Bank of England member votes for interest rate rise

Bank of EnglandThe Bank of England is responsible for setting interest rates

A member of the Bank of England's Monetary Policy Committee (MPC) has called for a rise in interest rates for the first time in almost two years.

Andrew Sentance voted to lift rates to 0.75% from the record low of 0.5%, due to stubborn inflation, minutes show.

It was the first call for a UK rate rise by an MPC member since August 2008, and will surprise economists, who expected another unanimous decision.

The other MPC members called for rates to be held at its June meeting.

The 7-to-1 majority ensured rates were kept at 0.5% for the 15th month in a row.

The Bank of England also decided not to inject any more money into the UK economy under its policy of quantitative easing (QE).

Inflation hit a 17-month high of 3.7% in April, and though it fell back to 3.4% in May it remains well above the Bank's 2% target.

Mr Sentance argued that the persistence of inflation had cast doubt on the Bank's prediction that spare capacity in the slow economy would be enough to bring inflation down.

But the other committee members said that this was not enough to justify a change in rates policy.

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Glastonbury gates open to festival goers


GlastonburyMore than 350 acts have been booked to perform this weekend

Thousands of music lovers have started arriving for this year's Glastonbury Festival at Worthy Farm in Somerset.

Although the music does not start until Thursday, festival goers arrive early to avoid heavy traffic and find the best pitch for their tents.

Unusually forecasters have predicted hot weather for the three-day festival, in place of the downpours of recent years.

Gorillaz, Muse and Stevie Wonder are headlining on the main Pyramid stage.

All 140,000 tickets have been sold and in an attempt to ease traffic flow, organisers opened up the site's car parks last night.

Football

England football fans heading to the festival early will also be able to catch their team's last group game against Slovenia.

The game will be shown on the Pyramid Stage screens and should Fabio Capello's players qualify for the knock-out stages, organisers say their game will also be shown live at the music event.

This year, revellers will be celebrating the 40th year of the music event.

Dizzee Rascal, The Scissor Sisters, Faithless and Hot Chip are among the 350 acts that have been booked to perform over the weekend.

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Why the great buzz about bees?

Our favourite insect is in decline. But, says Ian Douglas, we shouldn't ignore other, less charming, pollinators that play an equal role in our food production.

Ian Douglas with bumblebees
Ian Douglas at work in happier times: he replaced his queen this spring but he has seen his colony wiped out Photo: Philip Hollis

As I worked my way through the frames of my beehive this spring, it soon became clear that something was wrong. The bees had not eaten enough of the honey stores they had accumulated last summer and, while there were still a good number of them, they seemed a little aggressive and lacking in direction.

After a few more visits to the hive, which I keep on some allotments in Hampstead, north London, it became clear that the queen was missing, probably killed by the cold snows of December and January. Honeybees suffer from a wide range of pests and diseases, but in her case I'm sure it was just the cold and her age. Queens live for three to five years, much longer than the four or five weeks of toil allotted to a worker bee in summer, but we all go in the end.

A new one arrived in the post from a Gloucestershire breeder, sealed in a tiny plastic cage with a lump of sugar and a few attendant workers to keep her going on her journey.

She was introduced as gently as possible to the remaining workers, but to no avail. The old bees, set in their ways and reluctant to change, couldn't accept a new leader and rejected her, even though it meant their numbers would dwindle to nothing. I'm now looking for a fresh new colony or I shall be without bees to keep, which is a sad situation.

Sad it might be, but it's a story familiar to every beekeeper, especially in recent years. The winter of 2007-08 was disastrous, with more than 30 per cent of colonies failing to reach the spring. There are always some losses (plan on one in 10 of your hives being empty come March, old beekeepers tell young ones), but intrepid groups of bees split away from their parent colonies and form new ones, boosting the numbers. This year 18 per cent died off nationally, which is much better than it has been and offers hope for future honey supplies and, most importantly, pollination, but it's still low.

