Monday, January 15, 2018

Carillion collapse: Government contractor enters compulsory liquidation 'with immediate effect' ; a pre-Brexit slowdown ? - Independent

15/1/2018
Carillion collapse: Government contractor enters compulsory liquidation 'with immediate effect'
Company employs some 20,000 people in the UK and holds contracts for HS2, prisons, the NHS and the armed forces
Josie Cox Business Editor @JosieCox_London
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One of the Government's most important contractors has collapsed into liquidation, raising fears about the future of hundreds of major projects and thousands of jobs at an already challenging time for the British economy.
Following several days of tense negotiations, the board of construction giant Carillion early on Monday said that it had “no choice but to take steps to enter into compulsory liquidation with immediate effect’’.
:: Follow the latest updates and reaction to the collapse of Carillion ::
The company has been plagued by substantial debt as a result of a slowdown in many of its markets. It's been forced to issue a string of profit warnings in the last year and is battling a gaping pensions deficit.
For the first half of its financial year, it recorded a more than £1.4bn loss and the departure of its chief executive last year also contributed to an investor exodus, sending shares plummeting from around 230 pence a year ago to just over 14 pence at Friday's market close.
Carillion employs some 46,000 people worldwide, of which 20,000 are in the UK. It holds major contracts for prisons, the NHS and the armed forces. Only in July last year, it won major contracts to build the new High Speed 2 rail line, to connect London with the north of the country.
Crisis talks between Government and Carillion go to the wire
On Monday, the company said it had made “considerable efforts” to retain financial support, including from its creditors, like RBS, Santander and HSBC.
Crisis talks over the weekend focussed on “options to reduce debt and strengthen the group’s balance sheet”. But those discussions had "not been successful" leading the board to conclude "that it had no choice but to take steps to enter into compulsory liquidation with immediate effect".
Carillion reportedly has total debt and liabilities of around £1.5bn and Neil Wilson, a senior market analyst at ETX Capital, described the situation as "a terrible mess and one that will take a long time to clean up”.
“This was a case of bad management and pitching for contracts at any price, but the Government and banks could, or may be should, have done more,” he said.
Fiona Cincotta, senior market analyst at City Index, said that the developments, which put thousands of jobs at risk, are “yet another huge embarrassment for the UK Government, which appears to be moving from mishap to mishap”.
She also pointed out that the fact that Carillion has gone into liquidation rather than administration “screams volumes over the state of the financials at the firm”.
“There were no assets to sell so no administration,” she explained. An administration keeps options open for the company to avoid total insolvency, whereas liquidation leads to the complete dissolution of a company and the selling off of all its assets.
The news will deal a particularly sharp blow to the NHS, which is already battling a debilitating winter crisis.
Up until late last year the NHS was a major source of income for Carillion, generating around £200m a year in revenue.
Late last year the beleaguered company said that it had inked a deal to offload a significant part of its healthcare facilities management business to outsourcing group Serco, helping it to trim its debt pile.
But the transfer was set to run throughout 2018, meaning that Carillion was still responsible for providing a significant proportion of essential services – like cleaning, catering and maintenance of dilapidated wards – to at least 15 NHS hospitals.
Philip Green, Carillion's chairman, said the Government would now pick up the bill to maintain the public services Carillion currently runs.
Ministers had been under fierce pressure to intervene to prevent the collapse of the company, largely because of its heavy involvement in key infrastructure projects.
Labour on Monday said that it would question the group about how the situation was allowed to become so serious and the Unite union called for an inquiry into the crisis.
"The fact such a massive government contractor like Carillion has been allowed to [go into liquidation] shows the complete failure of a system that has put our public services in the grip of shady profit making contractors,” said Rehana Azam, GMB National Secretary.
"There is no place for private companies who answer to shareholders, not patients, parents and service users in our public services. What’s happening with Carillion yet again shows the perils of allowing privatisation to run rampant in our schools, our hospitals and our prisons," she added.
Tim Roache, GMB general secretary, said that Prime Minister Theresa May “must act right now to bring Carillion contracts back into public ownership”.
“That is the only way to safeguard the jobs and services this mess has put at risk.”
He accused the Government of spoon-feeding the company taxpayers’ money by awarding them contracts even after it had issued profit warnings.
“Ministers should be hanging their heads in shame today - it’s a complete shambles.”
General Secretary of the TUC, Frances O'Grady, meanwhile, took to Twitter to describe the collapse as a “textbook example of the failures of privatisation and outsourcing”.
Chairs of the Carillion pension schemes described the news as “very disappointing”.
They said that they would now work with PwC, who has been appointed to manage the liquidation, and the Pension Protection Fund to “deliver detailed information to members about how their benefits will be affected, and provide them with all the support that we can”.
“We are in the process of issuing an initial communication to all members, and we will make further information available as soon as possible, including by establishing a dedicated web page,” they said.

