Scranton, Pennsylvania (CNN) – Planning to push for an extension of the payroll tax holiday at a high school in Scranton,Pennsylvania on Wednesday, President Obama is taking his jobs message to a familiar setting.Â
Pennslyvania is among the states Obama has visited most as president.Â It’s no surprise: Pennsylvania’s penchant for close elections makes its 20 electoral votes a tempting prize for both parties.Â But a win here in November may be particularly important to the president, who could use a bit of breathing room as he faces tough odds to hold some of the Republican-leaning states he won in 2008.
Officially, the White House maintains this is not a campaign trip, but the 2012 overtones will be impossible to ignore when Air Force One touches down in this city that once thrived on the back of the coal-mining industry but now faces an unemployment rate bordering on nine percent – the highest among the state’s most populous cities.
Obama has a bit of a complicated history here, having gotten his clocked cleaned by Hillary Clinton in the 2008 Democratic primary before walloping Sen. John McCain eight months later.Â Now, the state appears solidly up for grabs: a recent Quinnipiac poll showed him with a razor-thin lead over Mitt Romney, currently the odds-on favorite to win the GOP nomination.
Still, White House Press Secretary Jay Carney said Monday presidential travel decisions are based on a variety of factors, not least of which is their proximity to Washington.
“There is a concentration of travel in states like Virginia and Pennsylvania because they’re close by,” Carney told reporters Monday.Â “[H]e can’t always go to the mountain states or the plain states or the West Coast.Â And so I think you do see a concentration in this time zone.”
Republican critics maintain Obama has long been campaigning on the taxpayer’s dime because he does not have to tap his 2012 coffers for the hefty travel costs unless the trip’s purpose is specifically campaign related.Â To be sure, Obama has yet to mention a Republican rival during his series of jobs-bill pitches this fall, nor has he pressed directly for his own reelection.
Indeed, the explicit message of Obama’s speech Wednesday is the benefits of extending the payroll tax holiday, the $260 billion price tag of which Republicans and Democrats are currently quarreling over how to pay for.Â Meanwhile, a Treasury Department analysis released by the White House Wednesday argues the extension will put an extra $1,000 in the average taxpayer’s pocket.Â
But the line between acting in his official capacity as President of the United States and campaigning for reelection is a blurry one, and it’s certainly easy to argue that railing against congressional Republicans in a swing state comes right up to it.
Still, if the argument sounds recycled, that’s because it is.Â In 2004, Democrats made the same accusations, calling for President Bush to pick up the tab for any travel that carried political overtones.Â And in these times, nearly everything a president says is political.
“It also true that we are moving forward in what will be a Presidential election year.so that process is also underway,” Carney conceded Tuesday.Â “But it is a separate process.Â And at this point, because the President faces no primary challenger, and the President has enormous responsibilities as President to fulfill – principally to do everything he can, both legislatively and using his executive authority to grow the economy and create jobs – he is overwhelmingly focused on that task and not on campaigning.”
HT Home / Blogs Home
Last week I had written that the logjam in Parliament was probably to stall the Lok Pal Bill. As events have started unfolding, the presumption is coming out to be correct. If in the first week, the Parliament did not function on the issues of corruption, black money and corruption, in the second week, the provocation has come from the arbitrary manner in which the decision on 51 percent FDI in retail was announced following a meeting of the Union Cabinet.
The move seems to have united the entire opposition and some of the allies of the UPA too are adamant that the decision must be put in abeyance pending a discussion on the subject in Parliament. The fact is that the Cabinet is fully empowered to take such a decision but it is the timing of the announcement that has ruffled even some people in the ruling coalition and the Congress party. Knowing fully well that the government had many problems on hand and many Bills to get passed, there was little logic for the proclamation on this issue during the session period.
The opposition is also peeved that it was for the second time in recent history when the government has shown scant regard for Parliament by announcing crucial decisions while Parliament was in session. The first time was when the creation of Telangana was announced on December 9, 2009. The issue continues to remain contentious and has ensured that the Congress grip over the whole of Andhra Pradesh stands greatly eroded. Similarly, the FDI matter should not have been declared outside.
