Gas Stockpile Drain Prompts Price Rise Fears

Britain has drained its gas reserves so much after weeks of bad weather that fears have been raised of a looming spike in energy prices.

Households have been forced to increase their heating usage as the freezing weather continues, pushing the demand for gas to 20% higher than normal in March.

Gas stocks were reportedly just 10% full at Britain's largest storage facility on Thursday night, compared to 49% this time last year.

Energy prices will soar if Britain is forced to make up the shortfall by importing more liquefied natural gas from elsewhere, an energy expert has warned.

Graphical comparison year-on-year of gas in the UK (graph: Utilyx)

Andrew Horstead of the energy consultancy Utilyx told the Times: "There is immense pressure on the existing infrastructure.

"We are almost maxed out from imports through pipelines. The big concern is that there is very little flexibility left in the system."

He added that Britain would struggle to cope if a technical problem caused an unscheduled North Sea gas field to shut down.

Matt Osborne, risk manager at energy consultancy and brokerage firm Inenco, told Sky News that wholesale prices had spiked about 20% overnight, prompting the industry to respond quickly.

County Durham after the latest batch of snow

On Friday morning gas prices for within-day delivery then jumped more than 50% above Thursday's close following the closure of the pipeline linking Belgium to Britain after a pump failed at Bacton, Norfolk.

Downing Street said Prime Minister David Cameron is "confident" that the UK's gas needs will continue to be met.

A spokesman said:  "The absolute key thing on this is that supplies are not running out.

It was so warm last March people flocked to beaches and parks

"The gas market is how we source our supplies and that market continues to function well.

"The Prime Minister's key concern is that gas supplies continue. It is absolutely clear that supplies are not running out."

Asked if the Prime Minister was confident that this would remain the case, the spokesman replied: "Absolutely confident."

Scrub fires near Newport in Wales last March

Britain is more vulnerable than other countries to gas shortages because of its limited storage capacity, which holds just 15 days' worth of energy supplies.

But a Department of Environment and Climate Change (DECC) spokesperson insisted that "gas supplies are not running out".

The Chancellor's Budget revealed further gas fracking support

The spokesperson said: "Storage levels are low at the moment - as you'd expect towards the end of winter - and the UK gas market is tight.

"But the market is responding as it is designed to do - gas prices are rising and supply is being maintained accordingly.

"Gas storage would never be the sole source of gas meeting our needs, so it is misleading to talk purely about how many days' supply is in storage."

However, the gas fears come as the head of the energy giant SSE warned of the "very real risk" of the lights going out in Britain.

Ian Marchant said the Government was underestimating the problem, as he announced plans to cut back on power generation at five sites because the stations are either uneconomic or coming to the end of their lives.

He said: "It appears the Government is significantly underestimating the scale of the capacity crunch facing the UK in the next three years and there is a very real risk of the lights going out as a result."

He said the energy watchdog Ofgem had recently expressed real concern about the reduction of the UK's generation capacity margin that would follow expected plant closures in the next few years, predicting a 1-in-12 chance of the lights going out.

Mr Marchant added: "It is unlikely that the majority of the reductions in generation capacity and the delays to new investment we have announced today will have been included in this analysis.

"(This) highlights that the situation is likely to be even more critical than even they have predicted."

The DECC spokesperson added: "We are in close contact with National Grid, who are able to step into the market to source gas and increase incentives on gas suppliers if they think there is a risk of a supply shortfall."

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Cyprus Bailout: MPs Stumble Towards Deal

Cyprus Bailout: Threat To Savings

Updated: 1:42am UK, Saturday 23 March 2013

By Ashish Joshi, Sky News Correspondent

Finally late into Friday night - into to an agreement on Plan B, meaning Cyprus has moved one giant step towards securing a Brussels bailout.

It includes a solidarity fund pooling together state assets and the granting of power to the Government to control bank capital.

The latter move is to prevent a run on the banks when their doors finally open on Tuesday.

There will also be a restructuring of the country's banks and a savings tax on Cypriot savers.

The details of the tax have still to be finalised, but the framework is in place.

It could mean savings over 100,000 euros held in Bank of Cyprus accounts being taxed up to 20%, according to one source close to the negotiations.

The same source said if that proposal is rejected there will be a plan to impose a tax of around 10% on all Cypriot bank accounts over 100,000 euros.

The threat of savers being hit hangs over the heads of people like Loizos Michael.

The 60-year-old tailor worked hard for 35 years, building up a good business.

He was looking forward to a wealthy retirement. Not anymore. Times are hard.

Speaking from his small tailor's shop in central Nicosia, Mr Michael said: "With the banks being closed, it is hard because I don't have a credit card and so cash flow is a problem.

