Live Blog

Ed Miliband
January 25, 2015, 10:21pm

Ed Miliband is planning to cut tuition fees from £9,000 to £6,000 if Labour wins this year's General Election.

The BBC's economics editor Robert Peston has been told that Miliband will make the policy announcement next month. A commitment from Labour on tuition fees has long been expected.

The policy may help the party keep some of the Lib Dem defectors on side as the election draws nearer and may help solidify the party's lead among younger voters. However, in times of restrained public spending Labour will come under scrutiny as to how the policy will be funded.

The cut in tuition fees could cost as much as £2.5bn a year, based on the amount that is expected to be lent this year. Peston reports that Shadow Chancellor Ed Balls has not yet found a tax or spending cut to cover the cost of the pledge.

Labour is considering a tax raid on banks or replacing the current student loans system with a graduate tax to pay for the policy, according to Peston. The Tories will no doubt take the opportunity to accuse Labour of making unfunded promises and being irresponsible with the public finances.

Labour have faced a challenge among the youth vote with the rise of the Greens. The Greens now tie with the Tories for second place among the 18-24 years olds. Labour's support fell from 44 per cent in January 2014 to last year to 32 per cent in December.

Syriza
January 25, 2015, 9:29pm

The radical left party Syriza has won Greece's snap election in a contest that could mark a historic turning point in the history of the Eurozone.

Greek prime minister Antonis Samaras has called Syriza's leader Alexis Tsipras to congratulate him on winning the election. 

Samaras told an audience of supporters:

We were obliged to take difficult steps. Mistakes were made but we avoided the worst. Above all I deliver a country that is a member of the EU and the euro. I told the truth to the Greek people to the very end

Syriza supporters flooded the streets of Athens to celebrate the historic victory. The election marks the first time a radical anti-austerity has taken the reigns of power in a Eurozone country.

Speaking to crowds in Athens Tsipras told crowds at Athens university:

Our victory is of all the peoples of Europe who are struggling. I would like to assure you the new Greek government will be ready to co-operate and negotiate with our friends, with a just and useful solution so that Greece will return Europe to development and social stability and values like democracy and solidarity

The prospect of a Syriza victory led the leader of Germany's eurosceptic Alternative for Germany party Bernd Lucke to suggest some debt relief for Greece. However, Lucke added this haircut would have to be accompanied by Greece's exit from the single currency.

The President of the Bundesbank Jens Weidmann has urged Greece to stick its agreements on austerity and structural reform. Speaking to Reuters, Weidmann said:

I believe it’s also in the interest of the Greek government to do what is necessary to tackle the structural problems there.

I hope the new government won’t call into question what is expected and what has already been achieved.

Syriza stood on a platform of reversing austerity policies and negotiating to write off a large chunk of Greece's debt. This sets the party on a collision course with Berlin.

Angela Merkel is extremely unlikely to give in to all of Syriza's demands. If no common ground or compromise is reached, Greece could be forced to leave the Euro. Syriza has moderated its position over the past few months saying it wishes to remain in the single currency. 

Golden Dawn
January 25, 2015, 7:50pm

Greece's political order is set to undergo a radical change after today's elections.

Exit polls suggested the far left party Syriza will receive the largest share of the vote between 35.5 and 39.5 per cent. The Greek interior ministry predicts Syriza will achieve 36.5 per cent of the vote and win 150 seats - one short of a majority.

Syriza is not the only extremist party making gains. The fascist party Golden Dawn may win third place if the exit polls are correct. Golden Dawn could win between 6.4 and eight per cent of the vote. However, it is still nip and tuck with the centrist To Potami party, according to the exit polls.

If the Greek interior ministry predictions are correct Golden Dawn will return 17 representatives to the Greek parliament.

The far right party achieved parliamentary office for the first time three years ago. Many of the party's top officials are prison thanks to their alleged association with criminal gangs. The party has been accused of carrying out vicious attacks on immigrants and political opponents.

Seven of the party's 16 members of parliament are in gaol or under house arrest. Golden Dawn has pledged to detain illegal immigrants and have them deported. 

