Despite the losses – down to £257m from £1.3bn a year ago – Northern Rock is paying out £15m in bonuses to its staff but chief executive will waive his

More than 22,500 Northern Rock customers – over 4% – have missed monthly mortgage payments, the nationalised mortgage lender admitted today as it reported a sharp fall in losses for last year.

Despite the losses – down to £257m from £1.3bn a year ago – the bank is paying out £15m in bonuses to its staff and will be paying £1.5m to the Treasury to cover the cost of the one-off tax on the payments.

Chief executive Gary Hoffman is waiving his bonus although the bank said a new long-term incentive scheme was being drawn up for the former Barclays executive.

The new scheme for Hoffman will pay out only when the nationalised bank returns to profit or if it can be returned to private hands.

The bank, which was split into a "good" and "bad" operation at the start of the year, actually managed to make a £466m profit in the second half of the year although this was not enough to offset losses in the first half, and charges for impaired loans of £1bn.

The operation reporting today is Northern Rock (Asset Management) plc – technically the "bad" bank. Before it was nationalised, the company specialized in so-called Together loans – allowing customers to borrow more than the value of their home – and this left it a legacy of large customers in arrears.

The company's mortgage arrears rate rose in the first half of 2009 before stabilising in the final quarter of the year by which time residential mortgage accounts over three months in arrears reached 4.28%, compared with 2.92% at 31 December 2008. If Together loans are stripped out, the numbers in arrears fall to 3.10% although this is still higher than the 2.25% at 31 December 2008, which shows that more than 6% of customers with Together mortgages are in arrears.

Hoffman warned of the difficulties ahead. "The outlook for the UK economy remains uncertain. After a contraction in the economy during 2009, with increases in unemployment and house price deflation, conditions appear to have stabilised, but economic recovery is still expected to be relatively weak," Hoffman said.

He said the current low level of interest rates means that loan repayments "remain affordable for those in employment", but said that the company's future performance will be influenced by the timing and extent of increases in rates.

He also admitted that loan loss impairment charges are expected to remain high during 2010, but below the level recorded in 2009.

"It is over two years since Northern Rock entered public ownership. During that time the company has made good progress in pursuit of its objectives that include repayment of state aid, delivering value for taxpayers and ultimately a return to private ownership. We are looking forward, not back, and my colleagues across the business remain committed to delivering a high standard of service for all of our customers. We are on the right trajectory and I am confident that, with the current strong management team in place, we are well positioned to deliver against our objectives in 2010," he added.

The bank, which has permission from the EU to start mortgage lending after reducing its loans in the early months following its nationalization in February 2008, said residential lending stood at £4.2bn in 2009, compared with £2.9bn in 2008. But as a result of the strategy to lend again, the taxpayer has injected more funds into the lender which now owes the taxpayer £22.8bn, up by more than £8bn.

Northern Rock Asset Management has £49.7bn of residential mortgages, as well as £3.9bn of personal unsecured loans.

Following approval for state aid granted by the European commission, the company ceased to offer new lending at the end of 2009. As a result of the restructuring the company also transferred its entire book of retail savings, of £19.5bn, to the new "good" bank, Northern Rock plc, and no longer offers any retail savings products.

Government proposals go further than the recommendations of City veteran Sir David Walker, who had suggested that banks should disclose how many people are earning more than £1m

Banks could be forced to reveal how many of their employees earn more than £500,000-a-year under new government proposals. This goes further than the recommendations of City veteran Sir David Walker, who had suggested that banks should disclose how many people are earning more than £1m.

The government has drawn up regulations on greater disclosure on pay for the top earners at banks, which will be published later today. This will include proposals for narrower disclosure bands than Walker suggested.

They are expected to show that hundreds, perhaps thousands, of City bankers become millionaires each year.

Speaking at the British Private Equity and Venture Capital Association this morning, City minister Lord Myners said: "From the outset of the crisis, the government has been focused on eliminating rewards for failure and ensuring that remuneration does not incentivise excessive risk-taking.

"And we will continue to lead on this issue – David Walker's proposals will be implemented to give shareholders much more power and information to shape remuneration policies at banks. And in some cases we may go further. Later today the government will publish draft regulations on greater disclosure on pay for the top earners at banks.

"This will include proposals for narrower disclosure bands than Walker proposed, starting with salary packages below the £1m floor that he suggested. We will consult on that idea, but as the chancellor has said – most people are convinced that far more disclosure is important, because they will then be able to see precise remuneration practices."

It is understood that the pay disclosure bands will start from £500,000 and go up in £500,000 increments to £5m, and then up from £5m by £1m increments. Pay packages include salary, cash bonuses, deferred shares, long-term awards and pensions.

In his review of corporate governance last year, Walker proposed bands of £1m-£2.5m and £2.5-£5m and bands of £5m thereafter.

Some economists believe the weak outturn was a blip and expect production to have bounced back in Februar

Britain's manufacturers suffered their biggest fall in production in six months at the start of the year when snow storms brought parts of the country to a standstill.

Factory output fell by 0.9% in January, official figures showed this morning, taking City economists by surprise who had pencilled in a 0.3% gain. This was the biggest monthly drop since last August and reversed December's strong 0.9% increase.

The pound fell more than half a cent to $1.49 on the news, which dented hopes that the economic recovery might have picked up more speed in the first quarter of the year. The figures were released as Gordon Brown warned in a speech: "Although the economy is growing, the recovery is still in its early stages and remains very fragile."

The Office for National Statistics said the decline came after a strong December and poor weather in January.

Some economists believe the weak outturn was a blip and expect production to have bounced back in February.

"Snow will have physically obstructed workers at manufacturers and their end customers from getting to work," said Alan Clarke at BNP Paribas. "Similarly deliveries in and out of businesses will have been impeded. We believe this was a temporary blip and a sharp snapback is likely next month. Past episodes of extreme snow have experienced an offsetting bounce when the big thaw arrives."

In the three months to January, manufacturers ramped up production at the fastest rate in nearly four years.

But Colin Ellis at Daiwa was more sceptical about industry's prospects. "The risk is that at least part of January's weakness reflects the soft underbelly of the economic recovery, and is another signal that GDP growth will struggle to pick up to around 3% by the turn of the year, as the Bank of England expects. At the very least, today's data mark an inauspicious start to 2010."

Overall industrial production, which also includes mining and utilities, fell by 0.4% in January, also the largest drop since August. The decline was less severe than in manufacturing because households cranked up the heating during the cold spell.

Hopes that the cheaper pound will power the UK to an export-led economic renaissance suffered a blow yesterday with the news the trade gap widened sharply in January.

"Industry now looks unlikely to drive any significant pick-up in GDP growth in the first quarter. What's more, with the latest trade figures still showing few signs of any real boost from the lower pound, the outlook for the export-sensitive industrial sector remains pretty fragile," said Jonathan Loynes at Capital Economics.

José Manuel Barroso says European commission considering ban on credit default swaps to ease market pressure on Greece

The European commission announced moves today to shore up the euro and ward off market pressure on Greece by considering a ban on complex derivatives allegedly being used to undermine the single currency.

The draconian move suggested by José Manuel Barroso, commission president, follows a joint campaign by the German chancellor, Angela Merkel, and the French president, Nicolas Sarkozy, for a prompt clampdown on credit default swaps (CDS).

George Papandreou, the embattled Greek prime minister, who has been arguing in Berlin, Paris, and Luxembourg for the past several days that unbridled speculation on the markets is driving his country towards national insolvency and sovereign debt default, was expected to lobby the White House last night to join the crackdown on the markets.

Papandreou was due to see Barack Obama in Washington last night following meetings in Berlin and Paris with Merkel and Sarkozy respectively.

In concerted criticism of the speculative attacks on the euro, Merkel was also joined by Jean-Claude Juncker, the Luxembourg leader and head of the eurozone of 16 countries using the single currency, in demanding swift action to rein in the markets.

Barroso said today it was "not justified" to buy CDSs "by unseen interventions on a risk, on a purely speculative basis ... The commission will examine closely the relevance of banning purely speculative naked sales on credit default swaps of sovereign debt."

The possible ban on CDSs – a form of insurance against the risk of default – would also be raised at the G20.

Following talks with Juncker in Luxembourg on the Greek crisis, the threat to the euro, and the talk across the EU of establishing a European Monetary Fund to bail out distressed eurozone countries, Merkel reserved her strongest criticism for the markets.

"We must discourage financial market speculation," she said. "A fast implementation in the area of credit default swaps must follow. We know this will be done on the American side too, but we think that a step ahead from our side, from the European Union, would help."

The commission announcement came in response to pressure from Merkel, Sarkozy, Juncker and Papandreou, who threatened to take national action against the markets if Brussels balked.

The European crackdown on CDS trading appeared to be the central result of Papandreou's tour of key capitals, a strong political signal aimed at winning time for the Greeks. The apparent determination to regulate the traders as well as the concerted political signals sent today were aimed at relieving the pressure on Greece whose debt and deficit crisis could spiral out of control and undermine the euro.

