City Figures To Back New Tamara Mellon Brand

By Mark Kleinman, City Editor

Tamara Mellon, the businesswoman who built Jimmy Choo into a globally-prominent fashion brand, is plotting a $25m comeback that will see her name adorning stores in leading cities around the world.

Sky News can exclusively reveal that Ms Mellon has lined up figures including Michael Spencer, the boss of broking firm Icap and former Conservative Party treasurer, and Tommy Hilfiger, the tycoon behind the eponymous fashion business, as investors in her new business.

Expected to be called Tamara Mellon, her lifestyle business will mark an ambitious return to the business world 15 months after she left Jimmy Choo. A non-compete agreement signed when she departed expires this month.

Ms Mellon has set her sights on securing the funds in the hope of replicating her success at the maker of upmarket women's footwear.

Her other backers will include David Ross, co-founder of The Carphone Warehouse, Lord Marland, who recently stepped down as a trade minister in the Coalition government, and Tory Burch, the fashion entrepreneur who is a close friend of Ms Mellon's.

People close to the fundraising said that Ms Mellon was keen to secure a significant amount of British investment for her new venture.

Although she now lives in the US, Ms Mellon is a British citizen and remains a Business Ambassador for the Government, which involved promoting British trade on overseas visits. She also sits on the board of Revlon, the global cosmetics group.

WH Ireland, the City broking firm, is believed to have been assembling the fundraising for Ms Mellon, which is at an advanced stage.

The new venture is understood to include plans for flagship stores selling a wide range of upmarket fashion and other products in London, Los Angeles and New York, with further openings likely as the business expands.

City sources said the fundraising deal could be announced within the next few weeks.

Ms Mellon's track record is impressive, having walked away from Jimmy Choo with an £85m fortune following its sale to Labelux, the Swiss-based fashion label collection, in 2011.

In an interview with The Sunday Times last year, Ms Mellon was candid about leaving the company she had founded and worked for since 1996.

"I didn't like the equity plan that had been put in place. The management team were asked to invest their own money in the business and hold their shares for seven years, which would then be subject to income tax and not come under capital gains. I felt it was unfair," she told the newspaper.

Ms Mellon began her fashion career from the modest foundation of a stall on Portobello Road in London, where she sold T-shirts. She later worked at the UK edition of Vogue magazine, where she met Jimmy Choo, a Malaysian-born Hackney cobbler. She went into business with him, launching a store in Knightsbridge.

The company was a huge success, making big returns for a succession of private equity-owners, although Ms Mellon has since been critical of the buyout industry, telling another newspaper last year:

"What happens in private equity is they come in and they say we're going to be a great partner. We want to hold this long term and we're going to help you nurture and build this brand, [but] the day after signing, they talked about selling the business."

A spokesman for Ms Mellon declined to comment.

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Twitter Hacked: Up To 250,000 Passwords Taken

Around 250,000 Twitter users may have had their accounts compromised by computer hackers.

The social networking site said usernames, email addresses and encrypted passwords may have been taken during an "extremely sophisticated" attack on its systems.

It said one attack was shut down moments after it was detected, adding that the passwords of users who may have been affected had been reset.

In a blog posting, Bob Lord, director of information security at Twitter, said there had been "a recent uptick in large-scale security attacks aimed at US technology and media companies", with the New York Times among those targeted.

He said: "Our investigation has indicated the attackers may have had access to limited user information - usernames, email addresses, session tokens and encrypted/salted versions of passwords - for approximately 250,000 users.

"As a precautionary security measure, we have reset passwords and revoked session tokens for these accounts."

"This attack was not the work of amateurs and we do not believe it was an isolated incident," he added. "The attackers were extremely sophisticated and we believe other companies and organisations have also been recently similarly attacked."

One expert said the hackers may have gained access through an employee's home or work computer by exploiting vulnerabilities in Java, a widely-used computing language.

Ashkan Soltani, an independent privacy and security researcher, said such a move would give attackers "a toehold" in Twitter's internal network, potentially allowing them to track user information as it travelled across the company's systems or break into specific areas, such as the authentication servers that process users' passwords.

Although the hackers are unlikely to have gained any confidential information, Mr Soltani said the stolen credentials could be used to access other services for which a person has signed up using the same username and password.

Mr Lord said that although "only a very small percentage" of users were potentially affected, everyone who uses the site should ensure their password is secure.

He said passwords should be at least 10 characters long, contain upper and lowercase letters, numbers and symbols, and be different to passwords used for other online accounts.

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Red Tape 'Strangling Youth Jobs Drive'

Attempts to get more than a million young people into work are being hampered by excessive bureaucracy and central government control, council leaders have claimed.

The Local Government Association (LGA) says a new, more local approach to tackling youth unemployment could reduce the number of young jobless people by a fifth.

In a report it complains of an "overly complicated" system of tackling youth unemployment, with 33 different national schemes covering 13 different age boundaries and costing £15bn a year.

