Austria Slams UK Over 'Tax Haven Hypocrisy'

Austria's finance minister has slammed Britain over its push against tax havens and bank secrecy laws.

Maria Fekter said: "Great Britain has many money laundering centres and tax havens in its immediate legal remit - the Channel Islands Gibraltar, the Cayman Islands, Virgin Islands.

"These are all hot spots for tax evasion and money laundering."

Ms Fekter would fight transparency "like a lion"

She added: "The G20 never, never accepted the information exchange (for bank accounts) and they never did any step to close the money laundering in all the (Caribbean) islands ... or the US in Delaware."

Ms Fekter made the statements as she arrived in Dublin for a two-day meeting of eurozone finance ministers, where they later formally approved the terms of a Cyprus debt bailout, saying it could now go ahead once cleared by national parliaments.

Earlier, Ms Fekter said she would "fight like a lion" to defend Austria's banking privacy.

"Austria is sticking to bank secrecy. We fight tax evasion and money laundering. I don't expect any uncomfortable questions."

According to an estimate by The Economist magazine, some $3trn (£2trn) has been ploughed in oblique tax haven accounts where investors' identities can remain hidden.

A recent data leak allegedly revealed Caribbean account holders as including British nominee firms, American dentists and the families of dictators.

Austria has vowed to stick to its bank secrecy laws on EU depositors, even though it has come under increasing EU pressure.

Prime Minister David Cameron and Chancellor George Osborne have both pushed for greater transparency among EU and G20 nations.

Business Secretary Vince Cable has also voiced serious concerns over multinational businesses using cross-border structures to reduce corporation tax liabilities.

Isle of Man banks have improved transparency and data exchanging

Australia has already informed large companies that their tax accounts would be made public.

The outburst from the Austrian finance minister comes amid pressure from Germany for Luxembourg, which has become a finance hub for many multinationals, to improve bank transparency.

Luxembourg said it would improve transparency from 2015 and Austria remains the last EU nation to resist greater exchange of financial data.

Meanwhile at the Dublin meeting, Cyprus said it did not want more money from Europe to solve its financial crisis but it will ask for leeway to lessen the burden of measures imposed in exchange for agreed helped.

Cyprus said the bailout cost will jump from 17.5bn to 23bn euros but Luxembourg said it will oppose any increase in the EU & IMF's 10bn-euro contribution.

The Nicosia government said that banks and their depositors would not have to fund the extra 6bn euros needed to prevent the economy's collapse, on top of 17.5bn.

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HBOS: Bosses Get Bonuses 'For Going Bust'

Pressure is mounting on disgraced former HBOS bosses amid anger over mammoth pension pots and nearly £1m of "bonuses for going bust".

Seven directors of HBOS landed £914,000 in "change of control" payments triggered by the bank's rescue takeover by Lloyds Banking Group, following its £20.5bn taxpayer bailout in 2008.

It also emerged that Sir James Crosby and Andy Hornby - two of the three former HBOS chiefs damned last week by a parliamentary commission for "catastrophic failures of management" - were on pension schemes that accrued benefits at twice the rate of average workers.

Mr Hornby, eligible to start drawing down a £240,000-a-year HBOS pension when he turns 50 in four years' time, is now in the spotlight following Sir James's decision earlier this week to hand back 30% of his £580,000-a-year pension.

Under the change of control payments handed out at the time of the Lloyds takeover, Mr Hornby received £251,000 cash and 7,599 shares - on top of salary, pensions awards and redundancy payments.

MPs are now demanding an inquiry into the handouts.

John Mann, MP and member of the Treasury Select Committee, said the due diligence done at the time of the deal needed to be investigated, while the former bosses should also pay the money back.

He told the Guardian: "This is taxpayers' money being used to pay bonuses to bankers that brought down their own bank and cost thousands of ordinary workers their jobs - These are bonuses for going bust."

Others to receive the payments include Peter Cummings - the former head of corporate lending and the only ex-HBOS director penalised by the Financial Services Authority (FSA) after being fined £500,000 and banned for life from working in the City. He received £129,000 and 2,051 shares.

Lloyds said the decisions to award change-of-control payments and pensions were made by HBOS before its takeover.

A spokesman said: "At the time these arrangements were settled, Lloyds did not own HBOS.

"All decisions with respect to the redundancy or severance terms applicable to departing HBOS senior executives, including pensions, were made by the HBOS remuneration committee or board of HBOS prior to the acquisition by Lloyds."

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Floods: UK Insurers Avoid Covering Risky Homes

By Becky Johnson, North of England Correspondent

People whose homes have been devasted by flooding fear they will be unable to get insurance in future as talks between the Government and insurers have so far failed to reach an agreement.

At present insurers are required to provide cover at reasonable rates provided the Government continues to strengthen flood defences, but this agreement - known as the Statement of Principles - is due to expire in June this year.