For the first time Barroso said the eurozone countries were preparing some form of bailout for the Greeks which, nonetheless, would not breach the no-bailout clause in the single currency rulebook.

"The commission has been actively working with euro-area member states to design a mechanism which Greece could use in case of need," he said. "It would include stringent conditionality. The commission is ready to propose a European framework for co-ordinated assistance, which would require the support of euro-area member states."

Market speculation against the euro was "an aggravating factor" in the Greek crisis, Barroso added, but conceded that Greece's problems "were not caused by speculation on the financial markets".

Despite the criticism of the markets and the CDS crackdown led by Merkel, Germany's financial services regulator said it had seen no evidence of speculation against Greek bonds and no growth in the use in effect of CDSs betting on the chances of a Greek default.

Following the weekend announcement from Wolfgang Schäuble, the German finance minister, that he favoured setting up a European Monetary Fund to safeguard the euro in future Greece-style crises, it was clear today that any such move will be slow and complex, tiptoeing gingerly through a legal minefield.

While supporting the idea, Juncker said there were "a thousand questions" to be answered. The Germans and the French are certain to scrap over the rules and functions of an EMF. Merkel reiterated that such a fund would mean reopening the Lisbon treaty, a nightmare scenario that could run into trouble with Germany's supreme court.

While the fund would work for the single-currency countries, changing the Lisbon treaty would require the assent of all 27 EU countries. Gordon Brown has already pledged no more changes to European treaties for at least a decade, while a Conservative government in the UK would face major dilemmas over how to respond to changes in the Lisbon treaty.

Mayor Boris Johnson faces choice of cutting transport network or postponing tube upgrades after arbiter's final ruling

Boris Johnson must consider making cuts to London's public transport network or postponing improvements to one of the capital's busiest Underground lines after he was told to plug a £450m funding gap in a controversial public-private partnership to repair the tube system.

The London mayor said taxpayers were being asked to "write a blank cheque" to fund Tube Lines, the last surviving PPP contractor that is responsible for maintenance and upgrades on three of the capital's busiest metro routes: the Jubilee, Northern and Piccadilly lines. In a final ruling today, the arbiter of the PPP contracts, Chris Bolt, said Tube Lines's work programme over the next seven-and-a-half years should cost £4.46bn. Publicly owned London Underground, which still runs the tube network on a day-to-day basis, must fund the Tube Lines work and has budgeted only £4bn for it – leaving a shortfall of £450m on its already stretched balance sheet.

Johnson, who ultimately controls LU and its parent Transport for London, said he would consider taking legal action against Bolt, who rejected demands that Tube Lines fund the difference by raising debt privately. Instead, Bolt said TfL should either cut back on an upgrade to the Piccadilly line – the only tube link to Heathrow airport – or find costs cuts elsewhere in its £9bn annual budget.

"Londoners will also be outraged that the Tube upgrades promised to them are now threatened," said Johnson. The mayor claimed that Tube Lines's co-owners, Ferrovial, the Spanish owner of Heathrow airport, and Bechtel, the US project management specialist, will be paid £400m in management secondment fees by 2017.

"In other countries this would be called looting, here it is called the PPP," he said. Bolt rejected the management fees argument, saying that Ferrovial and Bechtel managers were helping to keep down overall costs and, without them, the maintenance and upgrade work could cost more than £4.46bn.

Andrew Cleaves, Tube Lines's acting chief executive, said delaying an upgrade to the Piccadilly line was one option for closing the funding gap. Bolt has already asked the Department for Transport whether funding set aside for purchasing new Piccadilly line trains, believed to be around £500m, could be used to plug the cost gap. "There are many different variations around timing that we can work through with London Underground, including the timing of the fleet and the upgrade. That's the sort of thing I want to sit down with London Underground about and discuss," said Cleaves.

The Tube Lines boss also denied that the ruling would threaten the company's viability. Tube Lines had originally argued that the work should cost £5.75bn and faces an even greater funding shortfall than LU, which prompted Tube Lines directors to discuss whether the company is a going concern at a recent board meeting. Today's ruling means that Tube Lines must pull off the complex upgrades on the Northern and Piccadilly lines, as well as the day-to-day maintenance on those routes plus the Jubilee, at a cost of no more than £4.46bn in order to stay in business. "The outcome is a challenge for us but I fully expect that we will see it through," said Cleaves.

Bolt also hit back at accusations from the mayor that he had exceeded his powers and exposed himself to a possible legal challenge. Bolt took a swipe at LU's competence by accusing the tube operator of having slack financial discipline compared with privately-owned Tube Lines. LU took over the largest PPP tube contractor, Metronet, when it collapsed in 2007 and now runs maintenance on three-quarters of the tube network. Bolt said it costs LU £4.25m per track kilometre to upgrade the Victoria Line, whereas for Tube Lines it costs just £2.75m per track kilometre on the Jubilee and Northern Lines.

"If you asked today I might well be declaring that LU's own costs are not economic and efficient, which is a very different picture from the one that the mayor likes to put out."

• Driver called officers on mobile phone as car reached speeds of 94mph
• Toyota sends specialist to investigate the incident

Toyota's safety crisis deepened further last night when police officers in California were called to stop a runaway Prius that was accelerating out of control on a busy highway.

The driver, 61 year-old James Sikes, called Highway Patrol officers on his mobile phone after the 2008 Prius suddenly began to accelerate of its own accord while he was driving down the Interstate 8 freeway outside San Diego. The vehicle reached speeds of 94mph during the incident, which lasted more than 20 minutes.

Sikes said the accelerator pedal was stuck, and that the car would not stop even though he was pressing the brake with all his force.

"I pushed the gas pedal to pass a car, and it just did something kind of funny … and it just stuck there," Sikes told a news conference outside a Highway Patrol office following the incident. "As I was going, I was trying the brakes … and it just kept speeding up."

Sikes also explained that he had continued to depress the brakes until "finally they started smelling really bad and I had metal sounds coming in the car".

The highway patrol team drove alongside the Prius, and instructed Sikes to engage the hand brake while simultaneously holding down the foot brake. They also directed him uphill. Once the car slowed to 50mph Sikes was able to turn off the engine.

Toyota, which has recalled around 8m vehicles due to problems with sudden, unintended acceleration, said it has dispatched a specialist to investigate.

Last month Toyota announced a voluntary recall of the 2010 Prius to fix a problem with their anti-lock brakes. Earlier models, such as Sikes's, were not included in this recall. However, they were part of an earlier recall, in November 2009, which addressed concerns that accelerator pedals were being trapped by floor mats.

Sikes told reporters that he had taken his car to a local Toyota dealership about two weeks ago for a service, and was told his car was not on the recall list.

"I'll be back there tomorrow," he said.

This incident has prompted comparisons with the fatal crash in California last August in which four people, including an off-duty Highway Patrol Officer, died after the accelerator of their Toyota Lexus ES350 became stuck. The car hit another vehicle before leaving the freeway and catching fire. Last week the family of the victims filed a lawsuit, accusing Toyota of liability and negligence.

Labour likely go to the country on same day as local elections in England as budget date confirmed

The Treasury will announce the budget will be held on 24 March, making 6 May a racing certainty for the general election.

The timing is likely to mean parliament debating the budget in the week of 29 March. Gordon Brown could then go to Buckingham Palace to call the election on 6 April, after the Easter holiday weekend. MPs and peers would spend a short time in parliament to negotiate remaining bills.

A 6 May election, on the same day as local elections in England, has for some time been regarded as the favoured date. But it runs the risk for Labour of seeing critical first-quarter growth figures published in the final fortnight of the campaign.

Ministers are increasingly optimistic, however, that the figures will not reveal a slide back into recession.

It is not expected that the chancellor, Alistair Darling, will have to reveal major changes to growth forecasts or the size of the public sector deficit.

He may have some cash spare from lower-than-expected unemployment forecasts.

In a speech in London Brown is expected to confirm a cap on public sector pay rises despite civil servants gearing up for strikes in the run-up to the election. Brown is expected to use a speech on the economy to reaffirm the government's position as set out in last year's pre-budget report.

He will tell public sector workers that from 2011 those at the higher end will see an absolute pay cap and that 700,000 middle-ranking civil servants, including police officers, nurses and teachers, will have pay rises capped at 1% for two years. That could amount to a real-terms cut.

The plans for senior public sector workers would affect 40,000 GPs, hospital consultants, Whitehall's highest paid civil servants and the chief executives of quangos.

When he announced the plans, the chancellor said the move would save the exchequer £3.4bn a year. Darling has written to the salary review bodies calling for a freeze on the pay of the highest-paid civil servants and a cap of 1% for those in the middle.

The full details will be published tomorrow, including exemptions for armed forces.

Some 200,000 civil servants ranging from 999 operators and coastguards to court workers began a 48-hour strike on Monday. Driving tests have been cancelled and police officers called on to man 999 emergency lines in London.

