Exclusive: Lloyds Set To Pay Boss £1.4m Bonus

By Mark Kleinman, City Editor

Lloyds Banking Group is finalising plans to pay its chief executive an annual bonus of approximately £1.4m, although he will not receive it until taxpayers' stake in the bailed-out bank breaks even.

I have learnt that directors of Lloyds will meet early next week to sign off on the plan, which will be announced alongside the full-year results of Britain's biggest mortgage lender next Friday.

Sky News revealed earlier this month that Antonio Horta-Osorio's bonus would be approximately £1.5m, and that he would not receive it until the taxpayer's 39% stake returns to the black, which it will do if Lloyds' share price reaches 73.6p. The shares were trading on Friday morning at around 54p.

People close to Lloyds said that the final figure for Mr Horta-Osorio's bonus, which will be paid entirely in shares, would not be decided until next week and that it was still subject to adjustment, but added that £1.4m was broadly the number proposed by Lloyds' remuneration committee.

Wary of a potential political backlash, Lloyds is understood to have submitted its proposal to pay Mr Horta-Osorio a bonus to UK Financial Investments (UKFI), the body which manages the taxpayer's stake in the bank, in recent days. George Osborne, the Chancellor, has also been informed of the plan.

Lloyds' concern stems from the fact that it was forced to set aside just over £2bn in 2012 to compensate customers who were mis-sold payment protection insurance (PPI) policies.

That figure is certain to increase when Lloyds unveils full-year results next week, with another substantial provision expected to be taken for the fourth quarter of the year.

Although the PPI mis-selling itself took place long before Mr Horta-Osorio was poached from Santander UK, Lloyds was this week fined more than £4m by the Financial Services Authority for shortcomings in the way it handled complaints.

Lloyds is also expected to announce a "material" provision for the mis-selling of interest rate swaps to small businesses in next week's results.

Last year, the Lloyds chief executive waived his annual bonus after taking several weeks of leave as a result of fatigue.

Under the terms of his contract, Mr Horta-Osorio is eligible for an annual bonus worth 225% of his £1.061m salary, equating to about £2.3m. If Lloyds does pay the anticipated figure of about £1.4m, it would equate to roughly 60 per cent of the maximum potential award. The chief executive is also eligible for a long-term share award worth up to £3m, subject to deferral periods, for each year of service.

They added that it was still possible that he would waive the payout although a political backlash looked unlikely, one insider said.

In awarding Mr Horta-Osorio his bonus, Lloyds directors are expected to point towards the progress he has made in reshaping the bank since he took over nearly two years ago. Bad debt charges are expected to have fallen again, with customer service targets also having been met.

Last year, Lloyds announced a statutory loss for 2011 of £3.5bn, a figure which included £3.2bn of PPI compensation provisions. Analysts expect that the bank will report a loss for 2012 of £544m on the same basis, while the underlying performance of Lloyds' business, which strips out one-off charges such as PPI, is forecast to have been profitable to the tune of more than £2bn.

Allies of Mr Horta-Osorio pointed out that Lloyds' shares were the top performer in the FTSE-100 last year, rising by 85 per cent, and among the leading risers in the European banking sector.

The bosses of Barclays and Royal Bank of Scotland have waived their bonuses for 2012 amid various reputational crises. The chief executives of HSBC and Standard Chartered are expected accept their payouts, while the boss of Santander UK has already accepted her multimillion pound award.

Lloyds declined to comment.

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Britain's Premium Credit Rating Downgraded

Rating agency Moody's has stripped Britain of its top-grade AAA credit rating, citing slow growth and a rising debt burden.

After the international agency announced the one notch drop to AA1, Chancellor George Osborne said it was a "stark reminder" of the country's debt problems, but said the coalition was determined to stick by its plan for economic recovery.

The downgrade is a major blow for Mr Osborne, who has been coming under increasing pressure to take action to stimulate the economy.

Moody's said Britain's recovery was proving to be significantly slower than previous rebounds from recession and it did not expect the situation to change.

"[There's] increasing clarity that, despite considerable structural economic strengths, the UK's economic growth will remain sluggish over the next few years," it said.

Moody's is the first of the major credit rating agencies to knock the UK off of its top rating.

Moody's said it did not expect Britain's slow recovery to change

The ratings agency also cut the Bank of England's AAA rating by one notch, also to AA1.

Sky Economics Editor Ed Conway said: "The fact that Britain has lost its AAA crown for the first time since credit ratings were given to the UK back in the 1970s, it's a really big blow to Britain's reputation.

"It's something of an economic blow, but in a way it's more of a political problem for George Osborne. He made a key part of the Conservative election pledge to safeguard Britain's credit rating."

