SALES of Norwich Union life and pensions policies in York for the first quarter of this year plummeted to £2.505 billion – 12 per cent lower than the same period last year.

The gloomy quarterly figures were announced as another 571 posts – 15 per cent of its York workforce of about 3,800 across the city – are to be axed over the next year.

Company bosses believe it is unfair to compare similar time periods over this year and last because it reflects the downward ride for the entire economy.

But if you compare the last quarter of 2008 with this year’s first quarter, the figures are roughly equal.

David Barrall, marketing director for the UK Life business based in York, said the similar figures were reached after stripping out “lumpy” products – that is those products sold seasonally or occasionally, such as money purchase schemes or bulk purchase annuities.

In other words, a straight comparison with “core business” deals, between the last quarter and this, shows sales had seemingly evened out. “So the sharpness of the fall has slowed down,” he said.

But Mr Barrall said the job cuts, announced after the first quarter in April, were not linked to sales. “We said at the time the decision to remove these jobs was not due to economic conditions.

“We are in the third year of a three-year strategy to simplify the business, much of which was systems driven.”

He said the cuts would be a gradual process between now and the end of the year.

Mr Barrall said parent company Aviva would be reviewing its property strategy in York, but it was too early to say what buildings would be regarded as surplus to requirements and to what use they would be put.

Meanwhile, as far as the future of the York operation was concerned, it was difficult to predict “exactly how the market would play out,” but he pointed out that the group reserved had recently increased by £0.5 billion to £2.5 billion.

“If we were to suffer a further 40 per cent fall in equities, it would only have an effect of about £200 million on our surplus.

“It means we are in good shape to withstand any further deterioration in the economy.”