Yesterday the Policy Exchange thinktank published research showing that public sector productivity fell nearly 4% in the decade after 1997, while growing by 23% in the private sector.

Neil O'Brien, director of Policy Exchange, said: "Despite this, pay has risen by 15% more than in the private sector. The simple truth is that we need public services run on 21st century principles – not the rules of the 70s."

British Airways cabin crew warn walkout is looming, with Easter weekend the likely target for rail workers

Industrial action is threatening to disrupt the travel plans of millions of rail and air passengers over the next month as disputes at Network Rail and British Airways move towards strike action.

A walkout by BA cabin crew is possible after the airline asked for an extension to talks until tomorrow afternoon in order to consider a last-ditch offer of a 2.6% pay cut by flight attendants. The Unite trade union has ruled out striking over the Easter holidays, but a strike could be called for next week if discussions fail.

Unite's cabin crew branch, Bassa, warned members last night that a walkout was looming. "It would appear that at this stage it is also increasingly unlikely that an agreement will be reached," said Bassa representatives in an email.

Network Rail, the owner of Britain's rail tracks and stations, also warned yesterday that a national strike could follow straight after a BA walkout — with the bank holiday weekend the likely target. Maintenance workers and signallers at the RMT union are being balloted over job reductions and changes to working conditions, with the poll results due in the next week.

Robin Gisby, Network Rail director of operations, said he expected 5,500 signallers and thousands of maintenance staff to strike over Easter, in what would be the first national rail strike since 1994.

"Our guess is that it will come together this Easter weekend," he said, but indicated that the company would not back down over the changes to shift patterns and voluntary job cuts underpinning the dispute. "I cannot live with the RMT holding the whole country to ransom."

Gisby also accused the RMT of using the imminent general election to strongarm the company. "The timing of this dispute and the clinical attempt to bring together ops and maintenance issues at the same time is an obvious political move by the RMT to maximise pain for passengers over a holiday period – Easter – and to disrupt a potential election campaign."

Gisby admitted a strike by signallers would cause significant problems, possibly shutting down the busiest parts of the network, because major signalling centres would be left unstaffed. Network Rail believes it can withstand a strike by maintenance workers for a week, but anything longer could see speed restrictions imposed, with some branch lines being shut down. The RMT said the cuts would make a rail disaster an "inevitability".

Meanwhile, the BA dispute inched towards a conclusion yesterday as officials at Unite and Bassa haggled over cost-cutting proposals. Unite tabled a package including a pay cut this year and reductions in perks such as telephone allowances. Unite claimed the proposals exceeded the airline's annual savings target of £60m, but the airline was still mulling them over as the 5pm deadline for ending the talks passed. BA requested the extension, which was accepted by the trade union. If it fails to produce an agreement, a walkout could take place as soon as next Wednesday or Thursday once the union has given BA the obligatory seven days' notice. According to a poll on the Bassa website, nearly one-third of BA's 12,000 cabin crew want a strike lasting longer than 10 days.

A draft agreement between both sides, waiting to be published in the event of a deal, contains a pledge to "rebuild the trust damaged by the recent dispute". However, that will take some effort after months of increasingly bitter wrangling.

BA has drawn up plans to break any strike with 1,000 volunteer cabin crew drawn from the ranks of its 38,000-strong workforce and a fleet of 23 chartered jets. Willie Walsh, the chief executive, last week said he hoped to operate a "substantial proportion" of the airline's Heathrow long-haul operations and a "good number" of short-haul flights.

BA will operate its entire schedule from London City airport during the expected strike, and has also claimed more than two-thirds of its Gatwick-based crew will work normally.

The airline operates 650 flights a day with its 239-plane fleet, mostly from Heathrow, but has not said which routes would be kept open by the stand-in workforce. Meanwhile, the Irish national carrier, Aer Lingus, yesterday said it would have to fire a quarter of its cabin crew in order to stem losses.

Economist Jeffrey Sachs says transaction tax would meet aid promises, ease spending cuts – and curb the power of the banks

A tax on every deal conducted by the financial industry would curb the excessive power of Wall Street, avoid the need for swingeing cuts in public spending and pay for the west's unfulfilled promises to poor countries, one of the world's leading economists saidtoday.

Jeffrey Sachs, economics professor at Columbia University in New York, told a London audience that the so-called Robin Hood tax was a means of exercising control over bankers and ensuring they paid the right amount of tax.

"Wall Street has had the most profitable year in its history. It made profits of $55bn (£37bn) in the midst of the biggest downturn since the Great Depression," Sachs said, adding that the profits had only been possible because of taxpayer bailouts and the zero interest-rate policy pursued by the Federal Reserve, the US central bank. "Bankers are brazenly smirking as they pocket large amounts of our money."

A tax on all financial transactions is one of the options being considered by the leaders of the G20 developed and developing nations in the wake of the financial crisis of the past two-and-a-half years. Barack Obama has expressed support for a levy on banks that would pay for any future bailouts, but France and Germany favour a transaction tax.

With the International Monetary Fund due to produce a report to the G20 next month, Sachs said that a Robin Hood tax levied at 0.05% on every transaction would help countries repair the damage to their public finances caused by the recession. "We need the money," he said ."The financial sector is under-taxed. It is out of control."

Tim Geithner, the US treasury secretary, is deeply sceptical about a transaction tax but Sachs said Europe should try to shame the US into action. "Europe can and should lean on my country and say 'you get on the case too'."

Sachs said later that if Europe ran up against intractable US opposition to a transaction tax it should be willing to go it alone in a "coalition of the willing".

Wall Street had become so "politically powerful that it has written its own ticket for the past 25 years in a way that's shocking. The results are shocking. The lack of political responsibility is shocking."

The Robin Hood tax was an attempt to fight back, Sachs said. "It would be a low tax harmonised across countries. It is a progressive and non-distortionary tax."

Sachs said one use for the extra tax revenue was to meet the promises made at the G8 summit in Gleneagles in 2005 to double aid to Africa to $60bn. "We are $20bn short of that promise."

Sachs said the crisis had been caused by an unregulated financial system in which the market in credit default swaps had grown from nothing to $62tn – equivalent to the output of the global economy – over the past decade. "It happened without one regulator asking one single question. It was a shocking dereliction of responsibility."

The Royal Society of Arts event was also addressed by the actor Bill Nighy, star of a Richard Curtis film supporting a Robin Hood Tax. "It's a very simple and beautiful idea," Nighy said. "Its time has come."

• Kraft broke pledges to save 400 jobs at Somerdale plant
• Cadbury sale prompts talk of reforming takeover rules

Irene Rosenfeld, the chief executive of Kraft, has been accused of snubbing Britain and parliament for deciding not to appear before a committee of MPs investigating the US firm's takeover of Cadbury.

Jack Dromey, Unite deputy general secretary, added that he would ask the committee "where's Irene" when he gives evidence at the hearings next week.

Rosenfeld is under fire in particular for breaking her promise, made at the beginning of the takeover battle, to keep open Cadbury's plant at Somerdale. Days after the £11.4bn takeover was agreed, Kraft announced it would press ahead with existing plans to close the Somerset plant, with the loss of 400 jobs.

It is understood that Rosenfeld has "other engagements" next week which means she is unable to attend.

Kraft will instead be represented by Marc Firestone, executive vice president for corporate and legal affairs. Firestone was heavily involved in the Cadbury takeover and it is understood that he is prepared to answer specific questions about Kraft's broken promise over Somerdale as well as the company's plans for Cadbury in general.

Cadbury will be represented by Trevor Bond, president of Cadbury Britain & Ireland, and Richard Doyle, human resources director for Cadbury Britain & Ireland.

But Dromey told the Guardian: "Irene Rosenfeld has snubbed Britain and parliament. But Kraft will not escape public scrutiny by parliament – it's right that they are being called to account."

The Cadbury sale has sparked debate among politicians and in the City about whether takeover rules should be reformed.

In his Mansion House speech last week, business secretary Lord Mandelson said company directors should act more like "stewards" looking after their company's long-term interests rather than "auctioneers" selling off the business to the highest bidder. "In the case of Cadbury and Kraft it is hard to ignore the fact that the fate of a company with a long history was decided by people who had not owned the company a few weeks earlier, and probably had no intention of owning it a few weeks later," he said, referring to the hedge funds who snapped up Cadbury shares in the expectation that Kraft's pursuit of the company would be successful.

Florida's once-booming housing market is at the heart of America's financial crisis. In 2006, an average family home was $248,000; by 2009, that had fallen to $142,000

A short hop from Disneyworld in the heart of Florida, there's a little slice of Britain on offer at Harry Ramsbottom's pub. Cornish pasties, beans on toast or the house speciality, fish and chips, are on the menu. A policeman's helmet jostles for space behind the bar with Scottish banknotes and a pennant depicting a Welsh dragon.

