Taxpayers will have to pick up the £2.6bn bill for the controversial aircraft carrier that will never carry jets because Gordon Brown agreed an "unbreakable" contract designed to protect shipbuilding jobs in Scotland. Under a 15-year agreement signed with BAE Systems, the Labour Government guaranteed work for the company's shipyards on the River Clyde and in Portsmouth. This included the £5.2bn contract to build two new aircraft carriers for the Royal Navy, which David Cameron revealed this week that he was unable to cancel, the Times reports.Britain's borrowing costs have dropped to the lowest in a generation, falling below those of Germany, Europe's biggest and strongest economy, reflecting in part investor confidence that the government can bring the deficit under control. George Osborne, the chancellor, vowed on Thursday that he would not retreat on his plans to rein in the deficit, the most ambitious effort to cut public spending announced by any major economy. Benchmark five-year gilt yields fell to 1.43% on Thursday, almost a quarter of a percentage point below those of Germany, which traditionally benefits from much lower interest rate costs, and the lowest level since at least the 1980s, the FT reports.The Institute for Fiscal Studies (IFS) has accused Chancellor George Osborne of undermining his own agenda of simplifying benefits and driving the work-shy into jobs with his muddled welfare reforms. Cuts to tax credits "will reduce the incentive work", council tax benefit reforms go "directly against the ideas behind the universal credit" and the removal of child benefit from top earners is "not a well-designed means test", the IFS said, reports the Telegraph.Ministers from leading nations are struggling to forge an agreement spurning competitive currency devaluations amid fears that a foreign exchange war could derail the world recovery. G20 nations could pledge to "refrain from competitive undervaluation" of currencies, according to a draft communiqué circulated in the lead-up to a summit of finance ministers and central bankers in Korea starting today, the Times reports.Saskatchewan urged the Canadian government to block BHP Billiton's $39bn (£24.8bn) bid for PotashCorp on the grounds that the Australian miner had failed to show that the deal would benefit the prairie province. "We must say no to this hostile takeover," Brad Wall, Saskatchewan's premier, told the chamber of commerce in Regina, the provincial capital. "In this deal we would lose a proud Canadian company. We would go from being price-setters to price-takers," the FT reports.AIA was poised last night to raise the maximum $20.5bn from its bumper stock market listing in Asia ? the world's second largest this year. Bankers working for the Asian insurer were expected to price AIA's shares at HK$19.68 each late last night, at the top of the indicated range. The price values AIA at $30.5bn ? the exact price at which the Prudential disastrously failed to buy the insurer this year. AIA's flotation is the largest on a single stock exchange in Asia. It follows the $22.1bn raised by Agricultural Bank of China, which pursued a dual listing in June, the Times reports. Installing smart meters that use the internet to transmit information about gas and electricity use in Britain's 26 million homes will expose the nation to the threat of cyberattacks, according to a company with close ties to MI5 and GCHQ. Terrorists or foreign governments could switch off electricity supplies to entire cities, said Richard Watson, director of the commercial client group at Detica, part of BAE Systems. The drive to install the technology in every UK home by 2020 posed a distinct new security threat, the Times reports.Banks face being taxed twice on their balance sheets in the first year of the Government's new £2.5bn levy with Britain unlikely to reach an agreement with other countries on the issue of double taxation before the measure is introduced next year. British biggest banks such as Barclays, HSBC and Royal Bank of Scotland will be hit hardest by the issue of double taxation as they are likely to end up paying the UK government levy on their global balance sheets as well as similar taxes in countries such as France, Germany and the US, the Telegraph reports.Google, the internet giant which makes profits at a rate of $1m every hour, is shielding billions of dollars from tax across the world by using complex financial structures known in the industry as "the Double Irish" and "the Dutch Sandwich". The company is pushing the bulk of its non-US business revenues, including all the revenue generated in the UK, through an Irish subsidiary, and then on to the Caribbean tax haven of Bermuda - a structure that tax experts say is entirely legal and is becoming increasingly common among multinational corporations, the Independent reports.
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