed it, intensifying the faultlines in an alliance that was uneasy from the outset.
Venizelos who has seen his own support plunge since he entered the coalition, has demanded that all 2,700 employees be reinstated before the public broadcaster is restructured.
Fotis Kouvellis, leader of the small Democratic Left (Dimar) party, said the state-run channel must be switched back on, in compliance with a high court decision earlier this week, before he even begins to talk about reforms.
Despite mass protests and opposition from striking trade unions, the conservatives have insisted the public broadcaster remain off air until a leaner and more efficient state TV and radio network is set up.
"It's fairly simple: a mistake has been made and it must be corrected," Pasok's spokeswoman, Fofi Gennimata, said before the meeting. "It requires bravery to correct a mistake, but that is necessary. It's not acceptable for an elected government to fail to comply with a high court order."
Samaras has also come under pressure from Germany, the main provider of Greece's €240bn (£205bn) in rescue funds, to end the crisis. Officials say Berlin is in no mood to have Athens reignite the debt crisis "just when Germans are beginning to forget it" in the countdown to the country's own elections in September.
As the only European country in history to have shut down its own state-run television and radio network, the government has also faced pressure from public broadcasters across the continent to reopen ERT.
With Pasok and Dimar badly trailing in the polls, snap elections, are the last thing either needs. "Samaras clearly miscalculated the effect his decision would have," said the prominent political commentator Pandelis Kapsis. "And since then all three [governing] parties have become victims of their own rhetoric. The possibility, this week, of the government collapsing was very real … From the start this was a crisis that didn't need to happen. It was born of mismanagement."
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EU rejects Cypriot leader's plea for more bank aid
Country pledges to stick to terms of €10bn bailout after president's appeal for more help is turned down
Cyprus has pledged to stick with the terms of its €10bn (£8.6bn) bailout after EU officials signalled they would reject an appeal from the country's president, Nicos Anastasiades, for additional help.
Three months after accepting a deal with international creditors, the government in Nicosia denied reports that it had demanded an overhaul.
Cyprus claimed that Anastasiades had been trying to alert fellow leaders to the economic problems in the island republic when, last week, he wrote to them pleading for more help for its banking sector.
"There is no attempt to renegotiate the memorandum of understanding," said a spokesman. The programme co-ordinated by the International Monetary Fund, the European Central Bank and the EU includes raids on Cypriot bank accounts containing more than €100,000.
The notion of further bank aid was slapped down by EU policymakers on Wednesday. As in Greece, adjustments to the bailout could be made further down the line but only if the island stuck to the conditions of the rescue package, they said.
"There's no chance we'll revise the terms of the bailout," one official told Reuters. The official conceded, however, that the matter could be discussed when eurozone finance ministers meet in Luxembourg on Thursday ahead of next week's summit.
Despite Nicosia insisting it would implement the onerous conditions of the programme, the rejection once again raised the spectre of the island exiting the single currency. Ladbrokes cut the odds on Cyprus leaving the euro in the next 12 months to evens.
Indicative of the frustration felt by officials in Nicosia, Anastasiades described the bailout in his letter as insufficiently prepared. "Artificial measures" such as capital controls, imposed to prevent a mass outflow of money when it became clear that depositors would also be forced to endure losses as part of the bailout agreement, were eroding confidence in the banking sector by the day, he said.
"It is my humble submission that the bail-in was implemented without careful preparation," the leader wrote in his letter. "There was no clear understanding of how a bail-in was to be implemented; legal issues are being raised and major delays in completing the process are being observed." Referring to the haircut to Cypriot bank deposits, he added: "Moreover, no distinction was made between long-term deposits earning high returns and money flowing through current accounts, such as firms' working capital."
As a result, he said, businesses had suffered significant loss of working capital, driving the economy into deeper recession.
"The success of the programme approved by the Eurogroup and the troika depends upon the emergence of a strong and viable Bank of Cyprus. It is for this reason that I urge you to support a long-term solution to Bank of Cyprus's thin liquidity position."
In a first for a eurozone member state, the island accepted to enforce steep losses on large, uninsured deposit holders at its two biggest banks, Cyprus Popular Bank PCL – also known as Laiki – and the Bank of Cyprus. In exchange for €10bn in rescue loans from the EU and IMF, it also agreed to press ahead with €13bn worth of measures to cut its deficit in addition to winding down Laiki.
Anastasiades said Cyprus had been made to pay an excessive price for the restructuring of Greece's own debt to which Cypriot banks had been heavily exposed.
"The heavy burden placed on Cyprus by the restructuring of Greek debt was not taken into consideration when it was Cyprus' turn to seek help," he wrote. "At this crucial juncture, we are calling upon you for active and tangible support."
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New York to vote on bill increasing penalties for human trafficking
Vote would put state in line with federal regulations meant to protect sexually exploited teenagers from criminal prosecution
Lawmakers in New York state, where cases of human trafficking are among the worst in the nation, are expected to vote on a bill this week that would bring it into line with federal law to protect sexually exploited minors from prosecution.
The bill would raise to 18 the age at which a victim coerced into prostitution could be prosecuted.
In New York state, minors ages 16 and 17 can be arrested and prosecuted for prostitution, despite being considered not mature enough to consent to sex legally.
Other measures being considered by the legislature include making trafficking a violent felony, which would increase penalties for perpetrators.
The proposals form part of a nationwide, state-by-state campaign by advocates for child victims of sexual exploitation to stop them being prosecuted, ensure they do not have to prove they were coerced into prostitution and, to divert them into rehabilitation programmes.
If the measures are passed, New York would become the fifth state where children under the age of 18 coerced into prosecution can no longer be prosecuted. Similar measures are being put proposed in California. The other states where minors under 18 are automatically considered trafficking victims and do not need to prove they were forced into prostitution, are Illinois, Kentucky, Vermont and Tennessee, according to the Polaris Project, which campaigns for stronger laws against human trafficking.
Lauren Hersh, the NY director of Equality Now, who have been advocating for the measures with lawmakers for months, said the current law in New York sends "a bad message to victims".
"We need to start seeing children in prostitution as victims not 'child prostitutes' which implies a level of voluntariness," she said. "One of the things traffickers say to victims is that law enforcement will never believe them. Here in NY state and world wide we need to shift that paradigm."
Hersch said classifying sex trafficking as a violent rather than nonviolent felony would increase sentences and "send a message that sex trafficking is inherently violent."
She said: "We need to make sure that politics doesn't get in the way of the necessary language in this bill and the bill is given for a vote."
A felony carries a minimum sentence of between one and three years' jail time and a maximum of between eight and 25 years. But making trafficking a more serious crime would increase the minimum sentence to between four and nine years and the maximum to between 12 and 25.
