Chancellor not to blame for economic mess

Britain faces the prospect of the longest economic downturn in a century, with figures yesterday showing growth stagnant and the economy struggling to avoid a return to recession.

The Chancellor George Osborne is under pressure from his Cabinet colleagues to come up with a convincing plan to breathe new life into the faltering recovery.

Amid dismay among ministers over yesterday's anaemic economic growth figures, Mr Osborne is preparing fresh measures to try to ease the pressure on struggling small businesses. He hinted yesterday that planned cuts in corporation tax could be brought forward in an attempt to encourage businesses to expand. The figures showed that the UK's economy is flatlining, with growth slowing to just 0.2 per cent in the second quarter of 2011. It follows growth rates of -0.5 per cent and 0.5 per cent in the previous two quarters.

The Office for National Statistics said the figures had been hit by the extra bank holiday to mark the royal wedding, the unseasonably warm weather in April and the impact of Japan's tsunami and calculated that growth would have been 0.7 per cent without those one-off factors. Critics said the susceptibility of the economy to such events underlined the weakness of the tentative recovery. Although Mr Osborne appears to have avoided the nightmare of a double-dip recession, but will face the embarrassment in his Autumn Statement of being forced to cut his growth forecasts for the economy.

With Britain facing the prospect of the most protracted downturn for a century, he will use the occasion to try to inject fresh life into the economy. But his room for extra spending or tax cuts is extremely limited because of the squeeze on the public finances.

Senior Whitehall sources last night played down the prospect of dramatic cuts in business taxes in the autumn, apart from limited extra support for company start-ups. One possibility is that reductions already in the pipeline in corporation tax could be brought forward. The Chancellor said yesterday: "Business taxes have come down this year and we have further cuts in corporation tax coming down the path."

The sources indicated Mr Osborne was focusing on easing the regulatory burden on companies. The Treasury is also examining a scheme under which private firms would be subsidised to lay fibre-optic cabling in several major cities. Vince Cable, the Business Secretary, is privately pressing for moves to encourage the high-street banks to increase lending to small firms.

The Government had prepared the ground for lacklustre figures, repeatedly warning that Britain faces a very difficult year, and both David Cameron and Mr Osborne declared themselves pleased that the economy was still expanding.

The Chancellor said: "The positive news is that the British economy is continuing to grow and is creating jobs. And it is positive news too at a time of real international instability that we are a safe haven in the storm."

However, ministers will be hoping for much healthier figures in the second half of the year as proof the recovery – currently much more sluggish than in France, Germany and the United States – is gathering pace.

The Prime Minister and Mr Osborne were forced to dismiss reports of divisions between No 10 and No 11 Downing Street over economic strategy. Mr Cameron said: "Unlike previous governments, there is one team at the heart of this Government."

But Ed Balls, the shadow Chancellor, accused Mr Osborne of "recklessly choking off" the recovery by raising VAT and ordering deep spending cuts. Mr Balls said: "He ripped up the foundations of the house as the global economic hurricane was brewing, undermining our recovery well before the recent problems in the eurozone and America and leaving us dangerously exposed if things now go wrong there. Instead of clutching at excuses like too much snow in winter and too much sun in the spring, George Osborne needs to realise he only has himself to blame for the choices he made a year ago.

Breivik sent 'manifesto' to 250 UK contacts hours before Norway killings

If the English Defence League is feeling bruised by the barrage of publicity over the interest that the Norwegian mass murderer Anders Breivik has shown in the group, its leaders were not betraying any misgivings yesterday.

Quite the reverse. The far-Right organisation appeared unrepentant over the furore as it took the opportunity to promote its anti-Islamist agenda.

In a posting on its website, the EDL published a list of newspaper articles which it claimed illustrated "the problem of Islamic extremism" that "we are living with every week".

It included reports of arrests in Birmingham on suspicion of terrorism, a man's court appearance at the Old Bailey on charges of funding terrorist training in Somalia, and arrests of Britons in Afghanistan. The anonymous author wrote: "In a week that has seen such a terrible act of terrorism in Norway, we almost decided against publishing the following short article. But that would be to do a disservice to all those who continue to suffer as a result of Islamic extremism."

He added: "Now, therefore, is as good a time as any to continue to highlight cases of Islamic extremism."

Detectives are probing Breivik's boasts that he met "tens of EDL members and leaders" in the decade leading up to Friday's massacre. He claimed in his 1,500-page "manifesto", posted online, to have visited Britain twice since 2002 to attend EDL rallies and had more than 600 EDL supporters as Facebook friends.

Police in Britain and Norway are also investigating his claims to have met a group of ultra-nationalists in London nine years ago at which they vowed to resist the spread of Muslim influence across Europe.

Scotland Yard is understood to be probing whether he met former members of the Neo-Nazi groups Combat 18 and Column 88 – both now considered defunct – at that time.

However, security sources believe that Breivik is most likely to have been a lone wolf similar to David Copeland, the London "nailbomber" who killed three people in 1999, and suspect that his assertion to have been part of a far-Right uprising is fantasy.

But the resultant publicity has left the EDL – which is known to be infiltrated by Special Branch and the security services – in an unprecendented media spotlight. With its links to football hooliganism, it had been previously most associated with street protests sometimes degenerating into violence.

Founded in 2009 by Stephen Lennon, who was this week convicted of leading a group of Luton Town supporters in a massive street brawl, the EDL repeatedly stresses it is only concerned with fighting "militant Islam".

Its leading figures, none of whom have experience in mainstream politics, operate as a loose network.

