RBS chairman rejects £1.4m bonus

28 January 2012 Last updated at 19:34 GMT David Cameron: "It's a matter for Stephen Hester... it's obviously his decision"

Royal Bank of Scotland chairman Sir Philip Hampton has given up a £1.4m shares reward he was due next month.

Sir Philip told the bank's remuneration committee it would not be appropriate to receive the 5.17 million shares, says the BBC's Robert Peston.

Meanwhile, the government said it would not block a £963,000 bonus, also in shares, for RBS chief Stephen Hester.

Prime Minister David Cameron said it was up to Mr Hester whether he accepted the bonus.

"That's a matter for him, that's obviously his decision."

Mr Hester's contract at RBS - which is 82% publicly owned - was agreed by the last Labour government, Mr Cameron said.

The prime minister said alternatives - such as bringing in a new team at RBS - "could be even more expensive".

"We need this team to get on with the job of turning the bank around, making it safe and securing for the British taxpayer - getting back - all the money that was put into RBS."

RBS has confirmed Sir Philip's decision not to accept his shares reward.

Continue reading the main story Robert Peston Business editor, BBC News

The additional reward for Sir Philip was always something slightly unusual, which - as it happens - he didn't request when he took the job three years ago.

This shares incentive had already been agreed in negotiations with another candidate to chair RBS.

But sources have told the BBC his bonus was agreed three years ago when he became chairman in recognition for the scale of the task of turning around the bank.

The BBC's Robert Peston said Sir Philip made his decision before the uproar over Mr Hester's payment, which is still drawing criticism.

Labour leader Ed Miliband accused Mr Cameron and his government of being out of touch for failing to block the chief executive's share bonus.

Mr Miliband told the BBC that Mr Hester had done a "decent" job but that most people would think that his £1.2m salary was enough.

At a bank that was 83% state owned, there had to be some kind of "equality of sacrifice," he said.

In a written statement released earlier on Saturday, Mr Miliband said: "Freezing the pay of a nurse or hospital porter, while allowing a publicly-owned bank to pay million-pound bonuses, is the last nail in the coffin of this prime minister's claim that we're all in it together.

Sir Philip Hampton told the BBC's Robert Peston in January last year that some bankers are overpaid

He said his message to Mr Cameron was: "You've got another chance. At the AGM in April the government, as the majority shareholder in RBS, will have to decide how to vote on the bonus. They should vote it down."

Liberal Democrat deputy leader Simon Hughes said Sir Philip had set the right example and that "all those on the boards and in senior management at RBS and LloydsTSB should now act with equal principle and social awareness".

"In these days of austerity above all, it is unacceptable for anybody whose business has depended on public funds to take bonuses or salaries at levels which many tax payers regard as obscene" Mr Hughes said.

Professor Chris Roebuck of Cass Business School in London says there is little the government can do about pay and bonuses at RBS, because they are determined by overseas banks.

"In London there are 23 international banks, of which only three are British," he said.

Continue reading the main story Stephanie Flanders Economics editor, BBC News

George Osborne has just told me the government will not vote against Stephen Hester's bonus as a shareholder at the April AGM.

Ed Miliband had thrown down the gauntlet on this today, but the chancellor has declined to pick it up.

"Pay levels in London are determined by those other 20 overseas banks who determine their pay on what's happening globally, and if the British banks don't play along and if RBS doesn't play along, all it means is that somebody who works for RBS has to walk 50 yards across the street to Deutsche Bank to get more money."

The pay award sparked anger across the political spectrum with one Lib Dem minister calling for Mr Hester to waive the payment and the Mayor of London, Conservative Boris Johnson, urging the government to "step in".

But No 10 has said the proper processes were followed and it was up to Mr Hester to decide whether to accept

The contract agreed in 2009 meant Mr Hester was entitled to be considered for a bonus, a spokesman said.

"That process was established by the previous government and that process is reflected in a bonus which is less than half the bonus Stephen Hester was paid last year.