On Friday evening, the Chancellor said: "We have a stark reminder of the debt problems facing our country - and the clearest possible warning to anyone who thinks we can run away from dealing with those problems.

"We are not going to run away from our problems, we are going to overcome them."

Moody's said that the British economy is constrained both by the troubled global economy and the drag from businesses and the Government slashing its debt burdens.

"Moreover, while the Government's recent Funding for Lending Scheme has the potential to support a surge in growth, Moody's believes the risks to the growth outlook remain skewed to the downside," it said.

Mr Osborne has used maintaining the top credit rating for government bonds as one of the key arguments for the Government's austerity programme.

However, Labour has insisted that withdrawing demand from the economy has put it more at risk by stunting growth.

Labour shadow chancellor Ed Balls said: "This credit rating downgrade is a humiliating blow to a Prime Minister and Chancellor who said keeping our AAA rating was the test of their economic and political credibility.

"In the Budget the government must urgently take action to kick-start our flatlining economy and realise that we need growth to get the deficit down. If David Cameron and George Osborne fail to do so and put political pride above the national economic interest we face more long-term damage and pain for businesses and families."

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Food Bills May Rise Amid Growing Meat Tests

By Tom Parmenter, Sky News Correspondent

Consumers are being warned that food bills may rise if high demand for meat testing continues.

Since the start of the horsemeat scandal, laboratories all over the UK have been inundated with requests to test different meat products.

The latest Food Standards Agency results last week showed 29 positive results for horse DNA out of 2,501 tested beef products.

At Worcestershire Scientific Services laboratory staff have been working early mornings, late nights and weekends to keep up with demand.

Even some of the equipment has been unable to keep up with almost continual testing.

Laboratory manager Paul Hancock told Sky News that funding is tight, explaining: "The FSA do support the laboratory to a degree but things are very very difficult.

"If the consumer wants quality food they have to be prepared to pay for a degree of policing that."

Checking a meat sample for DNA from other species takes three days and costs between £75 to £100 per sample.

The number of labs capable of carrying out proper testing though has fallen over recent years due to funding cuts. In April, Somerset County Council will close its lab.

Those that remain open operate as competitive businesses rather than sharing information, equipment and practices with each other.

Mr Hancock added: "Ten or 15 years ago the labs used to work closely together that relationship has broken down because of commercial activity and that makes life a whole lot more difficult as well."

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Tax Cheats Named By HMRC For First Time

HMRC has published the names of nine individuals and businesses which it says each owe more than £25,000 in tax.

The tax authority described those named as "deliberate defaulters" who had repeatedly failed to co-operate with the taxman.

HMRC said those on the list had already received penalties for either errors in their tax returns or for failing to comply with their tax obligations.

But it stressed that the entries were specific to certain dates, and those named may no longer be defaulting on their tax.

The details published included names, addresses, occupations and the total amount of tax owed.

The Exchequer Secretary to the Treasury, David Gauke, said: "HMRC is dedicated to clamping down on the small minority of people who break the law, and finding and taking action against tax cheats who try to evade their responsibilities.

"The publication of these names sends a clear signal that cheating on tax is wrong and reassures people who pay their taxes - the vast majority - that there are consequences for those who refuse to tell HMRC about their full liability.

"It also encourages defaulters to make a full and prompt disclosure and cooperate with HMRC to avoid being named."

The following were on the list:

:: Southport Leisure, a licensed bar and club on Coronation Walk, Southport

:: Joseph Tyrrell, a hairdresser from Prescot Road, Liverpool

:: The Trade Beverage Company which bought and sold wine on Marrion Drive, Cheshire

:: Rafique Maroof Raja, a licenced grocer from Main Street, Kirkcaldy

:: S Stewart, a pipework specialist from Bishops Court, Liverpool

:: David Alan Jay, who works in property maintenance from Roseberry Gardens, Essex

:: Gatemain Contractors, a building company, on Holly Road, Rochester

:: Menemis, a knitwear manufacturer trading as Unlimited Knits, on Byron Industrial Estate, Nottingham

:: Brian Clifford Tattersall, a coach operator from Pixmore Avenue. Bolton

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Fuel Prices 'Head For Highest Level Ever'

Motorists have been warned that petrol prices may soon reach their highest level ever.

The AA said Sterling's slide and market speculation could push prices to record levels by Easter.

The warning comes as tanker drivers at the Grangemouth refinery, which supplies Scotland, Northern Ireland and northern England, begin a three-day strike in a row over pay and pensions.

After surging 5p a litre over a month, the price of petrol at the pumps has gone up a further 1p in the last five days, the AA said.

