Senate Leaders Confirm Deal To Avert Default

Senate leaders have reached a last-minute agreement to avert a threatened US default and reopen the government.

Senate Majority Leader Harry Reid announced on Wednesday that a bipartisan deal had been struck to end the fiscal impasse.

Speaking on the Senate floor after more than two weeks of political wrangling, Mr Reid said: "This is a time for reconciliation." 

Earlier, Republican Senator Kelly Ayotte said congressional leaders would push for passage as soon as possible.

The deal, struck by Mr Reid and GOP Leader Mitch McConnell, calls for the Treasury to have authority to continue borrowing through February 7, and reopen the government through January 15.

Sen Ayotte said she understood the legislation would first receive a vote in the Republican-controlled House, an arrangement that would speed its way through Congress to President Barack Obama's desk.

House Speaker John Boehner has failed to rally Republicans behind a deal

The White House expressed optimism that the bipartisan plan would gain passage and urged Congress to act quickly.

As word of the Senate deal emerged, Speaker John Boehner and the House Republican leadership met to plan their next move.

Notably absent from the pending agreement is a long-held Republican demand to defund aspects of Mr Obama's signature health care law.

The Senate deal makes only one modest change in the programme that requires individuals and families seeking subsidies to verify their incomes before qualifying.

Senator Ted Cruz, a Tea Party favourite who has been a staunch opponent of any deal that did not include cuts to "Obamacare", said he would vote against the measure but would not pursue delaying tactics to stall the legislation.

The president's health care law is at the heart of the dispute

Speaking to reporters ahead of the Senate's announcement, Mr Cruz said: "Once again the Washington establishment is refusing to listen to the American people."

A top Democratic aide told Reuters the deal appears certain to be approved with mostly Democratic votes.

The New York Stock Exchange soared on the news that the threat of default was easing in, rising roughly 200 points by late morning.

With borrowing authority set to run out on Thursday, leaders worked through the night to craft an agreement that could win bipartisan support in the deeply polarised Congress.

Mr Obama has warned of the consequences of a default and leading economists have said it could hurt the global economy.

Warren Buffett, one of the the world's most influential investors, said the threat not to raise the debt limit is a "political weapon of mass destruction" comparable to poison gas.

Mr Buffett, who leads the Berkshire Hathaway conglomerate, told CNBC that he does not think the federal government will fail to pay its bills.

"If it does happen, it's a pure act of idiocy," he added.

Uncertainty over Washington's ability to avert a default led Fitch Ratings to warn it could cut the sovereign credit rating of the United States from AAA, citing the political brinkmanship on Capitol Hill.

The renewed push in the Senate came after a day of chaotic developments in the House that saw two separate GOP plans buried when it became apparent they failed to rally enough support among Republican rank-and-file.

Politically, neither party is faring well, but polls indicate Republicans are bearing the brunt of public unhappiness as survey after survey shows their approval ratings plunging.

A Washington Post/ABC News poll released on Monday found that 74% of Americans disapprove of the way congressional Republicans have handled the standoff, compared with a 53% disapproval rating for Obama.

The shutdown has already furloughed hundreds of thousands of federal workers and forced national parks and monuments to close down in high season.

Some tourist attractions such as the Grand Canyon and the Statue of Liberty have now reopened, as states agreed to fund their running.

However, many communities have lamented the economic damage they have had to incur.

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Pressure On Cameron As Food Bank Use Soars

David Cameron has come under pressure to launch an inquiry into why people are turning to foodbanks as demand for emergency supplies continues to surge.

More than 350,000 people received a three-day food package from the Trussell Trust between April and September, three times as many as the same period last year.

It has written to the Prime Minister calling on him to look into the "scandalous" problem of food poverty, warning some food bank recipients are so poor they have returned produce that needs cooking because they cannot afford the electricity to heat it up.

Trussell Trust executive chairman Chris Mould said: "We said in April that the increasing numbers of people turning to food banks should be a wake-up call to the nation, but there has been no policy response and the situation is getting worse. The level of food poverty in the UK is not acceptable.

"It's scandalous and it is causing deep distress to thousands of people. The time has come for an official and in-depth inquiry into the causes of food poverty and the consequent rise in the usage of food banks."

