Lloyds: Osborne Plans Taxpayer Stake Sale

By Mark Kleinman, City Editor

The Government signalled today that it would begin considering the sell-off of its stake in Lloyds Banking Group when the lender's share price hits 61p - a far lower level than previously thought.

Treasury officials said that reaching 61p would mean that the taxpayer had broken even on the tens of billions of pounds injected into the bank to keep it afloat in 2008.

The news confirmed Sky News' discovery earlier on Friday that UK Financial Investments (UKFI), which manages the taxpayer's 39% stake in Lloyds, and the Treasury would indicate that the privatisation of the Government's stake can begin within months.

The 61p level is the price at which the stake - bought in 2008 at the height of the banking crisis - is booked in the national accounts.

The £1.48m bonus awarded to Lloyds boss Antonio Horta-Osorio can vest if the Government sells at least one-third of its stake above 61p, Lloyds confirmed today.

Antonio Horta-Osorio became Lloyds chief executive in March 2011

"This award is subject to the normal performance adjustment policy and will only vest if a share price of 73.6p has been reached for a given period of time or the Government has sold at least 33% of its shareholding at prices above 61p," Lloyds said.

"The board believes that these additional conditions are in the interests of all shareholders and support our common aim of repaying the taxpayer.

"HM Treasury has informed us that 61p is the average price at which the equity support provided to Lloyds Banking Group is recorded in the Public Finances."

The news comes as Lloyds reported a loss for last year of £570m, down from £3.5bn in 2011.

The loss was attributable to a £3.5bn provision during 2012 for mis-selling payment protection insurance, £1.5bn of which was taken during the fourth quarter.

Lloyds paid out £365m in bonuses for the year, with an employee average of £3,900.

In a statement, a Treasury spokesman said: "The Government's strategy remains to see Lloyds continue the progress it has made in reforming itself into a strong and sustainable bank that supports the British economy, which in time can be returned to full private ownership.

"Today's results show that it is making strong progress in improving its core underlying performance and strengthening its balance sheet, but that there is still work to be done as it continues to deal with the legacy of the past."

Insiders said the Treasury acknowledged that it would have to persuade parliamentarians and the public that selling between 61p and 73.6p would not crystallise a loss for British taxpayers.

George Osborne, the Chancellor, is expected to pave the way for an initial sale of Lloyds shares later this year.

The FTSE 100 share price for Lloyds Banking Group dropped almost 6% to 51.2p in late morning trades on Friday.

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Brits' Daily Internet Use Doubles, Says ONS

The number of people in Britain using the internet every day has more than doubled in six years to 33 million, according to the Office for National Statistics.

That figure represents 68% of those over 16. In 2006, only 16 million adults said they went online every day.

The rapid growth of Facebook and Twitter is also changing the way people use the internet.

Social networking is now the most popular activity among 16 to 24-year-olds, with 87% logging on.

Almost half of all adults were on social networks in 2012, and it is not just the preserve of younger people as 40% of 45 to 54-year-olds also used them to communicate.

Overall though, email remains the most popular online past-time.

Using mobiles to access the internet is also moving on in leaps and bounds, boosted by falling prices for the technology and the popularity of devices like the Galaxy and iPhone.

Just over 50% of adults used a phone to access the net in 2012 - more than double the 2010 figure - with 32% going online on their handset every day.

Tablets may be a 'must-have' gadget but laptops are still more widely used

The mobile internet now appears to be a regular feature of life for many people, with the ONS saying 60% of adults went online in 2012 via wi-fi hotspots or mobile networks.

But despite the growing popularity and "cool factor" of tablet devices, laptop computers are still a more popular option for out-and-about browsing.

In 2012, 21% of people used a tablet to access the internet outside their home or office, while 34% used a laptop device.

The spread of internet shopping is also reflected in the survey.

With reduced overheads and bulk buying power, retailers like Amazon have been blamed in part for recent high street closures.

