Morrisons Suffers Staff Payroll Data Theft

Data from supermarket chain Morrisons' staff payroll system, including bank account details, has been stolen and published on the internet, the company has confirmed.

In an email sent to staff and seen by Sky News, the company called it an "illegal theft" of data.

The information has since been taken off the website that published the details.

A data disk was also sent to a regional newspaper with the stolen data.

The theft included names, addresses and bank account details of an unspecified number of staff. It employs around 100,000 people.

The email warned that "this affects colleagues from all levels of the organisation".

Morrisons, which became aware of the theft on Thursday, said: "Initial investigations suggest that this theft was not the result of an external penetration of our systems.

"We can confirm there has been no loss of customer data and no colleague will be left financially disadvantaged."

The email warning was sent to senior staff who were asked to inform workers

So-called insider threats have become a serious concern for companies in recent years, due to the volume of data stored and its accessibility.

Sky News has confirmed that the data watchdog, the Information Commissioner's Office (ICO), has been alerted to the theft and may launch a probe.

An ICO spokesman said: 'We have been made aware of reports that Morrisons have suffered a potential data breach, and we will be making enquiries."

Morrisons, which is Britain's fourth biggest supermarket group, said it had called in police and cyber crime experts.

The criminal inquiry into the data theft from Bradford-based Morrisons is being led by West Yorkshire Police.

Detective Chief Inspector Nick Wallen said: "We are aware of the situation and are supporting Morrisons and their investigation into these matters."

It has also started communications with banks handling staff accounts and a credit rating agency, and has set up a helpline for employees.

The group has come under pressure recently over its performance in the ultra-competitive sector.

On Thursday, it launched a counter-attack in the supermarket price war after losing more than just ground to its rivals in its last financial year.

The chain, which has struggled amid strong challenges from discounters and because of its slow response to the online grocery and convenience markets, confirmed a pre-tax loss of £176m for 2013/14 after a profit of £879m in the previous 12 months.

Like-for-like sales fell 2.8% in the period, and its share price suffered a 10% drop on Thursday.

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Co-op Warned Of Collapse Without Overhaul

The Co-operative Group has been warned it will collapse unless drastic steps are taken to overhaul a "massive failure" of governance.

Former City minister Lord Myners made the warning in a damning interim review of the group's operations.

Lord Myners rounded on the Co-op's board because of oversight failings and inadequate experience for such a large organisation.

He was "deeply troubled by the disdain and lack of respect for the executive team" held by some board members.

Euan Sutherland has left the Co-op

Lord Myners added that some members, elevated from within the Co-op, had "simply not been up to their task".

He said: "The Co-operative Group suffers from acute systemic weaknesses in its governance framework that over many years have gravely damaged the organisation."

"Unless the group takes urgent steps to reform its governance so that it generates sustainable economic value, it will run out of capital to support its business."

Lord Myners was commissioned by the Co-op to conduct the governance review.

He decided to publish his findings earlier than expected after the shock resignation of chief executive Euan Sutherland.

Mr Sutherland quit on March 10 and said the Co-op was "ungovernable" with some board members thwarting reform attempts.

Lord Myners, who is also a new board member at the Co-op, said it was only due to Mr Sutherland and his executive team that the group remained viable.

His report revealed a board that was lethargic to change and potentially hostile to operational management.

He said: "There is a phrase frequently used in Co-operative Group circles that the executive should be 'on tap but not on top'"

Following Mr Sutherland's resignation on Monday the Co-op board agreed to the main recommendation by Lord Myners' review that it should be abolished in favour of a new "plc" style board, responsible for taking commercial decisions.

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Investors Line Up To Back £4bn AA Listing

By Mark Kleinman, City Editor

A powerful group of City investors is lining up to back a £4bn-plus deal that would entail a change of ownership for the AA, Britain's biggest roadside recovery group.

Sky News can reveal that Cenkos Securities, a London-based investment bank, has tabled a proposal to the AA's parent company for it to list on the London Stock Exchange.

The offer, which has been made in recent days, would resurrect a technique known as an accelerated initial public offering (IPO), which gained traction more than a decade ago but which has only been used infrequently in recent years.

Sources close to the situation said that Cenkos had approached major institutional investors including Aviva, BlackRock, F&C Investments, JP Morgan Asset Management and Threadneedle about a transaction that would involve them acquiring stakes in the AA through a new stock market-listed company.

It is not clear which of the firms has formally committed funds to the bid yet.

The AA is part of Acromas Holdings, a private equity-backed group which also owns Saga, the financial services and travel specialist for the over-50s which is pursuing its own £3bn flotation.

The Cenkos-led proposal for the AA was not solicited by Acromas and it is unclear whether it is likely to be formally considered by the company's current owner given its focus on Saga's listing.

