UK Economy: GDP Growth Accelerates To 0.8%

The Chancellor claims there is now "real momentum" in the UK's economic recovery after GDP growth of 0.8% was measured in the third quarter.

The Office for National Statistics (ONS) said it marked the strongest period of growth in more than three years - with services, construction and manufacturing all expanding.

It was also the third successive period of improving output, in line with the expectations of economists, though some had forecast growth to have reached 1%.

The ONS said construction - a sector bolstered by Government initiatives such as Help to Buy - surged by 2.5%.

George Osborne said: "This shows that Britain's hard work is paying off & the country is on the path to prosperity."

Prime Minister David Cameron tweeted: "Today's encouraging #GDP growth figures are another sign we are turning a corner."

Labour argued the growth was "long overdue".

Overall GDP was 1.5% ahead of the same period last year - a time when the economy was being boosted by the Olympics and Paralympics.

But the economy remains 2.5% off its pre-recession peak at the start of 2008.

During the third quarter, construction was boosted by new work on private housing and private commercial building as well as domestic home repair and maintenance but remained 12.5% off its 2008 high.

Housebuilders have been buoyed by the Government's Help to Buy scheme, which recently launched a new phase offering mortgage guarantees.

Production grew by 0.5%, though this remains 12.8% off its 2008 level, while within this manufacturing improved 0.9% in the third quarter.

The powerhouse services sector, which represents three-quarters of economic output, grew by 0.7% and is now 0.6% above its pre-crisis peak.

The largest contributions here came from business services and finance, followed by distribution, hotels and restaurants.

But the wider statistics highlighted one piece of bad news - in terms of UK growth.

The contribution from utilities - including gas and electricity - tumbled by 6.8% in the period, possibly a result of the warm summer compared to the same period last year which was largely a washout and cool.

The figure was seen as a potential factor behind the decision among energy suppliers to increase household bills - to make up for lower demand.

Chris Williamson, chief economist at Markit, said: "Britain is booming again with the economy showing the most sustainable and robust-looking upturn since the financial crisis."

But Alan Clarke of Scotiabank said the figure was a "tad disappointing" - given survey data indicating growth nearer 1% - and "wasn't a home run".

Shadow chancellor Ed Balls said: "After three damaging years of flatlining, it's both welcome and long overdue that our economy is growing again.

"But for millions of people across the country still seeing prices rising faster than their wages this is no recovery at all."

Dave Prentis, general secretary of the Unison union, said growth figures will "mean nothing to the vast majority of people in this country faced with mounting household bills and stagnant wages."

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Grangemouth's Future Saved In Last-Minute Deal

Grangemouth petrochemicals plant has been saved following a last-minute deal.

The 800 workers who were due to lose their jobs at the Falkirk plant - Scotland's largest industrial site and its only refinery - were told the news at 11am on Friday.

It came after the Unite union confirmed it would now "embrace" a survival plan in an effort to reverse a decision by Swiss-based owner Ineos to close the business.

Calum MacLean, chairman of Ineos' petrochemicals division, told a news conference a "great cheer" went up from workers as he told them their jobs were safe.

But he said "very limited redundancies" would have to be made.

Asked by one reporter if he had held a gun to Scotland's head, he replied: "I don't think that's the case."

He pointed out that Ineos had invested £1bn in the business and would invest another £300m to secure its future for at least the next 15 years.

Another £300m will be invested at the site, Ineos says

He said it was "only right" that by making such a "huge investment" the company had to make sure it had a "long-term sustainable base".

The agreement was to see fuel production resume at the company's oil refinery on Friday after a shutdown of more than a week.

The closure would have been a major setback for the Scottish National Party, which is leading the campaign for Scotland's independence from the UK.

Scotland's First Minister Alex Salmond said: "This news is a tremendous fillip for the workforce and the whole Grangemouth community, following what could have been a potential disaster."

Later, in an interview with Sky News, Mr Calum MacLean declined to say how many redundancies would be made. He said the £300m would be spent on building a new gas terminal at the site.

Asked what he thought of union tactics during the negotiations, he said it would have "saved a lot of traumatic effects" if union officials had begun the talks a week ago with the same attitude they had had over the past two days.

The closure would have been a huge blow for Alex Salmond

Jim Ratcliffe, chairman of Ineos Group, said: "This is a victory for common sense. Unite advised employees to reject change and vote for closure. Thank goodness people finally came to their senses. Grangemouth now has a great future."

Ineos said Unite had made a "dramatic U-turn" and had agreed to a three-year pay freeze, no strikes for three years, and moving to a "modern" pension scheme.

Earlier, Unite's general secretary Len McCluskey said shop stewards had decided to accept the company's survival plan "warts and all" in the wake of the closure decision.

Unite's Scottish secretary, Pat Rafferty, said: "Grangemouth is the powerhouse of the Scottish economy - it now has a fighting chance of upholding this crucial role into the future.

"Obviously today's news is tinged with sadness - decent men and women are being asked to make sacrifices to hold on to their jobs, but the clear wish of our members is that we work with the company to implement its proposals."

Ineos caused shockwaves on Wednesday when it announced it could not continue to operate its loss-making petrochemicals division, leaving hundreds of staff at risk and many more contractors facing the axe.

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Family Not Seeing 'Green Shoots' Of Recovery

By Emma Birchley, East Of England Correspondent

The green shoots of economic recovery might be growing stronger but the Horton family is not feeling the effects.

"It's been really, really tough. We are struggling to make ends meet," said Spencer, 39, from Felixstowe.

He has his own recording studio and band, Mohawk, but he makes much of his money from teaching guitar, bass and drums as well as vocal coaching.

The past year has been difficult as the luxury of music lessons has been dropped by those struggling to meet the cost. Pub closures mean fewer gigs.