And, it seems, more people are being attracted to the web in their search for a bargain.

Two-thirds shopped online in 2012, up from just over half in 2008, with clothes and sports goods the most popular purchase. The most keen to buy online were 25 to 34-year-olds (87%).

The ONS explained: "There are distinct differences in how individuals make use of the internet when analysed by age.

"As 'early-adopters', it is of little surprise that those adults aged 16 to 24 are proportionately the largest users of many of the available internet activities."

The ONS findings are based on a random sample of about 1,800 adults.

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Horsemeat: Four New Products Test Positive

Tests on four beef products sold by Birds Eye, Taco Bell and catering supplier Brakes have been found to contain horsemeat.

Checks revealed contamination of Birds Eye Traditional Spaghetti Bolognese and Beef Lasagne, Taco Bell's ground beef and Brakes' spicy minced beef skewer, the Food Standards Agency said.

Ten tests on the four products returned results of more than 1% horsemeat, the FSA said, and all four have been withdrawn from sale.

Meanwhile, McDonald's said tests for horsemeat in its products had come back negative.

US-owned Tex-Mex restaurant chain Taco Bell said that it was "disappointed" to have discovered the horsemeat in tests it carried out on beef supplied to its UK restaurants by a sole European supplier.

"We immediately withdrew ground beef from sale in our restaurants, discontinued purchase of that meat, and contacted the Food Standards Agency with this information," it said in a statement.

Overall, the Food Standards Agency has received 5,430 test results

"We would like to apologise to all of our customers, and we can reassure you that we are working hard to ensure that every precaution is being undertaken to guarantee that we are only supplied with products that meet the high standards we demand."

Birds Eye had already withdrawn the spaghetti bolognese, lasagne and a third ready meal, a shepherd's pie, from sale in Britain and the Republic of Ireland as a precaution after tests found 2% of horse DNA in a chilli con carne dish it sold in Belgium.

They are made by the same Belgian manufacturer, Frigilunch NV.

"No other Birds Eye products have tested positive for horse DNA, nor do they share the same supply chains as Frigilunch NV," the company said in a statement.

"Going forward we are introducing a new ongoing DNA testing programme that will ensure no minced beef meat product can leave our facilities without first having been cleared by DNA testing."

Brakes, which is based in Ashford, Kent, is the supplier for the House of Commons Catering Service and last month it withdrew its steak and kidney pie, beef and onion pie, steak and kidney suet pudding, and beef Italian meatballs as a precaution.

It also supplies pubs among 19,000 customers who buy around 48,000 cases of products containing beef every week.

It too said it was introducing new tests after the discovery, alongside 259 negative tests.

"Our tests also confirmed one positive equine DNA finding at between 1% and 10% on a Brakes spicy minced beef skewer and one positive test reported by a customer of our subsidiary division Creative Foods, on a lasagne manufactured exclusively for them," it said.

"Brakes have also segregated a frozen burger as a precaution after equine DNA at 1% was reported to the Food Standards Agency.

The latest findings come in the third round of checks on products

"Brakes and Creative Foods are very disappointed to have been let down by our respective suppliers and have sincerely apologised to our customers.

"As any responsible company, we have a duty of care to all our customers and the consumers they serve to guarantee the integrity of the products we purchase."

The discoveries were made in the third round of tests carried out since January.

A total of 19 products have now been confirmed to contain over 1% of horse DNA.

No tests to date on samples containing horse DNA have found the veterinary drug phenylbutazone, or bute, to be present.

Across the industry, a first wave of tests found horse meat in products including Aldi's special frozen beef lasagne and special frozen spaghetti bolognese, Co-op frozen quarter-pounder burgers, Findus beef lasagne, Rangeland's catering burger products, and Tesco Value frozen burgers and Value spaghetti bolognese.

