South Africa – paper tiger of African peacekeeping operations

January 7, 2012 · Posted in Uncategorized · Comments Off 

Johannesberg, South Africa (IRIN) – There is an expectation – and has been for several years – that Africa’s economic powerhouse, South Africa, would become a leading player in the continent’s peacekeeping operations, but analysts say this is wishful thinking at best, and possibly misguided.

“The international community expects more from South Africa [in a peacekeeping role], but South Africa is not deploying the amounts of troops and equipment expected of them,” Jakkie Cilliers, executive director of Pretoria-based think-tank Institute for Security Studies (ISS), told IRIN. “It all goes back to an overstretched department [of defense], lack of funding, transformation – which bedevils discipline – and operational capacity.”

South Africa’s defense policy since the end of apartheid in 1994 has prevented the country from taking a bigger role in African peacekeeping operations. The tone was set by the ruling ANC government’s 1996 White Paper entitled Defense in Democracy, which made the primary role of the armed forces defense against external aggression.

The 1998 Defense Review led South Africa to conclude a multi-billion-dollar arms deal in 1999 in which it acquired a range of sophisticated weaponry – from Gripen fighters and Hawk training jets to submarines and corvettes – “inappropriate” for peacekeeping duties, Cilliers said.

The idea that South Africa faced any conventional armed threats to its territorial integrity was “mythical”, he] said, in either the short or medium term, and the country’s role as regional super-power should be to stabilize the region.

Former president Thabo Mbeki was against a more active peacekeeping role on the continent: He had an “aversion” towards peacekeeping, viewing it as intervention, and preferred dialogue, Cilliers said.

The real threats to South African security were organized crime, illegal exploitation of marine resources and uncontrolled migration flows, Cilliers said.

Wrong equipment

The cost of the 1999 arms deal, which according to some independent estimates had risen to R70 billion (US$8.5 billion) by 2011, had left the country with military hardware that was both “expensive to maintain and which will probably never be used… This is the long-term tragedy of the arms deal [in that it constrains South Africa's peacekeeping abilities],” Cilliers said.

Greg Mills, head of the Brenthurst Foundation, a South African think-thank established by diamond magnates Nicky and Jonathan Oppenheimer, said in a 2011 discussion paper entitled An Option of Difficulties? A 21st Century South African Defense Review, that South Africa had fallen between two stools in its military vision.

“At the heart of any force design is the necessity of deciding which league you want to play in – and then fund at that level. Put differently, there’s no point in buying a luxury SUV if you can’t afford to fill the tank or replace the tires.”

A 2010 Jane’s Defense Weekly report said: “Perhaps the most startling illustration of under-funding is that the air force will only have 550 flying hours for its fighter force this year and 250 hours in each of the next two, just when it planned to `work up’ on the new Gripen; lead-in fighter training on the Hawk has been cut from 4,000 hours to 2,000. The South African Air Force (SAAF) had planned the Gripen to be fully operational by 2012, but that is now clearly unattainable.”

2011 defense review

In 2011 South Africa, a non-permanent member of the UN Security Council, embarked on a defense review (expected to be released for public comment later this year), but it appears that a policy shift towards creating a greater peacekeeping capacity is not on the cards.

Defense Ministry spokesman Siphiwe Dlamini told IRIN the primary function of the defense force was expected to remain preparedness against external aggression.

When the ANC came to power in 1994 it inherited a disparate defense force, made up of its own soldiers; other liberation movement operatives; career soldiers from the apartheid armed forces; and various elements of the Bantustan armies of the nominally independent homelands of Transkei, Venda, Ciskei and Bophuthatswana.

The London-based International Institute for Strategic Studies (IISS) which specializes in military-political affairs, said in its annual 2011 Military Balance report that South Africa had about 62,000 uniformed troops, 12,000 civilian support staff and a reserve force of 15,000.

At a media briefing in September 2011, Defense Minister Lindiwe Sisulu said 2,304 military personnel were on peace support operations in the Democratic Republic of Congo (DRC), Sudan (Darfur), and the Central African Republic.

Burundi, a comparative minnow in terms of population and economy and recently a host to South African peacekeepers, currently deploys more troops to peacekeeping operations on the continent than South Africa, according to the IISS 2011 Military Balance report. (Burundi’s deployments in Somalia are peace enforcement rather than peacekeeping).

At a defense review workshop in Cape Town on 24 November 2011, Sisulu said the “emerging consensus” for African countries was to assume responsibility for managing regional conflicts, and “South Africa is expected to play a significant role in this.”

However, Brenthurst Foundation’s Mills said the South African defense force was “battling” to make ends meet. The 2011-2012 defense budget was R34.6 billion, of which R22.5 billion was for personnel, R8.65 billion was operational costs and R3.5 billion capital costs.

Constraints… like drunkenness

Emmanuel Nibishaka in a paper for the Rosa Luxemburg Foundation entitled South Africa’s Peacekeeping Role In Africa: Motives and Challenges of Peacekeeping published in February 2011, cited additional constraints. He identified high HIV/AIDS infection rates, aging soldiers, a top-heavy officer class, and a “serious skills shortage”.

Nibishaka said more than half the soldiers were medically unfit, with many seen as too old for active service. He added: “Due to a lack of funds the army can deploy only one operational brigade of 3,000… Military equipment is in an appalling state with only 20 out of 168 Olifants [tanks] and 16 out of 242 Rooikat armored cars being deployed due to budget constraints.”

Since 1994 the reputation of South African peacekeepers has been tarnished by “unruliness”, Nibishaka said, including drunkenness, public brawls, consorting with sex workers, sexual harassment and murder.

“For example, the South African military in Burundi from 2002 to 2008 recorded some 400 cases of misdemeanor and approximately 1,000 military trials were heard. In DRC, the record was equally dismal,” Nibishaka said in his paper.