The Prime Minister appears to be adamant and seems to be in no mood to roll back his Cabinet’s decision. Many Congress party MPs have been admitting in private conversations that the move was ill timed and could jeopardize the government. But it defies all logic to believe that the Cabinet approved of a decision without taking consent of the Congress leadership. It seems obvious to most people that the Prime Minister went ahead after obtaining a green signal from the party bosses. But an attempt is now being made to distance the party from this announcement. It is evident that politics is happening. In any case it is the party’s government that has taken the decision and there is no way the Congress can distance itself from the issue.
There are two ways that this issue can be looked at. One that the timing went wrong and the government and the party are trying to create an ambiguity that they were not on the same page. Second, the Congress managers have thought through the consequences and find greater comfort at being pushed on the issue of FDI in retail rather than on corruption. The thinking could be that the continuation of this government has always had question marks over it and therefore it is better to shift the focus from corruption to FDI. Many cynics believe that it will not be so hard on either the Prime Minister or the party if it government gets isolated on FDI rather than corruption. At least the honour will be preserved. In any case, the Lok Pal bill will be a casualty.
All this is going on and the new week may bring in new things on the table. This is a difficult phase for the government and it should not try to make FDI a prestige issue as it had done with the Nuclear deal. While it managed to survive the nuclear deal due to dissensions within the BJP, the same may not necessarily happen on FDI.
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Posted by Pankaj Vohra on Wednesday, November 30, 2011 at 6:31 pm
Filed under Capital Closeup · Tagged Andhra pradesh, BJP, Capital Closeup, FDI, FDI in retail, hindustantimes, Lok Pal Bill, Pankaj Vohra, parliament, PM Manmohan Singh, Telangana, UPA, winter session
November 30, 2011 11:49 AM
The leafy British compound in north Tehran was a gift of the Iranian Qajar royal family, bestowed many decades ago so diplomats could escape the scorching summer heat.
As yesterday’s events showed, it hasn’t proved to be much of a refuge.
The chants and flag burning were, of course, entirely spontaneous and born of popular outrage at the UK’s meddling, past and present.
The state apparatus tried valiantly to intervene, firing tear gas and arresting twelve of the indignant mob.
That’s the government’s story, anyway, and they’re sticking to it!
It seems a pretty transparent sham – as referenced on the Foreign Matters blog, one Iranian website has already pounced on what they say is evidence to prove just how flimsy a stunt it was.
It claims that it has isolated a picture of Hossein Qadyani, the head of the Student Basij association, amongst the protesters.
The Student Basij are a branch of the Basij paramilitary, which operates under the command of the Revolutionary Guard. And the Revoultionary Guard, of course, is Iran’s most potent military and security organisation.
The Iranian government has a litany of grievances against the UK, many of which do genuinely upset liberal and “hardline” Iranians alike. One of the most poignant is the UK’s involvement in overthrowing Iran’s first – and only! -democratically elected Prime Minister Mohammad Mossadegh.
The British embassy compound itself is especially emblematic of what some Iranians see as the West’s wrongdoing in the region.
The compound was prime real estate granted to a country that, at the time, was already extracting a great deal of economic wealth out of Iran and exerting a great deal of political power in the country – when ordinary Iranians had little of either.
Hence, the embassy has always been tug-of-war territory. Earlier this month, for example, it was fined over 700,000 pounds for “environmental vandalism” after it was accused of cutting down more than 300 trees in the compound. The UK government denied the accusations, saying it had only cut down trees that were unhealthy.
The Iranian government contends that the UK has no legal right to the land, and the tree incident sparked rumblings of legal action being initiated against the embassy to force it to renounce its title to it (as reported by semi-official news agency Fars News).
Tehran mayor Mohammad Qalibaf – touted by some as the next President of Iran – has spoken out against the UK’s ownership of the land and a foreign ministry spokesman has reportedly said that the foreign ministry would “take action where necessary”. The FCO says it has not yet received no formal notification of a legal challenge.
Today should bring fresh detail of how the UK government will retaliate against yesterday’s attacks, which it has condemned as outrageous.
But seeing as it denies all involvement, the Iranian government is likely to express its own righteous indignation at whatever measures are enacted and may well hit back with measures of its own.
In light of the embassy’s fraught history, booting out the Brits from their cosy compound once and for all might well be one option currently under consideration.
::Update:: William Hague has announced the closure of the British Embassy in Tehran – thereby beating the Iranians to the punch it seems.