In St Asaph in North Wales more than 400 homes were deluged when the River Elwy burst its banks last November. So far, the majority of people have still been unable to return to their houses.

James Alcock stands in his kitchen after flood water recedes

John Wynn Jones who is a local councillor and whose own home was flooded told Sky News: "What we are finding is that because people are so concerned about getting insurance, as well as clearing up after the floods themselves, people are actually considering not moving back into their homes.

"They don't want to get back into their properties and then find out they can't get insurance or the premiums are now so high they can't afford it.

"There's one lady who was insured and ... they've told her they won't be able to renew her policy. When she's questioned it, they've told her 'you no longer fulfil our criteria'. It hasn't been explained to her why but she says the only thing that's changed is she has now been flooded.

"Another resident has had to shop around. Her existing premium had been £200 a year and the best deal she can get now is £1,200 a year. Someone else was told they'd only get a policy with a £10,000 excess.

"People are desperate to have the cover but a lot of people are saying they don't have the money to pay so they'll end up living in uninsured properties."

A fireman helps a member of the public in Aberfoyle

Aidan Kerr, head of property at the Association of British Insurers (ABI), said: "We continue discussions with Government on the model we have developed to safeguard the availability and affordability of flood insurance for those at high risk.

"With flooding the biggest natural risk the UK faces, it is important we have consensus on managing the risk going forward, which includes sustained and targeted flood defence investment and sensible planning decisions."

A spokesperson for the Department for Environment, Food and Rural Affairs told Sky News: "We want to get an agreement on insurance that provides a lasting solution and secures affordability and availability of flood insurance for policy holders.

"Constructive negotiations are ongoing and Government is meeting with the ABI regularly."

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KPMG Auditor Charged Over Insider Trading

US officials have charged a former senior partner of accounting giant KPMG over alleged insider trading.

Authorities charged Scott London with five criminal and civil charges over claims he gave a golfing partner non-public information, which was used to make share trades.

Mr London was apparently given part of the profit as cash, a Rolex watch and VIP concert tickets to see rocker Bruce Springsteen.

On Thursday, a federal court judge in Los Angeles released Mr London on $150,000 bail (£100,000) and ordered to hand in his passport.

The charges stem from information about five firms given to a long-term friend, jeweller Bryan Shaw, who recorded some conversations and later gave them to the FBI.

The judge also ordered that the former KPMG auditor was not to make contact with Mr Shaw unless in the company of lawyers.

Mr London's lawyer, Harland Braun, said his client intended to plead guilty when he next appears in court, on May 17.

In exchange for the privileged information, Mr London apparently received a share of the share trading proceeds.

Inside information was given on corporations including footwear firm Skechers and nutritional group Herbalife.

KPMG is one of the so-called Big Four audit firms

"Had my client been asked to give information for cash, he would have said no," Mr Braun said after the hearing.

"This is that grey area, when you talk at the country club. But once you take money, you're dead."

KPMG chief executive John Veihmeyer said his firm will take legal action against Mr London in the near future.

However, he said there was no reason to believe the financial statements of the companies involved are materially misstated.

"We unequivocally condemn his actions, and deeply regret the impact that his violations of trust and the law have had on our clients and our people," Mr Veihmeyer said.

According to prosecutors, Mr Shaw made about $1m (£640,000) trading on the tips and gave Mr London roughly 10% of his profits.

One gift for Mr London was a Rolex Daytona Cosmograph watch valued in 2011 at $12,000 (£7,800), while another payment he said was $10,000 wrapped into a bundle of $100 bills.

Mr Shaw told the FBI he believed he spent between $25,000 and $45,000 in concert tickets for the two of them, including a Bruce Springsteen VIP event.

Mr London's lawyer disputed the amounts, saying his client only received about $35,000. Mr London has already turned over $7,500 in cash and the Rolex to officials.

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'Unpaid' Interns: Firms Reported To HMRC

The details of 100 companies accused of breaking the law by using unpaid interns in paid roles have been handed to HM Revenue and Customs by Employment Minister Jo Swinson.

Ms Swinson told Intern Aware, which campaigns for paid internships, that its claims that the unnamed employers broke the law will be treated as intelligence by officials at HMRC.

In a letter to the group, she said: "I would like to take this opportunity to thank Intern Aware for their help and continued support on this issue."

Employers break the law if they use unpaid interns to fill full-time positions that would be subject to national minimum wage rules.

Intern Aware has called on HMRC to investigate companies suspected of breaking the law.

The group's co-director, Ben Lyons, said he was pleased Ms Swinson had decided to pass the list of employers on to HMRC. He said: "This is only the start and a lot more needs to be done."

HMRC said it did not comment on individual investigations.

A Department of Business spokesman said: "The law on the national minimum wage is clear. If somebody on a work experience placement or internship is a worker under NMW legislation, then they are entitled to the minimum wage.

"Internships can be a valuable way of helping young people get into work and realise their ambitions. Anyone who feels they are being exploited should contact the Pay and Work Rights Helpline."