But times are hard in the sub-tropical sunshine. On a recent weekday afternoon, the bar was deserted, with a Premier League football match flickering forlornly on television. Harry Ramsbottom's is the only operational business in an all-but-abandoned shopping centre – the rest of the strip mall, along a main highway west of Orlando, has been repossessed by the banks.

"We're having a wretchedly hard time," says Rodney Forton, who moved from Leeds to Florida in 1994 and runs the pub with his wife, Pamela. "We've got fewer bums on seats, and the bums we've got left don't have as much money on them."

Forton, whose pub is up for sale, reckons the number of British tourists visiting the area is down by as much as 40%. His regular customers – second homeowners – have been hammered by a devastating property collapse, with the value of their holiday homes plummeting by as much as two-thirds.

Florida's once-booming housing market is at the heart of the US financial crisis. In 2006, the average price of a family home in the state was $248,300 (£164,000). By 2009, that had fallen 43% to $142,600 according to the Florida Association of Realtors. And the worst-hit region of the state is the area surrounding Orlando, a haven of theme parks, lakes and golf courses that act like a honeypot for sun-loving expatriate Brits.

The British consulate in Orlando estimates that 400,000 British expats live in Florida and 1.5 million tourists visit the state each year, ranking Britain second only to Canada among the origin for overseas visitors. Many property owners spend a few months a year in the state and rent out their houses for the rest of the time. Almost all have been badly burned.

Antony and Katrina Heard, a couple from Cornwall, spent $275,000 in 2004 on a four-bedroom corner house in a development called Regal Oaks, just across the road from an amusement park, Old Town in Kissimmee. The estate was never completed, the developer went bust and a similar neighbouring property recently sold for a paltry $100,000.

"It isn't worth a fraction of what we paid for it. We probably got sucked into the hype and the figures," says Heard. "I suppose, with hindsight, we should have waited and bought now."

The Heards, unusually, were cash buyers. Most British homebuyers in Florida used mortgages, often from Lloyds TSB or Bank of America, which used to offer promising terms for international buyers. Buyers are now deep in the mire of negative equity.

Faced with mortgages far higher than the value of their property, some British owners have simply abandoned their properties. Patricia Kawaja, founder of the Florida Association of British Businesses, says: "We've had cases of Brits just leaving their homes and going back to the UK owing money. There's no extradition treaty for people unable to pay their mortgages."

Dean Churm, the British consul general in Orlando, backs this up. "I've certainly heard of it happening. The Orlando area has been particularly badly affected by the property bubble that burst," he says.

Central Florida has scores of British estate agents who made a good living, at the peak, helping buyers find their dream homes in the sun. Life is less easy now. Richard Veale, a broker at Profiles Realty, moved from Essex to Florida five years ago. He says demand for second homes has dried up: he sold 13 properties to British holidaymakers in 2008 but just two last year, although business buyers keep him busy.

"Buying a property is easier here than in Britain – you sign a contract and you can complete in just two or three weeks. There's never a chain," says Veale.

As distressed homeowners from Detroit to Las Vegas can attest, banks in the US foreclose on property far more quickly than their British counterparts. Tens of thousands of bank-owned homes are now on the market, often selling at mass auctions – Veale is fresh from showing off a three-bedroom townhouse priced at $120,000.

Sean Snaith, director of the University of Central Florida's institute for economic competitiveness, says prices have fallen below the bricks and mortar replacement cost of properties in many parts of the state. "Prices can't stay down there forever," he says. "There's no incentive to build and replace inventory."

He believes Florida is at, or close to, the bottom in terms of the slump, although with so many vacant homes to sell, it could be a long haul to recovery.

"There have been some severe downturns historically in Florida," says Snaith. "But the severity of this housing recession, together with the financial crisis and the pronounced credit crunch, has certainly made this one for the ages."

Banks are being browbeaten by the Obama administration to lend once more, yet many are still risk-averse and are under pressure from regulators to raise their capital ratios.

Florida's highways are littered with so-called "bandit signs" stuck into grass verges with offers of homes for sale. Dave Robertson, a Glaswegian expat who works for Orlando-based Dolby Properties, has a sanguine view of those who lost out: "There are countless numbers of people who paid way too much for properties. Greed got the better of them at the end of the day. They saw the market rocketing and tried to jump on."

There are hopes, though, that a new Harry Potter theme park, set to open this spring, will reinvigorate the British visitor trade. The venue, based on JK Rowling's young magician, joins a crowded clump of big-budget attractions around Orlando including Universal Studios, SeaWorld, Gatorland and even the Bible-themed Holy Land Experience.

Robertson, who has a five-bedroom house on his books for $118,000, insists the Brits will be back, lured by a potent combination of sunshine, relaxation and rollercoasters.

"It's not all doom and gloom. In my lifetime, we're never like to see another opportunity like this," he says. "If I had a pocket full of change, I'd have bought a dozen properties by now."

Korean company Samsung kicks off the industry-wide push by launching a 3D range that will be in British shops by the end of the month

The friendly green monster Shrek, the blue-skinned Na'vi of the planet Pandora and Wayne Rooney's shots on goal will shortly take on a new, three-dimensional glory.

Spurred on by the success of the Hollywood fantasy blockbuster Avatar, the world's top electronics companies believe they can make 3D television sets the norm for consumers in the US and Europe within three years.

The Korean company Samsung kicks off the industry-wide push – and battle for brand supremacy – by launching a 3D range that will be in British shops by the end of the month.

Billed as the world's first high definition, three-dimensional LED televisions, Samsung's range will be serenaded by the Black Eyed Peas at a glitzy global marketing debut in New York tomorrow.

At a press conference today, Samsung said its televisions and Blu-ray devices will come with a starter pack of two pairs of 3D glasses and a Blu-ray version of Monsters vs Aliens under a tie-up with the movie studio DreamWorks Animation.

"It's quite simply the entertainment revolution of our time," said DreamWorks' chief executive, Jeffrey Katzenberg. "It's as important as the introduction of sound or colour."

Keen to get in on the act, the Japanese company Panasonic will sell its first 3D television at a BestBuy electronics shop in Manhattan this week. And Sony, which expects to begin selling its sets in June, has set an ambitious target of selling 2.5m 3D televisions by March 2011 – amounting to roughly one tenth of all its global television sales.

In British shops, John Lewis's vision buyer, David Kempner, said he expected demand to be a "slowburn", with an opening price point of £2,000. "HD is still a relatively new concept and consumers are just getting used to it but 3D will be the next big thing. Given it has the support of all the major manufacturers, 3D technology has got momentum of its own but it also requires content providers to support it and there is a time lag there."

Experts say that 3D televisions are likely to enjoy mainstream uptake because the technology behind them barely costs any more than existing sets. To achieve three dimensions, manufacturers need more powerful processors but the fundamental make-up of the television changes only marginally. The only substantial extra cost is making 3D glasses.

"The add-on cost of manufacturing isn't significant," said Jim Bottoms, director of the technology consulting company Futuresource. "Set makers are starting to incorporate 3D in higher-end televisions this year. Very quickly, certainly by 2015, virtually every full-sized television will have 3D capability."

Although pricing for British shops is yet to be finalised, Sony's 3D televisions range in Japan from around £2,150 for a 40in set to double that amount for a 60in model, while Samsung is charging $2,000 (£1,350) to $4,000 in American stores.

Sport and films will be the early applications for 3D home entertainment. Under a deal with Sony, Sky has already begun showing certain Premier League matches in pubs on 3D televisions and this summer's World Cup could be a watershed for the technology: Sony will film 25 matches in South Africa using 3D cameras.

The opening ceremony of Vancouver's Winter Olympics was available in 3D. More than 20 movies in 3D are scheduled for release this year, including Tim Burton's Alice in Wonderland, which topped Britain's cinema box office charts at the weekend.

Mainstream television programming will take longer. The BBC and ITV have expressed interest in experimenting with 3D content.

But Bottoms said everyday shows were unlikely to go 3D until technology arrives to eliminate the need for special glasses, which is thought to be up to five years away.

"We see the next three to five years as being 'event-driven' for 3D. When we get to a glass-less solution, then we'll really see 3D become more pervasive," he said.

It has taken decades even to get to this point. The first 3D film, The Power of Love, was made back in 1922 and dozens of movies came out in the 1950s including such gems as Creature from the Black Lagoon.

But a key problem was "3D fatigue" whereby viewers' eyes became tired from distinguishing the twin images needed to create depth perception.

Samsung's president of visual display products, Boo Keun Yoon, told the Guardian that 3D fatigue killed off three-dimensional filming in the 20th century but that new techniques have overcome this lingering problem by creating a more consistent image.

"We've recently had developments in how 3D films are shot," said Yoon. "I believe 2010 will be the year of the 3D television revolution. Probably by the end of this year, we'll see an explosive growth in demand."

