China Pledges Economic And Business Reform

China has pledged more reforms to loosen the communist authorities' grip on the world's second-largest economy, raising hopes of greater benefit for its foreign trading partners.

The ruling party issued a document detailing economic reforms following a key meeting, known as the Third Plenum, which ended earlier this week.

The plans include requiring state firms to pay larger dividends to the government, and allowing private companies a bigger role in the economy, according to the document issued by the official Xinhua news agency.

The government will require 30% of earnings from "state capital" to be paid back to the public coffers and used for social security by 2020, it said.

China's 113 major state-owned enterprises (SOEs) directly under the central government typically pay 5 to 20% of their profits to the government in dividends - the part of a company's earnings distributed to shareholders.

"This will have an effect on facilitating a better competitive environment," ANZ Banking Group economist Liu Ligang said, adding it would make cash-rich SOEs allocate funds more rationally.

China moved to shut down or merge loss-making state firms in the late 1990s, leaving a smaller number, but with immense power over large sectors of the economy.

Further reforms have been made difficult by opposition from the state sector, which has been enriched by close ties to the government and lack of competition.

In acknowledgement of private firms, China will allow private capital to take equity stakes in state-funded projects, Xinhua said, but gave no proportion.

China will also allow the set-up of smaller banks and financial institutions using private funds, the document said. The country currently has just a handful of private banks.

In the financial sphere, China will push forward liberalisation of its interest rates and free convertibility of its yuan currency, the document said.

China currently sets deposit rates by administrative order, but the central bank began allowing banks to decide their own lending rates in July in a long-awaited move.

Beijing has repeatedly said it would push forward convertibility of the yuan - allowing the currency to be freely bought and sold, and with it the movement of funds into and out of China.

The government keeps a tight grip on the capital account - investment and financial transactions, rather than those related to trade - over worries that unpredictable inflows or outflows could harm the economy and reduce the party's control over it.

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Former RSA Boss Makes Haste For TSB Chair

By Mark Kleinman, City Editor

Andy Haste, the former boss of RSA Insurance, is being lined up to take the helm of TSB as it prepares for a rebirth as an independent bank on Britain's high streets.

Sky News can reveal that Mr Haste has emerged as the preferred candidate to become chairman of TSB ahead of a planned flotation on the London Stock Exchange next year.

Mr Haste, who stepped down from RSA in 2011, has not yet formally agreed to take the role, and the approval of the Prudential Regulation Authority, the UK banking watchdog, would also be required.

That consent is unlikely to be withheld, however. Mr Haste is highly regarded from his time at RSA, where he steered the company from the brink of collapse, although it has endured a rockier period since his departure with two profit warnings in the last 10 days alone.

His appointment as TSB's chairman would give a boost to the prospects of a successful flotation of what will be the UK's seventh-largest lender.

Lloyds Banking Group, which is 33%-owned by taxpayers, has to sell TSB under the orders of the European Commission in return for the state aid it received when it was bailed out in 2008.

Lloyds had planned to sell the 632 branches to the Co-operative Group, a plan which was abandoned because of the financial crisis at the mutual.

TSB was relaunched in September and has pledged to restore local banking services to British communities.

The bank has a 4.3% share of the current account market and under the stewardship of Paul Pester, chief executive, wants to increase that to at least 6%.

It will also make a series of commitments next year about executive pay and transparency of lending decisions as it tries to distinguish itself from its high street rivals, many of whom remain tainted by mis-selling scandals which pre-date the financial crisis.

Mr Haste has taken on a portfolio of jobs since leaving RSA, including the deputy chairmanship of Lloyd's of London and an ad hoc role with Advent International, the private equity firm.

Taking on the TSB role would reunite him at least temporarily with George Culmer, the Lloyds Banking Group finance director, who joined the lender from RSA.

Among the other candidates interviewed for the TSB chairmanship was Dennis Holt, a former Lloyds TSB executive.

Lloyds has lined up Citi and JP Morgan, the investment banks, to work on the TSB flotation, which is pencilled in for the middle of 2014.