:: The Pay and Work Rights Helpline can be reached on 0800 917 2368.

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Construction Industry Output Drops 7%

The total volume of UK construction output in February was 7% lower than in the same month last year, according to official figures.

Although output showed a significant contraction to a year earlier, output was 5.5% higher than in January, according to non-seasonally adjusted data that provides a glimmer of hope that activity in the sector may be recovering.

The Office for National Statistics (ONS) said nearly all sectors recorded increases during the month with the exception of 'private commercial other new work' which showed a fall of 0.5%.

Despite making up less than 7% of the economy,weak construction output was the main drag on growth during the first half of last year, helping push Britain into recession.

Surveys have pointed to weakness in the sector.

The Markit/CIPS construction index shows the sector contracted for a third consecutive month in March.

Construction output is highly responsive to the economic cycle and has fallen by 16.5% when comparing the last quarter of 2012 with the first quarter of 2008, the ONS said.

Comparing the three months from December 2012 to February 2013 with the same three months one year earlier, the volume of construction output decreased by 8.9%.

New work was lower by 10.7%, with large falls in public other new work and private-commercial other new work, which reported decreases of 23.7% and 9.8% respectively.

Other new work excludes the housing and infrastructure sectors but includes construction such as factories, warehouses, schools and offices.

There was also a 5.6% decrease in repair and maintenance, mainly due to a 8.3% fall in the repair and maintenance of housing.

Chancellor George Osborne used his Budget speech last month to push for greater residential construction as a way of sparking growth in the construction industry.

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President Obama Unveils 2014 Budget Blueprint

By Dominic Waghorn, US correspondent

President Barack Obama has sent a $3.77trn budget to Congress hoping to overcome fundamental differences with Republican rivals.

The ongoing struggle between Republicans and Democrats over taxing and spending has pushed the US to the brink of dysfunctional shutdown a number of times.

The American leader is looking for a compromise between the two parties on the issues that have divided US politics.

Republicans are ideologically opposed to raising taxes, hoping to balance books with severe spending cuts instead. They believe it is not possible to tax and spend a way out of deficit.

Democrats believe raising taxes on the rich will not jeopardise recovery and oppose drastic cuts in public spending. They seek inspiration from the Bill Clinton years when a strong recovery took the US from deficit to surplus in one presidential term.

The White House says Mr Obama's budget is a common sense and reasonable balance between spending cuts and tax increases. 

But at its heart is an offer he has already made to Republicans and seen rejected. House Speaker John Boehner has already walked away from the proposal to raise taxes on the rich.

Among its other proposals are plans to reduce defence spending by an additional $100bn, set aside a billion to launch manufacturing innovation institutions nationwide and cutting $400bn from health care programmes for the elderly and poor.

The president has been criticised from the right and left on his proposals but insists they form the basis for a longer term solution to an issue that has bedevilled US government for much of his term in office.

To try and win over opposition Mr Obama is inviting a dozen Republican senators to the White House for dinner to discuss the budget, along with gun control and immigration.

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M&S Sees Clothing Sales Fall As Food Goes Up

Retailer Marks and Spencer has reported a drop of 3.8% in like-for-like clothing sales for the first three months of the year, as food sales rose 4%.

It was the seventh consecutive quarterly fall in underlying general merchandise sales, though the outcome was a touch ahead of expectations.

M&S, which has been the subject of takeover speculation, said sales of its non-food products, spanning clothing, footwear and homewares, at stores open over a year dropped in the 13 weeks to March 30.

As a result of the boost by food, total group sales in the period rose by 3.1%.

The 129-year-old retailer, which serves 21 million customers a week from over 700 domestic stores, had to again rely on its strong food division to support overall growth.

Chief executive Marc Bolland is under pressure to recover M&S's clothing performance after a poor 2012 culminated in a disappointing Christmas.

However, he has cautioned that a new general merchandise management team led by John Dixon, the former boss of food, will not make a major impact on sales until M&S launches its autumn/winter collections in July.

Total UK like-for-like sales rose 0.6%.

"The fourth quarter wasn't as bad as some had expected," James McGregor, director of the retail consultants, Retail Remedy, said.

"General Merchandise is clearly still struggling but these numbers will buy Marc Bolland a few more months. Judgement Day for Marc Bolland will come later this year."

"We are working hard on improving our performance in general merchandise and, despite difficult trading conditions, we made progress in our operational execution," Mr Bolland said.

"In January we said we expect the pressure on consumers' disposable incomes to continue throughout 2013. As a result we were cautious about the outlook for the year ahead and this view remains unchanged."

The M&S share price was up more than 3% in early Thursday trading.

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Millions Of Cars Recalled Over Faulty Airbags

More than three million cars - including 152,000 on British roads - are recalled because of possible problems with passenger airbags.

A Japanese transport ministry official said four carmakers submitted reports about the problems and the recall would reach a combined total of 3.39 million.