Earlier this year, Chancellor George Osborne suggested food bank use had increased "because people have been made aware of the food bank service through local jobcentres".

But the Trust has echoed concerns that some households will have to choose between eating and heating this winter as they struggle to cope with the rising costs of food and energy.

It also highlights the impact of welfare reforms that came into force in April, reporting an increase in referrals as a result of the so-called "bedroom tax".

Mr Mould said: "We're talking about mums not eating for days because they've been sanctioned for seemingly illogical reasons, or people leaving hospital after a major operation to find that their benefits have been stopped or delayed."

Chris Johnes, Oxfam's UK poverty programme director, said: "These figures lay bare the shocking scale of destitution, hardship and hunger in the UK.

"It is completely unacceptable that in the seventh wealthiest nation on the planet, the number of people turning to food banks has tripled."

TUC general secretary Frances O'Grady described the figures as "shocking".

A Government spokesman said: "The Trussell Trust itself says it is opening three new food banks every week, so it's not surprising more people are using them. They also agree that awareness has helped to explain their recent growth."

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BBC Criticised For £24m Staff Relocation Costs

By Becky Johnson, North of England Correspondent

The multimillion-pound sum paid to BBC staff to help them relocate from London to Salford has been branded "difficult to justify" by MPs.

The £24m was spent relocating nearly 900 staff to MediaCityUK at an average of £28,000 per person.

There were 11 cases where the cost exceeded £100,000 per person, with one costing £150,000.

The move of several departments including BBC Sport, BBC Breakfast and Radio 5live was completed in April 2012.

The BBC developed the regional centre in Salford to address the fact that the majority of its decision-making and spending was being done in London.

Public Accounts Committee chairman Margaret Hodge

Many BBC staff who work in Salford were unwilling to speak to Sky News about the relocation allowances, with one describing the move to the North West as a "sensitive issue" within the corporation.

A report by the Public Accounts Committee criticised the large sums paid to staff to make the move and concluded that in future the BBC needs to find a better balance between treating staff fairly and spending licence fee payers' money in a reasonable way.

Committee chairman Margaret Hodge said: "The BBC did a good job in completing the move to Salford on time, within budget and without disruption to the television and radio services we all enjoy.

"However, the scale of some of the allowances paid to staff to relocate to Salford is difficult to justify.

"There were 11 cases where the cost of relocating staff exceeded £100,000 per person, with one costing £150,000.

"It is not acceptable that the BBC also failed to make a proper record of the exceptions it made to its allowance policy.

"The longer term success of the move to Salford depends on the BBC achieving the wider benefits it promised.

"These include reducing the gap between northern and southern audiences in the BBC's market share and stimulating economic and other regional benefits, including creating up to 15,000 jobs.

"The BBC's decision to enter into a 10-year contract for studio space at Salford seems to take little account the fast pace of change in the broadcasting industry.

"The BBC could end up having to pay for studio services it no longer needs."

In response the BBC issued a statement saying: "We are pleased that the Public Accounts Committee has recognised BBC North was delivered on time, under budget and with no break in services.

"We have just celebrated two years of award-winning TV, radio and online content, and the whole region is sharing in the momentum of Media City with spend by the Public Service Broadcast channels in the region up from 15.9% to 20% ."

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Twitter Shuns Nasdaq After Facebook Foul-Up

Twitter shares will trade on the New York Stock Exchange rather than the tech-heavy Nasdaq, which saw major problems in Facebook's market debut in 2012.

An update to Twitter's filing with the Securities and Exchange Commission on Tuesday said: "We intend to list the common stock on the New York Stock Exchange (NYSE)  under the symbol 'TWTR.'"

Twitter's decision to list on the NYSE came after the Nasdaq's foul-up marred the $16bn (£10bn) Facebook share issue in May 2012, the most hotly awaited initial public offering on the US markets in years.

The Nasdaq exchange agreed this year to pay a $10m (£6.3m) penalty for trading glitches.

Facebook's share issue did not go smoothly

Nasdaq is also facing lawsuits from investors who claim the problems led to losses when they were unable to execute trades.

The update also said Twitter's monthly active users had grown to 232 million, up from 218 million as of June 30.