Acromas has been expected to retain ownership of the AA for some time, given the scale of its borrowings relative to its earnings.

The AA has net debt of about £3.2bn, putting its borrowings on a multiple of 7.6 times the level of its earnings before interest, tax, depreciation and amortisation.

In the third quarter of last year, the AA reported sales of £244m, with earnings up 8.2% to £104m.

The AA, which has styled itself as "the fourth emergency service", has 4m personal members and 9m business customers, giving it a 40% share of the roadside insurance market.

Some City observers believe that a separate listing of the breakdown recovery group may be difficult because of its debts and a financial mechanism known as a whole business securitisation that was undertaken last year.

The accelerated IPO was first used in the City more than a decade ago by Collins Stewart, the investment bank which a group of Cenkos executives left to set up.

The technique involves a more rapid listing process during which the sponsoring investment bank agrees to buy the shares before selling them on to other investors.

Like Saga, the AA has turned to new leadership, appointing Chris Jansen, a former British Gas executive, as its new boss.

The AA has taken advantage of strong financing markets by launching a £350m bond, the proceeds of which are being used to repay a chunk of Acromas's vast debt-pile.

Acromas is owned by Charterhouse, CVC Capital and Permira, three of the UK's biggest private equity groups, which acquired the AA from Centrica, the owner of British Gas.

The AA's principal rival, the RAC, is also expected to be the subject of a change of ownership in the next couple of years, with Carlyle, its private equity owner, likely to seek a stock market listing for the company.

Sky News disclosed on Thursday that Acromas is close to hiring Goldman Sachs and at least three other banks to work on a flotation that will put Saga on course for inclusion in the FTSE-100 index.

As many as half of the shares on offer, equating to hundreds of millions of pounds, could be sold to ordinary retail investors, meaning Saga is likely to vie with Royal Mail's privatisation for the status of the City's biggest retail offering for years.

A sale of part of the Government's remaining stake in Lloyds Banking Group, expected this year, will include a retail offering that will dwarf those of Saga and Royal Mail.

Cenkos and Acromas declined to comment.

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Morrisons Plots Price Cuts After Annual Loss

Morrisons has launched a counter-attack in the supermarket price war after losing more than just ground to its rivals in its last financial year.

The chain, which has struggled amid strong challenges from discounters and because of its slow response to the online grocery and convenience markets, confirmed a pre-tax loss of £176m for 2013/14 after profits of £879m in the previous 12 months.

Like-for-like sales fell 2.8% in the period.

The £176m annual loss was largely explained by a £903m writedown relating to the value of its stores and its purchase of online children's wear retailer Kiddicare, which it now plans to sell following a poor financial performance.

Its share price fell 10% on opening on the FTSE 100 in response to the figures, with its plans to turn its fortunes around seemingly failing to impress.

Morrisons wants to focus more on value in a challenge to discounters

Sainsbury's and Tesco also saw steep falls in their values because of the implications of the price war, with Tesco having fired a new salvo the previous day with a fuel offer.

Morrisons said a £1bn programme of property disposals over three years would fund a major investment in its customer offer.

There would be £300m spent on its proposition during the current financial year and it would also introduce a loyalty card.

Chief executive Dalton Philips said Morrisons was investing the money to improve value and "defend and strengthen our competitive position," suggesting the grocery sector was facing its biggest structural shift since the 1950s.

The Yorkshire-based chain has been losing sales to hard discounters Aldi and Lidl faster than the rest of its so-called "big four" rivals.

In its annual results, it said of the discount market challenge: "It is currently worth £9.5bn (up 20%) over the prior year.

"This reflects a fundamental shift in the market and one that is likely to be structural rather than cyclical.

"It is a challenge we will address in 2014/15."

Morrisons also said it would do more to engage in the convenience sector as shoppers adopt more of a "little and often" approach at the expense of big basket weekly shops.

Its online grocery offer, in partnership with Ocado, only began at the start of the year.

However, Mr Philips said it was already producing market-leading performance for on-time deliveries and a low rate of substitutions.

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Which?: Energy Bills To Rise £640 By 2020

By Poppy Trowbridge, Consumer Affairs Correspondent

Annual household energy bills could rise by more than £600 within seven years so power companies can keep the lights on, consumer champion Which? has warned.

Sky News has learned the watchdog has written to the Treasury ahead of next week's budget to warn of rising costs.

In a new forecast, Which? has predicted energy companies will need to spend £118bn on new infrastructure between now and 2020.

This would include building new power stations, replacing grids and building wind farms as part of a drive to sustain Britain's power supply and cut down on carbon emissions.

Which? believes this cost will inevitably be passed on to consumers, and that households and businesses will foot the bill.

This would mean that the average bill would exceed £2,000 a year even if wholesale costs of gas and electricity remain stable - an annual rise of £640 per household.