The report says more than 94,000 people completed hair and beauty courses last year, even though there were only 18,000 new jobs in the sector.

By contrast, just 123,000 people were trained for around 275,000 advertised jobs in construction - more than two vacancies for every qualified person, said the LGA.

Young people at a jobs fair

David Simmonds of the LGA, said: "Youth unemployment is a worrying trend for us all, particularly long-term youth unemployment which has doubled since 2008 and continues to grow.

"All the evidence in this report points to the success that local organisations, such as councils, businesses and education providers, can achieve when working together... but this is being hampered by successive centrally-driven government approaches."

He added: "Councils are in a unique position and can play a pivotal role in identifying young people that are likely to slip into periods of long-term unemployment.

"But we need to be given the powers to prevent this happening and help equip future jobseekers with the skills, confidence and real-life experience they need to find work in their area."

The LGA said councils should be the main commissioners of employment programmes aimed at young people, not central government.

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Dragons' Den Star Peter Jones Buys Jessops

Dragons' Den star Peter Jones has bought the brand of collapsed camera retailer Jessops to run it as an online company.

Rob Hunt, joint administrator and partner at PwC, said: "We can confirm that we have sold the brand and certain other assets to a number of buyers including entrepreneur Peter Jones CBE."

Jessops closed all 187 of its stores in earlier this month, but the deal is not thought to include any of them.

The camera retailer was forced to call in the administrators after talks with its lender and suppliers broke down following a poor Christmas.

It had struggled since 2007 after suffering from online competition and a boom in camera phones hitting demand for digital cameras.

Mr Jones, 46, was awarded his CBE in 2009.

He made his fortune after setting up the Phones International Group, which he sold a part of in 2011.

He has appeared on the BBC show Dragons' Den since it started in 2005.

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Horse DNA: Burger King Dumps Irish Supplier

Burger King has issued full page newspaper apologies after discovering horse DNA in patties from its supplier in Ireland.

The fast food chain said sorry to customers as it confirmed it was cutting ties with Silvercrest, the food processing plant that supplied contaminated burgers to UK supermarkets.

Burger King said its own tests for equine DNA in its burgers had come back negative and that four samples from the Silvercrest plant that did test positive were from a product that did not make it into restaurants.

The Miami-based chain said the failure to deliver 100% British and Irish beef patties was a violation of contracts.

The UK newspaper ads include a statement from Diego Beamonte, Burger King Corporation's vice president for global quality, who said: "While the Food Safety Authority of Ireland has stated that this is not a food safety issue, we are deeply troubled by the findings of our investigation and apologise to our guests, who trust us to source only the highest quality 100% beef burgers.

"Our supplier has failed us and in turn we have failed you. We are committed to ensuring that this does not happen again."

The Irish authorities said that their investigations had traced filler product used in the burger processing facility to a supplier in Poland.

It contained a mixture of beef and horse offcuts.

Experts from the Food Standards Agency (FSA) yesterday told the Commons Environment Committee that they could not be sure whether the contaminated burgers were being sold for more than a year.

Aldi is the latest supermarket to suspend supplies over burger content

Bosses at the Food Safety Authority of Ireland (FSAI), who identified and publicised the controversy, or Department of Agriculture chiefs have yet to be questioned at a similar level in Dublin.

At least 10 million burgers were put into storage following the scandal. Silvercrest's parent company ABP Food Group initially said they would be destroyed.

Silvercrest had a contract to supply Burger King in the UK, Ireland and Denmark. It is understood the deals with the fast food chain and Tesco were worth in the region of £39m.

The Ballybay processing factory, closed since the scandal broke two weeks ago, employed 112 people.

Burger King said it had carried out its own internal investigation including scientific tests, inspection of the Silvercrest facility and scrutiny of traceability records over the last fortnight.

It has been using approved suppliers from Germany and Italy as a precaution since.

Burger King's apology came after Aldi suspended its contract with beefburger supplier Dalepak, having found small traces of horsemeat DNA in its products.

The supermarket withdrew three beefburger lines earlier this month after traces of pig meat and horsemeat were discovered, and launched an investigation.

"Aldi UK's customers are our absolute priority," a spokesman said. "This is why we immediately withdrew these products until such a time that we could verify that there was no risk to our customers.

"We are deeply angry and feel let down by our supplier and we are pursuing more tests until we are certain that we understand how the production line was contaminated."

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Mexico: Pemex Oil Company HQ Blast Kills 25

Twenty-five people are dead and at least 100 injured after an explosion at the headquarters of Mexican oil company Pemex.

Injured workers were seen being evacuated after the blast at the state-owned firm blew out windows and damaged three floors of the tower in Mexico City's commercial centre.

There are reports that as many as 30 people could be trapped in the debris from the explosion, which occurred in the basement of an administrative building next to the iconic 52-storey skyscraper.

Ana Vargas Palacio was distraught as she searched for her missing husband, Daniel Garcia Garcia, 36, who works in the building. She last heard from him at 1pm.