A second wave of tests revealed contamination of Asda's chilled beef bolognese sauce, beef burgers, minced beef and halal minced beef sold by Sodexo, which supplies food to schools, care homes and the armed forces, and a Whitbread Group lasagne and beef burger.

The president and chief executive of McDonald's UK, Jill McDonald, said no horsemeat had been found in the fast-food company's products.

"We voluntarily provided samples of all beef burgers currently available on our menu to the Food Standards Agency (FSA) for their own tests.

"All tests, including our own, have now been completed and we can confirm that no horsemeat has been found in any of McDonald's products."

Earlier, the British Retail Consortium said test results for horsemeat in all minced beef lines used by the UK's largest supermarkets had revealed no new cases of contamination.

Some 95% of products sold by retailers have now been checked, it said, with the latest round of checks since February 22 including 361 tests on 103 products.

A total of 1,889 tests have been carried out by the trade organisation's members since January 20, with 0.3% of them finding contamination.

Meanwhile in Germany, authorities say they have found a carcinogenic substance in animal feed delivered to more than 3,500 farms - but stressed that any risk to humans was unlikely.

Aflatoxin B1 is a chemical produced by fungus that can grow on hay or grains and appear in the milk of animals that eat the mildewed feed.

The state agriculture ministry in Lower Saxony said the contamination originated from a shipment of corn from Serbia.

It said it did not believe there was any danger to consumers and there was no indication legal limits on aflatoxins in milk had been exceeded.

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Row Looms As Anglo Boss Nets £7m Exit Deal

By Mark Kleinman, City Editor

The departing boss of Anglo American, one of the world's biggest mining companies, is to receive a potential £7m exit package that will reignite the row over executive pay.

I have learnt that Cynthia Carroll, who steps down in April after six years at the helm, will receive an immediate sum on departure of about £3.1m and could receive the larger amount depending on the company's operating and share price performance over the next two years.

Her exit will come just months after the FTSE 100 miner reported its first annual loss since it listed on the London Stock Exchange.

Ms Carroll's severance package is understood to have been signed off by Anglo American's board in recent days. It will be confirmed in the company's annual report, which will be published in the next fortnight.

The American former boss of Alcan's primary metals group will receive an immediate payment of just over £1m, comprising nine months' basic salary, and around 70,000 bonus shares which at the current share price could be cashed in with a value of approximately £1.4m.

These were awarded in previous years but could have been clawed back by Anglo American if Ms Carroll had been deemed to be a 'bad leaver'.

The outgoing chief executive is also expected to be awarded an annual cash bonus of roughly £700,000 for 2012, around a third of the level she received the previous year.

In addition to the immediate payout of about £3.1m, Ms Carroll is also eligible for approximately 30,000 'enhancement bonus shares', which could be worth £600,000, and about 150,000 shares contained in her long-term incentive plan, which at current prices would be valued at just under £3m.

The enhancement bonus shares and the long-term incentive awards were awarded in previous years and will only be paid out if Anglo American meets performance targets over one-year and two-year periods following Ms Carroll's departure

The payment is likely to spark accusations that Anglo American is rewarding Ms Carroll for 'failure' following a near-$5bn (£3.32bn) writedown on the value of a Brazilian iron-ore project called Minas-Rio, which has been under development by the company for several years.

The terms of her departure also come just months before the proposed introduction of Government reforms of executive pay, which will hand shareholders a binding vote on various elements of big public companies' pay policies, including exit payments.

"As part of their pay policy, companies will have to clearly explain their approach to exit payments, which will also be subject to the binding vote," Vince Cable, the Business Secretary, said last year.

"When a director leaves, the company will have to promptly publish a statement of payments the director has received. Companies will not be able to pay exiting directors more than shareholders have agreed," he added.

Amendments to the Enterprise and Regulatory Reform Bill are about to enter the report stage in the House of Lords, with the Government targeting an autumn deadline for them to become law.

Ms Carroll's exit package will not have to be approved by Anglo American investors, although they will have an advisory vote on the company's remuneration report at its annual meeting in April.