Richard Lloyd, executive director of Which?, said: "I don't think consumers know that this is heading their way and that decision has already been made by the Government.

"This is a massive chunk potentially on everyone's bills. This means one thing: that household bills are set to rise, and to rise for many people very steeply for the foreseeable future."

Which? is campaigning for a full market investigation to find out if consumers are paying a fair price for energy.

Sky News also learned that at least one of the 'big six' energy firms is not guaranteeing to make the necessary investment should it not prove profitable for the company.

Energy companies rely on investors - who require a return on their investment - to finance certain projects.

Angela Knight, of Energy UK, the body representing the industry, said: "A lot of this is all about the policy that the Government and previous Government signed up to.

"Right now there is significant concern about the price of a bill and that is before much of this investment comes through.

"At the same time, a lot of our stuff is old and you do have to refresh and replenish."

One move Chancellor George Osborne may deploy to tackle the costs being passed through to consumer energy bills could be freezing the Carbon Floor Price in next week's budget.

The tax policy means polluting industries must pay a minimum amount of money for the right to pollute.

If Mr Osborne were freeze or abolish the Carbon Floor Price, the knock-on effect would prevent around £8 being added to bills each year, according to one energy company source.

In December 2013, HM Treasury released estimates of planned national infrastructure investments relating to 2013-2020 and beyond.

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Liberty Global Aims To Bloom With £500m Daisy

By Mark Kleinman, City Editor

The US-based cable giant Liberty Global has been holding secret talks about a £500m-plus takeover of the London-listed IT supplier Daisy Group.

Sky News understands that Liberty has held discussions in recent weeks about an agreed offer for Daisy, which is run by Matt Riley, one of the UK's most prominent entrepreneurs.

The talks are understood to have been discontinued in the last few days because of a gulf in the two sides' views about the potential price that Liberty would pay for Daisy, a source said.

However, Daisy may come under pressure from the Takeover Panel to confirm that it had held discussions if its share price moves significantly during trading on Friday.

The talks about a prospective takeover were held in the wake of a deal struck by the two companies last month. That involved a five-year agreement for Daisy to provide services and engineering support to Virgin Media, which is part of Liberty Global.

It is unclear whether the talks are likely to be revived.

Shares in Daisy closed on Thursday up 1% at 188p, giving the company a market value of just under £500m.

Last year, it paid its maiden dividend, and has used bank facilities to extend the services it offers to small and medium-sized companies through a string of takeover deals.

Liberty has been on a much larger acquisition spree in recent times, snapping up cable and other assets across Europe amid an accelerating consolidation of the industry.

The company, which is chaired by the media tycoon John Malone, has a division called Liberty Global Business Services, into which Daisy would be likely to be integrated if a deal was successfully revived.

Liberty Global and Daisy both declined to comment.

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Co-Op Must 'Work To Rebuild Customer's Trust'

The chairman of the Co-operative Group has told Sky News that the mutual will need to work hard to rebuild customers' trust.

Ursula Lidbetter said the Co-op must also implement governance reform in the wake of chief executive Euan Sutherland's resignation.

"The situation we are in is very sad, but the basis of the organisation is still there," Ms Lidbetter told Sky's Poppy Trowbridge.

"Our members, our customers, our staff, the members who get involved in our democracy - they are such good people.

"The organisation, fundamentally, is really good and sound but we need to get the public's support back with us.

Richard Pennycook is now running the Co-op Group

"It's all about customer confidence. It's about doing the right thing."

The Group confirmed a Sky News report this morning that Mr Sutherland had left his job, despite efforts by the board to change his mind.

Mr Sutherland resigned on a point of principle, citing the Group's structure as "ungovernable".

He was also known to be furious over a number of leaks to the media - leaks that he believed had come from the top of the organisation and included details of his pay.

Mr Sutherland said in a statement: "It is with great sadness that I have resigned as chief executive.

"I have given my all to the business and had hoped to be able to lead its revival. However, I now feel that until the Group adopts professional and commercial governance it will be impossible to implement what my team and I believe are the necessary changes and reforms to renew the Group and give it a relevant and sustainable future.

"Saving The Co-operative Bank and with it The Co-operative Group from administration was a huge task, but the changes required do not stop there, with fundamental modernisation needed to safeguard the 11 future for our 90,000 colleagues and millions of members.

"The Group must reduce its significant debt and drive major efficiencies and growth in all of its businesses, but to do so also urgently needs fundamental governance reform and a revitalised membership.

The appointment of now ex-bank chair Paul Flowers is being investigated

"I will not accept the retention payments and long term incentive payments previously agreed for the delivery and protection of value in the Group and the Bank, even though this was successfully delivered."

Ms Lidbetter confirmed Richard Pennycook - who was chief financial officer - had been appointed interim chief executive pending the appointment of a permanent successor to Mr Sutherland.