The changing nature of conflict

Conventional conflicts, defined as confrontations between standing armies, are rare these days. “Warfare today has largely gone back to being a task of light infantry and modern cavalry, where numbers (and getting them there) are the important aspect, along with critical enablers of intelligence, surveillance and local knowledge,” says Mills.

Current and future instability, both internationally and in sub-Saharan Africa, was “likely to be so-called `small’ wars between ill-defined often non-state opponents, fighting for complex sets of causes ranging from greed to deeply entrenched grievances, fought at a low-intensity, employing mostly small arms. These are most likely to be fought not over territory but over ideas and symbols, among, rather [than] between peoples,” he said.

South Africa’s defense force should engage a younger, computer literate generation in order to grapple with the complexities of peacekeeping and peace-building; and use hi-tech, low cost, drones to monitor marine resources for “pollution; overfishing and piracy”, he said.

Quick reaction forces

The Africa Union is currently building capacity for the establishment of an African Standby Brigade, a quick reaction force of five brigades, each comprising about 6,500 soldiers. Each brigade is expected to be drawn from contributions from members states of Africa’s economic trading blocs, such as the Southern African Development Community (SADC) and Economic Community of West African States (ECOWAS).

In September 2009, Exercise Golfinho, a training exercise for the Southern Africa Standby Brigade (SADCBRIG), saw South Africa host 7,000 troops from 12 countries, and was deemed as a success, IISS said.

“After the exercise, SADCBRIG declared that it could deploy to any location in Africa or even beyond, though the group did add the important caveat that this was dependent on available strategic lift and sustainable logistical support – two factors that remain substantial impediments for all Standby Brigade operations,” the IISS 2011 Military Balance report said.

However, the Golfinho post-mortem virtually coincided with the new administration of ANC President Jacob Zuma announcing the cancelation of heavy-lift military transport aircraft, seen by military analysts as vital for reacting to mass atrocities.

Heavy lift aircraft

South Africa ordered eight Airbus military A400m transport aircraft in 2005 at a cost of about US$1 billion, but canceled the order, citing financial constraints and associated cost increases, and was reimbursed the $407 million down-payment on’ December 2011 by the European aircraft manufacturer. The transport aircraft was expected to enter service in 2013.

Helmoed-Romer Heitman, a military and defense analyst and senior correspondent for Jane’s Defense Weekly, told IRIN: “If you don’t have the airlift, you can’t do peacekeeping. You just can’t do it. I think they [South African government] have shot themselves in the foot.”

South Africa remains reliant on nine Lockheed Martin C-130 Hercules transporters, of which four were currently operational, Heitman said.

go/cb

– Provided by Integrated Regional Information Networks.

S&P reviewing Portugal ratings

December 1, 2010 · Posted in Bad Credit Loans · 2 Comments 

Standard & Poor’s Ratings Services is starting a three-month review of its ratings for Portugal’s debt that could lead to a downgrade. |||

Standard & Poor’s Ratings Services is starting a three-month review of its ratings for Portugal’s debt that could lead to a downgrade.

The ratings agency says placing Portugal’s credit ratings on “CreditWatch” reflects concerns about increased risks to the government’s creditworthiness.

Portugal is widely considered the next European nation likely to need a bailout. Concerns about the further spread of the debt crisis that has already led to Greece and Ireland getting European Union assistance have unsettled world markets recently.

S&P says while Portugal has outlined “an ambitious fiscal austerity program,” the government has made little progress with reforms to generate growth and it expects the nation’s economy to shrink next year.

The review will consider what Portugal does to address growth, and the terms of any potential EU deal. – Sapa-AP

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Clegg: IFS talks ‘distorted nonsense’

October 22, 2010 · Posted in Bad Credit Loans · 1,541 Comments 

Exclusive: Deputy PM attacks respected thinktank and insists coalition still has ‘more work to do’ in cutting deficit

Nick Clegg, the deputy prime minister, has taken the highly unusual step of attacking the respected Institute for Fiscal Studies, describing its methods of measuring the fairness of the coalition’s controversial spending review as “distorted and a complete nonsense”.

The Liberal Democrat leader also contradicted IFS claims that the spending review would see cuts in spending in classrooms by insisting the coalition had provided a cash increase per pupil for every schoolchild, and had added on top a pupil premium for deprived children worth £2.5bn. He described the premium as one of the biggest engines for long-term fairness.

In an interview with the Guardian Clegg also admitted that the government had not yet won the argument on why it is cutting the deficit at this pace, saying “we have more work to do”.

He also distanced himself from Conservative backbenchers who cheered and waved their order papers at the end of George Osborne’s statement on Wednesday cutting public spending by £81bn. “I don’t think this is something to be triumphalist about … this is a very serious task that we do not relish. This is not something I would get bunting out for. This is a really serious time.”

Clegg said the work by the IFS took no proper account of public spending inputs, or the potential for some spending, such as the pupil premium, to improve social mobility.

“I think you have to call a spade a spade. We just fundamentally disagree with the IFS. It goes back to a culture of how you measure fairness that took root under Gordon Brown’s time, where fairness was seen through one prism and one prism only which was the tax and benefits system. It is a complete nonsense to apply that measure, which is a slightly desiccated Treasury measure. People do not live only on the basis of the benefits they receive. They also depend on public services, such as childcare and social care. All of those things have been airbrushed out of the picture by the IFS.”

He said “the richest are paying the most”, and, in a reference to Labour, added: “Those who say otherwise are not being very straight with people and frankly they are frightening people.”

Clegg argued that the Treasury had tried to provide more than a snapshot of tax and benefits, and instead give a richer picture including the interaction between taxes and benefits cuts, public service cuts and public service gains. “We are also trying to shift the debate bit by bit by asking fundamental questions about fairness from one generation to the next.”