It revealed that the average cost of petrol in the UK is now 138.32p per litre, with diesel having risen 4.78p from its mid-January price to stand at an average of 145.10p.

The latest figures show that petrol has risen 6.24p since early January, adding £3.12 to the cost of refilling a typical 50-litre tank.

The AA said filling up the 70-litre tank of a Ford Mondeo now costs £4.37 more than it did six weeks ago.

A two-car family's monthly petrol cost has risen £13.25 with the current price surge.

Petrol price component breakdown over the past decade

It added that drivers have been caught between the a pound weakened against the dollar and soaring wholesale prices, both due to stock market speculation.

Regionally, Yorkshire and Humberside and the north of England are the cheapest for petrol at the moment at 137.6p a litre, with prices in London and Scotland at an average of 137.8p. Northern Ireland is the most expensive at 138.7p.

Yorkshire and Humberside remains the cheapest region for diesel, averaging 144.2p, while East Anglia, Northern Ireland and south-east England are the most expensive at 145.2p.

AA president Edmund King said: "This latest surge in fuel prices and its impact on spending indicates that UK drivers and families can't take any more.

"We're no longer talking of the motorist as a cash cow for tax and speculator greed, but a horse slowly but surely being flogged to death.

"This is the third 10p-a-litre wholesale price surge in 11 months, given extra vigour by currency speculators betting against the pound."

Government revenue from fuel duty has also been hard hit, due to suppressed volumes sold as Britons cut back on non-essential journeys.

HM Revenue and Customs figures showed that January's UK petrol sales fell to the lowest tracked by the Government in 23 years.

Drivers consumed 1.465 billion litres of petrol last month, down 14 million litres on the previous all-time low set in March last year and nearly 100 million litres below December's consumption of 1.564bn litres.

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Big Four Accountants 'Dominating Market'

An investigation into the UK's audit market finds that competition is restricted by factors making it hard for companies to switch accountants.

The Competition Commission (CC) said the so-called "big four" audit firms - Deloitte, Ernst & Young, KPMG and PricewaterhouseCoopers - dominate the market, as revealed by Sky's City Editor on Thursday. 

It said it was exploring implementing "mandatory tendering" of audit contracts and "mandatory rotation" of firms by companies.

Britain's largest listed companies lack bargaining power, the CC said, because it is difficult for them to switch firms, given the difficulties in comparing alternatives and the costs involved.

Its provisional findings also highlighted that audit firms often ignore the interests of their primary customer - companies' shareholders - meeting the demands of executive management instead.

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HMV To Close 37 More Stores With 464 Jobs Cut

Is Your Local HMV Being Axed?

Updated: 12:15pm UK, Wednesday 20 February 2013

The latest 37 HMV stores identified for closure are:

Ashford, Basildon, Bolton, Cheltenham, East Kilbride, Enfield, Folkestone, Glasgow Argyle, Gloucester, Grimsby, Hatfield Galleria, Heathrow T5 Departure Level, Heathrow Terminal 1, Heathrow Terminal 3, Heathrow Terminal 4, Hemel Hempstead, High Wycombe, Isle of Wight, Lancaster, Leadenhall, Mansfield, Middlesbrough, Newbury, Newcastle Silverlink, Newport, Nuneaton, Redditch, Salisbury, Scarborough, Southport, Stafford, Staines, Stockport, Swindon, Taunton, Torquay, Woking.

The 66 stores already earmarked for closure were:

Ashton-under-Lyne, Ballymena, Barnsley, Bayswater, Belfast Boucher Road, Belfast Forestside, Bexleyheath, Birkenhead, Birmingham Fort, Blackburn, Boston, Bournemouth Castlepoint, Bracknell, Burton-upon-Trent, Camberley, Chesterfield, Coleraine, Craigavon, Croydon Centrale, Derry, Dumfries, Durham, Edinburgh Fort, Edinburgh Gyle Centre, Edinburgh Ocean, Edinburgh Princes Street, Edinburgh St James, Falkirk, Fulham, Glasgow – Fort, Glasgow – Silverburn, Glasgow Braehead, Huddersfield, Kirkcaldy, Leamington Spa, Leeds White Rose, Lisburn, Loughborough, Luton, Manchester 90, Moorgate, Newry, Newtonabbey, Orpington, Rochdale, Scunthorpe, South Shields, Speke Park, St Albans, St Helens, Stockton-on-Tees, Tamworth, Teesside, Telford, Trocadero, Wakefield, Walsall, Walton-on-Thames, Wandsworth, Warrington, Watford, Wellingborough, Wigan, Wood Green, Workington, Wrexham.

