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Willie Walsh, BA chief executive: “We’ll do whatever we can to keep BA flying”

The union representing British Airways cabin crew has said its members will go on strike for three days from 20 March and for four days from 27 March.The Unite union confirmed it would not strike over Easter, but warned there could be further action after 14 April if a resolution had not been agreed. BA cabin crew are striking over changes to pay and staffing levels imposed by the airline last November. Another row has broken out between BA and the union about a new offer. In addition to strike action, the union announced at a press conference that it would also ballot its members on a new offer from BA tabled earlier this week, but said it would not recommend it. But shortly afterwards, BA boss Willie Walsh told the BBC that the airline’s offer was no longer available. He said the offer was conditional on strike action being averted, and so had been withdrawn. Unite’s assistant general secretary Len McCluskey said this latest move by British Airways “beggared belief” and denied that the offer was ever conditional. Far apartAlthough both sides reasserted that they were available for further talks, the language on both sides has hardened since the strikes were announced.

Mr Walsh said the two parties were “not close at all” to coming to an agreement. The union’s proposals to save more than £60m at the loss-making airline included staff pay cuts that BA described as “morally wrong”. Mr Walsh said Unite had failed to provide any credible plan to date. The union contended that it had “made enormous strides and significant offers that meet the demands of BA”. Mr McCluskey said that the withdrawal of the offer showed that the airline’s management was “bent on confrontation and never had any intention of an agreement”. The Conservatives accused the government of “looking the other way” because the union was “channelling millions” into “Labour’s election coffers”. Prime Minister Gordon Brown urged the two sides to resume negotiations. “It’s in my view essential that the parties continue to talk now even at this 11th hour,” he said. “I hope they will do so but I remind them of the danger and risk to the British economy of disruptive strikes going ahead.” Flight cancellationsBA said all flights to and from London City Airport would be unaffected by strike action, as would all long-haul flights from Gatwick.

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Len McCluskey, Unite: “We are unable to recommend BA’s offer”

Some short-haul Gatwick flights within the UK and Europe would be cancelled, while some short and long-haul flights to and from Heathrow would also be affected. BA said it was “very sorry for the stress and disruption Unite’s decision will cause”. Consumer group Which? said passengers should be able to get their money back if they are directly affected by the strike, but only once their specific flight has been officially cancelled. “Passengers whose flights are cancelled should get a full refund, or may be able to rearrange their BA flight date, but that won’t compensate for the time and money lost on hotel bookings or tour dates,” said Rochelle Turner from Which?. Back-up plansQuestions have been raised about how many of the 7,500 cabin crew that voted for action last month will actually go on strike. BA has said that those taking part will lose pay and perks, including no longer getting the right to buy heavily-discounted tickets. The airline has already made extensive contingency plans in preparation for strike action. It has already trained 1,000 staff to work as cabin crew to cover for any striking workers. In November, BA reduced the number of cabin crew on long-haul flights and brought in a two-year pay freeze from 2010. The airline has also proposed new contracts for fresh recruits and newly-promoted staff. These include a single on-board management grade, no seniority, promotion on merit, and pay set at the market rate plus 10%. However, this would still see new recruits paid significantly less than current staff. The union said these changes would hit passenger services, as well as the earnings and career prospects of cabin crew. BA says the cuts are necessary to save money. Last month, it said it lost £342m for the last nine months of 2009. That followed an annual loss of more than £400m reported in May last year. Unite has acknowledged the “need for change” and has proposed its own cost-cutting package worth £63m through a combination of pay-cuts and part-time working, but this was rejected by BA earlier this week. The airline said the package would not save as much as Unite claimed, and would involve pay cuts for crew members. Will you be affected by the strikes? Do you have flights booked over those dates? Do you work for British Airways? Do you support the strike? Send us your comments using the form below.A selection of your comments may be published, displaying your name and location unless you state otherwise in the box below.

The BBC may edit your comments and not all emails will be published. Your comments may be published on any BBC media worldwide.