But there are tentative signs that things may be on the up.

He said: "The lessons have started picking up in the last month or so. I've got five new students so that helps but I don't know how much of that is a sign that the economy is improving."

His wife, Morgan, is training to be a counsellor and volunteers her skills, but is also a self-employed massage therapist and has seen her business suffer.

She said: "I used to have a lot of clients who have a massage as a luxury or to treat chronic back pain but it got to the point that they had to make a choice because of money and the massage went.

"We have both chosen to be in professions that give back to the community and that keeps us going yet the Government does not value or recognise that."

The couple have two children, April, five, and Coby, two.

Keeping the house warm and the family well fed has meant putting up with increasing costs.

Mrs Horton said: "We don't buy luxuries very often and our food bill is still big. It's gone up by about a third in the last year or so.

"Energy is really expensive too. They say the national average is £1,400 a year and we pay close to double that in gas and electricity."

Keeping up with the bills meant they recently had to get a £10,000 loan.

She added: "It really frustrates me because I wanted to spend it on doing up the house but the overdraft kept creeping up so we had to pay that off."

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Mark Carney Announces Liquidity Boost

By Ed Conway, Economics Editor

The Bank of England Governor has unveiled a major overhaul of the way the Bank pumps cash into the markets.

In a speech on Thursday evening to celebrate the 125th anniversary of the Financial Times, Mark Carney revealed that the Bank will be making major changes to the terms under which the Bank provides cash to Britain's financial system.

Though the overhaul itself is unlikely to be noticed by bank customers, policymakers hope that it will help encourage lenders to provide more cash for those who want to borrow.

One of the key ways in which the Bank controls the UK economy, borrowing rates and financial stability is by lending private banks cash in exchange for assets.

However, over the course of the financial crisis it came under fire for offering this so-called liquidity at high prices and in exchange for only the best-quality assets.

The Bank of England will make facilities cheaper

Mr Carney said that the Bank intended to cut the charges for one such facility - the Index Long-Term Repo - and to allow banks to leave collateral of less-stringent quality in exchange for cash.

Whereas previously only high quality assets were acceptable, in future, lesser-quality investments such as mortgage-backed securities will be allowed.

The Bank will also make the terms of its discount window, an emergency short-term lending facility – more generous.

Mr Carney said: "Our facilities are not ornamental. They are there to be used by banks to access money and high-quality collateral. We are offering money and collateral for longer terms.

"The range of assets we will accept in exchange will be wider, extending to raw loans and, in fact, any asset of which we are capable of assessing the risks. And using our facilities will be cheaper. In some cases the fees are being more than halved."

The speech comes only hours ahead of the official announcement of Britain's latest gross domestic product figures.

The Governor indicated that while he was cheered by the recovering economy, the improvement in GDP, which is expected to be strong, was not as broad based as some had hoped. 

He said: "The economy has picked up over the last couple of quarters. We expect the second half to be stronger than the first half, as indicated in our minutes that came out earlier this week.

"We will find out, I'm not so foolish as to try to give a prediction of a number that's going to come out in less than 24 hours so why don't we wait for the GDP report."

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UK Economy 'May Have Grown By Up To 1%'

Carney Unveils Liquidity Boost

Updated: 8:39pm UK, Thursday 24 October 2013

By Ed Conway, Economics Editor

The Bank of England Governor has unveiled a major overhaul of the way the Bank pumps cash into the markets.

In a speech on Thursday evening to celebrate the 125th anniversary of the Financial Times, Mark Carney revealed that the Bank will be making major changes to the terms under which the Bank provides cash to Britain's financial system.

Though the overhaul itself is unlikely to be noticed by bank customers, policymakers hope that it will help encourage lenders to provide more cash for those who want to borrow.

One of the key ways in which the Bank controls the UK economy, borrowing rates and financial stability is by lending private banks cash in exchange for assets.

However, over the course of the financial crisis it came under fire for offering this so-called liquidity at high prices and in exchange for only the best-quality assets.

Mr Carney said that the Bank intended to cut the charges for one such facility - the Index Long-Term Repo - and to allow banks to leave collateral of less-stringent quality in exchange for cash.

Whereas previously only high quality assets were acceptable, in future, lesser-quality investments such as mortgage-backed securities will be allowed.

The Bank will also make the terms of its discount window, an emergency short-term lending facility – more generous.

Mr Carney said: "Our facilities are not ornamental. They are there to be used by banks to access money and high-quality collateral. We are offering money and collateral for longer terms.

"The range of assets we will accept in exchange will be wider, extending to raw loans and, in fact, any asset of which we are capable of assessing the risks. And using our facilities will be cheaper. In some cases the fees are being more than halved."

The speech comes only hours ahead of the official announcement of Britain's latest gross domestic product figures.

The Governor indicated that while he was cheered by the recovering economy, the improvement in GDP, which is expected to be strong, was not as broad based as some had hoped. 

He said: "The economy has picked up over the last couple of quarters. We expect the second half to be stronger than the first half, as indicated in our minutes that came out earlier this week.

"We will find out, I'm not so foolish as to try to give a prediction of a number that's going to come out in less than 24 hours so why don't we wait for the GDP report."

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Twitter Sets IPO Share Pricing Range

Twitter has set a price range of $17 to $20 (£10 to £12) per share for its initial public offering and says it could raise as much as $1.6bn (£987m) in the process.

Twitter Inc said in a regulatory filing on Thursday that it is putting forth 70 million shares in the much-anticipated offering.

If those are sold, the underwriters can buy another 10.5 million shares.

At the $20 share price, Twitter's market value is around $12.5bn (£7.7bn) - a relatively conservative number after some analysts expected the figure to be as high as $20bn (£12.3bn).