Likewise, the Iranian Embassy in London will be closed.
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I had been nursing a stubborn cold for weeks when I woke up yesterday with a painful shoulder. By the time I left Westminster after George Osborne‘s gloom-laden autumn statement I had also acquired a painful knee. Five more years of austerity and, to cap it all, Iranian rioters, whose government is so much more venal and incompetent than ours, were again attacking the British embassy.
A zeitgeist moment then. Yes, though the knee and shoulder feel better this morning, no thanks to the chancellor or the rioters. Overnight analysis of the autumn statement focuses on the coalition’s renewed squeeze on public sector jobs, pay and pensions – as well as the impact of lower tax credits on the lives and children of the working poor. The outlook looks bleak, uncertain or both for most people.
“Even the rich don’t know where to put their money so it will be safe,” explained a friend I met on a wet and windy street. Out and about unusually early on Wednesday morning I noticed a cluster of big 4×4 cars – those “Chelsea tractors” we like to laugh at – delivering pupils to the little private school at 8 o’clock so mummy and daddy can go straight to the office. Even the rich are having to work ever harder to maintain their high living standards. As Larry Elliott reminds us, we’ve been here before, but this is systemic – more like the 1930s than the 1970s.
The autumn statement was a little more complicated than mere class warfare (I don’t agree with Polly Toynbee about that) and the chancellor’s room for manoeuvre shrinks with every passing day that leaves the euro on the brink.
Despite his dramatic borrowing overshoot – an extra £100bn over the parliament – Osborne did switch some money into capital spending projects, credit easing and pro-growth business incentives; he did pay out the full 5.2% inflation-proofing owed on pensions and benefits after all.
In doing so he earned the anger of rightwing commentators who think he sounded far too like Gordon Brown – tinkering with subsidies instead of cutting back taxes and the state – than they’d like. Plan A-minus, growled one disapproving thinktank. If the eurozone goes belly up and takes a chunk of the globalised economy’s growth prospects with it he will be accused of failing to take sufficiently drastic action while he had the chance. At least Osborne will have the Lib Dems to blame for alleged soft-heartedness.
Savage austerity all round – the sort of policy still being urged on its eurozone neighbours by Germany – is the kind of pilot error that stalls aircraft and sends them plunging to the ground. In economics and politics, as in aviation, the trick is to maintain height, balance and velocity. Don’t panic the markets, but don’t push the real economy over the cliff either.
In a nuanced article Keynes’s biographer, (Lord) Robert Skidelsky, elegantly reminds Guardian readers today what the great man would have said (“look after unemployment and the budget will look after itself”) and concludes that the chancellor is slowly rewriting his narrative to reflect the new realities and increase job-creating capital spending. Events may force the pace.
This is not necessarily good news for the teachers, health workers, local and central government officials on strike since increased capital spending – infrastructure projects from roads to high-speed broadband – will have to come in part from the ongoing squeeze on current spending, which means salaries and pensions.
But we now know for certain that the government is not going to meet its deficit reduction targets on time, so the question becomes: “On what do we best spend the unavoidable extra borrowing?” Jobs are always best.
Having slept on it I am still minded to give the chancellor credit for making a good political fist out of a very poor hand, mostly not of his own making – 60% to 70% not so, I would say off the top of my head. Labour’s legacy and external factors – Europe and inflation-boosting world commodity prices – are still the dominant ingredients. Voters are still not listening to Labour’s remedies, which strike an uncertain note reflected in Wednesday’s Guardian coverage of the autumn statement.
But Wednesday’s strikers – protesters is surely a better word ? – are both anxious about their own individual futures (everyone’s case is different in different ways) but also concerned about fairness. After all, we are all in this together. Thus the coalition has yet to do enough to persuade voters that the better-off – not just the top 1% above £150,000, whose internal wealth gap is pretty steep – are pulling their weight in the collective sacrifice.
As Barack Obama’s problems have demonstrated, it’s difficult to get the tone right in ways that impress suspicious Middle America without arousing ridiculous charges of class warfare from the high end. Remember, Warren Buffet, the investment guru from Omaha, says the only class warfare being waged in the US is by his class – the super-rich – and that they are winning.
