Help To Buy: Doubts Over Success Of Scheme

By Poppy Trowbridge, Business and Economics Correspondent

The second phase of the government mortgage guarantee scheme, Help to Buy, is due to launch next week, three months earlier than expected - but experts are sceptical the initiative will help buyers.

Lack of capacity in the housing market and claims by banks which say they are not ready because they haven't received essential information from the Government - threaten to leave many would-be buyers empty handed.

Exclusive research by Sky News shows interest from potential buyers has sky rocketed since the Government surprised the market.

Property website Rightmove says clicks on its Help to Buy pages numbered 14,807 on Saturday, the day before last Sunday's surprise announcement.

When David Cameron revealed, on the eve of the Conservative party conference, that the launch date had been brought forward from January - clicks, measuring potential buyer interest, spiked to 59,571.

Now, almost a week later, they remain far above average at 23,660.

But there is concern that pent-up demand, cannot be met by existing market services.

Sky News has learned that the two taxpayer backed banks, Lloyds Banking Group and RBS, are not able to guarantee a launch date. Sky News understands both are waiting for further details from the Government.

Barclays has issued a statement saying it too is undecided.

"Whilst we cannot take a decision over participation in the new scheme before the terms are set, we are encouraged by the tone of the discussions so far," the bank said.

Estate agents are also worried that capacity to deal with a surge in interest is lacking.

Robert Ellice, of Clarke Hillyer, told Sky News: "At the moment we've got big delays in the whole process anyway, mortgages are still taking a long time to be offered, and taking a long time to be verified on values."

Does that mean hopeful homebuyers will have to wait for Westminster to work out the finer details before others can catch up?

Mortgage manager Ray Boulger said: "The first details of mortgage rates under this scheme we are expecting on Tuesday from Halifax, but they are likely to be the only lender offering these mortgages for probably some weeks.

"From a buyer's perspective the good news is there will be 95% mortgages available from the biggest lender in the country, the bad news is there will be no competition."

He added: "But it is a start, you have got to start somewhere."

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Twitter IPO: Company Hopes To Raise $1bn

Twitter has unsealed the documents for its initial public offering of stock, saying it hopes to raise up to $1bn.

It generated $317m (£200m) in revenue in 2012, driven largely by advertising.

Twitter had more than 215 million active users as of the end of June, up 44% from the previous year - compared to Facebook's nearly 1.2 billion and LinkedIn's 240 million.

But the company revealed that it lost $69.3m in the first six months of 2013, compared with a loss of $49.1m for the same period last year.

The losses come as Twitter rolls out a massive infrastructure and staffing expansion programme.

The company's total income in 2012 more than doubled from 2011, with 87% of the revenue comes from ad sales.

The San Francisco-based social network unsealed the papers with the Securities and Exchange Commission (SEC) on Thursday.

Last month Twitter announced that it had filed confidential initial public offering (IPO) papers with the SEC to start the process of going public.

The newly released document showed that private investors have ploughed $759m (£470m) into the company and it still has $375m (£230m) cash reserves remaining.

Twitter did not say which stock exchange it plans to list its shares on, however the company said it intends to use the ticker symbol "TWTR".

Facebook is listed on the Nasdaq exchange in New York.

The underwriters of the offering are Goldman Sachs, Morgan Stanley, JP Morgan, BofA Merrill Lynch, Deutsche Bank Securities and CODE Advisors.

Twitter's expansion plans have seen huge growth in staff across Europe, with many based at the regional headquarters in Dublin.

Its UK subsidiary gains all of its revenue from services rendered to the Irish intermediary.

Last year Sky News revealed that its UK company was fined by the business regulator for failing to file accounts on time.

Companies House also dissolved its sister company, TweetDeck, earlier this year for repeated failures to file accounts.

Afterwards, an Irish chartered accountant was made director of Twitter UK and San Francisco-based CEO Dick Costolo resigned his role in the British arm.

:: Twitter recently advertised for a tax manager to "implement and monitor transfer pricing strategy" to minimise the amount of tax paid in its Europe, Middle East and African businesses.

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Twitter IPO: Company Hopes To Raise $1bn

Twitter has unsealed the documents for its initial public offering of stock, saying it hopes to raise up to $1bn.

The company has also disclosed it generated $317m (£196m) in revenue in 2012, and that it has more than 215 million active users.