He admitted he had struggled with himself throughout the spending review. But he insisted “shrill allegations” that the state is going to be decimated did not stand up to scrutiny. “We are going to spend 5% more of national income on the state at the end of this process that Tony Blair and Gordon [Brown] were in 1997. We are going to employ 200,000 more people in the public sector at the end of this process. I think it is a cavalier misrepresentation to claim somehow it is a scorched earth policy.”

He also admitted that the decision to back a rise in university tuition fees – in contrast to his repeated election pledges – had been very difficult. “It quite understandably raises questions about promises politicians make. I signed a pledge that I have now not been able to honour.”

But he said the more he looked at the alternative of the graduate tax, the more impractical it appeared. He had been very uneasy about the idea contained in Lord Browne’s review into university funding of lifting the cap on tuition fees entirely, and was looking at how to keep one.

Clegg also disclosed that he had insisted the near £3bn cut in university funding in the spending review had not been so tough that it would be impossible to retain a cap. He also promised to prevent the rich being able to repay loans to cover fees more quickly and not face some penalty. “We have got to deal with the point that if you are wealthier you can pay the loan back more quickly and so reduce your costs. I don’t think that is right at all.”

He defended plans to cut funding for social housing and introduce a more short- term tenancy, closer to market rents, for social housing.

“Registered social landlords tell us that what would be the greatest catalyst for them to build homes is to allow rents for new tenants to drift up to something like 80% of market rents. They say that would give them the guaranteed revenue stream in order to invest to build new homes. People on low pay on those new rents will be compensated in full through housing benefit.” Spending review 2010 Tax and spending Economic policy Welfare Economics Thinktanks Nick Clegg Liberal-Conservative coalition Patrick Wintour Nicholas Watt guardian.co.uk © Guardian News & Media Limited 2010 | Use of this content is subject to our Terms & Conditions | More Feeds

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Cable addresses MPs on tuition fees review – LIVE

October 12, 2010 · Posted in Bad Credit Loans · 1,479 Comments 

Rolling coverage of the day’s events, including the publication of Lord Browne’s report on university funding Read a lunchtime summary

4.19pm: Cable says Labour’s 50% target for the percentage of young people who should be going to university was a mistake, not least because it implied that further education did not matter.

Asked about the possibility of universities going bust, Cable says the government is working on proposals to ensure that, if this were to happen, students would be protected. He rejects the suggestion that 30 institutions could close, but he does accept that some could shut.

4.15pm: Paul Farrelly, a Labour MP, says the Lib Dem website still contains the party’s six-point plan for getting rid of tuition fees.

4.12pm: A Tory MP asks Cable to confirm that wealthy students won’t be penalised for repaying their loans early. ( He has been reading today’s Guardian .)

Cable won’t give this assurance. He says that people who try to repay their mortgage early have to pay a redemption fee. He suggests that something similar could be introduced into the tuition fee system. He says that there has to be integrity in the system and that very affluent people will have to pay their fair share.

The full text of Cable’s statement is now on the business department’s website .

4.07pm: The Browne report only covers England. Mark Durkan, the SDLP MP, asks about the impact on Northern Ireland. Cable says that the need to increase funding will be an issue for non-English universities too.

4.05pm: This is what Cable said in his statement about the possibility of capping fees at £7,000:

We are considering a level of £7,000. Many universities and colleges may well decide to charge less than that, since there is clearly scope for greater efficiency and innovation in the way universities operate. Two-year ordinary degrees are one approach. Exceptionally, Lord Browne suggests there should be circumstances under which universities can price their courses above this point. But, he suggests, this would be conditional on demonstrating that funds would be invested in securing a good social mix with fair access for students with less privileged backgrounds, and in raising the quality of teaching and learning. We will consider this carefully.

4.02pm: Simon Hughes, the Lib Dem deputy leader, asks what the government can do to ensure that poor students are not discouraged from going to university by the existence of a large amount of debt.

Cable says there needs to be generous support for people from poor families. And he is concerned about people being put off by the very high fees that could be charged by some universities. That is why the government is thinking hard about whether or not to accept Browne’s recommendation that there should be no cap on fees.

4.01pm: Here is the key quote from Cable’s opening statement.

The government endorses the main thrust of the report. But we are open to suggestions from inside and outside the house over the next few weeks before making specific recommendations to parliament, with a view to implementing the changes for students entering higher education in autumn 2012. More detail will be contained in next week’s spending review on the funding implications. But as a strategic direction the government believes the report is on the right lines.

3.58pm: David Evennett, a Tory MP, tells Cable that the report is tremendous.

Jack Straw uses the Nick Clegg quote that John Denham used about increasing tuition fees being “a disaster”. He asks Cable what has changed. Cable says he addressed this earlier.

Nick Boles, a Tory, says Keynes said that when the facts changed, he changed his mind. Ed Miliband’s approach seems to be “when the facts change, I bury my head in the sand,” Boles says. The Speaker, John Bercow, tells him his question is not appropriate to today’s debate.

3.55pm: Cable addresses the point about breaking a promise made before the election. He says that, like many people in the Commons, he was the first member of his family to go to university. He did not have to pay. He would like other people to have that opportunity. But in the current circumstances that is not possible, he says.

3.54pm: Cable is responding to Denham. He says that the business department was facing cuts of between 20% and 25% under Labour’s plans. University funding would have been hit. Cable says that it is “sheer hypocrisy” for Denham to attack him for cutting university funding.

The members opposite … have to spell out what it is they would be cutting. And it would include university.

On debt, Cable says he was warning Gordon Brown about the dangers of excessive debt more than five years ago.

He repeats his point about the current system acting like “a poll tax”. Browne has come forward with a progressive alternative, he says. That reflects the government’s commitment to middle-earners.

He quotes from the IFS report on the Browne proposals. (See 3.20pm.) The IFS said “those in the bottom 30% of lifetime earnings would actually pay back less than under the current system”.

3.47pm: John Denham, the shadow business secretary, criticises the coalition for cutting university funding.

On tuition fees, he says that Nick Clegg said before the election that increasing tuition fees would be “a disaster”.