The caution appears to show that Twitter learned from Facebook's rocky initial public offering last year, which was marred by technical glitches on the Nasdaq stock exchange.

The tech-heavy exchange agreed this year to pay a $10m (£6.3m) penalty for trading glitches.

"It's conservative and likely going to be raised as they start the road show at least once if not twice," Sam Hamadeh of PrivCo, a private company research firm, said.

"The size of the offering is also a bit small.

"But they may only choose to raise the price once they gauge investor demand. Raising both the price and the size was Facebook's fatal mistake."

Twitter plans to list its stock under the ticker symbol "TWTR" on the New York Stock Exchange, with trading possibly beginning within the next few weeks.

The San Francisco-based micro-blogging service had more than 215 million active users as of the end of June, up 44% from the previous year.

Separately Twitter announced it had hired former NBC executive Vivian Schiller to head its news operations.

Ms Schiller has been the chief digital officer for NBC News since 2011, and has some 25 years experience in the media business. She is expected to be a key liaison between Twitter and the news industry.

The appointment highlights the growing role of Twitter and other social media in the news industry. 

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Grangemouth Job Fears As Chemical Plant Shut

The owner of the Grangemouth petrochemical plant is to close the operation permanently and keep shut, for now, its major oil refinery amid a continuing pay dispute.

The move threatens up to 800 jobs at the petrochemicals business, which makes products used in everyday items such as packaging and plastic bags, unless it can be sold.

The Grangemouth site's owner Ineos said while it would retain the refinery, which produces 80% of Scotland's petrol and diesel, production would remain shut down until the threat of industrial action was removed.

The Government said there was no current threat of fuel shortages in Scotland because of contingency planning.

Workers were given news of the closure at a meeting with Ineos petrochemicals chairman Calum MacLean following the passing of a deadline on a survival plan which asked all Grangemouth staff to accept changes to pensions and other terms and conditions.

The Prime Minister described the closure as "disappointing"

The Unite union said around 680 of the site's total 1,370-strong workforce rejected the proposals, which included a pay freeze for 2014-16, removal of a bonus up to 2016, a reduced shift allowance and ending of the final salary pension scheme.

Following the meeting with staff, one worker who did not want to be named, said: "I feel sick. It's gone."

The worker, who appeared close to tears at points, told Sky News he could only listen to about 10 minutes of the meeting, before he felt he had to leave.

"There's no livelihoods left and we don't even know if we're going to get redundancy out of it. I hope they're happy with themselves," he said.

More than 1,300 people are currently employed at Grangemouth by Ineos

Unite has accused the company's owner Jim Ratcliffe of playing "Russian roulette" with the future of Grangemouth, the biggest industrial site in Scotland, and said it would back any efforts by the Scottish Government to find a new buyer for the petrochemical complex.

In a statement, Ineos blamed the union's opposition to its survival plan for the decision to close the petrochemical plant - saying shareholders could no longer fund it.

Mr MacLean said: "This is a hugely sad day for everyone at Grangemouth. We have tried our hardest to convince employees of the need for change but unsuccessfully.

"There was only ever going to be one outcome to this story if nothing changed and we continued to lose money.

"We still struggle to comprehend what has happened here. The employees were offered a chance to secure substantial new investment in the company, preserve their jobs and keep their salaries. Sadly this will no longer be the case."

The company added: "As a result of this decision, the directors of the petrochemicals business have had no option but to engage the services of a liquidator. It is anticipated that a liquidation process will commence in a week."

Energy Secretary Ed Davey said: "I am saddened to hear of Ineos' plans to place the petrochemicals business into administration, particularly because of the impact it will have on the workforce and local community.

"While respecting Ineos' right to make this decision, it is regrettable that both parties have not managed to negotiate a fair and equitable settlement that delivers a viable business model for the plant.

"Even at this late stage, I urge Ineos to continue dialogue with the workforce and Government will offer help and support with this.

"Ineos have informed us that the refinery will stay open and the management wish to restart full operations as soon as possible.

"We stand ready to help with discussions between the management and the union to ensure this can happen.

"Fuel supplies continue to be delivered as usual and there is no current risk of disruption to supplies."

More follows...

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Marikana Massacre: 'Damning' Evidence Emerges

By Alex Crawford, Special Correspondent

The Marikana Miners Support group has called for South African police to be prosecuted after apparently unearthing new evidence which disputes the authorities' version of what happened on the day more than 30 striking miners were shot dead by police.

The evidence was uncovered by a film-maker - who is also a member of the campaign group - while he was doing research for a documentary on the incident at the Lonmin mine in August 2012.

It appears to throw more doubt on the police claim that they acted in self-defence when they opened fire on striking miners.

As well as the 34 miners killed, nearly 80 others were left wounded.

The footage has been submitted to the Commission of Inquiry which is continuing into just what went wrong at Marikana.

Film-maker Rehad Desai called it "damning" evidence which showed - in his opinion - that the police had not only engineered the situation which led to the miners being shot, but had then lied repeatedly to the South African public and the inquiry to cover up their actions.

New video shows a miners' leader (circled) who was shot dead minutes later

The footage is shot from what Mr Desai called a "fourth" angle that was mostly unseen and unexamined.

It depicts a large group of the miners being led away from the hillock, or koppie as it is known in South Africa, where they had been demonstrating.

They are filmed walking away slowly, apparently passively and quietly, as they are shepherded by their leaders towards the informal settlement where many of them lived.

The footage, which is shown in the order which it was filmed and apparently has an embedded time code showing what time it was recorded, then shows increased activity among the police.

They are seen moving armoured police vehicles to block the miners' path and forming a barrier between them and the informal settlement.

The footage shows police with guns drawn, apparently before trouble started

The miners are corralled down a relatively narrow path alongside police vehicles and in the direction of a waiting line of armed police.

