Category Archives: The Guardian

James Gandolfini dies aged 51

Star of HBO’s hit series The Sopranos may have suffered heart attack in Italy, according to cable network spokeswoman

The Emmy-award winning American actor James Gandolfini, best known for playing New Jersey mafia boss Tony Soprano on the hit television series The Sopranos, has died in Italy aged 51.

Gandolfini’s death was confirmed by HBO, the US cable network that produced the Sopranos, which said he was on holiday when he died. HBO spokeswoman Mara Mikialian told Reuters that he died of a possible heart attack.

The actor first came to prominence playing the mob hitman Virgil in the 1993 film True Romance, written by Quentin Tarantino. But he will be best remembered as troubled gangster Soprano who struggled to juggle his family life and his career as a mafia boss over the show’s six seasons.

Actor Joseph R Gannascoli, who played Vito on The Sopranos paid tribute on Wednesday night. He told website TMZ: “James is one guy who never turned his back on me. He was the most humble and gifted actor and person I have ever worked with … He was a great man and I will forever be indebted to him.”

Gandolfini won several awards for his role in The Sopranos, including both the Primetime Emmy Award for Outstanding Lead Actor in a Drama Series and Screen Actors Guild Award for Outstanding Performance by a Male Actor in a Drama Series. He also appeared in the films Zero Dark Thirty, Get Shorty, The Mexican and In The Loop. At the time of his death, Gandolfini had been working on an upcoming new HBO series titled Criminal Justice.

HBO declined to elaborate on the series other than to say that it was in development and that Gandolfini was a part of it.

“We’re all in shock and feeling immeasurable sadness at the loss of a beloved member of our family,” the network said in a statement. “He was a special man, a great talent, but more importantly a gentle and loving person who treated everyone, no matter their title or position, with equal respect.”

A New Jersey native, Gandolfini worked as a truck driver, bouncer and nightclub manager in New York City before he went to an acting class with a friend and got hooked.

“I’d also never been around actors before,” he told Time magazine, “and I said to myself, ‘These people are nuts; this is kind of interesting.’”

He is survived by his wife Deborah Lin, who gave birth to the couple’s daughter in October 2012. He also has a teenage son from a previous marriage.

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Children given antibiotics in first year ‘more likely to develop eczema’

New research published in British Journal of Dermatology suggests antibiotics could affect maturing immune system

Children who receive antibiotics in the first year of their lives are as much as 40% more likely to go on to develop eczema, according to a new study by British researchers.

“One potential explanation is that broad-spectrum antibiotics alter the gut microflora and that this in turn affects the maturing immune system in a way that prompts allergic disease development,” said researcher Dr Teresa Tsakok, who works at St Thomas’s hospital in London.

The findings, published in the British Journal of Dermatology, are based on a systematic review of 20 previous studies of the relationship between pre- and postnatal exposure to antibiotics and later risk of eczema.

The authors from London, Nottingham and Aberdeen concluded that: “Overall, we found a significant positive association between postnatal antibiotic prescribing and later risk of the skin condition. There was also a 7% increase in eczema risk with each additional course of antibiotics during the first year of life.”

But the authors also say that the use of antibiotics could be a result of the treatment of higher than usual rates of infections among children with eczema.

At least one in five children suffers from eczema, although most grow out of it, according to the British Association of Dermatologists (BAD), which represents specialists in skin conditions.

Dr Carsten Flohr, a co-author, said: “A better understanding of the complex relationship between antibiotic use and allergic disease is a priority for clinicians and health policymakers alike, as determination of a true link between antibiotic use and eczema would have far-reaching clinical and public health implications.”

Nina Goad, spokeswoman for BAD, said: “The researchers are not suggesting that parents should withhold antibiotics from children when doctors feel such treatment is necessary, but studies like this give an insight into possible avoidable causes and may help to guide medical practice.”

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North-south negative equity divide ‘widening’

Ratings agency S&P says that 13.5% of mortgage borrowers in north-west England are in negative equity, against 0.9% in London and the south-east

One in seven mortgage holders in north-west England are in negative equity, while in the south-east it is fewer than one in 100, according to a new report.

Ratings agency Standard & Poor’s, which issued the research, also claimed that the north/south negative equity divide “is getting wider”.

The report estimates that for the UK as a whole, the proportion of people trapped in properties worth less than their mortgages fell to 4.9% in the first three months of this year, from 5.6% at the end of 2011.

However, the fortunes of the housing markets of the north and south are very different. The report shows that the proportion of borrowers in the southern regions who were in negative equity fell from 3.3% to 1.5% over the same period, with London and the south-east “leading the way” at 0.9%. By contrast, the figure for the northern regions as a whole edged up to 8.7% from 8.5% last time.

The report includes a regional breakdown showing wide variations in the rates of negative equity across the country. This shows the north-west as having the highest proportion of these so-called trapped borrowers: 13.5%. In second place was Yorkshire and Humberside (10%), followed by the north-east and Wales (both 8.5%), and the West Midlands (7.3%).