Promises were made by the business secretary and the deputy prime minister at the last election that should not be lightly thrown away.

Denham says that under the current system, graduates pay off their loans on average over 11 years. Under the Browne proposals, this would rise to 30 years. Graduates would still be paying off their loans when their own children were going to university.

The people affected would be the same as those affected by the loss of child benefit, Denham says.

3.43pm: Cable says the Lib Dems were opposed to a rise in tuition fees. But in the current circumstances “we accept that that current policy is simply no longer feasible”. That’s why he will introduce legislation along the lines proposed by Browne, Cable says.

That’s it. Cable has accepted the report in principle. And he has formally buried the policy the Lib Dems adopted at the election.

3.40pm: Cable says that he is in favour of a progressive graduate contribution. But Browne is not in favour of a pure graduate tax. Cable says that Ed Miliband is in favour of such an idea. (Miliband, and David Cameron, are both in the chamber to hear the statement.) Cable says Miliband should listen to the advice he received from Alan Johnson. He reads an excerpt from the letter I quoted at 3.32pm.

3.39pm: Cable says that, if the graduate contribution is to rise, it should be linked to the graduate’s ability to pay. Graduates earn more than £100,000 over their lifetime as a result of having a degree, he says.

But Cable says he is concerned that the current system acts like a “poll tax”. He specifically asked Browne to consider a progressive approach. Cable says that under the Browne proposals the poorest 30% would pay less. The top third would pay more than twice as much as the bottom third, he says.

3.34pm: Cable says the government “endorses the main thrust of [Browne's report]“. But he says the government will consider the details. More information about university funding will be published at the time of the spending review next week, he says.

As a strategic direction, the government believes the report is on the right lines.

3.32pm: Vince Cable is speaking now. Just before he started, George Osborne taunted Labour again over the graduate tax. He said that Alan Johnson opposed the idea in an open letter addressed to Ed Miliband just two weeks ago . Here’s the key quote:

Oh, and for goodness sake, don’t pursue a graduate tax. We should be proud of our brave and correct decision to introduce tuition fees. Students don’t pay them, graduates do, when they’re earning more than £15,000 a year, at very low rates, stopped from their pay just like a graduate tax, but with the money going where it belongs: to universities rather than the Treasury.

3.20pm: Vince Cable will address MPs at 3.30pm. We’ve already had reams of reaction to the Browne report, but there is nothing quite like a statement in the Commons for allowing you to gauge how MPs actually react to a proposal. We’ll soon find out quite how unhappy the Lib Dems really are.

David Cameron and Nick Clegg knew this would be a problem from the moment they set up the coalition. That’s why the coalition agreement gives the Lib Dems the right to abstain on this issue. But a mass Lib Dem abstention doesn’t seem to be on the agenda any more. Clegg and Cable seem to be keen to develop a set of proposals that they can actively support. And the Lib Dem backbenchers who are determined to honour the promise they gave to the National Union of Students before the election don’t want to abstain on this issue. They want to vote against.

Cable will only give a preliminary response. He won’t tell us exactly what recommendations the government will and will not support. But he does not appear to have a lot of room for manoeuvre because the government has already indicated that it supports the broad thrust of Browne’s. In his exchange with Alan Johnson just now (see 3.06pm), George Osborne suggested that he was quite happy to accept the whole thing.

Meanwhile, the Institute for Fiscal Studies has produced a three-page analysis of the Browne proposals . Here’s the summary:

Under proposals released today by the Browne review of higher education funding and student finance, graduates would expect to pay on average at least £5,300 more for their degree, according to analysis by IFS researchers. However, the lowest-earning graduates would be protected from the burden of increased debt and would actually pay less than under the current system.

Despite the proposed increase in tuition fees to £6,000 or above, universities would not be likely to see any benefit: they would need to charge fees of £7,000 or more in order to recoup their losses from proposed cuts in public funding. The real winner of the proposed reforms is the exchequer, which would save up to £6,000 on the cost of a degree for each student.

Phil Willis, a former Lib Dem education spokesman and now a member of the House of Lords, told Public Finance today that he did not think there would be a Lib Dem rebellion over the Browne proposals .

I don’t believe there will be a Lib Dem rebellion. I believe the party is mature enough to recognise that it is a very different scenario being part of a government and facing the largest fiscal deficit the nation has ever seen.

3.06pm: In the Commons Alan Johnson has just made his debut as shadow chancellor against George Osborne.

Johnson chose to ask a question about the deficit and, after a self-deprecating joke about his lack of economic experience, he made a pithy comment about Osborne’s budget. Osborne was saying that the deficit was wrong and that the budget was unavoidable. But it was the other way round, Johnson said. The deficit was unavoidable and the budget was wrong because Osborne was cutting public spending “before there is any momentum to private spending in our economy”.

Osborne greeted his opposite number with a joke. He said that he was shadow chancellor for five years and that he hoped Johnson did the job for even longer. On the subject of the deficit, Osborne used that as an excuse to challenge Johnson over tuition fees. Johnson has spoken out against a graduate tax in the past, but on Sunday Ed Miliband made it clear that the party is now in favour of the idea. Osborne said Johnson should “exert his authority over opposition tax policy”.

It was not a revealing exchange. But it did reinforce the impression that Johnson will be strong on communication but vulnerable on policy (particularly on issues where he disagrees with his new leader).

2.50pm: Around 30 Lib Dem MPs could rebel over tuition fees, Linda Jack, a member of the party’s federal policy committee, told the World at One.

I expect them to vote against because, frankly, if they abstain they are effectively voting for, because they know that if they abstain it will go through. The integrity of the party is at stake here. Everybody signed that pledge that they would vote against an increase in tuition fees so they have really got to stick to their guns on this.

2.46pm: The Social Liberal Forum, a leftish Lib Dem ginger group, has issued a statement urging Vince Cable to reject the Browne recommendations outright . Here’s an extract.