Factory output suffered its steepest drop in six months at the start of the year, partly because of the snow and ice. Here's what economists made of the figures

Alan Clarke, BNP Paribas

"UK industrial production was much weaker than expected, though this was heavily influenced by adverse weather. Snow will have physically obstructed workers at manufacturers and their end customers from getting to work. Similarly deliveries in and out of businesses will have been impeded. We believe this was a temporary blip and a sharp snapback is likely next month. Past episodes of extreme snow have experienced an offsetting bounce when the big thaw arrives.

"Fundamentally, the manufacturing sector is well positioned to grow from here. Our financial and monetary conditions index is by far the most accommodative it has been since the series began 25 years ago. In turn this has helped to predict a sharp improvement in the manufacturing CIPS survey. December showed the first tangible evidence of follow through from surveys into hard output and were it not for the snow, we believe there would have been more of the same in January.

"Furthermore, Tuesday's trade data showed another month of strong imports of semi-finished manufactures. Firms are not importing these goods for the sake of it - the fact we are sucking these goods in shows that output is recovering. These imports are presumably inputs into the production process and they would not be coming in at an accelerating rate, were it not for improving output. Overall, a bad figure on the month, but temporary in our view."

Jonathan Loynes, Capital Economics

"With surveys like the CIPS/Markit report on manufacturing generally strengthening, some rebound in production in February seems very likely. Nonetheless, January's poor platform means that even 0.5% monthly rises in both February and March would leave a quarterly gain similar to that in the fourth quarter. So industry now looks unlikely to drive any significant pick-up in GDP growth in Q1. What's more, with the latest trade figures still showing few signs of any real boost from the lower pound, the outlook for the export-sensitive industrial sector remains pretty fragile."

Colin Ellis, Daiwa Capital Markets Europe

"Optimists will argue that some of the weakness in January could reflect weather disruptions to production, and that is certainly possible. And provided that the fall does reflect temporary factors, and reverses in February, production will still be on course to post modest positive growth in the first quarter as a whole. But the risk is that at least part of January's weakness reflects the soft underbelly of the economic recovery, and is another signal that GDP growth will struggle to pick up to around 3% year-on-year by the turn of the year, as the Bank of England expects. At the very least, today's data mark an inauspicious start to 2010."

Lee Hopley, EEF

"January's drop in output is surprising given the raft of other survey data since the beginning of the year which has been more upbeat. Despite the blip at the beginning of the year the underlying trend is one of growth and the continued recovery in the world economy should underpin this in the months to come."

Howard Archer, IHS Global Insight

"While undeniably disappointing, not too much should be read into the sharp drop in manufacturing output in January. It adds to the overall evidence that the economy took a significant hit from the weather in January, but latest data and survey evidence generally suggest that the economy bounced back pretty well in February. So hopefully, there will be a marked rebound in manufacturing output in February. Encouragingly, February's manufacturing surveys from both the purchasing managers and the CBI are pretty upbeat.

"Just as December's 0.9% jump in manufacturing output overstated the sector's strength so January's 0.9% drop overstates its weakness. The overall impression we get from the recent data and survey evidence is that manufacturers are currently seeing a reasonable but far from spectacular pick up in activity after a largely dire 2009 as they benefit from leaner stock levels, improved competitiveness in both domestic and foreign markets stemming from the weak pound, and recently firmer demand in key overseas markets. There are also signs from the surveys that domestic demand is picking up.

"Nevertheless, the appreciable drop in industrial production in January suggests that the sector will struggle to make a significant contribution to GDP growth in the first quarter, especially as it only accounts for 17.2% of overall output. Furthermore, serious uncertainties remain about the strength of demand for manufactured goods over the medium term, particularly once stimulative measures start being withdrawn."

Prime minister also announces pay freeze for doctors, dentists and hospital consultants as well as senior managers across most of the public sector

Gordon Brown warned today that Britain's economy is still in "choppy waters" but declared he had the "character" to lead the country to recovery. The prime minister announced a pay freeze affecting doctors, dentists, and hospital consultants as well as senior managers across most of the public sector.

Brown stressed the country was at a "crossroads" and faced "crucial decisions" in the months ahead. He warned that "ideologically-driven" Tory plans for cuts risked tipping the country back into recession.

Brown also used his address to confirm that the budget will be in two weeks' time, on 24 March, leading to speculation that the prime minister will announce the date of the election on 6 April.

Speaking at Thomson Reuters in Canary Wharf, the same venue where the Tory leader, David Cameron, attacked Labour's record on the economy last week, Brown said the "resolve" and urgency felt during the 2008 banking crisis needed to be displayed again now.

He admitted that in hindsight, it was now clear just how close the world economy came to "economic meltdown".

The economy remained in "choppy waters", said Brown as he cautioned against any belief that the recovery would automatically continue.

"In my view we are nearly there ... but there is nothing preordained or automatic about the upturn either here or abroad," he said.

Brown turned the tables on those who accuse him of lacking character by insisting that the past 18 months had been a period demanding the "greatest test of character" as the country was brought through a "dreadful" economic storm.

The prime minister said: "I have heard people say it is about policy and I have heard other people say it is about character. I do not think you can separate the two."

He told the audience that tough decisions needed to be made to keep the economy on course to recovery.

He said: "We face crucial decisions. The stakes are high. We dare not risk the recovery. We are weathering the storm and now is no time to turn back. We will hold to our course and will complete our mission."

This included a "disciplined approach" to pay and benefits right across the public sector.

Speaking on the day that the senior salary review bodies publish their recommendations for public sector pay rises, Brown announced he intended to freeze the pay of senior staff in the civil service, senior staff in the military, the judiciary, senior managers in the health service and the pay of consultants, GPs and dentists.

He said that the government remains committed to halving Britain's record £178bn deficit within four years.

Following on from the freeze on parliamentary and ministerial salaries for all government ministers which he announced last week, Brown said the curbs on public sector pay would save more than £3bn by 2013-14.

The announcement is likely to provoke fury among public sector unions just days after it was announced MPs' will see an automatic rise of 1.5% in their pay.

However, he stressed that while the worst of the recession is over, the economic recovery remains "fragile" and could be undermined if spending cuts were pushed through too quickly.

Brown emphasised the need to ensure the recovery is balanced and sustainable on a global basis as he called for the G20 to inject "new urgency into the delivery of the international agreements we have reached".

He said: "I believe that around the world we have to re-discover that sense of urgency and collective ambition that guided us a year ago. For it is our choices – and the wisdom resolve and judgments we bring to bear in making them – at both a national and global level – that will determine whether we secure a lasting recovery and indispensable reforms to safeguard our economic future."

Shares in Tanfield are motoring after the group received a conditional offer for its electric vehicles business from its US partner.

Smiths Electric Vehicles US - established by Tanfield in 2009 - is now offering £37m in cash for all its electric vehicle assets. This includes the UK business, as well as the 49% Tanfield owns in Smiths US, and licensing and intellectual property rights. It would leave Tanfield with its access business.

On top of the £37m - worth around 50p a Tanfield share - the company could receive an extra £33.3m - 45p a share - if Smiths floats before September 2015. Tanfield said it had granted Smiths a four month exclusivity period, but there was no guarantee an agreement could be reached. In part this depended on Smiths obtaining suitable financing.

The news has seen Tanfield jump 11.5p to 40p, a 40% increase.

The rocky road to cinemas for Tim Burton's 3D adventure shows cinemas will suffer as their grip slackens on the right to show films first

After its lacklustre reviews, few would have expected Alice in Wonderland to break box-office records. Yet in spite of the bounty it's appeared to bestow, this film has cast a shadow over the picture-house. It's shown cinemas to be threatened by a tide of change whose origins run deep.

To hear the Iliad or a Beethoven symphony, you used to have to turn up. Gradually, successive inventions fed cultural sustenance into our homes. Digitisation, the internet and hardware advances have accelerated this process and extended it to personal gadgetry. Now, most of our amusements come to us; if we venture into the cold, it's usually to seek relief from print and electronic entertainment in an occasional fix of the physical.

Music venues, festivals and theatres tempt us with flesh-and-blood action. Cinemas, however, have no live bait to offer. To get us out of the house, they have to rely instead largely on the box-freshness of the films they show. To sustain this, DVDs, downloads, pay-TV, free-to-air, in-flight and the rest are all required to wait in line. Yet the big screen enjoys no divine right to that first bite, and its claim on it is weakening.

These days, box-office is buoyant, but distributors and exhibitors have high costs and therefore have to collar most of the take. For the studios, DVDs are more profitable, but their sales are falling. So why waste the thrill of novelty on the theatrical release? Why not unleash films on electronic platforms before, or at least as soon as possible after, the cinemas get their turn?

Understandably, the big screen is now being squeezed. Five years ago, the gap between theatrical and video release was cut from six months to four. Since then, studios have tried to reduce this window further for particular films; cinemas have responded by threatening not to take them. Sadly, the outcome of the showdown over Alice in Wonderland suggests that cinemas now need films more than films need cinemas.