"I called his phone many times, but a young man answered and told me he found the phone in the debris," she said.

The two have an 11-year-old daughter. His mother, Gloria Garcia Castaneda, collapsed on a friend's arm, crying "My son. My son."

Television images showed people being carried out of the building on office chairs and gurneys. Most of them showed injuries likely to have been caused by falling debris.

Petroleos Mexicanos, or Pemex, said in a Tweet that several workers were injured in the blast but no one answered at its offices.

The blast happened in a busy central district of Mexico City

There was no immediate cause given for the blast, but in an earlier Tweet, the company said it had evacuated the building because of problems with the electricity.

"It was an explosion, a shock, the lights went out and suddenly there was a lot of debris," employee Cristian Obele told Milenio television, adding that he had been injured in the leg. "Co-workers helped us get out of the building."

The tower, where several thousand people work, was evacuated. The main floor and the mezzanine of the auxiliary building, where the explosion occurred, were heavily damaged, along with windows as far as three floors up.

"Right now they're conducting a tour of the building and the area adjacent to the blast site to verify if there are any still trapped so they can be rescued immediately," Interior Ministry spokesman Eduardo Sanchez told Milenio.

"We were talking and all of sudden we heard an explosion with white smoke and glass falling from the windows," said Maria Concepcion Andrade, 42, who lives on the block of Pemex building.

"People started running from the building covered in dust. A lot of pieces were flying."

Police landed four rescue helicopters to remove the dead or injured. About a dozen tow trucks were furiously moving cars to make more landing room for the helicopters.

Streets surrounding the building were closed as evacuees wandered around, and rescue crews loaded the injured into ambulances.

"I profoundly lament the death of our fellow workers at Pemex. My condolences to their families," President Enrique Pena Nieto said via his Twitter account.

Shortly before the explosion, Operations Director Carlos Murrieta reported via Twitter that the company had reduced its accident rate in recent years. Most Pemex accidents have occurred at pipeline and refinery installations.

A fire at a pipeline metering centre in northeast Mexico near the Texas border killed 30 workers in September, the largest-single toll in at least a decade for the company.

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Banks Face Up To Hefty New Mis-Selling Bill

By Mark Kleinman, City Editor

The City regulator will pave the way for Britain's big banks to pay out billions of pounds in compensation over the industry's latest mis-selling scandal.

I have learnt that the Financial Services Authority (FSA) is to set out a revised framework for small business customers (SMEs) to pursue redress for the mis-selling of interest rate hedging products, which were designed to provide insurance against steep rate rises.

Sources said that a crucial element of the FSA announcement would relate to a change in the definition of "sophisticated" customers, or those who would not be eligible to pursue compensation.

The new regime to be outlined by the FSA will alter the bracket of SMEs which will be eligible for compensation by increasing a £6.5m turnover threshold, according to people briefed on the details.

The changes will be an admission that the criteria used during a pilot scheme that ended recently failed to meet the needs of businesses which required the regulator's help.

The methodology was being thrashed out on Wednesday during talks between the FSA and Barclays, HSBC, Lloyds Banking Group and Royal Bank of Scotland, which between them accounted for the overwhelming majority of interest rate hedging product sales.

However, people close to the situation said a deal would be announced at 7am. A number of other banks which participated in the pilot programme are also likely to sign up to the new terms in the near future.

The new framework follows a seven-month pilot scheme involving a small sample of SMEs whose cases had been scrutinised by the banks with the oversight of an independent reviewer. Those reviewers will continue in their roles, potentially racking up huge fees for a small number of accounting and law firms.

Last June, the FSA announced that it had found widespread evidence of mis-selling of products such as swaps, which enabled customers to "fix" interest rates, and collars, which allowed them to limit interest rate fluctuations within a defined range.

"The greatest volumes were sold in the period 2005-2008, before the base rate fell sharply to its current, sustained, historic low," the FSA said in June.

Many SMEs have complained that they were left facing bills of tens or even hundreds of thousands of pounds because of these products.

The major banks have argued that while there were limited cases of mis-selling, most customers understood the risks inherent in hedging products and should not be compensated for costs triggered by the wider financial crisis' impact on interest rates rather than any venality on the part of lenders.

The four banks have now, though, agreed on a set of standards for reviewing thousands more swaps cases during a six-to-twelve month period.

Crucially, the wording of the FSA statement is expected to include a stipulation that the banks will be held liable for "consequential losses" incurred by customers who were mis-sold the hedging products.

While legally difficult to prove, it would mean that SMEs will have the opportunity to pursue significant damages from banks where they can establish that they lost out financially because their capital was wrongly deployed paying for the cost of the swaps.

Further details of the agreement will be announced in the FSA statement.

The FSA and the banks all declined to comment.

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EU Referendum Debate 'Damaging Economic Growth'

By Ursula Errington, Business Correspondent

An influential group of economists has said the government debate over having an "in or out" referendum over Europe is damaging economic growth.

