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Monday, February 13, 2012

MPs reverse Lords welfare defeats

1 February 2012 Last updated at 22:38 GMT Commons chamber and Lords chamber Ministers say the proposals are backed by the public MPs have overturned a series of defeats inflicted on the government's welfare reform bill in the House of Lords.

The coalition won seven key votes in the Commons, rejecting amendments made by peers and reinstating their original proposals into the legislation.

These include plans for a £26,000 annual limit on total household benefits, including child benefit.

Ministers say they will use a rule known as "financial privilege" to ensure Parliament approves the cap.

A special committee of MPs from all parties approved the move on Wednesday.

This will mean the Lords cannot send the same amendments back to the Commons when they re-consider the bill for a final time, preventing what is known as "ping pong" between the two chambers and effectively ending parliamentary opposition.

The measure, which the government says it will also apply to Lords amendments on employment and support allowance (ESA), relates to the principle that the Lords cannot oppose tax and spending decisions agreed by the Commons.

During nearly seven hours of debate in the Commons, the government won a series of votes on controversial aspects of the bill with large majorities.

They voted by 334 to 251 to overturn the Lords amendment - tabled by a group of bishops - which would exclude child benefit from counting towards the £26,000-a-year cap on benefits to working-age households.

The cap is set at the equivalent to the average post-tax salary of a working household.

Labour say they support the cap in principle but argue that rather than one national cap - there should be local caps, set by an independent commission.

'Transitional arrangements'

In the Commons, Work and Pensions Minister Chris Grayling said that idea was "ill-thought out" and "would be more credible if it was not being made at the very last minute".

He said there were already exemptions to the cap - such as families in receipt of Disability Living Allowance (DLA) and Working Tax Credit - and outlined "transitional arrangements" to minimise the impact.

David Cameron taunted the Labour front bench and called for a reaction on welfare reforms

People who had been in work for the previous 12 months would get a nine-month "grace period" before the cap kicked in and he said people in receipt of the "support component" of ESA - for people deemed unable to work due to illness - but who do not receive DLA, would not be penalised.

Additional payments would be made to families in certain circumstances, following a similar model used when the housing benefit cap was introduced - at a cost of up to £80m for 2013/2014 and £50m in 2014/2015.

And he said the policy would be reviewed "in a transparent way" - as they would with any major policy change of this kind.

For Labour, Liam Byrne told MPs there were "dangerous flaws" in the "one-cap-fits-all approach".

He dismissed government claims that Labour had never raised the issue of a local cap before and said they had made plenty of calls for safeguards in the cap.

He said the government had already "burnt a third of the savings they proposed for this measure" - because they had got the policy wrong - and the proposal had become a "dog's breakfast".

The government's decision to use financial privilege rules has been criticised by Labour peers.

And former Conservative chancellor Lord Mackay - who led a Tory rebellion in the Lords against charges for parents to access the Child Support Agency - suggested it was "a waste of taxpayers' money at a time of considerable austerity" for peers to pass amendments which were then rejected out of hand.

'Waste of money' Exclude child benefit from overall capNot charging single parents for Child Support Agency if they've taken steps to reach a settlementExempt cancer patients from means testing of ESAMeans test other ESA claimants after two years, not one as plannedAllow young disabled people who have never worked to keep claiming "contributory" ESAExempt social tenants with one spare room from "under occupancy" penaltiesLimit reduction to lower rate of "disabled child element" of Child Tax CreditsEarlier MPs voted down Lords changes to reduce entitlements to employment and support allowance (ESA).

They voted by 324 to 265 to back the government over plans to stop young disabled people who have never worked, due to illness or disability, from being able to claim "contributory" ESA - usually paid to those who have paid a certain amount of National Insurance.

They backed ministers by 332 to 266 over plans to means-test the same allowance after 12 months for those judged capable of working at some point in future.

Four Lib Dem MPs, including former leader Sir Menzies Campbell, defied their party leadership over the issue.

And MPs voted down a peers' amendment that would have exempted some cancer patients from means testing by 328 to 265.

They also reversed a Lords amendment limiting a reduction to the lower rate of the "disabled child element" of Child Tax Credits under the new Universal Credit system, by 324 votes to 255.

Critics say the move will hit working people facing severe financial difficulties - and could cost them over £1,300 a year.