Large increases in fees will lead to even greater debt, working against fairness because the poorest students will tend to have the greatest debts. Using differential interest rates rising with earnings as a means of providing for a more progressive system is less fair than a graduate tax, a graduate contribution or general taxation because those from wealthy backgrounds will have smaller debts as their families can afford to pay up front …

The Social Liberal Forum now calls upon Dr Cable, and all Liberal Democrat MPs, to continue to press for a system that ensures the abolition of student tuition fees, the reduction of student debt and their replacement with a graduate contribution, varying progressively with income and set at levels which do not deter students from taking less well paid, but socially beneficial, post-graduate employment.

2.22pm: If you want a reminder as to why this issue is so embarrassing for the Liberal Democrats, watch this clip on YouTube. It’s Nick Clegg, before the election, expressing his opposition to a rise in tuition fees. Here’s how it starts.

First we will campaign against any lifting of the cap on tuition fees. Both the Labour and the Conservative parties are clearly intending to come together after this general election to raise the cap from £3,000 to maybe several thousand more as demanded by a number of universities. We think that’s wrong.

Clegg would not be the first party leader to break a promise of this kind. Tony Blair legislated to introduce top-up fees for university in 2004 despite ruling out the proposal in Labour’s 2001 election manifesto.

2.11pm: Could the Lib Dems vote down government legislation on tuition fees? Not if Lib Dem MPs who are in the government were to vote with the Tories. Here are the figures.

The coalition has a working majority of 83. That’s because the 305 Conservative MPs and 57 Lib Dem MPs have 362 combined votes, while all the other parties only have 279. These figures exclude the Speaker, his three deputies and the Sinn Féin MPs who have not taken their seats.

With a majority of 83, you will only lose if 42 of your MPs vote against you (assuming no abstentions). There are 57 Lib Dem MPs (all of whom signed the NUS’s Vote for Students pledge). But 16 of them are sitting in the government as ministers (if you include Norman Lamb, who is attached to the Cabinet Office as Nick Clegg’s parliamentary adviser.) And another two are government whips. That leaves only 39 backbenchers. Even if all of them were to vote with all the other opposition MPs, they still would not be able to outvote the Conservatives plus Lib Dem members of the government.

1.35pm: Here’s some more Lib Dem reaction to the Browne proposals.

From John Leech, the MP for Manchester Withington

I signed the NUS pledge and supported our manifesto, which promised to vote against any rise in tuition fees. I am going to keep that promise. This is a political red line for me.

From Tim Farron, the MP for Westmorland and Lonsdale

A number of us will take the view that we cannot really in all conscience abstain on this one – we will have to vote against.

1.26pm: David Blunkett, the Labour former education secretary, has issued a statement strongly criticising Browne’s proposals. Here’s an extract.

This is a complete betrayal by the Liberal Democrats of everything that they have ever said on higher education and of the platform they stood on at the general election. The Tories have already performed a volte-face on their previous policy. This leaves only the Labour party with any credibility on student funding and the future of our great universities …

It is my strong belief that reverting to a real rate of interest transforms the student finance system into a market-driven approach which will distort what is available by allowing the better-off to access more favourable terms – for example, by re-mortgaging their property or arranging for beneficial terms outside the student loan framework. These moves are not available to less well-off students and their families …

So much for fairness, social mobility and equality of opportunity. I fear that, coupled with the draconian cuts in this country’s investment in the knowledge economy to be announced by George Osborne next week, we are burning the seed corn of Britain’s future. This is a short-sighted, unimaginative and short-term government with the vision of a bat and the antennae of a mollusc.

1.00pm: Here’s a lunchtime summary .

– A review chaired by Lord Browne of Madingley has said university tuition fees should rise sharply . Under his plan, the current cap – £3,290 per year – would be lifted and universities would be free to charge what they like, although there would be a levy on those charging more than £6,000 per year and Browne does not expect many to charge more than £7,000. Browne said that his proposal, which would allow universities to expand and which put their funding on a more secure footing, would be “highly progressive” because the lowest 20% of earners would pay less than they do today. The government said that it welcomes the report, although it has not agreed to implement its recommendations in full.

– The Lib Dems appear to be heading for a serious split over university funding . Nick Clegg has indicated that he backs Browne’s approach, and Vince Cable is expected to say something similar when he gives a statement in the Commons on the subject at 3.30pm. But Lib Dem MPs signed a pledge at the election saying that they would vote against an increase in tuition fees, and some Lib Dem backbenchers have already said that they will vote against the government if it tries to implement the Browne proposals. Simon Hughes, the Lib Dem deputy leader, has called for more concessions, saying that the report should not be seen as the “last word”.

12.28pm: My colleague Patrick Wintour has filed a fresh story about the Browne report. He says Vince Cable is battling to prevent a full-scale Lib Dem rebellion on this issue . He also quotes one senior Liberal Democrat as saying that the party should probably admit that the stance it took before the election (see 10am) was wrong.

This is a moment where it may be best if we just admit that what we said before the election about opposing tuition fees was wrong. Being in government means we are going to have to go through a long process of growing up.

12.27pm: On a different subject, four members of the Chilcot inquiry have spent six days in Iraq, the inquiry has announced . They visited Baghdad and Basra, met various senior figures and, “as much as security permitted, saw for themselves the situation on the streets”. In a press release about this , Sir John Chilcot says he is still hoping to publish his report in early 2011. The inquiry has not finally decided whether any of those who have given evidence already (such as Tony Blair) will be recalled.

12.16pm: Simon Hughes (left) has issued a statement about tuition fees . As the Lib Dem deputy leader, he is essentially the shop steward for the party’s backbenchers and what he says could be significant. He is not rejecting the Browne report outright. But he says it should not be “the last word”. In other words, he’s holding out for more concessions. Here’s the key extract:

All Liberal Democrat MPs are very conscious of the positions we have taken on higher education and the policies we campaigned for at the last election.