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Private Firms 'Better To Run Prisons', Report

Private firms are better at running prisons than the public sector and all jails should be subject to open competition, according to a think tank.

The Government would be wrong to limit the role of private companies within prisons to small contracts, such as maintenance and catering, right-wing group Reform said.

Ten out of 12 privately-managed prisons have lower re-offending rates among offenders serving 12 months or more than comparable public sector prisons, a report by the group found.

Researcher Will Tanner, who wrote the report, said: "Twenty years of private prisons have created an effective market which is ready to grow.

"Evidence shows that a greater role for the private sector will advance the 'rehabilitation revolution' which ministers want to deliver."

Private firms have been managing prisons since 1992, but in November last year Justice Secretary Chris Grayling signalled a move away from wholesale privatisation as he decided four prisons, including G4S-run HMP Wolds, should be run by the public sector.

Two contracts to run five prisons - Acklington and Castington, which have since formed Northumberland prison, and three in South Yorkshire - will proceed to the next stage of the competition with an announcement expected next spring.

Mr Grayling said private firms will be brought in to all public prisons to run maintenance, resettlement and catering to save up to £450 million over six years.

Policy groups, including Reform, said the decision amounted to the end of competition for prison management between the public and private sector, although Mr Grayling insisted it did not rule out further prison-by-prison competitions in the future.

The report found 12 out of 12 private jails performed better than the public sector at "resource management and operational effectiveness", while seven out of 12 were better at "reducing reoffending".

However, seven out of 12 public prisons performed better than private jails at "public protection".

Justice Minister Jeremy Wright said: "Reoffending rates across the entire prison estate are too high and we are pressing ahead with major reforms to tackle this unacceptable problem.

"And let's be clear, there has been no U-turn on the use of prison competition.

"The cost of running our prisons is too high and must be reduced.

"The recent competition process identified a new approach for reducing costs and improving services aimed at reducing reoffending at a faster rate involving the private sector."

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Sony Reveals Next-Generation PlayStation 4

Sony has unveiled its PlayStation 4 console at a live-streamed event in New York, and said it will be part of a new "ecosystem".

The console is the company's first major release since the PlayStation 3 went on sale in 2006.

Among other features, it will allow users to stream and play video games hosted on servers. Users will also be able to record their in-game footage and share it via social networks.

Sony said the console is powered by an eight-core processor, giving it the feel of a "supercharged PC".

The console's new controllers feature a touch pad and headphone socket

A new controller was also shown off at the event.

Dubbed "DualShock 4", it will have a touch pad and a "share" button, as well as a headphone socket and a light bar which can be tracked by a camera to detect where the player is - according to lead system architect Mark Cerny.

However, the look of the new console, and its eventual price, were not revealed at the event.

Sony said it is planning to release the console - in some countries at least - during the year-end holiday season.

Andrew House, group chief executive of Sony Computer Entertainment, said: "Today marks a moment of truth and a bold step forward for PlayStation as a company.

"Today we will give you a glimpse into the future of play."

Sony purchased US cloud-based gaming company Gaikai for $380m in July. Using that technology, the new console will offer a cloud-gaming service.

Some of the console's first games were also announced at the event, including racing simulator Drive Club and first-person shooter Killzone: Shadow Fall.

The event is seen by many as an attempt to give Sony a head start ahead of Microsoft's expected unveiling of the next Xbox in June - at the E3 video game expo in Los Angeles.

Last time around, the Xbox 360 beat the PlayStation 3 to market by one year.

However the new device arrives amid a decline in video game hardware and software sales. Research firm NPD Group said game sales fell 22% to $13.3bn in 2010.

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Google Share Price Breaks $800 Barrier

Google's stock price has topped $800 (£516) for the first time amid renewed confidence in the company's ability to reap higher profits.

The milestone comes more than five years after Google's shares initially hit $700, but then tumbled as the 2007 financial meltdown sparked global recession.

Its resurgent stock is an implicit endorsement of co-founder Larry Page, who replaced his managerial mentor Eric Schmidt as chief executive in April 2011.

Google's stock has risen by 36% since Mr Page took over.

Most of the company's gains have occurred in the past seven months - a period that has overlapped with a sharp downturn in the stock price of rival Apple.

The iPhone maker's market value has plunged by around $230bn, or 35%, since late September.

But it remains the most valuable US company with a market value of $432bn. Google now ranks third with a value of $266bn.

Tuesday trading saw Google stock climb 1.8% to close at $806.85.

Standard & Poor's Capital IQ analyst Scott Kessler said: "There are probably even going to be people talking whether Google's stock can get to $1,000.

"Never underestimate the excitement that can be caused by a rising stock market and a rising security."