The government says it wants to target support at the children with the highest care needs - and say there will be transitional protection so those already in receipt of the benefit will not lose money.

MPs also voted to overturn a Lords proposal calling for social tenants with one spare room to be exempt from new "under-occupancy penalties" linked to housing benefit. It won the vote by 310 to 268.

It also overturned the Lords amendment calling for single parents not to be charged for accessing the Child Support Agency by 318 to 257 votes - but only after ministers said they would reduce planned upfront fees to £20.

UK recession looms, says report

3 February 2012 Last updated at 00:02 GMT Share price graph, calculator, and pen The UK economy could rebound in 2013 if the eurozone crisis is resolved, Niesr said The UK economy will enter recession in the first half of the year as households continue to cut back, an influential think tank has warned.

The National Institute of Economic and Social Research (Niesr) said the government should temporarily ease its spending cuts to promote growth.

It expects the economy to shrink 0.1% in 2012, but to grow 2.3% in 2013 if the eurozone debt crisis is resolved.

Niesr said, however, that deficit cuts had bolstered market confidence.

The UK is already close to another recession - defined as two consecutive quarters of economic contraction - after official figures in January showed that the economy shrank by 0.2% in the final three months of 2011.

In its UK and World Economy Forecast Niesr said: "We forecast a return to technical recession in the first half of this year, as households continue to retrench, credit conditions remain tight, and businesses are reluctant to invest given uncertainty about both domestic and foreign demand."

Niesr said economic conditions will not improve in the short term, as both the private the public sectors are still focused on paying off debts. "Over the near term we do not expect economic conditions to improve," the report said.

The think tank predicted that inflation would fall sharply, with the consumer price index down to 2.2% this year and 1.4% in 2013.

But there were grim forecasts on unemployment, which Niesr expects will rise to about 9% this year, from 8.4% in the three months to November, and will remain above 7% in 2014.

"Unemployment at this elevated level for such a long period is likely to do permanent damage to the supply side of the economy, with large long-run economic costs," the report said.

As Niesr have said, the government's commitment to deficit reduction has helped maintain market confidence. ”

End Quote Treasury spokesman Niesr suggests relaxing the government's austerity programme. "The UK economy currently suffers from deficient demand; the current stance of fiscal policy is contributing to this deficiency. A temporary easing of fiscal policy in the near term would boost the economy," the group said.

Little scope

More investment would not derail the chancellor's long term fiscal goals, Niesr said.

On Monday, the Institute of Fiscal Studies said the government could safely cut taxes temporarily, without worrying that the Bank of England would raise rates in response.

But the IFS that there was little scope for big or long-term tax cuts, which risked undermining investor confidence.

"The chancellor faces his third budget with the economy and public finances in considerably weaker shape than he had hoped a year ago," said Paul Johnson, director of the IFS.

Last month, Chancellor of the Exchequer George Osborne said he would continue with the coalition government's efforts to reduce the deficit, despite criticism that it is choking off recovery.

A Treasury spokesman said: "As Niesr have said, the government's commitment to deficit reduction has helped maintain market confidence.

"They expect the government to meet its fiscal mandate and for the UK economy to grow more strongly than the euro area this year and next."

Meanwhile, Niesr forecast global growth of 3.5% for 2012, led by China and India, and 4% in 2013. It forecast US economic growth of 2% this year.An independent Scotland could be more constrained on economic policy than at present, a study has suggested.

Scottish independence

The report also considered the monetary and fiscal policy choices facing Scotland if it leaves the union.

Niesr concluded that retaining sterling would be "sensible" for Scotland, but warned that currency union could restrict fiscal policy.

The Scottish government said the report "validates" its aim to retain sterling and insisted Scotland would be in a "healthier" financial position.

The report said that it is "doubtful" whether the Bank of England would extend lender-of-last-resort facilities to Scottish institutions, something First Minister Alex Salmond has argued for.

Niesr adds: "With a pro rata transfer of existing UK public debt, Scotland would enter independence heavily indebted with no insurance from fiscal risk sharing or fiscal transfer mechanism with the rest of the UK.

"Even with a favourable settlement on future oil revenues, its fiscal balances are likely to be volatile with large deficits in some years as a result of its dependence on oil revenues," the report said.

BT cuts costs to increase profits

3 February 2012 Last updated at 07:29 GMT BT logo BT says more people are taking up its high speed services Telecoms group BT has reported a rise in profits, thanks to cost-cutting and an increase in broadband users.