Yesterday, we learnt that the decline of bees and other pollinating insects could seriously affect crop production in this country – the total loss of insect pollinators would cost Britain up to £440 million a year. Such is the concern that a £10 million research project, the Insect Pollinators Initiative, is to examine the ecology of pollinating insects in the hope that biodiversity and the natural pollination of crops can be protected.

We look closely at honeybees because people like me form deep attachments to our hives and find it difficult to stop talking about them, forming a vocal pressure group for their conservation. The news from the hives is improving but the bumblebee nests, complexes of waxy clay-like cups and balls about the size of a small loaf of bread, are still at serious risk. A colony of small, agile, brownish honeybees might contain 60,000 bees at its peak, but big, slow, furry, brightly striped bumblebees hang together in groups of only a few hundred. Fully 70 per cent of the flowering plants that bumblebees rely on are in decline. And hoverflies, solitary bees, butterflies and moths might be in equal need of our care.

I say "might" because when it comes to the importance of pollinator diversity, we're in that most important scientific position: the questioning phase. Professor Andrew Watkinson, director of the Living with Environmental Change programme, who speaks on behalf of the funding partners for the Insect Pollinators Initiative, is under no illusion that he knows everything already.

"What one wants to know is how important the different species are," he says. "How important are the hoverflies compared with the bumblebees or butterflies? What flowering plant resources are important and how much habitat is actually necessary?

"One of the amazing things is that we don't know how important the different species are. Some studies say that honeybees contribute 10 per cent, some say more. We know that bumblebees are very important, as are hoverflies. There are more than 20 species of bumblebee in Britain, and several of them are causing concern. Three are already extinct. Some species are doing OK, and we don't understand what's making the difference."

I said I was quite surprised that we didn't know all of this already, that this research was only being carried out now. "It is surprising that we don't know," says Prof Watkinson. "At the beginning of my career there was a feeling that there was a surplus of pollinators, but that's no longer the case. We're asking the question: do we have enough pollinators to ensure food production?"

The research programme consists of nine projects. Land use, pesticides, disease and nutrition will be examined, both in the countryside and in towns. In relation to honeybees, it's unclear whether disease or the decline in habitats is the bigger problem. "If we had better habitats, would the diseases be less important, or if we could get on top of the diseases, would we be able to get by with smaller habitats?"

Bees are still the focus of a lot of the activity, but that's combined with wider questions about the way our food grows and which species make it happen. As Jane Memmott, professor of ecology at Bristol University's School of Biological Sciences, says: "There are an awful lot of other critters out there apart from bees."

At an urban plot that she monitors, she has found 75 species of pollinator, of which only 17 are bees. Even on heathlands in the New Forest, another site she studies, no more than half of the pollinators are bees. We lack data on the other pollinators, not least because "bees are charismatic in a way that small flies aren't".

The importance of caring for bees is one of the easiest sells in the insect world. They give us delicious honey, their social structure is endlessly fascinating and they're unlikely to sting you unless provoked, so they have a good image. When I tell people I keep bees, they lean in with concerned looks on their faces and tell me that they're planting borage to tempt them into their gardens.

Bumblebees, too, furry and gentle with their low soothing hum, are seen as a benevolent garden presence that should be encouraged. Carpenter, leafcutter and masonry bees benefit from the positive image of honeybees and bumblebees but many of the other 250 pollinator species in decline are less well loved. Few people like hoverflies or moths, but Prof Watkinson's research might well show that they are as vital to our farms, parks and flowerbeds as my striped buzzing charges.

I'm currently helping to judge an architecture competition, Beyond the Hive, for which five insect houses have been constructed in London parks to encourage insects and invertebrates. Lacewings and ladybirds, earwigs and spiders as well as pollinating beasts such as bumblebees and Mother Shipton moths will be accommodated, providing a boost for surrounding wildlife and plants. The earwigs and moths might make you shudder, but it could be that we're lost without them.