The four makes are Toyota, Nissan, Honda and Mazda, the official said.

A Toyota spokesman said his company was recalling a total of 1.73 million vehicles, manufactured between November 2000 and March 2004 in Japan and abroad, due to a defect in passenger-side airbags.

A Toyota UK spokesman told Sky News the recall would affect some 76,000 cars in the UK. Across Europe the figure is 490,000.

Its affected vehicles are all between nine and 13 years old, sold from November 2000 until March 2004, and include Corollas, Yaris, Avensis, Avensis Verso, Picnic, Camry and Lexus SC430.

The Corolla and Avensis recall involves cars manufactured in Britain using at-risk Japanese components.

He said five problems had been recorded worldwide - none in the UK - and no accidents or injuries had occurred in Toyota vehicles.

Toyota's share price on the Nikkei went up 4% after the recall was announced.

Honda is recalling 1.135 million vehicles worldwide, and a spokesman told Sky News that the recall would be made for 15,400 Civics, CR-Vs and FR-Vs in the UK.

Nissan said it would recall 480,000 vehicles globally, with 59,058 requiring modifications in the UK. No injuries had been reported.

Its affected British cars were built between 2000-2004 and the models include the X-Trail, Patrol, Almera, Almera Tino, Terrano II and the Navara.

A UK spokesman said: "Nissan is conducting a voluntary safety recall campaign to address the issue identified ... and replace the front passenger air bag inflator. Nissan plans to begin notifying customers within 30 days."

Mazda UK has confirmed to Sky News that the recall will affect some 1,900 British cars.

The recalled air bags were made by Japan's Takata Corporation and are also believed to affect some non-Japanese manufacturers, company spokesman Akiko Watanabe said.

As a result, additional recalls are expected to be made later in the day.

A source told Sky News some airbags were constructed with excess gas canister charges.

A Honda representative said the problem stems from two human errors during production by the supplier.

Spokeswoman Akemi Ando said a worker allegedly forgot to turn on the switch for a system weeding out defective products and parts were improperly stored, which exposed them to humidity.

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Unicef: Austerity Risks Children's Prospects

British children's prospects trail behind many of their European neighbours and current Government policies are making it worse, a UN organisation has warned.

Unicef's report on child well-being placed the UK 16th out of 29 developed countries, but it ranked much lower on key indicators including involvement in further education (29th), teenage pregnancy (27th) and youth unemployment (24th).

The children's rights organisation warned that a generation of British teenagers is being "sidelined" by the Government's austerity agenda and called for more state investment in young people.

Anita Tiessen, deputy executive director of Unicef UK, said: "There is no doubt that the situation for children and young people has deteriorated in the last three years, with the Government making policy choices that risk setting children back in their most crucial stages of development.

"With the UK ranking at the bottom, or near the bottom, of the league table on teenage pregnancy and young people not in education, employment or training, we know that many are facing a bleaker future.

"While children and young people will be the first to bear the brunt if we fail to safeguard their well-being, over time society as a whole will pay the price."

The UK has actually crept up the child well-being tables since Unicef's last report in 2007, which branded Britain the worst place in the developed world to be a child.

But the organisation warned that the improvement seen under the previous Labour administration risks being reversed by the Coalition cuts programme.

It cited research by the Family and Parenting Institute and Institute for Fiscal Studies predicting that 400,000 more children will be in poverty by 2015/16 due to austerity measures.

The new report draws on statistics from 2010 and shows a general improvement in children's experiences over the first decade of this century, compared with the previous scorecard, which looked at data from 2001/2.

But the brighter picture for younger children is not matched among teenagers, who remain more likely than their peers in other developed countries to drop out of education and get involved in underage drinking and teenage pregnancy.

The table was topped by the Netherlands, then Finland, Iceland, Norway and Sweden. Romania was ranked last.

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KPMG Quits Audit Role Amid FBI Investigation

Top accounting firm KPMG is under investigation by the FBI over allegations of insider trading by one of its auditors.

KPMG said it has resigned as auditor of two US corporations amid the inquiry involving leaked information from a former senior partner.

The two California-based companies - nutritional products group Herbalife and footwear maker Skechers - confirmed separately that KPMG had quit as their auditor in connection with the alleged leaks.

The two companies said the investigation did not relate to their own conduct but that of the auditor.

The FBI's Los Angeles office is understood to be heading the investigation.

KPMG said that "the partner was immediately separated from the firm" when the allegations were made.

The company also said: "This individual violated the firm's rigorous policies and protections, betrayed the trust of clients as well as colleagues, and acted with deliberate disregard for KPMG's long-standing culture of professionalism and integrity."

The company is one of the so-called Big Four accounting firms which handle much of the corporate world's auditing.

In the UK, KPMG last year audited 21 companies in the FTSE 100, bringing in £431m in audit revenues.

Its total revenue peaked in 2012 at £1.8bn.