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Tesco: Supermarket Bottom Of Which? Survey

Tesco is the UK's least popular supermarket - and Waitrose is the most liked - according to a new survey.

Waitrose received an overall satisfaction score of 82%, including five-star ratings for its customer service and the quality of its fresh produce.

Meanwhile Tesco scored just 45% - placing it at the bottom of the poll of 11,492 people by consumer watchdog Which?

It also received poor marks for its pricing, store environment, quality of fresh produce and customer service.

Discount supermarkets Aldi and Lidl came second and third best with scores of 74% and 69% respectively, beating some of their bigger rivals such as Morrisons (59%), Sainsbury's (58%) and Asda (53%).

Aldi and Lidl were the only supermarkets to get four-star ratings for their pricing, with 97% of those surveyed saying they both offer good value.

Fourth place went to Marks & Spencer with 68%, while the Co-operative scored just above Tesco with 48%.

Ocado took top spot in the online ranking with 81%, followed by Waitrose (74%), Sainsbury's (71%), Tesco (63%) and Asda (61%).

The poll revealed that consumers' biggest irritation when shopping is not being able to easily compare prices because of different unit measurements, with 37% reporting that this annoyed them.

They also wanted supermarkets to keep special offers simple, with 55% preferring straight discounts ahead of other offers such as petrol vouchers (16%) or buy-one-get-one-free deals (11%).

A Tesco spokeswoman said: "Millions of customers shop regularly with Tesco and we are always looking at ways to improve their shopping experience.

"We have made a £1bn commitment to make Tesco better for our UK customers and since this survey in October 2012, we have had an encouraging Christmas and New Year and are delivering further improvements this year.

The survey was conducted before horsemeat was discovered in products sold as beef, triggering a probe by the Food Standards Agency which has embroiled British supermarkets.

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New 4G Phone Operators Announced By Ofcom

Telecoms watchdog Ofcom has granted permits for more mobile phone firms to operate faster 4G networks.

The four new winners were announced as Hutchison 3G, a division of BT called Niche Spectrum,Telefonica O2 and Vodafone.

Existing 4G operator Everything Everywhere was also given expanded bandwith.

Ofcom said in a statement: "This is expected to lead to faster mobile broadband speeds, lower prices, greater innovation, new investment and better coverage.

"Almost the whole UK population will be able to receive 4G mobile services by the end of 2017 at the latest."

Ofcom said the purpose of the auction was to "promote strong competition in the 4G mobile market".

However new entrants in the sector, including Chinese-owned firms, failed in their bids.

The regulator said the failure of new entrants was simply because their bids were too low.

The auction raised £2.34bn for the taxpayer but the Government had hoped for a total of £3.5bn.

There was a reserve price on the auction of £1.36bn.

Britain's last big mobile phone spectrum auction was in 2000 for 3G services and raised more than £20bn.

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Horsemeat: Nestle Withdraws Products In Scandal

Nestle has become the latest food company to be hit by the horsemeat scandal after it removed beef pasta meals from shelves in Italy and Spain when tests revealed traces of horse DNA.

The Swiss-based firm, one of the world's largest food companies, said it had informed the authorities a week after it had said products under its labels were not affected by the horsemeat scandal.

It withdrew two chilled pasta products - Buitoni Beef Ravioli and Beef Tortellini - in Spain.

Both products tested were found to contain more than 1% horse DNA.

Lasagnes a la Bolognaise Gourmandes, a frozen product for catering businesses produced in France, will also be withdrawn.

A statement from Nestle Europe said: "We are now suspending deliveries of all our finished products produced using beef supplied by a German firm, H.J. Schypke, a subcontractor of one of our suppliers, JBS Toledo N.V.

"Our tests have found traces of horse DNA in two products made from beef supplied by H.J.Schypke.

"The levels found are above the 1% threshold the UK's Food Safety Agency used to indicate likely adulteration or gross negligence.

"We want to apologise to consumers and reassure them that the actions being taken to deal with this issue will result in higher standards and enhanced traceability."

Concerns over horsemeat first emerged in January when Irish authorities found traces of horse in beefburgers made by firms in Ireland and Britain and sold in supermarket chains including Tesco and Aldi.

The scandal then intensified when French firm Comigel alerted Findus this month to the presence of horsemeat in meals it made for the company, which were also on sale in Britain.

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Supermarkets 'Now Take 58% Of Retail Spend'

Nearly 60% of all retail spend in now made in supermarkets, according to a new report.

The Payments Council study found that 58p in every retail pound is handed to them, up from 46p a decade ago.

The changing trend shows that in the last 10 years supermarkets have taken an extra 26% of retail sector spending.