"Even filling your car with petrol needs thinking about.

"Cypriots have always been workers by nature and nobody could have imagined that unemployment would be so  high.

"This has hit us hard in the pockets."

Cyprus is weathering a storm - the likes of which this Mediterranean island has never faced in her young history.

Mr Michael said he knew things were getting bad, but expected solutions to be found to avoid ordinary people having to suffer.

"I expected something better. But now, it looks like the problem has been brewing for some time," he said.

"There used to be some people talking about the crisis, but now everyone's talking about it.

"I think things are harder now than just after the war. After the war of '74 people could still find work. Now, there is just no work so people have no money. What can we do?"

In the 1990s, Cyprus boasted a dynamic, booming economy, but it grew and unchecked.

An overbloated banking sector exposed to Greek debt has crippled the country's economy.

Now people like Loizos Michael must pay the price. He and the rest of Cyprus will soon find out exactly how much that is going to be.

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Retail Sales Rebound In February

Strong demand for tablets has helped retail sales increase by more than expected in February.

Excluding fuel, they rebounded by 1.9% when compared to January, and by 3.3% on the year, according to the Office for National Statistics (ONS).

The jump in both volume and amount spent follows subdued year-on-year retail sales growth rates since September 2012.

Strong sales at computer equipment retailers and department stores helped drive February's rise, and online also performed well, the ONS said.

Spending online accounted for 9.7% of all retail spending, excluding fuel, in February. The average weekly spend on the internet was £540m - an increase of over 10% when compared with February 2012.

It comes after a disappointing start to 2013, when sales plunged as a result of heavy snow across swathes of the UK.

Deloitte's UK head of retail, Ian Geddes, said February's figures were good news for the sector - but warned that caution should be exercised because New Year sales often continue into February.

He added: "The period measured does not include the last week of February when poor weather hit, so next month's figures may be affected."

The data comes a day after Chancellor George Osborne unveiled his Budget - but Mr Geddes said it provided "little respite" for the troubled high street.

"Any retailer expecting consumers to have more money in their pockets as a result of this Budget may be disappointed," he said.

But he added that the reduction of the corporation tax rate would "significantly benefit" UK-based retailers, which represent some of the largest UK corporation tax payers.

The data also came as clothing retailers Next and Ted Baker reported full-year financial results.

Both companies said sales had increased in 2012, and joined a number of other companies - including Zara, Sports Direct and Asos - in reporting strong figures despite the difficult economic conditions.

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Cyprus Bank Limits Cash Withdrawals Amid Crisis

Russian Money Talks In Cyprus Bailout

Updated: 12:52pm UK, Thursday 21 March 2013

By Tim Marshall, Foreign Affairs Editor

Even allowing for inflation, 10 billion euros can still buy you quite a lot these days.

For example, if you were Russia, and you used your 10 billion to bail out Cyprus, you could buy another few decades of European dependence on you for energy.

You might also get a dent in people's confidence in the EU thrown in. If you invested it all wisely, in the longer term you could even get a warm-water naval port out of it.

Not bad a return.

The Russian offer to better the terms of the EU bailout for Cyprus is not just commercial. It is an attempt to regain influence in a region of growing energy importance.

Russia had already lost power in the Mediterranean and Middle East when Egypt was flipped and turned towards the USA.

After the implosion of the Soviet empire in 1989, Moscow lost any chance of a quick return to the region and was left only with a small port on the coast of Syria to play with.

But Russia is now back on its feet, and the discovery of the potentially huge gas field in the eastern Mediterranean has given it an opportunity to again engage in the region.

It has already done a deal via Gazprom with the Israeli's over its gas fields, and is now trying to get in on Cyprus's potential gold pot.

Europe has for years been looking for a way to wean itself off energy dependency on Russia, and Cyprus was one route.

However, if Gazprom secures the rights to explore the Cypriot gas fields, this will give Moscow massive influence there.

Influence is power and that power could feasibly result, down the line, in Cyprus suggesting that the British bases on their island close.

From there, the possibility of a Russian base might emerge in what is a key part of Nato's Mediterranean strategy and an intelligence gathering post.

The UK, Greece, Turkey, and the US - all Nato members - might object. But money talks and we have seen in the last decade that Russia wins some and loses some. 

The ties between Cyprus and Russia are not just commercial and political.

We should not underestimate the cultural ties between the two, which are based on Russia's perception of itself as the guardian of Orthodox Christianity.

Whether Russia wins this geopolitical fight or not, it will continue to watch with interest the political and social fallout of the euro crisis and the democratic deficit which has been part of it.