Twitter revealed last month that it had filed confidential IPO papers to start the process of going public.

On Thursday, the San Francisco-based social network unsealed the papers with the Securities and Exchange Commission.

Twitter did not say which stock exchange it plans to list its shares on, however the company said it intends to use the ticker symbol "TWTR".

The underwriters of the offering are Goldman Sachs, Morgan Stanley, JP Morgan, BofA Merrill Lynch, Deutsche Bank Securities and CODE Advisors.

Twitter's IPO has been long expected. The company has been ramping up its advertising products and working to boost ad revenue in preparation.

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HTC One Smartphone Wins At T3 Gadget Awards

By Stuart Duggan, at the T3 Awards

HTC was the big winner at the T3 Gadget Awards with the company's HTC One smartphone picking up three prizes.

The Android handset beat both the Apple iPhone 5 and the Samsung Galaxy S4 to win Phone of the Year - and also claimed Gadget of the Year and the T3 Design Award.

Samsung, Apple, Google and Sony were also recognised at the seventh annual T3s at Old Billingsgate in London.

Apple won two awards: Tablet of the Year and Computer of the Year for the iPad Mini and the Mac Book Air 11 inch.

Sony also got two prizes: for Digital Camera and TV of the Year.

Felix Baumgartner won Tech Moment of the Year

Google took home Innovation of the Year for Google Glass while Samsung was named Tech Brand of the Year.

Other winners included Netflix, who won Digital Media Service of the Year, beating rivals including Sky, Microsoft and the BBC.

Tech Moment of the Year was awarded to Felix Baumgartner for his daring skydive from the edge of space a year ago.

On any other year his fellow nominees would have had a very good chance: the Curiosity Rover reaching Mars, Gangnam Style hitting one billion YouTube views, goal line technology being introduced in football, the battle between the Xbox One and PS4 at E3 and the UK launch of 4G.

But it's difficult to compete with a man who fell to Earth from 128,097 feet.

The iPad Mini won the award for Tablet of the Year

"Fearless Felix" broke the sound barrier during his sky-dive in October last year, free-falling for four minutes and 19 seconds before landing smoothly in New Mexico.

T3 gave a new award last night with TED curator Chris Anderson getting their first ever Tech Legend prize.

Meanwhile, Michael Acton Smith, the creator of Moshi Monsters, won the Outstanding Contribution To Tech prize.

T3 magazine's editor-in-chief Kieran Alger said: "Chris Anderson's TED initiatives provide inspiration for a generation of enquiring tech minds while Michael Acton Smith's army of Moshi Monsters has brought fun to a mind-boggling 80 million people across the planet.

"They're both hugely deserving recipients."

Jason Bradbury from The Gadget Show was named Tech Personality of the Year.

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Ryanair Fined £6.7m For Labour Law Breach

Ryanair has been ordered to pay fines and damages totalling £6.7m by a French court for violating the country's labour laws.

The no-frills carrier faced several charges including registering workers employed in France as Irish employees, preventing workplace councils from functioning and preventing access to unions.

Ryanair said the majority of the financial penalties related to alleged non-payment of social insurance and state pension contributions in France for Ryanair crews.

The case centred around a facility operated by the company at Marignane, near the southern French cities of Marseille and Aix-en-Provence.

Ryanair, which plans to appeal, said it had believed it was operating there under Irish law.

In a statement released ahead of the judgment, the company said: "We will appeal any such negative ruling (and fine) on the basis that European employment and social security law clearly allows mobile workers on Irish registered aircraft, working for an Irish airline, to pay their taxes and social taxes in Ireland."

It claimed the laws it was said to have fallen foul of were specifically introduced in 2006 as state protection for the loss-making Air France and to limit competition to high fare Air France from lower cost airlines.

Another low budget carrier, EasyJet, was ordered to pay more than £1m in damages to unions representing crew for hiring 170 employees under British contracts at a Paris airport in 2010.

Prosecutors in the Ryanair cased argued there was no doubt the airline was operating in France, given that it had material and staff based permanently at Marseille and its employees lived in the area.

"We are dealing with a company whose only goal is to counter the law in defiance of the interests of workers," the prosecution argued.

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David Cameron: Young Should 'Earn Or Learn'

David Cameron has announced that under-25s could be banned from claiming benefits in his speech to close the Conservative conference.