Anglo American is chaired by the widely-respected industrialist Sir John Parker, who announced in January that he had picked Mark Cutifani, boss of the South Africa-based gold producer, AngloGold Ashanti, as Ms Carroll's successor.

The company is likely to face criticism that it has calculated Ms Carroll's notice period as commencing from the date that Mr Cutifani's appointment was announced, rather than when her resignation was signalled to the market last October. A company insider pointed out that Ms Carroll had agreed to serve until her successor was in place, a process that could have taken significantly longer.

Ms Carroll, who also sits on the board of BP as a non-executive director, will step down from the board of Anglo American at its annual meeting in April and will leave the company later that month.

The news of Ms Carroll's payoff comes amid an unprecedented level of change at the top of the world's biggest mining groups. In recent weeks, BHP Billiton, the largest industry player, named Andrew Mackenzie as its new chief executive, while Rio Tinto announced the ousting of Tom Albanese, its chief executive, who paid the price for spending $38bn (£25bn) in a top-of-the-market purchase of Alcan, the Canadian aluminium group, in 2007.

Ms Carroll's tenure at the helm has included notable achievements such as a vastly-improved safety record and improved relations with key stakeholders including the South African government.

It has, though, been punctuated by investor grumbling about the pace of change at the company. Ms Carroll was forced to fend off a hostile takeover bid from rival Xstrata in 2009.

Xstrata has since agreed to merge with Glencore, the giant commodities trader, and its chief executive Mick Davis will step down after the deal completes.

Anglo American declined to comment.

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Megaupload Kim Dotcom Rebuffs US Legal Move

Online entrepreneur Kim Dotcom has brushed aside an increased risk of extradition to the United States after New Zealand judges overturned a lower court's demand about evidence.

The court of appeal ruled that US authorities need not disclose all of the evidence they have against Mr Dotcom if they want to extradite him for alleged online piracy.

Mr Dotcom, who was arrested over claims relating to his now-defunct Megaupload file-sharing website, took to social media after Friday's ruling.

Dozens of New Zealand police raided his rented mansion near Auckland

He tweeted: "Am I disappointed about the ruling today? YES. Do 'good faith' & 'US govt' go together? NO.

"Will I sleep like an innocent baby tonight? YES."

Last year, his lawyers argued they could not effectively fight the extradition battle without full disclosure of evidence held on the site's founder by the US.

But lawyers representing the US successfully challenged the district and high court rulings, arguing in the appeal court that the evidence could involve billions of emails and would delay the extradition hearing.

Megaupload used racks of servers to hold customers' data

Two of the three judges on the appeals court bench voted to quash the order and said an accurate summary of the evidence would suffice at the hearing, which has already been delayed twice and is now expected to proceed in August.

The US Justice Department and FBI want Mr Dotcom to face charges of racketeering fraud, money laundering and copyright theft in a US court, which could see him jailed for up to 20 years if convicted.

The German-born ex-hacker said his legal team would continue to battle extradition.

He tweeted: "The fight goes on. Next is the Supreme Court of New Zealand."

The tech businessman launched a new cloud storage service last January

It is the first reversal after a string of legal wins for Mr Dotcom, who last year gained a court ruling that the search warrants police used when they raided his Auckland home as part of the operation against Megaupload were illegal.

Political fallout over the raid was widespread in New Zealand.

Prime Minister John Kay apologised to the entrepreneur after it was revealed that government eavesdroppers from GCSB - its version of GCHQ - tracked and spied on Mr Dotcom for the police ahead of the raid.

Police were also criticised for their heavy-handed apprehension of Mr Dotcom, after dozens of armed police descended on his rented mansion.

Mr Dotcom, who changed his name from Kim Schmitz, in court last year

The 39-year-old's file-sharing empire had 50 million daily visitors and accounted for 4% of all internet traffic at its peak, but was shut down after the raid in January last year.