When Disney told them it was tightening their window, Britain's three biggest exhibitors threatened a boycott. Then, one by one they crumbled. New arrangements were agreed, reportedly permitting further breaches of the four-month rule. In future it seems, cinemas can expect to enjoy less and less of a head-start. Their pitch may therefore have to depend rather more on the experience that they offer.

Once, this might not have seemed too challenging a prospect. The combination of a big screen, 35mm picture quality, comfy seats and the Kia-Ora lady used to be hard to beat. Now though, home cinema provides ever bigger screens and even surround sound. Resolution keeps improving, and Blu-ray ensures that the movies get the benefit.

Of course, cinemas retain one unique selling proposition: it's the fabled communality that they alone can provide. Only in their immersive and darkly comforting embrace can we be emotionally as one with a like-minded multitude. Only there can we share our titters, gasps and groans, locked in joyous communion with our fellow human beings. Or so they say. Unfortunately, it doesn't always seem like that.

Our unsolicited companions sometimes prove keener than we'd wish on crisp-crunching, popcorn-munching, Coke-slurping, texting and chattering. We may be glad that some bloke in a mackintosh has crossed the auditorium to sit next to us; or we may not. Maybe we don't mind the empty cartons around our feet, or the latecomers pushing past us. If the projector's out of focus we may be forgiving at first, but after a bit it can prove tiresome.

There are those who see 3D as the cinemas's trump card. Tim Burton's use of it in Alice, however, perhaps shows that it may not always add very much. Anyway, even this thrill is on its way to your home.

Alice basked in plenty of advance buzz. It cost a huge amount to generate, but it seems to have paid its way by over-riding those tepid reviews. Suppose, however, that the DVD had been due to appear while that expensive buzz was still fresh. Fewer tickets would doubtless have been sold, but perhaps many more DVDs.

If this is to be the shape of things to come, cinema may benefit; but not cinemas. Sooner or later, the back row seems set to find itself having to take a back seat.

Terry Smith's Tullett Prebon has jumped around 17% after confirming market speculation about a takeover by saying it was in talks with a possible bidder.

Although it described the discussion as preliminary, the interdealer broker's shares have jumped 52.6p to 362.8p, valuing the business at around £780m. A number of names have been linked with a takeover, including Australia's Macquarie Group, Bank of China and New York based GFI Group.

Earlier this week Tullett's shares came under pressure after it unveiled a 1% rise in full year pre-tax profits to £157m.

Banks are mostly edging higher at the moment but an exception is Barclays on talk it is interested in a US acquisition.

Barclays shares have dipped 2.7p to 343.1p after reports it is eyeing a US retail operation to help diversify away from its booming investment banking business. Danny Clarke at Shore Capital commented:

The acquisition would help rebalance the group's operations away from Barclays Capital, towards its longer term target of around one-third contribution from Investment Banking operations. Recent acquisitions of US Retail operations by UK Banks (notably, the acquisition of Household International by HSBC) have had somewhat mixed success. The strategy is in its early stages, with formal proposals expected to be put before the board in the coming months. It is possible that the news has emerged ahead of the board proposal to assess how receptive the investment community would be to the deal.

It is possible that reaction will be lukewarm at first, particularly given regulatory uncertainty and fragile economic recovery – however, noting Barclays' successful acquisition and integration of Lehman's US operations, we would be supportive of the right deal at the right price (with the right structure). We also take comfort from the board's confidence in considering a transaction on this scale, at this time. No formal targets have been identified, but those speculated in the report – SunTrust, PNC Financial Trading and US Bancorp - appear likely given circumstances and size. Trading at a 5% discount to 2010 tangible book, we continue to rate Barclays a buy.

Elsewhere Royal Bank of Scotland has risen 1.16p to 40.14p and Lloyds Banking Group is 1.15p better at 54.33p despite the government proposing tougher steps on disclosing bankers pay.

Overall the FTSE 100 has reversed earlier falls to edge up 4.53 points to 5606.83. The pound slipped below $1.49 for the first time in a week before recovering slightly, following yesterday's UK trade figures and warnings from Fitch ratings agency about the country's deteriorating credit situation. Industrial production numbers are due shortly, with analysts expecting a 0.3% rise.

On the latest edition of The Business, Aditya Chakrabortty speaks to Lord Myners about the City minister's attack on the 'lazy and complacent' bankers who, he says, still haven't learned the lessons of the credit crunch.

Also in the podcast, Tom Clark and Larry Elliott analyse the pros and cons of Germany's plan to introduce an International Monetary Fund for the eurozone. Is the idea for an EMF simply unbelievable (ho ho)?

Finally Nils Pratley, details the viability of the Red Knights as they prepare for battle for control of Manchester United.

Have a listen and post your comments on the blog below, and click here for more details about our live Politics Weekly show in Manchester.

Car dealership chain Inchcape has beaten City forecasts with annual profits but faced with a declining UK market remains cautious for 2010.

Sales fell to £5.6bn in 2009 from £6.3bn the year before, leaving profits before tax, excluding one-off items, down 19% at £155.1m. This was, however, better than the £141m to £151m expected by the market. The group is now debt-free.

In the UK, Inchcape benfited from the scrappage scheme and outperformed the market which fell by 6.4%, to deliver a like-for-like sales decline of 3.9%. It has had a troubled time and but insists it responded "swiftly and decisively to an unprecedented global downturn" by cutting 2,350 jobs and closing 31 sites.

Chief executive André Lacroix said:

In 2010, we expect to benefit from continued market momentum in Hong Kong and Australia and stable industry in Belgium and Finland but we also continue to anticipate market declines in the UK, Greece, Singapore, Eastern Europe and Russia.

We therefore remain cautious for 2010 and do not expect a global recovery to start until well into the second half of this year given consumer confidence is still weak and unemployment continues to rise in many of our key markets.

Insurer Standard Life also beat forecasts this morning as 2009 operating profits slipped just 1.5% while the City had expected a sharper drop. It put in a better than anticipated performance at home and in its growing Asian business.

Profits totalled £919m, compared with £933m in 2008.

David Nish, the insurer's former finance director who became chief executive at the start of last year, said:

Standard Life starts 2010 in a good position. We will continue to drive shareholder value through being a customer-centric business, focused on long-term savings and investments propositions. We are stepping up our investment in our leading corporate and retail propositions during 2010 and are excited by the many opportunities across our markets. We have also announced an increase to our efficiency targets which will improve margins. These actions will enable Standard Life to grow profits more strongly.

Laird saw annual pretax profits from continuing operations slump to just £4.6m from £26.5m and cut its dividend. Hit hard by the recession, the electronics and technology company, whose electromagnetic shielding devices are used in laptops and mobile phones, has slashed costs.

Annual profits at Tullow Oil plummeted to £20m from £299m due to lower oil and gas prices and a decline in output. But investors focus more on new oil finds and reserves upgrades than profitability.

The oil exporer said it is still in talks with the Ugandan government about bringing in China's CNOOC and France's Total as partners in its Lake Albert oil fields. Its Jubilee field project in Ghana remains on budget and the first oil is expected in the fourth quarter of this year.

The postal industry's greatest problem is not modernisation, but unfair agreements with private mail companies

I've just received the "official" CWU version of the agreement it has just negotiated with Royal Mail. It seems to be substantially the same as the leaked version I read over the weekend.

It came with a long overview justifying the union's position. That was a piece of propaganda, of course. It listed all the supposed gains, but glossed over – or completely ignored – all of the losses.

The most significant achievement of the agreement is probably the retention of the 75%-25% mix of full-time and part-time jobs. What the union doesn't acknowledge, however, is that it will be part-time workers who will lose out with this deal. Not only are they taking a substantial pay-cut in the loss of their door-to-door supplement – they are expected to do the same amount of work as a full-timer for half the money – but the agreement also makes it perfectly clear that part-time workers can never hope to be made into full-timers. This means that the Royal Mail now effectively has a two-tier work force.

Is this a case of the CWU serving one part of its membership at the expense of another? The frustrating thing for us postal workers is that we all know what the cause of the problem for the postal industry is, and it has nothing to do with the proportion of full-time to part-time workers, or the modernisation of equipment, or any of the other arcane and complex matters that are dealt with in the agreement.

We look at it every day while we are at work. It stares us in the face even as we are preparing our rounds. It mocks us and taunts us as we push the letters through the letter box. You probably don't even recognise it. It's there in the right hand corner of what may already be a majority of the letters we handle every day, in the form of three letters beside the frank: DSA.

It stands for "downstream access" and represents the access that private mail companies have to the Royal Mail network, which is being subsidised at the rate of about 2p for every letter we deliver. The rate is set by Postcomm, the so-called "independent" regulator. Check out who the commissioners are. Almost every one of them has interests either in the private mail industry or in deregulation.