Lloyds declined to comment, while Mr Haste could not be reached for comment.

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£11bn Olympics Benefit Target Met

A four-year target of raising £11bn worth of economic benefit from the London Olympics has been met in 12 months, the Government has said.

The country has benefited from new foreign investment, additional sales and firms winning contracts since last summer's events, according to a report.

The total includes £130m of contracts won by UK companies for next year's soccer World Cup in Brazil, and the next Olympic Games, in Rio in 2016

Trade and Investment Minister Lord Green said: "The delivery of London 2012 on time and on budget led to hosting nations turning to the UK to help deliver their own events with supply opportunities running into the billions.

"UK Trade & Investment has played a key role in helping British companies maximise these opportunities and the result is a £11.06bn boost to the UK economy from the Games, reaching our four-year target in just over a year."

Secretary of State for Culture Media and Sport Maria Miller said: "Last year's Games put the UK in the global spotlight and showed the rest of the world that this country is open for business.

"The economic legacy of last year's Olympic and Paralympic Games is sometimes neglected but these figures show that the financial investment made into London 2012 has already been recouped."

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Barclays Bank 'To Axe 1,700 Branch Jobs'

Barclays is to slash 1,700 jobs from across its branch network, saying fewer staff are needed because more people are banking online.

The number of cashiers, personal bankers and managers employed by the bank is expected to be cut throughout 2014.

The trade union Unite described the decision as a "colossal mistake" and said it was challenging Barclays' claims that the way customers access their banking services is changing rapidly.

Dominic Hook, the union's national officer, said: "These employees deliver high levels of service that customers of the bank benefit from.

"Such a massive reduction will be very detrimental to the bank and will also be hugely challenging for the staff remaining."

Mr Hook said the union would be "pressing Barclays to reconsider" its proposal.

He said the bank had agreed to demands for a voluntary redundancy register, as well as training grants for anyone leaving Barclays and compensation for employees who reduce their working hours.

"The union will also be seeking firm assurances that there will be no compulsory redundancies following the completion of the voluntary exercise," Mr Hook said.

A spokesman for Barclays, which has more than 1,700 UK branches and employs about 140,000 people worldwide, said it was investing in new technology and improving customer service.

"This means training staff so they can provide that expert support but also reducing staffing levels in our branches where there is over capacity," he said.

"As a result of technological changes, we will be able to provide better service for our customers with fewer staff in our branches.

"Today we have outlined a voluntary redundancy scheme for those colleagues who are interested.

"We are committed to working with our impacted colleagues so that they are fully consulted and have access to the support and services they require."

Earlier this month, Barclays announced it was opening a number of seven-days-a-week branches in Asda supermarkets around the country.

On Wednesday, it announced its head of compliance Sir Hector Sants had resigned after he was placed on sick leave for stress and exhaustion.

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Spain To Make Clean Exit From Bank Bailout

Spain's decision to make a clean exit from its bank bailout has been welcomed by Eurogroup, which is made up of finance ministers from euro-using countries.

It said it showed the effectiveness of steps to deal with excessive government debt.

Earlier, it was announced that Ireland's aid programme will end in December. Spain's wraps up in January.

Jeroen Dijsselbloem, who chairs Eurogroup, said: "These economies are back on the road to recovery."

In 2012 Spain tapped €41bn (£34.5bn) from the eurozone countries' bailout fund to recapitalise banks that faltered after a property boom collapsed.

EU Economy and Euro Commissioner Olli Rehn told a news conference that the Spanish financial market had stabilised, liquidity of banks had improved and deposits were rising.

He said the key now lay in the restructuring of Spain's local savings banks.

But the Eurogroup said Madrid still had work to do.

"We call on the Spanish authorities to rigorously continue the reform momentum to address any remaining challenges regarding the economic and fiscal situation, including the high unemployment rate and the vulnerabilities stemming from the still high private and external debt," the group said in a statement after talks in Brussels.