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Vauxhall gets UK loans guarantee

Business Secretary Lord Mandelson has announced a 300m-euro ($412m; £270m) loan guarantee to the European arm of General Motors (GM).The money will help secure operations at the carmaker’s two Vauxhall plants in the UK and those of Opel in Europe. Lord Mandelson told the BBC he thought the move would secure the future of Vauxhall plants in the UK. GM had planned to sell Opel after going into bankruptcy protection last year, but then changed its mind. After announcing last week an increase in its investment in Opel and Vauxhall to 1.9bn euros, GM said it needed 2bn euros of loans and guarantees from European governments. It has asked for about 60% of this total to come from Germany, where the majority of GM’s European workers are based. GM estimates that Opel - which includes the UK’s Vauxhall business - needs 3.3bn euros to be turned around. The US firm decided to keep Opel rather than sell it to Canadian car parts maker Magna, which Germany had supported. The UK government loan will come from the government’s Automotive Assistance Programme. Vauxhall said it represented “a strong vote of confidence in UK automotive industry”. Luton concernsGM is cutting 8,300 jobs across Europe and is closing plants as it seeks to revive the brand. No jobs will be lost at the Ellesmere Port factory in Cheshire, which employs 2,166 people and makes the Vauxhall Astra. But it confirmed earlier this year that more than 360 jobs were to go at Vauxhall’s Bedfordshire van plant, 150 from its administrative department and 369 posts would be lost at its Luton plant. There have been concerns about the future of the Luton plant - which makes the Vivaro commercial van - beyond the current contract, which ends in 2012-2013. “It’s too early to say what new product will replace the current production at Luton,” Lord Mandelson told the BBC. “But I have spoken to the head of GM Europe and he is working very hard… in finding a further product that can be produced at Luton.” RestructuringGM also plans to invest 11bn euros “in a new product offensive” over the next five years Opel plans to launch eight new models this year, and another four in 2011. A big slump in sales during the global downturn forced GM into bankruptcy protection last summer, and it emerged 62%-owned by the US government. It has since sold its Swedish brand Saab and closed a number of classic US car brands such as the Pontiac and Saturn. Last month, it decided to wind down operations of the off-road Hummer brand after failing to complete a planned takeover by a Chinese firm.

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The one exception might be where the mortgage interest rate was so low that a borrower would be better off putting the extra payments into a savings account paying a higher rate of interest, after tax. An analysis by the Council of Mortgage Lenders (CML) last year suggested that a quarter of the £20bn annual interest saving, brought about by the Bank of England’s 0.5% bank rate, was showing up in higher mortgage capital repayments. This analysis was backed up by a survey for Lloyds, suggesting that a quarter of mortgage holders were taking advantage of their much lower interest rates to pay off capital at a faster rate. Stephen Noakes, commercial director of mortgages, Lloyds Banking Group said: “The average mortgage repayment has dropped by around £188 per month. “And those on tracker mortgages have done even better - on average they are just over £400 a month better off.” ‘Not widespread’It is normal for lenders to allow some overpayment on mortgage loans, each month or each year, before levying charges for the privilege. Some allow up to £500 in overpayments each month; others stipulate a ceiling of 5% of the outstanding loan; and some allow 25% extra to be paid over the course of the particular deal, for instance during the two or three years of a fixed-rate mortgage. Ray Boulger of mortgage brokers John Charcol, said: “Offset mortgages can allow you to overpay as much as you like, so long as you don’t pay off the whole mortgage.” Despite the obvious attraction of making overpayments, January’s edition of Trends in Lending, published by the Bank of England, found that they have not been common. “The major UK lenders reported that overpayment of mortgages has not been widespread, partly because reduced payments had been used to finance spending and in some cases used to repay more expensive unsecured debts or held as precautionary saving,” it said.

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If the Conservatives win the general election, the Financial Services
Authority will be the one to carry the can for its part in the banking
crisis.