We all have a duty to read and consider fully Lord Browne’s proposals and the government’s response.

Today will not be the last word on policy for funding higher education in England.

All MPs should now engage constructively in questions, answers and debate in parliament. We must also listen to the considered responses of our constituents and the wider public before we come to take our final personal and collective decisions on the best way forward.

The test of any new scheme for organising and funding education and training for those over 16 must be whether we improve quality, increase opportunity for young people of all backgrounds and ensure a fair and progressive way of meeting the costs.

12.08pm: How much do universities charge for tuition? Fees are capped for British students, and most universities charge the same, but fees for overseas students vary widely. My colleague Simon Rogers has posted a chart with all the details on his data blog .

11.41am: The Department for Business, Innovation and Skills has now put out a press notice saying the government “welcomes” Browne’s report. The comments from Vince Cable just echo what he said in his written ministerial statement earlier. (See 10.50am.) But the comment from David Willetts, the Conservative universities minister, is slightly more supportive.

The current system of funding for higher education is no longer fit for purpose. Any new funding settlement must promote world class competitiveness in teaching and research, with better quality for students. I would like to thank Lord Browne and his panel who have worked in a truly independent, open and consultative manner, for all their efforts and we will carefully consider the recommendations.

11.34am: The Association of Graduate Recruiters has welcomed the Browne proposals. “Overall we hope that these proposed measures will lead to students making more considered and informed choices about their chosen course of study and welcome the emphasis on this in the report,” said Carl Gilleard, the AGR chief executive. But she also said the association had “concerns” that the plan to charge higher rates of interest to higher earners could be seen as potentially “a tax on ambition and success”.

11.12am: My colleague Steven Morris has been speaking to students at a college in Portsmouth who are thinking of going to university about the Browne report. They are all saying that an increase in fees would act as a deterrent. Here’s an example.

Two students, Lauren Harris, 20, and Roger Harris, 42, (no relation) say they will probably give university a miss if tuition fees rise to £6,000 or £7,000 a year.

“If it’s six grand or more I’ll stick and try to find a grown-up job,” says Harris, who is in the second and final year of a foundation course in media production. The daughter of a lorry driver, nobody from Harris’ family has ever been to university.

“I wanted to go. I wanted to be able to give my children more. I want to better myself. But I don’t want to start my working life with a big debt.”

Roger Harris, who left school with four CSEs, worked in a tax office for 20 years and then returned to further education, says he will probably skip university now: “A big rise will put off many mature students with commitments like a family or mortgage.”

11.06am: Paul Wellings, chair of the 1994 group of universities (which represents research-intensive universities), has put out a statement welcoming the report.

The Browne Review is the first progressive step in a long process to address the important issue of university funding, and we are pleased that the 1994 Group’s call to increase university resources has been heard. Everyone’s priority has to be to reassure students of all backgrounds that they will be able to attend a university with the resources necessary to offer academic excellence and the very best experience.

10.50am: Vince Cable has released a written ministerial statement about the Browne report. But it doesn’t say much. It describes the report as “the culmination of months of diligent enquiry”. And it says the government will judge the recommendations against various criteria, including the need to:

– Increase social mobility.

– Take into account the impact on student debt.

– Ensure a properly funded university sector.

– Improve the quality of teaching.

– Advance scholarship.

– And attract a higher proportion of students from disadvantaged backgrounds.

Cable will say more when he makes his statement to the Commons at 3.30pm.

10.48am: Tim Farron, the Lib Dem MP who is standing for the post of party president, has put a post on Twitter saying he would vote against an increase in tuition fees.

10.38am: I’ve been focused on the Browne report this morning, but I’ve still had time to take a quick look at the papers. Here are three articles worth mentioning.

– Alan Miliburn has told the Times (paywall) that he is in favour of taking child benefit away from high earners. Rachel Sylvester quotes him in her column. This is what the Labour former health secretary had to say.

In times of plenty, giving child benefit to high earners is a luxury the country can afford; in times of want I don’t think it is. We would be wrong to oppose it. I can’t see it having an adverse impact on social mobility.

– Steve Richards in the Independent predicts that George Osborne won’t cut Whitehall spending by 25%.

The final negotiations between various departments and the Treasury are fraught, I am told. Suddenly ministers are discovering the virtues of public investment. They even realise that a few doomed quangos save money rather than waste it. To their horror, they find that reforms require additional investment, at least in the short term.

– The Daily Telegraph says that a survey by the Taxpayers’ Alliance has found that 543 full-time diversity posts cost local authorities nearly £20m. It describes this as spending on “non-jobs”.

10.25am: The Open University has warmly welcomed the proposals in the Browne report relating to part-time students. (See 7.46am.) This is from Martin Bean, the university’s vice-chancellor.

This is a landmark day for part time higher education in England. The Browne Review marks the end of a two tier system which until now has disadvantaged part-time students. It signals the start of a new, modern era of higher education which promotes opportunity, flexibility, quality and the crucial role of part-time in delivering future economic growth and social mobility.

Under these recommendations the four in ten students who study part-time will have the same support for the cost of learning as full-time students for the first time.

As the Report makes clear “economic growth will rely upon people with high level skills and it is likely to be through part-time rather than full-time study that people already in the workforce will be able to retrain and prepare themselves for work in new industries”.

10.09am: Greg Mulholland, the Lib Dem MP for Leeds North West, has said that he will vote against any attempt to introduce the Browne recommendations. This is what he told BBC News a few minutes ago.

I’m going to stick to what I said before the election. I’m going to resist any attempt to increase fees. And I believe there are other colleagues who will do the same … I’m giving a very strong message [to the government], as are other colleagues, that there are certain things that we will not accept as part of the much-needed reform of higher education. Increasing fees is, for me, a red line.