The EU has crossed an intellectual line in Cyprus. Previous bailouts of other countries may have required austerity measures, but now unelected Eurocrats, in consultation with Cypriot leaders, have told the people that they are going to take up to 10% of their money without asking them. In Cyprus they have a word for this - theft.

This has been noticed across the European Union. If it might happen in Cyprus then it might happen in Greece, or Spain, or Italy. The raison d'etre of the Union is to ensure prosperity and the safety of its peoples, not to take money from their bank accounts.

The Cypriot politicians fear they could become the target of retribution from the people and so have hot-footed their way to Russia.

Not only might they get what in the short term looks a much better deal from Moscow, but, and this might be really what's going on, they might force Brussels to offer a much better deal to prevent Cyprus from "falling" to the Russians.

Either way - terms and conditions apply.

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Budget: 2013 Growth Forecast Is Cut In Half

George Osborne has unveiled tax breaks for beer drinkers, drivers and first time buyers as he admitted the economy is still struggling.

The Chancellor's Budget contained a string of moves designed to ease the cost-of-living, including a 1p cut in the price of beer and the cancellation of a planned fuel duty hike.

A £130bn mortgage guarantee scheme will help people without big deposits buy homes, with interest-free loans worth 20% of the value of a new build property also available.

And in what he called a Budget for "the aspiration nation", Mr Osborne said the income tax threshold will rise to £10,000 in 2014, a year earlier than planned.

The Chancellor also gave small businesses a boost by unveiling a new employment allowance which will save employers £2,000 on their National Insurance bills.

But he was forced to admit that the recovery was taking far longer than expected as he confirmed growth forecasts for this year have been cut in half to just 0.6%.

Ed Miliband called George Osborne a "downgraded Chancellor"

The independent Office for Budget Responsibility does expect Britain to avoid a triple-dip recession but public borrowing will be higher because of the floundering recovery.

It is now forecast to hit £114bn this year instead of £108bn before eventually falling to £42bn in 2017/18.

Driving home the problems facing Britain, figures released hours before the Budget showed the first rise in unemployment for a year - up 7,000 to 2.52m.

But despite growing calls to change course from his austerity regime, Mr Osborne insisted there could be no turning back.

"It is taking longer than anyone hoped but we must hold to the right track," he said.

Labour leader Ed Miliband claimed: "All he offers is more of the same - higher borrowing and lower growth - a more of the same Budget from a downgraded Chancellor.

"He is the wrong man in the wrong place at the worst possible time for the country."

The Chancellor leaving Number 11 Downing Street with his Budget

But Mr Osborne declared: "This is a Budget that doesn't duck our nation's problems. It confronts them head on. It is a Budget for an aspiration nation. It is a Budget for a Britain that wants to be prosperous, solvent and free."

He fleshed out plans for a further £2.5bn in Whitehall cuts over the next two years to fund capital spending projects.

And he confirmed plans to help working parents with tax-free childcare support and to introduce a flat rate pension by 2016.

The Capital Gains Tax holiday will also be extended and corporation tax cut further by 1% to 20% in April 2015.

But there will be anger at the extension of the 1% public sector pay cap to 2015/16, which came as civil servants staged a 24-hour strike.

There will also be further cuts in the spending review for 2015/16, up from £10bn to £11.5bn.

And the Chancellor announced that the Bank of England's remit was being overhauled but that it will keep its inflation target of 2%.

The House of Commons was extremely rowdy as Mr Osborne delivered one of the most important speeches of his career.

Shadow chancellor Ed Balls was singled out by the deputy speaker for barracking from Labour's front bench.

The Office for Budget Responsibility (OBR) now predicts growth of 2.3% for 2015, 2.7% in 2016 and 2.8% in 2017.

A Twitpic shows George Osborne at work

This means the Chancellor is now set to borrow £55.7bn more over the next five years than he was planning as little ago as in December.

Figures do show that the deficit has fallen from 11.2% of GDP in 2009/10 to 7.4% this year and is set to continue dropping until it reaches 2.2% in 2017/18.

But the OBR confirms Mr Osborne will miss his target for total public sector debt to start falling as a percentage of national income by 2015/16.

It now forecasts this will rise to a peak of 85.6% of GDP or a staggering £1.58tn in 2016/17 - an increase of 6.4% on its previous figures.

There was consternation as the speech began when the London Evening Standard newspaper posted its front page, complete with full details of the Budget, on Twitter.

The paper suspended the person behind the tweet and launched an investigation as it issued a fulsome apology for breaking the embargo.

Editor Sarah Sands said: "We have immediately reviewed our procedures. We are devastated that an embargo was breached and offer our heartfelt apologies."