Mr Dotcom is free on bail and denies US allegations the Megaupload sites netted more than $175m (£115m) in criminal proceeds and cost copyright owners more than $500m (£333m) by offering pirated copies of movies, TV shows and other content.

In January he launched a successor to Megaupload, called Mega, which provides cloud storage with encryption, in an attempt to disassociate his business from knowledge of customers' activities.

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Pound Falls As Triple Dip Fears Fuelled

Sterling has fallen to a two-and-a-half-year low against the dollar after manufacturing figures for February revealed a fall in output.

The closely watched Markit/CIPS purchasing managers' index showed a slump in activity to 47.9 - well below the 50 level which separates growth from contraction.

It was the first time since last November the sector's activity shrunk, and followed 50.2 in January.

The value of the pound slipped following the data, and fell below $1.50 on Friday afternoon - its lowest since the middle of 2010. 

Sterling has only been beneath the $1.50 mark for four of the 200 years since the US Declaration of Independence.

The last time it was at this level was briefly during the 2010 election and coalition-building process, and before that the 2008/09 recession.

Chris Williamson, chief economist at Markit, said the manufacturing data increased the chance that Britain will slip back into recession. 

"The return to contraction of the manufacturing sector is a big surprise and represents a major set-back to hopes that the UK economy can return to growth in the first quarter and may avoid a triple-dip recession," he said.

"The data so far this year point to manufacturing output falling by as much as 0.5%, meaning a strong rebound is needed in March to prevent the sector from acting as a drag on the economy as a whole in the first quarter."

The struggling sector contributed to the UK's worse-than-expected 0.3% decline in output in the fourth quarter of last year, and a negative reading for the first quarter of 2013 would see the UK enter a triple-dip recession.

Nawaz Ali, a market analyst with Western Union, said the manufacturing data could increase pressure on the Bank of England (BoE) to launch a new round of asset purchasing - or quantitative easing - as early as next week.

"The data is a major setback for sterling and the size of the manufacturing decline indicates that there is still a chance the British economy may suffer an unprecedented triple-dip recession," he said.

"The data also adds to growing concerns that not only could the BoE re-start monetary printing in March, the central bank's new flexible inflation strategy puts it in a position to launch a prolonged period of asset purchases, similar to what the US have done and what the Bank of Japan is planning to do."

More quantitative easing is likely to hit sterling further because it increases its supply and drives the currency's exchange value lower.

So far this year, sterling - which was also hit by Moody's downgrade of the UK's credit rating - has lost 7.5% against the dollar.

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Pressure On First Buyers As House Prices Rise

By Nick Martin, Sky Correspondent

House prices edged up month-on-month in both January and February this year, bringing good news for homeowners but adding pressure on first-time buyers.

Building society Nationwide said it was cautiously optimistic that activity will pick up in the months ahead.

It comes after reports revealed more young people were living with their parents while trying to save for a deposit for a property. 

According to the Halifax, the average age of a first-time buyer is 30 years old - up from 29 in 2011.

There has been a significant increase in the proportion of first time buyers receiving financial help in recent years.

The Council of Mortgage Lenders (CML) estimate that 65% of first time buyers of had financial assistance in mid 2012 compared with 31% in mid-2005.

Kirsty Gilmore, 26, from Bristol, has been living at home for 18 months and has saved more than £30,000. But that is still not enough to buy a property. She says the market is so competitive it is hard to get a good price.

"I want to have my own place, I want to start a family and have a home to call my own, not just my mum and dad's.

"You feel a bit excluded from society - nobody cares and you're stuck in this rut really - and everyone else my age is," she told Sky News.

Mortgage approvals for home buyers have dipped for the first time since a Government scheme to boost lending was launched last August, Bank of England figures showed.

There were 54,719 approvals in January, showing a 2% decline compared with an 11-month high recorded the previous month and marking the first time that there has been a month-on-month decrease since July.

