Deficit cut ‘could take longer’

2 December 2012 Last updated at 06:13 ET

Chancellor George Osborne says the rich will pay more, but welfare spending must also come down.

Chancellor George Osborne has admitted that curbing the UK’s financial deficit is “taking longer” than planned.

But he told the BBC the government was “making progress” and that to “turn back now would be a complete disaster”.

Mr Osborne, who delivers his Autumn Statement on Wednesday, said well-off people would “pay their fair share”.

Shadow chancellor Ed Balls said Mr Osborne’s judgement had been “woefully lacking” and more investment was needed to promote economic growth.

The coalition has set a target of reducing debt as a share of national income by the next general election, due in 2015.

UK public sector net borrowing, excluding financial interventions, hit £8.6bn in October, according to the Office for National Statistics (ONS), marking a rise from the £5.9bn borrowed in October 2011.

But last week the ONS confirmed that the UK’s economy had grown by 1% during the third quarter of this year, following a recession lasting nine months.

‘Pay our way’

Mr Osborne refused to divulge any details of the economic forecasts from the independent Office for Budget Responsibility, which will be unveiled during Wednesday’s statement.

But he told BBC One’s Andrew Marr Show: “We had two targets. One was to get debt share falling as a share of national income by 2015/16 and also to balance the current budget.

Ed Balls: “Unless you have a long-term jobs and growth plan you don’t get the welfare bill down.”

“It is clearly taking longer to deal with Britain’s debts. It is clearly taking longer to recover from the financial crisis than one would have hoped, but we have made real progress.

“The deficit is down by a quarter. There are a million more jobs in the private sector and to turn back now, to go back to the borrowing and the debt and the spending that Ed Balls represents would be a complete disaster for our country.”

He added that some people were calling for more borrowing and others for more spending cuts, but the government had “got the right plan and we should stick to that plan”.

The deficit had been cut by a quarter, he added.

Mr Osborne said of an economic recovery that “underpinning it will be the confidence of this country to pay its way in the world”.

However, Labour’s Mr Balls told the Andrew Marr Show that the chancellor’s “judgement has been proved to be woefully lacking”.

He added: “The growth plan is a shambles. There’s nothing there… We are in a hole with no growth and borrowing rising.”

‘Fair share’

According to the Sunday Times, the chancellor is poised to cut the £50,000 annual tax relief cap on pension contributions to as little as £30,000 in his Autumn Statement.

The change, affecting the wealthiest pension pots, would reportedly bring in up to £1.8bn a year.

Mr Balls said such a course would be “deeply unfair” and attacked the government for previously cutting the top rate of income tax from 50% to 45%.

BBC political correspondent Iain Watson said the Autumn Statement was a Budget by any other name and some tax rises for the wealthy and cuts in welfare were widely expected.

Mr Osborne said: “The richest have paid more in all of my Budgets.”

He added: “The richest will have to bear their fair share… more than they pay at the moment.”

But Mr Balls said: “There’s a millionaires’ tax cut worth £3bn… Why should pensioners pay more?”

Former Liberal Democrat Treasury spokesman Lord Oakeshott told BBC One’s Sunday Politics: “What matters in the Autumn Statement is to get the economy going.”

He said his party “must fight much harder to ensure we get policies [in government] to get it going”.

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Cargo plane crashes in Brazzaville, 3 dead

BRAZZAVILLE, Republic of Congo (AP) — A cargo plane owned by a private company crashed Friday near the airport in Brazzaville, the capital of the Republic of Congo, killing at least three people, officials said.

The Soviet-made Ilyushin-76 belonged to Trans Air Congo and appeared to be transporting merchandise, not people, said an aviation official who requested anonymity because he was not authorized to speak to the media.

The plane was coming from Congo‘s second-largest city, Pointe Noire, and tried to land during heavy rain, he said.

Ambulances rushed to the scene in the Makazou neighborhood, located near the airport, but emergency workers were hampered by the lack of light in this capital, which like so many in Africa has a chronic shortage of electricity.

“At the moment, my team is having a hard time searching for survivors in order to find the victims of the crash because there is no light and also because of the rain,” Congolese Red Cross head Albert Mberi said.

