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Government says Olympics have paid off with economic boost
7/19/2013 7:51:55 AM
By Keith Weir
LONDON (Reuters) - The economic benefits of hosting the Olympics in London already outweigh the nine billion pounds of public money spent on the Games, the government said on Friday.
A year on, the Games remain a fond memory for most Britons who recall the triumphs of runner Mo Farah and cyclist Chris Hoy but have gone back to their daily routines in a country where the economy is showing signs of life after a long stagnation.
Keen to show that the London 2012 Games had a lasting impact, the government said it calculated Britain had enjoyed a 9.9 billion pound boost to trade and investment from staging the world's biggest sporting event. Spending by foreign tourists also rose by 600 million pounds in 2012.
But while the figures show Britain well on the way to surpassing a target of 13 billion pounds in economic impact set by Prime Minister David Cameron ahead of the Games, economists had previously questioned the basis for government predictions.
They caution that it is difficult to quantify the exact economic impact of major sporting events like the Olympics and that the sums involved tend to be relatively modest.
Britain tried to use the international attention focused on the Olympics to showcase itself as a place to do business. The government ran a series of conferences in parallel with the Games to drive home its message to hundreds of executives who came to the British capital.
"We are harnessing the Olympic momentum and delivering the lasting business legacy of the Games that will help make Britain a winner in the global race," Prime Minister David Cameron said in a statement.
A separate report by a consortium led by accountants Grant Thornton said the Games could generate benefits of between 28 and 41 billion pounds by 2020.
HARD TO MEASURE
UK Trade and Investment, the department who produced the government figures said they included 5.9 billion pounds of sales from conferences around the Games, 2.5 billion of additional inward investment and 1.5 billion pounds of contracts for forthcoming Olympics and World Cups with Brazil and Russia.
It included an investment in London's landmark Battersea power station by a Malaysian consortium without specifying how it was directly related to the games. Also listed were projects involving Chinese technology company Huawei, Indian software firm Infosys and U.S. architects Gensler giving no details of the nature of the investment.
Figures aside, Britain looks to be well on the way to finding new uses for the expensive facilities built for the Games in east London, although there has been some grumbling over the deals struck.
Premier League football club West Ham United are to move into the Olympic Stadium in 2016, ensuring that it remains a part of the city's sporting landscape but securing only an initial 15 million pounds for a stadium that will have cost taxpayers more than 500 million.
The stadium has not been used since the Paralympics ended last September but will come back to life next week when it hosts the Anniversary Games athletics meeting which is expected to feature Jamaican sprint champion Usain Bolt.
The most tangible result of the games for now is the changes wrought to a once forgotten and polluted corner of the city's industrial east. Stratford, home to the Olympics and one of the poorest parts of the capital, now boasts Europe's largest urban shopping centre and excellent transport links to the rest of the capital.
(Writing by Keith Weir, editing by Patrick Graham)
G20 back fundamental reform of corporate taxation
7/19/2013 8:02:43 AM
By Tom Bergin
LONDON (Reuters) - The G20 backed a fundamental rethink of the rules on taxing multinational corporations on Friday, taking aim at loopholes used by companies such as Apple and Google to avoid billions of dollars in taxes.
The group of leading economies released an action plan drawn up by the Organisation for Economic Co-operation and Development (OECD) that said the existing system didn't work, especially when it came to taxing companies that trade online.
Large budget deficits and public anger at inter-company structures designed to channel profits into tax havens has prodded governments to act.
Google, Apple and others say they follow the law wherever they operate and pay what tax is due, while tax specialists point out that companies have a duty to shareholders to organise their affairs in a tax-efficient way within the laws set by politicians.
Pascal Saint-Amans, Director of the OECD's Centre for Tax Policy, said governments' frustration with companies' aggressive tax avoidance had created a "once in a century" opportunity to overhaul the rules, which date back to the League of Nations in the 1930s.
Currently, tax systems respect inter-company contracts even if they evidently seek to shift profits out of countries where they are earned into low or no-tax jurisdictions. New rules will seek to put more emphasis on economic substance, the Paris-based think tank said.
"We clearly have reached the point where the governments don't care any more about taboos, and they just say we cannot be bound by pure contractual arrangements. It's not possible to only allocate the profit through only contractual arrangements," Saint-Amans told reporters.
The OECD, which advises its mainly rich members on tax and economic policy, has two years to come up with specific measures that can be adopted internationally.
BUSINESS CONCERNED
Business lobby groups such as the United States Council for International Business (USCIB) and Britain's CBI dispute that there is a broad problem with tax avoidance and say measures to address it could hit job creation, trade and innovation.
Yet non-governmental organisations and those representing smaller or domestically focused companies support the OECD project.