John Longworth, director general of the British Chambers of Commerce, criticised Mr Osborne for not going far enough to support business and boost growth.

"We are at an unprecedented moment in economic history, and the Government should be doing everything in its power to get the economy moving", he said.

But Simon Walker, director general of the Institute of Directors, said: "We applaud this Budget. The Chancellor has stuck to his guns and held his nerve - which is exactly what we wanted to see.

"Deficit reduction is not an optional policy, it is an absolute necessity, and he is right to reject the siren calls to abandon it."

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YouTube Reaches Billion Viewers A Month Target

YouTube has announced more than one billion people are now visiting its online video site each month.

The milestone marks another step in YouTube's evolution from a quirky start-up launched in 2005 to one of the most influential forces in today's media landscape.

YouTube crossed the one billion threshold five months after Facebook said its online social network had reached that figure.

The vast audience has given YouTube's owner, Google Inc, another lucrative channel for selling online adverts beyond its dominant internet search engine.

Google bought YouTube for $1.76bn in 2006 when the video site had an estimated 50 million users worldwide.

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Hinkley Point Nuclear Plant Given Go-Ahead

The building of a new nuclear plant at Hinkley Point in Somerset has moved a step closer after Energy Secretary Ed Davey granted the scheme planning permission.

The proposed development of Hinkley Point C by French energy company EDF is a boost for the nuclear industry following a series of setbacks in plans to construct a new fleet of reactors in the UK, which ministers say are needed to cut carbon and keep the lights on.

The deal is expected to be rubber-stamped within weeks when EDF and the Government secure agreement on decommissioning the price the company will be paid for the electricity it generates.

Mr Davey told Sky News there would be no public subsidy and the cost would be "affordable for consumers and businesses" but he refused to go into further detail as the commercially-sensitive negotiations continued.

Once up and running it is anticipated that the plant's two reactors will generate enough electricity to provide 7% of the country's needs, or power five million homes.

The minister told the Commons that affordable new nuclear would play a "crucial role" in ensuring secure, diverse supplies of energy in the UK and decarbonising the electricity sector and the economy.

He also confirmed that EDF had now secured the majority of consents it needed to build and operate the plant and that he expected to announce shortly a deal on the so-called 'strike' price.

Under electricity market reforms, low-carbon power such as nuclear reactors and offshore wind farms will have long-term contracts with a guaranteed price for their electricity, to give investors certainty to invest in projects with high capital costs.

It has been reported that the costs of the new power station would run to around £14bn and the development would create up to 25,000 jobs during construction and 900 permanent positions once in operation.

But environmental groups reacted angrily to the news and raised questions about dealing with the waste.

Greenpeace executive director John Sauven claimed Hinkley Point C failed the test on economic, consumer, environmental and arguably even legal grounds.

He said: "It will lock a generation of consumers into higher energy bills, via a strike price that's expected to be double the current price of electricity, and it will distort energy policy by displacing newer, cleaner, cheaper technologies.

"Giving it the green light when there is no credible plan for dealing with the waste could also be in breach of the law," he warned.

Friends of the Earth's policy and campaigns director Craig Bennett added: "The Alice-in-Wonderland economics of the nuclear industry killed off previous plans for a new reactor at Hinkley – decades later, little has changed.

"The only way this plant will be built is if the Government hands over a blank cheque from UK taxpayers to French developers, EDF.

"The most cost-effective way to cut carbon and keep the lights on is a combination of energy efficiency and investing in renewables, the cost of which are falling year on year.

"For decades nuclear industry has over-promised and under-delivered – we can't afford to keep throwing money at it."

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Budget: Osborne's Hopes Of Rescuing Economy

By Jon Craig, Chief Political Correspondent

George Osborne will today unveil a Budget with the twin aims of attempting to rescue both the British economy and the political fortunes of the Conservative Party.

The Chancellor will announce a raft of measures he hopes will not only kick-start economic growth but also reverse a Tory slump that began with his Budget a year ago.

Many Conservative MPs blame last year's so-called "Omni-shambles" Budget - containing a series of blunders that required embarrassing U-turns - for the collapse in support for the party over the past 12 months.

This year Mr Osborne has already promised help for pensioners, working couples and homebuyers.

But to avoid another onslaught from critics he will also need to provide help for motorists on fuel duty and businesses with incentives to invest.

On tax, the Chancellor is tipped to help the low paid by accelerating raising the income tax threshold to £10,000, a move championed by the Tories' LibDem Coalition partners.

And after the furore in the Conservative Party over gay marriage, the Chancellor may boost the married couples' allowance to cheer up disgruntled Tory backbenchers. A cut in corporation tax from 21p to 20p would also delight business leaders.

