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Category Archives: Politics
Facebook comments get civil servant banned from promotion
Welsh government employee posted remarks that were deemed to breach civil service code, documents show
A civil servant was banned from promotion for a year following “misuse” of social media, official documents show.
The employee was one of seven staff members disciplined by the Welsh government for writing “inappropriate comments” on Facebook or Twitter during the past five years.
The civil servant was issued with a written warning and prevented from career progression for 12 months after posting remarks that were deemed to breach the civil service code on Facebook.
Disciplinary proceedings were launched against a further three employees for similar reasons.
Another three members of Welsh government staff were punished for writing inappropriate comments about their colleagues on social media.
Most were issued with informal or written warnings, while one employee left the organisation before the disciplinary process concluded.
Steven George-Hilley, director of technology at the thinktank Parliament Street, which obtained the figures through a freedom of information request, said: “Banning staff from promotion due to Facebook gaffes exposes a ham-fisted approach to social media.
“Whilst protecting the integrity of the organisation is paramount, employers need to recognise that social media is here to stay and that staff should be trained to utilise digital channels to provide improved services online.”
A Welsh government spokesman said: “As civil servants, Welsh government staff are obliged to adhere to the civil service code, and the provisions in the code governing honesty, political impartiality, objectivity and integrity.”
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Long-term transport plan urgently needed, say engineers
Institution of Civil Engineers call for immediate action to improve maintenance and guarantee Highways Agency funding
Engineers have warned that a lack of strategy, patchy maintenance and uncertain funding is undermining Britain’s infrastructure, and have called for an independent commission to create a long-term transport plan.
The Institution of Civil Engineers (ICE) said that the short-term political cycle and spending decisions were leaving necessary work undone and delaying big projects.
ICE said urgent, immediate action was needed to invest in roads to tackle a maintenance backlog including millions of potholes, with guaranteed funding for five years for the Highways Agency. The engineering body also said that the government should now choose to either expand Heathrow or build a new hub airport in the south-east.
Steven Hayter, the chair of the ICE’s transport panel, said: “In the last five years many of the most important issues – from aviation capacity through to severe pothole damage – are still unresolved.
“The need for a coherent, long-term transport strategy, particularly for England, is becoming urgent.”
The ICE proposed an independent infrastructure commission to develop transport strategy beyond electoral cycles, although Hayter said he believed the current Airports Commission was delaying decisions to suit “parliamentarians but not the public”.
Transport minister Stephen Hammond said that “big projects will never happen without consensus” and political mileage. He said: “We need to build a consensus: that’s the job of the commission. I don’t believe it’s kicking it into the long grass.”
Hammond said he agreed that “roads have suffered from a lack of investment in recent decades,” and said the government was committed to spending billions on major road schemes. A green paper outlining reform to road ownership and funding is expected soon.
The ICE said other areas for urgent attention included making buses outside London an attractive alternative for travel and unlocking the potential of cycling.
A separate RAC Foundation report found there had been a “significant shift” in road policy, with 32 of 96 unfunded schemes from 2011 now being given the go-ahead. RAC director Stephen Glaister said: “It’s a very welcome development that the government has been delivering on projects to enhance strategic and local road networks.”
Photograph : Foster and partners/PA
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Ofsted chief calls for troubleshooters in schools failing poor children
Sir Michael Wilshaw to deliver speech calling for improved education for disadvantaged children ‘unseen’ by current system
New superteachers should be parachuted into areas with “mediocre schools”, the chief inspector of schools in England will say in a radical speech on Thursday, as part of a drive to improve education for poor children “unseen” by the current system.
Sir Michael Wilshaw will also spell out a tougher approach from Ofsted to schools that are believed to be failing poor children. Schools previously judged outstanding but which are not doing well by their poorest children will be reinspected by the inspectorate.
The head of Ofsted argues that a cadre of “national service teachers” should be created, employed directly by central government rather than by local authorities or individual schools. They would be sent to teach in parts of the country that struggle to attract accomplished teachers, into schools that are said to be failing their most disadvantaged pupils.
Wilshaw believes that schools in large cities such as London, Manchester and Birmingham have been successfully turned around since Ofsted first raised the issue 20 years ago, and that the children now most at risk of missing out on the benefits of education are “hidden” in otherwise well-off areas, including Kettering, Wokingham, Norwich and Newbury.