He said that realistically, they will only be able to launch a proper search Saturday, when the sun comes up.

Reporters at the scene fought through a wall of smoke. Despite the darkness, they could make out the smoldering remains of the plane, including what looked like the left wing of the aircraft. A little bit further on, emergency workers identified the body of the plane’s Ukrainian pilot, and covered the corpse in a blanket.

Firefighters were trying to extinguish the blaze of a part of the plane that had fallen into a ravine. They were using their truck lights to try to illuminate the scene of the crash. Although the plane was carrying merchandise, emergency workers fear that there could be more people on board.

Because of the state of the road connecting Pointe Noire to Brazzaville, many traders prefer to fly the roughly 400 kilometers (250 miles).

Africa has some of the worst air safety records in the world. In June, a commercial jetliner crashed in Lagos, Nigeria, killing 153 people, just a few days after a cargo plane clipped a bus in neighboring Ghana, killing 10.

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JLo tones down concert in Indonesia

JAKARTA, Indonesia (AP) — Jennifer Lopez wowed thousands of fans in Indonesia, but they didn’t see as much of her as concertgoers in other countries — the American pop star toned down both her sexy outfits and her dance moves during her show in the world’s most populous Muslim country, promoters said Saturday.

Lopez’s “Dance Again World Tour” was performed in the country’s capital, Jakarta, on Friday in line with promises Lopez made to make her show more appropriate for the audience, said Chairi Ibrahim from Dyandra Entertainment, the concert promoter.

“JLo was very cooperative … she respected our culture,” Ibrahim said, adding that Lopez’s managers also asked whether she could perform her usual sexy dance moves, but were told that “making love” moves were not appropriate for Indonesia.

“Yes, she dressed modestly … she’s still sexy, attractive and tantalizing, though,” said Ira Wibowo, an Indonesian actress who was among more than 7,000 fans at the concert.

Another fan, Doddy Adityawarman, was a bit disappointed with the changes.

“She should appear just the way she is,” he said, “Many local artists dress even much sexy, much worse.”

Lopez changed several times during her 90-minute concert along with several dancers, who also dressed modestly without revealing their chests or cleavage.

Most Muslims in Indonesia, a secular country of 240 million people, are moderate. But a small extremist fringe has become more vocal in recent years.

They have pushed through controversial laws — including an anti-pornography bill — and have been known to attack anything perceived as blasphemous, from transvestites and bars to “deviant” religious sects.

Lady Gaga was forced to cancel her sold-out show in Indonesia in May following threats by Islamic hard-liners, who called her a “devil worshipper.”

Lopez will also perform in Muslim-majority Malaysia on Sunday.

“Thank you Jakarta for an amazing night,” the 43-year-old diva tweeted to her 13 million followers Saturday.

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South Africa makes progress in HIV/AIDS fight

JOHANNESBURG (AP) — In the early 90s when South Africa‘s Themba Lethu clinic could only treat HIV/AIDS patients for opportunistic diseases, many would come in on wheelchairs and keep coming to the health center until they died.

Two decades later the clinic is the biggest ARV (anti-retroviral) treatment center in the country and sees between 600 to 800 patients a day from all over southern Africa. Those who are brought in on wheelchairs, sometimes on the brink of death, get the crucial drugs and often become healthy and are walking within weeks.

“The ARVs are called the ‘Lazarus drug’ because people rise up and walk,” said Sue Roberts who has been a nurse at the clinic , run by Right to Care in Johannesburg’s Helen Joseph Hospital, since it opened its doors in 1992. She said they recently treated a woman who was pushed in a wheelchair for 3 kilometers (1.8 miles) to avoid a taxi fare and who was so sick it was touch and go. Two weeks later, the woman walked to the clinic, Roberts said.

Such stories of hope and progress are readily available on World AIDS Day 2012 in sub-Saharan Africa where deaths from AIDS-related causes have declined by 32 percent from 1.8 million in 2005 to 1.2 million in 2011, according to the latest UNAIDS report.

