George Osborne came under pressure from three sides today to put tax cuts at the heart of next month's Budget. Nick Clegg sought to sharpen dividing lines with the Tories as the Liberal Democrats pressed for more help for low earners. Labour called for an emergency VAT cut while senior Tories urged the Chancellor to cut "popular" taxes such as the 50p rate. The demands came as Mr Osborne tried to piece together his March 21 Budget against a backdrop of continued uncertainty in the Eurozone. William Hague today called for more clarity about Greece's prospects of remaining in the single currency. The Foreign Secretary said the Government was continuing to prepare contingency measures for all possible outcomes, including help for British nationals in Greece, The Times says.Signs that the US economic recovery is gathering pace and receding fears over a Greek sovereign default have propelled the main US stock market index to near its highest level since before the implosion of Lehman Brothers triggered a global market meltdown in 2008. "Last year there were fears that the developed world was melting down, and emerging economies were heading for a "hard landing," says Philip Poole, global head of strategy at HSBC Asset Management, according to The Financial Times. Mr.Poole adds the following, "even though those fears were overdone, the strength of this year´s rally has been surprising," but warns that, "this brinksmanship (referring to the crisis in Greece) could still lead to a formal default." Oil shipments to Britain and France have been halted by Iran, Iran's Oil Ministry announced today. The move is an apparent pre-emptive move against the European Union after the bloc imposed sanctions on Iran's crucial fuel exports. A statement posted on the ministry's shana.ir website gave no other details, but it follows a flurry of contradictory signals by Iran about a backlash against the EU for imposing a boycott on Iranian oil beginning in July. The 27-nation EU accounts for about 18 per cent of Iran's oil exports. Ministry spokesman Ali Reza Nikzad-Rahbar said the suspension posed no problems for Iran. "We have our own customers and replaced British and French companies with other firms," he was quoted as saying by the IRNA state news agency, Scotland on Sunday reports. British Airways is locked in talks with the Office of Fair Trading (OFT) over a £121.5m price-fixing fine levelled five years ago against the airline. The settlement talks are expected to lead to BA finally paying the fine, albeit at a reduced amount - less than half the original sum, according to one source. It is thought that although the fine will be paid, a statement pointing out that BA does not admit any wrongdoing will be issued. The fine was originally levied by the OFT in August 2007 in respect of the price-fixing inquiry involving the British flag carrier and rival Virgin Atlantic. It related to BA's alleged collusion with Sir Richard Branson's airline over fuel price surcharged between August 2004 and January 2006. Virgin acted as whistleblower in the case and as such was given immunity, The Telegraph reports.Greece's pending debt rescue could fundamentally change the financial mechanics of the Eurozone and result in tighter fiscal union, a leading economic think tank has warned. European leaders are working through the weekend to finalise the details of a second €130bn (£108bn) bail-out package for Greece, ahead of a key meeting on Monday. A conference call is expected to be held on Sunday by finance ministry officials from the 17 Eurozone countries. If the package is adopted, Greece's finances will be placed under stringent watch to ensure it delivers deep cuts and meets loan requirements. The respected Ernst & Young ITEM Club said: "This could be the template for a future European fiscal union."Tehran was preparing for a significant step forward in its nuclear enrichment programme as Iranian warships were ordered into the Mediterranean Sea in a show of strategic strength. Diplomats working with the International Atomic Energy Agency in Vienna said the regime was ready to install thousands of new-generation centrifuges which would radically reduce the amount of time needed to produce nuclear warheads. The work had been undertaken at the cavernous Fordo uranium enrichment facility, which can house 3,000 centrifuges. Admiral Habibollah Sayari said an unspecified number of Iranian vessels passed through the Suez Canal into the Mediterranean. The provocative move came as William Hague warned that Iran's pursuit of a nuclear weapons programme could lead to a "new Cold War", even deeper than that between the West and the USSR, The Times says.The March issue of the Harvard Business Review is devoted to "American competitiveness" (by which it means the country's ability to improve productivity and living standards). (...)The one thing that worries the HBS alumni more than anything else?the state of American politics?is the most difficult to fix. The political pendulum swings unpredictably, making it hard to plan for the future. Should companies assume that they will have to abide by Mr Obama's health-care law when it comes into effect in 2014, or will the Republicans have repealed it by then? No one knows. And Washington's aversion to compromise makes the budget almost unmendable. Without both parties' fingerprints on a deal, no one can curb the huge entitlement programmes that grow automatically (...) So deficits yawn and the welfare state keeps growing, even as America's roads crumble. That is not a recipe for dynamism, according to The Economist.Ministers seem to be listening. Since giving oil bosses a budgetary walloping last year, they have been talking to them about how to keep up investment. In this year's budget some change, or at least a formal consultation, is likely to provide certainty as to how firms should plan for their share of decommissioning costs. This matters, not just for the firms involved, or for the exchequer's coffers, but because the existing oil and gas industry is still important to Britain. Shale gas around Blackpool may be tomorrow's great hope for energy independence, but the country relies on its offshore reserves (North Sea) for 55% of its energy. Oil and gas account for 2.4% of GDP (finance is 10%, manufacturing 11%). In 2010 it invested more than any other industrial sector and paid a fifth of Britain's corporation taxes. Meanwhile, a thriving supply chain of British technical firms export their services around the world?a business that should continue long after the last drop of oil dribbles ashore, The Economist says.HSBC is considering walking away from George Osborne's plans to inject £20bn into the UK economy in what could prove to be a major blow to the Chancellor's hopes of reviving growth. This is because of the two separate charges the Treasury is proposing, which makes the fund more geared to banks, such as RBS and Lloyds, which benefit from cheaper wholesale funding. These banks are expected to report a combined loss of £4bn this week. For HSBC, which is deposit funded as opposed to wholesale funded, the charging structure being discussed - which would add 200 basis points on to the cost of the loans - is believed to be unworkable. Sources close to the detailed ongoing talks between the Treasury and the UK's biggest banks indicated that HSBC remains part of the discussions, but that on the current basis the proposals appear to be a "non-starter," The Telegraph writes. AB
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