Darling: tax may rise in downturn

The Chancellor signalled last night that taxes might have to rise if the economic downturn is prolonged.

Alistair Darling warned that Government revenue has collapsed because of the recession. He said that ministers would attempt to stimulate the economy by accelerating spending projects even if it meant a sharp increase in Government borrowing.

He is expected to announce plans today for a £4bn loan package designed to help small businesses cope with tough trading conditions ahead.

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Australia to implement mandatory internet censorship

AUSTRALIA will join China in implementing mandatory censoring of the internet under plans put forward by the Federal Government.

The revelations emerge as US tech giants Google, Microsoft and Yahoo, and a coalition of human rights and other groups unveiled a code of conduct aimed at safeguarding online freedom of speech and privacy.

The government has declared it will not let internet users opt out of the proposed national internet filter.

The plan was first created as a way to combat child pronography and adult content, but could be extended to include controversial websites on euthanasia or anorexia.

Communications minister Stephen Conroy revealed the mandatory censorship to the Senate estimates committee as the Global Network Initiative, bringing together leading companies, human rights organisations, academics and investors, committed the technology firms to “protect the freedom of expression and privacy rights of their users”.

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World is facing a natural resources crisis worse than financial crunch

• Two planets need by 2030 at this rate, warns report
• Humans using 30% more resources than sustainable

The world is heading for an “ecological credit crunch” far worse than the current financial crisis because humans are over-using the natural resources of the planet, an international study warns today.

The Living Planet report calculates that humans are using 30% more resources than the Earth can replenish each year, which is leading to deforestation, degraded soils, polluted air and water, and dramatic declines in numbers of fish and other species. As a result, we are running up an ecological debt of $4tr (£2.5tr) to $4.5tr every year – double the estimated losses made by the world’s financial institutions as a result of the credit crisis – say the report’s authors, led by the conservation group WWF, formerly the World Wildlife Fund. The figure is based on a UN report which calculated the economic value of services provided by ecosystems destroyed annually, such as diminished rainfall for crops or reduced flood protection.

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Fed interest rate cut may end up making matters worse

The Federal Open Market Committee’s half-point cut in its Federal Funds target does not address the leverage and credit issues in the banking system.

Indeed, by penalizing savers it worsens the economy’s supply/demand imbalance for funding. The cut doesn’t solve short-term problems and worsens long-term inflation worries.

The banking crisis was not caused by over-high interest rates. Its two main causes were large and unknown housing-related and other credit losses and an urgent need for banks to reduce their leverage.

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House prices fall 14.6pc in a year

House prices have fallen for the twelfth month in a row and are now 14.6pc lower than last year, the latest figures from Nationwide show.

Houses for sale: house prices are falling by almost £80 a day, according to Nationwide
The average house price has dropped by £27,000 in the past year, says Nationwide Photo: PA

Prices fell 1.4pc in October and the average house has seen £27,000 wiped off its value in the past twelve months.

The number of completed housing sales has now fallen to its lowest level since the Nationwide series began in 1974, the building society added in its lastest House Price Survey, driving the decline in prices.

The crisis in the financial sector and the latest Government data suggesting a recession is imminent is likely to worsen the housing market slump and has “uncomfortable implications”, Nationwide said.

“A looming recession and continued financial market instability have uncomfortable implications for the housing and mortgage markets, and will undoubtedly affect the pace of recovery in house prices,” Fionnuala Earley, the Nationwide’s chief economist, said.

Read moreHouse prices fall 14.6pc in a year

Goldman Sachs ready to hand out £7bn salary and bonus package… after its £6bn bail-out


U.S. investment bank Goldman Sachs HQ which has set aside £7bn for bonuses and salaries this year

Goldman Sachs is on course to pay its top City bankers multimillion-pound bonuses – despite asking the U.S. government for an emergency bail-out.

The struggling Wall Street bank has set aside £7billion for salaries and 2008 year-end bonuses, it emerged yesterday.

Each of the firm’s 443 partners is on course to pocket an average Christmas bonus of more than £3million.

The size of the pay pool comfortably dwarfs the £6.1billion lifeline which the U.S. government is throwing to Goldman as part of its £430billion bail-out.

As Washington pours money into the bank, the cash will immediately be channelled to Goldman’s already well-heeled employees.

News of the firm’s largesse will revive the anger over the ‘rewards for failure’ culture endemic in the world of high finance.

The same bankers who have brought the global economy to its knees seem to pocketing the same kind of rewards they got during the boom years.

Read moreGoldman Sachs ready to hand out £7bn salary and bonus package… after its £6bn bail-out

US motor industry: The great breakdown

Such is the severity of the downturn in the global car industry that US manufacturers are now pushing for their own state bailout.

Why stop at the banks? Now governments around the world are pouring taxpayer money in to bail out loss-making financial institutions, it is getting harder to argue against subsidies, loans, guarantees and other forms of government assistance for other industries, too – particularly since the economic pain is now being felt far from Wall Street.

Which is why Rick Wagoner, chief executive of General Motors, the largest US carmaker, packed his suitcase for Washington and headed to the capital again this week. He is leading a lobbying push aimed at tapping taxpayers and staving off the bankruptcy of the loss-making company. GM’s coffers are being depleted at a rate of $1bn a month, and will run dry by the end of next summer. Little wonder its shares have touched levels not seen since it emerged from the Great Depression.

GM – owner of the Vauxhall brand and Chevrolet, amongst others – is in the throes of merger talks with its smaller rival Chrysler, which is also haemorrhaging cash. The hope is a merger will save money, allowing them to close more factories and cut more jobs. The trouble is, things are so desperate they don’t have the cash to write the redundancy cheques. They are asking for up to $10bn in low-cost loans to tide them over.

So here we are, on the brink of Bail-out II: Detroit.

Read moreUS motor industry: The great breakdown

Toshiba drops 99 percent on weak chips, outlook hazy


A man looks at laptop computers at an electronics retailer in Tokyo October 29, 2008

TOKYO (Reuters) – Japan’s Toshiba Corp (6502.T) posted a 99 percent plunge in quarterly operating profit on Wednesday, dragged down by weakness in its mainstay chip operations, but stuck to its recently revised outlook above expectations.

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Thousands Still Without Power in Upstate New York After Snow Storm


Oct. 28: A snow plow clears a highway in Westerlo, N.Y.

ALBANY, N.Y. – Nearly 40,000 utility customers remain without power in eastern New York a day after more than a foot of snow fell on some areas.

National Grid has about 25,000 customers without power Wednesday morning, most in the Mohawk Valley and Adirondacks.

New York State Electric & Gas reports about 13,300 outages, most in the Catskills. Power is expected to be restored to most customers on Wednesday.

The storm dumped wet, heavy snow on trees still covered in leaves, bringing limbs down on power lines.

The National Weather Service reports snowfall totals ranging from 13 inches in northern New York to 15 inches along the northwestern edge of the Catskill Mountains.

Read moreThousands Still Without Power in Upstate New York After Snow Storm

London suffered its first October snowfall in 74 years as a winter chill set in across England

Snow covers parts of England as winter weather sets in


A blizzard hit Stevenage as temperatures fell across the country Photo: Gary Dowson

Thousands of homes in Bedfordshire, Hertfordshire and Buckinghamshire were left without power after the cold weather damaged high voltage cables.

Supplier EDF Energy said the bad weather has prevented engineers from fixing the problem.

Luton Airport was forced to divert a number of its flights on Tuesday evening while airport workers cleared snow from the runway.

Read moreLondon suffered its first October snowfall in 74 years as a winter chill set in across England