Shares of Herbalife in the US closed on Thursday down 3.8% amid an ongoing battle between key investors, meanwhile Skechers shares were up 1.9%.

The investigation into the auditor comes as increasing scrutiny mounts on the audit firms over corporate tax minimisation schemes and their role in the run-up to the global financial meltdown.

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Pressure Mounts On Two Other HBOS Bosses

Pressure has continued to mount on two members of the 'HBOS Three', after former chief executive Sir James Crosby decided to give up his knighthood and a portion of his £580,000 pension.

Ex chairman Lord Stevenson and Andy Hornby were urged to offer sacrifices too by members of a Parliamentary commission in the wake of a damning report on the bank's collapse and £20.5bn taxpayer bailout.

Mr Hornby, who was in charge at the time of the taxpayer-bailout remains CEO of gambling firm Gala Coral, which is owned by three private equity firms.

The three former bosses who ran HBOS in the run-up to its dramatic collapse were found to be ultimately to blame for "catastrophic failures of management", according to the commission's report.

The men's "toxic" misjudgments were blamed for the bank's downfall at the height of the financial crisis.

Lord Stevenson has come under heavy fire, having infuriated the commission by claiming reckless lending at HBOS was not his fault because he was "only there part time".

The commission said it was wrong that Peter Cummings was the only former HBOS director to have been penalised by the FSA, after being fined £500,000 and banned for life from working in the City last September.

It called on the new City regulator to consider barring Sir James, Mr Hornby and Lord Stevenson from taking up any role in the financial sector.

Sir James said the report made for "very chastening reading", and wanted to give up £174,000 - a total of 30% - of his pension.

Sky News City Editor Mark Kleinman revealed on Wednesday night that Sir James had stepped down as non-executive director of catering firm Compass Group.

The former bank boss still holds his knighthood as he cannot himself renounce the title, which was given to him after leaving HBOS in 2006.

Sir James, who stepped down from his role with private equity firm Bridgepoint last Friday, said he was "deeply sorry" for what happened at HBOS and the "ensuing consequences" for the bailed-out bank's staff, shareholders and taxpayers.

For his knighthood to be withdrawn, the Honours Forfeiture Committee has to make a recommendation to the Prime Minister, who then passes it on to the Queen for a decision.

He said he was also standing down from his voluntary position as a trustee of Cancer Research UK with "great personal sadness", but is expected to remain chairman of car credit company Money Barn.

Sir James was chief executive of HBOS from 2001 to 2006 and former deputy chairman of the now-defunct City watchdog, the Financial Services Authority.

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Energy Debts: Amount Families Owe Mounts

The number of families in debt to their energy supplier is rising, with around one in five households owing money, a study suggested.

Collectively, Britons are estimated to owe £637m to energy firms, which is £159m more than last year's projections, comparison website uSwitch said.

Some 20% of bill payers surveyed by the website, equating to more than five million households nationally, are in debt to their energy supplier after falling behind with payments or due to discrepancies between estimated bills and actual amounts.

This figure is up from 14% when similar research was carried out last year.

The latest survey of more than 2,000 bill payers in February found that the typical amount owed is £8 less than it was a year ago, at £123.

But a recent string of price hikes by energy companies combined with the unseasonably chilly weather could see the size of people's energy debts shooting back up again, the study warned.

The average annual household energy bill has risen by almost £100 in the space of a year, adding to the pressure on families as wages remain stagnant.

The website said the typical bill now stands at £1,353 a year, which is around £830 higher than it was in 2004.

This sum is based on a consumer who uses a medium amount of electricity and gas on a standard dual fuel bill, paying quarterly by cash or cheque.

Just over one fifth of those in debt to their supplier said they were turning a "blind eye" to what they owe in the hope that the amount will go down naturally over time.

A similar proportion plan to pay off a big lump sum, while one in 12 people in debt said they would need to try and agree a repayment plan with their supplier.

Ann Robinson, director of consumer policy at uSwitch, said: "The soaring number of households in debt to energy suppliers is a clear indication of the pressure people are coming under just to meet the cost of their basic bills."

She said ways that people could cut down on their costs included paying by direct debit as suppliers tended to offer discounts for paying in this way.

And consumers should also make sure that someone was taking regular meter readings, as relying on estimated bills can be a "shortcut to debt".

A Green Deal scheme has recently been launched by the Government, which allows people to make energy efficiency improvements such as loft insulation or double glazing at no up front cost. Repayments are then to be added to the property's energy bill over a period of time.

Last week, utility giant SSE was handed a record £10.5 million fine by regulator Ofgem for "prolonged and extensive" mis-selling.

SSE provided "misleading and unsubstantiated statements" to potential customers about prices and savings that could be made by switching to SSE, according to Ofgem.

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Cold Weather Affects Retail Sales Figures

The coldest March in 50 years saw sales of clothing and footwear freeze but it boosted demand for food and drink, according to new figures.