Society is not as polarised here, not as polarised in most of Europe, I think. But when respectable headteachers and members of Whitehall’s FDA union for senior officials feel moved to join a symbolic strike action, ministers should take notice.
But the fairness agenda is not confined to squeezing the rich harder than society’s poorest, whose in-work tax credits took a mauling on Tuesday.
There’s a gender component – more complicated than often presented, but real – which bears down on low-paid women. There’ll be an ethnic dimension and a north-south divide. Osborne tried to address that in his regional spread of capital spending programmes, though when I suggested on Twitter that it might guarantee him some positive headlines in the regional media, someone tweeted “there’s not much left”.
Regionalism cuts both ways. Osborne also hinted that he’d like to introduce regional pay bargaining in the public sector to trim the anomaly whereby a nationally agreed pay structure is perceived to be much more valuable in regions where travel, housing and living costs are cheaper than in London and the south-east.
Is that even true? And would a change weaken fragile regional economies even more if the public sector’s purchasing power was further diminished? We need to discuss it, but the unions hate such divide and rule tactics, a political objection as much as an economic one.
Finally, fairness may require us to look again at inter-generational issues. It has long been assumed that the post-war boomers (I am an early example) have had too good a time at everyone else’s expense. That narrative may be running out of steam as the re-rise of Asia and the end of the Atlantic world’s post-war splurge looks like levelling out – or worse.
But ministers must surely look at non-pension perks of the over-60s, given on a non-means-tested basis to elderly duke and retired dustman alike – those free TV licences and bus passes, the winter fuel allowance that helps heat ducal palaces, even free prescriptions. David Cameron was boxed into a pre-election corner on such pledges – Gordon Brown wrong-footed him in a TV debate – but the deepening crisis must mean more bets are off.
30 November 2011
Last updated at 17:24
A bid to force all hairdressers to register by law with a professional body has been blocked in the Commons.
Former salon owner and Tory MP David Morris warned harmful chemicals used by some hairdressers can cause serious injury – even death.
He wants hairdressers to be registered in the same way as doctors and dentists and for rogue salons to be struck off.
His bill to create a register has the backing of the industry’s official body, but it has been defeated by MPs.
Mr Morris, who ran salons in Wigan and Bolton before becoming an MP, told the Commons a bride-to-be recently suffered burns to her scalp.
Her hair “snapped off” and her face “puffed up to twice its size” after she booked in for a straightening and dyeing ahead of her wedding.
“The poor girl had to marry in a wig one week later.”
“I was a hairdresser for 28 years I was known as Mr Fixit and believe you me I saw some horror stories,” said the MP for Morecambe and Lunesdale.
“I saw women coming into my salon with their hair sky blue pink – that’s if it was still on their head.
“When you have a psychological problem where your hair turns a funny colour, snaps off, has burns, you don’t know where to go to.”
Out of an estimated 250,000 hairdressers in Britain, just 6,000 are registered with the British Hairdressing Council (BHC).
In order to register under BHC rules, hairdressers must have a City and Guilds or an NVQ level 2 qualification in hairdressing.
A BHC spokeswoman said: “We are absolutely in favour of the bill.”
But another Tory MP, David Nuttall said the status quo was “perfectly appropriate” and registration would not stop “tragic accidents” occurring.
“There is no demand for it,” he said. “I have not had a single inquiry about this since I was elected.”
“We do not want to criminalise hairdressers simply for not having a licence.”
Mr Morris’s Ten Minute Rule Bill – The Hairdressers Registration (Amendment) Bill – was defeated in a vote by by 67 votes to 63, a majority four.
30 November 2011
Last updated at 18:17
The UK is to expel all Iranian diplomats following the storming of its embassy in Tehran, Foreign Secretary William Hague has announced.
He said he had ordered the immediate closure of the Iranian embassy in London.
Tuesday’s attack by hundreds of protesters followed Britain’s decision to impose further sanctions on Iran over its nuclear programme.
The sanctions led to Iran’s parliament reducing diplomatic ties with the UK.
Mr Hague said he was demanding the immediate closure of the Iranian embassy in London, with all its staff to leave the UK within 48 hours.
“If any country makes it impossible for us to operate on their soil they cannot expect to have a functioning embassy here,” Mr Hague told MPs.