That's the thing we find most difficult to comprehend in this agreement, that our union has apparently made no more than a cursory attempt to address this most fundamental of issues. There is only one Royal Mail network: only one route by which the vast majority of your mail can get delivered. Neither TNT nor UKMail nor DHL – nor any one of the 47 private mail companies currently listed on the Postcomm website – actually delivers any mail. They add nothing to the mail network. They do nothing beyond acting as intermediaries between the clients who want their mail delivered and the Royal Mail, which delivers it for them. They pick up the mail that is delivered to them and then they deliver it to us.

They act as intermediaries and then take a profit for it. Our profit. They pay nothing towards our pensions. They pay nothing towards our wages. They add nothing to our job security or our conditions at work. They provide nothing useful for the public. They are a drain on our future and the future of our industry. They are a drain on us all.

And just as there is one single basic problem behind all of our ills as an industry, so there is one basic solution: allow the Royal Mail to charge the DSA companies the full market rate for the service we provide them. After that, we can negotiate the modernisation which the industry undoubtedly needs.

Number of 'phishing' attacks have risen to 51,000 from just 1,700 five years ago, according to the UK Cards Association

The amount of money lost to online banking fraud last year rose by 14%, according to figures released today, despite an overall drop in card fraud losses.

Criminals have switched their attentions from internal bank systems, which are notoriously difficult to attack, to individual household computers, the UK Cards Association said.

Fraudsters are targeting bank customers through email links and attachments. Once consumers click on the links or open the attachments they expose themselves to computer viruses that can detect their keystrokes when they log on to their accounts.

The number of "phishing" attacks, where fraudsters lead customers to fake bank websites via an email that purports to come from their bank, increased by 16% from 2008 to 51,000. This compares to just 1,700 such attacks five years ago.

As a result, online banking losses totalled almost £60m in 2009 compared to £52.5m in 2008 and £23.2m in 2005.

"Fraudsters are now relying on the weakest link in the chain, and that is online banking customers themselves," a spokesman for the UK Cards Association said. "Banks would never approach customers by email asking for their bank details, but people still fall for this scam."

Phone banking losses, which were recorded for the first time in 2009, totalled £12.1m, with most losses involving customers being duped into disclosing security details through cold calling.

Despite the sharp increase in online losses, overall fraud on debit cards and credit cards fell by more than a quarter compared to the previous year – the first time card fraud has decreased since 2006. However, it still costs the industry £440m a year, which is only slightly down on the 2005 figure.

Remote threat

The industry struggled with huge losses in 2007 and 2008 when the amount of money lost to fraud peaked at about £610m. It attributed this to the number of remote transactions not protected by chip and pin, such as internet purchases. This "card not present" fraud still accounts for the biggest chunk of card fraud losses, although they were down 19% last year to £266m.

Card fraud abroad was the other major problem in 2007 and 2008. In an effort to get around chip and pin, which completed its UK roll out in 2006, fraudsters were cloning the magnetic stripe on the back of cards and taking these overseas to countries where chip and pin had not yet been introduced.

In the last year industry initiatives to tackle both these areas have paid dividends. Chip and pin has been introduced by more countries across the world making cloning cards more difficult, while the continuing growth of MasterCard SecureCode and Verified by Visa in the UK has made it harder for fraudsters to shop online with other people's cards.

Banks and building societies have also become more proactive about blocking card transactions abroad. This tactic has not always proved popular with customers, however, who are increasingly finding themselves unable to use their cards abroad because their bank suspects fraudulent use.

Despite all the industry's best efforts, annual plastic card fraud losses are still up £1m from 2005.

"Tackling card fraud is like a rollercoaster with plenty of peaks and troughs," the UK Cards Association spokesman said. "Whatever system we put in place we know criminals won't give up and go and get legitimate jobs. They are always going to target our cards."

Voters in many eurozone member countries can be forgiven for thinking that the single currency has only made things worse

The euro faced its first big challenge in this banking crisis – and it failed. That is not the assertion of a British newspaper but comes from Angela Merkel, the chancellor of Germany, who admitted this week that "the sanctions we have were not good enough". She was referring to the Greek financial meltdown, but she could equally well have been talking about the fiscal crisis and violent demonstrations in Ireland in 2009 – or even the outbreak of the credit crunch over a year ago. As interconnected financial institutions across the continent tumbled like so many dominoes, the lack of a single eurozone banking watchdog (as opposed to a patchwork of national regulators from Austria to Malta to Slovenia) only made the crisis worse.

Indeed, voters in many eurozone member countries can be forgiven for thinking that the single currency has only made things worse. There has been the obvious problem inherent in a currency club that stretches across many nations in varying states of economic health, which means that Ireland, Greece and others in deep trouble can no longer devalue their punts or drachmas to make themselves more competitive but must rely instead on the more painful and certainly more unpopular task of driving down workers' wages. That was the congenital defect of the euro, but matters have been made far worse by the reluctance of individual governments to group together.

Whether Ms Merkel and her colleagues like it or not, they now share a currency and an interest rate with George Papandreou and his ministers in Athens. And yet, throughout the weeks that Greece has teetered on the abyss of economic collapse or massive political convulsions, Berlin has been unable to come out and stand behind Athens. This has nothing to do with altruism or international brotherhood, and everything to do with enlightened national self-interest. Clubs that do not hang together end up with the members being hanged separately, and in investors' minds Greece is not so different from Portugal, Italy or Spain: they all go on the target range marked Pigs. When he was Bill Clinton's treasury secretary, Larry Summers once remarked that "when markets overreact … policy needs to overreact as well". During this banking crisis, eurozone politicians have not overreacted – indeed, they have barely acted at all.

Which is why this week's suggestion from Berlin that the eurozone ought to set up its own version of the International Monetary Fund has come as such a surprise – even to other European governments. As it stands at the moment, the proposal is vaguer than a pitch on Dragons' Den, but it at least marks a recognition by Europe's anchor economy that the currency club urgently needs some more institutions if it is not to repeat the mistakes and missteps of the past few years. Ideally, an EMF (as it has inevitably become known) would stand behind the common currency and intervene when member governments get into financial strife. In Greece's case, such a body would have been able to give Athens some funds and a stamp of support that would have taken off some of the speculative pressure. The Washington-based IMF can already do this, but its intervention might dent European pride.

So much for the dream scenario: if an EMF is ever set up (a big if, given that it could force the renegotiation of the Lisbon treaty), it will probably not be so useful. It is more likely to go in for finger-wagging at governments that exceed their borrowing limits, and it is certainly hard to see German voters funding such an institution and its war chest. If that is what Ms Merkel has in mind, she should be warned: it will do nothing to glue together a eurozone that is slowly coming unstuck. If a 16-nation economic club is to grow up, it needs serious institutions and regulators – and for member governments to recognise that they are in it together.

Lucy Neville-Rolfe attacks the quality of education received by many of the young Britons recruited by the retailer

A main board director of Tesco will today attack the quality of school-leavers and the standards achieved by A-level students and university graduates.

Lucy Neville-Rolfe, the retailer's director of corporate and legal affairs, says school-leavers have basic problems with literacy and numeracy and that many also have "what you might call an attitude problem". She adds: "They don't seem to understand the importance of a tidy appearance and have problems with timekeeping ... Some seem to think that the world owes them a living."

Neville-Rolfe also says: "There are growing questions over various aspects of our exam system." She adds that grade inflation makes it difficult to identify the highest achievers: "There seems to be a fair amount of evidence now that [exams] are getting easier and failing to stretch people. The proportion of firsts and 2:1s has risen enormously so it's much rarer to get a 2:2 than a first. People who are clever today are achieving the grades of the very clever a couple of decades ago."

Tesco is the largest private sector employer in the country, with 280,000 UK employees, and Neville-Rolfe, 56, is one of the most powerful and well paid women in British business. An Oxford graduate and former civil service high-flyer before joining Tesco, her total pay package last year was more than £1.6m.

Her broadside, in a speech to be delivered at a London conference, is the second time in under six months that Tesco has publicly criticised the education system and the quality of school-leavers. Last October, the grocer's chief executive, Sir Terry Leahy, said: "Despite all the money that has been spent, standards are still woefully low in too many schools. Employers like us ... are often left to pick up the pieces."

His comments were echoed by Richard Lambert, director general of the CBI, which represents business leaders and by Sir Stuart Rose, chairman of Marks & Spencer. Rose said millions of school-leavers were unfit for work because: "They cannot do reading. They cannot do arithmetic. They cannot do writing." Lambert said the education system was failing poorer children and producing "exam results we ought to be ashamed of".

Neville-Rolfe, says part of the problem is that there are too many agencies and oversight bodies and too much paperwork: "Our education system seems very complicated to me. I would guess that the paperwork mountain with which teachers have to struggle is even worse than the red tape we face in business. There are lots of agencies and bodies, often issuing reams of instructions to teachers. It isn't surprising if teachers sometimes get distracted from the most important task at hand: teaching children well in the classroom."

She says Tesco store managers are the "equivalent of a headteacher in a school" and that senior supermarket staff would make good school governors.