The Payments Council said the latest data also showed that the UK spent £58bn on entertainment over the decade, 60% more than in 2001 and outstripping growth in consumer spending by over a quarter.

It came as spending in restaurants and cafes was revealed to have almost doubled in the same period.

According to the report, The Way We Pay, a number of consumer trends have been combined for the first time.

It said cash purchases continue to migrate to debit card payments but it warns that plastic spending may become history. The study said that mobile phones, led by the smartphone revolution, look increasingly likely to become the primary payment vehicle.

The Payment Council also said cheque usage halves every five years.

Smartphones are expected to become an important payment vehicle

In 2003, 43% of our retail spending by value was with cash, but now it is just 30% - with the majority being for payments under £5.

Chief executive Adrian Kamellard said: "We scarcely notice the steady changes in the way we pay, yet someone in their thirties today will see more change in their lifetime than in the entire history of money.

"Even recent innovations such as payment via a mobile phone, which ten years ago some felt to be science fiction, will soon be commonplace. The 2000s were the decade of the debit card.

"The 2010s are likely to be the decade of the mobile phone.  Just as we can't imagine how we ever did without the internet, many people will soon wonder how we used to be so dependent on cash and cheque - 20 years from now even cards may seem archaic."

The report also looked at how leisure pursuits continues to shift for many people

Spending in furniture and homeware shops is down by nearly half during the last decade, as is spending in DIY stores.

Meanwhile, the digital revolution of the media has now hit the delivery of publishing - newsagents have lost nearly 20% of their trade in the past 10 years.

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Mobile Network EE Posts Pre-Tax Loss Of £249m

Mobile provider EE has confirmed a loss before tax of £249m for 2012 - after a loss of £113m the previous year.

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FTSE 100 Firms' Legal Liabilities Shoot Up

The amount of money Britain's companies have set aside to cover regulatory and legal costs has shot up, according to legal publisher Sweet & Maxwell.

It said the legal liabilities reported by the FTSE 100 companies jumped by 22% last year to £22.1bn - up from £18.2bn the previous year.

This reflects the amount companies set aside to cover regulatory and legal costs in 2013.

Aggressive fines are the main cause of the increase, Sweet & Maxwell said - rather than more legal cases between businesses.

The banking industry saw the sharpest rise following a year in which it was forced to pay out billions of pounds to customers mis-sold payment protection insurance.

Legal liabilities in the sector, which made almost 30% of the annual total, shot up from £991m in 2011 to £6.3bn last year.

But it was the oil and gas industry that was hardest hit, setting aside £8.1bn - although this was less than the £8bn clocked up in 2011.

The managing director of Sweet & Maxwell, Teri Hawksworth, said: "When the credit crunch started there was the expectation that legal liabilities would rise as commercial pressure led to more litigation between companies.

"What was not so widely forecast was that the biggest source of this pain would be from regulatory bodies."

These include the Financial Services Authority in the UK and the US Securities and Exchange Commission among others, she said.

Ms Hawksworth added that it remains to be seen whether the fines are a result of normal processes or because regulators and Government agencies are following public pressure to punish "big business" more severely.

Businesses are responding to the rise in these costs by broadening the role of in-house legal teams, she said.

"In-house counsel is moving from a role of just managing the costs of external law firms to clear up after a problem to taking a bigger role in ensuring that legal problems do not arise in the first place."

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Half Of Train Firms Lagging In Passenger Poll

More than half of train companies have a customer satisfaction score of 50% or lower, according to a Which? survey.

Overall, only 22% of train travellers feel their service is improving despite above-inflation fare rises in January.

Bottom in the 19-company satisfaction table was First Capital Connect, with only 40% of its passengers satisfied with its service.

The next least-satisfied passengers were those travelling on Greater Anglia trains,  with the company only scoring 42%.

Other companies where satisfaction levels were low included Southeastern (43% satisfied), First Great Western (43%), Northern (44%) and London Midland (45%).

Also below 50% were South West Trains (47%) Southern (48%) and Arriva Trains Wales (48%). The East Midlands Trains' figure was 50%, leaving 10 companies at 50% or worse and nine at better than 50%.

Top of the satisfaction table, compiled from responses from 7,500 regular train users, was West Coast main line operator Virgin Trains with a score of 67%.

London Overground was second with 65%, while the London to Tilbury and Southend company c2c and Merseyrail both scored 64%.

On London Overground, where new trains have been introduced in recent months, 60% of users said they felt the service had improved in the past two years.

But Which? said at the other end of the scale, a quarter of passengers reckoned they were now getting a worse service on London Midland where staff shortages have caused problems in recent months.

Which? said: "One First Capital Connect customer told us: 'The price has increased and the trains get more and more crowded. I never see any improvements for the extra money I am paying'.