As they pass a row of police trucks, one policeman can be seen to the left of the picture shooting birdshot into the crowd of passing miners.

Other police then follow suit. The miners, who are already cowering with some crouching over, then start to panic.

One can be seen turning towards the police who are side-on to the crowd and firing his handgun directly at the police.

There is some smoke seen which is thought to be tear gas. Miners start running away from the gas and the shooting coming at them from the side.

Film-maker Rehad Desai says the new evidence is 'damning

They run directly towards the line-up of police and within seconds, a cacophony of noise is heard as the police open fire with live ammunition.

The latest allegations follow a statement by the Commission a few weeks ago that it had managed to obtain documents which the police had previously said did not exist.

The Commission also managed to get access to police computer hard drives.

At the time, it issued a statement saying: "We have obtained documents which in our opinion demonstrate that the (police) version of the events at Marikana ... is in material respects not the truth."

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Grangemouth Plant Closure U-Turn Is Possible

The owner of the Grangemouth petrochemicals plant says it could reverse Wednesday's decision to close it if "substantive" talks today yield union concessions.

Sources at Ineos were speaking to Sky News ahead of a meeting with Unite which began at 8am but they insisted that any agreement on re-opening the chemical side of the operation at the peace talks would have to be rubber-stamped by a full meeting of Ineos shareholders.

The company had announced that it could not continue to operate the loss-making petrochemicals division - leaving 800 jobs at risk at the plant with many more contractors facing the axe too.

Ineos also confirmed that while it was not planning to close down the oil refinery, which produces 80% of Scotland's fuel supplies, it would remain shut for now pending reassurances from Unite that there would be no strike action.

The union yesterday accused Ineos owner Jim Ratcliffe of deliberately engineering the chemical plant's closure.

It said it had put what it called a "plan to save jobs" to the company yesterday and Unite's Scottish secretary Pat Rafferty added: "The ball is now in the court of Jim Ratcliffe and the respective governments in Edinburgh and Westminster and we await their responses."

Ineos argued it was left with no alternative but to close the petrochemical business, which makes products used in the manufacture of household goods such as plastic packaging.

The firm cited a failure to persuade its staff to accept a survival plan, which included a pay freeze, ending of a final salary pension scheme and other changes to terms and conditions.

Ineos said white-collar workers such as admin staff had backed the plan but workers represented by Unite had rejected it.

Politicians had urged the two sides to resume talks to prevent the closure, while efforts are expected to continue to find a potential buyer in case the peace efforts fail.

More follows...

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Energy Bills: Major Calls For 'Windfall Tax'

By Jon Craig, Chief Political Correspondent

Former Prime Minister Sir John Major has dropped an energy price hike bombshell on David Cameron by calling for a windfall tax on power companies this winter.

In a move that stunned the Tory high command, he said the recent price rises were unacceptable and many people would have to choose between heating and eating.

And he said that if there was severe cold weather this winter and the Government had to help vulnerable people it should impose an "excess profits tax" on the energy companies.

But within an hour the former Prime Minister was slapped down by Downing Street, with the Prime Minister's spokesman declaring: "We have no plans for this."

Labour seized on the apparent disarray.

Ed Miliband, whose price freeze pledge has put the Government on the defensive for weeks, tweeted: "Sir John Major makes Labour's argument: David Cameron stands up for the energy companies not hard-pressed families."

Ed Miliband said Sir John was making "Labour's argument"

Sir John's shock intervention in the energy price row came in a comeback speech to political journalists at Westminster in which he made a passionate plea to the Tories to win back the support of blue collar voters.

Asked about energy price hikes of up to 10%, Sir John said: "I do not see how it can be in any way acceptable that with energy prices rising broadly 4% in terms of costs that the price to the consumer should rise by the 9-10% that we are hearing.

"I do not regard that as acceptable at all by the energy companies.

"And it is not acceptable to me, it ought not to be acceptable to anyone, that many people are going to have to choose between keeping warm and eating. That is not acceptable.

"So if we get this cold spell the government, I think, will have to intervene and if they do intervene, and it is costly, I for one would regard it as perfectly acceptable for them then, subsequently, to levy and excess profits tax on the energy companies and claw that money back to the Exchequer, where their primary job is to get the economy working and people back to work."

Asked if he was backing the Labour leader, the former Prime Minister said: "When Ed Miliband made his suggestions just a few weeks ago I think his heart was in the right place but his head had gone walkabout.

"But he did touch on an issue that's very important. The private sector is something the Conservative party support but when the private sector goes wrong or behaves badly I think it is entirely right to make changes and put it right."

David Cameron's spokesman said it was an "interesting contribution"

Sir John told reporters that with interest rates at a record low, energy companies should be looking to borrow money to pay for investment rather than funding it "out of the revenue of families whose wages have not been going up at a time when other costs have been rising".

"I believe there will be difficulties this winter without action and, if there are those difficulties, the Chancellor will have my total support if he acted in the way I suggest and imposed an emergency impost upon the energy companies to claw back the money that we will have to give to people to help them see the winter in any form of warmth," he said.

Shortly after Sir John's speech, Mr Cameron's spokesman told reporters: "The Prime Minister's view on this is that this is an interesting contribution. We have no plans for this.

"What the Government is doing is legislating around forcing energy companies to put customers on their lowest tariffs and more competition in energy markets."

Asked about Sir John's concerns about people having to choose between eating and heating this winter, the spokesman said: "There are a number of initiatives that the Government has to support vulnerable people, such as the cold weather payments.

"We have a range of ways in which support is given and those are the right ones."

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Grangemouth: Oil Workers To Learn Their Fate

By James Matthews, Scotland Correspondent

Workers at the Grangemouth oil refinery will discover today whether the plant has a future or faces permanent closure amid a bitter dispute over pay and conditions.

