from the London EVENING STANDARD web site
at 1654 Hrs GMT
Friday
09 July 2010
"News
HEADLINES:
Police find Moat's mobile phones..... US and Russian planes swap 14 spies..... BT union agrees three-year pay deal..... McDonald's to find Games volunteers..... Schoolboy jailed for life over fire..... Spending watchdog 'under pressure'..... Fury over shielding of foreign aid..... Handyman who killed daughter jailed..... Lab pupil knocked out by chloroform..... Toddler drowned at family party.....

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As the Department of Transport faces savage budget cuts, it appears that funding for Crossrail is safe. But the suggestion that the Tube will have to bear the brunt of cuts is alarming.
With projected Tube upgrades already running behind schedule, a big cut in funding would be disastrous. Overcrowding, heat and antiquated signalling systems make the Tube woefully inadequate to serve a capital of London's size. Already the upgrades have taken far too long, with the schedule held up by the collapsed Public Private Partnership. Business leaders warn that failure to invest in the Tube will have real impacts on London's economy.There is little scope for raising the shortfall from ticket prices: already, fares are rising next January ahead of inflation and are likely to continue to do so regardless of central government cuts. Nor is it easy to see how TfL could make up the difference from cuts elsewhere: it is already imposing swingeing efficiency savings, while deep cuts to the bus budget would hurt both the suburbs and the inner-London poor hardest.
London must take its share of cuts: that will inevitably mean slower and less ambitious Tube upgrades. But cuts so deep that they threaten the whole future of the project would be completely counter-productive. London will be the motor of the nation's recovery, and anything that damages its economy will end up hurting the provinces too. Transport Secretary Philip Hammond must convince the Chancellor that such cuts would be self-defeating.
Pensions crunch
Public sector pensions have been the focus of recent concern but they are part of a wider pensions crisis. Most private employers have now ended final-salary schemes, while others stagger under the weight of pension obligations. In this respect, the Government's mooted change to pension index-linking could be positive. But it is unlikely to please those who depend on final salary pensions.The issue may appear technical but it could have a significant effect over time on pensioners' income. Private schemes are legally required to be index-linked, to prevent pensioners' incomes being eroded by inflation. Existing legislation stipulates that they be linked to the Retail Price Index, usually higher than the alternative Consumer Price Index because it includes house prices.
The Government proposes to change the law to link pensions instead to the CPI. This would help company schemes by meaning they pay out less, thereby improving their health at a stroke.
It would, however, reduce the monthly increase in pensioners' incomes. The difference would be small but cumulative: over 20 years, the change could erode income by as much as 25 per cent. Few pensioners pay mortgages, and CPI may thus be a better reflection of the price rises they face. That is unlikely to make a drop in income more palatable. Moreover, if house prices fall, CPI-linked pensions could end up costing employers more.
Ministers are right to be concerned about the burden of pensions on companies — but these measures risk angering a large constituency.
- Adrian, London, 09/07/2010 16:09
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