She said she had accepted his resignation with "deep regret."

An emergency board meeting on Monday night - held to discuss Mr Sutherland's resignation - also proposed a restructuring that would result in the current 21-member board being disbanded and replaced by two different structures.

One would be a PLC-type board while the other would represent members.

Ms Lidbetter has described the planned reforms as urgent.

The decisions were taken following a crisis for the Co-op which has seen its banking operation subjected to regulatory scrutiny after control was lost to US hedge funds.

A £1.5bn black hole in the bank's balance sheet sparked the Co-op's problems but the restructuring of the lender left the Group with just a 30% stake.

Mr Sutherland's own role was in focus at the weekend over plans to raise his own pay to £3.6m despite the mutual's problems and an expected worst-ever loss for 2013 of £2bn, due to be announced at the end of the month.

The Co-op could sell 15 farms and its pharmacy business

The debate over rising awards at the Co-op began just weeks after Mr Sutherland admitted the Group had "lost touch" with customers.

At that time he launched an online poll so the public could make suggestions about its future direction.

A plan to sell parts of its business also left question marks over more than six thousand jobs.

Mr Sutherland has only been in the job since last April.

He expressed fury about media leaks on Sunday in a Facebook posting to an employees' group after the news on pay awards appeared in a national newspaper.

He said: "I'm very sorry to have to report that we have had yet another leak to the media.

"This time it is to the Observer newspaper and concerns levels of annual Executive remuneration, including my salary, and also proposed changes to the Group Executive team.

"It appears that, once again, the leak has come from our Group Boardroom.

"We seem to have an individual, or individuals, determined to undermine me personally, my team and the rest of the Group Board regardless of the uncertainty and disruption this causes to our 90,000 colleagues and our supportive members.

"Despite this, I am determined that we will see through the vital transformation of our business."

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Payday Lenders Face Debt Sympathy Inquiry

A wealth of complaints about how payday lenders and other such firms treat their customers has prompted an inquiry by the City regulator.

The Financial Conduct Authority (FCA), which assumes oversight responsibility for the consumer credit market on April 1, said it was making a priority of the issue because three-fifths of complaints to the Office of Fair Trading (OFT) are about how debts are collected.

The watchdog, which has previously announced a range of measures to strengthen protections for consumers, wants to investigate how sympathetic lenders are when customers struggle to pay back their debts.

It will examine the culture at each payday firm.

More than a third of payday loans - equal to 3.5 million - are repaid late or not at all annually.

The new rules are expected to see a quarter of payday firms exit the market

The FCA said its new rules should help reduce the numbers.

They include limiting the number of times a payday loan can be rolled-over to two, the banning of misleading adverts and compulsory affordability checks for all loan applicants.

But the regulator said it also wants to see struggling borrowers helped by discussions on the different options open to them.

It expects that around one quarter of payday firms will decide they cannot meet its higher consumer protection standards and leave the market.

The consumer credit market is huge.

Around 50,000 consumer credit firms are expected to come under the FCA's remit from next month when it assumes responsibility from the OFT.

Around 200 of those firms will be payday lenders - a number already reduced through failures to adhere to market rules or simply leaving the market because of the looming regulations.

Analysis by the Competition Commission, which is carrying out a separate inquiry into the payday loan sector, found that such firms currently issue approximately 10.2 million loans a year, worth £2.8bn.

More than a third of payday loans are repaid late or not at all each year

The average size of a payday loan is £260.

By comparison, the entire consumer credit market is worth over £200bn.

Martin Wheatley, the FCA's chief executive, said: "There will be no place in an FCA-regulated consumer credit market for payday lenders that only care about making a fast buck."

The regulator is additionally considering a cap on the overall cost of short-term credit, which would be put in place early next year.

The Consumer Finance Association, which represents the biggest payday operators, welcomed the developments.

Its chief executive Russell Hamblin-Boone said: "We urge the FCA to use its proposed price cap on credit to tackle excessive default fees and charges which are used by the least reputable lenders to profit from customers who are already in dire straits.

"CFA members offer a range of help for customers in financial difficulty including freezing interest and charges to prevent a short-term loan becoming a long-term debt," he said.

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Facebook HQ Placed In Lockdown After 'Threat'

An apparent threat against Facebook's California headquarters has been dismissed by police after the campus was placed on a precautionary lockdown.

Staff were prevented from going home until 8:30pm local time (0330 GMT) while officers investigated.

The site - at Menlo Park in the San Francisco area - was searched before the authorities decided the threat was "totally not credible."

Menlo Park Police Department spokesman Dave Bertini said Facebook personnel held employees inside.

"It was a totally not credible, unsubstantiated threat," he told reporters.

The spokesman declined to say what the nature of the incident was.

