A challenge to the right of employers to make people retire at 65 has been rejected by a European court adviser.

An Advocate-general, a senior legal adviser to the European Court of Justice, backed current UK rules – although the view is not binding.

Age Concern is challenging UK laws, which since 2006 have allowed employers to compel workers to retire at 65.

Some 260 people in Britain have cases at employment tribunals which depend on the European court’s ultimate decision.

Many believe they have been unfairly treated and are worse off because they had to retire at 65.

Campaigners, who believe that setting an age limit is discriminatory, described the latest decision as a setback but stressed that the case would run for some time.

But employers’ groups have welcomed the latest guidance. Around a third of UK employers have a mandatory retirement age, but this is not necessarily set at 65.

Timescale

The Advocate-general’s view could influence the judges who are expected to give their ruling in the case just before Christmas, but it is not binding.

If they eventually find in the campaigners’ favour, the case could then return for a final hearing in a British court.

Consultant paediatrician Nigel Speight on being forced out of his job at 65

The employers’ organisation the CBI has argued that a normal retirement age of 65 is an essential management tool.

It has added that employees can ask to work beyond that age.

Employers have a duty to consider these requests, and the CBI has said that this system has proved to be a success.

‘Sensible’

Katja Hall, the CBI’s director of employment, said the Advocate-general’s opinion was a “sensible and fair” approach to the issue.

“Employees already have the right to request postponement of retirement. Our surveys show that just over 30% of employees requested postponed retirement in the last year and over 80% of these requests were granted.

“This right ensures that employers and employees sit down and find solutions that work for both sides.

“The law ought to be in favour of good management, recognising value and not price”< strong> Post-65 worker Phil Hingley

“Firms offer a growing range of options but they must retain the right to say no and retire people with dignity at the end of their career with the company.”

Losing this right could make employers less inclined to take on older workers, she said.

But Gordon Lishman, director general of Age Concern, said: “Millions of older workers in the EU will be fuming that the Advocate-general thinks ageism counts for less than other forms of discrimination.”

The case is being brought by Heyday – part of Age Concern. It was prompted by a survey of 60,000 people, with 80% claiming the rules were unfair, Heyday said.

Heyday director Ailsa Ogilvie said that the current rules were “costing good workers their jobs”.

“Denying people work because of their date of birth is grossly unfair, and in these tough times we expect more people will need to carry on working into ‘retirement’ in order to make ends meet,” she said.

“I do not want to be told when I have to retire. If I am healthy at 65 I want to continue working” Captain, Westbury
Send us your comments”More than a million people are already working past state pension age and they are the fastest growing group in the workforce.”

Phil Hingley, 66, has 47 years experience in the railway industry and has continued working part-time. His wife, a university lecturer, has also continued to work.

“The law ought to be in favour of good management, recognising value and not price,” he said.

He believed that in many cases line managers wanted employees with experience to continue, whereas corporate human resources departments looked more at the costs involved in keeping on higher paid staff.

More hearings

Lawyers have said that the government would still have to win a key battle to justify the inclusion of a default retirement age in the age discrimination legislation, based on its employment policies.

The government says that, with the population living longer, its long-term aim was to move away from a compulsory retirement age anyway.

“Many employers already realise the value of recruiting, training and retaining older staff and introducing more flexible working practices,” said a spokesman for the Department for Business, Enterprise and Regulatory Reform.

“We are monitoring the default retirement age and are committed to reviewing its effectiveness in 2011. If evidence shows it is no longer necessary then we will remove it.”

News reported by The BBC

The UK, Germany and Spain will fall into recession in 2008, the European Commission has predicted.

Brussels said the three countries would see two negative quarters of economic growth in a row, which is the technical definition of a recession.

In its latest economic forecast, the commission also downgraded its outlook for eurozone growth again.

It said the 15-nation euro bloc would now grow by 1.3% this year, against previous projections of 1.7%.