"The public sector shareholder has taken a keen interest in this and has had an influence on it."

The bonus is not payable for three years, when the final amount will be determined by the firm's share price.

Several City and business analysts have said Mr Hester is entitled to receive a bonus for his performance.

Spain jobless passes five million

27 January 2012 Last updated at 14:25 GMT Spain's unemployment figure passed the five million mark in the last quarter of 2011, official figures show.

Spain's unemployment figure passed the five million mark in the last quarter of 2011, official figures show.

The National Statistics Institute said 5.3 million people were out of work at the end of December, up from 4.9 million in the third quarter.

The rate rose from 21.5% in the third quarter to 22.8% - the highest rate in nearly 17 years.

Spain already has the highest jobless rate in the 17-nation eurozone and is expected to slide back into recession.

Continue reading the main story Tom Burridge BBC News, Madrid

Rising unemployment is a double blow for the relatively new administration of Mariano Rajoy. The more people who are registered as out of work, the more the Spanish government has to pay out in unemployment benefits. And fewer people in work means fewer people paying income tax, so less revenue for the government.

On top of that, if people are not earnin, then they spend less and that is driving Spain into recession.

Unemployment has been high ever since 2008, when Spain's housing boom burst and thousands of people working in the construction industry were laid off.

The Spanish government will soon announce labour reforms so that employers can hire and fire people more easily.

The last time I went to talk to people at a job centre in Madrid, people were waiting outside because there weren't enough chairs inside.

The 22.8% rate is more than twice the average unemployment rate of the eurozone, which stood at 10.3% in November, according to data released earlier this month.

The Spanish figures show almost half of all 16-24 year-olds in the country are jobless - 48.6% compared with 45.8% before.

Spain's new ruling Popular Party conservative government has pledged labour reforms to try to improve the jobs market.

On Thursday, public service employees staged a series of demonstrations across Spain to protest against unemployment and increasing austerity measures.

Budget cuts

Spain has struggled since the property bubble burst in 2008.

In the years between 2004 and 2008, the average house price in Spain rose 44%, Construction represented about 16% of GDP by the end of the boom, and the unemployment rate was down to 7.95%.

However, rising house prices fuelled the sub-prime mortgage market, leading the Spanish to borrow more as they struggled to get on the housing ladder.

The downturn has seen repossessions of Spanish properties rise 32% in the past year.

The range of austerity measures proposed by new Prime Minister Mariano Rajoy's government angered many ahead of this week's protests.

His measures include 8.9bn euros in new budget cuts, and tax increases designed to boost government coffers by 6.3bn euros.

However, there are concerns that Mr Rajoy will be unable to meet his pre-election pledge to cut the country's deficit to 4.4% of GDP in 2012.

The Bank of Spain predicts the country's economy will shrink by 1.5% this year, saying the eurozone debt crisis has destroyed business confidence and closed off bank credit, causing a large drop in domestic demand.

Hundreds of jobs to go at Serco

27 January 2012 Last updated at 16:57 GMT Among its range of services Serco provides prison transport Outsourcing group Serco has announced it is to cut 500 jobs, mostly at its UK head office in Hampshire.

The group, which provides back-office support for a range of public and private sector bodies, said it was overhauling its UK management.

The jobs will mainly go from its offices at Hook near Basingstoke.

A statement said: "We regularly review our opportunities, our structure and the way Serco delivers services for our customers and to target future growth."

Serco, which works with banking, insurance, travel, defence, transport and healthcare, is merging its business-processing operations into one global division, following a series of acquisitions in the UK, India and Australia.

It employs 100,000 people around the world, including 35,000 in the UK.

A spokesman added staff in Hook had already been briefed about the cuts and the early stages of the redundancy process were under way.

Unison regional organiser Peter Terry said the loss of jobs was "dreadful news".

"This is the area which the coalition says will be providing growth. Instead, these private sector companies are actually losing staff, making people redundant and costing the taxpayer even more," he said.