The London School of Economics Growth Commission also branded Government investment in a long-term growth strategy as "inadequate", "unstable" and "failing".

The commission's 35-page report says the debate over whether to hold a referendum "is analgous to the needless self-inflicted wounds that the US is causing in its debates over the debt ceiling and fiscal cliff".

The co-chair of the panel, Professor John Van Reenen, went further saying: "The idea of leaving the EU would be very, very damaging for the UK, so I personally think the uncertainty around having the referendum is actually going to retard growth and retard investment, so I don't think there is a strong case for having that referendum."

Talks of an "in out" referendum on Europe are damaging to the economy

The report examined the key factors in fostering growth, years and even decades in the future.

The findings of the nine economists are grim. They conclude that years of under-investment in education, infrastructure and innovation has left the UK economy structurally weak, with UK institutions less able to compete globally.

They accuse politicians of "short-termism" when, in their view, investment in promoting long-term growth would reap dividends now by establishing certainty in policy direction in areas such as transport and energy.

The panel identified that the singular greatest influence on economic growth was education, holding up Germany and Finland as exemplary models.

Greater autonomy for schools, longer probation periods and a shift to more "on-the-job" assessment for teachers would help redress systemic imbalances against disadvantaged youngsters.

It concedes radical change to the way teachers are hired, monitored and fired could take 30 to 40 years to achieve.

Apprenticeships were singled out for comment with the report concluding: "Apprenticeships need to be longer, they should pay a training wage (English apprenticeships are relatively highly paid by international standards) and their administration must be radically simplified."

Arguments over Heathrow should be based on economic merits

However, the panel stopped short of advocating a cut in apprentice wages to encourage employers to join the scheme.

It also suggests Maths and English should be a compulsory element of apprenticeships.

To boost action and investment on infrastructure, the panel is recommending a radical re-structure of the current system.

It suggests an infrastructure strategy board should be created to take a long-term view impervious to changes in government and ministers.

An Independent Planning Commission would have to deliver on that strategy, funded by a specialist "Infrastructrue Bank."

By de-politicising issues such as an extra runway at Heathrow and basing arguments purely on their economic merits, the Growth Commission believes genuine progress would be swift.

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BSkyB Sees Half-Year Profit Up 8% to £647m

BSkyB, the parent company of Sky News, has reported an 8% increase in operating profit for the first half of the financial year.

The company said operating profit for the period was £647m.

Revenues increased 5% to £3.5bn in the same period.

BSkyB added 88,000 net new customers to the service in the three months to the end of December, compared with a forecast of 58,000.

The net new customer total was up 271,000 year-on-year to reach 10.74 million.

Chief executive Jeremy Darroch said: "We have delivered another good performance in the first half with strong progress across the board.

"In what remains a tough consumer environment, our broadly-based growth strategy is working well.

"Good product growth in the quarter means that our total base of subscription products has grown by 10% year on year."

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Icesave In Court Win Over UK Bank Deposits

Iceland was right to refuse to repay billions to Britain and the Netherlands for bailing out depositors in a failed Icelandic bank, a European court has ruled.

After the collapse four years ago of Iceland's top lenders during the credit crunch, the British and Dutch governments stepped in to repay savers in the online "Icesave" account run by Landsbanki and wanted Iceland to pay them back directly.

Iceland did not comply, triggering a row between the governments and potentially complicating the island's bid to join the European Union.

But the court of the European Free Trade Association bloc (Efta) found Iceland did not break depositor protection laws by refusing to return the money.

Last week, Iceland's president told Sky News Economics Editor Ed Conway that his nation would "never forget" Gordon Brown for the treatment it was given by the then British leader.

Icelanders twice voted in referendums against repayment schemes drawn up by their government to satisfy the British and Dutch claims, leaving the estate of Landsbanki to pay back the funds, which it has steadily done.

Protesters outside the Icelandic parliament

"It is of considerable satisfaction that Iceland's defence has won the day in the Icesave case - the Efta court ruling brings to a close an important stage in a long saga," the Icelandic foreign ministry said in a statement.

The Efta court, a cooperation group of which Iceland is a member and which has links to the European Union, rejected the case brought by the Efta Surveillance Authority - the body which oversees the bloc's rules.

In a ruling on its website, the court dismissed all three of the claims brought by the Surveillance Authority against Iceland, partly on the grounds of the massive nature of Iceland's bank collapse.

It also said the depositor protection rules did not mean a country itself had to fund the deposit guarantee scheme.

The foreign ministry said in a statement that 660 billion crowns (£3.2bn) had already been paid out from the estate of Landsbanki, of which 585 billion crowns (£2.9bn) had gone to claims related to Icesave, or more than 90% of the total which the UK and Dutch authorities advanced to cover the minimum deposit guarantee for Icesave.

"It is important to bear in mind that payments from the estate of the failed Landsbanki will continue regardless of the ruling of the Efta court," the Icelandic foreign ministry added.