The measure to increase penalties is part of governor Andrew Cuomo's controversial 10-part Women's Equality Bill, which has now been broken down into 10 separate bills. Cuomo, a Democrat, acknowledged on Monday that one of the most contentious points, which would enshrine abortion rights into law, was unlikely to be taken up by the legislature this year. The bills also cover pay equity and sexual harassment.
Advocates said they hoped the trafficking measures would be voted on this week.
'There is never really a choice'New York was the first state to pass the Safe Harbour law, a 2008 statute that sought to protect sexually exploited children from prosecution by diverting them to family courts. But criminal law still allows anyone 16 or over to be prosecuted in a criminal court, so advocates say additional safeguards are needed.
Stella Marr, a former trafficking victim who is now the executive director of Sex Trafficking Survivors United, said that minors working as prostitutes should be offered help, not criminalised: "Traffickers are violent, they threaten you, they threaten your family" said Marr. "I was manipulated, threatened and I felt I had no other choice. The trauma (from sexual violence and rape) changes your brain.
"There is such a stigma you feel that you are not worth anything. If we are realistic about it, there is never really a choice. Sex trafficking and prostitution are intrinsically linked. Treating 16- and 17-year olds as criminals, when they have been so abused goes against humanity."
There are few statistics on trafficking, but a Bureau of Justice Statistics study reported that out of thousands of suspected human trafficking incidents investigated between 2008 and 2010, 40% involved the sexual exploitation of a child.
A report by the New York City administration for Children's Service this year, which acknowledged that data on sexually exploited children is difficult due to stigma and its hidden nature, quoted one 2007 study which estimated the number of sexually exploited children in New York City alone to be 2,200.
Statistics form the division of criminal justice service in New York show that in 2011, NY state prosecuted ,3315 for prostitution but only 1,824 people were prosecuted for crimes of coercion, including patronising, promoting and compelling.
The Jewish Child Care Association (JCCA), which has a residential programme, Gateways, to house and help sexually exploited youth, see "scores" of children every year, some as young as 12 or 14, it said. Many have been prosecuted as a result of New York's law.
Richard Altman, chief executive of the Jewish Child Care Association, said he was "hopeful" that the legislation would pass under this session.
"I believe that the governor was recommending that it be de-coupled form the omnibus bill and if it's rewritten as a stand alone bill it will pass."
Altman said that, prior to the safe harbour act, they saw a "significant number of young girls aged between 13 and 16 that were incarcerated in juvenile facilities". The mean age is now 15.
James Dold, senior policy director of the Polaris Project said: "Federal law says that minors do not have to prove they were coerced into prostitution. But if does not give them protection at the state level. If we recognise as a society that (minors) can't engage in sex in the first place, then how on earth can we prosecute them as prostitutes?"
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FBI admits to using surveillance drones over US soil
Robert Mueller tells Congress bureau uses drones in a 'very, very minimal way' as senators describe 'burgeoning concern'
The FBI has admitted it sometimes uses aerial surveillance drones over US soil, and suggested further political debate and legislation to govern their domestic use may be necessary.
Speaking in a hearing mainly about telephone data collection, the bureau's director, Robert Mueller, said it used drones to aid its investigations in a "very, very minimal way, very seldom".
However, the potential for growing drone use either in the US, or involving US citizens abroad, is an increasingly charged issue in Congress, and the FBI acknowleged there may need to be legal restrictions placed on their use to protect privacy.
"It is still in nascent stages but it is worthy of debate and legislation down the road," said Mueller, in response to questions from Hawaii senator Mazie Hirono.
Hirono said: "I think this is a burgeoning concern for many of us."
Dianne Feinstein, who is also chair of the Senate intelligence committee, said the issue of drones worried her far more than telephone and internet surveillance, which she believes are subject to sufficient legal oversight.
"Our footprint is very small," Mueller told the Senate judiciary committee. "We have very few and have limited use."
He said the FBI was in "the initial stages" of developing privacy guidelines to balance security threats with civil liberty concerns.
It is known that drones are used by border control officials and have been used by some local law enforcement authorities and Department of Homeland Security in criminal cases.
Mueller said he wasn't sure if there were official agreements with these other agencies.
"To the extent that it relates to the air space there would be some communication back and forth [between agencies]," Mueller said.
A Senate intelligence committee member, Mark Udall, later questioned whehter such use of drones was constitutional. "Unmanned aerial systems have the potential to more efficiently and effectively perform law enforcement duties, but the American people expect the FBI and other government agencies to first and foremost protect their constitutional rights," Udall said in a prepared statement.
"I am concerned the FBI is deploying drone technology while only being in the 'initial stages' of developing guidelines to protect Americans' privacy rights. I look forward to learning more about this program and will do everything in my power to hold the FBI accountable and ensure its actions respect the US constitution."
At the same hearing, Mueller urged Congress to move carefully before making any changes that might restrict the National Security Agency programs for mass collection of people's phone records and information from the internet.
"If we are to prevent terrorist attacks, we have to know and be in their communications," said Mueller. "Having the ability to identify a person in the United States, one telephone number with a telephone that the intelligence community is on in Yemen or Somalia or Pakistan ... may prevent that one attack, that Boston or that 9/11."
The FBI director argued for the continued use of the NSA programs. "Are you going to take the dots off the table, make it unavailable to you when you're trying to prevent the next terrorist attack? That's a question for Congress," said Mueller.
The Associated Press contributed to this report
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Bernanke predicts tapering this year, as Cyprus denies seeking bailout changes - as it happened
Fed chair says asset purchases will slow later this year, if his forecasts are right, as Cyprus's government denies trying to get its bailout obligations overhauled
Graeme WeardenTaliban peace talk plans lead Afghan women to fear loss of rights
Afghanistan's women fear Taliban's return to power would 'wipe away' hard-won achievements of past 11 years
Even the dimmest prospect of peace would be welcome in most countries that have endured more than three decades of conflict, but news this week that the Taliban planned to sit down for peace talks with the US was met with trepidation by many in Afghanistan.
Women in particular are nervous, because Taliban rule was so bitter for them. They lost the right to an education, to most work, even to show their face in public.
After 10 years of slowly clawing back basic protections, the prospect of losing them again is terrifying, particularly for older women, who remember being confined to their homes.
"If they return to power in Afghanistan again, all the achievements of the past 11 years will be wiped away," said Aroozo Parwani, a 35-year-old teacher. "The doors of schools and universities will close in women's faces. The duty of Afghan women is to make large protests all over the country and say we don't want the Taliban back, or for them to have an office in Qatar."
The Taliban have changed in some ways, most obviously embracing television and other modern technology they once outlawed, to get their message across to followers and foes.
Some supporters of talks argue the group have modified their harsher attitudes to women too, while officials in Washington say the US will not broker a deal that does not protect the rights of women and minorities.