“Today, many of the disadvantaged children performing least well in school can be found in leafy suburbs, market towns or seaside resorts. Often they are spread thinly, as an ‘invisible minority’ across areas that are relatively affluent,” Wilshaw will say.
“These poor, unseen children can be found in mediocre schools the length and breadth of our country. They are labelled, buried in lower sets, consigned as often as not to indifferent teaching.
“They coast through education until – at the earliest opportunity – they sever their ties with it.”
Ofsted’s latest report identifies deprived coastal towns and rural, less populous regions of the country, particularly down the east and south-east of England, as having been overlooked by national initiatives. It also found that a significant number of poorer children are being failed by schools in areas of higher income.
Wilshaw is calling for the London Challenge programme – in which successful schools partnered with weaker establishments in the capital – to be extended nationwide. “The most important factor in reversing these trends is to attract and incentivise the best people to the leadership of underperforming schools in these areas,” Sir Michael is to say.
Christine Blower of the National Union of Teachers praised the school collaboration model of the London Challenge but was otherwise sceptical of Wilshaw’s superteacher proposal.
“Sir Michael’s idea of individual teachers being catapulted into schools to help with pupils achievement will not have anywhere near the same impact,” she said. “It really is time government and Ofsted stopped trying to reinvent the wheel and just work with what we know achieves results,” she said.
The speech marks 20 years since Ofsted published its first report on the educational barriers for the most disadvantaged children in seven deprived areas in England. “Our report shows that poverty of expectation is a greater problem than material poverty because we know of examples of schools serving areas of great disadvantage that are doing very well by their children,” Wilshaw says.
Sir Peter Lampl of the Sutton Trust said: “Sir Michael Wilshaw is absolutely right to focus on the poor attainment of low income pupils, particularly outside London, where results have been patchy. Good teaching across the board, strong leadership and effective use of data are all absolutely vital.”
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BT chief executive exits to become trade minister
Ian Livingston will join the House of Lords, replacing the former HSBC chief executive and chairman Lord Green
The chief executive of BT is leaving the telecoms firm to take up the role of trade and investment minister in the government – but he will not be paid.
Ian Livingston, 48, says he has already been “well rewarded” during more than a decade as director of one of the biggest companies on the stock market.
Livingston, who will take a seat in the House of Lords, is a surprise replacement for the former HSBC chairman Lord Green, who quit the bank to join the coalition in 2011 and is approaching retirement.
In the last months in his role, Green has faced repeated questions about what he knew about US Senate revelations that HSBC branches were used to launder money for drug cartels and pariah states – activity which led to a record £1.2bn fine for the bank.
But this controversy was said to be unrelated to his departure and David Cameron paid tribute to him for bringing in investment for projects such as Battersea power station. Green will leave his post in early December.
Livingston’s new globetrotting mission to promote UK trade and attract inward investment is considered one of the most senior ministerial jobs below cabinet level. His appointment was announced by Cameron during prime minister’s questionson Wednesday. Livingston, who is also a director of Celtic football club, leaves BT in September and will join the Lords as a Conservative life peer.
The son of a Glasgow GP, Livingston’s talent was spotted early by the Dixons chairman Sir Stanley Kalms, who made him the youngest FTSE 100 finance director at the age of 32. He joined BT in the same role, and became chief executive in June 2008.
He earned over £16m in his last two years at BT as long-term incentive schemes bore fruit. “I’m clearly not in it for the money,” he said of his new job. “It’s a fascinating role and I can make a difference. I have been well rewarded over the years at companies where they’ve done well.”
Under his leadership, BT was regarded as an important coalition ally, helping meet government ambitions to replace antiquated copper telephone lines with fibre-optic cables and ensuring more rural homes joined the internet grid.
His departure comes ahead of the publication next month of a National Audit Office report which is expected to raise questions about the process which has seen BT win every contract so far awarded to extend Britain’s broadband network into rural areas.
Over the last five years, Livingston has transformed the former national telecoms monopoly by tackling its towering pension fund deficit and curbing losses at its global services division. The company’s shares, which have risen from a nadir of 75p to 300p under his leadership, initially tumbled 3.5% on news of his departure.
Last year, Livingston signed the £738m cheque for a three-year Premier League football broadcasting rights deal, pitching BT into battle against BSkyB.
It will now fall to his successor Gavin Patterson, currently head of BT Retail, which sells broadband, calls and pay TV under the BT and Plusnet brands, to bring to a successful conclusion the challenge to Rupert Murdoch’s satellite broadcaster that begins in August with the launch of two BT sports channels.