"EEF welcomes today's report and urges the UK and the G20 generally to respond positively to its central recommendations," said Steve Radley, Director of Policy at EEF, which represents many small and medium-sized British manufacturers.
Saint-Amans noted that all OECD members including Switzerland, Ireland and the Netherlands, which have been described as tax havens by lawmakers on both sides of the Atlantic, had backed the action plan.
The report identified a raft of loopholes used by companies in the technology, pharmaceutical and consumer goods sectors.
These include the practice of companies not creating tax residences or 'permanent establishments' in countries where they have major operations.
The OECD also criticised the corporate practice of designating units in tax havens as holders of group funds, patents or brands that can then be lent or licensed, for generous fees, to affiliates in countries where customers or factories are located.
International treaties designed to avoid double taxation of profits earned from cross-border activities but which have been used to avoid any taxation, are also under scrutiny. Saint-Amans said protocols to amend existing treaties could be developed to stop such "double non-taxation".
He added that representatives of OECD and G20 members who helped draft the plan had rejected an idea favoured by some non-governmental groups that would split multinationals' profits among the different countries where they operate, according to an agreed formula, with each country assessing its share of profit.
Such a system exists in the United States for the application of state taxes, but countries agreed it was too complex to adopt internationally.
Some countries had proposed a reform of corporate income tax whereby companies would be taxed where their customers were based, but the group did not accept this idea.
(Reporting by Tom Bergin and Will Waterman)
Privatised NHS blood services sold to Mitt Romney company
7/19/2013 7:57:31 AM
By Ian Dunt
Plasma Resources UK, which provides blood supplies to the NHS, has been sold to Bain Capital, a private equity firm set up by Republican presidential candidate Mitt Romney.
The move, which has angered some medical experts, is being described as a 'privatisation too far' in some circles.
"It's hard to conceive of a worse outcome for a sale of this particularly sensitive national health asset than a private equity company with none of the safeguards in terms of governance of a publicly quoted company and being answerable to shareholders," said crossbench peer Lord Owen, who helped made the UK self-sufficient in blood supplies when he was Labour health minister in the 1970s.
"Is there no limit to what and how this coalition government will privatise?"
Even business secretary Vince Cable seemed to express uncertainty about the move this morning.
"I certainly wouldn't want to see it undermined by any thoughtless commercial activity," he told the Today programme.
"But if the basic principles of the blood donor system are preserved I wouldn't stand in way of government deriving some revenue from it."
Bain Capital was branded a "job destroyer" during the US presidential campaign, as the media focused relentlessly on how Romney's company shredded jobs in the American heartland.
Romney became very rich through Bain, but left over a decade ago.
The firm has taken an 80% stake in the Hertfordshire-based company with the Department of Health controlling the other 20%.
Bain has paid £90 million and will pay another £110 million in a deferred payment in five years' time.
It has promised to invest £50 million in the service and maintain its headquarters in the UK.
Other competitors included South Korean drugmaker Green Cross Corp and German plasma specialist Biotest.
"Bain Capital was chosen following a fair and open competitive process which looked at who offered the best deal for patients and to ensure future employment at the company," Health minister Dan Poulter said.
Devin O'Reilly, managing director of Bain Capital in London, said: "We are excited about the prospects of PRUK in the growing plasma products industry and are committed to investing in the company to help it reach its full potential in this global market."
Plasma Resources turn plasma in the blood into life-saving treatments for immune deficiencies, neurological diseases and haemophilia.
Plasma is a clear, brown-coloured liquid which acts as a 'storage area' for fluids.
But the plasma is collected from US donors because of concerns of a risk of contamination with variant Creutzfeldt-Jakob disease, the human form of BSE.
Kerry, Palestinians discuss peace talks in Amman, progress unlikely
7/19/2013 7:46:52 AM
Russian opposition leader freed temporarily after protests
7/19/2013 7:42:59 AM
KIROV, Russia (Reuters) - Russia temporarily freed Alexei Navalny on Friday, bending to the will of protesters who denounced the opposition leader's five-year jail sentence as a crude attempt by President Vladimir Putin to silence him.
People took to the streets of Russia's main cities in their thousands on Thursday to vent their anger after a court in the city of Kirov convicted Navalny of what he says were trumped-up theft charges. More than 200 were detained.
In a move that could be designed to head off more unrest, the court accepted an unusual request by prosecutors to let Navalny out of detention to await the outcome of an appeal, but said his movement would be restricted.
"I am very grateful to all the people who supported us, all the people who went to (protest on Moscow's) Manezh Square and other squares," Navalny, 37, said after he was released from a glass courtroom cage and embraced his wife.
Navalny, an anti-corruption campaigner who has led protests against Putin, was convicted on Thursday of organising a scheme to steal at least 16 million roubles ($494,000) from a timber firm when he was advising the Kirov regional governor in 2009.