It said the company lost $133m (£83m) in the first nine months of 2012 on revenues of $422m (£263m), updating its earlier figures.

Twitter also revealed a new contract with chief executive Dick Costolo worth some $11.5m (£7.2m), mostly in stock.

Its senior vice president for engineering, Christopher Fry, will get $10.4m (£6.5m), again mainly in stock awards.

Twitter first revealed its initial public offering in a confidential filing last month, and in early October revealed it would seek to raise $1bn (£630m) for the massively popular messaging platform.

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US Shutdown: Las Vegas Family's Anxious Wait

In the US state that was hardest hit by the financial meltdown, they are watching anxiously as America teeters on the brink of a new economic unknown.

Nevada, home of the gambling capital of the world Las Vegas, still suffers the highest unemployment and most home repossessions in the country.

People in the so-called Silver State have been slowly picking up the pieces from the recession that started in 2008 - and are anxious that a US default will dump them straight back into crisis.

Jay Carrasco used to employ a dozen men at his construction firm, his wife Jackie was a high-flier in home sales.

But a life that has included numerous homes, a fleet of cars and luxury holidays was shattered by the financial crisis.

Jay Carrasco has gone from construction boss to mattress salesman

Now the couple share a rented flat in the Las Vegas suburbs with two of their grown up children. Jay is a mattress salesman and Jackie works part-time.

Just like millions of Americans, they are watching anxiously what is happening in Washington DC.

Jay, 57, said: "It is going to be devastating for everyone if they don't make the right decisions soon. We are all feeling it even now.

"But hopefully stronger minds will prevail and they'll make the right choices."

Jackie Carrasco: Crisis "has taken its toll on us"

Jackie says she longs for the days when they lived in "high cotton": "It was hard, it is still hard for us.

"I'm not saying we were rich or anything like that but we were very comfortable. We both made decent salaries, if we wanted to go out to dinner, anything, we never had to think twice.

"Now we are living pay cheque to pay cheque and barely making it. It has taken a toll on us. It is rough."

Her husband says the American people have fought hard to recover from the lows of the last five years.

"We're nowhere near where we need to be. All we can do is fight hard and hope for the best," he said.

"I think it has marked a lot of people, the majority I think, they think twice before they do anything. It has taught all of us a lesson."

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Employment: Jobless Benefit Claims Tumble

The number of people claiming jobless benefits saw its biggest monthly fall in more than 16 years in September.

The Office for National Statistics (ONS) measured a drop of 41,700 in the number of Jobseeker's Allowance claims in September - the biggest drop since June 1997.

It follows a revised total of 41,600 in the previous month - 9,000 more than first reported - and means the so-called claimant count has fallen for 11 consecutive months to 1.35 million.

While the jobless rate remained at 7.7%, unemployment in the three months to August fell by 18,000 to 2.48 million.

Employment rose by 155,000 to 29.87 million, the biggest total ever recorded, giving a rate of 71.7%.

People classed as economically inactive also fell, down 83,000 to 8.95 million, while job vacancies rose by 6,000 over the latest quarter to 541,000, the highest for five years.

But the ONS data also showed that 1.45 million people were working part-time because they could not find full-time jobs, the highest figure since records began in 1992.

Average earnings growth fell back from 1.2% to 0.7% for the year to August compared to the previous month.

Youth unemployment fell between June and August

Average weekly earnings in private firms increased by 1.1% but the annual growth rate in the public sector slumped to minus 0.5%, the lowest since 2001.

There were 958,000 unemployed 16 to 24-year-olds in the latest three months, down by 1,000 over the quarter.

More than 1.1 million people have been unemployed for up to six months, down 32,000, but those out of work for between six months and a year rose by 29,000 to 446,000.

The number of people out of work for over a year fell by 15,000 to 900,000.

The Government's new Employment Minister Esther McVey paid tribute to the work of British business in keeping people in employment amid the deepest recession in a lifetime, saying one million more people were now in work compared to when the coalition took office.

But TUC General Secretary Frances O'Grady pointed to the drop in average wage rises and said: "While it's good news that unemployment is still falling and more jobs are being created, there is still plenty to be worried about.