I used to be one of those people who would wave his arms at picnics whenever an insect that might sting me flew past, but I've come to love bees. After just a few years of beekeeping they run across my hands and fly around me in circles, trying to work out if I'm a threat to the hive, but in the end, they leave me alone to see to their needs.

As my role is, eventually, to steal their surplus food, I suppose I could be seen as an enemy, but their industry and energy charm me and the idea of a world without bees seems to me a terrible one, pollination crisis or not. Learning to love the other species in Prof Memmott's patch of land might be difficult, but I'm sure we can manage it.


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How to breed a ‘beautiful’ baby

http://www.spermcenter.com/

2010 SPERMCENTER, LLC.


BeautifulPeople.com, self-defined "as the dating site with a strict ban on ugly people," announced on June 21 the launch of their virtual sperm and egg bank.

Greg Hodge, the managing director, explained, "BeautifulPeople.com has launched a fertility introduction service to help members and non-members alike procreate."

To access the virtual sperm bank if you are not a member you will need to go to BeautifulPeople.com, click on "Or browse the site as guest" and in the left-hand menu select "groups," search "Fertility" then you will have access to the Fertility Forum, also referred to as the virtual sperm bank.

Once inside, there are a number of members engaged in four group discussions. One of the more interesting is titled "Racial hygiene?" that delves into "Fertility Tourism" and all the criteria reviewed before selecting sperm donors in Europe.

BeautifulPeople.com likes to spark controversy, as they did when revoking the membership of 5,000 members because they gained weight, its founder Robert Hintze said, "Initially, we hesitated to widen the offering to non-beautiful people. But everyone - including ugly people - would like to bring good looking children in to the world, and we can't be selfish with our attractive gene pool."

However, more interesting is to ponder whether it will lead to a global trend where individuals will be able to use the web in a systematic way to select sperm or egg donors. A virtual, less intimate, sperm bank already exists with SpermCenter.com, a site that helps Americans cull through over 1200 sperm donor profiles for $9 (€7.30) a year.

Posted in the ‘Fertility Forum' is an open letter that reads: "Due to the fact that BeautifulPeople.com members are aesthetically blessed, their genetic donation is in high demand. This, combined in some part to a global shortage created by failed government legislation, has created a high demand for new donors."

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Israel indicts three East Jerusalem Arabs over shooting attack on settlers

Suspects allegedly fired 11 bullets at Beit Yonatan settlers' jeep, lightly wounding a government-appointed security guard.

Israel indicted three East Jerusalem Palestinians Wednesday were for allegedly carrying out a shooting attack on Jewish settlers from Beit Yonatan as they were being transported through the Arab East Jerusalem neighborhood of Silwan.

Local women stand above El Bustan (King's Garden) in the Silwan neighborhood in East Jerusalem

Local women stand above El Bustan (King's Garden) in the Silwan neighborhood in East Jerusalem on June 21, 2010.

Photo by: Reuters

The three have been charged with attempted murder, conspiring to commit a crime, and illegal possession of firearms.

Beit Yonatan is a contested Jewish property placed by Israel placed in heart of Silwan.

According to the indictment, the three suspects opened fire with handguns on a jeep that was transporting the Beit Yonatan settlers through the Arab neighborhood of Silwan with the intent of killing them.

The suspects allegedly fired 11 bullets at the jeep, lightly wounding the leg of one of the government-appointed security guards hired to protect the settlers.

The prosecution has asked that the three be remanded until the end of the judicial proceedings.

The Shin Bet Security Service and Israel Police arrested the shooting suspect along with the members of three terrorist cells in East Jerusalem likely connected to a string of attacks against Israeli civilians and security forces in the West Bank, authorities announced Monday after a gag order was lifted in the case.

Police said the suspects have confessed to taking part in the attacks, most of which took place in the Silwan neighborhood of East Jerusalem in recent months.

Six arrests were also made in connection with an incident that took place on May 2, in which attackers blocked a road in Silwan and attacked an Israeli security jeep with stones and Molotov cocktails after it was forced to stop. One of the passengers in the jeep was hurt by a stone that was hurled.