As people around the world celebrate a reduction in the rate of HIV infections, the growth of the clinic, which was one of only a few to open its doors 20 years ago, reflects how changes in treatment and attitude toward HIV/AIDS have moved South Africa forward. The nation, which has the most people living with HIV in the world at 5.6 million, still faces stigma and high rates of infection.

“You have no idea what a beautiful time we’re living in right now,” said Dr. Kay Mahomed, a doctor at the clinic who said treatment has improved drastically over the past several years.

President Jacob Zuma’s government decided to give the best care, including TB screening and care at the clinic, and not to look at the cost, she said. South Africa has increased the numbers treated for HIV by 75 percent in the last two years, UNAIDS said, and new HIV infections have fallen by more than 50,000 in those two years. South Africa has also increased its domestic expenditure on AIDS to $ 1.6 billion, the highest by any low-and middle-income country, the group said.

Themba Lethu clinic, with funding from the government, USAID and PEPFAR, is now among some 2,500 ARV facilities in the country that treat approximately 1.9 million people.

“Now, you can’t not get better. It’s just one of these win-win situations. You test, you treat and you get better, end of story,” Mahomed said.

But it hasn’t always been that way.

In the 1990s South Africa’s problem was compounded by years of misinformation by President Thabo Mbeki, who questioned the link between HIV and AIDS, and his health minister, Manto Tshabalala-Msimang, who promoted a “treatment” of beets and garlic.

Christinah Motsoahae first found out she was HIV positive in 1996, and said she felt nothing could be done about it.

“I didn’t understand it at that time because I was only 24, and I said, ‘What the hell is that?’” she said.

Sixteen years after her first diagnosis, she is now on ARV drugs and her life has turned around. She says the clinic has been instrumental.

“My status has changed my life, I have learned to accept people the way they are. I have learned not to be judgmental. And I have learned that it is God’s purpose that I have this,” the 40-year-old said.

She works with a support group of “positive ladies” in her hometown near Krugersdorp. She travels to the clinic as often as needed and her optimism shines through her gold eye shadow and wide smile. “I love the way I’m living now.”

Motsoahae credits Nelson Mandela’s family for inspiring her to face up to her status. The anti-apartheid icon galvanized the AIDS community in 2005 when he publicly acknowledged his son died of AIDS.

None of Motsoahae’s children was born with HIV. The number of children newly infected with HIV has declined significantly. In six countries in sub-Saharan Africa — South Africa, Burundi, Kenya, Namibia, Togo and Zambia —the number of children with HIV declined by 40 to 59 percent between 2009 and 2011, the UNAIDS report said.

But the situation remains dire for those over the age of 15, who make up the 5.3 million infected in South Africa. Fear and denial lend to the high prevalence of HIV for that age group in South Africa, said the clinic’s Kay Mahomed.

About 3.5 million South Africans still are not getting therapy, and many wait too long to come in to clinics or don’t stay on the drugs, said Dr. Dave Spencer, who works at the clinic .

“People are still afraid of a stigma related to HIV,” he said, adding that education and communication are key to controlling the disease.

Themba Lethu clinic reaches out to the younger generation with a teen program.

Tshepo Hoato, 21, who helps run the program found out he was HIV positive after his mother died in 2000. He said he has been helped by the program in which teens meet one day a month.

“What I’ve seen is a lot people around our ages, some commit suicide as soon as they find out they are HIV. That’s a very hard stage for them so we came up with this program to help one another,” he said. “We tell them our stories so they can understand and progress and see that no, man, it’s not the end of the world.”

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Shakespeare in the Boardroom

Act I: A skeptic attends a Paris conference
One day in September 2010, Walt McFarland sat down with 23 other people—mostly men, mostly in their late 40s—for the final class of a master’s degree program taught by the Oxford Saïd Business School and the HEC Management School in Paris. The presentation, about inspiring organizational change within a company, was led by Richard Olivier, son of the late Shakespearean actor Laurence Olivier, who was there to walk the execs through The Tempest.