The Prime Minister signalled that young people would have to "earn or learn" as he promised to "nag and push and guide" them away from a life on the dole.

The move could affect some 1.09 million so-called Neets - people "not in employment, education or training".

Mr Cameron said: "Today it is still possible to leave school, sign on, find a flat, start claiming housing benefit and opt for a life on benefits. It's time for bold action here."

He said the party would consider as it writes its 2015 election manifesto, "if that option should really exist at all".

He added: "Instead we should give young people a clear, positive choice. Go to school. Go to college. Do an apprenticeship. Get a job.

"But choose the dole? We've got to offer something better than that." 

The Prime Minister and his wife Samantha after his speech

The finer detail of how benefits would be withdrawn is expected to form part of a review of Britain's youth unemployment initiatives being carried out by cabinet secretary Sir Jeremy Heywood.

It is thought that people in care, disabled people and single parents would all be considered for exemptions from the crackdown.

The welfare announcement was the main policy hint in the Prime Minister's keynote address, in which he urged voters to hand him a majority so that the Tories could build a "land of opportunity".

It followed Chancellor George Osborne's pledge that a Conservative government would require the long-term unemployed to undertake community work if they want to continue receiving benefits.

The Prime Minister evoked Winston Churchill as he asked Britain to give the Conservatives the tools to "finish the job" of "clearing up the mess" left by Labour.

He said the economy was starting to turn the corner but warned that anyone who thought the struggle was over is "living in a fantasy land".

In a bid to adopt a more upbeat tone, his party conference speech talked of creating a better Britain and signalled he would slash taxes if he stays in power.

Activists watch as the Tory leader speaks on stage

But he also warned of further austerity measures as the Conservatives aim to pay off the deficit and then build up a surplus for the future.

In a 49-minute speech, the Tory leader sought to draw clear dividing lines with Labour, accusing Ed Miliband of adopting a "crazy" anti-business agenda.

He dismissed Mr Miliband's promises to cut the cost of living as "all sticking plaster and quick fixes" - dubbing it "Red Ed and his Blue Peter economy".

Borrowing the slogan Mr Miliband repeated 17 times in his own speech, Mr Cameron declared: "I tell you what, Britain deserves better than that lot."

He insisted profit, wealth creation and enterprise were not "dirty, elitist words" but the driving force behind the recovery.

"It's businesses that get wages in people's pockets, food on their tables, hope for their families and success for our country," he said.

He branded Labour's plan to hike corporate tax rates for large businesses as "just about the most damaging, nonsensical, twisted economic policy you could possibly come up with".

Mr Cameron declared that he is "fighting heart and soul for a majority Conservative government because that is what our country needs".

The Prime Minister having a final read-through in his hotel room

But he warned Tory ambitions should not be limited to repairing the damage caused by Labour and eliminating the deficit.

"Finishing the job is about more than clearing up the mess we were left," he said. "It means building something better in its place. In place of the casino economy, one where people who work hard can actually get on.

"In place of the welfare society, one where no individual is written off. In place of the broken education system, one that gives every child the chance to rise up and succeed.

"Our economy, our society, welfare, schools, all reformed, all rebuilt - with one aim, one mission in mind: To make this country, at long last and for the first time ever, a land of opportunity for all."

His speech followed a raft of policy announcements aimed at countering Labour's claim that it is the only party that will tackle the rising cost of living.

Tory plans include bringing forward the Help-to-Buy scheme, the prospect of a fuel duty freeze until 2015 and a tax break for some married couples.

Mr Cameron accused Labour of failing Britain's young people and disadvantaged households by giving up and consigning them to a life on benefits.

"If you expect nothing of people, that does nothing for them. Yes, you must help people, but you help people by putting up ladders that they can climb through their own efforts," he said.

"It's this party that is fighting for all those who were written off by Labour. It's this party that's for the many, not the few. Yes - the land of despair was Labour, but the land of hope is Tory."

He also sought to position the Tories as the true defenders of the NHS, hailed the "noble" calling of social work and vowed to drive regeneration in the North of England.

"Make no mistake who's looking forward in British politics," Mr Cameron said. "We'll leave the 1970s-style socialism to others. We are the party of the future."