Mortgage approvals for house purchases had been on a steady upward path since the Government's Funding for Lending scheme, which aims to help borrowers by giving lenders access to cheap finance, was launched at the start of August.

The latest figures echo recent findings from the CML, with some analysts blaming the recent bad weather.

Housing minister Mark Prisk said the Government was trying to help first time buyers get onto the property ladder.

"Many people have to rely on the bank of mum and dad - so what we are trying to do with the builders and the Government by putting equity loans forward is make those deposit affordable for first time buyers. It's already helped 17,000 people. We hope it will help 27,000."

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Obama Signs Order To Start Spending Cuts

President Barack Obama has signed an order authorising $85bn cuts in domestic and defence spending following the failure of efforts to strike a deal with Republicans on cutting the US deficit.

Mr Obama and Republican leaders in the House and Senate declared themselves still deadlocked after a last-minute White House meeting last night.

The two sides are at odds over the president's insistence on increasing tax revenue as part of any plan to tackle the country's $16.6trn debt.

Mr Obama signed the order which officially enacts the across-the-board reductions - known as a "sequester" in government budget language. Under the law, the president had until midnight.

The $85bn cuts apply to the remainder of the 2013 fiscal year, which ends on September 30. But the legislation that requires the spending reduction will continue slashing government spending by about $1trn more over a 10-year period.

Speaking after the White House meeting, Mr Obama said: "Let's be clear, none of this is necessary."

He blamed the deadlock on Republicans who he said refused to close tax loopholes that benefit the wealthy, adding that "the pain will be real" for the American people.

"I am not a dictator. I'm the president," Mr Obama said, warning he could not force his Republican foes to "do the right thing," or make the Secret Service barricade Republicans leaders in a room until a deal is done.

"These cuts will hurt our economy, will cost us jobs and to set it right both sides need to be able to compromise," Mr Obama added.

US Speaker of the House John Boehner walked out of the meeting

Republican John Boehner, speaker of the House of Representatives, walked out of the meeting to say there would be no compromise as long as Mr Obama insisted on higher tax revenue.

Republicans are standing fast against further increasing taxes and will not compromise on achieving debt reduction through spending cuts alone.

The opposition party is still feeling the sting from its most conservative members after agreeing at the end of 2012 to allow the expiration of Bush-era tax cuts for Americans earning $400,000 or more a year.

Friday's meeting was the first the two sides have held this year on the budget battle, and it lasted less than an hour.

The immediate impact of the cuts on the public is uncertain, but they will carve 5% from domestic agencies and 8% from the Pentagon between now and October 1.

Defence officials say they will be forced to reduce the working week of 800,000 civilian employees, scale back flight hours of warplanes and postpone some equipment maintenance.

The deployment of a second aircraft carrier to the Persian Gulf has also been cancelled.

The US Navy will gradually stand down several hundred planes starting in April, the Air Force will curtail flying hours and the Army will cut back training for all units except those deploying to Afghanistan.

Several major programmes will be unaffected, including the Social Security pension programme, the Medicaid health care programme for the poor and food stamps.

Pentagon chief Chuck Hagel warned that the budget cuts will endanger the US military's ability to conduct its missions.

"This will have a major impact on training and readiness," he said. "Later this month, we intend to issue preliminary notifications to thousands of civilian employees who will be furloughed."

Mr Hagel also acknowledged that the budget cuts "will cause pain, particularly among our civilian workforce and their families".

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Rape T-Shirt: Amazon Offered 'Hit Her' Tops

Amazon is continuing to offer T-shirts advocating domestic violence on its website - after withdrawing tops sloganed "Keep Calm And Rape".

The company withdrew the rape T-shirts - sold by the Solid Gold Bomb company - from its UK site and later pulled tops with the slogan "Keep Calm And Hit Her".

But the "Hit Her" top remains for sale on some international Amazon sites, including the version in Germany.