Greece, Portugal and Cyprus remain on bailout support as a result of  troubles with too much debt.

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Nationwide Sees Half-Year Profit Up 155%

The Nationwide has reported a 155% leap in half-year underlying profits, citing more lending and a rush of new customers coming to it from high street rivals.

Nationwide is Britain's biggest customer-owned lender and the the third biggest mortgage lender.

Dissatisfaction with the so-called big four high street banks has helped drive new customers to the Nationwide.

The building society said it made an underlying profit of £332m in the six months to the end of September, up from £130m the year before.

The lender's performance has been boosted an improvement in its net interest margin - the difference between the rate it offers to savers and the rate it charges borrowers.

"The first six months of the financial year have seen Nationwide build on the momentum generated in 2012-13, with strong business volumes driving an excellent financial performance," chief executive Graham Beale said.

As a building society the Nationwide seeks to serve its members' interest while generating profit to expand its business.

It says profit is then utilised to offer higher rates for savers and lower rates for borrowers.

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Bank: UK Recovery Has Finally Taken Hold

Interest Rates To Rise As Handcuffs Come Off?

Updated: 6:14pm UK, Wednesday 13 November 2013

Let's start with the good news. The economy is recovering more convincingly than at any point since the financial crisis of 2008.

And while this is hardly new news (the figures have been pointing that way for a while), the Bank of England seemed to confirm it today as it raised its growth forecast for both this year and next year.

If its predictions are borne out, next year the economy will expand by 2.8% - the highest rate since 2007.

In fact, this isn't the end of the good news. Inflation is lower than expected; unemployment is also falling faster.

Almost any metric you care to look at suggests that this is turning into a benign and pretty solid recovery. Let's leave aside for the moment the question of why it's taken so long, and why that growth is uncomfortably reliant on consumer debt.

The big question, however, is what the Bank of England does next. Not only are interest rates down at 0.5% - the lowest level on record - the Bank's new Governor, Mark Carney, committed earlier this year not to raise them until unemployment dropped beneath 7%.

Forward guidance, as the bank calls it, is best regarded as a set of self-imposed handcuffs. Until the jobless rates drops beneath that magic number seven, the handcuffs stay on and rates don't go up.

And what we learned from the bank's Inflation Report today is that the handcuffs are likely to come off a lot sooner than had been expected.

Back in August, the bank didn't expect the unemployment rate to drop beneath 7% until at least the end of 2016.

Today it revealed it now believes unemployment will drop beneath this level at the end of 2014. That's a pretty big adjustment.

There are a few obvious implications. One is that the Bank's Monetary Policy Committee will be free to start voting on higher interest rates before the next election.

But taking the handcuffs off doesn't necessarily imply the captive will actually move his hands. Rates won't necessarily rise the moment forward guidance comes to an end.

Indeed, today the Governor signalled that markets, which currently expect the bank to start lifting rates in early 2015 and to bring them up to 1.7% by the end of 2016, may be getting ahead of themselves. However, if not before the next election, rate rises are likely shortly afterwards.

With the end of forward guidance (eg the handcuff period) already on the horizon, some have construed this as evidence of the policy's failure.

After all, it only kicked in three months ago. What, they ask, was the point of it in the first place?

The bank's answer is that forward guidance has helped cement the economic recovery and that recovery has come along sooner than expected, so that it's right forward guidance will come to an end (well, in late 2014/early 2015).

To use a rather odd analogy, consider the male honeybee. It dies as soon as it fertilises the queen bee, but its death allows the rest of the colony to survive.

In the same way, forward guidance, having stimulated economic recovery, will inevitably need to expire for the rest of the economy to recover. It is, in economic terms, the supreme sacrifice.

Economists are likely to argue about the wisdom or otherwise of the policy for some time. What matters for most of us is that growth is returning to the UK and that interest rates are likely to rise a touch sooner than expected.

One final noteworthy aspect of today's Inflation Report press conference was the amount of time the Governor spent answering questions about the housing market.

There is growing concern about a bubble (or at the very least some regional bubbles) emerging in UK property prices.