The Tories want a split regulatory system, with the Bank of England returning
to regulate the banks and a new Consumer Protection Agency to safeguard the
interest of the consumer. The FSA will be no more.

But while George Osborne, the shadow chancellor, talks of a “powerful new
regulator” and a “powerful new consumer protector”, I doubt
whether the upheaval will be worth it.

For a start, many current FSA employees used to work at the Bank of England.
One can only assume that should the Bank regulate the banks again, many will
return to Threadneedle Street. What’s more, many of the senior figures at
the FSA who presided over the crisis walked away long ago.

Lord (Adair) Turner, the former CBI boss, is in the chair and his report on
the future of regulation received much praise. He has distanced himself from
the FSA’s dark past and has called for a more heavy-handed approach to
regulation. Consumers can already take some comfort that the FSA is being
more proactive than in the past – last year it collected a record £27.3m in
fines.

The regulator still faces a daunting task and questions remain over whether it
can police the industry effectively. Those questions would remain if a new
protection agency were installed.

Many of the proposals for the new CPA are in force already. The Tories talk of
summary boxes for credit card statements, yet they have been required since
2006.

They talk about the need for bank charges to be more transparent, but after a
long drawn out battle with the OFT the banks have begun to change the way
they charge fees. The Tories talk about opening up competition in banking,
but new entrants – Tesco, Virgin and Metro Bank – are already emerging.

Few would disagree that the existing tripartite regulatory system – FSA, Bank
and Treasury – is flawed and that its failings need to be addressed. So why
not give the FSA solitary power and give it the responsibility to tighten
banking regulations? Let the Bank of England channel its energies into
inflation and interest rates. The Government should get on with running the
country rather than meddling with financial services regulation.

Don’t transfer the regulation of consumer credit from the Office of Fair
Trading to the new CPA. Transfer it to the FSA instead, thereby creating a
unified regulatory regime for financial services firms and consumers.

Scrapping the FSA will cost billions, in all likelihood take years and create
an administrative nightmare. But most importantly, the Tory vision will not
guarantee better regulation or improved consumer protection.

Folklore has it that when former England football boss Graham Taylor was at
Aston Villa, he once stormed into the dressing room with his side two-nil
down and shouted to his players: “You have got yourself into this mess,
so you can get yourself out.” They went on to win 3‑2.

It’s a strategy that Osborne should consider for the FSA should he take up the
reins at 11 Downing Street.

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House prices fell 1.5 per cent in February after seven months of uninterrupted
growth, according to the Halifax, the UK’s biggest mortgage lender. It says
that buyers were deterred from visiting estate agents by the severe cold
weather and changes to stamp duty.

However, Hetal Mehta, an economist from Ernst & Young, warns that a fall
in mortgage approvals in January backs up the view that “the market is
running out of steam”.

This week the monthly survey from the Royal Institution of Chartered Surveyors
(RICS) also warned that its members were seeing a gradual rise in the number
of new instructions from sellers. Simon Rubinsohn, chief economist at RICS,
says: “Supply is certainly catching up with demand as sellers return to the
market, which will hit prices.”Mr Rubinsohn expects house price gains made
between January and June to be wiped out by falls in the second half of this
year.

Ray Boulger, the senior technical manager at John Charcol, the mortgage
broker, also predicts that prices should remain buoyant until the start of
the summer. The turning point could be the general election. Whatever the
outcome, the next government will have to cut spending dramatically in the
face of the enormous public sector deficit. It is likely to lead to rising
unemployment, a blow to any recovery in house prices.

Experts are divided over when these job cuts will occur but they are expected
to filter into the market later this year and into 2011. David Buik, of BGC
Partners, a City brokerage firm, warns that the jobless total will hit three
million by the end of this year “as 200,000 jobs are lost in the public
sector”.

There are also fears that the housing market is likely to be hit by a second
round of mortgage rationing towards the end of the year.