Earlier Stephen Williams, another Lib Dem MP who is not in the government, told Radio 5 Live he was unhappy about tuition fees going up. He said he would “certainly” vote against the government if the Browne report was just about increasing tuition fees. But he hinted that, if Vince Cable were to produce a more progressive scheme, he could support it. According to PoliticsHome (paywall), this is what he said.

The repayment for graduates even on a fee based system can be made much more progressive than it is at the moment. Effectively at the moment you’ve got a flat rate poll tax on all new graduates and if Vince is able to come up with a progressive system with different thresholds, perhaps different rates of repayment. You wouldn’t call it a graduate tax, but it will have elements of graduation within it. That will be a much more progressive system for repayment than we have at the moment.

Like Mulholland, Williams represents a university city. He’s MP for Bristol West.

10.00am: Nick Clegg, the Lib Dem leader and deputy prime minister, has just been speaking to BBC News about the Browne report. He said that this was a complicated issue, but he seemed to broadly endorse Browne’s approach.

Everybody wants the same thing, not only sustainable funding for universities, but also a system where the teaching you receive at university, the upfront costs of it are free at the point of use, that we encourage more students from poor backgrounds into university than is presently the case and, crucially, that when people pay back for their university tuition, they only do it when they can afford to do it and that people who earn more pay a bit more back than others. I think that is a fair and sustainable approach and that is what we are looking for in the Browne report today.

Clegg’s problem is that he and Vince Cable were among the 400 Lib Dem candidates who signed the National Union of Students’ Vote for Students pledge . It said:

I pledge to vote against any increase in fees in the next parliament and to pressure the government to introduce a fairer alternative.

The coalition agreement between the Conservatives and the Lib Dems says that tuition fees is one issue on which the two parties can agree to differ. It says that if the government’s response to the Browne report is one that the Lib Dems cannot accept, “then arrangements will be made to enable Liberal Democrats MPs to abstain in any vote”.

This shows that in May, when the coalition agreement was drawn up, Clegg was preparing for the possibility that Lib Dem MPs might abstain en masse.

But now we seem to be heading for a different outcome. It looks as if Lib Dem MPs who are in the government, like Clegg and Cable, will support government proposals based on the Browne recommendations, while some Lib Dem backbenchers may not just abstain, but actually vote against them.

9.09am: The University and College Union, which represents lecturers, has criticised the Browne proposals. This is from Sally Hunt, the union’s general secretary:

Lord Browne’s recommendations, if enacted, represent the final nail in the coffin for affordable higher education. His proposals will make our public degrees the most expensive in the world and price the next generation out of education. The government must not go down this route. Students have already been clobbered with fees and top-up fees and every poll on the subject warns that they, and their families, won’t accept another hit.

And the National Union of Students has said much the same. This is from its president, Aaron Porter.

To make the next generation pick up the bill for cuts and force students to pay even more for less would be both unsustainable and unjust. Lord Browne is clearly dangerously out of touch with the pressures faced by students and their families. The government must reject proposals that would recklessly undermine our future by ending the notion of public higher education.

9.01am: My colleague Jeevan Vasagar says the reports suggests that funding for arts and humanities courses will be cut. Here’s the clue, on page 25 of the report :

There are clinical and priority courses such as medicine, science and engineering that are important to the wellbeing of our society and to our economy … In our proposals there will be scope for government to withdraw public investment … from many courses to contribute to wider reductions in public spending; there will remain a vital role for public investment to support priority courses and the wider benefits they create.

The report also recommends “student charters” that would provide information about employment rates and course quality. And it proposes raising the amount poorer students receive to cover their living expenses while at university.

8.56am: According to the BBC , Vince Cable will only issue a “preliminary” response to the report when he makes a statement on it in the Commons this afternoon. But he will say that it is “on the right lines”.

8.48am: At the weekend Vince Cable, the business secretary (who is also in charge of universities), sent an email to Lib Dem party members saying that a graduate tax – the proposal favoured by Ed Miliband and many Lib Dems – would be unworkable. On page 10 of his report (pdf) , Browne lists a series of reasons why he thinks a graduate tax would be a bad idea. Browne has just been asked about this on Sky, and this is what he had to say about the graduate tax:

We studied the graduate tax. It doesn’t work. Basically, it costs too much money, it takes forever to get the taxes coming in and it’s basically unfair. It allows people to pay huge amounts of money compared with the cost of what they have actually undertaken as education.

8.37am: Liberal Youth, the youth and student wing of the Liberal Democrats, has criticised the plan to lift the cap on tuition fees. Martin Shapland, its chairman, has issued this statement.

You simply cannot build our future on debt. This move has the potential to cripple students with unprecedented levels of debt which will act as a real deterrent to those from poorer backgrounds seeking a better life through the education system. Higher fees will not be acceptable to grassroots Lib Dems and, I imagine, most of the parliamentary party.

8.32am: Lord Browne has just been on the Today programme. Here are some of the points he made that haven’t been covered already:

– He said the £21,000 threshold at which people start repaying their tuition fees would rise in line with inflation.

– He said he only expected a few universities to raise their fees to a very high level.

– Only the top 40% of earners would pay back the full amount lent to them by the government.

– He said his plans would benefit the 40% of students who study part-time. They currently have to pay tuition fees upfront, but under Browne’s plans they would be treated the same as full-time graduates and would not have to pay until they graduate.

8.13am: Here’s some early Twitter reaction to the report.

From David Hanson, a Labour Treasury spokesman:

From Jim Knight, a former Labour education minister:

What we really need, though, is some reaction from Lib Dem MPs. Over the last few days many of them have been reluctant to comment in public. But Vince Cable, the business secretary, will make a statement about the Browne report in the Commons this afternoon and at that point we will get a good sense of how Lib Dem MPs are reacting to it.

8.03am: More from Lord Browne. According to PoliticsHome (paywall), he has been on Radio 5 Live saying that having a degree will continue to be worthwhile.