Owner Ineos says shutting the plant is a possibility if it does not get the response it wants from the workforce.

Employees were given a deadline of 6pm on Monday to accept what the company called a "survival plan".

The Unite union, which represents more than two thirds of the Grangemouth workforce, said a majority had opted to reject the company's demands.

The Grangemouth plant employs 1350 workers and 2000 contractors

Amid the threat of closure, the Scottish Government has begun a worldwide search for a potential buyer for the plant. 

Politicians at Holyrood and Westminster have urged both sides in the dispute to return to the negotiating table.

The Secretary of State for Scotland, Alistair Carmichael, told Sky News: "The UK and Scottish governments have had more discussions on the Ineos situation.

"We both agree there is a great deal at stake for Scotland over this issue and the primary aim is to see both sides return to the negotiating table with the Advisory, Conciliation and Arbitration Service (ACAS) to secure the long-term future of the Grangemouth site.

"DECC and other UK government departments are in regular contact with both the company and the union and we are sharing information with the Scottish Government at official and ministerial level.

Unite says a majority of the workfoce have rejected the company's demands

"The next day or so will be an important phase in this situation and it is imperative we keep trying to bring the two sides together. That is what is best for Scotland and we will keep working hard to make that happen."

The Grangemouth refinery provides 80% of Scotland's fuel needs and also supplies parts of the North of England and Northern Ireland. 

A spokesman for the Scottish Government told Sky News there are no immediate concerns over fuel pump supplies. 

The plant employs 1,350 workers and 2,000 contractors. An estimated 10,000 further jobs rely on the facility. 

Ineos claims that Grangemouth is losing £10m per month and, to survive, it needs fresh investment and a cut in workers' terms and conditions.

The Unite union claims that employees are being bullied with regard to the proposed changes and are, effectively, being told by the company to "sign up or be sacked".

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Whiplash Insurance Claims Face Fraud Crackdown

By Enda Brady, Sky News Correspondent

Fake whiplash claimants are facing a fresh crackdown under Government plans to tackle the rising cost of motoring in Britain.

Justice Secretary Chris Grayling said the measures would cut insurance premiums for all drivers by targeting "whiplash fraudsters".

From now on only evidence from accredited professionals will be considered when whiplash claims are assessed.

The Government also plans to freeze the price of an MOT at £54.85 until 2015 and motorway service stations will be forced to advertise their petrol prices on signs along the route to increase competition.

"We are turning the tide on the compensation culture and helping hard-working people by tackling high insurance premiums and other motoring costs," said Mr Grayling.

"We have already helped families by cutting income tax for 25 million people by raising their personal allowance, by freezing council tax and by helping with tax free childcare for example. But we want to do more.

"It's not right that people who cheat the insurance system get away with it while forcing up the price for everyone else, so we are now going after whiplash fraudsters and will keep on driving premiums down."

There were more than 500,000 whiplash claims in the UK last year, costing the insurance industry some £2bn.

Roads minister Robert Goodwill said: "The costs of owning and running a car are felt by millions of households and businesses across the nation. The Government is determined to help keep those costs down.

"That is why we are freezing the price for an MOT test and looking again at the costs associated with getting a driving licence.

"We also want to make it easier for people to get a better deal on fuel at motorway service stations, for instance through a trial of motorway signs that will show motorists the different fuel prices on offer on their route."

New statistics from the AA show motor insurance premiums are now falling at the fastest rate since 1994 - a fall of 12.3% in the year to October for an average comprehensive insurance policy, from £648 in October 2012 to £568 in October 2013.

Each whiplash compensation payout costs an average of £2,400 insurers say, with an additional £2,000 in legal costs.

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Grangemouth Refinery Workers 'Reject Deal'

Two-thirds of workers at the Grangemouth oil refinery have refused to accept new terms and conditions, their union says.

Ineos had set a deadline of 6pm on Monday for the workforce to agree to its "survival plan", which amounts to a cut in pension entitlement, overtime pay and redundancy terms.

Without agreement and without fresh investment, management has said it could close the plant by 2017.

Ineos said the Scotland's biggest oil refinery, which has been shut down since last week because of the dispute, is losing £10m a month. 

Ineos Grangemouth site manager Gordon Grant talks with Unite's Pat Rafferty

Ineos group director Tom Crotty told Sky News that the risk of the refinery having to shut permanently was very real and that the workers needed to show commitment to persuade shareholders to increase investment.

He said: "The shareholders will consider the over all view of the workforce and we have to consider have we got enough people supporting the company to make it a viable proposition to restart the plant because we have serious safety concerns over this type of operation.

"It's a big site, three time the City of London, and to restart it we cannot take the risk of having to restart it and then stop it again. It's very risky.

"Until we know we have got the support of the people on the site we cannot do that."

Ineos sent out a letter on Thursday to all 1,350 worker at the plant asking them to either reject or accept the plan, and said that hundreds had agreed to the new deal.

However, according to Unite, 65% of workers had rejected the plan.

Ineos says if workers do not agree, the refinery will close

Unite's Scottish Secretary Pat Rafferty said: "The people who have so far rejected Ineos' ultimatum are the backbone of the plant, the people who keep the site running and the oil flowing.

"The people of Grangemouth and Scotland will be expecting Jim Ratcliffe and the Ineos shareholders to now take heed. Do the right thing tomorrow, drop the threats to the workforce, fire up the plant and get around the table at Acas.

"This is an overwhelming rejection of the company's blackmail and threats. This workforce has said that they want to secure a future for Grangemouth, free from fear, based on negotiation not confrontation."

A shareholders meeting is expected to take place on Tuesday to discuss the dispute.