He said there had been “some degree of regime consent” in the attacks on the embassy and on another UK diplomatic compound in Tehran.
He said all UK diplomatic staff in Tehran had been evacuated and the embassy closed.
Mr Hague said relations between the UK and Iran were now at their lowest level, but the UK was not severing relations with Tehran entirely.
Continue reading the main story
In Iran’s iconography of villainy, Britain holds a special place. The UK is seen as the mastermind behind the overthrow of previous Iranian governments. Conservative hardliners believe Britain has in its blood the desire to decide who rules Iran.
But, somehow, Britain and Iran have usually managed to keep their diplomatic relations going. Among ordinary Iranians there is a degree of affection for British people.
During the administration of President Mohammad Khatami, which began in 1997, diplomatic ties produced a reasonable degree of understanding. But in recent years, under President Mahmoud Ahmadinejad, those ties grew much more strained.
Now the drawbridge has been pulled up. The empty embassies in London and Tehran won’t bother conservative hardliners in Iran’s establishment. They feel little need for dialogue. These are the same people who have led Iran’s pursuit of a nuclear programme.
Addressing parliament, Mr Hague said he was due to raise the matter at a meeting of the EU Foreign Affairs Council in Brussels.
“We will discuss these events and further action which needs to be taken in the light of Iran’s continued pursuit of a nuclear weapons programme,” he said.
Iran’s foreign ministry called the British move “hasty”, state TV reported, according to Reuters.
It said Iran would take “further appropriate action”.
Also on Wednesday, Germany and France announced they were recalling their ambassadors to Tehran.
Italian Foreign Minister Giulio Terzi said the Iranian ambassador to Rome was being summoned to give guarantees of security for Italy’s mission in Tehran.
Hundreds of protesters – whom Iran described as “students” – massed outside the embassy compound on Tuesday afternoon before scaling the walls and the gates, burning British flags and a car.
Another UK diplomatic compound in northern Tehran, known locally as Qolhak Garden, was also overrun and damaged.
Iran said it regretted the incident, which it described as “unacceptable behaviour by a small number of protesters”.
Mr Hague said the majority of those taking part had been members of a regime-backed Basij militia group.
He said the private quarters of staff and the ambassador had been ransacked, the main embassy office set on fire and personal possessions belonging to UK diplomats stolen.
The US, EU and UN Security Council also condemned the attacks.
Relations between the UK and the Islamic Republic of Iran have been fraught since the Iranian revolution in 1979.
Wednesday’s move brings bilateral relations to their lowest level since 1989 when ties were broken over Iran’s declaration of a “fatwa” (edict) to kill the author Salman Rushdie.
New pictures have emerged of offices at the British embassy being searched by protesters
Analysts have compared Tuesday’s scenes in Tehran to the 1979 storming of the US embassy there. That ended with more than 50 US diplomats and staff being held hostage for more than 400 days.
The US and Iran have had no diplomatic ties since then – the Swiss embassy in Tehran serves as the protecting power for US interests in the country.
Last week the US, Canada and the UK announced new sanctions against Iran, including measures to restrict the activities of the Iranian central bank.
The UK said then it was severing all financial ties with Iran.
The move followed a report by the UN’s nuclear watchdog (IAEA) that said Iran had carried out tests “relevant to the development of a nuclear device”.
Iran denies the accusations, saying its nuclear programme is solely for peaceful purposes.
On Sunday, Iran’s parliament voted by a large majority to downgrade diplomatic relations with the UK in response to the recent action.
30 November 2011
Last updated at 17:08
David Cameron has said the strike by public sector workers is proving “a damp squib” with many key services continuing to operate.
Mr Cameron clashed with Ed Miliband over the issue at Prime Minister’s Questions, accusing Labour of “taking the side of the unions”.
But Mr Miliband accused the PM of “demonising” low-paid workers and “spoiling for a fight”.
Unions say up to two million workers could take part in industrial action.
Thousands of schools have closed as a result and hospital operations have been cancelled while courts and government offices are among other disrupted services.
But thanking those who had helped to keep public services going – including No 10 staff – Mr Cameron told MPs that early evidence suggested about 40% of schools were open, less than one in three civil servants had walked out while contingency measures at airports and ports were “minimising the impact”.
There was also full ambulance cover and only 18 out of 900 job centres had closed, he added.