But it is hard to pin down the real policies and beliefs of a fragmented movement pushed into the shadows by the exigencies of fighting an insurgent war against a super-power and its allies, and there are fears the newfound enthusiasm for women's learning will vanish when they gain power.
"There should be concrete terms for them to demonstrate the changes," said activist Palwasha Hassan. "Girls' schools have been under attack, teachers have been killed, women leaders have been assassinated. The real change will show in stopping these actions ... we will remain concerned until the end." There are fears that deals cut in secret may undermine women, with mistrust of both the government and the Taliban negotiating teams.
These concerns were heightened after female lawmakers discovered this month that a group of conservative male colleagues had made a secret last-minute addition to a law they passed that cut dozens of government jobs for women.
"My wish is that ... they should keep the channels of negotiation as open as possible," said activist and academic Orzala Ashraf Nemat. "We deserve to know what is being negotiated on our behalf, there shouldn't be secrets. The people of Afghanistan find themselves surprised often enough."
If talks do begin in earnest, women are keen to have serious representatives at the table, not just a token female face chosen because she can be trusted not to rock the boat.
"The voices of Afghan women are missing again from the whole rhetoric," tweeted the outspoken Wazhma Frogh after talks had been announced by the US and the Taliban, and then rejected by Afghan President Hamid Karzai in a dramatic couple of days.
The focus on the Taliban office has also underlined Afghan women's desire to ensure that as the search intensifies for a negotiated end to the war, their rights are not seen as a bargaining chip that can be traded in for peace.
"Its funny to suggest that peace and women's rights are two (opposing) sides. The war is not happening because women are getting their basic rights," said Nemat. "Even if we go sit in our homes this war will not be over ... The cause of war is clear to every single person who sits around those negotiating tables, so why should we pay the price?"
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George Osborne ready to sell taxpayers' stake in Lloyds Banking Group
Chancellor tells bankers in Mansion House speech time is right to sell bailed-out bank back to private sector
George Osborne has signalled he is ready to start the sell-off of the taxpayer's stake in Lloyds Banking Group, but said he is to consider whether to break up the Royal Bank of Scotland, in a move that could delay the bailed out bank's return to the private sector.
In his annual speech to City grandees at Mansion House on Wednesday night, the chancellor said he was "actively considering options for share sales in Lloyds", in which the government has a 39% stake. Speculation is mounting that a partial sell-off of the state's Lloyds stake could take place within months.
But he played down expectations of an immediate "Tell Sid" style privatisation, as implemented by the Conservatives during the 1980s.
Big City institutions are likely to be offered a chunk of shares first as an "institutional placement is likely to be the most effective way of managing risk and getting value". He added: "And for later share sales, we will consider a retail offering to the general public."
The chancellor also used his strongest language yet to signal his confidence that the economy is recovering nearly five years after the banking crisis forced taxpayers to pump £65bn into the two banks. He said: "We are moving from rescue to recovery. But while Britain has left intensive care, we still need to secure the recovery – and make sure we continue to treat the ailments that brought us low in the first place."
Osborne told top bankers and City figures assembled at Mansion House that the move to a share sell-off was a sign of this recovery, but he refused to set out a time table. He stressed that bailed-out banks needed to support the economy through more lending to businesses and that a sell-off must generate an acceptable return for the taxpayer.
Osborne was speaking hours after the parliamentary commission on banking standards, chaired by Conservative MP Andrew Tyrie, called on the government to consider an RBS break-up and introduce new rules to jail bankers for "reckless misconduct".
Both those ideas were embraced by the government on Wednesday. David Cameron told MPs the financial services banking reform bill would be amended to introduce a new criminal offence for reckless misconduct, while Osborne used the cover of the commission's report to change his view on an RBS break-up. Only four months ago he had appeared to reject a break-up, but he said last night that "with hindsight I think splitting RBS into a good bank and bad bank was probably what should have happened in 2008".
Osborne added: "That is with hindsight. I wasn't in office. I didn't suggest it opposition. And I'm not criticising my predecessor [Alistair Darling] who had to act quickly in a desperate situation."
On the 81% stake in RBS, bought for £45bn in 2008 and 2009 to stop the Edinburgh-based bank collapsing, Osborne said the sale was "some way off", despite the resignation of the bank's boss Stephen Hester last week in a move intended to speed up a sell-off.
Any privatisation will be delayed by the review to look at whether a "bad bank" should be set up to house the Ulster Bank subsidiary and UK commercial property loans granted by RBS before its bailout.
However, Osborne took steps last night that the City regards as essential to kick off an RBS share sale by announcing talks to remove a special share – known as a dividend access share – put into RBS at the time of its bailout which prevents the bank paying dividends. It is estimated that the bank will have to pay the government as much as £2bn to buy the share.
External advisers will be appointed to conduct the three-month review of RBS.
The chancellor stressed that no more taxpayer money would be pumped into the bank. The review may also be seen as a victory for Sir Mervyn King, who has been calling for a break-up of RBS.
In his last speech as governor of the Bank of England, King told the Mansion House audience: "I welcome your announcement that Lloyds Banking Group will be returned to private hands soon. And I very much support your plans for a full review of the structure of RBS."
Banks, he said, needed to make a real contribution to the economy: "It must be time for decisive action".
King, who will be replaced by Canadian Mark Carney at the end of the month, said there were "clear signs of recovery in the UK, albeit modest, under way". But he appeared far less confident about the strength of the economy, saying "the need to support the recovery remains".
Osborne's upbeat language on the economy was a careful attempt to avoid the ridicule that one of his predecessors, Lord Lamont, had faced in 1991 after claiming "green shoots of economic spring" were appearing in the middle of a recession.
Other aspects of the banking commission report were accepted on Wednesday. A study of competition in the small business sector was launched while Cameron also voiced support for the commission's recommendation to force bankers to wait up to 10 years for bonuses.
At prime minister's questions Ed Miliband seized on figures from the Office for National Statistics, which showed a 64% increase in bonuses over the past year, to attack the prime minister for giving bankers a tax cut. The cut in the top rate of income tax from 50p to 45p was introduced in April. Cameron said bonuses were a fifth of the size they were under Labour. Miliband retorted: "He cannot deny the figures I read out to him. He doesn't even know the facts. Bonuses are up so that people can take advantage of his massive tax cut."
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Letters: International intervention in Syria
Alastair Crooke (The Red Line is not crossed, 17 June) asks the right question: "Will arming the opposition make the situation for the Syrian people better, or will it lead to more bloodshed?" However, he obscures the answer by turning to statistics about the volume of small arms allegedly provided to opposition groups when the key issue is the regime's persistent deployment of heavy weaponry against civilian populations.