The plant processes around 200,000 barrels of oil a day and supplies most of Scotland's fuel, however, Ed Davey, the energy secretary has said that the shutdown would not hit petrol and diesel supplies.

Ineos and Unite have been embroiled in a bitter dispute for weeks, initially over the treatment of Unite convenor Stephen Deans, who was involved in the row over a selection of a Labour candidate in Falkirk, where he is chairman of the constituency party.

He was suspended, then reinstated, and is facing an internal investigation, which is due to report on Friday.

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Rescue Plan Leaves Co-op With 30% Bank Stake

The Co-operative Group is to lose overall control of its banking arm amid a funding struggle, Sky sources have confirmed.

The Co-op will be left with only a 30% stake in the bank, according to Sky News City Editor Mark Kleinman.

An announcement is expected to confirm the deal next Monday, with City investors and bondholders filling the funding shortfall.

The growing likelihood of the self-styled ethical lender being controlled by predatory US hedge funds and blue-chip investors such as pension funds and insurers has triggered warnings over the bank's future ethos.

Meanwhile, the bank has confirmed a suspension of listing and trading on the London Stock Exchange of its subordinated debt securities.

"The group has stated that constructive engagement with bondholders is continuing and that Group remains confident that a proposal to recapitalise the bank can be agreed and put to bondholders," it said in a statement.

"The bank expects to request the suspension of the relevant securities to be lifted at the time that full details of a recapitalisation plan are announced."

The Co-op banking division operates as a mutual concept and currently has 4.7m customers. It includes an insurance arm for home, motor and pet cover.

On June 17 the bank, which was founded in 1872, announced it needed to raise £1.5bn to plug the capital black hole.

The bank now admits it needs an additional £105m to deal with increased provision for payment protection insurance (PPI) and other product mis-selling claims, and "expects that many elements of any recapitalisation plan will be materially different".

The recapitalisation from outside the mutual comes after the Co-op previously set aside £269m to compensate customers mis-sold PPI.

The recalculated funding shortfall is due to more customers coming forward as well as the Financial Conduct Authority providing fresh guidance on appropriate levels of compensation for customers.

The sum also includes a compensation for mortgage customers affected by a newly-discovered flaw in which they were charged only interest on their first mortgage instalment - meaning further payments were higher than they should have been.

Customers who took out Platform and Optimum mortgage products would have been affected although the bank has not yet notified any of them and further details of the scale of the issue remain unclear.

The bank said the overall new provision of up to £105m also took into account "the identification of a technical breach of the Consumer Credit Act".

This was thought to relate to failing to inform some loan customers that they could reduce their outstanding balance.

The overall provision from the bank also includes money put aside because of overdue payments and unpaid cheques.

Co-op disclosed the figures as it prepares for its recapitalisation plan - which will mean it has to publish financial details to the stock market.

The attempt to plug the £1.5bn black hole in its balance sheet through a painful fundraising will force losses on to owners of its bonds and leave it with a stock market listing - ending its prized mutual status.

Hedge funds represented by investment banks had earlier demanded the bank tear up its rescue plan, instead proposing an alternative plan of converting all its bonds into shares, giving it a bigger stake in the lender.

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Energy Regulator Moves To Protect Fixed Rates

The energy regulator has confirmed new rules governing fixed rate energy deals while announcing an £8.5m penalty against Scottish Power over misleading sales techniques.

Ofgem said Scottish Power would pay £7.5m to benefit vulnerable customers and establish a £1m customer compensation fund  for breaching the terms of its market licence between October 2009 and January 2012.

It said Scottish Power provided customers with inaccurate estimations of annual charges and comparisons with their current supplier both on the doorstep and over the phone.

The settlement, the company said, meant that more than 140,000 people on the Warm Home Discount scheme would automatically receive payments of around £50 each.

Scottish Power accepted the failings but said it had now rectified the problems. It stopped door-to-door selling in 2011.

The penalty comes at a sensitive time for the big six energy firms - under fire from customers over inflation-busting increases to bills ahead of winter while politicians scrap over intervention in the market.

To date, three of the firms have announced average rises of between 8 and 11%.

As part of moves to ensure the market acts fairly, Ofgem said new rules were now in force meaning energy suppliers were banned from increasing prices on fixed term tariffs over the course of a contract and banned from automatically rolling householders on to another fixed term offer when their current one ended.

From December 31, firms will have to cut the number of tariffs they offer customer to just four for gas or electricity while from March companies will have to show the cheapest tariff they offer on every customers' bill.

Andrew Wright, Ofgem's chief executive, said: "Ofgem is resetting the energy market in consumers' favour to make it simpler, clear and fairer.

"Today's extra protection for consumers on fixed prices is just one of a range of reforms we are bringing in over the next six months to hold energy companies to higher standards.

"If suppliers fail to deliver, then Ofgem stands ready to take enforcement action to protect consumers.

"In an era of rising prices it is vital that competition works as effectively as possible. Our reforms seek to give consumers the tools they need to find the best energy deal for them and to ensure that suppliers have to treat them fairly.

"Ofgem is going to make it easier for consumers to "vote with their feet" and for new suppliers to enter the market and take on the Big Six.

Now we are looking for energy suppliers to pick up the baton and put their efforts into restoring consumer trust.

"Encouragingly suppliers have shown a willingness to start on this journey by signing up to our reforms and are now acting to implement them."

More follows...

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Co-Op Bank Ups PPI Mis-Selling Gap By £105m

Troubled lender Co-operative Bank has revealed that the cost of a series of failings including its involvement in controversial payment protection insurance policies (PPI) will be up to £105m more than expected.

The bank, which is in the middle of a rescue plan after a £1.5bn black hole was identified in its balance sheet, said it has had to increase its provision for customer redress.