RAF intercepts Russian bombers near UK 'area of interest' - BBC News

15/1/2018
RAF intercepts Russian bombers near UK 'area of interest'
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RAF Typhoons from RAF Lossiemouth intercepting two Russian "Blackjack" Bombers flying over the North Sea
The RAF has previously intercepted Russian bombers flying over the North Sea, including this operation from 2015
Two Russian Blackjack bombers were intercepted by the RAF over the North Sea as they were approaching a UK "area of interest", the RAF has confirmed.
Two RAF Typhoon fighter jets were scrambled from RAF Lossiemouth in Scotland on Monday morning.
An RAF spokesman said a "variety of friendly nation fighters" initially monitored the Russian aircraft, before the RAF moved to intercept them.
The Russian aircraft did not enter sovereign UK airspace, he said.
The spokesman added: "We can confirm that Quick Reaction Alert Typhoon aircraft from RAF Lossiemouth scrambled to monitor two Blackjack bombers approaching the UK area of interest.
"The Russian aircraft were initially monitored by a variety of friendly nation fighters and subsequently intercepted by the RAF in the North Sea. At no point did the Russian aircraft enter sovereign UK airspace."
It comes at a time of heightened tension between the West and Russia, and it is not unusual for Russian bombers to probe the airspace of Nato countries.
Last May, RAF fighter jets were scrambled from Lossiemouth after two Russian planes entered UK airspace.
The RAF also sent aircraft to monitor two Russian Tupolev Tu-160 Blackjack bombers, which passed near UK airspace in February.


The RAF is on standby to intercept any unidentified military or civilian aircraft around UK airspace.

Palestinian leader calls Donald Trump's peace efforts 'slap of the century' - Telegraph

Palestinian leader calls Donald Trump's peace efforts 'slap of the century'
Mahmud Abbas tells Trump: 'we will not accept your project'
Telegraph Reporters
15 JANUARY 2018 • 1:40AM
Palestinian leader Mahmud Abbas denounced US President Donald Trump's peace efforts as the "slap of the century", at a key meeting Sunday on the White House's declaration of Jerusalem as Israel's capital.
In a wide-ranging two-hour speech, Abbas reiterated he would not accept the Trump administration as a mediator in peace talks with Israel and called for an internationally-led process.
He also accused Israel through its actions of ending the 1994 Oslo peace accords that form the basis of Palestinian ties with the Jewish state, saying the Palestinians would study all strategies for responding to it.
Beyond that, Abbas attacked the US ambassadors to Israel and the United Nations, David Friedman and Nikki Haley, calling them a "disgrace".
Both Trump appointees have been strong supporters of Israel, with Friedman having backed Jewish settlements in the occupied West Bank.
"We said 'no' to Trump, 'we will not accept your project'," the Palestinian president said.
"The deal of the century is the slap of the century and we will not accept it," he added, referring to Trump's pledge to reach the "ultimate deal" - Israeli-Palestinian peace.
The meeting in Ramallah of the Palestinian Central Council - a high-ranking arm of the Palestine Liberation Organisation - was called in the wake of Trump's December 6 recognition of Jerusalem as Israel's capital.
The move has infuriated the Palestinians, who want the annexed eastern sector of the city as the capital of their future state.
Prior to the declaration, Trump and his envoys, including senior advisor and son-in-law Jared Kushner, had spent months seeking to negotiate how to restart talks between Israel and the Palestinians that have been stalled since 2014.
But since Trump's Jerusalem announcement, the Palestinians have refused to meet with the US administration, and Abbas is expected to shun Vice President Mike Pence when he visits the region next week.
Low point in US-Palestine relations
In the buildup to the Central Council meeting on Sunday and Monday, Palestinian officials had stressed that all options were on the table for responding to Trump, including suspending the PLO's recognition of Israel.
Abbas did not mention recognition but said the Oslo accords that led to the creation of his Palestinian Authority and envisioned a final resolution to the conflict were in effect finished.
"I am saying that Oslo, there is no Oslo. Israel ended Oslo," he said, referring to persistent Israeli settlement building and other issues seen as eroding the possibility of a two-state solution to the conflict.
The 121-member council will meet Monday to discuss strategy for responding to Trump's announcement, but Abbas offered few concrete policy proposals.
Hugh Lovatt, Israel and Palestine Project Coordinator at the European Council for Foreign Relations, said while the speech was full of rhetoric, there was little noticeable policy.
"It is safe to say that president Abbas has done little to improve US-Palestinian relations which have now reached their nadir," he told AFP.
"Abbas's rambling speech was also noteworthy for what was not there - namely, any real vision for moving beyond the failed US-led Oslo paradigm.
"Those hoping for a glimpse of a new Palestinian strategy to end the occupation or a shift towards a one-state solution will have been left disappointed."
While Palestinian leaders have been outraged by Trump's moves, they also face difficult choices in how to respond as they seek to salvage remaining hopes of a two-state solution to the conflict.
Earlier this month, Palestinian leaders said they will not be "blackmailed" after Trump threatened to cut aid worth more than $300 million annually to force them to negotiate.
Trump says "we refused negotiations. May God demolish your house. When did we refuse?" asked an indignant Abbas.