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Report: Youth Joblessness Rises Fastest In UK

Youth unemployment has increased in the UK at a faster rate than any other country in the G8 since the start of the recession, a new report has said.

A study by the Work Foundation found that the UK now lags only behind Spain and Greece for youth joblessness in OECD countries.

The problem cannot be attributed just to the recession because other countries have fared better, the research group said.

The Government was urged to follow the lead of countries like Germany and Denmark by taking measures including more apprenticeships and increased training.

Lizzie Crowley, the report's author, said: "In many other developed nations, youth unemployment has remained low despite the global downturn.

"However, in the UK youth unemployment as a proportion of 15 to 24-year-olds has increased at a faster rate over the course of the recession than both the European and OECD averages.

"While the reasons for this are complex, it's clear that the UK can learn from the experiences of those countries that have fared much better in terms of youth unemployment.

"The Government should focus on those policies that have been shown to work, cherry-picking the best responses from other countries and adapting them to the needs of the UK labour market."

Unemployment for people aged 15 to 24 had increased in the UK by 35% to 916,000 between 2008 and 2011.

That compares to an average of 15% in the other G8 countries Canada, France, Germany, Italy, Japan, Russia and the United States.

Germany, Russia and Japan had seen a reduction in youth unemployment in the same period.

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Sugary Drink Tax 'Could Pay For School Meals'

Sugary drinks should be taxed at up to 20p a litre, say health campaigners – with the proceeds helping to pay for free school meals.

Food and farming charity Sustain said the Government could raise £1bn a year from the duty, while also saving lives by cutting excessive consumption of unhealthy drinks.

The report has been backed by more than 60 organisations, including the Academy of Medical Royal Colleges, Friends of the Earth, the National Heart Forum and the Royal Society for Public Health.

Diet-related illness is now costing the NHS £6bn every year, said the report.

Sustain urged Chancellor George Osborne to introduce the duty in his March 20 Budget and to channel most of the cash raised into a Children's Future Fund for programmes to improve children's health.

Money could be spent on campaigns to encourage youngsters to eat more fruit and vegetables, the report said.

The group's campaigns manager, Charlie Powell, said: "Sugar-laden drinks are mini-health time bombs, contributing to dental diseases, obesity and a host of life-threatening illnesses which cost the NHS billions each year.

"We are delighted that so many organisations want to challenge the Government to show it has a public health backbone by including a sugary drinks duty in Budget 2013.

"It's a simple and easy-to-understand measure which will help save lives by reducing sugar in our diets and raising much-needed money to protect children's health."

Sustain chairman Mike Rayner, of Oxford University's Department of Public Health, added: "Just as we use fiscal measures to discourage drinking and smoking and help prevent people from dying early, there is now lots of evidence that the same approach would work for food.

"Our obesity epidemic causes debilitating illness, life-threatening diseases and misery for millions of people. It is high time Government did something effective about this problem."

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Christmas Boost Sees Ryanair's Traffic Rise

Ryanair has reported a 3% rise in traffic in the third quarter as strong pre-Christmas bookings boosted its profit.

The airline's average fares were up more than expected - by 8% over the period - leading the company to increase its full-year profit forecast.

Its profit after tax in the third quarter was up by over 20% to 18.1m euros (£15.4m), and it expects full year profits to be over 540m euros (£461m) - up from an earlier estimate of 520m euros (£444m) at most.

The airline carried a total of 17.3 million passengers over the third quarter - but is predicting that in the fourth, passenger numbers will fall as a result of higher fuel costs and airport fares.

Chief executive Michael O'Leary said: "Our Q3 profit 

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Exclusive: Banks' Fury At Mis-Selling Probe

By Mark Kleinman, City Editor

The bosses of Britain's major banks have mounted a coruscating attack on their new regulator as they brace for the outcome of a new mis-selling probe that will result in another multi-billion pound compensation bill for the industry.

I have learned that the chief executives of some of the biggest high street lenders met for secret talks earlier this month, at which they shared profound concerns about the approach of Martin Wheatley, head of the new Financial Conduct Authority (FCA), to the mis-selling of interest rate-hedging products to small businesses.

The bank chiefs are understood to be concerned that Mr Wheatley will ignore recent victories for banks in mis-selling court cases and establish a compensation framework that could cost them as much as £10bn.

One bank executive said: "Repaying customers who have been mis-sold to is right and proper, but he [Mr Wheatley] seems to have an agenda to persecute the banks which goes way beyond that.

"It is getting to the point where investors will have to apply a 'Wheatley discount' to bank share prices."

The banking sector is braced for its latest bruising battle with Mr Wheatley to unfold this week when the Financial Services Authority (FSA) announces the results of a long-running pilot programme aimed at assessing the scale of redress owed to customers who were mis-sold interest rate swaps.

The FCA will be spun out of the FSA later this year.

I understand that Mr Wheatley has written in recent weeks to Royal Bank of Scotland (and possibly other major banks) to warn them that recent court victories will not determine the structure of the complaints resolution regime that will be outlined on Thursday.