On Monday, Mr Lennon made a rare foray before the television cameras to ridicule suggestions of links with Breivik, suggesting the EDL is changing its strategy in dealing with the media.

Searchlight, the anti-fascist magazine, said the 32-year-old used the pseudonym of a 12th-century Norwegian king who led one of the Crusades to communicate with people on an English Defence League forum.

In one posting, on 9 March, the author called on rightwing activists in the UK to "keep up the good work". The message said: "Hello. To you all good English men and women, just wanted to say that you're a blessing to all in Europe, in these dark times all of Europe are looking to you in such [sic] of inspiration, courage and even hope that we might turn this evil trend with islamisation all across our continent. Well, just wanted to say keep up the good work it's good to see others that care about their country and heritage. All the best to you all. Sigurd."

Breivik boasted about his links to the UK far-right group in his manifesto. He also wrote that he was given the codename "Sigurd (the Crusader)" at a founding meeting of a group called the Knights Templar Europe in London in 2002. There is no confirmation that the author is Breivik. Sigurd is a common name in Norway.

In other messages, "Sigurd" says he attended a football ground in the UK and expressed his admiration for the EDL.

"I've seen with my own eyes what has happened to england, i was in bradford some years ago, me and a friend walked down to the football stadium of bradford, real 'nice' neighborhood, same thing in the suburbs of london. well thinking about taking a little trip over the sea and join you in a demo. would be nice with a norwegian flag alongside with union jack or the english flag, that is if a norwegian would be welcome offcourse?"

In another message, he goes on to discuss the situation in Norway.

"The biggest problem in Norway is that there is no real free press, there is a left-wing angle on all the political topics so most people are going around like idiots. And offcourse with our norwegian labour party beeing in power for most of the last 50 years dont help. but i i think there is an awakening now at least i hope so."

In his manifesto, Breivik repeatedly refers to the EDL, stating at one point: "I used to have more than 600 EDL members as Facebook friends and have spoken with tens of EDL members and leaders."

"In fact, I was one of the individuals who supplied them with processed ideological material (including rhetorical strategies) in the very beginning."

"There also appears to be a growing dispute among some figures associated with the EDL over who Breivik's "mentor" Richard may be. In his manifesto, the Norwegian said he met "Richard" at the Knights Templar meeting in 2002 and says the pair became "close."

The EDL – which has staged a series of street demonstrations, many of which have turned violent, denies any links to Breivik and has condemned the killings, stating it is a peaceful organisation that rejects all forms of extremism.

Last night the EDL said in an emailed statement that it was "not aware of any contact between Breivik and EDL leadership … of anyone using the name Sigurd and the forum".

"You must realise anyone on the EDL Forum or EDL Facebook can join and make up any name that they may choose."

Since the killings there have been unconfirmed reports that Breivik attended EDL demonstrations in the UK last year – possibly in London and Newcastle.

Friday shooting trial start monday

Calling himself a crusader against a tide of Islam in a rambling 1,500-page online manifesto, the 32-year-old mass murderer wants the opportunity to explain actions he deemed "atrocious, but necessary".

Lawyer Geir Lippestad said his client had admitted to Friday's shootings at a Labor youth camp and a bomb that killed seven people in Oslo's government district, but that he denies any criminal guilt.

"He has been politically active and found out himself that he did not succeed with usual political tools and so resorted to violence," Lippestad told TV2 news.

"I await a medical assessment of him," he said.

That Breivik deliberately surrendered to police when finally confronted on the tiny island of Utoeya after cold bloodily gunning down 86 youngsters underlines his desire to grab a public platform to deliver his radical thoughts.

In other instances of gunmen going on killing sprees the perpetrators often commit suicide when the police arrive or actively provoke officers to shoot them dead.

It was not clear how long Breivik will have to talk in court since the hearing will be about custody and he will not be required to enter a guilty or innocent plea.

Friday's shooting spree lasted for around 90 minutes before Breivik surrendered to police, who immediately arrested him. Police said on Sunday that Breivik had ammunition left over.

"Breivik is being held at Oslo's police headquarters," Al Jazeera's Harry Smith, reporting from Norway's capital, said. "On Monday, he will be transferred across town for an appearance at the city's criminal court."

"His lawyer has said on that occasion [Breivik] will explain fully what he's done, and more importantly, why he did it."

Witnesses described scenes of horror among the more than 500 people attending the youth camp. Some who tried to swim to safety were even shot in the water.

The chief surgeon at a hospital treating victims of Norway's camp massacre says the killer used special bullets designed to disintegrate inside the body and cause maximum internal damage.

And ballistics experts say so-called dum-dum bullets also are lighter in weight, can be fired with greater accuracy over varying distances and are commonly are used by air marshals and hunters of small animals.

Sveinung Sponheim, the acting police commissioner, said that all the dead had now been removed from the island and "taken to the coroner's morgue where the autopsies will be carried out".

During weekend interrogation, Breivik told police that his attacks were "cruel" but "necessary".

While he "admitted responsibility", police said, his lawyer Geir Lippestad said he was not accepting "criminal responsibility", and that his client felt he had done "nothing reprehensible".

The attacks have caused outrage in Norway amid calls for the reinstatement of the death penalty, given the maximum prison sentence the perpetrator can face is 21 years' imprisonment.

Police have not ruled out the involvement of a second gunman, and on Sunday they detained several people in a swoop on an Oslo property thought to be connected to the attacks. They were released shortly afterwards and no explosives were found.