A further valuation of the pension schemes was carried out in 1995 which identified another large surplus.Worst hit would be National Power, the generator, which could be asked to pay back as much as pounds 200m, while Eastern Electricity has confirmed its liability would be pounds 75m. Peter Crampin QC for the Grid said if the ruling were enforced it would mean the company would carry on accumulating huge surpluses in its fund without being able to adjust company contributions. He said the Grid had previously raised its contributions to cover a deficit in the scheme and was entitled to set aside part of the surplus to cover future company liabilities.The court heard details of discussions between the Grid's board and its pension fund trustees after the pounds 62.3m surplus was identified following a valuation by the actuary Bacon and Woodrow in 1992. In April 1993 the trustees had called for the cash to be divided equally between the company and the pensioners, but were overruled by the board. A landmark ruling by the pensions ombudsman requiring National Grid to repay pounds 46m to its pension fund included an "astonishing proposition" which would prevent the company from ever reducing its contributions, the High Court was told yesterday as the company began its appeal against the judgment. But he said borrowing remained too high for this stage of the economic cycle.Comment, page 21. After the backlash over the planned windfall tax last week comes the first sign of disenchantment with the Government's pledge to sign up to the EU's Social Chapter. The deputy chairman of the investment bank Nikko Europe warned yesterday that this could threaten future inward investment in the UK. Haruko Fukuda said, in a speech to the Eurosceptic Bruges Group, that Labour's move would create uncertainty about the future business environment in Britain in the minds of Japanese investors."Japanese businessmen will therefore be watching very closely over the next few months to see whether the new Labour government takes measures either in the social security, or in the employment or in the corporate tax fields which make it less attractive for Japanese shareholders to invest in Britain rather than elsewhere," she said.Echoing the caution of the last government, she said: "The philosophy of social Europe appears to be one which finds its ideal where all European industry is equally uncompetitive."I find it difficult to believe that such a social Europe would be attractive to foreign investors."The worry was that the Social Chapter was an unknown quantity, with very little legislation actually passed under its auspices so far, Miss Fukuda said.It was a "bulging pipeline of unspecified employment legislation".In addition, the Labour Party remained an unknown quantity to Japanese investors.Miss Fukuda said: "Signing up to the Social Chapter is a reversal of the hard-won radical change in the business culture in the UK of the past 18 years which has been so clearly recognised and admired by the international business community.".

Apart from VAT, income tax and national insurance contributions are growing strongly, reflecting rising in employment.There is clear evidence that the public finances are benefiting from the strength of the economy," said Jonathan Loynes at HSBC Markets. The sale of Ministry of Defence married quarters and the Housing Corporation loan book brought one-off reductions of pounds 700m each. The switch to quarterly VAT payments on account accounted for up to pounds 1bn of the pounds 1.4bn in total VAT receipts compared with last April.A spokesman said the Chancellor was determined to see significant further progress before he could be confident that the public finances were on a sound long term footing.Even so, yesterday's figures diminished expectations that Gordon Brown will opt to raise extra taxes in his first Budget, due next month."A significant downward revision to the Treasury's PSBR forecast in the forthcoming Budget seems certain," said John O'Sullivan, an economist at NatWest Markets.Excluding the one-off asset sales, central government spending was about 1 per cent higher than a year earlier, well on target to meet the tough public spending plans set out in the last Budget and adopted by the new Government.Tax revenues were 12.5 per cent up on the year, well ahead of the Treasury forecast. City experts had expected a shortfall of more than pounds 1bn.Although caution is needed in drawing conclusions from the first month of the financial year, the trends suggest that the PSBR for 1997/98 could be much lower than the pounds 19bn forecast in last November's Budget.The Treasury said special factors helped explain April's surplus. The balance of optimists over pessimists was, at 6 per cent, the highest since August 1988.Commenting on the results, Ben Sanderson of Nottingham Trent University said: "The latest survey suggests that New Labour means new confidence."He said the figures indicated that consumers would probably spend rather than save the free share handouts from building societies this summer. Nearly a fifth said they planned big purchases during the next 12 months.On top of this return of the feelgood factor, the run of favourable economic news inherited from former Chancellor Kenneth Clarke continued yesterday.New figures showed that government revenues exceeded expenditure by pounds 36m in April.

Three-quarters of those below the rank of sergeant have to live apart from their families.. There was welcome news for the Government yesterday from figures showing that the public finances were in surplus in the last month before the election. Buoyant tax revenues mean the Treasury will be able to reduce its target for this year's public sector borrowing requirement (PSBR) in the Budget next month. In a speech to the Confederation of British Industry tonight, Gordon Brown will promise to be tough on public spending and borrowing. He will say: "In my first Budget I will be looking to the long-term needs of the British economy.

I will set tough rules for government borrowing and spending. Never the less, Hong Kong was a popular posting for the Nepali soldiers.Having observed the wealth of Hong Kong from their barracks, as many as 4,000 have returned to try and secure a small slice of it for themselves. However, pension arrangements remained unchanged.Discrimination also still applies to curbs on Gurkha soldiers living with their families. Last February, the few remaining Nepali soldiers in the British forces scored a major victory by breaking historical precedent and gaining parity in remuneration. They trade on a good reputation for honesty and hard work, but this has proved insufficient to supply adequate employment.Gurkha groups have long campaigned for equal pay with their British counterparts. The job was arduous and anti-social, as most patrols were out and about in the hours of darkness. Most have more or less landed on their feet by signing up as security guards.