Carmaker Ford's profits increase

27 January 2012 Last updated at 22:50 GMT Ford CEO Alan Mulally: "European production has been reduced to match a lower demand"

US carmaker Ford has reported a surge in profits in 2011, fuelled by a one-off payment and strong sales in its home country.

The company report a net income of $20.2bn (£12.9bn) for last year, up from $6.5bn in 2010.

And for the last three months of the year, profits jumped to $13.6bn from just $190m in the previous year.

"2011 marked a milestone year in our work to strengthen our balance sheet," Ford said.

The bulk of its profits in the fourth quarter came from favourable one-time, non-cash special gain of $12.4bn marked against the value of some deferred tax assets.

"It could be argued that the decision to book the tax profit now equates to management confidence in prospects for the company," said Richard Hunter, head of equities at Hargreaves Lansdown Stockbrokers.

Excluding that gain, the carmaker's operating profit fell to $1.1bn during the fourth quarter, from just less than $1.3bn a year earlier.

Continue reading the main story Jorn Madslien Business reporter, BBC News

On the face of it, last year was good for Ford.

But dig a bit deeper and it soon becomes clear that the carmaker is struggling in some of its key markets.

Europe is particularly challenging at the moment: Ford is losing money here and its market share is slipping.

Ford's arch rival in Europe, Opel/Vauxhall, is in a similar pickle, with both facing tough competition from Asian rivals and from German luxury car companies.

But the biggest problem in Europe is overcapacity caused by countries protecting their domestic carmakers during the recession, according to Ford.

Ford chief executive Alan Mulally told the BBC that the floods in Thailand were a major disruption to production in Asia Pacific and meant the company made a small loss in the region.

However, he said he was "very positive about [future] growth" in the region.

He also said the firm would be scaling back production in Europe to meet the lower demand that has resulted from the economic slowdown.

Mixed sales performance

Ford said that it sold 693,000 cars and trucks, up 78,000 a year ago, in the fourth quarter in wholesale in North America and recorded a profit.

In Europe, which experienced a slump due to its debt crisis and slow growth, fourth quarter sales fell by 6,000 to 391,000 vehicles, and it recorded a loss.

The carmaker announced the resumption of its quarterly dividends as well.

Ford and rival General Motors both reported record car sales in China for 2011, despite a slowdown in the market in that country.

Top Euro MP quits in piracy row

27 January 2012 Last updated at 14:24 GMT By Dave Lee Technology Reporter Mr Arif's resignation follows protests in several locations across Poland Negotiations over a controversial anti-piracy agreement have been described as a "masquerade" by a key Euro MP.

Kader Arif, the European Parliament's rapporteur for the Anti-Counterfeiting Trade Agreement (Acta), resigned over the issue on Friday.

He said he had witnessed "never-before-seen manoeuvres" by officials preparing the treaty.

On Thursday, 22 EU member states including the UK signed the agreement.

The treaty still needs to be ratified by the European Parliament before it can be enacted. A debate is scheduled to take place in June.

Mr Arif criticised the efforts to push forward with the measures ahead of those discussions taking place.

"I condemn the whole process which led to the signature of this agreement: no consultation of the civil society, lack of transparency since the beginning of negotiations, repeated delays of the signature of the text without any explanation given, reject of Parliament's recommendations as given in several resolutions of our assembly."

Mr Arif's decision to stand down follows protests by campaigners in Poland. Thousands of demonstrators took to the streets after the agreement was signed.

Crowds of mostly young people held banners with slogans such as "no to censorship" and "a free internet".

Earlier in the week, hackers attacked several Polish government websites, including that of Prime Minister Donald Tusk.

The country's Foreign Minister Radek Sikorski defended the plans, telling local television: "We believe that theft on a massive scale of intellectual property is not a good thing."

'Legitimate demands'

Campaigners' concerns have been buoyed by Mr Arif's strongly-worded statement released on Friday.

"This agreement can have major consequences on citizens' lives," he wrote.