The British Retail Consortium (BRC) said sales grew by 1.9% in March on a like-for-like basis, weaker than February's 2.7% surge but a performance described as "encouraging" given the weather impact.

While clothing and footwear retailers endured a "dismal" month, food sales were up as families treated themselves over Easter.

BRC director general Helen Dickinson said: "Snow and the prolonged cold were not ideal, but not a disaster. They brought mixed fortunes for different categories.

"2013 has got off to an encouraging start for the market as a whole.

"Retailers are now hoping for a boost in consumer confidence and the general mood to lift performance across all, not just some sectors, as we head into the second quarter."

Across the whole of the January to March quarter, like-for-like retail sales increased 2.2%, with 1.9% non-food growth offset by 2.5% food growth.

Continued expansion by the retail sector will add to hopes the UK economy managed to eke out growth in the first quarter, thus avoiding a feared triple-dip recession.

KPMG head of retail David McCorquodale said it may be the start of a positive trend for retailers, adding clothing and shoe stores will be "desperate for a change in weather in April".

The BRC said clothing and footwear were the worst-performing non-food categories in March and the only ones where sales declined, but did not break out specific figures.

Marks & Spencer, one of the UK's biggest clothing retailers, is likely to be a major casualty of the big chill, and is expected to report falling clothing sales for the three months to the end of March on Thursday.

However, the retailer's food sales are forecast to grow by around 3%, as consumers continue to treat themselves and opt to eat in rather than dine out.

Roasts and oven chips were popular categories, the BRC said - while beer and ready meals were also big sellers, which it put down to people stocking up for the Six Nations rugby tournament.

House textiles were the best-performing category, as sales of duvets increased and Easter boosted table cloth sales.

Furniture and flooring was the second-best category, helped by a gradually improving housing market.

Online sales were up 6.6%, but that growth was much slower than the 13.9% increase recorded in March 2012.

That was the slowest online growth since August, and the BRC said it may suggest shoppers are searching out items online but completing the purchase in-store, as well as spending less time online over Easter.

:: House sales have been lifted to a three-year volume high in March, according to the Royal Institution of Chartered Surveyors.

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UK Manufacturing Output Gets February Boost

UK manufacturing output went up 0.8% in February as it rebounded from a snowy January, according to official figures.

The Office for National Statistics (ONS) said the 0.8% boost, which was almost double that forecasts by economists, came after it said output fell 1.9% the month before.

The ONS said that overall industrial output in Britain rose 1%, which was also above forecasts.

The encouraging February figures come as concerns continue about the risk of Britain returning to recession and the so-called triple-dip.

However, the balance of trade in February reached £9.41bn as imports exceeded exports of British goods, up 15% on January's figure.

Sky News Economic Editor Ed Conway said: "The trade deficit has deteriorated over the course of the recession.

"The concern is the UK's recovery has not been allowed to fully take place, partially because there isn't an appetite in Europe for Britain's goods."

More follows...

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Disability Benefits: New System Rolled Out

By Siobhan Robbins, Sky Reporter

Major changes to disability benefits, which critics say will leave many worse off, are beginning to be rolled out today.

New claimants in parts of northern England will now receive Personal Independence Payments (PIP) in place of the old Disability Living Allowance (DLA).

The new system which includes face-to-face assessments and regular reviews will take at least two years to roll out across the rest of the country.

Steven Sumpter from Worcestershire, who suffers from ME and diabetes so finds walking painful, told Sky News he was worried about the future.

Previously, to get disability benefit he had to prove he was unable to walk 50m, but that will be changed to 20m.

He said he fears in the future he will lose half of the money he receives and the subsidised car he relies on.

"It means every single trip to the shops and the doctor will turn into maybe three hours of effort and that will leave me in bed, exhausted and in pain for days afterwards," he said.

The Government insists DLA was outdated and the changes mean those who really need support will now receive it.

Work and Pensions Secretary Iain Duncan Smith has described the previous system as "ridiculous".

Iain Duncan Smith: Old system is "ridiculous"

"We've seen a rise in the run-up to PIP. And you know why? They know PIP has a health check. They want to get in early, get ahead of it. It's a case of 'get your claim in early'," he told the Daily Mail.

He added that rigorous new health checks for claimants were "common sense".

Some charities have already expressed concerns that it will mean 600,000 people miss out on support.

Chief Executive of Scope, Richard Hawkes admitted changes were needed but claimed the Government was motivated by cost cutting.

"The Government has already announced how much the Disability Living Allowance budget is going to be reduced, they've already announced how many people are going to lose DLA and they're introducing a test which is going to provide them with the results they want to reduce those costs. It's not right, it's not fair," he told Sky News.

PIP will initially be introduce for new claimants in northwest England, Cumbria, Cheshire, northeast England and Merseyside.

As the new scheme is being rolled out, welfare reform campaigners will present a petition calling for Mr Duncan Smith to live off £53 a week to his office.