Activists gave the speech a standing ovation as Mr Cameron, joined by wife Samantha, left the hall to Fleetwood Mac's Don't Stop (Thinking About Tomorrow), famously used by Bill Clinton as the soundtrack to his successful campaign for the US presidency in 1992.

Mr Miliband wrote on Twitter: "David Cameron's speech shows he does not know where to start in tackling the cost of living crisis facing Britain's hard-working families.

"The last thing families want is him to 'finish the job' when prices have risen faster than wages and average pay is down by almost £1,500."

Simon Walker, director general of the Institute of Directors, said: "Businesses up and down the country will welcome the Prime Minister's recognition that they are the driving force behind the economy, creating jobs and putting money in people's pockets.

"But they will be looking for him to match the sentiment with action. If tax cuts aren't dirty, let's have a few more of them. If profit isn't elitist, let's allow businesses to keep a little more of it."

John Longworth, director general of the British Chambers of Commerce, added: "David Cameron has set out a clear vision, but the harder task of making it happen still lies ahead.

"The Government cannot afford to become complacent, and must focus on creating an environment that supports enterprise, and puts economic growth at its heart."

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Cyber Crime: Banks Ordered To Bolster Defences

The Bank of England is drawing up a "concrete plan" to help protect the UK's banking system from the mounting threat of cyber attack.

The development emerged in minutes of last month's meeting of the Financial Policy Committee (FPC), which is charged with safeguarding financial stability.

The FPC's move was confirmed following two recent attacks on UK banks in which Barclays and Santander branches were allegedly targeted.

It cautioned there were a number of "potential vulnerabilities" in the banking system and said it wanted banks and other institutions - including the Bank of England - to draw up plans for protection as a priority.

The UK's banking sector is particularly at risk due to old and complex IT systems, as well as a high degree of interconnectedness and its reliance on centralised infrastructure, such as payment systems and clearing houses.

Treasury officials are already working on plans to assess, test and improve the system's resilience to cyber attacks.

But the minutes of the meeting of the FPC, which is chaired by Bank governor Mark Carney, said there now needed to be a "concrete plan" in place by the end of the first quarter of 2014, with a progress report before the end of this year.

Details of the FPC's worries come just days after the Ministry of Defence announced it was creating a new Joint Cyber Reserve Unit to help defend national security as it battles against hundreds of thousands of attacks against secure government sites each year.

The Bank also separately today published plans on how to stress test banks each year, proposing to initially limit the exercise to the eight largest players - HSBC, Barclays, RBS, Lloyds Banking Group, Standard Chartered, Santander, Nationwide Building Society and Co-operative Bank.

It has launched a consultation on the stress tests, with a deadline for feedback set for January 10 next year.

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US Shutdown Is 'Ideological Crusade' - Obama

President Barack Obama has urged Republicans in Congress to reopen the government, saying "one faction of one party" does not get to "hold the economy hostage over an ideological crusade".

Speaking from the White House Rose Garden more than 12 hours into a government shutdown, Mr Obama said the longer an impasse continues, the worse the impact will be.

America woke up to the shutdown after a deeply polarised Congress failed to agree a new budget in a dispute over Mr Obama's signature healthcare law.

Mr Obama blames the shutdown on the Republicans

The president said shutting down the government will not accomplish some Republicans' stated goal of "rolling back efforts to provide health insurance for those who don't have it".

Earlier Tuesday, Mr Obama sent federal workers a letter lamenting that they had become "punching bags" in Washington's partisan fiscal fights.

"This shutdown was completely preventable. It should not have happened," Mr Obama said in the letter.

As the shutdown entered into force, "closed" signs and barricades sprang up at the Lincoln Memorial, museums and federal workplaces across the country.

Some of America's most famous tourist attractions, such as the Statue of Liberty and Ellis Island in New York, and Alcatraz Island near San Francisco were closed to the public.

Almost all of Nasa shut down, except for Mission Control in Houston. Even the National Zoo's popular panda cam went dark, shut off for the first time since a cub was born there in late August.

The shutdown affects national parks such as Yellowstone

Up to 800,000 government employees are furloughed, and more than a million others could be asked to work without pay.

Meanwhile, workers classified as essential government employees, such as air traffic controllers or Border Patrol agents, continue to work. 

Republicans in the House said on Tuesday they would push for a series of small funding bills aimed at reopening portions of the government, including national parks.

The White House rejected the plan, saying it showed an "utter lack of seriousness" on funding the federal government.

