Cameron's Speech Rebuked By Fiscal Watchdog

David Cameron has been rebuked by the Office for Budget Responsibility about the impact of his Government's austerity measures on economic growth.

In a high-profile speech on Thursday, the Prime Minister said the OBR was "absolutely clear that the deficit reduction plan is not responsible" for depressed growth, adding "in fact, quite the opposite".

But the head of the independent fiscal watchdog has written to Mr Cameron saying he misrepresented its position.

Chairman Robert Chote wrote to Number 10, disputing the claims.

He insisted that it believed there was a short-term effect and that "fiscal consolidation measures have reduced economic growth over the past couple of years".

The strong retort from the watchdog came in response to a passage from the Prime Minister's speech which he used to insist there was "no alternative" to the Government's strategy.

"There's not some choice between dealing with our debts and planning for growth," he said.

"As the independent Office for Budget Responsibility has made clear growth has been depressed by the financial crisis, the problems in the eurozone and a 60% rise in oil prices between August 2010 and April 2011.

"They are absolutely clear that the deficit reduction plan is not responsible. In fact, quite the opposite."

But the OBR published a letter sent to Number 10 on Friday by Mr Chote in which he took exception to the claims.

"For the avoidance of doubt, I think it is important to point out that every forecast published by the OBR since the June 2010 Budget has incorporated the widely-held assumption that tax increases and spending cuts reduce economic growth in the short term."

He added that an impact of "external inflation shocks, deteriorating export markets and financial sector and eurozone difficulties were more likely explanations" than incorrect multipliers for the reason growth was even weaker that initially forecast.

A Downing Street spokesman said: "The OBR has today again highlighted external inflation shocks, the eurozone and financial sector difficulties as the reasons why their forecasts have come in lower than expected.

"That is precisely the point the Prime Minister was underlining."

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US Boom: Jobs Jump By 236,000 In February

The number of people hired in the United States by non-farm employers jumped by 236,000 in February, exceeding expectations.

The unemployment rate also dropped to 7.7% from 7.9% in January, the lowest level since December 2008.

The Obama administration said it is evidence that the economic recovery is "gaining traction".

New jobs have averaged more than 200,000 per month since November last year.

Wages have increased and the gains were broad-based, led by the best construction hiring in six years.

New construction jobs continue to build up the US economy

But there was one negative detail in the government's February employment report.

Employers added fewer jobs in January than first estimated.

Job gains were lowered to 119,000 from an initially reported 157,000.

However, December hiring was a little better than first thought, with 219,000 jobs added instead of 196,000.

The upbeat figures saw a strengthening of the dollar, with Sterling sliding beneath the $1.49 figure.

Many economists expected hiring to fall in early 2013 largely due to the ongoing uncertainty surrounding the US budget, higher tax rates and looming federal spending cuts that took effect in March.

Yet the latest jobs report indicates job creation is speeding up.

However, early 2011 and 2012 also saw hiring jumps only to see the figures die back as the year went on.

White House economist Alan Krueger noted in a statement that the new unemployment rate was measured before $85bn (£56bn) in automatic budget cuts started taking effect.

The administration has warned that the cuts could have a negative impact on employment and economic growth.

It is urging Congress to move toward a "sustainable federal budget" by closing tax loopholes, enacting entitlement reforms and cutting spending.

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More Than 400 In Barclays Millionaires' Club

By Mark Kleinman, City Editor

More than 400 staff at Barclays earned pay deals worth more than £1m last year, a reduction on 2011 but a substantial number for a year in which the bank's reputation was dragged through the mire.

According to Barclays' annual report, which was published on Friday morning, the number of employees paid more than £1m fell from 473 in 2011, with proportionately larger falls in the number paid more than £2.5m and in excess of £5m.

The disclosures are the most detailed given yet by Barclays and are designed to demonstrate a new commitment to transparency in the way it pays its top staff.

The 356-page annual report confirmed Sky News' revelation last month that Barclays had imposed around £450m of financial penalties on staff because of the Libor-rigging scandal through a combination of clawback and bonus reductions.

Barclays said it had decided to comply ahead of schedule with new Government requirements for companies to publish a single figure for the total remuneration of executive directors.

By one measure, this showed that Antony Jenkins, the new chief executive, earned a total of £1.129m in 2012, although this excludes a long-term share award valued at £1.467m.

The bank did not identify the pay package awarded to Rich Ricci, the chief executive of its investment bank, who was one of four executives to forego their annual bonus because of the Libor scandal, although he is thought to have received less than £3.5m in total.

Five employees were paid more than £5m in 2012, although the bank declined to identify them or specify what their total remuneration had been.

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Barclays Chief Jenkins Hints At Jobs Axe

By Mark Kleinman, City Editor

The chief executive of Barclays has suggested that the growing automation of banking services could result in tens of thousands of jobs disappearing from its workforce during the next decade.