"People's pay packets continue to fall in real terms, earnings growth has never been lower and the longest wage squeeze in over a century is becoming even tighter.

"We need more high quality jobs and proper pay rises if this recovery is to begin to feel real for hard-working people."

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Gatwick Suffers Power Cut Amid Fog Disruption

Gatwick Airport's south terminal is effectively closed as a power cut in the building compounds earlier flight delays caused by fog.

Passengers expressed frustration via Twitter - with some describing how staff were trying to communicate instructions via loud hailers and whiteboards.

It was not clear what had caused the outage but one report suggested a server room had flooded.

A whiteboard contained advice for passengers (credit: Charle Talbot)

Gatwick said the problem was affecting check-in, baggage and some parts of the departure lounge.

"Staff are currently assisting passengers and we are working to get this resolved," Gatwick tweeted and it apologised for "any inconvenience."

Its statement said: "We advise all passengers scheduled to fly out of the South Terminal today to check the status of the flight with their airline first and check the flight information on our website.

"We are also advising passengers to expect some delays."

The power problem followed earlier delays caused by fog at the West Sussex airport and problems for easyJet passengers at Gatwick, and elsewhere yesterday caused by a Europe-wide failure of the airline's computer system.

Passengers describe their various predicaments in a growing number of tweets.

Ian Graham said: "Just back from Croatia and stuck on plane due to flooding and power cut at Gatwick."

Adrian Simpson said: "You can add rain to the list of things that @Gatwick--Airport can't handle. Stuck in plane with airport flooded and no power. Fun."

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MP Warns Cable Over Royal Mail Bank Jackpot

By Mark Kleinman, City Editor

Vince Cable, the Business Secretary, is under pressure to cancel millions of pounds of fees to the investment banks which oversaw the privatisation of Royal Mail.

Adrian Bailey, the Labour MP who chairs the Business Innovation and Skills (BIS) Select Committee, told Sky News that paying approximately £4m in discretionary payments to the syndicate of banks would be a "reward for ripping off the taxpayer".

Under the terms of ministers' agreement with the seven banks The privatisation prospectus disclosed that Mr Cable would have the discretion to award 0.3% of the sum raised from institutional investors during the flotation in additional fees to the banks.

The looming row over bankers' fees, which are relatively low by City standards but still run to tens of millions of pounds, came as it emerged that Royal Mail workers had voted as expected in favour of industrial action, with a one-day strike likely to take place next month.

Mr Cable has dismissed talk that the sale was undervalued

Including the so-called 'greenshoe' option, which is expected to involve a further 8% of Royal Mail being sold to institutional investors during the next few weeks, as much as £4.3m could be paid to the banks, with their earning potential dependent upon their underwriting quota.

Sources said the decision about whether to award the fees would also be based on whether the fund managers they had placed the shares with at 330p had held onto the stock or sold to make a quick profit.

Mr Cable has said repeatedly that the bulk of Royal Mail's shares were sold to long-term investors, meaning that any decision about the fees is unlikely for several months.

"It is too early to consider paying discretionary fees," a BIS spokeswoman said.

The discretionary fee component is commonplace in company flotations, and is typically exercised when there has been a healthy share price performance in the aftermath of a listing.

However, Mr Cable has been criticised for undervaluing Royal Mail following the near-50% surge in its share price in its first three trading sessions as a public company.

"My advice would be that paying the additional fees would be seen by the public as rewarding those that have ripped off the taxpayers: don't do it," Mr Bailey said.

Sky News revealed on Monday that the BIS Committee is to summon some of the bankers who worked on the deal to an evidence session in November.

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Royal Mail Staff To Strike In November

The first national postal strike in almost four years will be held on November 4, union bosses have confirmed.

A 24-hour stoppage is being planned by the Communication Workers Union (CWU) amid a bitter row with Royal Mail over pay and pensions which threatens to disrupt the busy Christmas delivery season if left unresolved.

The union ballot of around 115,000 of its members at Royal Mail and Parcelforce returned a 4-1 decision on a 63% turnout in favour of industrial action, which is linked to the recently completed privatisation of the service.

The vote was returned despite a windfall under the flotation that left full-time staff who took up free share options sitting on paper earnings worth £3,545 by close of trading on Tuesday.