Golden Dawn gained popularity on the back of anti-immigrant sentiment and by providing social services to the poor. They won three MEPs after coming third in the European elections. In 2012, Golden Dawn received seven per cent of the vote.

Alexis Tsipras
January 25, 2015, 7:40pm

The official projections for Greece's long-awaited general election are in. The radical left party Syriza led by firebrand Alexis Tsipras will win first place with between 36.5 per cent of the vote.

According to MetronAnalysis' pollster Fanaras Syriza will come just one seat short of winning a parliamentary majority with 150 seats.

The anti-austerity party has promised to reverse massive spending cuts and negotiate a write-off of Greece's debts. Tsipras's principal opponent is the conservative New Democracy party, which make-up the current government. The exit polls showed New Democracy taking 23-27 per cent of the vote.

New Democracy has pushed ahead with economic reforms recommended by the Troika - the European Union (EU), International Monetary Fund (IMF) and European Central Bank (ECB). While the deficit has been eliminated and growth has returned many Greeks are still immensely poorer than they were five years ago.

The Greek parliament is comprised of 300 members. The party that wins the largest share of the vote is awarded an additional 50 MPs. After voting this morning, Tsipras said, "the vicious circle of austerity is over".

Syriza's programme of debt relief and an end to austerity have set the party on a collision course with other EU member states. Angela Merkel, in particular, will be unwilling to give way to Tsipras's demands for fear of a backlash at home and encouraging radical parties in other member states. Syriza has attempted to moderate its positions over the course of the campaign, saying it wants Greece to remain in the Euro.

A Syriza victory followed by political deadlock could lead to Greece defaulting on its debts and exiting the Euro. Last week, ratings agency Moody's has warned that the heightened risk of a Greek exit from the Eurozone "could have negative credit implications for other members of the European single currency".

However, the Eurozone is in a far better shape to withstand any contagion from a Grexit than it was five years ago. But a Grexit would still be a seminal moment for the currency block, said chief credit officer, Colin Ellis:

Any exit from the single currency would be a defining moment for the euro: it would show that the monetary union is divisible, not irreversible.
 

BHS
January 25, 2015, 5:18pm
Retail tycoon Sir Philip Green has decided to break apart one of Britain's biggest retail empires by selling British Home Stores (BHS).
 
Green purchased the business, which sells mostly clothing and household items, from the Storehouse conglomerate in 2000 for £200m. It now has a significant presence on high streets across the UK, with 180 stores employing 12,000 staff nationwide. 
 
In fact, it was his turnaround of the chain a decade ago that earned him his first billion, and he went on to purchase the Arcadia Group. But the sale of BHS means a key part of the retail empire will be lost, leaving behind Topshop, Wallis, Burton and Dorothy Perkins among others.
 
BHS has had a difficult time in recent years - after the recession, shopping habits altered and stiff competition meant sales started to suffer, causing the company to lose hundreds of millions of pounds in value over the proceeding years. In 2013, write-downs on failing stores caused sales to drop by 3.5 per cent to £675.7m, resulting in a pre-tax loss of £69.6m. The situation was even worse a year earlier in 2012, however, when the business lost £116m. 
 
Last autumn, Green said BHS was in repair, with the business starting to show signs of promise again, but he has nonetheless gone ahead and put the store up for auction. 
 
According to The Sunday Times, the billionaire has been approached by potential buyers of the chain a number of times, but until now all offers were rejected on price grounds. Over the past few months, he has received some “serious” approaches for the store. 
 
Post Office
January 25, 2015, 3:34pm

The Post Office is in for major changes this week as the aged company sets its sights on one of the top spots in Britain's financial services industry.

According to Sky News, the Post Office is hoping to become one of the country's leading financial services providers and will announce on Monday its plan to amalgamate financial products under Post Office Money.

The Post Office provides insurance, mortgages and savings accounts. It is hoped the Post Office will become a leading challenger on the high street competing with the five biggest banks.

The Post Office is still a major presence on the high street with 11,550 branches and roughly 3m customers. Speaking to Sky News, Nick Kennett, director of financial services at Post Office Money, said:

Consumers want a choice about how they manage their money; at Post Office Money our customers have access to an unrivalled network as well as online and phone, combined with multi-award winning products.