Mr Osborne is also expected to agree to unlock £4.8bn in child trust funds and allow parents to transfer their investments into more generous Junior ISAs. This move could leave some children up to £34,000 richer.

He will also announce that thousands of elderly people who lost up to half of their life savings when Equitable Life came close to collapse a decade ago will receive compensation.

But in a bleak message to MPs and voters on the state of the economy, there will be no U-turn on spending cuts or unfunded tax cuts and some grim economic forecasts.

Speaking at the weekend, the Chancellor rejected calls from LibDem Cabinet colleague Vince Cable and former Tory Defence Secretary Liam Fox to change course and abandon his so-called "Plan A".

Warning that economic recovery would be a slow process, he said: "There is no easy answer to Britain's problems.

"There is no miracle cure, because of course if there was a miracle cure it would have been deployed. It is just a lot of hard work dealing with Britain's debts, helping businesses create jobs and helping families who work hard and want to get on."

Yesterday it was revealed the Chancellor will unveil another £2.5bn of cuts to fund capital spending, although health, schools, overseas aid and HM Revenue and Customs will be shielded from the latest round of savings.

Osborne warned there would be no U-turn on spending cuts

Mr Osborne told the Cabinet other departments would have to find 1% savings on day-to-day budgets for each of 2013/14 and 2014/15.

But the move was attacked by Labour. Shadow Treasury Minister Chris Leslie MP said: "An increase in capital spending of just £2.5 billion compares to deep cuts of £12.8 billion to infrastructure investment in the last three years on the plans George Osborne inherited.

"If this is the only additional investment in infrastructure in the Budget it will be a huge disappointment. Business groups, the IMF and even Vince Cable have all said now is the right time to invest, at record low interest rates, in building homes, road and schools to create jobs now and strengthen our economy for the future.

"The test for the Budget is whether it delivers bold action to kickstart our flat-lining economy and significant tax cuts for middle and low income families, not a £3 billion tax cut for the very richest and more of the same failing policies."

But only weeks after Britain lost its AAA credit rating and slipped into a double dip recession with the risk of a triple dip, Mr Osborne is expected to have to deliver more gloomy news about the country's finances.

The Office for Budget Responsibility is expected to raise borrowing forecasts and lower those for growth.

Confirmation of Mr Osborne's unpopularity comes in a survey suggesting that more than four out of ten voters (44%) think he should be sacked as Chancellor.

Fewer than one in five (18%) of those questioned said Mr Osborne should keep his job, while 38% did not know.

Favourite to replace him is Mr Cable, favoured by 12%, followed by Foreign Secretary William Hague (5%) and Home Secretary Theresa May (3%).

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Cyprus Urged To Protect Savings Under 100k

Eurozone finance ministers have urged Cyprus to protect savers with less than 100,000 euros (£86,000) in their accounts from a proposed tax on bank deposits.

Under a bailout deal agreed with the EU, Cyprus planned to impose a levy of 6.7% on all savings below that level.

The scheme was then changed  to a 6.7% tax on all savings between 20,000 and 100,000 euros and 9.9% on all savings over 100,000 euros.

But the finance ministers, known as the Eurogroup, said they favoured a higher, 15.6% tax on richer savers in order to protect those with smaller deposits.

A statement from the group's president Jeroen Dijsselbloem said: "The Eurogroup continues to be of the view that small depositors should be treated differently from large depositors and reaffirms the importance of fully guaranteeing deposits below 100,000 euros."

Sparing more modest savers in favour of the higher rate on bigger deposits, would not impact on the overall amount of the bailout - 10bn euros (£8.6bn) - the group said.

Protesters gathered outside Cyprus' parliament in Nicosia

On Saturday the Eurogroup told debt-ridden Cyprus it would not give it a bailout unless it recouped some of the money it needed from savers.

The scheme had the potential to affect thousands of Britons who had either moved to Cyprus to live or had money saved in Cypriot accounts.

Russia, whose citizens are thought to have up to $30bn of their cash tied up in Cypriot accounts, was left furious by the proposal.

Cyprus may still ignore the advice from the Eurogroup and its parliament is expected to vote on a plan to save its economy on Tuesday.

Foreign Secretary William Hague said Britain had been "separated" from contributing towards the bailout, adding that 3,000 Britons in the country would not suffer in the proposed raid on bank savings.

Large numbers of Russian millionaires have stashed savings in Cypriot banks

It is believed however that many British Cypriots may have millions in accounts that are not protected by UK rules.

It was also unclear whether British troops serving in Cyprus who had set up large savings accounts would be able to escape the tax.

Cyprus had been due to vote on the levy on Sunday but it was first pushed back until Monday and then Tuesday.