Those shares cannot be sold for three years under the terms of the sale.

A Royal Mail spokesman said the company was "very disappointed" at the result of the ballot, adding: "Any action, or the threat of disruption, is damaging to our business, especially in the run up to Christmas, our busiest time."

However, Dave Ward, deputy general secretary of the CWU, said: "Postal workers have spoken very clearly that they care about their jobs, terms and conditions far more than they care about shares.

"The stakes have become much higher for postal workers since privatisation, making this ballot more important than ever.

"Postal workers will not be the people who pay for the profits of private operators and faceless shareholders.

"The question now is whether this privatised Royal Mail still wants an agreement.

"We have offered the company a two-week period to reach an agreement and having already had many hours of negotiation, this is achievable if there is a will.

"What we want is a groundbreaking, long term, legally binding agreement that not only protects postal workers' job security, pay and pensions, but will also determine the strategy, principles and values of how the Royal Mail Group will operate as a private entity.

"This means there will be no further breakup of the company, no franchising of individual offices or delivery rounds, no introduction of a cheaper workforce on two-tier terms and conditions and no part time industry.

"It will mean - regardless of who owns Royal Mail - this company will not be able to enter the race to the bottom and replicate the employment practices and service standards of its competitors."

The union also announced a new ballot of its members at Royal Mail that would potentially enable postal workers to boycott competitors' mail to supplement the strike action.

The Royal Mail spokesman added: "The three-year pay offer and groundbreaking deal on protections on offer from Royal Mail addresses points raised by CWU, and talks to reach agreement are continuing to further address these points.

"Royal Mail will do all that we can to protect our business and minimise the impact of any industrial action on our customers' mail."

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Fuel Risk As Grangemouth Crisis Deepens

The Grangemouth oil refinery is to be closed for at least a week, threatening fuel supplies in Scotland, as its owner complains of financial damage from a threatened strike.

The 48-hour stoppage was called off by the Unite union following the breakdown of talks through the night with the site's owners Ineos at the conciliation service Acas.

The company later confirmed operations would not be re-started this week.

Ineos said: "Grangemouth is financially distressed. The industrial action called by Unite the Union has inflicted significant further damage on the company.

"Ineos will put a proposal to the workforce tomorrow and expects a response on Monday, after the weekend. The company will review its position with its shareholders on Tuesday."

Ineos says Grangemouth is run at a loss

Unite had earlier accused Ineos of "scandalous behaviour" as their talks failed to resolve their bitter row over the treatment of a union convenor - accusing the firm of walking away and said it was acting to protect a national asset.

Unite's Scottish secretary Pat Rafferty said: "We are outraged that Ineos representatives walked away from Acas talks, after 16 hours of negotiation and on the cusp of an agreement, for the ludicrous reason that Ineos chairman Jim Ratcliffe instructed his management representatives to demand an apology on his behalf.

"Acas representatives informed us that we could not conclude an agreement to take to our members because a list of fresh demands were placed upon us and because 'Jim wants an apology' and that this was a 'deal-breaker'.

"I have never came across anything like this in over 30 years of employment relations and it is utterly reprehensible."

Unite accused Ineos of running the Grangemouth refinery and petrochemical sites into a "damaging cold shutdown" which would affect fuel production and supply across Scotland.

Mr Rafferty continued: "As a result, Unite will now call off all industrial action with immediate effect in order to protect this national asset from the scandalous behaviour of its owner.

"The plant should now start the return to full production and there is no excuse for this not to happen."

Petrol and diesel production was suspended at the plant on Monday night in preparation for Sunday's walkout.

Experts had warned that the stoppage raised the prospect of shortages if the dispute was not resolved as all of Scotland's needs are met through supplies from Grangemouth.

The row centred on alleged unfair treatment of plant worker, Stephen Deans, who is also a union official. Unite and the company were already in dispute over terms and conditions at the plant.

Ineos had previously warned the petrochemical site would have to close by 2017 unless a "survival plan" involving cutting pension entitlement and pay was implemented.

The company argued that the refinery, located on the Firth of Forth, was not profitable - losing more than £576m in the last four years.

It claimed the pension scheme was £200m in deficit and pension costs of 65% of salary were "unsustainable".

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