Police said they also arrested three suspects they say were involved in an April shooting attack in Jerusalem's Ras al-Amud neighborhood. The incident occurred following the rededication ceremony of the Hurva synagogue in the Old City.

Members of the cell said they shot police officers operating in the neighborhood, according to police. A police officer was wounded in the attack.

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Budget 2010: Queen's spending under scrutiny as Royal Household books opened

The Queen’s spending will be subjected to greater public scrutiny than ever before after the Chancellor announced the Royal Household would have to open its books to the National Audit Office.

The Queen. Budget 2010: Queen's spending under scrutiny as Royal Household books opened
The Queen's spending is to come under greater scrutiny following the emergency Budget.Photo: PA

Taxpayers will be given far more detail on how much of the annual Civil List payment of £7.9 million is spent on staff wages, travel and entertainment. The NAO’s involvement means MPs will be able to summon Sir Alan Reid, the Keeper of the Privy Purse, to justify to Parliament’s public accounts committee the money spent on anything from train tickets to bottles of wine.

A Buckingham Palace spokesman said: “It will be up to the National Audit Office to decide exactly what level of detail to go into. If they decide the Royal Household has to publish details of how much it has spent on every pencil and paper clip, that’s what will happen.”

The Queen has agreed to keep the Civil List payment frozen for another year, despite reports that she had asked for an increased payment, which has not gone up since 1990.

In real terms, the payment is worth only a quarter of its 1990 value, and the Royal Household is expected to spend £14.9 million next year to enable the Queen to carry out her official duties. The £7 million shortfall will be made up out of a reserve fund which the Royal Household has built up over decades.

An ICM poll commissioned by the anti-monarchist group Republic showed 56 per cent of people opposed an increase in the Civil List, with just 28 per cent in favour of a rise.

George Osborne’s move to open the Royal accounts to NAO scrutiny brings the Queen into line with government departments, which are also answerable to the public accounts committee.

Ian Davidson, a Labour MP who has served on the committee and has called for greater transparency of Royal finances, said: “The PAC has been calling for this for some considerable time and we very much welcome further access, but it remains to be seen whether we will be given access to other accounts, such as those of the duchies of Cornwall and Lancaster, to build up a complete picture.”

Mr Osborne said a new means of support for the Queen would be proposed at a later date.

About 70 per cent of the Civil List money is used to pay the salaries of the Royal Household’s 1,200 staff. The money is also used to help pay for official functions such as garden parties, receptions and state dinners.

The Queen and the Duke of Edinburgh are the only members of the Royal family who receive an annual parliamentary allowance. Allowances paid to other Royals, including the Duke of York, the Earl of Wessex and the Princess Royal, are repaid by the Queen. The Prince of Wales meets his own costs through his income from the Duchy of Cornwall.

Graham Smith, the campaign manager of Republic, said: “We believe a much greater level of transparency will be very embarrassing for the monarchy as it will reveal a lot of spending of public money that is clearly inappropriate.”

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Wartime sackings of US military commanders

General Stanley McChrystal has tendered his resignation to President Barack Obama after a magazine profile portrayed him as at odds with his commander in chief.

US commander McChrystal forced to apologise for Afghanistan comments
General Stanley McChrystal Photo: AFP/GETTY IMAGES

Sackings of wartime commanders are rare, but not unprecedented in US history. Insubordination or a simple lack of confidence have moved presidents to take the fateful step. Here is a history of previous incidents:

Abraham Lincoln and General George McClellan

Abraham Lincoln was the first to face the difficult decision of whether to get rid of his military commander.

Major General George McClellan, a politically ambitious former railroad executive, was credited with mobilizing and training the volunteer Army of the Potomac after the outbreak of the US Civil War in 1861.

Popular with the troops, he was made general in chief of the Union Armies in November 1861.