In recent months borrowers have benefited from some of the lowest fixed-rate
and tracker mortgage rates in more than six years. The state-owned or
part-owned lenders have also made big promises about the amount of home
loans offered to borrowers this year.

However, the mortgage market remains a shadow of its former self. Gross
mortgage lending is estimated to be £150 billion this year, compared with
£363 billion in 2007, according to the Council of Mortgage Lenders (CML),
the trade body.

The council has expressed grave concerns about a £300 billion shortfall in
mortgage funding over the next four years as the Government demands that
banks repay the financial support received at the height of the global
economic crisis. Lenders will be forced to divert cash earmarked for new
mortgages to repay the Government’s Special Liquidity Scheme and its Credit
Guarantee Scheme in the early months of 2011.

Wholesale money markets, at one time a significant source of funding for
lenders, remain largely frozen. The CML says that fierce competition for
retail deposits could mean a shortage of new mortgages, or higher rates, or
both.

Other commentators have said that new regulations from the European Union
could force UK banks to reduce the size of their balance sheets by as much
as £530 billion over the next three to four years. A report by Credit Suisse
released this week suggests that state-controlled banks will have to cut
their balance sheet by up to 20 per cent, potentially meaning fewer new
mortgages for customers.

Brokers say that the mortgage market is already in a weak position and can
hardly worsen, particularly for first-time buyers. Big lenders are currently
turning down nine out of ten applications from borrowers with only a 10 per
cent deposit, brokers warn.

David Hollingworth, of London & Country Mortgages, another broker, says:
“It is difficult to see how the mortgage market could slow any more than it
is already. There may be some competition for rates at the moment, but
lending is still extremely limited and affordability criteria remains very
tight. The worst that can happen is that the market fails to improve any
further.”

However, even if mortgage rates do not rise sharply, at some point in the
coming years the Bank of England is expected to raise the base rate from its
current level of 0.5 per cent, pushing up the cost of all types of borrowing
and providing another hurdle to a recovery in the housing market. Ms Mehta
says: “Even a small rise in the base rate will come as a shock to homeowners
on very low mortgage repayments.”

So what does all of this mean for buyers and homeowners now?

First-time buyers

Despite the many potential headwinds the housing market faces, most economists
predict a return to steady house price growth over the longer term because
of a fundamental shortage of housing stock, particularly in the South East
of England. The Ernst & Young ITEM Club forecasts that although national
house prices will rise by only 0.4 per cent next year, this shortage will
result in annual growth of 3.5 per cent in 2012, rising to 6 per cent in
2014.

But property experts remain divided over whether first-time buyers should get
on to the property ladder soon and risk any short-term fall in values or
wait until the economy is more stable. Some mortgage experts argue that now
might be a good time for first-time buyers to try to secure a mortgage
because lending criteria and rates have improved recently, although they
could worsen again over the next couple of years.

Mr Hollingworth says: “There have been some gradual improvements in the
availability of deals for buyers with small deposits in recent months but
mortgage availability could be restricted later in the year, which could hit
first-time buyers.”

The best-buy five-year fixed-rate deal for first-time buyers, available up to
90 per cent of a property’s value, is from Yorkshire Building Society. It is
charging 6.69 per cent, with a £499 fee. HSBC is also offering a
market-leading lifetime tracker deal pegged at 4.49 per cent above the base
rate, a payable rate of 4.99 per cent.

Martijn van der Heijden, head of mortgages at HSBC, says: “In the next few
years some volatility in interest rates may be unavoidable. If you can’t
afford an increase of up to 3 per cent on your mortgage, you should
seriously look to fix your payments.”

Homebuyers

Melanie Bien, director of Savills Private Finance, the broker, says: “Those
looking to buy this year should ensure they negotiate hard on the price,
given that the consensus view is that prices have further to fall.”

This week HSBC unveiled a new two-year discounted deal pegged at 1.94 points
below its standard variable rate, a payable rate of 1.99 per cent, available
up to 60 per cent loan-to-value.