Mr Carney is clearly sensitive to this - we shall have to wait until the next meeting of the Bank's Financial Policy Committee to see whether he's willing to take action on it.

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British Gas Owner To Warn On Domestic Margins

By Mark Kleinman, City Editor

The owner of British Gas will warn on Thursday of stuttering margins in its residential gas and electricity supply business as the row over energy profits rages on.

Sky News has learned that Centrica is expected to say in a third-quarter trading update that British Gas' domestic supply margins are likely to come in significantly below 5% for the full year.

The news is likely to fuel the debate about energy company profits amid accusations by ministers that the 'Big Six' suppliers treat customers as "cash cows".

Centrica's announcement is unlikely to constitute a full-blown profit warning, with City analysts forecasting a broad spread of outcomes for the full year.

However, insiders said that Centrica was likely to "massage expectations" for the full year because of rising costs outside the company's control, with some downward revisions to forecasts the likely outcome of its guidance.

Analysts have pencilled in an average projection of adjusted operating profit of £2.95bn for the full financial year.

In line with its usual practice, Centrica will not provide detailed quarterly revenue or profit numbers in Thursday's announcement.

It is, however, expected to highlight challenging market conditions across many of its businesses, reflecting anxieties that have sent its shares into a prolonged decline in recent weeks.

"The company is braced for the shares to take another hammering after the trading update," said a City source close to Centrica.

In a note to clients, analysts at Credit Suisse said last week that they had concerns about weaker margins in its business energy supply operations and lower profitability in its upstream oil and gas production unit.

British Gas announced last month that it would raise gas and electricity prices by an average of 9.2% from November 23, becoming the third of the six firms that dominate the industry to do so.

Only German-owned Eon among the six companies has not yet announced a price hike.

The escalating conflagration about energy prices has cost Sam Laidlaw, the Centrica chief executive, an annual bonus potentially worth up to £2m.

Mr Laidlaw said at last week's annual CBI conference that he would waive the payout because of the political climate, although he will still be in line for a multimillion pound long-term share award for this year.

The Centrica boss has pledged that any reduction by ministers in the green levies that constitute a large chunk of consumers' bills would result in immediate price cuts.

George Osborne, the Chancellor, is expected to use next month's Autumn Statement to remove some of the environmental tariffs affecting energy costs although the exact mechanism for doing so is unclear.

On Tuesday, Ed Davey, the Energy Secretary, warned at an industry conference that companies were treating customers as "cash cows" and said they risked being compared to the venality of banks before the financial crisis.

The criticism prompted a furious response from the industry. SSE announced on Thursday that it made an operating loss of £115m for the half-year to September at its energy retailing business.

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Airbus Firm EADS Sees Profit Up 45% In Q3

Airbus parent company EADS has seen its profit increased by 45% in the third quarter, driven by strong commercial aircraft demand.

But the European jet maker warned that its free cash flow, a measure of cash generated by a business, would be negative this year.

EADS estimated the negative figure for 2013 at 1.5bn euros (£1.25bn) because of investment into lifting production and development of programmes such as the A350 long-range wide body.

The A350 is due to enter service in the second half of 2014.

Previously, the company had said its free cash flow would break even this year, compared to positive 1.5bn euros last year.

In a statement EADS said net profit for the July-September quarter rose to 436m euros (£366m), up from 301m euros (£252m) a year earlier.

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Energy Bills: Households Face 17 Years Of Hikes

Households are facing another 17 years of inflation-busting increases in energy and water bills, a spending watchdog has warned.

The National Audit Office (NAO) said consumers are being forced to pay more to stump up the cost of renewing Britain's ageing infrastructure.

It said the Government had little idea of the impact the continued price hikes would have on households or whether they would they would even be affordable.

Its findings will intensify the political debate raging over energy bills, with the Government under pressure to act after Labour promised a 20-month price freeze if they came to office.

The Treasury estimates that at least two-thirds of the £310bn of planned infrastructure investment over the next decade and beyond will come from private companies paid for, ultimately, by consumers through their utility bills.