“It looks like something of a damp squib,” he said.
Mr Miliband said the government was to blame for the strike, set to be the largest by the public sector in years, by effectively calling time on negotiations and not meeting with the unions for nearly a month.
Continue reading the main story
I wouldn’t call two million people taking strike action a damp squib”
“What has the prime minister gone around saying? He has gone round saying he is privately delighted the unions have walked into his trap. That is the reality. He has been spoiling for this fight.”
Despite government claims that low-paid workers would be protected, he said more than 800,000 part-time workers on salaries of less than £15,000 faced a “3% tax rise” on their pensions.
“The reason people have lost faith is he is not being straight with people,” he said.
He added: “The difference is, unlike him, I am not going to demonise the dinner lady, the cleaner and the nurse.”
Mr Cameron said he did not want to see strikes, and that negotiations were continuing. While the Labour leader had previously said it would be wrong to strike while talks were under way he had now changed his mind.
During stormy exchanges at PM’s questions he accused Mr Miliband of being “left-wing, weak and irresponsible” and said Labour was unwilling to condemn the strikes because they were “in the pockets” of the unions.
“The leader of the Labour Party has taken sides today,” he said.
“He is on the side of the trade union leader that wants strikes not negotiations, on the side of the people who want to disrupt our schools, disrupt our borders, disrupt our country.”
Changes to public sector pensions were “absolutely essential”, Mr Cameron added, and the offer made by the government was “very reasonable and very fair”.
Amid a row over whether meaningful negotiations were going on, the Cabinet Office accepted that the last official talks between ministers and union leaders on the pension issue had taken place on 2 November.
But it said talks on a scheme-by-scheme level with civil servant and local government representatives had taken place since, while meetings with teaching and health unions were scheduled in the next few days.
Unison, which represents 1.3 million workers, said the prime minister was sounding “increasingly desperate”.
“I wouldn’t call two million people taking strike action a damp squib,” said its general secretary Dave Prentis.
“He has only to turn on the TV, or listen to the radio, or look out the window, to see nurses, dinner ladies, paramedics, social workers, teaching assistants, lollipop ladies amongst others standing up for their pensions.
“And the thousands of picket lines, demonstrations, rallies and events are not a figment of our imagination. These people are angry public servants who the government has driven to the end of their tether.”
30 November 2011
Last updated at 10:20
George Osborne opened his statement by announcing downgraded growth forecasts
George Osborne says the economic situation in the UK will get “very much worse” if the eurozone “goes belly up”.
The chancellor urged Europe to take “decisive action” as he defended the “hard decisions” the UK government has made on public sector pay, the state retirement age and working tax credits.
But for Labour, Ed Balls accused him of “a catastrophic error of judgement”.
He said Mr Osborne’s austerity measures had left the UK unable to cope with global shocks like soaring oil prices.
In his Autumn Statement to MPs on Tuesday, the chancellor said the Office for Budget Responsibility (OBR) was now forecasting that the UK economy would grow by 0.9% this year – compared with 1.7% forecast in March – and 0.7% next year, down from 2.5%.
The OBR also predicted that unemployment would rise from 8.1% this year, to 8.7% next year, and the number of public sector job losses would be almost twice previous estimates, at up to 710,000 by 2017, as a result of extra spending cuts.
Shadow chancellor Ed Balls told BBC Radio 4′s Today programme he had warned 18 months ago that cutting spending so deeply and quickly would damage the UK’s economic resilience.
“I have to say that if there’s a hurricane brewing, you don’t rip out the foundations of your house. We have done that and that’s why the chancellor is in such a difficult position,” he said.
“We’ve got the worst of all worlds, his plan has colossally failed, but what’s he saying? Just more of the same.”
The OBR said much of the contraction in the UK economy could be blamed on the rise in global energy and commodity prices.
But Mr Balls said: “The oil price shock can’t explain why Britain has done so much worse over the last year than America or the eurozone.
“The reason is because we overlaid on top of that this very strict fiscal contraction.”
Mr Osborne said he did not “underestimate” the impact of the decisions he was taking on people’s lives, but said they were necessary in order to protect sectors like the NHS and schools.
“There are many things the government spends money on and the Parliament of the day, the elected politicians, have to make those choices… but I think we have shown you can face up to these difficult decisions.”