The government's return to full operation will depend on how long it takes politicians to bridge their differences - and there was no immediate sign of compromise on Capitol Hill.

For now, Democrats and Republicans keep blaming each other.

The Republicans had insisted on delaying the healthcare reform - dubbed Obamacare - as a condition for passing a bill.

But this approach was rejected by allies of the president in a series of back-and-forth moves between the Republican-controlled House and the Democrat-dominated Senate.

House Speaker John Boehner said Mr Obama refused to negotiate

The Democrats accused the Republicans of succumbing to the Tea Party hard-line conservatives and seeking to gain political advantage at the expense of citizens.

Senate Majority Leader Harry Reid said: "The government is closed because of the irrationality of what's going on on the other side of the Capitol."

House Speaker John Boehner, a Republican, said he did not want a government shutdown, but added the healthcare law "is having a devastating impact ... Something has to be done."

Meanwhile, Obamacare itself was unaffected and enrolment opened for millions of people shopping for medical insurance.

The House of Liberty can be seen only from a distance

Online insurance marketplaces at the heart of the healthcare overhaul struggled to handle the volume of consumers on Tuesday, resulting in some glitches.

The shutdown, meanwhile, is likely to further alienate citizens already largely disillusioned by their ruling class and for the most part disappointed with the president's performance, according to the latest polls.

The political dysfunction on Capitol Hill also raised fresh concerns about whether Congress can meet a crucial mid-October deadline to raise the government's $16.7trn debt ceiling.

This would force the country to default on its obligations, dealing a potentially painful blow to the economy and sending shockwaves around global markets.

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Osborne Wants Fuel Duty Frozen Until 2015

Fuel duty will be frozen until 2015 if the money is available, George Osborne has told the Tory party conference.

The Chancellor revealed he aims to cancel the 2p-a-litre rise pencilled in by Labour for September 2014, continuing a freeze that has already lasted two-and-a-half years.

Aides claimed drivers would save £750m a year, leaving pump prices 20p-per-litre lower than under the plans inherited from Labour, if the cancellation goes ahead.

The promise is conditional on finding savings to pay for it and came as Mr Osborne declared that he wanted a future Conservative government to run a surplus.

Warning that the battle to rebuild the UK economy is not over, he effectively outlined a new fiscal rule designed to protect Britain from future crashes.

He said: "What is the alternative? To run a deficit for ever? To leave our children with our debts? To leave Britain perilously exposed to the next time the storm comes?

The Chancellor leaving the stage after his keynote address

"This crisis took us to the brink. If we don't reduce our debts, the next could push us over. Let us learn from the mistakes that got Britain into this mess.

"Let us vow: never again. This time we're going to run a surplus. This time we're going to fix the roof when the sun shines."

Mr Osborne told delegates a continued squeeze on welfare and spending even after the deficit is eliminated would also allow for tax cuts and vital investment.

In a deliberately sombre speech, he rejected accusations of complacency about the recovery, insisting there was "no feeling of a task completed or a victory won".

He said: "The sun has started to rise above the hill and the future looks brighter than it did just a few dark years ago".

But he also cautioned: "The battle to turn Britain around is not even close to being over and we are going to finish what we have started."

He accused Ed Miliband of making up Labour policy "on the back of a fag packet" and warned his energy price freeze plan was a "quick-fix con" that would stunt growth and cost jobs.

But in a move to show the Tories are also determined to help ease the cost of living, he said he was ready to take immediate action to help drivers.

"Provided we can find the savings to pay for it, I want to freeze fuel duty for the rest of this Parliament," he announced to loud applause.

George Osborne says "the sun has started to rise above the hill"

He added: "Conservatives don't just talk about being on the side of hard-working people. We show it day in day out in the policies we deliver."

Shadow chief secretary to the Treasury Rachel Reeves described the move as "panicky" and claimed it was just another unfunded "aspiration".

The British Chambers of Commerce said it would be welcomed by small businesses, although its chief John Longworth warned: "They will want to ensure that ambition becomes a reality."

The address also confirmed tough new rules to make the long-term unemployed earn their benefits by doing full-time unpaid community work will come into force next year.

From April, people still without work after two years on the coalition's Work Programme will face three options if they want to remain on the dole.

They will either have to do community work such as litter picking, visit a job centre every day or take part in compulsory training to tackle problems like illiteracy.