However, brokers argue that homeowners who want to fix their rate should opt
for a longer-term deal to avoid having to remortgage when interest rates are
rising in a couple of years.

The best-buy five-year fix available now is from Leeds Building Society, at
4.6 per cent, available for up to 60 per cent of a property’s value. It has
a large £1,499 fee.

Remortgaging

Homeowners coming to the end of their current mortgage deal will be watching
house prices carefully. Another drop in house prices could push borrowers
into a higher loan-to-value bracket, increasing the cost of a mortgage deal.

Ms Bien says: “If you don’t have enough equity in your home to remortgage, it
is time to try to rectify this by overpaying and reducing your debt more
quickly if you have spare cash available or savings earning very little
interest.”

Case study

Sara Shackleton and her partner, Gary Hay, have secured a mortgage worth up to
90 per cent of the property’s value, enabling the couple to trade up to a
bigger house near by.

Ms Shackleton, 38, and Mr Hay, 43, from Kilbride, Lanarkshire, need more room
to accommodate their expanding family. The couple have a 21-month-old
daughter, Aimée.

They considered the movement of house prices when making the decision to
relocate, but decided that they did not want to wait.

Ms Shackleton says: “The market is still very unsettled but I do not think
prices will fall much farther. We made a considerable profit on our last
property, which helped us to move to a bigger place.”

The couple took a £142,000 mortgage on their new three-bedroom semi-detached
property, worth £167,000. The deal, from Santander, has a fixed rate for
three years of 5.99 per cent. Ms Shackleton says: “We’ll be in this property
a long time so our priority was getting the right home for our family.”

Property experts recommend trading up to a bigger home during a period of
falling prices because a more expensive property will lose more in value
with each percentage point fall in the wider market, making it more
affordable.