I have learned that during meetings with leading shareholders following Barclays' annual results last month, Antony Jenkins said that he envisaged a future in which the bank employed as few as 100,000 people. Barclays currently employs approximately 140,000 staff.

Mr Jenkins is understood to have discussed during the investor meetings the objective of Barclays becoming a self service-oriented company which allows its remaining staff to focus on delivering "added value" to customers and clients across its retail, investment and wealth management operations.

The suggestion by Mr Jenkins could stoke concerns that he is planning a vast redundancy programme, although a Barclays insider insisted that Mr Jenkins had not been setting a formal target for job cuts and that his comments should be regarded as "blue-sky thinking about the long-term future".

"He was talking about how the bank needs to be more efficient in general terms," a person close to Mr Jenkins said. "It's about how we do the same or more with a smaller headcount, but there is no specificity about how much smaller."

Antony Jenkins replaced Bob Diamond as chief executive last year

Even so, the reference to such a potentially dramatic reduction in the size of Barclays' workforce is inflammatory, given Mr Jenkins' effort to position it as the 'Go-To' bank for stakeholders. Mr Jenkins took over as chief executive in the wake of the Libor-rigging scandal that saw Barclays fined £291m by regulators in the UK and US.

His comments come as banks face growing pressure from investors to make themselves more efficient amid pressure from regulators to hold more capital. The major UK-based banks have consistently underperformed in terms of delivering returns to investors since the financial crisis because of their bloated cost bases, and have been under pressure to reduce bonus pools in order to deliver more capital to shareholders.

Barclays has more than 1,650 branches in Britain, employing tens of thousands of people. Achieving job reductions on the scale implied by Mr Jenkins during his recent meetings would, insiders said, principally involve Barclays' investment bank's back office as well as the closure of some branches both in the bank's home market and overseas, although a spokesman said that such actions were not on the bank's immediate agenda.

Any large-scale closure of UK branches would entail further bad news for high streets ravaged by the collapse of a string of prominent retailers.

Mr Jenkins has already set out a concrete cost reduction programme at Barclays, which will involve £1.7bn being eradicated from the bank's cost-base by 2015. 3700 jobs will be axed as part of the plan to address costs, which the Barclays chief executive referred to last month as a "strategic battleground".

Many of the proposed job cuts are taking place within Barclays' investment banking arm, with the bulk of the rest focused on its retail banking operations in troubled Eurozone countries such as Italy and Spain.

Accompanying last month's full-year results, in which Barclays reported a profit of £246m, Mr Jenkins gave a presentation about the future of the bank in which he referred to the "21st Century industrialisation" of the industry.

The "large-scale focused automation of core processes", "globalisation of processes [and] reduced real-estate footprint" and "customer and client-centric self-service via best-in-class digital and mobile" were all signalled by the Barclays chief in his presentation.

Barclays has been a pioneer in internet and mobile-based banking and payment services, including through its money-transfer app, Ping-It, which has been hugely popular as customers increasingly switch to digital channels.

One investor said Mr Jenkins' presentation underlined his determination to overhaul Barclays in a more radical way than even that attempted by Bob Diamond, his predecessor.

Barclays declined to comment on Mr Jenkins' remarks.

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PM: We'll Come Through If We Hold Firm

Cameron Firm On Tough Resolutions

Updated: 4:54pm UK, Thursday 07 March 2013

By Jon Craig, Chief Political Correspondent, in Keighley

David Cameron came to Bronte country to talk about human emotions … or rather the impact on them of these tough economic times.

"I know things are tough right now," he said at the beginning of his big speech on the economy in a smart, modern workshop at the Cinetic Landis factory, heading up hill out of Keighley towards the moors.

"Families are struggling with the bills at the end of the month. Some are just a pay cheque away from going into the red. Parents are worried about what the future holds for their children."

Spoken with Bronte-like passion.

It was as if he wanted to answer straightaway the criticism of his opponents - and some Conservative MPs - that he's a rich, posh boy who doesn't understand the hardship facing ordinary families.

But after the "I feel your pain" opening, he ended his speech with a defiant message on the economy, rejecting calls for a U-turn on spending cuts and repeating Margaret Thatcher's famous slogan: "There is no alternative."

"This month's Budget will be about sticking to the course," said the Prime Minister. "Because there is no alternative that will secure our country's future."

Aah, but there is, his critics are arguing. And those critics now include Vince Cable, according to Labour, after his New Statesman article calling for more borrowing to fund more capital spending.

But David Cameron wasn't having any of that.

After he said in his speech that he was prepared to "roll up his sleeves and fight" opponents of various Government initiatives like the HS2 rail project, I asked him in his Q&A if he would do the same with his Business Secretary.

No need, he said, somewhat unconvincingly. "He agrees with the Government's policy," he said. "The article he wrote in the New Statesman was cleared and approved by the Treasury."