In December, RBS won a case in the High Court, which dismissed a claim by a Lancashire hotelier and his business partner who had alleged that the bank had mis-sold them an interest rate swap in May 2005 as a form of insurance against their existing loan liabilities.

The attack by the bank chiefs on Mr Wheatley's handling of the swaps and other conduct-related issues was made during private talks, and is unlikely to be repeated in public.

At least one bank chief executive, however, plans to write to George Osborne, the Chancellor, to warn that the "over-zealous" FCA approach risks grave consequences for the wider economy by eating further into banks' capital reserves.

The interest rate swaps scandal comes in the wake of the payment protection insurance debacle, which has already cost the major banks well over £10bn, and with little prospect of an end to the rise in compensation costs.

Swaps are products which provide a form of insurance in the event that (in this case) there was a steep rise in interest rates during the period covered by the product.

After the banking crisis hit, deep cuts to interest rates left thousands of customers facing bills far larger than the interest they were having to pay.

The banking industry has argued robustly that the fact that some customers were left facing large bills provides in itself no evidence that the swap products were mis-sold.

To date, Barclays has set aside £450m for customer compensation, RBS £50m and HSBC a little over £130m.

Lloyds Banking Group has said the sums involved will be "not material" to it, but it could still involve a tab running to hundreds of millions of pounds.

The banks are not the only stakeholders concerned about the outcome of the swaps probe.

The Financial Times quoted Mike Cherry, national policy chairman of the Federation of Small Businesses, calling for the range of businesses eligible to apply for compensation to be expanded.

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Corporate Manslaughter Cases Up By 40% In A Year

The number of new corporate manslaughter cases opened by the Crown Prosecution Services has spiked by 40% in a year, according to newly released figures.

The research shows there has been an increase in charges from 45 in 2011 to 63 in 2012.

In total 141 cases have been opened since 2009, with 56 prosecutions currently ongoing, according to law firm Pinsent Masons.

But despite the rise in numbers, there have only been three convictions since 2008.

It said the figures hinted that the scale of potential corporate manslaughter cases may be much higher.

Since the Corporate Manslaughter and Corporate Homicide Act 2007 was introduced the following year,  large and medium sized companies can be found guilty of corporate manslaughter for deaths arising from management failures which constituted a gross breach of a duty of care.

Pinsent Masons' Simon Joyston-Bechal said: "High-risk industries and companies cannot be reassured by the current lack of convictions for corporate manslaughter.

"The three convictions so far are just the tip of an iceberg."

He added: "Corporate manslaughter cases are very complex and can take a long time to come to trial. We can now see from these figures that there are a rapidly growing number of cases in the pipeline.

The first corporate manslaughter conviction in 2011 related to a 2008 fatality.

The second conviction in 2012 related to a 2010 fatality, while the third conviction in 2012 related to a fatality four years prior, in 2008.

Complaints against the historic low number of corporate manslaughter convictions may be misplaced in light of these new figures.

However with firms under pressure to limit costs, Pinsent Masons warns that it may have implications for any possible legal action.

Mr Joyston-Bechal added: "Cutting corners on safety in order to save money is probably the most serious aggravating feature of an offence.

"All businesses need to have robust health and safety procedures in place."

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UK GDP Falls By 0.3% In Last Quarter

How GDP Is Compiled Really Matters

Updated: 10:21am UK, Tuesday 27 November 2012

By Ed Conway, Economics Editor

I've covered economics for a decade or so, but I confess that until very recently I didn't really know what GDP really is.

I mean, like most of you I knew it was the broadest and most widely-used measure of our economy's health - that it determines whether we're officially in recession or not (two or more quarters of shrinking GDP equals a recession).

I knew it was the sum of everything spent, earned or made in Britain.

What I didn't know was how it's actually put together.

I guess I vaguely assumed - and I don't think I'm entirely alone - that the Office for National Statistics had some kind of electronic hotline into British business, some privileged access to their numbers, which in turn became the Gross Domestic Product number.

Turns out I was monumentally wrong.

For it transpires that GDP - that big number we're all so focused on, the figure that tells us whether we're in a recession or booming, that can end a political career and swing an election - is actually a big, big survey.

I know this because earlier this month I spent some time in the ONS headquarters in Newport with the team who put together this most significant of all numbers.

For the first time, they allowed cameras into their offices to show how GDP really comes into being - and the genesis might well surprise you.

At this point it might be worth explaining why this matters so much: there is arguably no other number out there that can swing the financial markets quite so much, that can influence Britain's feelgood factor, that dominates the headlines and strikes fear into politicians.

And yet there are many people who question whether we can really rely on the numbers.

Some economists argue that the GDP figures in recent months have painted a far more negative picture of the UK economy than is actually the case.

Some argue that Britain never really experienced a double-dip recession - but that this reality will only ever be confirmed many years into the future when the ONS revises those initial estimates.

So how GDP is put together really matters. And it all starts with the pounds in your pockets.