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Its “essential” £999 deal covers an agent’s valuation, property description, floor-plan and photographs; a “for sale” board; and listings on the big property websites such as rightmove.co.uk. The seller conducts viewings, but iSold staff act as middlemen in any subsequent negotiations.
Under this deal, savings on a typical estate agent’s fees of 1.5 per cent would be £2,085 on a £175,000 sale; £6,051 on a £400,000 property.
Steve Shore, of iSold, says: “We do everything that you would expect from a high street agent, apart from taking viewings — and many agents no longer do that. Clients often tell us that they prefer to show people round themselves, as they know their house better than anyone.”
The iSold “premium” package, at £1,199, adds a 3-D tour for online ads, plus local newspaper (and other) advertising for an open house event. The “premium-plus” deal at £1,299 provides sales staff to host the day’s viewings.
Customers pay either £299, £499 or £599 up-front for the three packages.The final £700 is paid on completion.
The deals do not cover the non-agency costs of selling, such as solicitors’ services and the Home Information Pack (Hip) and Energy Performance Certificate (EPC). However, Mr Shore says that the company will offer all these at competitive rates.
Linda and Kevin James are one couple who plan to use the iSold premium-plus service. They put their four-bedroom house in Bradley Stoke, near Bristol, on the market in January for £280,000, but have had little serious interest.
Mrs James, 59, says: “We’ve had offers of £250,000 and £260,000, which isn’t even close. The agent is not getting us many viewings, so we have given them notice and hope to do better with iSold.”
She adds that the current agent charges a “good rate” of just under 1 per cent on completed sales. If the couple sell with iSold, they will save about £1,400.
The Little House Company offers online agent deals similar to iSold at thelittlehousecompany.co.uk. For example, sellers can get a valuation, floor plans and photographs, listings at the big property websites, a “for sale” board and use of negotiators for £425 (plus Vat), or £195, with an extra £495 on completion (also plus Vat).
However, Nick Marr, of The Little House Company, says that its cheaper “private sale” packages are far more popular. These provide listings on the company’s own website (£85) or, for £135, on its site and 500 others. The “all-in-one” package at £415 also includes a valuation, Hip, EPC and “for sale” board. However, none of these deals covers ads at rightmove.co.uk, globrix.com and other popular websites that do not permit private sale listings.
Private sellers at The Little House Company and similar sites, such as houseweb.co.uk, must decide a price and provide property details and photographs. These must comply with the law and not mislead prospective buyers. Sellers can get advice at the websites which.co.uk, oft.gov.uk and adviceguide.org.uk.
Mr McLaren, of Which?, says that sellers should be able to find their own buyer with relative ease, and points out that private sales (via small ads) were common until the 1980s.
Barry Thomas used one of The Little House Company’s private sale deals when he sold his mother’s house in Forest Gate, East London, this year. He says: “We had tried an estate agent, who wanted 1.9 per cent commission — and was unhelpful. Selling privately was easy. When viewers seemed serious, we gave them our solicitor’s contact details and said they should ask their solicitor to get in touch. It took nine months, but we got £250,000, which was what we wanted, in a difficult market. I was keen for my mother to keep as much of her money as possible. In the end, we spent less than £500 and saved more than £4,000 in fees.”
Mr Thomas says that a “for sale” board attracted about 60 per cent of the people who came to see the property, with the remainder prompted by the online ads. He has now listed his three-bedroom home, in Chadwell St Mary, Essex, on the website at £185,000.
Mr Marr says: “Our typical client is in his or her late forties to early fifties and selling a home for more than £400,000. These are people who have sold with agents before and know how the market works but have not received good value. Because their homes are worth good money, they stand to save £5,000-plus on fees.”
He says that many clients use his company’s private sale services alongside an estate agent — hoping to find their own buyer first. The law states that home owners who advertise privately alongside an agent are not liable to pay the agent commission under a sole agency agreement if they find their own buyer. It can be more complicated in reality, however, as some “private sale” sites may be classed as an agent.
To be safe, sellers should ask to add a clause to their agent’s contract confirming that no commission is due on a private sale, Mr Thomas says. They should also note that some agents will charge for marketing, even when they do not manage to secure a sale.
Private sellers have other options aside from the internet. Local sign-makers can provide a “for sale” board for about £50, which should drive significant passing interest, as should ads in local newspapers and shop windows. Word of mouth can also help.
Private sales not made on the open market (sales to friends, for example) have the advantage that they do not require a Hip.
How to use estate agents
• If you decide to use a traditional estate agent, be sure to shop around. You can search for members of the National Association of Estate Agents (NAEA) by postcode at NAEA.co.uk. Speak to several local agents and ask them to list all their services, plus fees and charges (and which of the latter are payable even if they can’t find a buyer).
• Check terms and conditions carefully. Under a sole, joint-sole or multi-agency agreement, you are entitled to search for a private buyer while your property is on the agent’s books — and should not be charged commission if you find one (see main text). However, you may not instruct another agent to act for you until your notice period is up. If you sell via a second agent during this period, you could be charged double commission. Under a sole selling agreement, you may be liable for commission on sales made either privately or via another agent.
• Which? has free template letters to use if you wish to withdraw an instruction, or you believe that you have been unfairly charged commission, at which.co.uk.
• TheAdvisory.co.uk covers all aspects of selling your home , with information on agent and private sales. The site concludes: “We feel that online estate agency services [such as those from iSold and The Little House Company] give sellers the best chance of successfully selling privately and saving many thousands of pounds. For the money, their service is unrivalled.”
• The Government also has useful advice at direct.gov.uk. This states, for example, that customers unsure about an estate agent’s contracts should get advice from a solicitor or their local Citizens Advice Bureau.
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The Council of Mortgage Lenders said that the number of all home loans issued
in January had fallen by 49 per cent to 32,000 mortgages. The total was, it
said, an emphatic demonstration of the temporary lift that the stamp duty
break had given the housing market.

The CML said that lending was expected to remain weak over the next few
months.

The number of loans to first-time buyers fell even more steeply, by 54 per
cent to 11,300.