Really? By Danny Alexander, perhaps, but not George Osborne, I fancy.

Vince Cable's intervention rather took the gloss off the PM's speech in the big, shiny workshop in this highly impressive machine tools factory, where they're working seven days a week to meet their export demands from China and other countries.

The Prime Minister was clearly intending, less than a fortnight before the Budget, to give a few pointers to the Chancellor's statement on March 20. There would be more help for people to get mortgages, he hinted, and possibly more help for motorists hit by rising fuel bills.

He described himself as a "low tax Conservative" and said the only way to cut taxes was to cut the deficit. Labour, he said, believed there was a "magic money tree". From branding Ed Miliband a "croupier in the casino" at PMQs to a "magic money tree". Colourful!

But the main thrust of his defiant message came at the end of his speech, when he concluded by insisting the Government would "stick to the course" because it was about "doing the right thing".

Why? Because, he said, if there were to be good jobs, good public services and money to look after people in their old age, the deficit had to be cut and there must be no more "squandering billions on welfare for people who could work".

This speech came just a few days after Mr Cameron pledged in a Sunday Telegraph article that there would be no "lurch to the Right".

And yet here he was repeating Mrs Thatcher's "There is no alternative" slogan.

But then Margaret Thatcher has always been David Cameron's heroine, in true Wuthering Heights style.

Was Maggie Catherine Earnshaw to Dave's Heathcliffe, I wonder? No, it was Gordon Brown who was likened to the brooding Heathcliffe.

Wait a minute, the PM also talked here about "tough choices", a Tony Blair phrase.

Perhaps Dave is Jane Eyre to Blair's Mr Rochester? No, Frank Field compared Gordon Brown to him too.

Many Tory MPs see the Prime Minister as a flawed hero these days, however.

No wonder he only stayed in Bronte country for about an hour and a half.

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Esure Sets Price Range Ahead Of Flotation

esure has set a price range of 240p to 310p per share ahead of its much anticipated London initial public offering.

The mid-point values the company - founded and chaired one of Britain's wealthiest entrepreneurs, Peter Wood - at £1.1bn.

The home and motor insurer said it would repay "all of esure's outstanding debt" with the £50m it hopes to raise from the sale of new shares.

Mr Wood and private equity firm Tosca Penta will also reduce their stakes in the company, which provides insurance for around two million people in the UK.

Michael Winner featured in esure's advertising campaigns

Esure will be floating between 35% and 50% of its share capital in the offering, which is due to be completed on March 22.

In a statement, Mr Wood described the company's flotation as a "milestone".

"We have worked hard for many years to make esure a business that can compete at the highest level with confidence," he said.

"We live and breathe insurance at esure and look forward to bringing that knowledge, commitment and focus to bear as a premium listed company."

The flotation follows last year's listing of fellow insurance group Direct Line - also founded by Mr Wood - and the housebuilder Crest Nicholson in February.

A number of other companies are also believed to be drawing up plans to go public.

Esure was founded in 2000 and quickly became one of the country's fastest-growing insurance providers.

It also owns the Sheila's Wheels brand and half of the GoCompare price comparison business.

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RBS Apology As Customers Hit By New IT Glitch

RBS, NatWest and Ulster Bank have apologised after many customers were unable to use their accounts online or withdraw cash for several hours.

The technical problems, which started on Wednesday evening, come less than a year after they were hit by a computer meltdown that left millions of people unable to access their money.

"We are disappointed that our customers have faced disruption to banking services for a period this evening, and apologise for that," the banks said in a message on Twitter.

The banks said their systems were back to normal around three hours after they admitted there was a problem - but not before hundreds of customers took to Twitter to voice their frustration.

Complaints piled up on Twitter as customers could not access cash

Many said they had difficulties using cash machines or logging into online banking, while others complained their cards had been declined.

Steve Ireland, who lives in London, told Sky News he discovered the problem when he tried to pay with his card at a supermarket.

"I was out shopping after a night out with my partner to celebrate a birthday," he said. "I went into a very big chain supermarket and got to the cash desk with all my shopping, only to be told the card was declined.

RBS boss Stephen Hester had to apologise for a glitch last June

"It was a really bad experience and very embarrassing. You get evil looks from the cashier when you can't pay."

Stuart Keel, from Cornwall, said he tried to use a cash machine but it was not working.

"We went to the supermarket thinking we could use our cards in there, no problem," he said.

"While we were walking around I was using my NatWest (smartphone) app and it wasn't working at all."

He said his card was then declined at the checkout.

"I thought, 'There's something not right here'," he added.

In June last year, millions of people were affected when a software update failed at the banks.

Customers were unable to view up-to-date balances, while payments such as direct debits for bills were not made and some wages were not received.