McFarland wasn’t familiar with the play, but he knew a thing or two about change. Over his career he’d helped several major U.S. federal entities including the FBI and Congress reorganize their management systems: He worked with 100,000 employees during the IRS modernization in the late 1990s and helped formulate the Department of Homeland Security after Sept. 11. “I’d been to a lot of presentations like this. Things can get pretty beaten down and cynical when it comes to change,” he says. “This was not my first rodeo.” But minutes into the program, as Olivier was explaining the story of the magical duke Prospero, McFarland swears Olivier looked right at him. The moment was as “brief as the lightning in the collied night,” as Shakespeare might have said, but it changed McFarland’s life forever. Richard Olivier found a new path into the family business
 
Act II: A legend’s son confronts his father’s ghost
In the mid-’90s, Olivier was a well-respected West End director who felt resentment toward his famous father, who died in 1989. “As a child it was hard to understand that he preferred playing Othello to being with me,” he told the London Times in 1999. Olivier had spent his career avoiding Shakespeare—“that was my father’s territory”—but in 1997, he was invited to direct Henry V at London’s Globe Theatre, an honor he couldn’t pass up. In rehearsal, he and his leading man, Mark Rylance, “wondered, what if, instead of an audience watching the play, we … allowed them to live through the play and apply it to their own lives?” Olivier explains. Henry V is about an inspirational political leader—the king famously rallies his troops before a battle with France—so they conducted a three-day workshop with several local public officials. “At the end, they said they’d learned more about leadership from Henry V than any other program that they’d been on in their career,” he says.

And thus was born Olivier Mythodrama. The company adapts some of the Bard’s greatest tales into lessons of corporate leadership, presenting them to corporations such as Rolls-Royce and FedEx (FDX), organizations such as the United Nations, and even the World Economic Forum in Davos. The idea, says Olivier, is that “in most of the great Shakespeare plays, there is some wisdom about human nature that’s encoded into the story and which can help guide us.” In other words, if something was rotten in Denmark, it’s probably rotten in UBS (UBS). Or MoneyGram (MGI). Or the CIA.
 
Act III: An industry searches for a king
“Truth is truth”: Corporate leadership programs are boring and rarely involve lessons about invading France. Companies often delegate training responsibilities to HR departments; you may even go to an “executive education program” at a B-school, but those aren’t much better. Chief executives keep trying: The HR research firm Bersin & Associates estimates that $ 13.6 billion was spent on such initiatives in 2012. “They’re all the same,” says John Kotter, a professor of leadership, emeritus, at Harvard Business School. “They put together a training program for middle and senior management, they show you a bunch of PowerPoint slides, and then you return to work and everything you learned just washes away.”

Effective programs, says Kotter, force you outside your comfort zone. The Gettysburg Leadership Experience analyzes the historic Civil War battle for management insights. (Uh, deliver a great speech?) The most extreme example may be Outward Bound, “but even then, it’s just a bunch of out-of-shape 45-year-old guys doing trust falls,” Kotter says. Mythodrama doesn’t involve mountains—or men in tights. Instead, it draws on Shakespeare’s insights into the human condition and plays on the universal emotions his words often evoke: pride, fear, joy. How’s that for a day in a conference room?
 
Act IV: A program hones its strengths
Each Mythodrama program is based on one of five plays: Henry V deals with inspiration, Julius Caesar with politics and power, As You Like It with sustainability, The Tempest with organizational change, and Macbeth with fraud. Whether it’s a one-time session or a weeklong program (prices depend on length and size; Olivier commands almost $ 24,000 for a single keynote), the presentations all have the same structure. A trained presenter runs through the CliffsNotes version of the story. After a major plot point—say, when Henry executes three traitors—the audience breaks into groups to discuss how their company’s problems relate. “I’m not suggesting for a minute that [execution] is how we deal with traitors in our organization,” Mythodrama’s Phyllida Hancock said during her Henry V talk at the 2011 National Leadership Conference, “but … how do you deal with voices of dissent? How do you deal with that same person in management meetings every week saying, ‘It’ll never work’?” At that, the audience laughed—they know what it’s like to want to execute someone.

