VAT rise was far from 'unavoidable' - papers

George Osborne's "unavoidable" increase in VAT, the single largest revenue raising measure in Tuesday's Budget, could have been avoided if the Chancellor had not decided to cut other taxes.

Denting the coalition Government's claim Labour's years of overspending had left it with little option but to raise VAT from 17.5% to 20%, Robert Chote, director of the Institute of Fiscal Studies, said: "You might as well say it was his desire to cut other taxes that made it so."

The Chancellor unveiled £20bn of tax rises and £12bn of reductions in the Budget, the largest of which were changes to corporation tax for business and a £1,000 increase in the income tax personal allowance. Read more

DAVID CAMERON agreed to give up his £66,000-a-year prime ministerial pension last night as he came face to face with public sector workers angry about cuts to their pay and perks, reports the Daily Mail.

The Prime Minister made a joint TV appearance with his Lib Dem deputy Nick Clegg on the BBC programme Face The Audience.

He conceded a two-year pay freeze being imposed on all state employees earning more than £21,000 was a real-terms cut. Read more

BP says it has reinstalled an oil-siphoning cap on its blown-out well in the Gulf of Mexico and has resumed collecting crude after an accident led to oil flowing unhindered into the ocean for several hours yesterday, reports the Guardian.

The political risks from the disaster were underscored by a poll showing Barack Obama's job performance rating has dropped to the lowest level of his presidency.

The Obama administration is appealing a court ruling blocking a six-month moratorium on deepwater drilling. Read more

GEORGE OSBORNE has heralded a fresh onslaught on Britain's £200bn welfare bill in an attempt to prevent his deficit reduction plan inflicting serious damage on the underlying economy, reports the Financial Times.

Amid warnings the Chancellor's Budget implied spending cuts of up to one-third on areas such as transport, energy, universities and business support, Osborne said the new welfare cuts would take some of the strain.

Ministers warn they may have to tear up some untargeted welfare promises. Read more

LEGENDARY INVESTOR George Soros has called on Germany to leave the euro unless it is willing to embrace a growth strategy, describing Berlin's austerity doctrine as a threat to democracy and political stability in Europe, reports the Telegraph.

"German policy is becoming a danger that could destroy the European Project. A collapse of the euro cannot be excluded," he told German publication Die Zeit.

His comments reflect growing alarm in influential circles on both sides of the Atlantic over the 1930s-style policies of wage cuts and debt-deflation being imposed on the Club Med bloc, Ireland, and parts of Eastern Europe by the EU authorities, at the behest of Berlin. Read more