"And a Southeastern passenger said: 'The prices are terrible, the service is bad and trains are often delayed, cancelled and dirty.'"

The survey also showed that 40% of train travellers are likely to reduce the number of journeys they make as a result of the recent price increases which have season tickets rise by an average of 4.2%.

But a third of commuters said they did not have an alternative way of getting to work and would just have to pay more.

Responding to the Which? survey, a spokesman for the Association of Train Operating Companies said: "The independent watchdog Passenger Focus surveys up to eight times as many people a year and last month reported 85% of passengers are satisfied with their service - a record high."

Bob Crow, general secretary of the RMT transport union, said: "It is about time these basket-case private train companies like First Capital Connect were booted off Britain's railways for good and their franchises returned to public ownership.

"This current tolerance of these private rail spivs by the Government is reward for total and abject failure on an epic scale."

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India Visit: David Cameron Leads Trade Mission

By Joey Jones, Deputy Political Editor, in Mumbai

David Cameron has arrived in India where he is heading the largest ever trade delegation to travel overseas with a British Prime Minister.

Mr Cameron is anxious to drum up the prospects for business deals, but knows that there is a risk that his trip will be clouded by corruption allegations surrounding the sale of luxury AgustaWestland helicopters to India.

The Indian media and political arena has been dominated for days by a corruption probe, which has led to arrests in Italy where AgustaWestland's parent company Finmeccanica is under investigation.

The Prime Minister knows there is a risk that the deal - which has already been part-completed - could end up cancelled, but is anxious to ensure his schedule is not derailed by the helicopter affair.

On arrival, Mr Cameron travelled to Mumbai for a day of business-focused meetings ahead of talks with the Indian Prime Minister and President in Delhi.

Mr Cameron has frequently stressed the value he places on working to improve the UK's trade relationships overseas.

Among the party of more than 100 joining Mr Cameron are representatives of major companies like Rolls-Royce, BAE Systems and BP, small businesses, universities, football's Premier League, the London Underground and nine parliamentarians.

On this trip he is likely to suggest that the relationship with India had been neglected under the previous Labour government, but that it is a priority for the current government.

Before the visit he told the Hindustan Times: "Frankly, Britain did neglect this relationship during the first decade of this century.

"But under my Government we're determined to turn that around.

"Trade grew at over 20% in 2010 and 2011. We're reaching out beyond the biggest cities, with the biggest diplomatic footprint of any country in India."

Ministers have set themselves a target of doubling bilateral trade over the course of the parliament.

But the speed of growth in India is such that Mr Cameron knows opportunities to trade are continuing to expand above expectations; and UK ministers and companies alike need to be ready to take advantage.

He has also indicated that he is planning to relax visa requirements to attract Indian business visitors to the UK.

Asked by the Hindustan Times about business concerns about the difficulty of obtaining UK visas, Mr Cameron said: "I think there's more we can do here and that's an area where I hope we can put an even more attractive offer on the table during this trip."

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Home Ownership '£1,440 Cheaper' Than Renting

The cost of buying a home has become £1,440 a year cheaper than renting, according to new research.

Halifax found the average monthly costs associated with buying a three-bedroomed house stood at £621 in December, which is £120 cheaper than the typical monthly rent of £741 on a similar property.

The latest figures are an about-turn from December 2008, when buying a home was £217 a month more expensive than renting.

In recent years the gap has widened amid house price falls and record low interest rates which have made borrowing cheaper for those who can get access to a mortgage.

Meanwhile, increased demand in the rental sector from those struggling to raise a deposit or meet lenders' borrowing criteria has pushed up rental costs.

Home buying costs have declined by one third (34%) over the past four years, while average monthly rents have been pushed up by 14%, the study found.

The gap between buying and renting has widened by £21 a month over the past year. At the end of 2011, the monthly cost of home buying was £99 lower than renting.

Buying was found to be more affordable than renting in every UK region.

Buying is most affordable compared with renting in London, where the monthly difference is £193, while in Yorkshire and the Humber buying is just £1 a month cheaper than renting, Halifax found.

Martin Ellis, housing economist at Halifax, said that while the "financial attractiveness" of buying a home has improved in recent years, the tough economy is still holding would-be home buyers back.

He said: "Concerns over job security and raising a deposit are the main obstacles to people buying their own home. However, it is worth noting that once home buyers are on the first rung of the ladder, their monthly costs are notably lower."

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Osborne Plays Down Talk Of RBS Share Giveaway

By Katie Stallard, Moscow correspondent

George Osborne has played down claims he plans to give British taxpayers up to £400 in Royal Bank of Scotland shares before the next election.