It offers the shirt for a price ranging between 16.90 euros and 18.90 euros and they are also available to non-German account holders.

A spokesman for Amazon UK had earlier told Sky News that all offensive garments had been pulled and said: "I can confirm that those items are not available for sale."

This top is being sold on the German website

Other offensive slogans discovered on the UK website - but now withdrawn - included "Keep Calm And Grope On" and "Keep Calm And Grope A Lot".

Critics of the T-shirts quickly let their feelings be known by posting hundreds of negative comments on the relevant Amazon pages and Twitter.

One said: "Do the decent thing and pull this disgusting item now. Remove all items by the same company to show them this will not be tolerated."

Another online customer, Jody, said: "Your on a roll now Amazon. So not content with supporting and encouraging rape your also advocating violence against women.

"Domestic violence is a crime. Real men don't beat there partners."

The firm apologised but later shut down its Twitter and Facebook accounts

Meanwhile, Labour deputy leader Lord Prescott, tweeted: "First Amazon avoids paying UK tax. Now they're make money from domestic violence."

An e-petition was set up titled "Amazon: Stop Encouraging Gropers", while Labour MP Roberta Blackman-Woods tweeted that "these amazon t shirts are terrible & we must speak out against them".

Amazon listed the manufacturing quality of the rape T-shirts as "Fine Jersey T-Shirt", saying the items were made by American Apparel prior to printing in the US.

When Solid Gold Bomb withdrew the 'rape' garment it also posted a statement on its website which said: "We have been informed of the fact that we were selling an offensive T-shirt primarily in the UK.

The Amazon UK site still offered 'hit her' T-shirts on Saturday

"This has been immediately deleted as it was and had been automatically generated using a scripted computer process running against 100s of thousands of dictionary words."

Solid Gold Bomb said it received death threats and its Twitter account was bombarded with scores of angry messages - many of which said: "Rape is not a joke."

Solid Gold Bomb replied: "We're sorry for the ill-feeling this has caused! We're doing our best here to fix the problem."

Both its Facebook and Twitter accounts have since been shut down.

It said the scripted programming process that created the slogan was compiled by "only one member of our staff", but that it "accepted the responsibility of the error".

Solid Gold Bomb said it sends its T-shirts from Worcester in Massachusetts to throughout the US, UK, Germany, Canada and 79 other countries daily.

Amazon typically charges companies 7% of the price, postage and any taxes to list and sell items through its website.

Prior to withdrawal the 'Keep Calm' shirts retailed in Britain for between £14.99 to £16.99 - excluding postage - allowing Amazon to make more than £1.18 on each sale.

Last year Amazon came under fire from MPs and the public over tax avoidance, after it was claimed the company generated UK sales during three years of between £7.6bn and £10.3bn, but paid virtually no corporation tax.

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HSBC Boss Gulliver In Line For £2m Bonus

By Mark Kleinman, City Editor

HSBC is to award its chief executive a bonus of just under £2m for 2012 following a year of successful strategic action to overhaul the bank but which was marred by a £1.2bn fine for violating US money-laundering laws.

I have learnt that HSBC, Britain's biggest lender by market capitalisation, will announce on Monday alongside its full-year results that Stuart Gulliver has been awarded the bonus as part of a multimillion pound pay package.

Mr Gulliver intends to accept the award, according to HSBC insiders. His bonus will be deferred and subject to clawback, and he will not be able to cash it in until he retires from or leaves HSBC.

As part of an effort to demonstrate greater transparency over the way it rewards top executives, HSBC will for the first time publish a single figure for the aggregate pay and benefits packages awarded to Mr Gulliver and his most senior colleagues.

This will include pension contributions as well as salary, annual bonus and a long-term share award that has been allotted to him this year. It is designed to show compliance with new Government rules that will come into force later this year, which have been spearheaded by Vince Cable, the Business Secretary.