Banks were closed in the country on Monday because of a bank holiday, which prevented people withdrawing their money but cash machines across the island were emptied.

Branches will stay shut for another two days - Tuesday and Wednesday - to prevent people removing all their cash while the authorities decide what to do.

The decision to target bank accounts stunned Cypriots, and police sealed off parliament as about 400 people staged a noisy protest outside, aggrieved that their small island of one million people should be singled out for such treatment.

It is the first time within the EU that it has been proposed to tax savers in a country to pay for the failings of their government.

The euro and stock markets fell on concern that developments in tiny Cyprus could reignite the financial crisis in the 17-nation eurozone.

A large amount of cash was withdrawn from Cypriot banks on Monday

If Cyprus does tax large savers heavily there are fears that money could flood out of the country as two thirds of deposits are from abroad.

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Nuisance Phone Calls: Which? Demands Action

Campaigners have demanded "tougher regulation" to clamp down on companies who plague people with unwanted phone calls and nuisance text messages.

Consumer group Which? found seven out of 10 consumers had been cold-called in the last three months, while two-fifths had received unsolicited texts.

The majority of calls and messages came from claims management companies (CMCs) offering to take up payment protection insurance (PPI) and personal injury cases.

Which? urged regulators including Ofcom and the Office of Fair Trading (OFT) to set up a joint taskforce to pull the plug on "intrusive and distressing" calls and texts.

It said offenders should receive fines and be put out of business.

"Unwanted calls or texts are not just a nuisance, they can be intrusive and distressing," executive director Richard Lloyd said.

"Many of us have been bombarded with spurious claims of PPI or injury compensation. People are telling us they are totally fed up with this nuisance and want to see action.

"Our research once again shows the behaviour of unscrupulous claims management companies must be tackled to stop them exploiting consumers who could claim compensation for free themselves.

"We want to see tougher regulation from the Government to clean up the CMC industry."

Which? said that a quarter of its members who made a claim on their car insurance were contacted by a CMC within three months.

Many of them were then bombarded by repeated messages. More than a fifth said they were sent at least 10 texts and one in eight received 10 or more phone calls.

The Transport Committee is currently investigating the extent to which bogus and exaggerated whiplash claims push up the cost of car insurance. False claims are estimated to add around £90 to the cost of every premium.

From next month, insurers will be banned from receiving money in exchange for the details of customers who make personal injury claims.

However, Which? said the rules will not cover non-injury claims such as car repairs.

It urged people to register their details with the Telephone Preference Service and to avoid opting into third party marketing when taking out an insurance policy.

It also said consumers should not respond to spam texts, even to text "stop", as this alerts the sender to the phone number being active and in use.

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Lloyds Paid 30 Staff £1m Last Year

By Mark Kleinman, City Editor

The state-backed lender Lloyds Banking Group paid dozens of staff more than a million pounds last year, taking the number of UK-based bankers earning seven-figure sums to more than 750.

I understand that Lloyds will disclose in its annual report next week that roughly 30 of its staff were awarded pay packages of more than £1m.

The figure will be the first time that Lloyds, which is 39% owned by taxpayers, has disclosed the number of millionaires in its ranks.

It threatens to re-ignite anger among critics of banking sector pay after a year in which Lloyds lost more than £500m as it continued to deal with the massive financial penalties associated with mis-selling payment protection insurance (PPI).

The Lloyds millionaires largely work in its corporate and investment banking division, according to insiders.

Among those receiving £1m-plus packages was Antonio Horta-Osorio, the chief executive. His £1.48m bonus will vest depending on either the bank's share price performance or the Government's disposal of part of its shareholding.

In total, Lloyds paid out £375m in bonuses, lower than the other state-backed bank, Royal Bank of Scotland (RBS), which forked out £607m.

RBS, which has a larger investment bank than Lloyds, awarded £1m-plus pay deals to 95 staff, while Barclays handed the sums to 428 employees. The two banks were fined a collective £680m for manipulating the interbank borrowing rate, Libor.

HSBC paid 204 of its staff at least £1m last year, making a total for the big four UK banks - including Lloyds' approximately 30 employees - of 757.

Lloyds declined to comment.

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Cyprus Bailout: Savings Tax Could Be Cut

Officials in Cyprus are reportedly trying to renegotiate a eurozone bailout deal in order to soften the impact of a levy on smaller savers.

Authorities had planned a 6.7% tax on deposits under 100,000 euros (£85,454), triggering queues at cash machines as people in Cyprus rushed to withdraw their money.

But the country's government is thought to be discussing cutting the tax rate to 3% while raising the rate for deposits over 100,000 euros from 9.9% to 12.5%.