The Chancellor, speaking to Sky News at a G20 meeting in Moscow, said it was too early to consider handing out shares and returning the bailed out bank to the private sector.

His intervention came after reports that Economic Secretary to the Treasury Sajid Javid was exploring plans to sell the Government's stake by 2015.

The Chancellor insisted a sell-off could not happen soon because it would mean a huge loss to the taxpayer, but he notably did not rule out such a move.

Mr Osborne said: "It is just a premature discussion about what to do with the shares when we get to the point where they are worth what the country paid for them.

"Gordon Brown bought them at a price that they are not worth today and we have got to get the Royal Bank of Scotland to a point where it is worth what the taxpayer paid.

"Then we can have a no doubt big national discussion about what to do with the shares and how to return it to the private sector."

RBS was bailed out with £45bn in public funds in 2008 at the height of the financial crisis and is now 81% owned by the state.

Royal Bank of Scotland is 81% state-owned after a £45bn bailout

In Moscow for the finance ministers' meeting, Mr Osborne also renewed his call for a global tax crackdown and issued a warning about international "currency wars".

There is increasing concern about competitive devaluations between major exporting economies as they struggle to recover from the global downturn.

Japan has been criticised for weakening the Yen, which is down 15% against the dollar since September, to give its exporters a price advantage in the short term.

"These so-called currency wars are what in previous decades have led to huge problems in the international economy," the Chancellor said.

"I think people will be pleasantly surprised by the strong statement that you'll see from the G20 today that currency is not a tool of economic warfare.

"What we want to do in our own countries is put our own houses in order and make our economies competitive and our currencies will reflect that rather than being used as a weapon to achieve it."

On tax, Mr Osborne said current rules are out of date and that Britain would lead efforts to stop companies shifting their profits around the globe to avoid large bills.

"The international rules on taxes haven't kept pace with changes in the world economy, changes in the way we shop online and use the internet so we're taking action with countries like France, Germany, and the United States," he said.

"Britain is leading the way in getting a set of rules that mean that businesses can come to Britain, and Britain is one of the best places to do business, but also when they come to Britain  - they pay their taxes.

"It means that big international companies that may have their headquarters in one country, their shops in many other countries, may locate their so-called intellectual property in another country altogether, perhaps a low tax place like Bermuda or the Cayman Islands.

"They'll find that a more difficult arrangement because the international tax rules will change and they will have to pay taxes much more where the profits are generated - that's the objective."

But he acknowledged  that Britain could not act alone and that they needed global consensus to make it happen.

Just getting agreement on the need for a crackdown from the 20 countries represented in Moscow on Saturday would represent significant progress in itself.

Mr Osborne said: "There is no single law Britain can pass that will make this happen.

"This has to be done internationally and so we are working with other countries to make sure it does happen and that the tax laws which were actually created about a 100 years ago are appropriate for an economy of the 21st century rather than the 20th century."

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Michael Fallon Eyes £65bn Kazakh Trade Deals

By Mark Kleinman, City Editor

Michael Fallon, the Business Minister, will fly to Kazakhstan on Sunday in an attempt to help British companies win a share of $100bn (£65bn) in new trade deals.

Mr Fallon, who was promoted in last autumn's Cabinet reshuffle, will visit resource-rich Kazakhstan aiming to bang the drum for companies with a big presence there, including BG Group, the gas producer, and Rio Tinto, the mining group.

Trade ties between Britain and Kazakhstan are relatively modest in scale, with UK exports to Kazakhstan in 2011 standing at £530m, and UK imports just £459m.

British companies have won $7bn (£4.5bn) in contracts in Kazakhstan in the last ten years, but Mr Fallon believes the opportunity is much more substantial than that, with up to 15 times that sum available in contracts during the next decade.

"The French and the Germans are already there, on the ground, and we have to be relentless in pursuing opportunities for British trade," he said.

His trip will be the first by a business minister since the last general election to the central Asian country.

During talks with ministers and government officials, Mr Fallon is also expected to discuss the operations of GlaxoSmithKline and HSBC, which also have a presence in Kazakhstan.

Tens of millions of Britons do already have an exposure to the Kazakh economy through investments made by pension funds in companies such as ENRC, the FTSE-100 miner.

Mr Fallon's trip to Kazakhstan will come in the same week that David Cameron travels to India accompanied by the biggest-ever business delegation to visit the country.

The Prime Minister is expected to promote access to the vast Indian market for British retailers as well as discuss a string of major defence and aerospace deals.

His visit takes place amid deepening concerns that the UK's trade ties with India are faltering, placing the Coalition's target of doubling trade by 2015 in doubt.

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