"However, everything is made to prevent the European Parliament from having its say in this matter. I want to send a strong signal and alert the public opinion about this unacceptable situation. I will not take part in this masquerade."

The treaty has caused controversy since an early discussion paper was published by Wikileaks in 2008 - two years after negotiations first began. The details were subsequently confirmed in 2010.

People took to the streets across Poland to protest against Acta

If ratified, it proposes to improve "the enforcement of intellectual property rights" in participating countries.

It suggests setting international standards over how copyright infringements are dealt with, with preventative measures including possible imprisonment and fines.

The UK's Intellectual Property Office has backed the measures, describing piracy as a "major global issue".

"Yesterday's signing of Acta is important for the UK as it will set an international standard for tackling large-scale infringements of IPR, through the creation of common enforcement standards and more effective international cooperation. Importantly, it aims to improve the enforcement of existing IPR laws, not create new ones," it said.

'Dangerous'

Darrell Issa, a US senator and vocal critic of the stalled Stop Online Piracy Act (Sopa), voiced his concerns about Acta at the World Economics Forum in Davos.

"As a member of Congress, it's more dangerous than Sopa," he said.

"It's not coming to me for a vote. It purports that it does not change existing laws. But once implemented, it creates a whole new enforcement system and will virtually tie the hands of Congress to undo it."

In addition to internet-based measures, the agreement also seeks to curb trade of counterfeited physical goods.

Past drafts of the treaty suggested that internet service providers would have to give up data about users accused of copyright infringement and might have to cut them off - although this segment of the agreement has since been removed.

Outside of the EU, the treaty has also been signed by the US, Australia, Canada, Japan, Morocco, New Zealand, Singapore and South Korea.

In response to Mr Arif's resignation, a spokesman for the European Commission told the BBC: "Mr Arif and other members of the European Parliament's [Committee on International Trade] have had access to successive versions of the Acta text. The full text has been fully public since April 2010. It was made available in the first place because the European Commission convinced the other countries to publish this text.

"There have been four stakeholder conferences since 2008, and at least three speeches in the European Parliament on Acta. And now there will be a full debate. This is exactly what the normal process is.

"But most importantly Acta does not change any EU laws, it simply levels the playing field so that other countries match our standards. There is no threat to internet freedom or privacy. Everything you can do legally today in the EU, you would be legally able to do if Acta is ratified."

Mortgage rates 'to be volatile'

27 January 2012 Last updated at 11:58 GMT A number of lenders have made changes to their mortgage rates in recent days Brokers are telling new borrowers to expect mortgage rates to fluctuate in the coming months, owing to economic uncertainty.

A number of major lenders have increased the cost of a mortgage for new borrowers in recent days.

Brokers suggest that the increased activity is likely to be followed by an "ebb and flow" in the mortgage market in the first half of 2012.

Lenders are concerned about the cost of funds to lend in the current climate.

Uncertainty in the eurozone means that they do not want to overstretch themselves with lending, when there is a chance that accessing funds could become more expensive.

'Shop around'

In recent days, some of the major lenders have increased their mortgage rates by up to 0.3 percentage points.

Others have changed the loan-to-value bands, so borrowers might not always get a cheaper deal by offering a larger deposit.

"It really does pay to shop around at the moment if you are looking for a mortgage as some lenders are much more expensive than others," said Aaron Strutt, of Trinity Financial.

Lenders tend to move as a herd, as they do not wish to be inundated with mortgage applications if they suddenly become cheaper than their rivals.

Andrew Montlake, of mortgage broker Coreco, said: "We are going to see a period in which the Bank rate remains stable, so lenders will manage the business they want by increasing or decreasing their rates."

A few lenders have reduced mortgage rates for new borrowers in recent days.

He predicted that this volatility would continue for the first half of the year at least, until there was a clearer picture in the eurozone crisis.

Long-term costs for lenders have risen, he said, owing to uncertainty as a result of the crisis.