But to Mr Lincoln's frustration, Gen McClellan proved to be an exceedingly cautious commander, chronically overestimating the enemy's strength and unwilling to commit his prized forces in combat against the Confederate forces massed on Washington's doorstep.

Moreover, Gen McClellan did not support the emancipation of the slaves and was contemptuous of the president, privately referring to Lincoln as "a well meaning baboon" who was unworthy of his office.

By March 1962, Mr Lincoln had removed Gen McClellan as general-in-chief, leaving him in command only of the Army of the Potomac.

But when Gen McClellan's army finally moved on the Confederate capital in Richmond, Virginia, he was forced to retreat.

And after the Battle of Antietam, he failed to pursue the retreating Confederate forces, allowing it to survive intact after the bloodiest battle of the war.

Mr Lincoln removed Gen McClellan from command on November 5, 1862, eventually turning to Ulysses Grant to finish the war.

"If General McClellan does not want to use the army, I would like to borrow it for a time," Mr Lincoln is reported to have said.

Harry Truman and General Douglas MacArthur

President Harry Truman's firing of General Douglas MacArthur during the Korean War also was a historic showdown, one that reaffirmed civilian control over the US military after a decade of global conflict.

Gen MacArthur, already a legend for his World War II campaigns in the Pacific and the surrender of Japan, was placed in command of all UN forces after North Korea invaded the South in June 1950.

He quickly delivered on his reputation with a daring amphibious landing at Inchon in September 1950 that outflanked the North Korean forces, and drove them back across the 38th parallel.

But then China entered the war, tipping the balance once again, and Gen MacArthur soon began to bridle at what he saw as Washington's too timid approach to the new communist power.

He first criticized Mr Truman's policy toward Formosa, now Taiwan, in August 1951, referring to it in a statement to Veterans of Foreign Wars as a "threadbare argument by those who advocate appeasement and defeatism in the Pacific."

Mr Truman let the attack pass, and met with the general on Wake Island in October 1950.

But when Gen MacArthur ignored a ceasefire proposal that Truman had sent him on March 20, 1951, and then issued an ultimatum demanding China's surrender, the US president was fit to be tied.

"I was ready to kick him into the North China Sea. I was never so put out in my life," Mr Truman later wrote.

The last straw came on April 5, 1951 when a letter from Gen MacArthur criticising the Truman administration was read out in the US Congress by the House Minority leader.

Mr Truman consulted his top aides and the chairman of the Joint Chiefs of Staff, and fired Gen MacArthur on April 11, causing a political furore.

"If there is one basic element in our Constitution, it is civilian control of the military," he said.

Since MacArthur, wartime commanders have generally been kicked upstairs as confidence in them waned.

General William Westmoreland, who commanded US forces in Vietnam from 1964 to the Tet offensive in 1968, was elevated to chief of staff of the army.

General George Casey, the army's current chief of staff, was replaced by General David Petraeus in Iraq in 2006 as the country spiralled into uncontrolled sectarian violence and chaos.

But in Afghanistan, General David McKiernan was unceremoniously sacked as US and NATO commander on May 31, 2009 by US Defence Secretary Robert Gates, who said he wanted "new thinking" and picked Lieutenant General Stanley McChrystal to replace him.

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Budget 2010: George Osborne defends 'tough but fair' tax rises

George Osborne has defended his drastic Budget as "tough but fair" and suggested Britain faces a choice between cuts to welfare or departmental spending.

The Chancellor said "everyone in our society has had to make a contribution" and that he had "tried to be as fair as possible".

He also insisted the coalition had "a democratic mandate" for the rise in VAT to 20 per cent despite assurances during the election campaign that the Conservatives had no plans for such an increase.

He told BBC Radio 4's Today programme that Whitehall departments would not have to reduce expenditure by the planned 25 per cent if there were further welfare savings identified.

"If over the coming couple of months we can find further savings in the welfare budget, then we can bring that 25 per cent number down," he said.

