LONDON (Reuters) – Public sector workers will not stop the government from reforming their pensions by going on strike, Treasury minister Danny Alexander will say on Friday, in a speech likely to further inflame union anger.

The coalition government is making changes to public sector pensions as part of efforts to reduce Britain’s debt burden and to adjust to a population that is living longer.

About 750,000 workers including teachers and job centre staff have vowed to stage co-ordinated action later this month in what would be Britain’s worst labour stoppages for decades as anger over the coalition government’s spending cuts grows.

“It may be that those who oppose this change think that they can force the government to change its mind,” Alexander will say in a speech in London, according to extracts seen by Reuters.

“This head in the sand approach is a colossal mistake. This government will reform public service pensions, and this is the time to shape that change not try to block it.”

Government spending is bearing the brunt of the austerity plan to eliminate a record budget deficit, with hundreds of thousands of jobs in the public sector set for the axe, pay packets frozen for two years and pensions facing reform.

Alexander will also confirm the government will protect low paid workers from an average pension contribution increase of 3.2 percent.

LONDON, June 16 (Reuters) – Britain’s overhaul of financial regulation began to work its way into law on Thursday, with ministers keen to put in place a framework robust enough to avoid a repeat of the credit crisis.

At the top of the agenda is the abolition of the city watchdog Financial Services Authority and the establishment of a Bank of England Financial Policy Committee (FPC), which meets for the first time on Thursday.

The BoE will still be in charge of monetary policy, but also take over regulation of banks in the biggest shake-up of Britain’s financial services framework since the previous Labour government came to power in 1997.

The draft financial regulation bill, published on Thursday, will be open to pre-legislative scrutiny with a cross-party committee from both houses of parliament combing through the details. The changes should be written into law in 2012.

“This is a detailed blueprint for regulatory reform setting out how the new structure will work,” Financial Secretary to the Treasury Mark Hoban said. “It is in all our interests to get this right,” Hoban told lawmakers.

The BOE’s new Prudential Regulation Authority (PRA) will supervise the big banks and insurers while a new standalone Financial Conduct Authority (FCA) will supervise markets and protect consumers.

“They have ducked a number of issues — what macroeconomic tools will the FPC actually have, how will the FCA and the PRA manage their interaction — which have been put off for later,” said Simon Gleeson, a financial services partner at Clifford Chance lawfirm.

LONDON (Reuters) – Bank of England Governor Mervyn King on Wednesday defended the case for ultra-low interest rates despite soaring prices, indicating that any monetary tightening may still be some way off.

Chancellor George Osborne echoed King’s concerns about the strength of the economy as both policymakers gave speeches to London’s financial elite, stressing that a global headwind and a fragile banking sector are holding back the recovery.

The bank is facing hefty criticism with inflation at more than double its 2-percent target and its failure to forecast the price rises correctly.

But in his annual Mansion House speech, King gave the impression he is in no hurry to start raising rates from their record low 0.5 percent, noting that output growth was weak and lending conditions still tight.

“The committee is watching extremely carefully for any signs of a pickup in domestically-generated inflation and it will take action as soon as it is appropriate to do so,” King said.

“So far, subdued rates of increase in average earnings, as well as remarkably — some might say disturbingly — low growth rates of broad money have provided strong signals that inflation will fall back in due course,” he said.

King’s comments will add weight to the view that the central bank may not raise rates this year. Money markets are not fully pricing in a first quarter-point hike until May 2012.

LONDON, June 15 (Reuters) – Bank of England Governor Mervyn King on Wednesday defended the case for ultra-low interest rates despite soaring prices, indicating that any monetary tightening may still be some way off.

Finance minister George Osborne echoed King’s concerns about the strength of the economy as both policymakers gave speeches to London’s financial elite, stressing that a global headwind and a fragile banking sector are holding back the recovery.

The bank is facing hefty criticism with inflation at more than double its 2-percent target and its failure to forecast the price rises correctly.