"I'm not even sure that it was specifically to the Menlo Park campus of Facebook," he added.

Facebook declined to comment.

The incident happened just a week after Facebook said it would pay to fund a full-time police officer to bolster security in the area around its HQ - a move seen as the first such partnership between a private company and police.

The company's offer to pay $200,000 (£120,000) annually for a minimum of three years was backed by the city council.

Ray Mueller, the Menlo Park mayor, shrugged off suggestions that Facebook could get special treatment, saying: "The only way you'd have a conflict of interest is if someone tried to exert influence over our police force.

"That's not going to happen."

More follows ...

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Insurers 'See Customers As Pound Signs'

The City regulator has accused insurance firms of seeing customers as pound signs in the so-called 'add-on' market, worth £1bn annually.

The Financial Conduct Authority confirmed proposals to reform the industry on Tuesday, nine months after it began a market investigation into the products.

A general insurance add-on is an insurance product that is sold alongside goods or services, a car or holiday for example, or other principal insurance products such as home insurance.

Christopher Woolard, director of policy, risk and research at the FCA, said: "There's a clear case for us to intervene. Competition in this market is not working well and many consumers are simply not getting value for money.

"Firms must start putting consumers first and stop seeing them as pound signs.

"We believe our proposals will address these issues and prevent consumers paying for poor-value insurance products that they may not need or use."

It is recommending the banning of pre-ticked boxes, forcing firms to publish claims ratios and breaking the point of sale advantage for guaranteed asset protection (GAP) insurance, usually offered alongside car sales.

More follows...

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Floods Hit Retailers But Deliver Jobs Boost

The misery inflicted by the winter storms kept people away from the shops last month but provided a £250m boost to the jobs market.

Separate reports on Tuesday painted different pictures on the impact of the flooding - with monthly retail sales falling for the first time since April 2013, according to the British Retail Consortium and auditors KPMG.

Their report measured a 1% drop in like-for-like sales in February compared to the same period in 2013, as the poor weather took its toll on town centre stores.

However, online sales continued to grow - by 14.3% on a non-food basis.

David McCorquodale, head of retail at KPMG, said: "February saw a hiatus on the high street, with online sales soaring while in-store sales stalled.

Discounters were said to fare better than the major supermarkets

"There's no doubt inclement weather exacerbated this trend, but it certainly underscores the importance of having a sophisticated online operation.

"The grocery sector remains fiercely competitive. February's figures were impacted by the discounting campaigns launched by the value grocers, which caused a sharp slowdown of overall price inflation in the food sector."

"There were some bright spots amidst the gloom. The effects of a rapidly recovering housing market are already feeding through to the retail sector, with sales of furniture and home accessories remaining solid."

While the insurance industry appears set for a bill totaling hundreds of millions of pounds for the storms, a report by employment firm Manpower showed demand was strong for those repairing the damage.

Thousands of homes are drying out

It pointed to £250m of growth in the wake of the wet weather and said that energy firms had also taken on extra staff to help restore power to thousands of homes, as well as more customer service workers to handle compensation claims.

The roll out of smart metering will also create jobs at utility firms into next year, it was predicted.

Manpower said firms in every sector were planning to take on extra staff in the coming months, the first time this had happened for six years.

Mark Cahill, managing director of Manpower, said: "The UK jobs market has reached a turning point. Whilst the overall outlook has been consistently positive now for a number of quarters, it's actually been six years since the employers we've interviewed have reported positive hiring plans in every single sector.

"In particular, the construction forecast has been in negative territory since 2008 and was one of the sectors hardest hit by the recession, but it has really bounced back.

"At last we can confidently say that the jobs market is starting to fire on all cylinders.

"With over 6,000 properties flooded, and an average repair bill of £30,000-£40,000, the beneficiaries of all this extra work will be builders who are already being called in to repair homes.

"Even in areas where flooding has been less of a problem, the persistent and heavy rain will have highlighted problems with roofs that need fixing, and that should help boost demand for the sector."

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Fidelity Criticises Pay 'Mess' At Barclays

By Mark Kleinman, City Editor

The fund management giant Fidelity International has become the first big City institution to publicly criticise Barclays over its £2.4bn bonus pot, intensifying the pressure on the bank ahead of a potentially-fiery annual meeting next month.

Speaking exclusively to Sky News, Dominic Rossi, Fidelity's global chief investment officer, said he was "disappointed" Barclays had landed itself in a "public relations mess" by hiking bonus awards for 2013 by 10% despite a significant fall in profits.

He joined critics including the Institute of Directors in expressing dismay Barclays had decided to hand out almost three times as much in bonuses to staff as it was handing out in dividends to shareholders.

One of the most influential shareholder voices in the City, Mr Rossi oversees billions of pounds in investments made by Fidelity, which is among the biggest owners of UK-listed shares.