Those who break the rules of the new Help-to-Work scheme, for example by failing to turn up without a good reason, could lose their benefit for four weeks.

A second offence would see them lose it for three months.

The scheme, devised by Work and Pensions Secretary Iain Duncan Smith, will cost around £300m - with the money likely to be found from departmental underspends.

Critics claimed the Government scheme would treat the unemployed more harshly than criminals and was just a "rehash" of plans that had already failed.

Joanna Long, from the Boycott Workfare campaign, said: "It's bad news for people who will be forced to work at far below the minimum wage - and it's terrible news for the people whose jobs they will be replacing."

Graeme Cooke, from the Institute for Public Policy Research, added that the measures would probably affect only one in 20 people on the dole and warned it needed careful planning.

"The key issue is how such schemes are designed. If they give people real experience of work and the practical employability habits that go with it, they can help people be more attractive to prospective employers," he said.

"But if it is pitched as a punishment where people do menial tasks, it risks acting as a signal to employers that these are people not to employ."

But Matthew Sinclair, chief executive of the TaxPayers' Alliance, welcomed the move.

"There is plenty of international evidence from countries such as Australia, Canada and the US that this type of scheme is not only fairer on those footing the welfare bill, but also gets people back into work," he said.

Simon Walker, director general of the Institute of Directors, hailed the "bold ambition" of returning Britain to a surplus but also called for an explicit commitment to lower taxes.

Meanwhile, Ms Reeves claimed "nobody will believe a word" Mr Osborne says about capital spending because he had already broken his pledge to balance the books by 2015.

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US Shutdown: Deadline Passes Without Approval

US Government Shutdown Q&A

Updated: 5:35am UK, Tuesday 01 October 2013

Why is this happening now?

Normally the US federal budget is decided in March. Although it is proposed by the executive, headed by the president, it has to be put into law by the legislative branches of government – the House of Representatives and the Senate.

One element of the 2013/14 budget has upset the Republican Party more than any other.

Obamacare, as it has been called, is a healthcare plan that aims to provide greater access to affordable health insurance for poorer sections of society.

Several Republicans oppose it as it increases state spending and, they feel, interferes in what should be private matters.

In March, because the Republican majority House of Representatives and Democrat dominated Senate could not agree on a 2013/14 budget bill, a compromise was reached that kept the federal budget funded for a further six months while negotiations continued.

That six months was up on Monday at midnight. With no compromise reached and no bill approved to fund state spending, no money will be available to pay for non-essential services.

Why should the Republican Party do this?

American politics has become more partisan in recent years than at any time in recent history.

The 'Tea Party', a particularly right-wing, libertarian element of the Republican Party, has been increasingly determined to impose itself on the operation of the state.

Among its key aims are the reduction of the impact that government has on the life of an individual, and the reduction of government spending.

As well as believing federal government spending should be slashed in general, they believe Obamacare is in opposition to everything they stand for.

As a result, many Republicans who are allied to the Tea Party are so determined to stop Obamacare, they are prepared to effectively hold a gun to the head of government by refusing to back a federal funding bill that funds Obama's health care plans.

They want it thrown out or heavily watered down and this is their way of fighting for what they want.

Could this happen in the UK?

It is one of the particular characteristics of the US federal government system that the executive (i.e. the president and his cabinet), can be made up of people of a different political hue to the main chamber – the House of Representatives.

In the UK, the head of Government (i.e. the Prime Minister), only normally comes from the largest party, or grouping, in the main chamber (i.e. the House of Commons).

As a result, it would be rare for a Prime Minister in Britain to be opposed by the main chamber.

In America, the system of checks and balances that was put in place following the American Revolution means that a US president does not need the support of Congress.

This stops the President becoming too powerful, but can also mean that the head of state finds it impossible to push through legislation, as is happening at present.

What will happen next?

After the failure to reach a compromise, more than 800,000 federal government employees will be told not to come to work until a deal has been done.

Certain 'essential' government services, such as national defence, will still be provided but many of those deemed unessential will not.

With no funding approved, the federal government is also not allowed to borrow extra money.

As a result, in about two weeks it will effectively reach its credit limit and will be unable to pay interest on the debts it owes.

Many economists believe this could be disastrous for the US as world markets will lose confidence in its ability to pay its bills, with many investors potentially pulling out.