Earlier this month, data showed the region’s economy shrank by 0.2% between April and June – the bloc’s first decline since its creation in 1999.

The contraction was driven by a slowdown in exports and consumer spending.

But high inflation in the region led policy makers at the European Central Bank to keep interest rates at 4.25% at its latest meeting, allowing no relief for the eurozone’s slowing economies.

In its latest report, the commission believed that inflation was now likely to creep up to 3.6% in the eurozone – above its previous predictions of 3.2% and way above the government’s target of 2%.

Gloomy outlook

Shaken by a housing slump and volatile financial markets, the Brussels-based organisation predicts that the UK economy, which is not a member of the eurozone, will shrink by an annual rate of 0.2% in each of the next two quarters.

A second quarter of negative growth is also expected in the German and Spanish economies, which are expected to contract by 0.2% and 0.1% respectively.

The grim outlook echoes forecasts from the Organisation for Economic Cooperation and Development (OECD) out earlier this week, which were even worse.

According to the latest official figures, the UK economy did not grow at all in the second quarter of 2008.

The European Commission said the UK economy would grow by 1.1% in 2008 – much less than the 1.7% previously forecast and a sharp reduction from the official Treasury forecast of 2.5%.

A Treasury spokesman told the BBC:

“Along with every other country in the world, the UK is facing the twin shocks of high food and fuel prices and the global credit crunch.

“As a result of these global shocks, the UK economy is slowing, as we are seeing around the world. Growth in the second quarter was zero in the UK and it was negative in Germany, France, Italy and Japan.

“But with employment levels near record highs, interest rates that are historically low and the past decade of rising incomes and job creation, the UK is well placed to deal with these challenges.”

Stubborn inflation

Economic and Monetary Affairs Commissioner Joaquin Almunia blamed ructions in the financial markets, soaring commodity prices and the housing slump for the gloomy outlook.

“In a context of an unusually high degree of uncertainty, the external headwinds not only had a direct adverse impact on inflation and capital costs, but also an indirect one on confidence,” he said.

Stamping out hopes of an interest rate cut in the near term, Mr Almunia said even if economic activity were to slow further, inflation risks were still “tilted to the upside”.

“The risk of second-round effects can not be excluded, although there is no evidence of any widespread such effects so far.”

News reported by The BBC

UK economic growth ground to a halt between April and June, according to the latest official figures.

The Office for National Statistics said the economy stalled, showing no growth from the first quarter of 2008.

It ends a run of more than 15 years of consecutive growth in the UK and will raise expectations of a rate cut.

The 0% growth figure was down from an earlier estimate of 0.2% and lower than the 0.3% growth recorded in the first three months of 2008.

‘Challenging times’

The figures were the weakest since 1992 and the news sent the pound lower against the dollar and the euro.

The government said the economy was feeling the effects of global pressures such as high commodity prices and the continuing credit squeeze.

“The Government’s priority is to guide Britain through these challenging times, while also supporting those hit hardest as a result of these global factors,” a Treasury spokesman said.

But the Conservatives said that Labour’s economic record had been tarnished.

“The figures are very weak and suggest the UK economy is already in recession” George Buckley, Deutsche Bank

The symbolism of stagnation
Q&A: What is a recession?

“For years Gordon Brown boasted about consecutive quarters of economic growth,” Shadow Chancellor George Osborne said.

“Now economic growth has ground to a halt and Brown’s bubble has burst.”

Friday’s figures showed that the services sector, the backbone of the UK economy, grew just 0.2%, while manufacturing output fell by 0.8%. Household spending dropped by 0.1%.

Exports also fell as Europe, the UK’s main trading partner, saw growth contract in the same period.

The UK economy grew 1.4% from the second quarter of 2007, revised down from an initial estimate of 1.6%.

“The figures are very weak and suggest the UK economy is already in recession,” said George Buckley, an economist at Deutsche Bank.

The economy technically enters a recession when it shrinks for two consecutive quarters.