For years, Olivier worked mostly with British and European companies (“Britons have a deep connection with Shakespeare, whereas in the U.S. it can seem quaint,” says William Ayot, who holds the quaint title of Mythodrama’s poet in residence). That’s changing. This fall it hosted an informational presentation at American University in the hopes of increasing its presence in Washington. “We usually have to tell the participants, ‘Look, this is going be different,’ ” says Ron Meeks, a senior partner at Pivot Leadership in Portland, Ore., which has brought Mythodrama to such corporations as McDonald’s (MCD) and Wal-Mart Stores (WMT). “But once it starts, people usually get into it.”

People like Walt McFarland. After he and Olivier locked eyes in Paris, “Olivier said, ‘If you’re leading a major change, you have to be willing to change yourself. You might have to be willing to die for it.’ ” McFarland was stunned. He felt the weight of his job—tens of thousands of employees’ lives and careers depended on his success. He had no idea that working for the IRS could be like The Tempest.

When he talks about the play’s most climactic moment—when Prospero relinquishes his power by snapping his magical staff—McFarland sounds as if he’s about to cry. “At the peak of his power he gave it up,” he says. He vowed to conduct himself the same way when he got back to work.
 
Act V: A conflicted leader finds his epilogue
The true test of any corporate leadership program is whether its lessons will stick with participants when they reenter the real world. And while there isn’t a comprehensive survey of the effectiveness of such programs, a 2000 Harvard Business Review article reported that 70 percent of all corporate change initiatives fail. Add to that the fact that nearly 90 percent of New Year’s resolutions falter, and it’s clear that changing a person’s behavior is a difficult battle to win. McFarland, however, maintains that Mythodrama has turned him into a different man. He’s cagey about the details, but says that months after his session, as he was leading a roomful of people through one of his plans, he realized that he’d made a mistake. “I didn’t take responsibility,” he says. “I blamed it on something else.” McFarland told his team to take a break and walked around the block. “After one loop, I still didn’t want to do the right thing, so I walked around the block again,” he says. “Then I came back and I did it. I threw my staff on the ground.” As Prospero declared: “Now my charms are all o’erthrown. And what strength I have’s mine own.”

Businessweek.com — Top News

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African Union asks UN for immediate action on Mali

DAKAR, Senegal (AP) — In an open letter Thursday to U.N. Secretary-General Ban Ki-moon, the president of the African Union urged the U.N. to take immediate military action in northern Mali, which was seized by al-Qaida-linked rebels earlier this year.

Yayi Boni, the president of Benin who is also head of the African Union, said any reticence on the part of the U.N. will be interpreted as a sign of weakness by the terrorists now operating in Mali. The AU is waiting for the U.N. to sign off on a military plan to take back the occupied territory, and the Security Council is expected to discuss it in coming days.

In a report to the Security Council late Wednesday, Ban said the AU plan “needs to be developed further” because fundamental questions on how the force will be led, trained and equipped. Ban acknowledged that with each day, al-Qaida-linked fighters were becoming further entrenched in northern Mali, but he cautioned that a botched military operation could result in human rights abuses.

The sprawling African nation of Mali, once an example of a stable democracy, fell apart in March following a coup by junior officers. In the uncertainty that ensued, rebels including at least three groups with ties to al-Qaida, grabbed control of the nation’s distant north. The Islamists now control an area the size of France or Texas, an enormous triangle of land that includes borders with Mauritania, Algeria and Niger.

Two weeks ago, the African Union asked the U.N. to endorse a military intervention to free northern Mali, calling for 3,300 African soldiers to be deployed for one year. A U.S.-based counterterrorism official who saw the military plan said it was “amateurish” and had “huge, gaping holes.” The official insisted on anonymity because he was not authorized to speak on the matter.

Boni, in his letter, said Africa was counting on the U.N. to take decisive action.

“I need to tell you with how much impatience the African continent is awaiting a strong message from the international community regarding the resolution of the crisis in Mali. … What we need to avoid is the impression that we are lacking in resolve in the face of these determined terrorists,” he said.

The most feared group in northern Mali is al-Qaida in the Islamic Maghreb, or AQIM, al-Qaida’s North African branch, which is holding at least seven French hostages, including a 61-year-old man kidnapped last week.

On Thursday, SITE Intelligence published a transcript of a recently released interview with AQIM leader, Abu Musab Abdul Wadud, in which he urges Malians to reject any foreign intervention in their country. He warned French President Francois Hollande that he was “digging the graves” of the French hostages by pushing for an intervention.