"We are disappointed that the distributions between employees and shareholders did not favour shareholders more. It is disappointing that a year after making various commitments on pay, they have got themselves into a PR mess again," he said.

Mr Rossi's remarks about Barclays underline the difficulty facing Sir David Walker, Barclays' chairman, who will step down next year, and Antony Jenkins, the chief executive, as they attempt to keep both investors and top-performing employees happy.

His remarks are likely to be particularly painful for Barclays since one of the bank's non-executive directors, Simon Fraser, spent 27 years at Fidelity, including a stint in the role that Mr Rossi now occupies.

Mr Fraser is to step down from the Barclays board this year.

Sir David Walker, chairman of Barclays

Mr Rossi has been among one of the most vocal advocates of remuneration reform in British boardrooms, recently threatening to vote against companies' pay policies unless they force top executives to hold onto share awards for at least five years from 2015.

Barclays is among the companies which have pledged to ensure executives such as Mr Jenkins hold onto share options for at least five years, which Mr Rossi said on Monday he welcomed.

Other commentators, including the Parliamentary Commission on Banking Standards, have called for banks to lengthen to as long as ten years the period until managers receive bonuses, which Mark Carney, the Bank of England Governor, said last week would be considered as part of a consultation on the issue.

It is unclear how Fidelity will vote on the Barclays remuneration report for 2013 at next month's annual general meeting.

It seems unlikely, however, that it will use its vote on future pay policy - the binding nature of which is new this year following reforms led by Vince Cable, the Business Secretary - to embarrass Barclays given the bank has moved to lengthen the deferral period for executive share awards.

Last autumn, Mr Rossi wrote to hundreds of UK companies to warn them of a tougher stance on that issue.

"Despite a broadly positive response to our initiative, change on the ground has been slow and we continue to be concerned that incentive schemes are too short-term in their orientation."

He added that longer deferral periods would "change corporate governance for the better, reduce the temptation of management to maximise short-term financial performance and instead promote investment and growth".

"It's quite clear that a number of leading companies are going to move," Mr Rossi said in his letter.

"It's also clear that a number aren't, and therefore we will find ourselves voting against a material number of reports next year."

Last week, Mr Jenkins ran into another row over pay, saying in a newspaper interview he had had to pay bigger bonuses to avoid its investment bank falling into "a death spiral".

In total, 481 Barclays workers' remuneration broke through the £1m threshold, a 10% increase on the previous year despite the sharp decline in profits.

The row over bonuses could be especially damaging given shareholders injected almost £6bn last year to help shore up Barclays' finances through a rights issue.

A round of shuttle diplomacy involving Mr Jenkins and Tushar Morzaria, Barclays' new finance director, has attempted to reassure investors they will exert a tighter grip on the bank's cost-base during the next 12 months.

Since replacing Bob Diamond, his lavishly-paid predecessor, Mr Jenkins has pledged to make Barclays a stakeholder-friendly bank by boosting shareholder dividends and punishing employees whose behaviour does not meet exacting standards.

However, Barclays has continued to face legacy issues including a Serious Fraud Office probe into a rescue fundraising in 2008, and, like other banks, sizeable compensation bills for insurance and other product mis-selling.

Barclays is not the only bank to have made troubling pay-related disclosures in recent days, however.

More than 100 employees at state-backed Lloyds Banking Group and Royal Bank of Scotland were paid more than £1m last year.

At the weekend, it emerged Euan Sutherland, chief executive of the Co-operative Group, would be paid more than £3.5m this year, including a £1.5m guaranteed retention bonus.

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Tesco Paves Way For Finance Director's Exit

By Mark Kleinman, City Editor

Tesco is preparing the ground for the departure of its finance director amid tensions with its chief executive as the retail giant attempts to reverse the declining fortunes of its core UK operations.

Sky News has learnt that Laurie McIlwee, who has served as Tesco's chief financial officer since 2009, could leave the company within months.

The company is understood to have held discussions at a senior level about Mr McIlwee's position since an investor presentation late last month at which it ditched a key profit margin target.

Mr McIlwee, who has in the past been the focus of doubts expressed by unidentified City investors, is said to have an uncomfortable working relationship with Philip Clarke, Tesco's chief executive.

A formal search for a new finance director is not yet thought to be underway, but senior sources said on Sunday that Mr McIlwee's exit was now "more likely than not" at some stage this year.

"The feedback [from some investors] was that the status quo is not tenable," one insider said.

If Mr McIlwee does depart, it would represent the latest stage of a sweeping overhaul of the executive management at Tesco, which still possesses a commanding share of the British grocery market.

Its seemingly-unassailable position has, however, begun to look more vulnerable as so-called 'hard discounters' such as Aldi and Lidl have eaten into its market share.