The significance of this is demonstrated by an analysis of the data collected by the Centre for Documentation of Violations in Syria: of the 11,000 deaths of women and children it has documented thus far in the conflict, some 7,500 have died as a result of regime aerial bombardment and shelling of their towns and neighbourhoods. Measures which would limit the regime's freedom to casually use heavy weapons in this fashion would certainly "make the situation for the Syrian people better".
Brian Slocock
Chester
• Your leading article (Editorial, 19 June) fails to mention that it was Cairo, not Tehran, which made a bad situation worse. On the same day the US announced its decision to arm the rebels, a conclave of Sunni clerics in Cairo sanctified jihad against the Shias and Hezbollah, thereby turning the Syrian conflict from a war of liberation into a war between Muslim sects.
If the west chooses to arm the rebels at this critical juncture, it will be entering, albeit indirectly, the Syrian conflict on the side of the Sunnis, although it was Sunnis, not Shias, who carried out the 9/11 and subsequent acts of terrorism against the west.
Shia Iran now has a reformist president, who wants to re-establish relations with the west. Perhaps it is time that the west, instead of plunging into Syria's sectarian quagmire, engaged President Hassan Rouhani and let him spell out his rapprochement plan, if any.
Randhir Singh Bains
Gants Hill, Essex
• David Cameron says everyone wants a new government in Syria. No they do not. Everyone wants peace in Syria, even if that means Bashar al-Assad staying in place. Cameron should be leading an all-out effort to ensure that the planned Geneva peace conference is a success. If it does not succeed, the next step should be a redoubling of diplomatic efforts, not their abandonment.
Our government, by blocking the involvement of Iran in peace negotiations, pushing for arming the rebels, backing unnecessary preconditions about the role of Assad and generally treating him with contempt, has greatly damaged the prospects for a peaceful resolution of this catastrophe in Syria.
Brendan O'Brien
London
• The prime minister is right to acknowledge that we're in it for the long haul on Syria, which has prompted the largest single funding commitment ever made by the UK in response to a humanitarian disaster. But the urgent focus needs to be on the many Syrians simply unable to access humanitarian aid in any form.
Doctors of the World runs centres in Lebanon and Jordan and, although we also have medics inside Syria, we are often powerless to help many Syrians because cross-border assistance is prohibited for opposition-controlled areas. Assistance is sometimes allowed via Damascus but this can often be dangerous due to geography and the quagmire of checkpoints and bureaucracy. Yes, Syrians need aid but we must ensure they can benefit from it and not just those in government-controlled areas.
Leigh Daynes
Doctors of the World (Médecins du Monde) UK
• Surely the "red line" that Assad has crossed in Obama's eyes is his regaining control of Syria. Those of us who are old enough to remember WMD in Iraq are not taken in by the sarin claim.
Martin Davidson
Bromley, Kent
• It may be an old-fashioned concept, but surely it is up to the Syrian people to decide who their government is, not Vladimir Putin or any other members of the self-selecting G8.
Declan O'Neill
Oldham
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Thomas Heatherwick accused of plagiarism over Olympic cauldron
New York design studio says Heatherwick's concept and design 'looked identical' to something it proposed to Locog in 2007
As the polished copper petals of Thomas Heatherwick's Olympic cauldron rose up to form a striking flaming dandelion last July, gasps of awe and wonder echoed around the world at the structure's startling originality. In the offices of the New York design studio Atopia, however, there were gasps of a different kind.
"We were absolutely furious," said the practice's co-director Jane Harrison. "It looked identical to something we had proposed to the London Olympic committee back in 2007, after which we hadn't heard anything."
Locog orginally approached Atopia, whose motto is "anticipate the future", to come up with ideas for a One Planet pavilion, a structure to embody the sustainable ethos behind the London 2012 Games.
"Our pitch was all about the story," Harrison said. "We devised a structure of petals on tall stems, which would travel from all of the participating countries, then be brought into the stadium by children. The petals would be assembled during the opening ceremony to form a flower-like canopy, and distributed back to the different nations after the Games."
Atopia's structure was designed to collect rainwater and generate power from solar cells rather than burning a constant supply of natural gas, but their sketches and models bear an uncanny resemblance to Heatherwick's design. His flaming flower also used the narrative sequence of the 205 nations coming together, with the metal dishes returned to the competing countries after the Olympics. It was critically acclaimed and went on to win several awards, as well as earning the designer a place in the Queen's birthday honours list. His practice denies all knowledge of Atopia's earlier design.
"This has come completely out of the blue," a spokesperson for Heatherwick Studio told the Guardian. "We have never seen this project before, nor were we made aware of it by Locog. The creative ideas for the cauldron were very much born from a conversation between Danny Boyle and Thomas Heatherwick."
Atopia is only now free to make its claims, having been gagged by a restrictive non-disclosure agreement since 2007 that prevented all companies from promoting any work related to the Olympics. The confidentiality agreement was lifted in January this year after a vociferous campaign and a government payment of £2m to the British Olympic Association.
Atopia, which also produced a white paper on strategic sustainability issues which it says was taken forward by Locog's contractors, have not received a penny for their work.
"It was a crushing disappointment," said Harrison, a British-trained architect who has run the practice with David Turnbull for the last 10 years while also teaching at Princeton University. "We were led to believe it was a confidential presentation to the high-level board, so it was even more shocking to see the ideas had been taken forward by others without us. We are a small office, so we can't afford to launch legal action."
Locog has since been disbanded, but its former design principle, Kevin Owens, described the situation as "unfortunate".
"Atopia really are forward thinkers," he told the Guardian. "Strands of their work became part of what was taken forward, and I wish there was a way we could acknowledge that."
Owens said he had never seen images of their proposals, but that their strong narrative must have "stayed in the psyche" of his colleagues, who went on to commission the opening ceremony. "We can only assume that similar conclusions were drawn by the designers," he added.
Atopia's accusations follow claims last year by an artist that Boyle's opening ceremony design was copied from a project he had submitted in 2009 to Locog's Artists Taking the Lead competition. The Hull artist Lee Merrill Sendall proposed the construction of a 61m (200ft) spiraling Neolithic mound in East Yorkshire to represent the UK's ancient history. His images also featured a lake, farmhouse and fluffy white clouds, all of which appeared in the opening ceremony alongside a spiraling mound said to represent Glastonbury Tor.
Locog denied Sendall's claim, saying Boyle's vision for the opening ceremony "was inspired by the very well-known Glastonbury Tor landmark and British history. The vision was Danny Boyle's and his only".
"This is definitely something worth investigating," said Lionel Bently, professor of intellectual property at the University of Cambridge. "There is a strong body of case law about the confidentiality of submissions. If Atopia's idea was regarded as a confidential pitch of an idea from designer to recipient, there could well be grounds for 'breach of confidence' proceedings."