However, it also revealed that regulators say the amount needed to cover the wider issue of the hole in its finances does not need to be increased.

The update comes amid speculation that details of a rescue plan which would have seen Co-op Group retaining a majority stake in the bank while floating a chunk on the London Stock Exchange have been rejected.

More follows...

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Tourist Attraction Firm Merlin In Float Plan

The company behind some of Britain's biggest tourist has announced plans to float on the London stock market.

Private equity-owned Merlin Entertainments, which operates sites including the London Eye, Madame Tussauds and Alton Towers, announced the decision this morning.

It operates 99 attractions in 22 countries and received more than 54 million visitors in 2012.

Analysts believe the firm to be worth as much as £3bn.

Madame Tussauds has been popular as a London attraction for decades

Merlin said the public offer of shares will enable it to pay down debt and plan for the next stage of its development.

The company generated revenues of more than £1bn last year and is Europe's leading visitor attraction operator and the second largest globally after Walt Disney.

Other sites operated by Merlin include Legoland Parks, Chessington World of Adventures and Warwick Castle.

News of an impending float was first revealed by Sky News City Editor Mark Kleinman, last May.

Merlin is owned by Blackstone and CVC Capital Partners, two of the world's biggest buyout firms, and would be likely to head straight into the FTSE 100 given its potential £3bn-plus valuation.

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PM Cheers Somerset Nuclear Power Plant Deal

The Prime Minister has hailed a landmark deal to build Britain's first new nuclear plant in a generation.

The agreement with French-owned EDF Energy will see Hinkley Point C, in Somerset, begin operating in 2023.

David Cameron said: "As part of our plan to help Britain succeed, after months of negotiation, today we have a deal for the first nuclear power station in a generation to be built in Britain.

"This deal means £16bn of investment coming into the country and the creation of 25,000 jobs, which is brilliant news for the South West and for the country as a whole.

The 'strike price' gives EDF a guaranteed rate for producing electricity

"As we compete in the tough global race, this underlines the confidence there is in Britain and makes clear that we are very much open for business."

The Government has been negotiating with French-owned EDF Energy for more than a year over two new plants.

But ministers are likely to face criticism over the £92.50 per megawatt hour that will be paid for electricity produced at the Somerset site - around double the current market rate.

The so-called 'strike price' could fall by £3 if another mooted development at Sizewell goes ahead, allowing for efficiencies in development and testing.

Ed Miliband and George Osborne weighed into the energy debate last week

The contract is due to run for 35 years, with the electric price increasing annually in line with CPI inflation. At full capacity the two reactors could provide up to 7% of the country's energy needs.

It is understood that China General Nuclear Power Group and China National Nuclear Corporation will be investing in the estimated £14bn scheme.

One of the last stumbling blocks to a deal was removed last week when Chancellor George Osborne announced that Chinese firms would be allowed to invest in civil nuclear projects in the UK - even potentially taking a majority stake.

Energy Secretary Ed Davey insisted he had secured "good value" following more than a year of intense negotiations.

The project will cut the UK's carbon emissions by 9 million tonnes a year, and create thousands of jobs.

"We think it would be good value if (the strike price) was a little higher," the Liberal Democrat Cabinet minister said.

Anti-nuclear campaigner, Theo Simon

"I was determined to get them below £90 so I could prove to everybody we had got a good deal...

"What has driven a tougher deal is the fact that I made clear we could walk away from the table. We had other nuclear options."

Energy policy has shot up the agenda since the party conference season, when Labour leader Ed Miliband pledged to freeze retail prices for 20 months.

The funding agreement will almost certainly mean that the new reactor at Hinkley will be a mirror image of the Taishan plant in China.

During a visit to the Taishan plant last week, Mr Osborne said: "It is an important potential part of the Government's plan for developing the next generation of nuclear power in Britain.

"It means the potential of more investment and jobs in Britain, and lower long-term energy costs for consumers".

But anti-nuclear activists living near the site say they have been misled by the decision process to site the plant at Hinkley.

Campaigner Theo Simon told Sky News: "We were told it would mean lower energy bills, but actually the announcement of the strike price is really the last nail in the coffin of this project.

The Chancellor visited a Chinese nuclear power plant last week

"We were told that it would provide cheap energy; we were told it would help us to bridge the energy gap in the early 2000s, and now it seems it won't be built (until) 2025 and we will all be paying for the profits of EDF and Chinese nuclear corporations for the next 40 years."

The issue of prices has become even more controversial with the Big Six power firms unveiling hikes of more than 9% in electricity and gas prices.

Deputy Prime Minister Nick Clegg has raised concerns about the increases, telling Sky News' Murnaghan programme that the energy firms needed to justify prices increases.

"Clearly the companies need to justify the bill increases that they are now announcing," he said.

"It cannot be right that people who are really struggling - many, many people still struggling to pay their weekly, their monthly bills, where electricity and gas bills for this winter are a looming worry.

"It can't be right that those bills are increased for those households in our country and yet it is all rather opaque about what drives these increases."

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HS2 Rail Link: 'Cities Could Lose Up To £220m'

Some cities in the UK could lose as much as £220m if a new high-speed rail link is built, previously unseen figures have shown.

If HS2 goes ahead, it will leave more than 50 areas worse off - details that were omitted from a Government-commissioned report in September, it is claimed.

The full findings of the KPMG study into the north-to-south rail route were released under a Freedom of Information request by the BBC's Newsnight programme.

Last month, the Department for Transport hailed the study, which found the UK economy would be boosted by £15bn a year, with Greater London benefitting by £2.8bn and the West Midlands by £1.5bn.

The project has caused outrage in some areas

But the study shows many areas not on the line - which would connect London to Birmingham and to Manchester and Leeds - will suffer a fall in economic output.