But in his annual Mansion House speech, King gave the impression he is in no hurry to start raising rates from their record low 0.5 percent, noting that output growth was weak and lending conditions still tight.

“The committee is watching extremely carefully for any signs of a pickup in domestically-generated inflation and it will take action as soon as it is appropriate to do so,” King said.

“So far, subdued rates of increase in average earnings, as well as remarkably — some might say disturbingly — low growth rates of broad money have provided strong signals that inflation will fall back in due course,” he said.

King’s comments will add weight to the view that the central bank may not raise rates this year. Money markets are not fully pricing in a first quarter-point hike until May 2012.

LONDON (Reuters) – A minister threatened the country’s banks on Wednesday with punitive taxes if they fail to meet lending goals set by the government to help boost a stuttering economy.

Business Secretary Vince Cable, a consistently fierce critic of the banking industry, said the government could consider new sanctions if the banks missed their lending targets.

“We do have the option of approaching the taxation of profits or bonuses or balance sheets in a more forceful way — that certainly is one of the sanctions open to government,” Cable told parliament’s business committee.

Earlier this year, the banks struck a deal with the government called “Project Merlin,” in which they pledged to moderate excessive salaries to staff and in return lend out more money to small businesses to boost the UK’s flagging economy.

Last month the Bank of England said top banks had fallen short of those targets during in the first quarter.

Public anger against the banking industry remains high after the government part-nationalised Royal Bank of Scotland and Lloyds, both rescued with taxpayers’ money during the global credit crisis.

However, shares in the country’s top banks did not react to Cable’s renewed attack. Traders and analysts were waiting for a Treasury Select Committee hearing later on Wednesday, where the heads of RBS, Lloyds, HSBC and Barclays will be questioned by politicians.

LONDON, June 8 (Reuters) – A British minister threatened the country’s banks on Wednesday with punitive taxes if they fail to meet lending goals set by the government to help boost a stuttering economy.

Business minister Vince Cable, a consistently fierce critic of the banking industry, said the government could consider new sanctions if the banks missed their lending targets.

“We do have the option of approaching the taxation of profits or bonuses or balance sheets in a more forceful way – that certainly is one of the sanctions open to government,” Cable told parliament’s business committee. [ID:nLDE7570RH]

Earlier this year, the banks struck a deal with the government called “Project Merlin”, in which they pledged to moderate excessive salaries to staff and in return lend out more money to small businesses to boost the UK’s flagging economy.

Last month the Bank of England said top banks had fallen short of those targets during in the first quarter. [ID:nLDE74M0N9]

Public anger against the banking industry remains high after the government part-nationalised Royal Bank of Scotland (RBS.L: Quote, Profile, Research, Stock Buzz) and Lloyds (LLOY.L: Quote, Profile, Research, Stock Buzz), both rescued with taxpayers’ money during the global credit crisis.

However, shares in the country’s top banks did not react to Cable’s renewed attack. Traders and analysts were waiting for a Treasury Select Committee hearing later on Wednesday, where the heads of RBS, Lloyds, HSBC (HSBA.L: Quote, Profile, Research, Stock Buzz) and Barclays (BARC.L: Quote, Profile, Research, Stock Buzz) will be questioned by politicians.

LONDON (Reuters) – The opposition Labour party leader is struggling to capitalise on anger over government spending cuts, raising doubts he can revive the battered left before the next parliamentary election in 2015.

Labour, dumped out of power in 2010 with its lowest share of the vote since 1983, enjoyed a bounce in opinion polls late last year as the severity of the Conservative-Liberal Democrat coalition government’s austerity plan began to dawn on voters.

But Ed Miliband, who beat his brother David to take Labour’s helm last year, failed to translate that turnaround into a harvest of votes at closely watched regional elections in May. The party’s poll lead has since narrowed.

At a press conference Tuesday, the 41-year-old former cabinet minister struggled to explain why voters appear unimpressed with him.

“It’s always true for leaders of the opposition early in their time in office that the public are getting to know them,” Miliband said.