Sir Michael Rake, chairman of BT, said: “Ian has done a tremendous job in transforming BT. His decision to accept a government post demonstrates the sense of public service which many of us know to be characteristic. He leaves behind him a very capable team, one which will take forward the strategy that has served BT well and which lays out the path to further success.”
Cameron said it was a “testament to the importance of this role” that Livingston had agreed to oversee the work of UK Trade and Investment, the agency which promotes British business.
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All aboard the New Bus for London
Boris Johnson’s grand replacement for the bendy bus, which will run from Hampstead to Pimlico, was billed as the greenest, cleanest in the world but does it live up to its promise?
On the upper deck of the No 38, the passengers giving their verdict on the Boris bus might equally be discussing the man behind it, the mayor elected on precious few promises other than to rid London of his predecessor’s bendy buses.
“It doesn’t make sense,” claims one commuter. Another counters: “It’s a nice upgrade – and it makes you a little bit happier when you see the new, shiny one coming along.”
A few prototypes have run in London since 2012, but now the Dalek-like visage of the New Bus for London is to flood the No 24 prestige route from Hampstead through Trafalgar Square to Pimlico with upgraded models – the first full service to start making Boris Johnson’s grand, costly bus dream a widespread reality.
The 28 buses are the first instalment of 600 to be delivered over the next three years – the culmination of Johnson’s rallying cry in 2007. As a putative Conservative challenger to Ken Livingstone, he tapped into nostalgia for the Routemaster for his first policy of note.
Critics say the bus has come with a hefty price tag and high running costs. They question the wisdom of the open rear entrance, the boarding platform that became emblematic of fun, leaping Boris versus dour Ken, worried about access for all. And they question the environmental credentials of the bus heralded as the greenest yet.
Early jibes that the £11m budget brought just eight prototypes proved unfair, but there is no question that the bus has cost more than envisaged – exploding Johnson’s pledge not to exceed the bill for existing hybrid diesel-electric buses. Instead of the £305,000 off-the-peg equivalent, the price escalated to £354,500 for each bus – unfortunate timing when London has to make the case to preserve its transport budget in the chancellor’s spending review. Transport for London (TfL) claims this fixed price for the entire order equates to £326,000 at today’s prices, once inflation and leasing costs are factored in. Conductors will cost about £62,000 for each bus, or £37m extra a year.
So is it worth it? The mayor, naturally, rhapsodises about his bus, recently telling a city hall audience he would “clean up the air with a wonderful new bus, the cleanest, greenest in the world”.
But the New Bus’s case is best made by two champions from a very un-Boris background. The first route-24 bus out of Pimlico garage at 6am this Saturday will be driven by Sir Peter Hendy, London’s transport commissioner, and Leon Daniels, head of surface transport at TfL – two veteran bus lovers whose Christmases have all come at once from a mayor brash enough to fork out for such a gleaming, expensive toy.
“It’s fabulous,” said Hendy. “It’s a lovely vehicle, very comfortable, popular, well-designed – everyone likes it. They love it.”
Daniels has admitted to having waited four decades for something like this – a bespoke bus, built to a high specification, just for London. While it retains the Routemaster’s curves and its rear platform – open only when a conductor is aboard in the daytime – three doorways and two staircases mean more rapid boarding and access for wheelchairs and pushchairs.
Fuel consumption and emissions have not, on the prototypes, been as impressive as expected. But Daniels insists that results from the few on route 38 are not a valid benchmark for what the bus will achieve when fully operational. “In any event, it’s the cleanest and most compliant bus we have.”
London assembly members are yet to be convinced, and Greens and Liberal Democrats point out that the bus will not even meet the mayor’s 2020 target for an ultra-low emission zone, claiming that Johnson’s “obsession” has locked the capital into today’s diesel technology.
Hendy shrugs. “Technology is changing. They won’t be the best or the only ones [on the road] at the end of 14 years, [their London lifespan] but they will be a very decent bus.”
With Treasury eyeballs on London’s budget, TfL is at pains to stress the economic benefits and jobs sustained in a nationwide supply chain for the buses, built by Wrightbus in Northern Ireland. Johnson is well versed in reeling off suppliers around the UK: engines from Darlington, seats from Telford, moquette from Huddersfield, wheelchair ramps from Hertfordshire, and so on.