"The whole process reveals the ease with which big organisations tend to absorb creative input and adopt it over time almost unconsciously," says Harrison. "Either that, or we're the best clairvoyants in the business."
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Federal Reserve hints it could end stimulus program next year
Fed to continue bond-buying program for now but could ease off once unemployment falls to 7%, Ben Bernanke says
The US Federal Reserve has signalled that it will end its massive stimulus programme next year amid further signs of a split in the central bank's committee.
Ben Bernanke, the chairman of the Fed, said that if forecasts for the country's economic recovery are correct the bank could end its asset purchase scheme next summer, with the winding-down process due to start this year.
Bernanke said the asset purchases would continue at their current rate until unemployment fell to about 7%, the first time that the Fed has specified an economic objective for the bond-buying. The unemployment rate stood at 7.6% in May.
In an effort to assuage investors' concerns over the consequences for the world's largest economy, Bernanke likened the move to "letting up the bit on the gas pedal as the car picks up speed, [and] not pressing on the brake."
Bernanke's recent suggestion that the Fed could taper off its huge bond-buying programme, known as quantitative easing (QE), shook investors, and US stock markets fell sharply again as Bernanke gave further details about the possible winding down of the scheme at a press conference on Wednesday.
The fall came even as the Fed concluded that the possibility that the America's economic recovery would slip into reverse, taking the jobs market with it, had "diminished since the fall."
In a statement released after a two-day meeting, the Fed said: "Labor market conditions have shown further improvement in recent months, on balance, but the unemployment rate remains elevated. Household spending and business fixed investment advanced, and the housing sector has strengthened further, but fiscal policy is restraining economic growth."
Against this backdrop, the Fed said it would continue to pump $85bn per month into the economy for now, buying $40bn of mortgage-backed securities and $45bn in Treasury bonds in an attempt to keep interest
rates at rock-bottom levels and to encourage investment.
The Fed chairman was at pains to stress that there was no imminent intention to change QE or raise rates. "It's important not to say: this date, that date, this time," Bernanke said. Any decision would be "economic dependent".
However, two members of the FOMC signaled in the latest statement that they had doubts about the Fed's handling of QE. James Bullard, president of the Federal Reserve Bank of St Louis, said the committee should "signal more strongly its willingness to defend its inflation goal in light of recent low inflation readings".
Long-time QE critic Esther George, president of the Federal Reserve Bank of Kansas City, again voiced her concern that the policy "increased the risks of future economic and financial imbalances."
Jack Ablin, chief investment officer at BMO Private bank, said the mixed messages were likely to continue as the Fed wants to keep up its stimulus program while warning that it will not last forever. "We believe Bernanke would like to keep the pedal to the floor with stimulus in an effort to spur as much growth and employment for as long as possible.
"At the same time, the Fed will continue to employ a Federal 'open mouth' policy to keep stocks and housing from rising too much further above fair value," he said in a note to investors.
At his regular press conference this afternoon, the Fed chairman refused to be drawn on his future plans following comments by the president earlier this week.
On Monday, Barack Obama said Bernanke has stayed in his job "longer than he wanted to or he was supposed to." In an interview with Charlie Rose on PBS the president said Bernanke, a 59-year-old former Princeton University professor, had been "an outstanding partner" in helping the US recover "from what could have been an economic crisis of epic proportions."
"I am not going to comment on my personal plans," said Bernanke. Bernanke was appointed chairman by president George W Bush in February 2006. His second four-year stint at the central bank officially ends January 31. While few expected him to seek, or get, a third term the comments were seen as a clearest signal yet that his time as Fed chairman is drawing to a close.
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Karzai suspends US-Afghan security talks
President accuses Washington of 'inconsistent statements and actions' with regard to peace talks with Taliban
Afghanistan's president, Hamid Karzai, has suspended talks on a long-term security deal to keep US troops in his country after Nato leaves in 2014, accusing Washington of duplicity in its efforts to start peace talks with the Taliban.
The announcement came the day after the Taliban opened a "political office" in Qatar, saying they wanted to seek a peaceful solution to the war in Afghanistan, and the US announced plans for talks with the insurgent group.
News that American diplomats would sit down with Taliban leaders for the first time since the US helped oust the group from power in 2001 prompted speculation that real progress towards a negotiated end to the war might be in sight.
US officials underlined that they aimed mostly to facilitate talks between Afghans, although they do have issues to tackle directly with the Taliban, including a possible prisoner exchange.
But while the Taliban hinted at meeting US demands of a break with al-Qaida – saying Afghan soil should not be used to harm other countries – there was only the barest of nods to the Afghan government's request that they talk to the current administration and respect the constitution.
Diplomats say Karzai was kept in the loop about plans for the formal opening of a Taliban office in Qatar, but had expected it to be couched differently. After hours of ominous silence, his office issued a terse statement in effect condemning the move.
"In view of the contradiction between acts and the statements made by the United States of America in regard to the peace process, the Afghan government suspended the negotiations, currently under way in Kabul between Afghan and US delegations on the bilateral security agreement," the palace said.
The final straw for Karzai was their display of a white Taliban flag and repeated use of the name "Islamic Emirate of Afghanistan", both in their statement and on a printed backdrop used for a televised press conference, according a senior Afghan official.
It was the name the group used when they ruled from Kabul, and together with their official flag gave the group's representatives the air of a government-in-exile as they addressed the media.
The US had pledged the Taliban would only be able to use the office as base for talks, not as a political platform, and Karzai felt the press conference was a clear violation of that promise, an official Afghan source told the Guardian.
The president was also unhappy about the lack of any reference to the country's constitution, which both he and the US say the Taliban must respect.
Instead the statement made more than one reference to the "establishment of an independent Islamic government"; as the group have often denounced Karzai as a puppet, that could be read as a call for a change of leader or change of system.
The decision to suspend talks was made after a meeting on Wednesday morning with his national security team and close aides, a source said.
The Afghan government's anger is a blow to hopes that the country's warring factions could be taking the first real steps towards peace; despite US cash and military might, 12 years of fighting have shown it cannot secure the country alone.
In another reminder of the fragile situation in Afghanistan, the Taliban claimed responsibility on Wednesday for an attack on Bagram air base that killed four American troops.
A Taliban spokesman said insurgents had fired two rockets into the base outside the Afghan capital, Kabul, late on Tuesday. US officials confirmed the base had come under attack by mortar or rocket and four troops had been killed.
Karzai has long been a strong advocate of peace talks and cautiously welcomed the idea of a base in Doha, while pushing hard for any negotiations to move to Afghanistan as fast as possible.
But he has also drawn clear red lines, one of them being that the Taliban office first mooted in 2011 should not be used as a base for fundraising or building diplomatic relationships.