The NAO said that such high levels of planned investment meant that the increases in charges for energy and water were now expected to continue to outstrip inflation until 2030.

It expressed particular concern about the plight of the low income households where energy and water bills accounted for 15% of spending in 2011 - almost double the overall average of 8% - while their incomes had fallen by 11% in real terms since 2002.

The head of the NAO, Amyas Morse, said that ministers needed to know at what point the continuing price rises would become too much for consumers to bear.

"Government and regulators do not know the overall impact of planned infrastructure on future consumer utility bills, or whether households, especially those on low incomes, will be able to afford to pay them," he said.

"It seems critical to know 'how much is too much', based on reliable information."

Margaret Hodge, the chairman of the Commons Public Accounts Committee, said ministers needed to work with the industry to ensure bills did not become "unmanageable" for consumers.

"I have serious concerns that government is taking decisions on infrastructure, banking on hard-pressed consumers to foot the bill, without knowing whether households will be able to afford to pay."

A Government spokesman said: "Decades of underinvestment have left the UK struggling with insufficient energy infrastructure, but we are committed to fixing the failures of previous governments, and to making the difficult decisions that will allow us to have the infrastructure we need."

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Energy Firm SSE Confirms £336.4m Profits

Energy firm SSE has confirmed a return to half year profits, just two days before its household bills are due to rise by an average 8.2%.

The company made a pre-tax profit of £336.4m in the six months to 30 September following a loss of £41m in the same period last year.

But SSE said its retail arm, which supplies energy to homes, made an operating loss of £89.4m - blaming higher wholesale gas charges and the growing cost of Government 'green' levies.

The company said in October it was raising household gas and electricity bills by three times the rate of inflation to help counter an expected loss in the retail business.

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Sainsbury's First Half Profits Hit £433m

Sainsbury's has announced a 9.1% increase in first half pre-tax profit to £433m as it battles Asda to be Britain's second-biggest supermarket chain behind Tesco.

Total sales including VAT and fuel rose 4.4% over the 28 weeks to September 28 - by 4% when the effects of fuel sales were stripped out.

On a like-for-like basis, which measures continuing operations, sales rose 1.4%.

The company said its strategy focused on own brand products alongside online and convenience store growth was resonating with customers.

Sainsbury's said it had now enjoyed 35 consecutive quarters of underlying sales growth, continuing to outshine Tesco, which last month posted a 1.5% fall in first half UK trading profit.

Its online grocery sales rose by 15% in the half, while convenience store sales increased over 20%.

The firm also benefited from the success of its "Brand Match" price comparison scheme, increased sales of non-food products, especially clothing, kitchen electrical and cookware.

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Energy Giants To Flag £3bn Tax Contribution

By Mark Kleinman, City Editor

Britain's under-fire energy companies will hit back at their critics on Tuesday by arguing that it contributed more than £100bn to the UK economy last year as it calls for "an honest and open debate" about the industry's future.

Sky News has obtained details of a new study of the sector's industrial profile that will be launched at the annual conference of EnergyUK, the lobbying organisation.

According to people briefed on the report, called Powering The UK, the group will say that in 2013 the energy industry was responsible for £102bn of economic value, both directly and through its supply chain, and paid more than £3bn in taxes.

Some £24bn of the economic value figure was direct investment, an increase of £3bn on 2012, EnergyUK will say. The body will add that its £11.6bn of investment to secure electricity and gas supplies was more than either private sector investment in transport, or public sector investment in health or education.

The conference will come at a critical time for the industry, with fund managers warning that they may have to reconsider their investments amid growing political and public hostility.

Four of the six largest energy retailers have increased gas and electricity prices in recent weeks, blaming a combination of rising wholesale costs and Government-imposed green levies.

The resulting political row prompted Sam Laidlaw, chief executive of Centrica, the owner of British Gas, to forfeit his annual bonus for 2013.