Also on Thursday, Islamists meted out the latest Shariah punishment in northern city of Timbuktu. Six young men and women were each given 100 lashes for having talked to each other on city streets, witnesses said.

___

Associated Press writer Virgile Ahissou in Cotonou, Benin and Baba Ahmed in Bamako, Mali contributed to this report.

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Apple overcomes last hurdle, iPhone 5 cleared for sale in China as Android continues to dominate

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France’s Depardieu detained for drunken driving

PARIS (Reuters) – French actor Gerard Depardieu was detained for driving his scooter while drunk on Thursday after he had a minor accident in Paris, prosecutors said.

The 63-year-old star of films such as “Jean de Florette” and “Green Card” was held for questioning after he fell from his scooter mid-afternoon, slightly injuring his elbow.

No-one else was hurt in the accident.

One of France’s best-known actors for roles in more than a hundred films, Depardieu has recently grabbed headlines for the wrong reasons.

The incident came just months after a car driver filed a legal complaint for assault and battery against Depardieu in August following an altercation in Paris.

Last year, Depardieu outraged fellow passengers by urinating in the aisle of an Air France flight as it prepared to take off, forcing the plane to turn back to its parking spot.

A passenger on the flight said Depardieu appeared to be drunk and insisted he be allowed to use the bathroom during takeoff, when passengers must remain seated.

(Reporting by Gerard Bon; Writing by Leigh Thomas; Editing by Jon Hemming)

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Large Europe majorities for assisted suicide: survey

PARIS (Reuters) – Large majorities of west Europeans favor the legalization of assisted suicide, now allowed only in four countries on the continent, according to a new survey.

In almost all the 12 countries polled, three-quarters or more of those responding to questions posed by the Swiss Medical Lawyers Association (SMLA) said people should be able to decide when and how they die.

Two-thirds to three-quarters of them said they could imagine opting for assisted suicide themselves if they suffered from an incurable illness, serious disability or uncontrollable pain.

“In practically all European countries, many signs indicate that the prevailing legal system no longer reflects the will of large parts of the population on this issue,” the SMLA said.

The results of its poll “should allow politicians to take democratic principles into account when considering legislation on these issues,” it added in its introduction to the study.

Assisted suicide is now allowed only in Belgium, Luxembourg, Netherlands and Switzerland. The German government has proposed legalizing it as long as no profit is involved while France is debating whether to allow it.

GERMANS MOST OPEN, GREEKS LEAST WILLING

In both Germany and France, the Roman Catholic and Protestant churches oppose legalizing euthanasia and argue for better palliative care to ease pain for dying patients.

The study was conducted by the Swiss pollster Isopublic in Austria, Britain, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Portugal, Spain and Sweden.

It did not survey the four European countries that allow assisted suicide, or countries in eastern Europe.

Germans were most open to letting people decide when and how they die, with 87 percent supporting the idea, and results slowly descended to Denmark’s 71 percent in 11th place.

Greece was the only exception to this strong support, with only 52 percent backing the idea of allowing assisted suicide.

Spaniards were the most willing to consider asking for help to die, with 78 percent support, followed closely by Germans (77 percent) and the French (75 percent).

In Britain, 71 percent said they might seek assisted suicide while Greece was again the most reluctant with 56 percent saying they might do so.

More than three-quarters of those polled in all countries said only doctors or trained practitioners should perform assisted suicides.

A majority of all respondents said doctors should not lose their licenses if they help a patient die. Results ranged from 84 percent in Britain to 58 percent in Greece.

GERMANS OPPOSE GOVERNMENT BILL

About 30 percent of those polled thought dying patients might occasionally be pressured by relatives or doctors into accepting assisted suicide if it is legalized. Roughly another 30 percent thought this would almost never happen.

In Germany, where the government’s bill is now being debated in parliament, 76 percent said the proposed law was wrong to ban assisted suicide if the doctor is paid for the service.

The bill would not punish those helping patients commit suicide, for example by accompanying them to Switzerland where assisted suicide has been legal since 1942.