A source at the High Peace Council, a body created by Karzai to lead government negotiation efforts, said it was still planning to send a delegation to Qatar, but it was unclear when; and without the support of the Afghan government there is little hope it can make much progress.
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CDC says HPV down by 56% among teenagers since vaccine introduction
Health officials say decline is 'encouraging' but concern remains over lack of discrepancies in awareness of vaccine
US health officials said on Wednesday that the prevalence of HPV has decreased by 56% among teenagers, since a vaccination for the disease was introduced in 2006.
Human papillomavirus, the most common sexually transmitted disease in the country, infects approximately 79 million US residents, according to the Center for Disease Control. "This report shows that HPV vaccine works well, and the report should be a wake-up call to our nation to protect the next generation by increasing HPV vaccination rates," CDC director Tom Frieden said in a statement.
Samples from more than 8,000 females between 14 and 59 years of age were collected by government workers and examined by the CDC. The agency then compared the proportion of females infected in the three-year period before the program was started (2003 to 2006) to the proportion infected in the three-year period after the vaccine was introduced. For girls aged 14 to 19, infections from the cancer-causing strains of HPV dropped from 7.2% in 2006 to 3.6% in 2010.
"The decline in vaccine type prevalence is higher than expected and could be due to factors such as to herd immunity, high effectiveness with less than a complete three-dose series and/or changes in sexual behavior we could not measure," said Dr Lauri Markowitz, the lead author of the study. "This decline is encouraging, given the substantial health and economic burden of HPV-associated disease."
The CDC recommends that males and females should get the vaccination around age 11 or 12. Yet, only a third of women aged 13 to 17 have received the full three shot vaccination series.
Frieden warned that the low vaccination rate means that 50,000 women alive today will suffer from cervical cancer in their lifetime. CDC data shows that each year, about 27,000 cancers caused by HPV occur in women and men in the United States.
Yale Cancer Center researchers said this month that there are stark economic and racial discrepancies of HPV vaccine awareness in the US. Women – especially those who are white, college-educated and have private medical insurance – are more likely to know about the vaccine.
When the vaccine was introduced, some groups claimed it would encourage promiscuity in young adults. A number of studies show that this fear is groundless.
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Obama calls for reduction in nuclear arms in broad-brush Berlin speech
President sticks to big themes of freedom and openness but acknowledges concerns over threats to privacy and drone strikes
Barack Obama called for a renaissance in the shared liberal values that underpin western nations on Wednesday as he announced plans to cut nuclear weapons in a much-anticipated speech in Berlin that also acknowledged unease over privacy and drone strikes.
Speaking at the Brandenburg Gate, in the shadow of historic speeches by Presidents Kennedy and Reagan, Obama stuck to big themes but clearly sought to address concerns in Germany caused by recent revelations of internet surveillance and US drone warfare.
After quoting Immanuel Kant on freedom and his belief "in open societies that respect that sanctity of the individual", the president echoed calls he made during a recent speech in Washington for an ending of America's war on terror.
"Threats to freedom don't merely come from the outside; they can come from within, from our own fears. For over a decade, America has been at war, but much has changed … no nation can maintain its freedom if it does not move beyond mindset of perpetual war."
The president called for tight controls on the "use of new technology like drones and balancing security with privacy" but said he was confident the US could strike the right balance.
Obama also insisted that US surveillance programmes were aimed at "threats to security, not the communications of ordinary persons" and said "they keep people safe in Europe as well as the US".
But he acknowledged there were legitimate concerns over privacy and other hot-button issues such as drones and Guantánamo.
"We must listen to voices that disagree with us, and have a open debate about how we use our powers and remember that government exists to serve the power of individual not the other way around … that is what keeps us different to those on the other side of the wall. That's what keeps us true to our better history," said Obama.
Among the only firm policy statements was a comittment to cut US nuclear weapons arsenals by a third and seek fresh talks with Russia to reduce stocks further.
"We are on track to cut nuke warheads to lowest levels since 1950s … but we have more work to do, so I am announcing [that] we can ensure security of US and allies by reducing our stored weapons by up to one third," said Obama. "I intend to start talks with Russia to move beyond cold war postures."
Speaking to an invited crowd of 6,000 guests, he also hinted at calls for greater German support for US intervention in countries such as Syria.
"We cannot dictate the pace of change in Arab world but we must reject the excuse that we can do nothing to support it," said Obama.
But much of the speech was couched in broad calls for a restoration of the western alliance that helped defeat communism, amid growing fears in Washington that support for Nato and US is waning in Europe.
"There can at times be a complacency among our western democracies," he said. "We face no concrete walls … sometimes there can be a sense that the great challenges have somehow passed and that brings with it a temptation to turn inward."
Receiving a cheer for taking his jacket off in sweltering heat and reprising John F Kennedy's "Ich bin ein Berliner" line, Obama called on German people to remember what they shared with America.
"Our alliance is the foundation of global security and our trade the engine of the global economy," said the president.
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Syria crisis needs political solution, David Cameron tells MPs
Reporting on G8 summit, Cameron places strongest emphasis yet on political solution but refuses to rule out arming rebels
David Cameron has said he will not recklessly take Britain into a military escalation in Syria, putting his strongest emphasis yet on a political solution to the crisis as he came under pressure from his own backbenchers and Labour not to supply weapons to the Syrian rebels.
Cameron was reporting back to the Commons from the G8 summit in Loch Erne on Syria and agreements to attack corporate tax evasion, which he claimed were now "written into the DNA of future G8 summits for many years to come".
In exchanges lasting nearly 90 minutes, Cameron rejected a role for Iran at a Syrian peace conference and refused to rule out providing arms to the rebels before that peace conference.
But he told MPs: "There is no military victory to be won and all our efforts must be focused on the ultimate goal of a political solution.
"We will not take any major actions without first coming to this House, but we cannot simply ignore this continuing slaughter."
He added that there was a danger in Britain accepting the argument put forward by the Syrian president, Bashar al-Assad, that the only alternatives to his rule were extremism and terrorism.
He acknowledged there were extremists in the Syrian opposition, saying they posed a threat to the west, but he said the west should stand for democracy and freedom.
He said the immediate task in Syria was for the Americans and Russians to sort out the delegations that would attend the peace conference. He again insisted Assad could have no future role, and said the summit had managed to persuade Russia not to draw back from its support for a transitional government with full executive powers.
The G8 summit communique made no mention of Assad's future role, due to disagreements between the Russian president, Vladimir Putin, and the west, but Britain privately believes he is not totally committed to Assad and instead wants to ensure that Syria does not become an ungoverned space.