The consequences of that are hard to gauge but some fear it could trigger another world downturn.

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Singapore Fund Swoops For Royal Mail Stake

By Mark Kleinman, City Editor

A Singaporean state-backed fund is poised to become a significant shareholder in Royal Mail amid strong overseas demand for the postal operator's shares.

Sky News has learnt that the Government Investment Corporation (GIC) of Singapore has placed an order as part of the £3bn privatisation of Royal Mail, further details of which were announced last week.

GIC is one of several sovereign wealth funds which have expressed an interest in buying shares in the initial public offering, according to people close to the deal.

Their appetite for the stock effectively means Royal Mail will swap the ownership of some of its shares by one government for others.

Royal Mail is expected to be valued at between £2.6bn and £3.3bn as ministers race to privatise the company ahead of potential strike action by staff.

The company's flotation will include an eventual distribution of 10% of Royal Mail shares to 150,000 of its employees and an offer of shares to retail investors.

At an overall company valuation of £3bn, the employee shares would be worth in the region of £2,000 per person.

Royal Mail's profit more than doubled to just over £400m in the year to March as the modernisation plan of Moya Greene, chief executive, gathered pace.

GIC, like other sovereign funds, is a familiar investor in UK companies, with Royal Mail's promise of a robust dividend policy attracting strong interest.

Dealing in Royal Mail shares is likely to begin on October 16.

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Chancellor: 'Jobless Must Work For The Dole'

The long-term unemployed will have to earn their benefits by doing full-time unpaid community work from next year.

Chancellor George Osborne is to give details of tough new conditions being attached to unemployment handouts - pledging to end the "something for nothing" culture.

Claimants who go through the coalition's flagship Work Programme but still fail to find a job will be required either to do community work, report to a job centre daily, or undergo intensive treatment to tackle problems such as illiteracy or mental illness.

Those who break the rules of the Help to Work scheme, for example by failing to turn up for duty without a good reason, could lose their benefit for four weeks.

A second offence would see them lose it for three months.

The Chancellor wants the jobless to earn their benefits

Mr Osborne will announce the US-style initiative, which is due to come into force in April, in his speech to the Tory conference in Manchester today.

He will promise that the Government will not "abandon" the long-term unemployed.

"For the first time, all long-term unemployed people who are capable of work will be required to do something in return for their benefits to help them find work," he will say.

"They will do useful work to put something back into their community making meals for the elderly, clearing up litter, working for a local charity. Others will be made to attend the job centre every working day.

"And for those with underlying problems, like drug addiction and illiteracy, there will be an intensive regime of help.

"No one will be ignored or left without help. But no one will get something for nothing.

"Help to work - and in return work for the dole. Because a fair welfare system is fair to those who need it and fair to those who pay for it too."

Potentially, around 200,000 long-term Jobseeker's Allowance claimants could be eligible for the new initiative.

But ministers believe that the numbers on it will be significantly lower, as many of those working covertly will decide it is no longer worth trying to claim benefits and drop out.

The scheme, devised by Work and Pensions Secretary Iain Duncan Smith, will cost around £300m to implement - with the money likely to be found from departmental underspends.

Sky's chief political correspondent Jon Craig described the new conditions as "a tough crackdown".

He said: "Mr Osborne will say 'work for the dole' will mean having to undertake community work, for example cleaning up litter and cooking meals for old people - doing work that is beneficial for the local community.

"If they refuse to do that, Mr Osborne will say they will have to turn up at job centres every day, not just once a week at present, to continue claiming benefits."

Labour's shadow chief secretary to the Treasury, Rachel Reeves, said: "It's taken three wasted years of rising long-term unemployment and a failed Work Programme to come up with this new scheme.

"But this policy is not as ambitious as Labour's compulsory jobs guarantee, which would ensure there is a paid job for every young person out of work for over 12 months and every adult unemployed for more than two years."

During his set piece speech later, Mr Osborne is not expected to unveil specific action on living standards, despite pressure to respond to Labour leader Ed Miliband's energy price freeze pledge last week.

Instead, the Chancellor will stress the need to stick with the coalition's economic plans, warning that the UK still has not fully recovered from the credit crunch.

:: The Chancellor's speech to the Conservative Party Conference in Manchester will be broadcast live from 11.30am on Sky News.

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