Douglas Flint, the chairman, Sir Simon Robertson, the deputy chairman, and John Thornton, the non-executive director who chairs the remuneration committee, are understood to have orchestrated the switch to the new disclosure regime ahead of the Government deadline.

For 2011, Mr Gulliver was awarded an annual bonus of just over £2.1m, alongside his base salary of £1.25m and £3.75m in long-term share awards, making a total of £7.2m.

In 2012, his bonus and LTIP are understood to have been determined "in broadly the same ballpark" with a total package worth between £6m and £7m, one person close to the bank said.

HSBC has been applauded by many leading City shareholders for the way it details its executive pay policies through the publication of a 'scorecard' for Mr Gulliver, who took over in 2011.

The chief executive is eligible for an annual bonus of three times his salary and six times his base pay in long-term incentive awards.

A chunk of both payments is determined by HSBC's compliance success and the bank's reputation during a 12-month period. Mr Gulliver is understood to have been awarded nothing in this bracket in 2012, the same outcome as a year earlier, when HSBC was fined for mis-selling bonds to elderly customers.

HSBC suffered one of the most ignominious episodes in its history last year when it was forced to pay £1.2bn to US regulators to settle money laundering and sanctions breaches which had allowed its Mexican operation to be used by drug cartels and terrorist organisations.

In January, the bank established a committee to bolster its defences against financial crime, recruiting the former heads of HM Revenue and Customs and the Serious Organised Crime Agency, as well as a former US deputy attorney-general.

HSBC will set out plans on Monday to claw back millions of pounds from senior executives deemed to have been culpable in the Mexican situation.

While the bank will not name the affected individuals, they include Sandy Flockhart, the former head of the bank's Asian operation, who was at one stage seen as a contender against Mr Gulliver for the top job.

Mr Flockhart, who left HSBC last year, ran its Mexican subsidiary between 2002 and 2007, and had several million pounds-worth of shares which he is understood to have been told he will not now receive.

I understand, however, that Lord Green, the  trade minister who stepped down as HSBC chairman in 2010, will not be included in the clawback effort, partly because he opted to take his long-term pay awards as pension contributions.

Michael Geoghegan, Mr Gulliver's predecessor as chief executive, has also been excluded from the clawback arrangement because the bank's remuneration committee did not conclude that he had been personally responsible for the compliance failings.

The effort to demonstrate pay restraint will be reflected in a lower bonus pool than the £2.8bn that was paid out for 2011, less than a quarter of which was paid to UK employees. HSBC will say on Monday that there has been an across-the-board reduction in the payout pot because of the US fine, although it is still understood to be paying out roughly £2bn in bonuses to staff around the world.

HSBC is also expected to pay a healthy final dividend, with its payouts to shareholders an increasingly important source of income to UK investors in the context of a banking sector which has seen dividend expenditure shrink dramatically since the financial crisis.

In the UK, HSBC has abandoned a structure for paying staff that saw it impose a £50,000 cap on cash bonuses last year. The scheme involved the bank issuing shares that were then sold immediately in the market to hand executives larger cash sums.

HSBC bosses felt the initiative, devised with the Bank of England and Financial Services Authority, was "cosmetic". Instead, payouts will not include a cash ceiling but larger sums will have to be deferred for several years and won't pay out until employees leave or retire.

Analysts expect HSBC's full-year results to show continued progress under Mr Gulliver at accelerating the pace of change of what had historically been seen as a sluggish supertanker.

He has sold scores of businesses which did not meet internal targets for generating returns, and has prioritised growth in the world's fastest-growing economies.

"HSBC has made excellent progress in its strategy to simplify the business and refocus it on growth markets and markets that benefit from international connectivity," analysts at Shore Capital said.

They predict underlying full-year profit of £12.5bn against £11.8bn in 2011.

HSBC, which declined to comment, is also expected to outline a further provision for compensating customers who were mis-sold payment protection insurance.

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