"In the end, that is the trade-off not just between departments but also between the very large welfare bill and the departmental expenditure bill.

"That's why we are having this big public engagement through the spending review process so that as a country we can come to that decision collectively."

Prime Minister David Cameron and Liberal Democrat Deputy PM Nick Clegg will appear on television together today to show a united front amid criticism, particularly from Liberal Democrat MPs, over the extent of the changes. Treasury documents show that, by the end of this parliament, taxes will have gone up by £29 billion a year.

Mr Osborne insisted the possibility further and faster action on the deficit was aired throughout the election campaign and "both the Conservative Party and the Liberal Democrats made the argument that it needed to happen".

"We were not thinking seven or eight weeks ago we are definitely going to go ahead with VAT. We wanted to keep options open, which is why we didn't rule it out, and the reason you kept asking that question was because we weren't ruling it out," he said.

"And it was only when we saw the public finance and we got the independent assessment of the structural deficit that we decided we had to go ahead with the VAT rise."

Mr Osborne also appeared on GMTV, where he had to listen to angry and anxious messages from viewers about his Budget announcements.

"The damage to the economy, the people losing their jobs, will come if we do not sort out our problems in this country, and the welfare bills have got out of control," he said.

"The hole in the public finances was so great and the debts were so large, and people at home know, if you have got a debt problem, you have got to deal with it."

Danny Alexander, the Liberal Democrat Chief Secretary to the Treasury said increasing VAT to 20 per cent – a move his party vigorously opposed in the general election campaign – was "the unavoidable choice".

However, Alistair Darling, the shadow Chancellor, said the coalition was taking a "huge risk" by cutting public spending so quickly.

"I'm very concerned, and I'm not the only one – there are a number of commentators and others who are extremely concerned that this Government is taking a risk," he said.

"Also, they announced a whole screed of stuff yesterday and, as the days go by, I suspect some of the small print will reveal one or two horrors that aren't immediately obvious.

"With a coalition Government and a flaky set of partners like the Liberal Democrats, I just wonder whether they will be able to deliver some of this stuff."

In a 55-minute speech to a febrile House of Commons, Mr Osborne outlined a package of drastic measures he said was designed to pay for Labour’s “past irresponsibilities”.

He announced that, in October, Whitehall departments would be hit with cuts of 25 per cent or more to their budgets.

VAT will rise from 17.5 per cent to 20 per cent in January, raising almost £13 billion in extra tax a year. Up to 700,000 people face paying the higher rate of income tax after the threshold was lowered, while National Insurance will increase for higher-rate taxpayers.

Some 600,000 middle-income families will lose out on child tax credits and child benefit is to be frozen for three years. Millions of public-sector workers face an effective pay cut after having their salaries pegged for two years.

Capital gains tax will be raised from 18 per cent to 28 per cent for higher-rate taxpayers, a move aimed at raising almost £1 billion from investors. However, the announcement represents a partial climb-down by Mr Osborne, who had been ready to impose a higher rate.

Banks will be charged a £2 billion-a-year levy, a move matched by France and Germany.

The Speaker was forced to call for order in the House when the Chancellor disclosed his planned VAT rise.

According to Treasury figures, every household will be worse off as a result of tax rises and benefit changes. Those earning more than £49,700 a year will be £1,600-a-year worse off within two years. Those on average incomes will be around £400 a year worse off.

Even the lowest earners – those with incomes of less than £1,800 a year – will be on average £180 worse off as a result of higher VAT and cuts to benefits.

Mr Osborne told jeering Labour MPs: “The years of debt and spending make this unavoidable. This single tax measure will by the end of this Parliament generate over £13 billion a year of extra revenues. That is £13 billion we don’t have to find from extra spending cuts or income tax rises.”

Mr Osborne’s bolder than expected austerity measures appeared to reassure the City. After recent fears that Britain could have its top credit status downgraded, the leading ratings agency Fitch welcomed the tough measures set out by the Chancellor.