There’s no evidence to show that degrees are going to be less worthwhile. If anything they are probably more and more required and will produce a higher and higher premium for those who wish to work. The important thing is only graduates pay back the amounts that are paid by the government. The graduates pay it back according to their success.

He also explained how the tapered levy on universities charging more than £6,000 would work:

Above £6,000 universities have to contribute a portion of what they charge back to the government. Between £6,000-7,000, 40% will have to go back to the government, then the scale rises. Above £7,000 they have to satisfy the new regulator that they’re doing everything they can to get people from all types of backgrounds in, widening their participation and making sure the students are satisfied with what they’re getting.

7.55am: Labour’s business spokesman, John Denham, has issued a response to the Browne report:

Lord Browne’s report deserves careful study but his conclusions seem to reflect a belief that the coalition government will cut spending on HE teaching by around two thirds. This is a massive cut even when set against the coalition’s aim to cut spending by 25%. Higher education is a major driver of growth and innovation and needs sustainable financial support from both the public and private sources.

It is right that students make some contribution towards the cost of their higher education. However, the system must be fair, progressive, sustainable, and ensure that students can choose the course most suited to them and not be forced to shop around for the cheapest course.

We are concerned that many graduates will be shackled by debt for the majority of their working lives; that those on middle incomes in typical graduate jobs may pay more than their fair share and the highest earners will pay less and be free of debt much earlier.

His point about higher earners paying less is based on some Institute for Fiscal Studies figures that assume those earning £100,000 a year would be able to repay their debt over four years (thus having to pay less interest). Today’s Guardian story explains this in more detail .

7.50am: Lord Browne has been talking about his plans on BBC Breakfast. According to PoliticsHome (paywall), he said the system was “very progressive indeed”. He explained: “The more you earn, the more you pay off.”

He dismissed the charge that higher fees would deter young people from going to university.

You’re also facing better job prospects, a more exciting array of job prospects, mobility [if you are a graduate] … But if you choose to go to a job that doesn’t pay a lot, your obligations are waived by the government. These are not mortgage-style debts.

7.46am: Lord Browne’s findings have been well trailed, but there are some recommendations that have not been written up in advance. For the record, here are the main points:

– Browne proposes a new system called the student finance plan . No student would start to pay anything for their tuition until they graduate and start work.

– The current cap on student fees, set at £3,290 per year, would be lifted . Universities that charge more than £6,000 per year would have to pay a tapered levy designed to ensure that the most expensive universities contribute more to supporting the poorest students.

– Universities that want to charge more would have to prove that they are improving teaching standards and operating a fair admissions policy .

– The number of places available to students would increase by 10% . Browne says his plans would make this expansion possible.

– Graduates would not start repaying money until they earn more than £21,000 a year, up from £15,000 under the current system . Payments would be “small”, Browne says; for example, someone on £25,000 would pay £7 a week.

– The bottom 20% of earners would pay back less than they do today .

– Careers advice in schools should be improved so that pupils have access to the right information about university choice .

– Part-time students should have the same access to tuition support as full-time students .

7.31am: Here is what Lord Browne is saying about his plans:

Our higher education system is world-renowned but too often it enshrines the power of universities and not the power of students. These reforms will put students in the driving seat of a revolutionary new system.

Under these plans universities can start to vary what they charge but it will be up to students whether they choose the university. The money will follow the student who will follow the quality. The student is no longer taken for granted, the student is in charge.

We have been guided by three principles: participation, quality and sustainability. Any student who has the academic potential should be able to participate in and benefit from higher education.

Students do not pay anything upfront. Only graduates pay and only then according to the level of their success. Under our proposals, the bottom 20% of earners will pay less than today and only the top 40% of earners will pay back close to the full amount.

7.23am: The full report is available on the website for the independent review of higher education funding and student finance. It’s 64 pages long.

7.02am: Lord Browne’s report into university funding it now out. I’ll post a link as soon as I can find one, but in the meantime here’s an extract from the Press Association story:

Today’s review calls for a radical shake-up of the funding system, with graduates paying a higher rate of interest on loans, more places being made available and universities effectively “competing” for students.

It said there should be “no single fixed price for higher education” because all universities are different and provide different courses.

“Different courses will cost different amounts,” the report says.

“Institutions will have to persuade students that the charges they put on their courses represent value for money.”

Under Lord Browne’s proposals, universities charging more than £6,000 a year for a course would have to pay a tapered levy, depending on the fee they charge, to cover the cost to government of providing the students with finance.

Those institutions wanting to charge more will have to prove improved standards of teaching and that they have fair admissions policies, as well as contributing more to supporting the poorest students.

The review, led by former BP boss Lord Browne of Madingley, calls for the introduction of a new streamlined funding scheme, called the Student Funding Plan.

Under the plan, similar to the current system, no student would pay back their loans until they were in work. But the repayment threshold would be raised from £15,000 to £21,000, with outstanding loans written off after 30 years.

Higher-earning graduates would pay back their loans at an interest rate equal to the government’s cost of borrowing, while those earning below the threshold would pay no real interest rate.

I’ll be blogging more on the report today, as well as bringing the reaction from Westminster.

The report will dominate today’s news, although there’s also an interesting event coming up in the Commons. It’s Treasury questions this afternoon, which means that George Osborne will go head-to-head with the new shadow chancellor, Alan Johnson, for the first time. Higher education Education policy University funding Andrew Sparrow guardian.co.uk © Guardian News & Media Limited 2010 | Use of this content is subject to our Terms & Conditions | More Feeds

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Morning Forex Review: Interest Rates Awaited From RBA and BoJ

October 4, 2010 · Posted in Business finance · 1,538 Comments 

Friday’s release of the ISM manufacturing index reinforced the view among market participants that the Fed will most likely counterbalance the headwinds faced by the US economy by more quantitative easing. The ISM survey signaled a slowdown in manufacturing growth and reported deceiving numbers in the inventories’ and backlogs’ sub-indices.

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