We have been listening to our customers and know that people are facing some big financial decisions, and through the new Post Office Money we want to become their first choice when thinking about a mortgage, credit card or a safe haven for their savings."

Kennet wants to double the size of Post Office money by 2020. Earlier this month, insurgent Metro Bank cut its losses to £8.9m in the final quarter of 2014 as it edged towards profitability.

The bank, set up by Vernon Hill in 2010, has been championed as an alternative to Britain’s big four lenders – Lloyds, RBS, Barclays and HSBC – which account for more than 75 per cent of Britain’s 65m personal accounts and provide nine out of every 10 business loans. 

The rich elite
January 25, 2015, 2:06pm
London has more than its fair share of the super-rich, but when it comes to the country with the largest portion of the world's wealthiest one per cent of people, the US tops the chart by a long way.
 
18m people in the US fall into this bracket – out of a total of 47m across the world. Being in the top one per cent requires having a wealth (assets minus debt) of $798,000 (£530,000) or more.
 
They are an important bunch – according to a recent report by Oxfam, the wealthiest one per cent will soon own more than the rest of the world's population put together. 
 
After the US, the next country down is Japan with four million – although taken as a proportion of a whole country, this is much higher than the US. The only other Asian country to appear in the list is China with 1.6m. 
 
In Europe, France comes top with 3.5m people in the one per cent bracket, followed by the UK with  2.9m. It is surprising that Germany, which has both the largest economy in Europe and a population larger than France's or the UK's, comes behind both of them. 
 
According to Credit Suisse, which put together the statistics, Germany's lower-than-expected ranking is the result of low home ownership in the country.
 
But of all the countries in Europe and beyond, the country with the highest proportion of its national population falling into the top one per cent is Switzerland – one in ten of its residents has assets worth more than the minimum $798,000.
 
Below is a chart showing ten countries in the world with the largest share. The remaining 7.7m people unaccounted for are scattered across 28 other countries. 

 
The figures give a good estimation of wealth distribution, but cannot give an entirely accurate representation – the comparisons look at wealth alone and not income, which means that some young high earners may not reach the bracket because they are paying off debt or living an extravagant lifestyle. 
 
It also doesn't take into account how much it costs to buy goods in each country – where costs are high, the same level of wealth won't go as far. 
HMRC
January 25, 2015, 12:09pm

Small business in the UK are taking the government to court over their exclusion from a compensation scheme set up following the mis-selling of interest rate swaps.

The swaps were complex products sold to a large number of business by UK banks. They were designed to provide protection against interest rate changes. 
 
But when the banking crash happened in 2008, interest rates were cut to such lows that businesses wanted to exit the contracts. To do so required payment of extremely high fees, which were damaging to many of the businesses. 
 
An investigation by the Financial Conduct Authority (FCA) found that many banks had wrongly encouraged businesses to enter the expensive and complicated deals, and a compensation scheme worth billions of pounds was set up to make banks pay for the resulting losses.
 
Not everyone who entered the deal was eligible – at least 10,000 “sophisticated borrowers” were not able to claim back their losses, including those with revenues greater than £6.5m or assets worth more than £3.26m. Companies that entered into swap deals worth more than £10m were also not eligible. 
 
However, a number of small businesses not included in the scheme are now arguing that their circumstances made them eligible, making their exclusion by the FCA unlawful. According to The Sunday Times, 20 of them will reveal their intention to take the government to court this week. 
 
The FCA has argued back, saying the sophistication test was designed to “identify those smaller business that were less likely to have understood the risks associated with swaps or to have had resources enough to have access to independent, expert advice before buying a product”.
 
The challenge is being led by law firm Seymours, which said the case was based on the government's failure to correctly apply the Markets in Financial Instrument Directive rules. These dictate that a minimal level of protection should be provided for victims in such cases. 
 
While only a handful of businesses are involved in the initial challenge, thousands could end up receiving large payouts from the government if it is a success. This would amount to a bill of around £2bn for the UK taxpayer. 
 