Last month, Tesco told investors that it would plough £200m into lowering the price of everyday food staples, while also scaling back the volume of new store space it will open in the UK this year.

The chain reported a 2.4% fall in like-for-like sales during the important Christmas trading period, adding its name to those of Wm Morrison, Debenhams and Marks & Spencer, which also saw festive sales disappoint the City.

Some investors have questioned whether the proposed new phase of Tesco's price-cutting campaign will go far enough to win back the custom of shoppers who have defected elsewhere.

Mr McIlwee's departure as chief financial officer would leave Mr Clarke with a crucial post to fill as he battles to convince shareholders that his plan to revive Tesco deserves long-term backing.

An external appointment is seen by investors as the most likely route to rebuilding the group's executive team.

The head of Tesco's UK business was replaced shortly after Mr Clarke took over from Sir Terry Leahy in 2011.

In addition to the challenges in the UK, Tesco is navigating its way through the establishment of a new joint venture in China, into which it will fold is existing assets there.

A similar outcome is expected in Turkey, where Tesco has also struggled to make a success of its standalone business.

Mr McIlwee joined Tesco in 2000 as the finance director of its UK business, prior to which he had worked for PepsiCo, the multinational food and drink company, in a variety of roles.

Last autumn, the Financial Times quoted an unnamed top 20 shareholder in Tesco as saying that there were "worries" about Mr McIlwee.

"He is very abrasive and is not communicating very well with shareholders... If things keep going wrong for Tesco, then his position could come under threat," they were reported to have said.

Tesco is far from the only major UK food retailer facing questions about its strategy.

Morrison's will announce full-year results this week alongside which it is expected to announce the sale of some of its property assets following weak trading.

Tesco refused to comment on Sunday.

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UK Economy 'To Reach 2008 Peak In Summer'

The size of the UK economy will surpass its pre-recession peak by the summer, according to an upgraded forecast from the British Chambers of Commerce.

The business lobby group believes the UK will grow by 2.8% this year and that the second quarter will see gross domestic product rise to the level seen in the first quarter of 2008.

A year ago, the BCC predicted the pre-recession peak would not be reached until 2016.

The group's director general, John Longworth, said Britain's economic recovery is gaining momentum.

"Businesses across the UK are expanding and creating jobs, and our increasingly sunny predictions for growth are a testament to their drive and ambition," he said.

The BCC expects the first increase in interest rates will happen in the autumn next year - one quarter earlier than previously envisaged, before rising to 1.5% in the second half of 2016. GDP will be 2.5% next year and in 2016.

The BCC boss says unemployment remains a 'major issue'

But Mr Longworth warned business investment is likely to remain below pre-crisis levels for some time to come.

"Major issues remain, such as the unacceptably high level of youth unemployment," he added.

"We urge the Chancellor to use this month's Budget wisely by incentivising businesses to hire young people so that the next generation of workers are not left behind.

"We just hope that as the general election gets closer, politicians are not tempted to abandon a drive for long-term economic security in favour of short-term vote winners.

"No government over the next decade can afford to get distracted - and our leaders must do everything in their power to ensure the economy goes from being merely good, to being truly great."

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Energy Bills To Show Codes To Help Consumers

By Rhiannon Mills, Sky Correspondent

Homeowners are being offered a new way to potentially save money on their energy bills - QR (or quick response) codes.

The Department for Energy and Climate change wants all energy companies to add the codes to their bills to give customers an easier way of finding out how much they have spent on gas and electricity.

Ed Davey says the move will make a 'real difference'

The codes are small box shapes with unique combinations of black and white dots, and are similar to barcodes, providing easy access to information through your smartphone.

In order to read them, customers will need to download a QR reader app on their phones.

This is the latest announcement from the Government to help consumers get a better deal, with collective switching and simpler tariffs already introduced.

Secretary of State for Energy and Climate Change Edward Davey said: "We're determined to make energy markets work better for consumers - and despite all the evidence showing that QR codes on bills would make a real difference to people, energy companies still haven't done anything about it.

"That's why we're acting to make sure people have a quick, straightforward way to compare the best deal for them with a simple swipe of their phone.

"With so many of us using smart phones and tablets nowadays it would be strange if we weren't using the latest technology to help us save money at home."

The big six energy companies have all raised prices in recent months

The Government says studies have shown that the technology would be helpful for customers, but there has been no voluntary move by the energy sector to introduce QR codes, therefore it is taking action under the Energy Act to modify the energy company licences to have QR codes included as part of energy bills.

Energy UK, which represents the industry, told Sky News: "Energy companies are working hard to streamline tariffs, improve customer information and encourage choice so people have all they need to compare and switch.

"And it's working - around quarter of a million customers switch every month and nearly a million did last November and December alone."

Despite concerns from some campaign groups, ministers insist the QR codes will also benefit vulnerable consumers or those who do not use smartphones, because people with smartphones will be able to help friends and family less comfortable with technology.