A rise in dying foreigners – particularly from Germany, France and Britain – ending their lives there has prompted calls for tighter laws, but Zurich voters rejected in 2010 a proposed ban on what opponents called “suicide tourism”.

In the United States, assisted suicide is allowed in Oregon, Washington and Montana. Massachusetts voters narrowly defeated a proposal to legalize it there this month.

(Reporting by Tom Heneghan; Editing by Mark Heinrich)

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Supermarkets pledge prices action

30 November 2012 Last updated at 06:04 ET

Eight supermarkets have agreed to ensure that special offers and price promotions are fair.

The Office of Fair Trading (OFT) has been investigating the way prices are displayed, advertised and promoted in stores.

It raised concerns about prices being artificially inflated to make later discounts look more attractive.

The major UK supermarkets have now agreed to adopt a set of principles drawn up by the OFT.

They are Tesco, Sainsbury’s, Morrisons, Waitrose, Marks and Spencer, Aldi, the Co-op and Lidl.

Asda, which has not yet signed up, said it was considering the revised code.

In a statement Asda argued that as it aims to keep prices for customers “as low as possible for them week in week out”, a code covering special offer price promotions was not relevant.

Continue reading the main story

• Product is sold at an inflated price for a limited period at low volume in just a few stores, then rolled out across all stores at the lower price – known as “yo-yo pricing”


• The “discount” price period lasts much longer than the original higher price period, making the discount price really the normal selling price


• Using a previous selling price from months ago as a comparison


• Charging one price in store A, a lower price in store B, then saying “was £x, now £y” when the higher price was never actually charged in store B


• Saying a product price has been reduced without mentioning that this is only because the package size has shrunk


• Buy One Get One Free deals where the same volume of the same product can be bought more cheaply in a larger pack

Source: Office of Fair Trading

Clive Maxwell, OFT chief executive, told the BBC: “It is particularly welcome that we’ve reached this agreement at this stage with household budgets under pressure”.

‘Squeezed finances’

The OFT says that “half price” or “was £3, now £2″ offers must be sold at the new discounted price for the same, or less, time than the previously higher price.

This would prevent short-term, artificially inflated prices masking the offer.

Items that suggest they are “better value” because they are in a “bigger pack” must have a comparable product elsewhere in the same store,

“Shoppers should be able to trust that special offers and promotions really are bargains,” said Mr Maxwell.

“Prices and promotions need to be fair and meaningful so shoppers can make the right decisions. Nowhere is this more important than during regular shopping for groceries.

“[This] provides supermarkets with a clear benchmark for how they should be operating so that their food and drink promotions reflect the spirit as well as the letter of the law.”

Richard Lloyd, executive director of consumer group Which?, said: “When household budgets are squeezed and food prices are one of people’s top financial worries, it’s unacceptable that shoppers are confused into thinking that they’re getting a good deal when that might not be the case.

“Regulators should be prepared to take enforcement action against traders found breaking the rules.”

A Which? investigation in May suggested that some customers had been misled by supermarkets over discounts and multi-buy offers.

It analysed more than 700,000 prices and suggested that in some cases “discounts” ran for much longer than the original price. Following that investigation, some supermarkets admitted isolated errors amid a huge volume of pricing.

‘Inconsistency’

Misleading advertising is illegal under the 2008 unfair trading regulations, and the OFT is not making any recommendation that the law should be changed.

The regulator said it did not discover any illegality during its investigation, but did find some “inconsistency” in the way the law was interpreted and applied.

Meanwhile, nearly 40% of fast-moving consumer goods could be on some sort of promotion or discount.

Many of the supermarkets said they were happy to work with the OFT.

“We will continue to ensure that our pricing and promotions are as clear as possible for our customers,” said a spokesman for Sainsbury’s.

The Co-op said: “We understand how important it is for shoppers to be able to easily understand what the promotional offer is, so they can spot the best deal, and we are committed to providing clear and accurate labelling for our customers so they can make informed purchasing decisions.”

Aldi said it supported any initiative that encouraged “transparent pricing and a fair deal for consumers”, although the agreement would have no effect on its own prices.

A Marks and Spencer spokesman said: “It is right that we sign up to these new guidelines.”

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