“This is one of those rare situations where the state can incur liability to private companies,” said George Menzies, the solicitor leading the case.
Syriza
January 25, 2015, 10:15am
Today is Greece's general election. 
 
Until 7pm, polling stations will accept votes on whether the current New Democracy party remains in power or is replaced by another party. 
 
According to the polls, it looks likely that the radical left-wing Syriza party will be the ultimate winner. In terms of economic policies and the recovery of the Eurozone, this could spell disaster.
 
Syriza's leader, Alexis Tsipras, wants part of Greece's huge €320bn (£239bn) debt written off and austerity measures revoked, and he intends to renegotiate the terms of the country's bailout with its Troika of international lenders – the European Union (EU), International Monetary Fund (IMF) and European Central Bank (ECB). 
 
He says he will restore "dignity" to Greece by rolling back on job cuts which have left half of the country's youth in unemployment. 
 
Antonis Samaras, current Prime Minister and leader of centre-right New Democracy, has imposed tough austerity on Greece in return for loans from the EU. But many Greek people feel they are not benefitting from the measures, with the economy shrinking by 25 per cent since the start of the Eurozone crisis. 
 
The appeal of Syriza's radical policies to the disenchanted Greeks is clear: an average of opinion polls conducted between 11 and 18 January shows that it is in the lead with 35.1 per cent of intended votes. New Democracy comes in second place with 35.1 per cent, while all other parties fall much further behind. 

Fears of a Grexit

If Syriza wins, creditor countries such as Germany will have to agree to an extension of the bailout plan, which is a commitment to pay  €240 billion (£184 billion) to Greece – the equivalent of €30,000 (£23,000) per citizen.

While Tsipras has maintained that he wants Greece to remain part of the single currency, there are fears among Eurozone debt holders that a Greek exit, or “Grexit”, lies ahead if Syriza takes over – it is considered likely that Greece will default on its debt, forcing it to leave the Euro. Such a withdrawal would be deeply damaging to the other 18 members of the Eurozone, since there would be significant losses on the loans paid out by other countries. 
 
Not only that, but it has the potential to set off a trend of other economically weaker members deciding to not adhere to bail-out plans. This is especially likely if Greece is successful in its dealings with the lending troika, since anti-austerity populist parties in other struggling countries may start to gain momentum as more of the population see them as a way out of economic difficulty.
 
A more immediate concern is that a bank run could take place tomorrow if Syriza wins, with savers rushing to withdraw large deposits. There is already evidence that those holding large amounts of money in Greek banks are transferring it abroad – in December last year, lenders lost €2.5bn because of this. 
UKIP
January 25, 2015, 9:33am
Last night, former Ukip member Amjad Bashir defected back to the Conservative party.
 
He was elected Ukip MEP for Yorkshire and the Humber in 2014, and had also become the pro-independence party's communities spokesman.
 
Originally he moved over from the Conservatives because he wanted a definite referendum on Britain's European Union membership and desired the introduction of tighter immigration controls.
 
But writing in the Mail On Sunday this morning he described how he became progressively disenchanted with the party, which he now views as a “vanity project” that had “outlived its usefulness”. 
 
I have decided to leave Ukip because it has become a vanity project for Nigel Farage and because many of the criticisms made of the party are true. David Cameron famously said that Ukip was a party of ‘fruitcakes, loonies and closet racists’.
 
I joined Ukip because I wanted a referendum on the EU and wanted better controls on immigration. But now I have no doubt that Mr Cameron will deliver on this, so, in my view, Ukip has outlived its usefulness.
 
I joined Ukip because I thought it was dedicated to those goals. But I now realise that Ukip is more concerned with furthering its own interests as a political party than delivering for the British people.
 
Ukip is guided more by dogma than common sense.
 
The Pakistani-born businessman also said he experienced racism within Ukip, with some of the MEPs making “childish remarks during debates” and being “abusive towards MEPs from other countries".
 
Four months ago, Conservative MPs Mark Reckless and Douglas Carswell defected in the opposite direction, both leaving to join Ukip. 

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