The figures for the east Midlands and Scotland were 6.2% and 5.4% respectively, followed by the south-west (3.4%) and East Anglia (3.2%). Northern Ireland was excluded because relatively few of the loans in the sample were from this region.

The S&P report also found that when it came to people who were behind with their mortgage payments, the figures for the north were “substantially higher” than for the south. Around 4.4% of northern mortgage accounts were in arrears in the first three months of this year, compared with 3.5% in the southern regions.

“Diverging regional house prices mean that the proportion of borrowers with low equity has continued to rise in the north, while it has fallen in southern regions,” said the Standard & Poor’s report. It added: “Given the buoyant London property market, and further public sector job cuts, which could disproportionately affect the north, we expect that the regional divide in mortgage risk will persist in the coming quarters.”

The researchers said that while northern employment had recently picked up, “we note that part-time jobs account for most of this rise … Government job cuts, to the tune of 1.2m between 2011 and 2018, are also likely to hit northern regions harder, in our view. Furthermore, given increased foreign demand for ‘safe’ property assets, we expect the capital’s housing market to remain resilient in the near term. Therefore we don’t see the regional house price divide closing any time soon.”

The study covers about 2m mortgage loans backing prime “residential mortgage-backed securities”.

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Police cells holding more than 9,000 mentally ill people a year

Prisons and health inspectors warn that those detained with mental disorders should be in hospital not police custody

More than 9,000 mentally ill people a year are being detained in police custody despite official guidance that such powers should be used only in exceptional circumstances, watchdogs say.

The official investigation of the watchdogs finds that some of those being detained are as young as 14. The majority in a 70-strong sample said they were held after either attempting suicide or self-harm, or indicating that they were thinking of doing so.

The joint report by the police, prisons and health service inspectorates, published on Tuesday, says that police custody is regularly used to detain people whose only crime is that they are suffering from a mental disorder.

The report, entitled A Criminal Use of Police Cells?, says that “place of safety” powers, under section 136 of the 1984 Mental Health Act, make clear that people should be detained in a hospital or another health facility to be medically assessed and that police cells should be used only in exceptional circumstances.

The inspectors say that mentally ill people spend an average of 10 hours, 32 minutes in police custody, and that they are kept in the same type of cells and subjected to the same processes and procedures as people who have been arrested. “The only difference is that they are ill, not suspected criminals,” the inspectors say.

The report’s publication follows the announcement last month by the home secretary, Theresa May, of a drive to end the use of police cells “as places of safety” for mentally ill people.

May has estimated that police officers spend 15% to 25% of their time dealing with people with mental health problems.

According to the inspectors’ report, in many of the 70 cases examined in detail no reason was given why detainees were held in police cells. But the most common explanations were shortages of hospital staff or available beds, or that the person detained had drunk alcohol or was displaying violent behaviour, or had a history of doing so.

The report says that in 2011-12 more than 9,000 people were detained under section 136, and 16,035 were taken to hospital to await assessment.

In one case a custody sergeant told inspectors that he was so concerned about the welfare of a 17-year-old, detained overnight, he had put an officer outside his cell to monitor him. There had been no one from mental health services available to assess the teenager.

Kevin Huish, of the Police Federation, said that police officers did not wish to detain people under the Mental Health Act but were all too often forced to do so due to a lack of provision in other services.

“This is unacceptable for the officer, the individual and the public,” Huish said. “This is an issue which has been identified by the government as a serious problem … This matter needs to be addressed and it needs to be addressed urgently.”

A Home Office spokesman said: “We are already working on a range of measures to ensure that people with mental health problems get the care they need.

“These include providing suitable places of safety in every local area and piloting street triage services where mental health nurses accompany police officers to incidents.”

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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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Slim Whitman dies of heart failure at the age of 90

Country singer recorded more than 65 albums and his 1955 version of Rose Marie was No 1 for 11 weeks in Britain

Country singer Slim Whitman has died of heart failure at Orange Park medical centre, Florida, aged 90, his son-in-law Roy Beagle said.

The singer, whose tenor falsetto and ebony moustache and sideburns became global trademarks, recorded more than 65 albums and sold millions of records. His 1955 version of Rose Marie, the title song from the venerable operetta that spawned Indian Love Call, was No 1 for 11 weeks in Britain, where he was particularly popular.

Whitman encouraged a teen Elvis Presley when he was the headliner on the bill and the young singer was making his professional debut.

Whitman, born in Tampa, Florida, started his career in the late 1940s, but he achieved cult status in the 1980s. “All of a sudden, here comes a guy in a black and white suit, with a moustache and a receding hairline, playing a guitar and singing Rose Marie,” Whitman told AP in 1991. “They hadn’t seen that.”

He yodelled throughout his career and had a three-octave singing range. He said yodelling required rehearsal. “It’s like a prize fighter. He knows he has a fight coming up, so he gets in the gym and trains. So when I have a show coming up, I practise yodelling.”

In 1952, Whitman had his first hit, Love Song of the Waterfall, which 25 years later became part of the soundtrack of the movie Close Encounters of the Third Kind.Another Whitman hit from that year, Indian Love Call, was used in the 1996 Mars Attacks! – his yodel causes the Martians’ heads to explode.