Stephen Hester, the chief executive of the banks' parent company RBS Group, which is 80% state-owned, was forced to apologise for the problems at the time and £100m was put aside to compensate customers.

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Aviva Shares Hit After Dividend Slashed

The country's second-largest insurer has seen its share price tumble after announcing a huge loss and cut to its dividend.

Aviva lost more than 14% of its value when the FTSE 100 opened for trading.

It had updated the market on its performance for 2012, confiring it was slashing payouts to shareholders by a quarter to pay for a turnaround strategy aimed at bolstering capital and profit.

Investors will get 19p per share in total from 2012 earnings, down from 26p the previous year.

The company slumped to a net loss of £3bn, mainly owing to a massive writedown following the sale of its US business.

The dividend cut is the latest step in a reorganisation launched by Aviva last July after investors irked by a persistently weak share price forced out chief executive Andrew Moss.

Under the recovery plan, the company has cut costs and raised about £2.4bn by selling less profitable businesses, including its US subsidiary.

Its underlying profits were in line with analysts' expectations and suggested Aviva's core day-to-day business in the UK is healthy.

News of the lower dividend at Aviva emerged as rival British insurer Standard Life cited a strong capital position for announcing a one-off payout of £302m to shareholders.

Investors have traditionally looked to insurers for strong dividend payments as revenues are seen as predictable, given the practice of customers renewing policies annually.

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Daw Mill Mine Closes Leaving 650 Jobs At Risk

The owner of Daw Mill Colliery confirms it will close, ending 47 years of coal production at the Warwickshire mine.

UK Coal Mine Holdings said the majority of its 650-strong workforce face redundancy.

The move comes after what the company's chief executive described as a "ferocious" underground fire at the colliery last month.

The fire - believed to be the largest in a UK coal mine in more than 30 years - is still burning at a depth of 740 metres with no signs of stopping, the company said.

"This has been a terrible week, not just for the company and its employees but also for the energy security of the country," Kevin McCullough said in a statement.

"Having successfully completed the restructuring, and being only weeks away from returning to healthy production, this ferocious fire has dealt a blow to everything we tried to achieve over the last 12 months - in just ten days."

He said the company is exploring the possibility of transferring some staff to other mines, but added: "this news is likely to see the majority of the Daw Mill workforce being made redundant."

A small team will remain on site to secure the mine over the coming months, the company said.

It added that it is in discussions with the Department of Energy and Climate Change over managing the closure of Daw Mill and seeking a way forward for its remaining collieries.

Its deep mines at Kellingley in North Yorkshire and Thoresby in Nottingham - along with its surface mines - will continue to produce coal for use in the UK's power stations.

News of the closure comes after Hargreaves Services said Maltby Colliery - which has been producing coal for more than 100 years in Rotherham - was no longer viable on health and safety grounds.

UK Coal Mine Holdings supplies about 5% of the UK's energy needs making it the country's largest coal producer.

Daw Mill has been at risk of closure since March last year when it said restructuring was needed to safeguard its future.

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Payday Loans: Firms Face Tougher Ad Rules

Payday loans firms are facing tighter advertising rules as the Government tries to ensure that companies do not take advantage of people drowning in debt.

The plans include limiting the number of adverts firms are allowed to put out per hour, the times they can advertise and forcing them to make sure that interest rates are clearly displayed.

The Government will work with the Advertising Standards Authority and the industry to make sure advertising does not tempt consumers into taking out payday loans that they cannot afford.

The clampdown emerged as the Office of Fair Trading (OFT) prepares to publish the results of a wide-ranging probe into the payday lending industry later.

The OFT has carried out spot checks of 50 major lenders and obtained information from all 240 lenders in the market.

The regulator said in its interim report last autumn that formal investigations have been launched into several firms over their debt collection methods.

Charities have reported rocketing numbers of complaints about payday lenders from borrowers.

The Money Advice Trust (MAT) recently said that complaints about payday loans have doubled year-on-year to reach a record of 20,000 across 2012.

The charity warned that "something is drastically wrong" with the way that expensive loans are being dished out to people who cannot afford them, with lenders often rolling over loans.

New regulator the Financial Conduct Authority (FCA), which will oversee the consumer credit market from next year, will prioritise tighter rules on payday lending that could come into effect from April 2014.

The FCA's rules will be binding and if they are broken the regulator will have tough enforcement powers including imposing unlimited fines and the ability to claw consumers' money back.

The Government is also planning to do more to encourage greater communication within the industry to stop consumers taking out multiple loans from different lenders.

Sajid Javid, Economic Secretary to the Treasury, said: "The Government is introducing a fundamentally new approach to regulating consumer credit, which will ensure that irresponsible firms and bad practice will have no place in the consumer credit marketplace.

"Consumers can have greater confidence that the new FCA will intervene early and decisively in their interests - thanks to its more focused remit, objectives and powers."

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