Musician and part-time shop worker Dominic Aversano, who started the petition on campaigning website Change.org, said: "When I started this petition I never imagined the level of support it would get, and the amount of encouragement people would give me.

"It has sent a powerful message to this Government, showing the level of opposition to their vicious welfare cuts."

George Osborne has defended the changes

Mr Duncan Smith was challenged to live on £53 a week after a market trader on a radio show said that was all he had to live on despite working 50 to 70 hours a week.

Asked whether he could live on £53 a week, the former army officer who now earns around £1,600-a-week after tax replied: "If I had to I would."

As well as the Personal Independence Payments, other reforms including a below inflation 1% cap on working-age benefits and tax credit rises for three years, have already come into force.

Around 660,000 social housing tenants deemed to have a spare room will lose an average of £14-a-week in what critics have dubbed a "bedroom tax".

Trials of a £500-a-week cap on household benefits are also due to begin in four London boroughs.

Chancellor George Osborne insisted on Sunday that the public was behind his changes to the benefits system.

Mr Osborne also said he felt "angry" that too much money was being "spent in the wrong way in our welfare system".

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Luxembourg 'May Ease' Bank Secrecy Laws

Luxembourg has said it is prepared to ease its banking secrecy rules and work more closely with foreign authorities amid a crackdown on tax havens.

Its finance minister, Luc Frieden told Germany's Frankfurter Allgemeine Sonntagszeitung of the possible shift in policy.

He said there was an international trend towards automatically exchanging information about depositors, adding: "We no longer strictly reject this, in contrast to before."

"Luxembourg does not rely on clients who want to save tax," he said.

Last month's 10bn euro (£8.5bn) bailout of Cyprus, whose banking system was swollen by foreign deposits attracted by low taxes and easy regulation, has put the spotlight on tax havens.

Australia has warned 2,000 top firms that their tax arrangements are to be revealed while Britain has pushed for bank secrecy changes.

Prime Minister David Cameron and Chancellor George Osborne have both urged the G20 group of countries to improve transparency.

Some firms have been criticised over 'transfer pricing', where local divisions must buy goods and services from a parent firm - often from a small office in places such as Luxembourg.

Austria and Luxembourg are the only European Union states that do not share with other EU members the identities of EU residents with cross-border bank accounts.

German finance minister Wolfgang Schaeuble said he was pleased with the comments from Luxembourg.

"I welcome every step towards automatic information exchange," he told the Saarbruecker Zeitung newspaper.

Amid growing outrage over the scale of tax evasion, Mr Schaeuble said last week Berlin would push the EU to take legal measures against tax havens.

The German government this weekend also urged several German publications to hand over details they have obtained on suspected tax cheats.

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Total UK Wealth 'Now Exceeds £7 Trillion'

Total household wealth in the UK has soared past the £7trn mark for the first time amid a growing stratification of society, according to new research.

Net wealth - the value of residential buildings and financial assets less outstanding debts - is estimated to have hit £7.05trn at the end of 2012.

But the increase has not been shared equally between the top and bottom rungs of society, with the top 10% accumulating wealth at a much greater rate.

Researchers for Lloyds TSB Private Banking said that despite the current tough state of the economy, there has been a £2.71trn increase over the past decade, equal to a gain of £86,000 per household since 2003.

Lloyds said a rise in financial assets has boosted the increase in household wealth over the last decade, contributing £1.7trn to the overall rise.

The value of household wealth has grown at a faster rate (62%) than either gross household disposable incomes (44%) or the consumer price index (29%), since 2002.

Financial assets include bank and building society deposits, government bonds, shares in listed companies, life assurance and pensions.

Meanwhile, housing wealth has increased by £1trn over the past decade as the value of property has risen by more than the increase in mortgage debt.

Lloyds economist Nitesh Patel said: "Most of this increase came during the 'boom' years prior to 2007 when the economy grew rapidly, with rising employment and incomes."

However not everyone has gained equally with the stratification of society strengthening, according to the research.

"While wealth has soared in the past decade, there is a large divide in where it has accumulated," Mr Patel said.

"The wealthiest 10% of households hold 22 times more wealth, on average, than those in the bottom half."

Lloyds used official figures as well as those from its own database to make its findings.

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US New Jobs At Lowest Level For Nine Months

US Jobs Figures Are Deeply Worrying

Updated: 4:04pm UK, Friday 05 April 2013

By Ed Conway, Economics Editor

Americans are dropping out of the jobs market, and fast. That's the depressing takeaway from today's non-farm payroll report.

The overall participation rate – a measure, essentially, of the proportion of people of working age either in a job or looking for one – has fallen to the lowest level since 1978.

It is, as far as employment experts are concerned, a deeply worrying signal: increasingly, potential workers are giving up on getting work, dropping out of the jobs market instead of attempting to find a new position.

In fact, as you can see from the chart, participation has been falling since the turn of the millennium, though it's only in the wake of the financial crisis that the drop has become more vertiginous.