The first estimate of GDP is created from data collected in surveys of tens of thousands of surveys from businesses around the country - whether they're manufacturers, construction firms, retailers or others.

Each month a large sample of them is asked by the ONS to tell them their turnover (how much money is going through the till), along with a few other industry-specific questions which form part of the retail sales, manufacturing output and other releases.

The turnover number is what matters from the perspective of GDP. They fill the relevant questionnaire in and post it to the ONS (they can also submit the data through an automated telephone system).

When those envelopes arrive there the questionnaires are scanned and the numbers go into the ONS' systems.

The problem is that by the time that first estimate needs to be produced, the ONS only has 44% of the relevant data (the rest arrives in dribs and drabs over the following months, hence later revisions). In particular, the ONS only has early responses for the final month of the quarter.

So there are some pretty big gaps to be filled, and the ONS has to make some estimates about what the other data will eventually say when it comes in.

It relies for this on computer models, backed up by assumptions and calculations from the ONS staff themselves. After they make these calls they meet and discuss them in so-called "balancing meetings" - the statisticians ask each other whether the data are reliable and their assumptions have foundation.

During this entire period, those GDP assumptions and the ultimate figure are kept locked up (quite literally - there are safes into which they are put) such that only a dozen or so statisticians actually know the number before it comes out.

So far as anyone knows, there has never been a leak of a number as sensitive as this from the ONS. But 24 hours before the figures are published, selected ministers and officials also get a look.

The figures are revised again a month after that initial release, and then again a month later. During that period, more information has come in from quarterly surveys which measure families' and businesses' incomes, and other spending data.

As I said, GDP can be measured in terms of what we spend, what we earn and what we make - they should all add up to the same number, since what one person buys another person sells. And the extra data furnishes that initial estimate and, occasionally, contradicts it.

The ONS maintains that its record of revisions is acceptable by international standards. It points out that its surveys have far more respondents than those put together by independent competitors.

But some, most notably Kevin Daly of Goldman Sachs, argue that it has a tendency to revise the more distant history so substantially that often periods we thought at the time were slumps were actually booms.

A case in point is the early 1990s - at the time, the ONS said the UK was suffering a double-dip recession.

But by the end of the millennium it had revised its assessment - far from slumping, the UK was actually bouncing back forcefully at that point. When Norman Lamont referred to "green shoots", it turns out he was absolutely right.

Today, the GDP figures have been telling an altogether different story to the unemployment figures, which seem to suggest there never was a double-dip. Based on precedent, we are unlikely to know the definitive story for years to come.

Which implies that the ONS, and the way it puts together this most important of all numbers, will remain in the spotlight for the foreseeable future.

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Payday Loan Sites' Dirty Tricks To Boost Traffic

By Jason Farrell, Sky Correspondent

A Sky News investigation has found that some payday loan brokers have benefitted from hacking into websites to divert the history and status of a legitimate business to their domain.

This increases their ranking on Google, and the tactic has given unregulated brokers access to online traffic worth millions of pounds.

The findings come as the Office of Fair Trading (OFT) prepares its report into dirty tricks in the market, due to be published in February.

Every month, tens of thousands of potential customers use Google to search for payday loans.

The search engine has a complex algorithm based on a website's history and credibility which tries to ensure that users are directed to the most appropriate websites.

However, Google's natural listings system can be tricked. Sky News found three payday websites that were stealing the credibility of other websites to boost their ranking. The target victim sites included a music business, a graduate website and even a church website.

In November last year, Sky News discovered established music licencing website Ricordi was one of several domains that began ranking highly for selling payday loans on the front pages of Google. Clicking on the link diverted the user to a payday broker's site.

Dr Joseph Somerhalder says brokers have been 'stealing identities'

Web analyst Dr Joseph Somerhalder from search optimisation company Chillicow explained what was happening.

He told Sky News: "They hack into the website. They optimise the website for something that it is not about such as payday loans. Then they wait for the right moment, and then they forward all the history and all the credibility from the old website, the legitimate business, into the illegitimate business."

He added: "It's a bit like stealing your identity online. They take the website's identity and history and they point it somewhere else."

Ricordi is owned by Universal Music Group. A spokesperson for the company said: "We recently discovered the unauthorised access to our Ricordi UK website. UMG takes the protection of its sites very seriously and has implemented measures to prevent a recurrence of this type of event."

But other companies may not be aware of the hacking. Using web analysis software, we found that over 10,000 websites have been compromised by this technique on one server alone.

Sky News spoke to the owners of UK graduate website Gradfunding which was also in the process of being hijacked.

Dr Luke Blaxill, director of the website, said he was also trying to deal with the problem.

"To get rid of this we are going to have to rewrite every bit of code on the website and transfer it to a new server."

The payday loan intrusion meant his company was starting to fall down the listings for its own business operations and it could lose years of building up an online reputation.