But he said he did “sympathise” with the difficulties people were facing, adding: “Everywhere I am able to do something to help, within the very, very limited means the government has at the moment, I have done that.”
Asked whether a failure to sort out the debt crisis in the eurozone could make the situation in the UK much worse, he said: “Yes I’m afraid that’s the case.
“I think if the eurozone goes belly up, as you might put it, then of course things will be very much worse.
“In a way what’s happening in the eurozone is a reminder to Britain that if you don’t face up to your problems, you have very much worse problems.
“Britain has taken decisive action, we now need the eurozone to do the same.”
The OBR said that although it was not forecasting a recession for the UK, a recession in the eurozone would make it more likely that such a crisis could occur in Britain.
The BBC’s political editor Nick Robinson said the severity of the economic downturn – and the need to make huge savings – might well force politicians to look much more fundamentally at the role of the state and the nature of wealth distribution.
Difficult questions they have previously shied away from – like how the NHS is funded, the size of the welfare state and the universality of benefits like winter fuel payments – may now have to be considered, he added.
In the Autumn Statement, Mr Osborne announced that public sector pay rises would be capped at 1% for two years – after a current two-year freeze – and the rise in the state retirement age to 67 would be brought forward by eight years to 2026.
The child element of child tax credit and the disability elements of tax credit will be uprated in line with inflation, but other tax credit increases will be restricted.
But in April there will be a £5.30 increase in the basic state pension to £107.45, in line with the 5.2% inflation rise in September, and pension credit will also increase.
Other announcements included an increase in the bank levy, a 50% discount for social housing tenants who want to buy their own home, and a cancellation of a 3p rise in fuel duty in January.
Mr Osborne also went through a series of schemes aimed at boosting the UK’s flagging economy.
These include a £40bn “credit easing” scheme to underwrite bank loans to small businesses and plans for £5bn spending on big infrastructure projects over three years.
30 November 2011
Last updated at 17:26
Unions accuse the government of failing to participate in proper negotiations in recent weeks, a claim rejected by ministers
Tens of thousands of people have joined rallies around the UK as a public sector strike over pensions disrupted schools, hospitals and other services.
About two thirds of state schools shut, and thousands of hospital operations were postponed, as unions estimated up to two million people went on strike.
But Prime Minister David Cameron described the action as a “damp squib”.
Unions object to government plans to make their members pay more and work longer to earn their pensions.
The strike has had the following effects:
- Department for Education figures suggest 62% of England’s 21,700 state schools were closed, with another 14% partly shut
- In Scotland 98% of the 2,700 council-run schools closed, according to local authority body Cosla, while in Wales 80% of schools were shut. In Northern Ireland, just over half of about 1,200 schools closed
- South East Coast Ambulance Service says it is only responding to “life-threatening emergencies”; London Ambulance Service tells BBC London it is “struggling”, is unable to respond to many 999 calls and prioritising life-threatening cases
- NHS managers say a little fewer than 7,000 of approximately 30,000 routine operations have been cancelled or postponed across the UK as well as tens of thousands of appointments
- BBC News Channel’s chief political correspondent Norman Smith tweeted: “(Health Secretary) Andrew Lansley says patients who have ops cancelled today will still be seen within 18-week limit.”
- In Northern Ireland, no bus or train services are operating
- Plane arrivals and take-offs at Britain’s two biggest airports – Heathrow and Gatwick – are said to be largely unaffected with only a few cancellations of in-bound transatlantic flights to Heathrow
- The Local Government Association said about a third of England and Wales council staff were not in work, equating to about 670,000 out of 2.1 million. Unions estimate about 300,000 public sector workers are on strike in Scotland while 170,000 workers in Wales are taking action
- Just 14 job centres out of more than 900 across the UK have closed, according to the Cabinet Office
- An office in London’s West End was stormed at about 15:50 GMT by a group of protesters believed to be from the Occupy London anti-capitalist campaign group
- Scotland Yard said that, as of 16:15 GMT, it had made 52 arrests for a variety of offences
Video from around the UK
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Strikers speak out across UK
Teacher: Too many pension reforms
‘No delays at Heathrow’
What impact has strike had?