Demand for properties that had benefited from the stamp duty holiday, priced
between £125,000 and £175,000, tumbled with the number of first-time buyer
mortgages, falling by 80 per cent.

Michael Coogan, director-general of the CML, said: “It was a quiet start to
the year. Lending volumes in January were low, but we had predicted this
would happen due to the end of the stamp duty holiday distorting December’s
figures.

“We expect lending over the coming months to remain weak as uncertainty
over of the state of the economy and the upcoming election are likely to
continue to hold back housing market activity.”

The value of mortgages fell by 45 per cent to £4.7 billion between December
and January, while remortgage loans declined by 12 per cent to £3 billion.

However, brokers said that there was some evidence that lenders had begun to
offer better deals.

Brian Murphy, head of lending for the Mortgage Advice Bureau, said: “The
mortgage market as a whole is trending upwards. There are more products,
more products at higher loan to values and more competition on rate among
the main players.

“February, for example, was our busiest month for nearly two years.
Despite this, it will, of course, remain difficult for anyone who doesn’t
satisfy the requisite borrowing criteria to obtain a loan.”

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The average cost of a two-year fixed-rate deal has fallen to 3.88 per cent
last month, down from 3.97 per cent in January and the lowest level since
July 2003.

There was also a fall in the average cost of a five-year fixed rate mortgages,
which dropped to 5.49 per cent from 5.56 per cent the month before.

However, the figures show that margins on tracker home loans, which are pegged
to the Bank of England base rate, increased slightly. The average pay rate
on a tracker loan was 3.69 per cent last month, the second lowest level
since records began in 1997.

Banks and building societies introduced a round of mortgage interest rate cuts
in recent weeks as lenders competed to attract good-quality borrowers and
encourage existing customers to remortgage, although affordability criteria
remains tight.

Meanwhile, the costs charged on unsecured lending, in the form of credit
cards, personal loans and overdrafts, has increased or remained static, the
Bank of England figures show.

The average interest rate charged on a credit card rose to 16.51 per cent, up
from 16.37 per cent in January. It was the fifth consecutive month that the
rate has increased or stayed the same, pushing it up to its highest level
since June 2006.

Loan and overdraft rates remained unchanged during the month at 18.95 per
cent.

Savers have also suffered as with the average return paid on a fixed-rate bond
dropping for the sixth consecutive month. The accounts, which require savers
to lock away cash for periods of up to five years, have been one of the only
competitive accounts on the high street in recent months.

The average return on the bonds fell to 2.39 per cent in February, down from
2.41 per cent in January and compared to a peak of 6.06 per cent in 2008.
Instant access deposit accounts continued to pay a negligible average rate
of 0.17 per cent.

The only good news for savers was that tax-free Isa interest rates rose
slightly, from 0.41 per cent to 0.47 per cent, as providers geared up for
the approaching Isa season.

Mortgage lenders have also been reducing the cost of some of loans and those
aimed at borrowers with smaller deposits.

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“While most supermarkets are carrying out audits of their suppliers, our evidence shows that these audits are not safeguarding workers and they clearly need to take steps to improve them. The processing firms themselves and the agencies supplying their workers also need to pay more than lip- service to ensuring that workers are not subjected to unlawful and unethical treatment.”
Jack Dromey, deputy general secretary of Unite, the union that has been campaigning for change in an industry that employs 88,000 workers, said that supermarkets should hang their heads in shame. “[They] have driven down costs along their supply chain with tens of thousands of workers paying the price, suffering discrimination and unfair treatment,” he said. “A two-tier labour market has been created, exploiting migrant agency workers on poorer conditions of employment.
“The report exposes labour practices in the supply chain that are an affront to human decency — physical and verbal abuse, a lack of health and safety protection, shameful treatment of pregnant women and a culture of fear. The report says, and rightly so, that there are reputable employers but they are undercut by the rogues.”
Asda has signed new arrangements with its suppliers, but no other leading supermarket has followed suit.
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