“What we’ve succeeded in doing is winning back a section of voters who left us at the last election. You’ve got to recognise that we were coming from a long way back … We’ve got to show them (voters) we have a compelling view of the future,” he said.

Many Labour activists worry about their leader’s progress but also seem prepared to give him the benefit of the doubt.

LONDON (Reuters) – Britain’s opposition Labour party leader is struggling to capitalise on anger over government spending cuts, raising doubts he can revive the battered left before the next parliamentary election in 2015.

Labour, dumped out of power in 2010 with its lowest share of the vote since 1983, enjoyed a bounce in opinion polls late last year as the severity of the Conservative-Liberal Democrat coalition government’s austerity plan began to dawn on voters.

But Ed Miliband, who beat his brother David to take Labour’s helm last year, failed to translate that turnaround into a harvest of votes at closely watched regional elections in May. The party’s poll lead has since narrowed.

At a press conference on Tuesday, the 41-year-old former cabinet minister struggled to explain why voters appear unimpressed with him.

“It’s always true for leaders of the opposition early in their time in office that the public are getting to know them,” Miliband said.

“What we’ve succeeded in doing is winning back a section of voters who left us at the last election. You’ve got to recognise that we were coming from a long way back … We’ve got to show them (voters) we have a compelling view of the future,” he said.

Many Labour activists worry about their leader’s progress but also seem prepared to give him the benefit of the doubt.

LONDON (Reuters) – Lowry’s lonely people, Tracey Emin’s scrawlings and a mysterious portrait of Elizabeth I are just a few of the gems from the British government’s art collection unveiled to the public for the first time this week.

The exhibition, at London’s Whitechapel Gallery and picked by top government officials old and new from offices scattered across the globe, brings together a mix from five centuries of art and diplomacy.

L.S. Lowry’s masterpiece ‘Lancashire Fair: Good Friday, Daisy Nook’, chosen by the wife of British Prime Minister David Cameron, shows a drab and alienating crowd of northern English folk at an Easter fair a year after the end of World War Two.

The painting, which usually hangs in Cameron’s Downing Street headquarters, fetched a record price of 3.8 million pounds at auction in 2007.

Emin’s ‘Still Love You Margate’ and ‘Margate 1 Sand’ will also catch the eye — stark and blurry odes to an unspectacular English seaside resort town. In one, a lone child-like seagull hovers, in the other, a couple copulate on the beach.

“I spent every summer with my aunty and uncle in Margate as a child, so there is a strong personal connection for me in the pieces,” said culture minister Ed Vaizey, who chose both pieces.

The three-month exhibition, the first of five from the 13,500-piece collection to feature at the gallery until September 2012, also sheds some light on the thinking of Britain’s top diplomats and spies.

LONDON, June 3 (Reuters) – Britain’s coalition government has regrouped after voters punished the Liberal Democrat junior partners in May’s local elections, but health reform and worries over the economy will keep pressure on the relationship.

The Conservative-led government is seeking to overhaul Britain’s state-run health service but has faced widespread criticism from those, including many Lib Dems, who fear creeping privatisation of what is regarded as a national treasure.

The issue is the latest in a line of policies that have driven a wedge between the two parties, with the Lib Dems bearing the brunt of blame from voters for seemingly failing to stand up to the much larger Conservative party.

The Lib Dems suffered in local council elections last month as voters reacted angrily to deep cuts in public spending. The Conservatives actually gained seats in England and Wales. [ID:nLDE74415Y]

Concerns over the strength of Britain’s economic recovery – and whether it can withstand austerity measures aimed at slashing a record budget deficit — have flared in recent weeks.

In Scotland, the pro-independence Scottish National Party (SNP) won a majority in the devolved parliament and plans a referendum in the coming five years on breaking with the rest of Britain. [ID:nLDE74517C]

And Britain’s involvement in Libya’s civil war risks turning into an unpopular, long-haul foray — despite a pledge by the year-old government to be less interventionist than the previous Labour administration.