Pre-tax profits for the three months to the end of December were £652m, 48% higher than a year earlier. Revenue fell 5% to £4.77bn.

Excluding one-off items, profits increased by 18%.

The company said it had expanded the availability of its fibre-optic broadband to seven million homes and signed up 95,000 customers to it.

"We have delivered another quarter of growth in profits and cash flow despite the economic head-winds," said chief executive Ian Livingston.

"In the UK, our fibre roll-out has accelerated bringing super-fast broadband within reach of over seven million homes and businesses and we remain the number one broadband retailer with over six million customers," he added.

The company said labour costs fell by 3% while payments to telecommunications operators fell 15% due to lower call volumes.

Pensions

However the firm saw a significant increase in its pension deficit, which rose to £4.1bn.

BT said the rise reflected low returns on corporate bonds, "reflecting the impact of quantitative easing and recent inflation being higher than the long-term assumptions".

The market value of the scheme's assets also fell during the quarter.

Score draw in TV football case

3 February 2012 Last updated at 15:30 GMT By Bill Wilson Business reporter, BBC News Manchester United v Stoke in the Premier League The Premier League has enjoyed a number of lucrative TV deals since its formation in 1992 The Premier League and the importers of foreign satellite TV decoder boxes and cards are both claiming victory after their latest court battle.

Satellite systems from other parts of the EU were sold to pubs for less then that charged by Sky and ESPN, who have exclusive UK deals with the league.

Now, after a High Court hearing, the league says it will take action against pubs for breach of copyright.

But the satellite importers claim they are free to carry on their business.

Copyright v competition

The Premier League had initially taken out a civil action against QC Leisure (a digital box supplier), and SR Leisure Limited (a publican).

That case was sent to the European courts - along with that of pub landlady Karen Murphy, who had shown games in her pub using a QC decoder - for legal advice and guidance on points of law.

It meant that UK prosecutions for using these systems had been put on hold while the case went to the European courts.

Last autumn, the European courts ruled that national laws that prohibit the import, sale or use of foreign decoder cards were contrary to the freedom to provide services.

But is said while live matches were not protected by copyright, any surrounding media, such as any opening video sequence, the Premier League anthem, pre-recorded films showing highlights of recent Premier League matches and various graphics, were "works" protected by copyright.

High Court ruling

Now the High Court has said that in some aspects the importers of foreign satellite equipment had been in breach of Premier League copyright by allowing the showing of foreign broadcasts.

But it also said that the Premier League had only proved its claims of breach of copyright "to a limited extent".

Lord Justice Kitchen added that "the defendants who are continuing to trade must be entitled to carry on their business in a way which avoids infringement of [Premier League] copyright if they are able to do so".

Furthermore, he said that clauses in Premier League TV contracts with national broadcasters that prohibit them from broadcasting Premier League games outside their own country's borders may constitute "a restriction on competition".

'Court declaration'

The Premier League said: "It is clear that the law gives us the right to prevent the unauthorised use of our copyrights in pubs and clubs when they are communicated to the public without our authority.

"We will now resume actions against publicans who are using European Economic Area foreign satellite systems to show Premier League football on their premises unlawfully and without our authority."

Anand Pattani, is a lawyer at Smithfield Partners legal firm, which has represented QC Leisure and other defendants.

"Our clients are extremely pleased that, in line with the finding of the European Court, the judgment confirms that the majority of claims against our clients are to be dismissed," he said.

"Insofar as there has been a finding of infringement relating to a limited number of artistic works our clients also welcome Lord Justice Kitchin's confirmation that they must be entitled to carry on their business in a way which avoids any such infringement. "

Investment

Daniel Geey, of FFW legal firm, is an expert on sport broadcasting issues.

He says the High Court will now "make a declaration which will set out the precise infringing acts established against QC Leisure and the other defendants".

And he said the overall effect of the High Court ruling, with its observations with regard to territorial sales of TV rights, "may may have significant implications for the way that the Premier League will be able to tender its matches in the next rights auction".

Sky has pumped billions into top flight English football since the league was founded in 1992, with the money given to clubs allowing them to buy some of the top names in the world.

The Premier League's television income from mainland Europe is about £130m, less than 10% of their total £1.4bn overseas rights deal.

Ms Murphy's case will be heard in the High Court later this year.