Rate dilemma

Bank of England governor Mervyn King has warned that the UK economy is in for a difficult and painful period due to a combination of high inflation and rapidly slowing growth.

Inflation, which at 4.4% is well above the 2% target rate, could make it more difficult for the Bank to cut interest rates to spur the economy.

But analysts said the zero growth reading could lead to lower borrowing costs by the end of this year.

“This really does put a rate cut firmly on the agenda although it is unlikely to come until we have seen the peak in inflation,” said Brian Hilliard, an analyst at SG.

News reported by The BBC

Wholesale gas prices rose by more than 14 per cent yesterday after a leak on a North Sea pipeline prompted fears about supplies this winter.

The Norwegian oil and gas producer Statoil Hydro said it discovered the leak on a gas pipeline linking its Kvitebjoern field to an onshore processing plant.

The company closed the pipeline, which pumps an estimated 5 per cent of Norway’s total gas output, and warned that it could remain shut until next spring.

Norway is a significant source of gas supplies to Britain, which imports about 40 per of its gas owing to dwindling North Sea stocks.

The announcement sent the forward price of gas for delivery to Britain this winter rising to 104p per therm from 90.75p per therm at the start of the day.

This is above the record highs seen in June this year, when wholesale gas prices passed £1 a therm on the back of rising oil prices, and around double the price this time last year.

David Hunter, an analyst with the energy consultancy McKinnon & Clarke, said the rise was a sign of nervousness of the markets to supply problems. He said: “The impact on the energy market has been significant, as demonstrated by the momentous jump in gas and electricity prices. The amount of gas available to export from Norway to countries, including the UK, will be cut significantly.”

News reported by The Independent

Top City practitioners and regulators have been summoned to the Treasury tomorrow to discuss reforming the rights issue process, in the wake of the chaos surrounding the recent cash calls undertaken by the UK’s troubled banks.

The Treasury is determined to push for changes to the process, which became more controversial following the crisis cash calls launched by HBOS, RBS and Bradford & Bingley to shore up their balance sheets. If agreement can be reached with practitioners over the next few weeks, the Treasury hopes to put recommendations in place by the end of the summer.

One source said: “The Treasury is genuinely shocked by the disastrous way the recent rights issues by the banks were undertaken. It’s bad for the companies in trouble but also bad for London as a financial centre. Officials understand that the system of raising money needs to be speeded up and improved.”

Tom Scholar, managing director of the Treasury’s financial services unit, and Kitty Ussher, Economic Secretary at No 11, are both involved in the planned reforms, which are likely to include speeding up the process and reducing requirements such as issuing a full prospectus.

This is the first meeting of the rights-issue working party, set up after the Treasury announced its review a few weeks ago. Bankers and investors will be at the meeting along with representatives from the Financial Services Authority and Bank of England. Any reforms will require new legislation.

One banker who will be at the meeting said: “This debate has been going on for decades. But for the first time there is a sense of urgency from all parties. It’s no longer about paper-pushing. Everyone wants changes.”

The UK is the only country to give investors pre-emption rights over shares, giving them first refusal on new shares in proportion to their existing holdings.

But the system has come under attack from big US investment banks such as Morgan Stanley and Goldman Sachs. They have argued that the UK should adopt their placement process, which is quicker; however, even they now accept the principle of pre-emption and are pushing only for the process to be made more efficient and faster.

“There is now a consensus. This is a great opportunity for reform,” said another source.

The working party will consider removing the need for a full prospectus, tightening the timetable so that the period needed for an extraordinary general meeting can be shorter, and introducing a twin-track system for institutions and retail investors.

Paul Myners, a non-executive director of the Bank of England, who led a study of pre-emption rights three years ago, said that the Treasury only had to pull out his report to see what changes needed to be made. Mr Myners recommended a trading update be issued rather than a prospectus, and that EGM notice periods be cut to seven days. He said that nothing in his proposals threatened the interests of companies or their shareholders.

News reported by The Independent