Why be concerned about this? Well, a high participation rate has typically been seen as evidence of the American economy's strength – a complement to its high productivity rate and consistently-strong GDP growth rate.

A low participation rate, on the other hand, is often evident in economies which are more sclerotic and less efficient – particularly ones with over-generous welfare states which some think discourage people from working.

So, for instance, Japan and Spain both have participation rates below 60%: Germany's has only just tipped fractionally above it.

The reality is that now, for the first time since 1977, America's participation rate, at 63.3%, is lower than Britain's, which is 63.6%, or was in the three months to the end of January.

It would be nice to claim that this was because Britain was in some way becoming leaner and meaner, but the statistics suggest otherwise: Britain's participation rate has remained steady since 2005 while America's has fallen sharply as people leave the workforce.

It might be odd, having said all of the above to say that today's nasty US jobs report (the headline, by the way, was that a mere 88,000 net jobs were added in March – well below the rise in the population) also technically make it more likely that the Federal Reserve will scale back its stimulus.

But in one sense they do. The Fed has committed to more quantitative easing, buying up $85bn (£55.8bn) of debt each month until the unemployment rate drops below 6.5%.

But because unemployment measures the number of working people as a percentage of the total workforce, it can fall as a direct result of the workforce falling – and that's what happened this time, with the rate dropping from 7.7% to 7.6%.

Now, pragmatically speaking the Fed will try to "look through" this optical illusion. But it's an important reminder that when you tie your monetary policy to a very specific number, it doesn't always make it easy to predict future moves from the central bank.

Mark Carney, who is coming in as Bank of England Governor this summer and has nodded approvingly over at what the Fed has been doing, should take note.

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Axminster Rescue To Save 100 Devon Jobs

By Mark Kleinman, City Editor

One of Britain's oldest carpet-makers is to be rescued in a deal that will preserve about 100 jobs in the south-west of England.

I understand that Axminster Carpets, which traces its roots back to 1755, will be bought out of administration by a local consortium. An announcement about the deal is expected.

The consortium is being led by Stephen Boyd, a businessman who chairs Pittards, a major leather supplier, and includes backing from Centric Commercial Finance, an invoice discounting and asset-based lending group.

Axminster fell into administration last month, citing difficult trading conditions, with the loss of about three-quarters of the company's 400-strong workforce.

A supplier to Clarence House, 10 Downing Street and the Royal Albert Hall, the carpet-maker was founded by the Whitty family in the 1750s, and gave rise to what became known as the Axminster method of weaving.

After going out of business in the 1830s, it was subsequently revived a century later.

Joshua Dutfield, grandson of the founder of the current incarnation of Axminster, is expected to remain involved with the company following the rescue deal.

Axminster's collapse sparked an emotional response in Devon, with thousands of people signing a petition aimed at saving the company.

A spokeswoman for Axminster declined to comment ahead of the announcement. Duff & Phelps, which has been handling the administration, could not be reached for comment.

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Cable 'Wants Investigation Into HBOS Life Bans'

An investigation is to be launched into whether the three former HBOS directors blamed for the banking group's collapse can be banned as company directors for life, it has been reported.

The Business Secretary has asked his officials to see if there is enough evidence against Lord Stevenson, the former HBOS chairman, Sir James Crosby, the former chief executive, and Andy Hornby, his successor, to start a formal probe under the Company Directors Disqualification Act.

Vince Cable told The Sunday Times it was the first step in a process which could lead to the three - who have so far not faced formal sanction - being barred from acting as company directors.

The move comes in the wake of a damning report into the collapse of the bank by the Parliamentary Commission on Banking Standards published on Friday.

The group was given a £20.5bn bailout

It found Sir James was the "architect of the strategy that set the course for disaster" and held primary responsibility for the collapse along with former chairman Lord Stevenson and fellow chief executive Andy Hornby.

Their "toxic" misjudgments led to the bank's downfall and a £20.5bn taxpayer bailout at the height of the financial crisis and they should never be allowed to work in the financial sector again, according to the influential commission of MPs and peers.

Mr Cable told The Sunday Times: "It's quite a legalistic process. I can ask (officials) to look at whether the companies investigations branch take action.

"We do have this power which I have begun to initiate."

Sir James stepped down from his role as a member of Bridgepoint's European Advisory Board on Friday but remains chairman of the car credit company Money Barn and a senior independent director for Compass, one of the country's largest catering firms, according to company spokespeople, as well as a trustee for Cancer Research UK.

Mr Hornby's current employer, Gala Coral, has said he has their "complete backing" as chief executive.

Sir James and Lord Stevenson have so far retained their titles, though the Royal Bank of Scotland's disgraced former boss Fred Goodwin was stripped of his knighthood.

Peter Cummings is the only former HBOS director to have been penalised by the Financial Services Authority, after being fined £500,000 and banned for life from working in the City last September.

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