Maude ‘astonished’ at union claims
‘This is about low paid women’
Ambulance calls under pressure
Cameron and Miliband clash
At Prime Minister’s Questions, Mr Cameron said he thought the government had made a “very reasonable, very fair offer to public sector workers”.
“I don’t want to see any strikes, I don’t want to see schools closed, I don’t want to see problems at our borders, but this government has to make responsible decisions,” he said.
Earlier, the prime minister’s spokesman said a small number of Downing Street staff had gone on strike, while others had been affected by school closures and some staff from the Downing Street policy unit were helping out at the borders.
Mr Cameron’s press secretary Gabby Bertin worked on passport control at Heathrow airport, along with a number of No 10 staff, Downing Street confirmed.
Speaking from Brussels, Chancellor George Osborne told BBC Breakfast that the “strike is not going to achieve anything” and will only “make our economy weaker and potentially cost jobs”.
He said unions should be holding talks with the government to resolve the pension dispute, rather than taking strike action.
‘Refused to negotiate’
But union leaders accused the government of failing to participate in proper negotiations in recent weeks.
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At the scene
Standing out in their suits, ties and smart overcoats, the headteachers took their place at the front of the march. It’s the first time their union, the NAHT, has been on strike for 114 years.
Chris Hill, head of Hounslow Town primary school, said all of the school’s staff were striking for the first time.
“It’s not a decision we take lightly but we have to take a stand,” he said.
Also among the thousands gathering in central London are paramedic staff, out for the first time since the 1970s.
Among the placards and balloons is a common message to the government: “Don’t work longer, and pay more to get less.”
The number of protesters joining the march delayed its start for almost an hour, and progress was slow.
They were watched by a huge number of police – with roads to the City blocked by barricades and Trafalgar Square ringed with a wall of steel.
The protest ended with a rally at Victoria Embankment – perhaps the cheers were heard a few hundred metres away in Downing Street.
Unison general secretary Dave Prentis said that the last time unions met Treasury ministers was 2 November, adding that “this idea that negotiations are continuing is just not true”.
Cabinet Minister Francis Maude disputed this claim, saying formal discussions with the civil service unions took place on Tuesday and that talks would take place with teaching unions on Thursday and with health unions on Friday.
A TUC spokesperson responded: “There have been informal exchanges but nothing that could be described as negotiations at the national level.”
Chris Keates, head of the teachers’ union NASUWT, said: “We’re in this position today simply because the government had not entered into genuine negotiations at an earlier stage.”
Labour leader Ed Miliband said he had “huge sympathy” for people whose lives are disrupted by the strike.
But he said he was “not going to condemn the dinner ladies, nurses, teachers who have made the decision to go on strike because they feel they have been put in an impossible position by a government that has refused to negotiate properly”.
Liberal Democrat Party president Tim Farron told the BBC News Channel the unions were wrong to strike because workers on low to middle incomes would get a “better, or certainly no worse” pension when they retire than is currently the case.
TUC general secretary Brendan Barber said the public sector was “under attack” by the government, adding that the action was justified.
“With the scale of change the government are trying to force through, making people work much, much longer and get much, much less, that’s the call people have made,” he said.
Public and Commercial Services (PCS) union members who work for the UK Border Agency have gone on strike but airport sources suggested to the BBC that immigration controls were at two thirds of normal staffing levels – more than the 30-50% predicted previously.
More than 1,000 demonstrations were expected across the UK
The Immigration Services Union says 80% to 90% of staff are striking, with 22 out of 23 workers at Calais port not showing up for work and, as far as they are aware, none of their members working at Heathrow.
A UK Border Agency spokesperson said: “Early signs show our contingency plans are minimising the impact of strike action, but waiting times at some ports may still be slightly longer than normal.”
A Downing Street spokesman said: “I think what it shows is that our contingency plans have been reasonably effective in mitigating the impact of the strikes.
“Obviously, there has been an impact on schools and we always knew that there would be a significant impact on schools.
“We are confident that all the essential services have been maintained throughout the day. A lot of non-urgent work was rescheduled.”
Simon Walker, of the Institute of Directors, told the BBC News Channel the strike was doing “significant damage” to the economy.
“If you’re damaging the productive capacity of this country you’re really doing huge damage to the fabric of the economy and that will last a long time and impact on all of us,” he said.