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China Solar Panel Firm 'In Bond Default'

China has suffered what has been called its first corporate bond default, as the government tries to make its financial system more market-orientated.

A Shanghai-based manufacturer of solar panels paid only part of the 90 million yuan (£9m) in interest due on Friday for bonds issued in 2012.

Chaori Solar Energy Science and Technology had earlier warned it would struggle to make the payment.

According to two bondholders hit by the default, only 3% of the due amount was paid.

The solar industry has been heavily criticised in the past for levels of state subsidies.

Competitor nations including the United States, and Germany - Europe's largest solar user - have been vociferous critics of Chinese state support in the sector.

Manufacturers in the US and Germany have struggled as cheaper Chinese panels flooded their markets.

Beijing has previously bailed out troubled companies in an attempt to maintain confidence in its credit markets.

However the ruling Communist Party has promised to make the domestic market more productive and competitive.

Chinese citizens have complained that bailouts have not encouraged a need for risk aversion by big businesses.

Legal representatives for the bondholders hit by the default said they would pursue the money owed.

Lawyer Gan Guolong said: "The default today is already an established fact. We will definitely help recover bondholders' interests through relevant legal action."

A commentary published by the official Xinhua news agency hinted that government policy over defaults was hardening.

"The episode should help reduce the moral hazard caused by the widespread assumption that an almighty government will always bail out underwater investments with taxpayers' money," Xinhua said.

"That, after all, is the market playing its own decisive role."

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US Jobs Up As Part-Time Work Hits New Record

The number of new jobs in the United States accelerated in February, as the number of part-time workers in the month reached an all-time high.

The rise of 175,000 jobs helped ease fears of an economic slowdown.

The dollar rose sharply on the news and the Federal Reserve is now expected to continue tapering its quantitative easing stimulus package.

The US Labor Department said the 35% job jump comes on the back of 129,000 new positions in January.

The unemployment rate, however, rose 0.1% to 6.7%. The previous figure was at a five-year low.

"This bodes well for the economy since there were massive head winds," Adam Sarhan, chief executive at Sarhan Capital in New York, said.

"This report plays perfectly into the Fed's script of tapering."

US shares opened higher on the data. The British pound dropped at first against the dollar before recovering.

The dollar also hit a six-week high against the yen.

Analysts had expected harsher figures as snow and ice hampered economic activity across swathes of the US.

Economists had expected non-farm payroll numbers rising by only 149,000 jobs.

Revised figures for December and January were also released, showing 25,000 more jobs being created in that period than previously thought.

Last month's weather did impact average working hours, with February being the lowest level since January 2011.

Economists now expect a reversal once the weather improves.

A smaller survey of households, from which the unemployment rate is derived, showed that 6.9 million people with jobs reported they were working part-time.

That was the highest reading for February since the series started in 1978.

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TV Licence Dodgers May Not Be Prosecuted

Pressure Grows Over TV Licence Prosecutions

Updated: 1:18pm UK, Saturday 08 March 2014

By Anushka Asthana, Political Correspondent

What crime led to 180,000 people being hauled in front of magistrates in 2012, resulted in 70 prison sentences and accounted for one in nine of all cases heard by the courts?

OK, OK, I know you've read the news story and realise the answer is failure to pay a television licence fee.

Magistrates have long objected to being asked to deliver criminal records to these offenders, who tend to be poor, are often older and about two-thirds of whom are women.

They think it is an over-reaction and a waste of court time.

Instead, they want to divert cases to the civil system, along with parking offences or failure to pay your gas bill.

So could their argument be gathering steam in Parliament?

An amendment calling for the change by Conservative MP Andrew Bridgen is gathering support from across the political divide with a variety of motivations.

Some object to the "poll tax" nature of the fee - a £145.50 levy on the rich and poor is clearly regressive.

Others feel that criminal sanctions including prison are simply not the right response, particularly given the vulnerability of those it affects.

Then there is the idea of easing pressure on courts and prisons appeals across the political system.

And finally, there are those who simply detest the BBC.

The corporation itself would be uneasy about the change because of fears it would reduce the incentive to pay.

Even a 1% rise in evasion would cost £35m, which the Beeb tells us is equivalent to 10 local radio stations (or, to put a different spin on it, 11 Jeremy Clarksons).

What is notable about this story is that Chris Grayling, the Justice Secretary, has called Mr Bridgen's intervention "really interesting".

He says Maria Miller, the Culture Secretary, agrees and both departments will be doing some "serious work on the proposal".

In reality, any such change would be discussed as part of BBC Charter renewal.

The next round is due to be completed by the end of 2016, with talks starting around 18 months beforehand.

That means the middle of next year - probably not until after the General Election.

The magistrates, it seems, will have to wait.

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