China to block cryptocurrency platforms that allow centralized trading - Reuters

JANUARY 15, 2018 / 11:04 PM
China to block cryptocurrency platforms that allow centralized trading: Bloomberg
Reuters Staff
BEIJING (Reuters) - Chinese authorities plan to block domestic access to Chinese and offshore cryptocurrency platforms that allow centralized trading, Bloomberg reported Monday citing sources.
A collection of Bitcoin (virtual currency) tokens are displayed in this picture illustration taken December 8, 2017.
Chinese authorities will also target individuals and companies that provide market-making, settlement and clearing services for centralized trading, Bloomberg reported.
Last year, Chinese regulators banned initial coin offerings, shut down local cryptocurrency trading exchanges and limited bitcoin mining - but activity in the cryptocurrency and bitcoin space has continued through alternative channels in China despite the crackdown.
Reporting by Beijing Monitoring Desk; Editing by Nick Macfie

Jeff Flake expected to deliver floor speech comparing Trump's attacks on media to Stalin's - CNN

Jeff Flake expected to deliver floor speech comparing Trump's attacks on media to Stalin's
By Aileen Graef and Liz Turrell, CNN
Updated 0001 GMT (0801 HKT) January 15, 2018
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(CNN)Republican Sen. Jeff Flake of Arizona is expected to deliver a floor speech on Wednesday in which he will compare President Donald Trump's attacks on the news media to the rhetoric of late Soviet dictator Joseph Stalin.
According to an excerpt of the speech, Flake will criticize the President for calling the news media the "enemy of the people," calling it "an assault as unprecedented as it is unwarranted."
"Mr. President, it is a testament to the condition of our democracy that our own President uses words infamously spoken by Josef Stalin to describe his enemies," reads the excerpt. "It bears noting that so fraught with malice was the phrase 'enemy of the people,' that even Nikita Khrushchev forbade its use, telling the Soviet Communist Party that the phrase had been introduced by Stalin for the purpose of 'annihilating such individuals' who disagreed with the supreme leader."
Flake's prepared speech goes on to say the President's actions should be "a great source of shame" for the Senate and the members of the Republican Party.
"The free press is the despot's enemy, which makes the free press the guardian of democracy," Flake's remarks say. "When a figure in power reflexively calls any press that doesn't suit him 'fake news,' it is that person who should be the figure of suspicion, not the press."
Flake, who announced he will not be seeking re-election in 2018, has said he will use his remaining time in the Senate to speak out against the President when he believes it is warranted.
A frequent critic of Trump, Flake announced his decision to retire in a Senate speech in October that bemoaned the "coarsening" tenor of politics in the United States and criticized his own party's "complicity" with Trump's behavior.
The Arizona Republican has said he doesn't have any formal plans to run for President after his time on Capitol Hill.
"I don't rule anything out, but it's not in my plans," Flake told ABC's "This Week" last month.
CNN's Manu Raju contributed to this report.