David Riley, the head of sovereign ratings at Fitch, said: “Our preliminary assessment of today’s Budget is that it sets out an ambitious deficit reduction path that, if delivered upon, will materially strengthen confidence in UK public finances and its AAA status.”

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Budget 2010: George Osborne defends 'tough but fair' tax rises

George Osborne has defended his drastic Budget as "tough but fair" and suggested Britain faces a choice between cuts to welfare or departmental spending.

The Chancellor said "everyone in our society has had to make a contribution" and that he had "tried to be as fair as possible".

He also insisted the coalition had "a democratic mandate" for the rise in VAT to 20 per cent despite assurances during the election campaign that the Conservatives had no plans for such an increase.

He told BBC Radio 4's Today programme that Whitehall departments would not have to reduce expenditure by the planned 25 per cent if there were further welfare savings identified.

"If over the coming couple of months we can find further savings in the welfare budget, then we can bring that 25 per cent number down," he said.

"In the end, that is the trade-off not just between departments but also between the very large welfare bill and the departmental expenditure bill.

"That's why we are having this big public engagement through the spending review process so that as a country we can come to that decision collectively."

Prime Minister David Cameron and Liberal Democrat Deputy PM Nick Clegg will appear on television together today to show a united front amid criticism, particularly from Liberal Democrat MPs, over the extent of the changes. Treasury documents show that, by the end of this parliament, taxes will have gone up by £29 billion a year.

Mr Osborne insisted the possibility further and faster action on the deficit was aired throughout the election campaign and "both the Conservative Party and the Liberal Democrats made the argument that it needed to happen".

"We were not thinking seven or eight weeks ago we are definitely going to go ahead with VAT. We wanted to keep options open, which is why we didn't rule it out, and the reason you kept asking that question was because we weren't ruling it out," he said.

"And it was only when we saw the public finance and we got the independent assessment of the structural deficit that we decided we had to go ahead with the VAT rise."

Mr Osborne also appeared on GMTV, where he had to listen to angry and anxious messages from viewers about his Budget announcements.

"The damage to the economy, the people losing their jobs, will come if we do not sort out our problems in this country, and the welfare bills have got out of control," he said.

"The hole in the public finances was so great and the debts were so large, and people at home know, if you have got a debt problem, you have got to deal with it."

Danny Alexander, the Liberal Democrat Chief Secretary to the Treasury said increasing VAT to 20 per cent – a move his party vigorously opposed in the general election campaign – was "the unavoidable choice".

However, Alistair Darling, the shadow Chancellor, said the coalition was taking a "huge risk" by cutting public spending so quickly.

"I'm very concerned, and I'm not the only one – there are a number of commentators and others who are extremely concerned that this Government is taking a risk," he said.

"Also, they announced a whole screed of stuff yesterday and, as the days go by, I suspect some of the small print will reveal one or two horrors that aren't immediately obvious.

"With a coalition Government and a flaky set of partners like the Liberal Democrats, I just wonder whether they will be able to deliver some of this stuff."

In a 55-minute speech to a febrile House of Commons, Mr Osborne outlined a package of drastic measures he said was designed to pay for Labour’s “past irresponsibilities”.

He announced that, in October, Whitehall departments would be hit with cuts of 25 per cent or more to their budgets.

VAT will rise from 17.5 per cent to 20 per cent in January, raising almost £13 billion in extra tax a year. Up to 700,000 people face paying the higher rate of income tax after the threshold was lowered, while National Insurance will increase for higher-rate taxpayers.

Some 600,000 middle-income families will lose out on child tax credits and child benefit is to be frozen for three years. Millions of public-sector workers face an effective pay cut after having their salaries pegged for two years.

Capital gains tax will be raised from 18 per cent to 28 per cent for higher-rate taxpayers, a move aimed at raising almost £1 billion from investors. However, the announcement represents a partial climb-down by Mr Osborne, who had been ready to impose a higher rate.

Banks will be charged a £2 billion-a-year levy, a move matched by France and Germany.