The prime minister claimed the G8 summit had made progress on Syria by reaffirming its commitment to a peace conference and by requiring Assad to give UN weapons inspectors unrestricted access to establish the facts on the use of chemical weapons by regime forces or anyone else.
Cameron rejected Iran's involvement, saying the country had never accepted the principle of a transitional government in Syria, and adding that he wanted to limit the conference to key players within Syria.
Ed Miliband, the Labour leader, claimed the summit had failed to achieve Cameron's stated objective of providing "a moment of clarity".
Labour's former Northern Ireland secretary Peter Hain urged Cameron not to set preconditions about Assad's involvement. "In a search for a political solution, can I just caution him in his apparent insistence on a precondition. Northern Ireland shows preconditions do not work," Hain said.
"We both share exactly the same view of the hideous nature of Assad's barbarism, but if you're insisting that he can't come to the conference and that he can't play any subsequent role, I just caution him that this conference may never happen."
The prime minister told MPs that 30 jurisdictions had now signed agreements on an automatic exchange of information over tax evasion. He claimed Britain's overseas territories and Crown dependencies had made decisions that would realise an extra £1bn in revenues for the Treasury. He also claimed that every member of the G8 had committed to action plans that would introduce central registries on benefical ownership.
"This agenda has now, I believe, been written into the DNA of the G8 and G20 summits, I hope for many years to come," he said.
Asked if Britain backed public registries of companies' beneficial ownership, or registries open only to tax authorities, he said: "There are strong arguments for it to be public."
But he added: "The point at which one says one's own registry will be public, one gives up rather a lot of leverage over other countries we might want to encourage to do that at the same time".
He also said: "It is important to take the business community that believes in responsible behaviour with us on this journey of greater transparency and fairness. To be fair, the CBI has been supportive of this agenda, so there is nothing to fear from a consultation where we try to take people with us on this important progress."
But he insisted he had managed to make the issue of corporate taxation a mainstream issue on the agenda of future G8 meetings.
"Frankly, tax transparency and beneficial ownership were academic issues that were discussed in lofty academic circles, but they are now kitchen table issues that are being discussed by the G8 leaders, who have pledged to take action on them".
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Soldiers' families can sue Ministry of Defence, supreme court rules
Court ruling enables families of three soldiers killed in Iraq to sue MoD for negligence because soldiers have a 'right to life'
Families of three soldiers who were killed in Iraq in poorly-armoured Land Rovers – and those killed in a friendly fire incident – can sue the Ministry of Defence for negligence because soldiers have a "right to life," the supreme court ruled on Wednesday.
The ruling means soldiers heading into battle overseas can claim protection under article 2 of the Human Rights Act – a decision the defence secretary Philip Hammond said could leave operational decisions in combat zones open to "the uncertainty of litigation".
The court ruled that the doctrine of combat immunity – which prevents soldiers from claiming compensation for injuries received in combat except under official schemes – should be interpreted "narrowly" and should not be extended to cover "the planning of and preparation for active operations against the enemy".
The ruling is a victory for the families of servicemen killed in Iraq – who are likely to be able to claim payouts of about £250,000 each. Many have spent years trying to find out what happened to their relatives and are challenging the army over the standard of kit issued.
One group of claims was brought by families of three men killed when their poorly-armoured Snatch Land Rovers were destroyed by roadside bombs. Private Lee Ellis, 23, of Wythenshawe, Greater Manchester, Private Phillip Hewett, 21, of Tamworth, Staffordshire, and Lance Corporal Kirk Redpath, 22, of Romford, Essex, died between 2005 and 2007.
Jocelyn Cockburn, the solicitor who represented Susan Smith, Hewett's mother, said: "What has been established is that soldiers do have human rights and remain within the jurisdiction of the UK when abroad. Whether there has been a breach of those rights is a different question that will now go to court. There's now a duty on the government to protect its soldiers from known risks." Outside the court, Smith said: "We have won at last. To be honest we didn't expect to. The MoD will now have to make sure our soldiers are safe abroad. What we have done will make a lot of difference to people in the future. There will have to be protection in place. Phillip is dead. Nothing is going to bring him back. But there are other boys out there."
But Hammond said he was "very concerned" at the wider implications of the judgment, which "could ultimately make it more difficult for our troops to carry out operations" and "throws open a wide range of military decisions to the uncertainty of litigation". He added: "It can't be right that troops on operations have to put the [European Convention on Human Rights] ahead of what is operationally vital to protect our national security."
A second group of claims was lodged by the families of those killed and injured in a Challenger tank in March 2003 as a result of friendly fire. Corporal Stephen Allbutt, 35, of Stoke-on-Trent, Staffordshire, was killed and several others injured.
Shubhaa Srinivasan, from the law firm Leigh Day who represents the claimants, said: "The highest court in the land has ruled the MoD, as employer, must accept that it owes a duty of care to properly equip service personnel who go to war. We have constantly argued that the MOD's position is morally and legally indefensible."
Andrea Coomber, director of the organisation Justice, which intervened in the case, said: "The human rights of UK troops should be protected wherever they serve. The government's case would have had them shoulder the burdens of serving this country, but not protected by its most fundamental safeguards." A decision at the European court of human rights in 2011 on the al-Skeini case, relating to Iraqi civilians who died in areas under British military control, set a powerful precedent. If Iraqi civilians were deemed to have human rights and be under UK jurisdiction, lawyers for the soldiers' families argued, then the troops themselves should not be denied such legal protection.
The individual claims for negligence and breach of human rights will now return to the high court to be examined in detail. The supreme court ruling is likely to stimulate further legal actions involving allegedly inadequate or missing military equipment. If claims for compensation are fought families could, lawyers suggested, receive up to £750,000 between the three Land Rover victims.
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Sepp Blatter urges Brazil protesters not to link grievances to football
Fifa president makes plea amid preparations for Confederations Cup matches following protests condemning his organisation
Fifa president Sepp Blatter has called on Brazil's protesters to stop linking their demonstrations to football, as police stepped up reinforcements ahead of expected clashes at Confederations Cup matches taking place in Rio de Janeiro and Fortaleza.
After protests on the fringes of earlier games, boos during official speeches in the stadiums and placards on the streets condemning Fifa, the head of the world football body said the tournament – a dry run for next year's World Cup – was being wrongly targeted.
"I can understand that people are not happy, but they should not use football to make their demands heard," Blatter said on Globo TV, a domestic station.
His appeal looks likely to fall on deaf ears. Protesters on Wednesday blocked the road to the stadium in Fortaleza, where Brazil were due to play against Mexico. Police turned back hundreds of cars.
There is also a Twitter and Facebook campaign for spectators inside the ground to turn their backs when the national anthem is played.
Several of Brazil's national team players have also expressed their support for the demonstrators.
"I see these demonstrators and I know that they are right," the midfielder Hulk told a press conference in Fortaleza.