Dr Blaxill said: "It has taken years for us to get to the position that we are in this particular market and for that effectively to be almost rewritten overnight by a scammer, is a real problem."

Gradfunding was among the target victim websites

Raiham Islam from Jar Applications, which fixed the problem for Gradfunding, told Sky News: "What they did was inject a malicious code into the web server, and the files trick Google by the method of cloaking.

"They then bomb the site with payday loan links to increase its ranking for payday loans and redirect the traffic to their scam website. That's when the hacker starts making money."

During the investigation we found church website Canada had been hacked for this purpose. We also discovered 21,000 payday loan links had been pointed at a Bonsai society website.

There are concerns these tactics leave UK loan customers exposed to unscrupulous, unregulated brokers.

Over the last two months Sky News conducted test searches on Google for payday loans which produced websites high in the natural listings that were in breach of OFT regulations.

Several had no consumer credit licence, a requirement for any loan broker and lead generator.

Some websites claimed to be 100% secure, but actually had no data protection when customers entered their bank details. This exposes customers to fraud and identity theft.

We also found many websites broke legal requirements on transparency to customers, such as failing to prominently display a representative APR or an address where the company can be contacted.

Sky News found three payday websites involved in dirty tricks

Some legitimate lenders in the industry have told us they are aware of the problem. Many of them advertise on Google's pay per-click service as an alternative to the natural listings.

One lender who did not want to be identified suggested the price of Google's sponsored links have gone up because demand has increased with legitimate companies struggling to get on the natural listings.

"Google could solve this problem by tightening up their algorithm" he suggested. "But they have no incentive to do so. We're all having to use the sponsored listings to get any traffic to our websites."

He added: "But customers don't realise that some companies on the natural listings don't have a consumer credit licence, which means they don't have to tell the customer how much they're going to pay back, which feeds into some of the problems we're seeing at the moment of customers not able to pay back their loans."

Google says its key motivation is to try to direct customers to the best websites.

A spokesman told Sky News: "As part of our on-going effort to reduce webspam and return high-quality websites to our users, we are constantly improving our search algorithm to better detect and decrease rankings for sites that we believe are violating Google's quality guidelines and engaging in webspam tactics to manipulate search engine rankings."

For legal reasons we are not naming the websites linked to hacking but we have passed our evidence to the OFT, which told us: "The OFT is clear regarding the standards it expects from those businesses that it regulates and has publicised an extensive suite of guidance documents. We take very seriously any evidence tending to show that businesses are not meeting the standards set out in our guidance.

"The guidance for credit brokers and intermediaries states that creditors should satisfy themselves that persons they deal with are appropriately licenced. Accepting leads from unlicensed sources would raise concerns about a lender's fitness to hold a consumer credit licence."

At one point during our investigation we found the highest ranking website on Google was a four-day-old domain registered to a field in California.

Just a few days in this position can earn the web owner tens of thousands of pounds. Yet this site was in breach of several regulations and displayed nothing on the website to suggest it was licenced to sell loans in the UK.

Last November, the OFT opened formal investigations into the tactics used by an number of payday lenders. But if the regulator wants to properly police the market, it seems it is going to have to work with Google.

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EasyJet Chair Rake In Departure Lounge

By Mark Kleinman, City Editor

The chairman of easyJet, Britain's biggest airline by passenger numbers and revenues, is to step down this summer after a four-year tussle with the company's founder over its fleet size and strategy.

Sir Mike Rake will leave once a successor has been identified, about three-and-a-half years after he took on the chairmanship.

EasyJet brought forward the announcement of Sir Mike's departure on Saturday afternoon following a leak to Sky News.

A statement had been due to be issued by the company next week but a spokesman said the company had decided to confirm news of Sir Mike's departure after its City advisers were made aware of the leak.

In the statement, easyJet said it had already started a process to recruit a new chairman.

The news of Sir Mike's intention to quit comes days after shares hit an all-time high on the back of a surge in more profitable business travellers using the airline. It also benefited from capacity cuts by rival carriers during the winter months.

That solid performance has not appeased Sir Stelios Haji-Ioannou, who - alongside a number of family members - is easyJet's largest investor.

Last week he threatened to sell his shareholding if the company proceeded with a major new aircraft order.

EasyJet is poised to join the FTSE 100 following its next quarterly review in March, which will mean that Sir Mike chairs two companies in the blue-chip index.

He is also chairman of BT, and was a leading candidate to replace Marcus Agius at the helm of Barclays following the bank's £290m fine for Libor rate-rigging.

"In advance of the forthcoming [annual general meeting] I wanted to make my position clear," Sir Mike said. 

"easyJet has by any definition enjoyed a period of success and profitable growth in the last three years. 

"As this takes the airline to the threshold of entry to the FTSE 100 it is the right time for me to stand down.

"Carolyn McCall and her management team have developed and implemented the right strategy for the airline which is already bearing fruit wth record profits, a healthy share price and strong dividends.

"The airline is now well positioned to continue to deliver profitable growth and returns for all its shareholders."

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