The worst-hit areas will be Aberdeenshire (-£220m), Norfolk East (-£164m), Dundee and Angus (-£96m), Cardiff (-£68m) and Norfolk West (-£56m).

Professor Henry Overman, who was an expert adviser to HS2 Ltd, told the BBC it was obvious that as some areas reap the benefits of being better connected, other places away from the line will pay a price.

The link will cut journey times between the north and south

"When a firm is thinking of where to locate, it thinks about the relative productivity of different places, and the relative wages etc," he said.

"HS2 shifts that around. So if you are on the line, that makes you a better place that hasn't had that productivity improvement."

Alison Munro, chief executive of HS2 Ltd, told Newsnight the figures were unsurprising.

"What this is showing is that the places that are on the high-speed network ... those are the places that will benefit most from high-speed two," she said.

The first phase of HS2 from London to Birmingham

"But high-speed two isn't the only investment that the Government is making. Over the next five years it is planning to spend £73bn on transport infrastructure."

Earlier this month, the Treasury Select Committee said HS2 had "serious shortcomings" and should be put on hold.

It said a "more convincing" economic case was needed for the scheme, which is now estimated to cost £42.6bn - 17% higher than first thought.

A Department for Transport spokeswoman said: "These figures show that the new north south railway is vital to rebalance our economy and it boosts the north overall more than the south. Of course the line does not serve every city and region and these figures reflect that.

"But it is wrong to take them in isolation. HS2 is part of a much bigger boost to our transport system - £73bn in the next parliament, of which HS2 is just £17bn. This will massively benefit places HS2 will not serve long before the line opens."

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Energy Bills: Welby Slams 'Severe' Price Rises

The Archbishop of Canterbury has launched a stinging attack on Britain's energy firms, warning the latest round of price hikes seem to be "inexplicable".

Justin Welby insisted the so-called Big Six energy companies had an obligation to behave morally rather than to simply maximise profit.

His intervention, published in an interview with the Mail on Sunday, came after British Gas followed in the footsteps of SSE by announcing a 9.2% increase in prices.

The head of the Church of England, himself a former oil executive, said he understood the anger the rises had generated.

"The impact on people, particularly on low incomes, is going to be really severe in this, and the companies have to justify fully what they are doing," Mr Welby said.

Last week British Gas announced a 9.2% increase in prices

"I do understand when people feel that this is inexplicable, and I can understand people being angry about it, because having spent years on a low income as a clergyman I know what it is like when your household budget is blown apart by a significant extra fuel bill and your anxiety levels become very high. That is the reality of it."

The Archbishop urged firms to be "conscious of their social obligations", saying they had to "behave with generosity and not merely to maximise opportunity".

"They have control because they sell something everyone has to buy. We have no choice about buying it. With that amount of power comes huge responsibility to serve society," he said.

"It is not like some other sectors of business where people can walk away from you if they don't want to buy your product and you are entitled to seek to maximise your profit.

"The social licence to operate of the energy companies is something they have to take very, very seriously indeed."

Electricity prices are rising faster than those for gas

But the Church Of England owns a significant number of shares in energy companies.

Sky's Chief Political Correspondent Jon Craig said: "Justin Welby has now joined in this increasingly politically charged debate about energy prices - the only embarrassment really for the Church of England really is that it owns more than £7m of shares in Centrica and about £6m of shares in SSE.

Craig added: "The remarks have been welcomed already by the Labour Party - but they will infuriate government ministers, the Prime Minister and the Energy Secretary."

An ongoing bitter political spat over energy has seen Labour leader Ed Miliband attempt to seize the initiative by pledging a 20-month-long price freeze.

But Prime Minister David Cameron has dismissed the idea as a "con", and encouraged consumers to switch suppliers to keep bills down.

But polls have suggested that Labour's promise is popular with voters, putting pressure on the coalition to respond.

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JPMorgan Facing Record £8bn Fine: Reports

One of America's biggest banks is facing a record $13bn (£8bn) fine for mis-selling mortgage-backed securities in the run up to the 2008 financial crisis, say US reports.

A tentative deal has reportedly been reached between JPMorgan and the US Justice Department.

Last month, the bank was fined more than £600m over the "London Whale" trading scandal arising from disastrous trades by former bank employee Bruno Iksil.

If the deal is finalised, it would be the biggest settlement of its kind ever paid by a US company.

The agreement was reached by Attorney General Eric Holder, Associate Attorney General Tony West, JPMorgan CEO Jamie Dimon and the bank's general counsel Stephen Cutler in a phone call on Friday night, according to the Wall Street Journal.

It does not resolve a criminal investigation into the bank's conduct being handled by federal prosecutors in Sacramento, California, according to the reports.

On Friday night, Mr Holder told the bank that a non-prosecution agreement was a non-starter, meaning the Justice Department will continue its criminal investigation into JPMorgan.

JPMorgan executives give evidence over the 'Whale' losses to US Senate

As part of the deal, the Justice Department expects the bank to co-operate with its probe into the sale of overvalued mortgage-backed securities, which were blamed for the near-collapse of the banking system in 2007.

JPMorgan spokesman Brian Marchiony and Justice Department spokesman Brian Fallon declined to comment on the reports.

Of the $13bn, $9bn is fines and $4bn will go to consumer relief for struggling home-owners, it is claimed.

When the US housing bubble burst in 2007, bundles of mortgages sold as securities turned sour and the investors who bought them lost billions.

In the aftermath, public outrage boiled over that no high-level Wall Street executives had been sent to jail.

Some lawmakers and other critics demanded that the big bailed-out banks and senior executives be held accountable.

In response, the US government set up a task force of federal and state law enforcement officials to pursue wrongdoing with regard to mortgage securities.

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