Downing Street is considering scrapping January's planned rise of 3p a litre in petrol duty to avoid imposing another crippling burden on motorists and damaging growth prospects. The Government is worried that the rise will hurt the economy, but cancelling it entirely would leave a £1.5bn hole in the public finances. The AA said that the Government must go farther than reverse the January rise, and change the inflation measure used to uprate fuel duty from the retail prices index to the lower consumer prices index. It added that the ONS data showed the poorest 20% were paying almost twice as much of their income in duties than the richest 20%, The Times reports. The Royal Bank of Scotland should be broken up and the merger of Lloyds TSB and HBOS reversed as part of a radical move to end the "comfortable oligopoly" of the country's High Street banks. That is the call from a group of high-profile Conservative MPs who publish a paper today arguing that it is time for David Cameron to take on the might of Britain's banking giants. The report from the Free Enterprise Group also recommends the development of a new system that would allow customers to switch between banks by the "click of a button" in order to drive up standards. The group is made up of 29 Tory MPs, many of them high-flyers in the 2010 intake, who want to increase competition in British markets, writes The Times.Small businesses are to be flooded with up to £4bn of taxpayer-backed loans as Chancellor George Osborne battles to stop Britain being dragged back into recession by the EU debt crisis. The Treasury is finalising plans for a programme of 'credit-easing' that will see the state provide cash directly to struggling firms. The move comes as official figures show banks have failed to meet their promise, made in the so-called Project Merlin agreement with the Government, to hand out money to cash-strapped small businesses, The Daily Mail says.Britain will lose the "safe-haven" status it has enjoyed this year as an improving US economy proves a bigger attraction for investors, UBS has warned. The Swiss bank is forecasting the American economy will expand faster than any other developed rival next year, offering appeal both for those after higher returns as well as a shelter from Europe's debt crisis. While US gross domestic product will expand by 2.3% in 2012, Britain will muster growth of just 0.7%, according to the bank. (...) UBS predicts the dollar will be the big winner in 2012, strengthening to $1.51 against the pound and $1.25 against the euro. Europe will slide back into recession in the first half of next year, according to the report, forcing the European Central Bank to cut interest rates, The Telegraph says. China's financial system is at risk from bad loans, booming private lending and sharp falls in property prices, the International Monetary Fund (IMF) has warned, as it called for sweeping reforms. In its first formal evaluation of China's financial system, the Washington-based lender blamed "heavy" government involvement in the country's banks and watchdogs for reducing market discipline and corporate governance. (...) Despite numerous vulnerabilities in the system, the IMF said stress tests of China's 17 largest banks found most of them would be resilient to "isolated shocks". But a confluence of events such as a slump in property prices - which have already started to fall nationwide - changes in the exchange rate and a sharp slowdown in economic growth could "severely" impact the sector, it warned, according to The Telegraph. George Osborne is putting 6,000 coal mining jobs at risk, despite new technology potentially transforming the fuel into a clean source ofenergy, a new paper by a right-wing thinktank says. The report, called The Atomic Clock, due to be published by the Centre for Policy Studies next month, examines the impact of Osborne's plans to increase the cost of burning fossil fuels with the introduction of a carbon floor price. It says the proposals will make the remnants of the British coal industry uneconomic and force the energy industry to import foreign coal - even if efforts to develop carbon capture and storage systems prove successful, The Guardian reports. King Abdullah II of Jordan has become the first Arab leader to call for the resignation of President Bashar al-Assad, although he doubts that his successor would be any more able to embrace reform. The Jordanian monarch made the call on a visit to London during which he warned that if the regime collapsed, the ensuing ethnic and sectarian violence could be worse than that in Iraq. Speaking to The Times, King Abdullah said that he had been in touch with the Syrian leader to offer help in dealing peacefully with the country's growing opposition but that his gesture had been rebuffed, The Times says. AB
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