"We know that Brazil needs to improve in many areas and must let the demonstrators express themselves."
Brazil is in the midst of its biggest wave of protests in 20 years. Initially sparked by police violence against small demonstrations against bus price rises, the protests have rapidly expanded in size, range and motivations.
On Monday night, a quarter of a million people rallied in more than a dozen cities to express a range of grievances, including dire public services, corruption and evictions.
Fifa's tournaments have become a focus for many demonstrators, who feel the 12 stadiums that the country has built or renovated at huge cost show how public money is spent on projects that benefit construction companies and TV stations rather than on hospital and schools.
This argument has been eloquently expressed in English in a popular YouTube video titled "No, I'm not going to the world cup" which has drawn more than 1.5m views.
The video's narrator, Carla Dauden, said: "Suddenly there is all this money available to build new stadiums and the population is led to believe the World Cup is the change they need for their lives to get better. But the truth is that most of the money from the games and the stadiums goes straight to Fifa and we don't see it so we don't get it and the money from tourists and investors goes to those who already have money."
The government says the $13.3bn spending on the tournaments is also being used to improve roads, metro services, airports, communications and public security – all of which would help to boost the country's economic and social development.
This point was emphasised by Blatter, who said Fifa did not impose the tournament on the hosts. "Brazil asked to host the World Cup," Blatter said. "They knew that to host a good World Cup they would naturally have to build stadiums.
"But we said that it was not just for the World Cup. Together with the stadiums there are other constructions: highways, hotels, airports … Items that are for the future. Not just for the World Cup."
He and Brazilian president Dilma Rousseff were booed by the crowd at the opening ceremony of the Confederations Cup on Saturday.
This are unlikely to be the last insults they hear. The football tournament will run until 16 July.
The protests are expected to escalate with bigger rallies planned for Thursday. Despite Blatter's appeal, it is unlikely the two will remain apart.
Jonathan Wattsguardian.co.uk © 2013 Guardian News and Media Limited or its affiliated companies. All rights reserved. | Use of this content is subject to our Terms & Conditions | More Feeds
The Nile belongs to Ethiopia too | Maaza Mengiste
The increasing tensions with Egypt over the proposed dam reveal how fundamental the river is to both nations' identity
Tensions between Egypt and Ethiopia have grown at an alarming rate since Addis Ababa announced its plans to construct the Grand Renaissance dam across part of the Nile. The project will divert the flow of the river and give Ethiopia greater access.
Egypt claims the dam could lower the river's level in a country that is mainly desert, and reduce cultivated farmland. President Mohamed Morsi has called the river "God's gift to Egypt", and the country's politicians claim the reduced water flow could prove catastrophic. An Ethiopian government spokesman, Getachew Reda, says none of Egypt's worries are scientifically based, and that "some of them border on … fortune-telling".
As the debate continues, I am reminded of an encounter between my mother and an Egyptian man one afternoon in New York. My mother was visiting from Addis Ababa and we decided to go to a pizzeria. One customer, an Egyptian, recognised us as Ethiopians. After brief introductions, he made a passing comment about the age-old conflict between our countries over the Nile. My mother calmly stated there was no conflict: the Nile was ours. The man was not amused. What followed degenerated into verbal sparring that ricocheted between "historic right", ancient civilisations and colonial-era treaties. Finally, my mother, frustrated, claimed full ownership of the river – and he did the same. It wouldn't have ended if the pizza hadn't arrived.
The Nile, at 6,700km, is the longest river in the world. It begins in Ethiopia and ends in Egypt. It moves counter to what one might expect, flowing upwards on the map. This, as much as anything, reflects the river's mythological dimensions. It defies logic, its identity is as much a product of poetry as politics. Homer, in The Odyssey, called the body of water "Aegyptus, the heaven-fed river". The name alone gave Egypt symbolic rights, and bestowed religious qualities upon the water. Despite the fact that 85% of the Nile originates in Ethiopia, we still associate the river with Cleopatra and King Tut, with pyramids and the sphinx, with sophisticated belief systems and advanced scientific knowledge. The Nile is a metaphor for Egypt. It is a geographic location as much as it is shorthand for one of the most innovative moments in world history. In popular imagination, it is as far removed from poverty as one can get. It is the opposite of devastation and privation.
Perhaps what my mother and the Egyptian man were arguing for was an exclusive cultural identity that was synonymous with the Nile's rich past. Perhaps he didn't realise he was fighting for something he already had, or maybe he was trying to defend what he knew wasn't entirely his. Despite being the source for much of the Nile's water, Ethiopia uses very little of it. By asserting Ethiopia's ownership of the river in such a sweeping and unequivocal manner, maybe my mother was trying her best to redefine what the country had become to westerners: the barren land of begging children and dying cattle. This was not the life she had known – nor had it been mine. Maybe she wasn't decrying a historic wrong as much as trying to co-opt it. Both of them were too mired in pride and nationalism to find a way towards common ground.
Tourists like to speak of Ethiopia as a country of contrasts, as a place where time has stood still. They point to quaint hillside villages and farmers ploughing with oxen, they wave at children in ragged clothes, and photograph women bent beneath bundles of firewood. Somehow this represents a kind of existence free of the hassles of modernity. It feels old, in the way of our oldest stories, and somehow more authentic. But tucked behind those sentimentalised visions of an unfettered life are harsh realities. For as much progress as Ethiopia has made economically in recent years, an overwhelming majority of the population, particularly in the rural areas, still has no access to electricity.
Ethiopia is vulnerable to drought and climate change. It has unpredictable distribution of water. The country's "timelessness" has something to do with the lack of access to basic necessities. There is nothing romantic about this. The dam would generate electricity. It could produce surplus energy for export to neighbouring countries. And controlling water flow in the Nile could bring improved irrigation and water distribution.
Last week Morsi promised to "defend each drop of Nile water with our blood". The language emerging from the two nations evokes epic poetry; the clash of gods in the guise of men.
On a recent trip to Ethiopia, I travelled to Bahir Dar, a picturesque city close to the Blue Nile. I was eager to see this great river, to come as close to its point of origin as I could. As I crossed a bridge, a companion pointed eagerly to a group of young boys playing in a trickling stream of water. "There," he said, almost shouting. "That's our Nile!"
I looked out of the window, surprised. Not by the boys, but by the ordinariness of it all. There was nothing grand or mythic in this snapshot of daily life, but it contained everything that was most important about the debate. Regardless of our poetic allusions and historic references, when we talk about the Nile, we are talking about water: a fundamental right for all people, regardless of geography.
Maaza Mengisteguardian.co.uk © 2013 Guardian News and Media Limited or its affiliated companies. All rights reserved. | Use of this content is subject to our Terms & Conditions | More Feeds
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