Whatever the economics, it’s hard to escape the fundamental reason why two genteel swaths of London will awake this weekend to find a new bus linking their boroughs: the Routemaster’s open platform and all it symbolised. As Johnson puts it, the ability to “hop on, hop off – fall over, should fate intervene in that way …”
Livingstone has no regrets over the Routemaster, despite the political fallout – he had, notoriously, said that no one but a “dehumanised moron” would scrap it. He happily admits having once enjoyed jumping on and off the moving bus. Getting older, and becoming a father, changed his view. “If you’re old, disabled, with kids or heavy shopping, it’s impossible … You can’t expect to run a bus fleet where 10% of Londoners can’t physically board.”
Most of all, he thinks Johnson, in pursuing a populist flourish, has missed an opportunity to bring in something cheaper that would have really tackled pollution and air quality in London: electric buses. “The technology is now there for a proper electric bus. If I’d won I’d have ordered 9,000. The manufacturers are waiting for a city to place an order to get them going.”
Back on the route-38 prototype, Dom Harwood, 28, a composer, continues to enthuse about the hybrid bus, with additional conductors creating jobs: “Two people rather than one.”
Even the sceptic, ceramic designer Emmely Dovaston, 22, says she prefers travelling on the quieter, cooler new bus but is dubious about the cost of the conductors, and points to fares that have inflated 50% under Johnson. “I’d rather have cheap travel. At the end of the day, it’s a bus.”
Facts and figures
Cost
New Bus £354,000
Hybrids c £305,000
Fuel consumption
New Bus 6.74mpg
Hybrid 6.1mpg
Emissions
New Bus 2.048g/km of NOx
690.23g/km of CO2
0.012g/km of PM
Average hybrid 7.7g/km NOx
864g/km CO2
0.048g/km of PM
Passengers per bus
New Bus 87 (25 standing)
Hybrid 84 (23 standing)
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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.”
Despite Osborne’s caution on the timescale for a sell off the Lloyds stake, he said the government was “actively considering options for share sales in Lloyds”. 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.” 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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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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PMQs and statement on CQC cover-up and G8: Politics live blog
Andrew Sparrow’s rolling coverage of all the day’s political developments as they happen, including David Cameron and Ed Miliband at PMQs, Jeremy Hunt’s statement on the CQC cover-up scandal and Cameron’s statement on the G8 summitAndrew Sparrow
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Anxiety or depression affects nearly one in five UK adults
Office for National Statistics says highest incidence of mild mental illness is in 50-54 age group and among women
Nearly a fifth of adults in the UK experience anxiety or depression, according to the latest official figures.
The Office for National Statistics (ONS) said a higher proportion of women than men reported that they suffered from the conditions, with the highest indication of anxiety or depression occurring in the 50-54 age group.
There was evidence of anxiety or depression in 19% of people aged 16 or over, with 21% of women reporting the symptoms and 16% of men.
People who were divorced or separated were more likely to have symptoms of mild to moderate mental ill health, with 27% showing signs of the conditions compared with 20% of those who were single, cohabiting or widowed and 16% of those who were married or in a civil partnership.
Higher levels were also recorded by those who were not in paid work – 23% reported they were experiencing mental health issues, compared with 15% of those in paid work.
The ONS also revealed that 38% of those who said they were relatively unhappy with their health had some indication of anxiety or depression, compared with 11% of those who declared themselves to be relatively satisfied with their health.
Carers were more likely to report mild to moderate mental health issues, at a rate of 25% of those questioned, compared with 17% of people who did not provide such care.
The study is part of the ONS Measuring National Wellbeing programme, which surveyed 40,000 households between 2010 and 2011. The figures released on Wednesday come from the general health questionnaire, which asked 12 questions about respondents’ levels of self-confidence, stress, depression and self-worth.
The ONS said the types of mental illness recorded on the questionnaire did not include severe mental disorders.
The latest figures released as part of the wellbeing study also showed that 66% of people in the UK were satisfied with their health. In those aged 80 or older, satisfaction with health fell to 53%.
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G8 and tax avoidance: Q&A
David Cameron said Britain would use its G8 presidency to crack down on tax avoidance. What progress has been made so far?
How serious has David Cameron been in attempting to tackle tax abuses?