Heads should also be given more power and rewarded better. "Why don't we give heads and teachers more freedom to take responsibility and use their professional judgment?"

She also points to wider problems among the young and their attitudes to work, authority and discipline: "The truth is that a certain humility and an ability to work hard are important for success ... More broadly, a society where people don't feel the need to work to gain material possessions will not be a stable or successful society."

In her speech to the Institute of Grocery Distribution's conference on skills, she says that education "is set to be an important point of debate at the general election" and that the supermarket industry should come up with a "manifesto for education and skills which we can give to whoever wins".

The government and teaching unions have repeatedly dismissed the attacks by business leaders on educational standards, pointing out that they have never been higher.

Our large South American neighbour should not be allowed to force its colonial ambitions on us

Simon Jenkins fails to acknowledge that the Falklands have moved on (The Falklands can no longer remain as Britain's expensive nuisance, 26 February). Argentina's endeavours to force its colonial ambitions on a small country, against the freely expressed wishes of its people, ignore our basic right to self-determination.

"Anyone who studies the tortuous history and law of the Falklands will know that Argentina's claim to the islands was certainly strong," Jenkins says. But their claim to a territory 300 miles away is neither logical nor valid. Falklands inhabitants did not replace an indigenous population because there was none. The islands were claimed by Britain in 1765, long before Argentina existed as a country, and have been permanently settled since 1833. Some families, like mine, can now boast eight or nine generations on the islands. The Falklands are an overseas territory of the UK, with internal matters governed by a democratically elected legislative assembly, of which I am a member.

Jenkins talks of Argentina regularly protesting about their rights to the islands to "the UN's decolonisation committee, supported by other post-imperial states in South and North America". But the annual vote in this committee is a sham – the Islands are not a colony and the debate there is therefore an irrelevance. More relevant are the European convention on human rights and the international covenant on civil and political rights, both of which endorse the principles of self-determination.

We have repeatedly attempted to work with Argentina, and agreed a joint declaration on co-operation on oil exploration in 1995. This was renounced by Argentina in 2007. Co-operation on sustainable fisheries through a joint commission was a way for the Falklands and Argentina to conserve South Atlantic stocks through the exchange of scientific data and the setting of sustainable catch levels. Argentina not only withdrew from the commission but set unsustainably high quotas in some fish stocks.

Jenkins states that "Argentina has not threatened military action over the Ocean Guardian" (the oil rig currently drilling in our waters). But it is clear that our large neighbour is attempting to achieve by economic warfare what it failed to achieve by military means.

It has threatened sanctions against companies holding licences to fish in Falklands waters and tried to exclude our representatives from participating at international conferences. It prevents charter flights from other South American countries flying to the islands, and is now attempting to disrupt our oil exploration by threats to hinder shipping. These are hardly the acts of a friendly and peaceful neighbour.

We remain eternally grateful to those who liberated us from the Argentine aggression in 1982. By referring to that time as "the silliest of wars", Jenkins insults their memory and diminishes their incredible achievement.

Jenkins believes us to be an "expensive legacy of Empire". He should be aware that the Islands are self-financing – except for defence, which is purely because of the continued Argentine claim to my country. And our government has expressed the wish to contribute more to these costs, should oil be discovered in commercial quantities.

As cabin crew strike looms, British Airways prepares contingency plans – of a sort

Private equity is struggling to float businesses on the stock market, as New Look, Travelport and Merlin Entertainments can testify. Now it looks as if the masters of the universe, circa 2003-2007, can't buy firms from the market either.

That, at least, is one conclusion to draw from events at Shanks, the waste management firm where Carlyle Group pitched up last October with an indicative offer worth 135p a share, or £535m. Shanks, supported by its two largest shareholders, said it would be minded to sell at 150p, so there was a basis for negotiation and the board agreed to open the books.

After four months of due diligence, however, Carlyle returned with only 120p, which unsurprisingly was rejected . Shanks' directors were too polite to say so but they might fairly feel they should be managing waste rather than having their management time wasted.

Carlyle remained silent yesterday, so we don't have its version of events. But it would be very odd if its offer of inferior terms turned on the mild-looking profits warning issued by Shanks a month ago. That statement appeared to reveal nothing more than the bleedin' obvious – that snow on the roads isn't helpful when you are running a lot of lorries.

So what was it? Was Carlyle struggling to raise finance for a bid at 135p-plus? You can understand why the private equity firm would be less than keen to advertise that idea. Did it choose the wrong target in the first place? Again, it wouldn't want to shout about that.

Poor old Shanks, however, is left to cope with the suspicion that Carlyle found something nasty during its four-month examination. If that is not the case, Carlyle ought to say so, or next time it won't find potential targets so willing to open their books.

The scheme's supporters are mostly German, other countries will be suspicious

The strangest part of all this talk about the creation of a European Monetary Fund is the timing.

Eurozone members are in the middle of dealing with the Greek debt crisis and are desperately trying to maintain the line that Greece's problems can be fixed by the adoption of austerity measures. Yet here is a proposal seemingly designed to deal with cases where austerity is not enough and bailout cash is required.

Supporters might reply that an EMF would deal with the "next Greece," rather than fix the current mess, but markets will inevitably see the message as weak and confused. No wonder speculators are salivating. No wonder Axel Weber, president of the Bundesbank, would prefer everybody to shut up. Discussions about "the institutionalisation of emergency help," he declared , are "unhelpful".

Weber has a point. Most of the voices arguing in favour of an EMF are German. Other European states – especially smaller countries – will be suspicious. They might, in theory, welcome the creation of a fund that could help in a crisis. In practice, they will view the manoeuvre as a way for Germany to impose fiscal restrictions on its neighbours while neglecting to get its consumers spending again.

If the creation of an EMF would require a new European treaty – which is German chancellor Angela Merkel's view – it is hard to see how the idea will get off the ground in the near-term. In which case, concentrate on the immediate problem.

The run of economic data has been miserable since the turn of the year but today's trade figures were comfortably the most depressing of the lot. The trade deficit widened from £2.6bn to £3.8bn in January, snuffing out signs that sterling's decline was finally stimulating a revival in exports.

The reason why one or two manufacturing surveys at the end of last year struck a semi-cheerful note now appears clear: exporters weren't exporting more goods, they were simply enjoying a boost to their profit margins.

There remains the unanswered question of why other surveys are indicating increases in actual export orders, but the trade figures are the real deal. They are hard numbers – best to believe them.

So it seems sensible to brace ourselves for weak first-quarter GDP figures. Spending in shops is slowing, the housing market is off the boil and it's unlikely that anybody is restocking in anticipation of a pick-up in demand. Nobody is buying that story.

Nobody, that is, apart from the stockmarket, seemingly unruffled by it all. Admittedly, investors' horizons stretch beyond the UK. But they, too, may be guilty of concentrating on healthy-looking profit margins that disguise the real picture.

Deal with resources group Hargreaves Services would transform coal industry

UK Coal and resources group Hargreaves Services are weighing up a £350m merger which would transform the coal industry, the Guardian has learned.

UK Coal, the UK's last major coal producer, announced today that it had received a merger approach from an unnamed third party. The company is keen to reduce its reliance on its deep mines, which are expensive to maintain and have suffered production problems leading to large losses. UK Coal shares closed up more than 12% today.

It is understood that property and transport firm Peel Group, which owns 28% of UK Coal, is being kept fully informed of developments. The merger plan is still tentative and even if both sides proceed with the plan, they are understood to be some way from putting a formal agreement to shareholders. Neither company commented last night.

Hargreaves Services owns a deep mine in Maltby, South Yorkshire, which it bought from UK Coal, and is soon to start open cast mining. It also manufactures metallurgical coke and solid fuel such as briquettes used in barbecues. The company also runs a transport division and an industrial services division mainly handling fuel on behalf of power station owners in the UK. With a market value about a quarter more than UK Coal, it is likely that Hargreaves Services would be the senior partner in any merger.

UK Coal has embarked on an expensive project to upgrade its coal mines. But it has struggled in recent years because of the fall in coal prices following the economic slowdown and writedowns in its property portfolio. Its 43,000 acre portfolio is mainly located around disused collieries which have been earmarked for housing and light industrial redevelopment schemes and is a significant source of potential income. It reported losses of £80m in the first six months of last year, including a near £60m writedown in the value of its property portfolio. It also reported a rise in net debt to £191m, prompting urgent talks with its lenders.

In September UK Coal raised £100m via a rights issue to see it through the next couple of years. Next year, it should start to see the benefits of higher production rates from its mines and higher property values. The company has also struggled for some years with long term supply contracts which have forced it to sell coal below market rates to large customers such as Drax. The last of these contracts will expire next year.

UK Coal is Britain's largest producer of coal, supplying around 6% of the country's energy needs for electricity generation. It has four deep mines in operation, employing 3,100 people. Eight years ago it owned 13. It is looking to expand its surface mines, which produced around 1.7m tonnes of coal a year in 2008. They are cheaper to run but are opposed by many local communities.