Whitman’s other hits included “Have I Told You Lately That I Love You,” “Red River Valley,” “Danny Boy” and “I’ll Take You Home Again, Kathleen.”

He was survived by his daughter, Sharon Beagle, and his son, Byron Whitman.

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US condemns China, Russia and Uzbekistan for human trafficking

State department’s annual slavery report relegates three countries to bottom tier for failing to tackle forced labour and widespread exploitation

The US has condemned China, Russia and Uzbekistan for their failure to stem widespread systematic human trafficking and slavery within their borders.

The annual Trafficking in Persons (Tip) report, released by the US state department on Wednesday, grades the scale and severity of people-trafficking in 188 countries and territories.

It has downgraded China, Russia and Uzbekistan to tier three, the report’s lowest ranking, reserved for countries whose governments do not fully comply with the Trafficking Victims Protection Act and are not making significant efforts to do so.

The relegation was attributed to continued failure to stop the routine complicity of officials in trafficking crimes, state-sponsored slavery, and widespread forced labour, sexual exploitation and enslavement of nationals and foreign nationals in the three countries.

The report, which has been published since 2001 and is the US’ principal diplomatic tool to engage foreign governments on human trafficking, paints a damning pictureof conditions of modern slavery in the three countries. China is criticised for perpetuating human trafficking in 320 state-run institutions and the widespread domestic trafficking of girls and women into forced prostitution. In Russia, an estimated 1 million people are exposed to exploitative labour , including forced labour used in the construction of the Winter Olympic park in Sochi, according to the report

conditions. The government of Uzbekistan continues to force older children and adults into slave labour in its cotton industry. , the US state department says, and the country “remains one of only a handful of governments around the world that subjects its citizens to forced labour through the implementation of state policy”.

“What we have seen in all three of these countries has been stagnation in efforts and the continuation of issues such as conflated human trafficking and child abduction in China and the continued use of forced labour in Uzbekistan,” said Luis CdeBaca, the US state department’s ambassador-at-large to monitor and combat trafficking in persons. “With this report, the rankings follow the results and at some point the waivers run out.”

The report reveals pitifully low global figures for the prosecution and conviction of trafficking criminals and identification of people who have been trafficked.

Although the International Labour Organisation (ILO) estimates there are around about21 million people trapped in forms of forced labour around the world, only about 47,000 people were identified by governments as having been trafficked last year.

Global prosecutions of traffickers rose by about 10% from 2012-13, but totalled only 7,705 cases, with 4,746 resulting in a conviction.

Relegation into tier three ranks China, Russia and Uzbekistan among the countries with the worst records on human trafficking, including Zimbabwe, Saudi Arabia and Yemen. Under US law, it could trigger non-trade related sanctions, leading to restrictions on US foreign assistance and access to global financial institutions such as the World Bank.

This year’s report is the first to be released under the new US secretary of state, John Kerry. The decision to downgrade China, Russia and Uzbekistan was hailed as “brave” by anti-trafficking campaigners in the US, who had feared that diplomatic pressure, especially from China and Russia, and a reluctance to be seen as a self-appointed watchdog would influence the rankings.

“The vibe we were picking up earlier this year is that there was a good chance all three countries would be upgraded, which would be a disaster in terms of its impact on internal efforts to take action on the huge trafficking and human rights problems, which affect millions of people,” said Holly Burkhalter, vice-president of government relations and advocacy at International Justice Mission [http://www.ijm.org/].

“Any decision to downgrade represents a significant degree of political courage on behalf of secretary Kerry as neither Russia or China take kindly to criticism from the west,” she said.

However, although the report is widely acknowledged as the most influential catalogue of anti-trafficking initiatives by governments, the impartiality of the ranking system has faced criticism.

“Although in general the Tip report paints a reliable – probably the best available – picture of modern-day slavery in all its forms, the rankings can be the problematic issue,” said Aidan McQuade, director of Anti-Slavery International [http://www.antislavery.org/english/].

“This is because the ranking is inevitably coloured by US foreign and strategic interests, and this can give a get-out-of-jail-free card to some countries which are failing to protect their citizens from slavery, meaning that they do not get the bad ranking that they truly deserve.”

Other countries including Iraq, Azerbaijan and Congo-Brazzaville escaped relegation, due to what CdeBaca called “concerted efforts on the behalf of their governments to address the problem of human trafficking”.

Afghanistan, Barbados, Chad, Malaysia, Maldives and Thailand are facing an automatic downgrade to tier three in the next report if significant progress is not made before the end of the year.

Afghanistan was granted a waiver from an automatic downgrade to tier three despite widespread internal trafficking, government complicity in trafficking rings, and reports of police officers raping and imprisoning trafficking victims.

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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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Posted in Banking, Banks and building societies, Business, Economics, Financial crisis, Financial sector, Lloyds Banking Group, Money, News, Politics, Royal Bank of Scotland, The Guardian, UK news, World news | Comments Off