In exchange for the tax levy, Cyprus will receive 10bn euros (£8.54bn) in aid to help recapitalise banks.

Cypriot President Nicos Anastasiades held talks with his cabinet

Cypriot President Nicos Anastasiades, who was elected just three weeks ago, said the island had to accept a painful compromise or face bankruptcy.

In a televised address, he said the bailout "will eventually stabilise the economy and lead it to recovery".

Monday is a national holiday in Cyprus and measures need to be approved before banks open again on Tuesday.

Depositors in the eurozone's weaker economies have been unnerved by the levy, with investors fearing the move will set a precedent that could reignite market turmoil.

Their uncertainty could be reflected when European markets open later, with the euro having already seen sharp falls in Asia.

British government and military personnel in Cyprus will be protected from any levy on their bank deposits.

Foreign Secretary William Hague told Sky News that Britain had been "separated" from contributing towards the bailout, adding that 3,000 Britons in the country would not suffer in the proposed raid on bank savings.

The tax on deposits in Cyprus, which accounts for only 0.2% of the eurozone's economy, is expected to raise up to 6bn euros (£5bn).

Those affected will include rich Russians with deposits in Cyprus and Europeans who have retired to the island, as well as Cypriots themselves.

Savers have queued to withdraw their money from cash machines across Cyprus

The size of foreign deposits in Cyprus - estimated at 37% of the total - was one reason the eurozone agreed to the tax on savings.

It will apply to all deposits held in banks within Cyprus, including an estimated 2bn euros (£1.75bn) of British money, according to the European Central Bank.

It will not affect deposits held in the UK branches of Cypriot banks, such as Bank of Cyprus, whose UK subsidiary is regulated by the Financial Services Authority.

However, Laiki Bank UK said on its website: "Your eligible deposits with Laiki Bank UK are protected up to a total of 100,000 euro (£87.000) by the Cyprus Deposit Protection Scheme and are not protected by the UK Financial Services Compensation Scheme.

"Any deposits you hold above the 100,000 euro limit are not covered."

Cypriot banks lost 4.5bn euros (£3.8bn) - equal to a quarter of the island's gross domestic product - when eurozone leaders decided to write off Greek debt last year.

As part of its bailout deal, corporate tax will rise from 10% to 12.5%, while state assets will be sold off to help balance the public finances.

Cuts to government worker salaries and pensions have already been approved.

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Cyprus Bailout: Savers Lose Money In EU Deal

Cyprus Savings Raid Crosses Rubicon

Updated: 4:04pm UK, Saturday 16 March 2013

By Ed Conway, Economics Editor

Back in 1941, with the memory of the Great Depression still weighing heavy, an American wrote into the Federal Reserve with an idea.

"Would it not be feasible," the member of the public asked, "to impose a federal tax on the deposit of funds in bank checking accounts?"

The reply from the Fed was polite but succinct: while there is no doubt a tax on bank deposits would have "the advantage of administrative simplicity", it is "not in accord with one of the fundamental principles of taxation in a democracy, namely, that taxes should be imposed in accordance with ability to pay".

And that, when it comes down to it, is the most scandalous and worrying aspect of the overnight decision to impose a one-off levy on all bank deposits in Cyprus.

There is no doubt the country is in big trouble. It was heading for a potential default and is in desperate need of another bail-out.

However, trying to recoup some of the cash directly from bank deposits is a step across the financial Rubicon.

Even in the depths of the euro crisis, none of the troubled countries had, until now, gone so far as to confiscate bank deposits.

As the Fed said all those years ago, doing so involves arbitrary charges on those least equipped to afford them.

And so it will be in Cyprus.

If you have anything up to 100,000 euros in a bank, by the time you next get access to your account on Tuesday (after Monday's Bank Holiday) some 6.75% of your cash will have disappeared into the government's coffers to help keep the country afloat.

That goes for everyone, from a pensioner to a small business owner to a millionaire - although Greek depositors get an exception.

If you have more than 100,000 euros, the charge is 9.9%.

In exchange, Cypriots will get a share in the relevant bank, equivalent to the value of the tax deduction - although this is unlikely to be of much consolation given the country's current financial woes.

To make those distributional consequences even more egregious, the word from Brussels is that while depositors will get hit, the senior creditors who own bonds in the banks (including, naturally, some of the racier hedge funds) will escape scot-free.

The concern is not merely about the brutal arbitrariness of the plan - it is about its implication for the country's financial system in the coming months.

There are scant examples of similar bank levies and those that do exist are hardly shining models.

In July 1992, Italy's Socialist Prime Minister Giuliano Amato imposed a one-off levy on bank accounts.