Neuroscience - How feeling bad changes the brain - BBC Science

15/1/2018
Neuroscience
How feeling bad changes the brain
Our emotions can have an unexpected downside of how we respond to others in pain, finds Melissa Hogenboom
By Melissa Hogenboom
15 January 2018
In Margaret Atwood’s dystopian novel A Handmaid’s Tale, the many wrongs that befall Offred strike a chilling chord among most readers. When she is struck with a cattle prod we can almost feel her pain, and recoil at the terrible injustice of her imprisonment.
It is so unsettling because we know that each scenario in this fictional work was influenced by an element of history. “If I was to create an imaginary garden I wanted the toads in it to be real,” Atwood wrote of her work in the New York Times.
We are therefore easily able to put ourselves in Offred’s shoes and feel empathy towards her. It taps into our very human capacity to share the feelings others feel. In fact, when we see someone else hurt, the brain areas linked to our own pain also become active.
But it turns out that our emotional state has an effect on how much empathy we feel. Our emotions literally change the way our brain responds to others, even when they are in pain. In particular, it is when we feel bad that it can have a consequence on our social world.
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It is apparent that our mood can influence our behaviour in a myriad of ways, from the food choices we make – when we are in a bad mood we eat less healthily – to our friendships. When our friends are down and gloomy, the feeling can be contagious and can makes us feel more miserable too. Bad moods can even spread on social media, a 2017 study found.
In fact, our emotions are so powerful that when we are in a positive mood, it can dampen how much pain we feel when injured. It provides us with an analgesic-like effect. When it comes to negative emotions, the opposite occurs: our feeling towards that pain is exaggerated.
Negative emotions change how much empathy we feel towards those in pain (Credit: Alamy)
Negative emotions change how much empathy we feel towards those in pain (Credit: Alamy)
Worse, a recent study, published in December 2017, has shown that when we feel bad it affects our in-built capacity to respond to others in pain. It literally dampens our empathy. Emilie Qiao-Tasserit at the University of Geneva and her team wanted to understand how our emotions influence the way we respond to others while they are in pain. Individuals were made to feel pain with a temperature-increasing device on their leg. The team also showed participants positive or negative movie clips while in a brain scanner, in addition to making them feel pain, or when watching clips of others in pain. Did participants feel empathy towards those who they knew were made to feel pain, the team wondered.
Negative emotions can suppress our brain capacity to be sensitive to others’ pain
It turns out that those who watched a negative clip and then saw others in pain showed less brain activity in areas that are related to pain: the anterior insula and middle cingulate cortex. These are usually active when we see others in pain as well as when we experience pain ourselves. “In other words, negative emotions can suppress our brain capacity to be sensitive to others’ pain,” explains Qiao-Tasserit.
This work is revealing. It shows that emotions can literally change our “brain state”, and that by doing so our own feelings modify how we perceive someone else’s.
A Handmaid's tale has many distressing moments (Credit: Alamy)
Along similar lines, another study by Qiao-Tasserit and colleagues found that after watching a negative clip, people tended to judge a face with a neutral emotion as more negative.
These results obviously have real-world implications. If a person in power, say a boss, has been exposed to something negative in their lives – even something as simple as a negative movie – they could be less sensitive to a colleague in pain and even view them more negatively. Our bad moods literally make us less receptive to others’ feelings.
Anxious and depressed patients who suffer from an excess of negative emotions are more likely to focus on their own problems and be isolated
A lack of empathy has other implications too. Findings show that reduced empathy will result in less monetary donations for charity. Brain scans reveal that we also show less empathy to those who are not in our immediate social circle, say teammates in a sports club.
So why would negative emotions reduce empathy? It could be that a specific type of empathy, called empathic distress, is at play. This, explains Olga Klimecki, also at the University of Geneva, is “the feeling of being overwhelmed” when something bad happens to someone else, which makes you want to protect yourself instead of being overcome by negative feelings. This type of empathy even shows very different brain activation compared to typical empathy. This kind of distress might naturally also reduce compassion.
It might also be that any situation that elicits negative emotions encourages us to focus more on ourselves and any issues we face. "Anxious and depressed patients who suffer from an excess negative emotions are more likely to focus on their own problems and be isolated," says Qiao-Tasserit.
It is normal to feel empathy for the loser (Credit: Getty)
It is normal to feel empathy for the loser (Credit: Getty)
One 2016 study by Klimecki and colleagues even found that empathic distress increases aggression. Here participants were subjected to unfair scenarios and then had the chance to punish or forgive their competitors. What’s more, the participants in her study were asked to do personality tests before they came into the lab. She found that those who were more naturally compassionate reacted with less derogatory behaviour.
For Klimecki this was telling. In her extensive research on empathy she has shown that it is possible to cultivate more compassionate behaviour. She found that feelings of compassionate empathy can be trained. Our emotional responses to others are therefore clearly not set in stone.
This shows that we can all re-engage our inner empathy, even in the face of someone else’s distress. And when we think a bit more positively it will help broaden our attention towards others’ needs. “This could contribute to greater relationships, a key factor of happiness,” says Qiao-Tasserit.
So next time you are in a foul mood, consider the effect it might have on the people you communicate with day-to-day. You may also want to time your reading of chilling dystopian novels or horror movies wisely. If you read or watch them while in a bad mood, that’s the perfect time to keep your empathy at bay, and feel a little less distressed at the pain – real or fictional – of others.
Melissa Hogenboom is BBC Future’s staff writer. She is @melissasuzanneh on twitter.