He says he did nothing wrong and that the sentence is intended by Putin to sideline him as a potential political rival. The United States and the European Union criticised the verdict and said it raised questions about the rule of law.
(Reporting by Gabriela Baczynska, Writing by Timothy Heritage, Editing by Elizabeth Piper)
Policeman releases manhunt photos of accused Boston bomber
7/19/2013 7:17:14 AM
(Reuters) - A U.S. policeman said he released photographs of accused Boston marathon bomber, Dzhokhar Tsarnaev, including one with a red dot of a sniper rifle's laser sight on his forehead, to counter a "fluffed and buffed" image of him on the cover of Rolling Stone magazine.
Massachusetts State Police Sgt. Sean Murphy took the photographs during the manhunt for Tsarnaev, the younger of two brothers accused of killing three people and wounding more than 260 at the Boston Marathon on April 15 by detonating two pressure-cooker bombs. The elder brother was killed in the hunt.
Murphy, a police tactical photographer, said he decided to release the images in response to the portrait of Tsarnaev on an upcoming cover of Rolling Stone, saying the picture of him with shaggy hair and a light beard glamorized "the face of terror".
"What Rolling Stone did was wrong. This guy is evil. This is the real Boston bomber. Not someone fluffed and buffed for the cover of Rolling Stone magazine," he said in a statement carried by Boston Magazine, which published more than a dozen of his pictures on its website on Thursday.
Boston Magazine said later on Thursday that Murphy had been "relieved of his duty" hours after releasing the photographs and the status of the sergeant's duty would be reviewed next week.
Massachusetts State Police declined to comment on whether Murphy had been suspended. In a statement, spokesman David Procopio said only that the release of the photographs of Tsarnaev's capture was unauthorized.
A day earlier, Boston officials reacted angrily to the portrait of Tsarnaev on the cover of Rolling Stone's August issue, over the headline: "The bomber: How a popular, promising student was failed by his family, fell into radical Islam and became a monster."
Boston Mayor Thomas Menino called the cover "a total disgrace," and the drugstore chain CVS Caremark Corp refused to sell the magazine.
Tsarnaev pleaded not guilty in court last week to all charges in a 30-count indictment. He faces the possibility of the death penalty if convicted.
(Reporting by Tim Gaynor; editing by Elizabeth Piper)
Murdoch says phone-hacking probes taking too long
7/19/2013 6:38:42 AM
Media tycoon Rupert Murdoch has questioned the "sense of proportion" and time taken by police investigating phone-hacking claims in a letter to MPs.
He retracted accusations made on a secret tape recording that police were "totally incompetent" but said the length of time police were taking between arresting and charging suspects had led to suicide attempts.
Murdoch was responding to a request from Home Affairs Select Committee chairman Keith Vaz to explain the recorded comments, which he believed he was making in private to journalists from his Sun newspaper.
"I accept that I used the wrong adjectives to voice my frustration over the course of the police investigation," wrote the 82-year-old businessman in a letter.
"I am in no position to judge the competence of the investigation and should never have done so."
But he later criticised the manpower and time being consumed by investigations into behaviour at his News International titles.
"My own lay view is that it has been more than thorough, indeed it has in some respects appeared to be excessive," he argued.
"My own personal view is that this has gone on too long.
"I cannot endorse the judgement that the investigation has 'progressed' very well, not when some of our employees were arrested early in the investigation in 2012 and their families are still in limbo".
Murdoch said that the stress on families had led to "suicide attempts and medical conditions".
Vaz welcomed Murdoch's "acceptance that he used the wrong words to describe the police investigation and his explanation of why he did so."
"I am glad that he has confirmed he does not think the police investigations are incompetent," he added.
He also echoed Murdoch's fears about the cost of the investigation, which so far stands at £20.3million ($30.9 million, 23.5 million euros).
On the recording, the tycoon appears to call the probes into phone hacking and bribery by his journalists a "disgrace".
He was speaking in March at a meeting with journalists at his top-selling British tabloid The Sun, where he also appeared to suggest that reporters jailed as a result of the probe could get their jobs back.
According to the tape obtained by the Exaro investigative website and released by Channel 4 news, Murdoch said his News Corporation made a "mistake" in handing over so much information to police.
Murdoch shut down his top-selling News of the World tabloid in July 2011 after it emerged the weekly had illegally accessed the voicemails of hundreds of public figures, including murdered teenager Milly Dowler.
Hauled before British MPs to explain himself over the scandal, Murdoch apologised and said "this is the most humble day of my life".
But in the meeting this year, which was apparently secretly recorded by one of his own journalists, Murdoch was defiant, railing against the ongoing police investigations into hacking and the alleged bribery of public officials.
He has divided New York-based News Corp since the hacking scandal into two companies separating the television and film business and the newspaper and publishing arm.
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