It was a mere 0.6% in comparison with Cyprus's scheme, and it still left a lasting scar on the country's financial psyche.

In 1936, Norway experimented with a bank deposit tax, but it caused an exodus of cash from the country.

There are also some Latin American examples (Brazil in 1992, Argentina at the turn of the millennium) but most were combined with capital controls, and were last-ditch efforts to rescue the financial system when all else had already been tried.

There really is no precedent for a policy of this sort, on this scale, and in an economic system where there are no controls on the movement of cash from one country to another, which leads one to believe that it will trigger depositors to pull money out of Cyprus at record speed as soon as they have the chance.

Moreover, given that this policy was not merely rubber-stamped but engineered by Eurozone finance ministers and the IMF (indeed, the IMF wanted an even deeper cut of deposits), it sends a disquieting message to anyone with deposits in a euro area bank.

Although the ministers were quick to insist that this is a one-off and is "exceptional", anyone even vaguely acquainted with the initial Greek bailouts will remember precisely how long such exceptions last.

Now, to some extent, one can see the logic in the plan.

The country has an enormous banking system, worth several times more than its economic output.

Around half of all those deposits (estimates vary) are owned by Russians, many of whom allegedly use the country as a tax haven from their own domestic charges.

Another hefty chunk of the bank deposits are owned by Britons - although UK deposits in UK branches and subsidiaries won't be affected.

This one-off levy will at least recoup some of the cash needed for the bailout from these depositors rather than the Cypriot taxpayer.

And why should the Russians (primarily) and the British (less so) have to contribute to a bailout simply because Germany was unwilling to pay up?

The pragmatic answer is that conveniently they weren't in the room when the move was negotiated. Germany, which let's not forget has an election later this year, was.

Or, in the words of someone closely involved with the negotiations: "Basically Cypriots turned their country into an offshore tax haven for dirty Russian money and the Germans and others are now insisting they pay the price for that."

However, that price is a deeply socially-damaging one.

The move has all sorts of implications, whether it's for the state of the euro crisis, the prospect of future assaults on bank deposits, and the British deposits in Cypriot banks, which will now be raided for the bailout.

However, most of all, one's sympathy has to be with the country's savers. Consider it: overnight a widow's life savings, carefully built up over decades, have been gouged, simply because EU bureaucrats decided to protect hedge funds and the German surplus, and to teach Russians a lesson.

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Chancellor Warns Of 'More Tough Choices'

George Osborne has warned the country of "more tough choices" and says there are no "miracle cures" for the UK economy, as he prepares to deliver Wednesday's Budget.

The Chancellor is under mounting pressure to change course and kick start growth as the UK faces an increased risk of falling into a triple-dip recession.

An opinion poll suggests most voters - including more than a quarter of Conservative supporters - think his policies are failing.

But Mr Osborne dismissed calls for extra borrowing to cut taxes or finance a "spending spree" and insisted that abandoning his austerity programme would be a "disaster".

Writing in The Sun on Sunday, Mr Osborne hinted he would do more to help homebuyers, business start-ups, apprentices and people saving with retirement.

Helping create jobs would mean "cutting tax rates and red tape, backing scientific advance, building new roads and broadband" and making the UK an attractive investment option, he said.

However he warned of "more tough choices" to be made on further slashing public spending from 2015 - with the scale of the squeeze to be unveiled in his statement.

"It won't be easy," he warned, amid rows between ministers over where the axe should fall.

Hopes the economy could grow in this quarter and thus avoid returning to recession were dealt a blow this week by a 1.5% fall in manufacturing output in January.

The Chancellor will deliver his Budget on Wednesday

Former cabinet minister Liam Fox is leading Tory calls for a change of course - suggesting Corporation Tax be reduced to zero and far bigger cuts to public spending, notably welfare.

Other prominent backbench demands include cancelling a fuel duty rise due in the autumn and scrapping the beer duty escalator that automatically ups the price of a pint.

Mr Osborne is tipped to announce extra investment in housebuilding and road projects - called for by leading business groups - and help for people to buy homes.

But he will not abandon "Plan A" by increasing borrowing to fund it - a move being mooted within the coalition by Liberal Democrat Business Secretary Vince Cable.

Shadow chancellor Ed Balls said he would welcome extra borrowing to fund a cut in the basic rate of income tax to put more money into people's pockets.

But Mr Osborne hit back: "I think the British people know there are no easy answers in today's world. They aren't fooled by the miracle cures peddled by the same snake oil politicians who got us into this mess.

"Labour's answer to Britain's borrowing problems is to borrow even more - that simply doesn't make sense. If there were easy options and miracle cures then of course I would take them, but sadly there aren't."

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