The Speaker was forced to call for order in the House when the Chancellor disclosed his planned VAT rise.

According to Treasury figures, every household will be worse off as a result of tax rises and benefit changes. Those earning more than £49,700 a year will be £1,600-a-year worse off within two years. Those on average incomes will be around £400 a year worse off.

Even the lowest earners – those with incomes of less than £1,800 a year – will be on average £180 worse off as a result of higher VAT and cuts to benefits.

Mr Osborne told jeering Labour MPs: “The years of debt and spending make this unavoidable. This single tax measure will by the end of this Parliament generate over £13 billion a year of extra revenues. That is £13 billion we don’t have to find from extra spending cuts or income tax rises.”

Mr Osborne’s bolder than expected austerity measures appeared to reassure the City. After recent fears that Britain could have its top credit status downgraded, the leading ratings agency Fitch welcomed the tough measures set out by the Chancellor.

David Riley, the head of sovereign ratings at Fitch, said: “Our preliminary assessment of today’s Budget is that it sets out an ambitious deficit reduction path that, if delivered upon, will materially strengthen confidence in UK public finances and its AAA status.”

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Twilight's Julia Jones: A Model Werewolf

Julia Jones

Julia Jones

Photo By Stefanie Keenan

Joining the cast of the third installment of “Twilight,” one of the highest-grossing movie franchises of all time, would seem to be like jumping into a hyper-speed version of double Dutch — while wearing roller skates. The action figures, the T-shirts, the ubiquitous paparazzi, the equally ubiquitous (and even more aggressive) Twihards and the rest of the hoopla surrounding the vampire trilogy‚ how could it not make a newcomer anxious?

But none of this seems to faze Julia Jones, one of the new faces in “Twilight: Eclipse,” which hits theaters June 30. “I was just focused on working on the character,” Jones says. “I kind of got lost in that. The size of the franchise is just hitting me now.”

Jones plays Leah Clearwater, a werewolf whose overprotective behavior toward fellow pack member Jacob (Taylor Lautner) has pitted her against Bella (Kristin Stewart), who broke Jacob’s heart.

Jones, a 29-year-old former model, was shocked when she landed the part because it was her biggest role and because she committed a major gaffe in her audition. “I left realizing that I had paraphrased my entire audition,” she says. “I was so focused on figuring out who the character was that the memorization was secondary. The words completely left me. I wanted to die.”

Well, it didn’t matter. And Jones also appears as Josh Brolin’s wife in “Jonah Hex,” a movie out now about a cowboy-bounty hunter that co-stars Megan Fox.

Until “Eclipse,” Jones had a modest résumé (a brief stint on “ER,” a tween movie about a modeling contest in New York, etc.). The Boston native did some modeling in high school and college with Click Models, which didn’t make it easier for her to make friends once she began to attend Columbia. During her freshman orientation week, Jones and two new girlfriends were wandering around Union Square, only to find themselves under a billboard with Jones’ face plastered on it. “From that point, that’s sort of where I got alienated from my peers. When you start modeling, you do all those teen magazines, which is what everybody was reading at the time. So that, combined with the fact that I’d come to class with, like, sparkles in my hair from shoots,” she says, laughing. “I mean, I just looked ridiculous.”

So Jones decided to take on the time-honored model-slash-actor title, training 25 hours a week with acting coach Susan Batson. “I found [Batson] through models because she takes pretty people and teaches [them] how to act,” Jones says. “But she was really hard core.” (Former Batson students include Tom Cruise, Nicole Kidman, Jamie Foxx and Juliette Binoche.) The experience motivated Jones, an English major who graduated in 2002, to wake up at 5 a.m. to do mailings to agents and run to auditions between classes.

Although she’s appearing in what may be the summer’s biggest movie, Jones is impressed with the accomplishments of others in her class. “I run into people that I went to school with now and they’re doing such amazing, cool things,” she says. Her classmates would probably say the same of her.

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