The prime minister has set out bold ambitions to “rewrite the rules on tax”. He promised Britain would use its G8 presidency to crack down on big businesses and rich individuals using “an army of clever accountants” to avoid tax. “This is an issue whose time has come,” he told the World Economic Forum in Davos in January. But seasoned tax experts heard in his words an of echo Gordon Brown’s distinctly premature 2009 summit declaration of “the beginning of the end for tax havens”.
Has the G8 made progress cracking down on multinationals playing off one regime against another to lower its tax bills?
The world leaders have called on the OECD, the body that draws up international guidelines on tax, to draft a template for multinationals to report the tax they pay to taxing authorities in each jurisdiction in which they operate. Cameron claims this will “identify where multinational companies are earning their profits and paying their taxes so we can track and expose those who aren’t paying their fair share”. Tax campaigners, however, suggest it does not go nearly far enough. There was no commitment for this information to be made public or for companies to provide greater disclosure on other economic activity on a country-by-country basis.
What about closing loopholes in international tax rules exploited by firms such as Google, Apple and Amazon?
Several issues around taxing multinationals are being worked on furiously by the OECD before a wider G20 meeting of finance minister next month. The G8 promised to “take the necessary individual and collective action” to back up any recommendations from recasting the rules. As a broad statement of intent the G8 leaders said: “Countries should change rules that let companies shift their profits across borders to avoid taxes”.
Will companies and trusts be forced to disclose those who stand behind them as owners, or as trust settlors and beneficiaries?
Tax fairness campaigners fought hard on this issue and appeared to have won the support of Cameron who pushed for a commitment to registers of beneficial ownership to be set up. However, the prime minister appears to have been left isolated on the issue by his G8 peers. The final leaders’ communique offered little more than support for an existing review being carried out by the Financial Action Task Force (FATF), another international quango. The FATF believes a central register is just one way forward, with other proposals more akin to imposing tougher know-your-customer rules on company administrators. With little common ground on transparency thresholds the G8 declared that nations would each commit to their own “action plans” on this issue. The UK is to set up a central registry of beneficial owners, but will consult on whether this should be made publicly accessible. It will also review the role of nominee directors and bearer shares in corporate life. The US is to leave the decision to individual states, with Delaware – a well known secrecy haven – thought likely to resist.
Did the G8 achieve progress on tax information exchange between countries to help in the battle against evasion?
There have been a confusing blizzard of bilateral and multilateral tax information exchange agreements in the last four years, each of them building in significance. Before the G8 meeting, Cameron was able to claim a victory by corralling many British affiliated tax havens – crown dependencies and overseas territories – into signing up to some less onerous tax co-operation initiatives. The gold standard in this area is a US measure called FATCA (Foreign Account Tax Compliance Act), an aggressive unilateral initiative that comes into force later this year requiring financial firms to disclose details of all US citizens’ assets held overseas or face punishing taxes. There are signs that Europe and others could follow with similar draconian measures, setting a common international standard. “We call on all jurisdictions to adopt and effectively implement this new single global standard at the earliest opportunity,” the G8 communique said.
How will the summit be judged?
Cameron’s verdict at the closing press conference was that he had secured a G8 declaration that “has the potential to rewrite the rules on tax and transparency for the benefit of countries across the world”. New tools, he said, would now be forged that would help ensure “proper tax justice in our world”. But most tax campaigners were last night expressing disappointment at a final communique long on talk and short on commitment. Some took heart that radical ideas had made it onto the table for discussion – even if they were not adopted. Murray Worthy, tax campaigner at the anti-poverty charity War on Want, said: “As always, the devil will be in the detail, and there is no detail here. Talk of stopping companies shifting profits to avoid taxes is a huge step forwards, but we have heard great promises from the world’s heads of state before – it is what they do that counts.”
What will it mean for tax haven’s linked to Britain?
Jersey and other crown dependencies were on Monday night claiming that they were already way ahead of the G8 economies themselves in meeting the standards set out in the communique. “We have been doing what is being commended for quite a long time,” said Geoff Cook, chief executive of the islands financial lobby group Jersey Finance, “So my message to the G8 is… Level Up!” If Cook is right, and principles set out by the G8 leaders changes little in Jersey, many tax campaigners will regard the summit as a heavy defeat. The islands trust industry – and that of Guernsey and the Isle of Man – are viewed by critics as facilitating billions of founds of tax evasion. Campaigners claim sophisticated evaders use these offshore trusts, often in combination with companies and bank accounts in other secrecy jurisdictions, to hide assets from tax authorities.
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