Ed Miliband, the Labour leader, pledged to freeze prices for 20 months if the party wins the 2015 general election, a promise which has intensified the cost-of-living debate dominating Westminster politics.

In response, Ed Davey, the Liberal Democrat Energy Secretary, has vowed to force the major energy suppliers to establish a system allowing customers to switch providers within 24 hours.

At a meeting between ministers and the industry on Monday, companies are understood to have argued that while it would be feasible to reduce the current switching timetable from five weeks, reducing it to one day would be impossible because of a statutory two-week cooling-off period.

In her foreword to Powering The UK, which has been produced in conjunction with EY, the accountancy firm, Angela Knight, EnergyUK's chief executive, is expected to refer to ongoing "uncertainty about energy policy".

"The economic climate is still difficult with households and businesses increasingly concerned about rising prices," Mrs Knight will say.

"Energy costs are driven by a mix of world energy prices, investments to meet our climate change commitments and other policy and network charges that flow through onto the bill.

"UK electricity and gas prices remain lower than average in other European countries but affordability is now at the top of most people's agenda. Policymakers - and the industry - must take that into account in everything we do."

Pointedly, Tuesday's report will say that the energy industry continues to create new jobs, unlike other sectors including financial services.

Prior to her role at EnergyUK, Mrs Knight was chief executive of the British Bankers' Association.

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Banks Do Battle In Cyber Warfare Exercise

By Ursula Errington, Business Reporter

Hundreds of staff from the UK's financial institutions will take part in a simulated cyber attack today.

The exercise, the details of which have been kept top secret, will be overseen by officials from the Bank of England, Treasury and Financial Conduct Authority, and will be monitored by the Government's cyber agencies.

It will concentrate on how investment banks would cope with a sustained attack on essential shared and company-specific systems, such as clearing and risk management tools.

The cyber war game, called Waking Shark II, will be led by a team from Credit Suisse, who have designed a scenario to be released to the participants in stages, as if the situation is unfolding in real time.

The test will take place in one room, with various companies and organisations sitting on different tables interacting as the situation gathers momentum. 

The aim is to help in-house IT security experts and fall-back operations planners to practise making swift decisions and communicate effectively with the regulator and industry partners to contain the problems thrown at them.

The last time such an extensive exercise was undertaken was in 2011, when institutions rehearsed how they would cope with a cyber attack during the busiest period of the London Olympics.

From that, it became apparent that an investment banking-focused exercise would be useful to lay out communication protocols between banking institutions and governing bodies, and to establish who would take the lead to co-ordinate a response in the event of such an attack.

According to David Emm, senior security researcher at internet security firm Kaspersky Lab, the right communication is vital in the aftermath of a cyber attack.

He told Sky News: "Businesses must have a plan of action which includes all relevant stakeholders from both internal and external parties.

"Communication across other sectors can be important as the effects on one company can have far reaching consequences for many others.

"The UK Government is keen to pursue a joined-up approach to dealing with cyber attacks - which is good news, but more work still needs to be done to help all businesses adopt a more secure mindset, and exercises like this help contribute to this."

Results and recommendations from the exercise will be published by early next year.

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Gas Bills 'Could Rise' Due To Low Reserves

By Thomas Moore, Health and Science Correspondent

Gas prices could soar this winter if the national supply runs short during another cold snap, an energy expert has warned.

Industry analyst Peter Hughes told Sky News that a "perfect storm" last March of extreme weather and the shutdown of two major pipelines caused prices to double.

And that could happen again because the Government has refused to support the storage of more gas.

"It foreshadows things to come," he said.

"The situation in terms of the risks will only get worse as North Sea production runs down and demand rises.

"That's the double whammy. And if you don't have more storage that translates into real vulnerability."

Britain currently stores enough gas for 13 days of supply. But Germany has reserves to last 69 days, in case there is a problem with the supply from countries such as Russia.

Storage companies buy up cheap gas in the summer, then release it over winter. The effect is to stop prices soaring.

A report by the Redpoint energy consultancy, commissioned by the Government, showed subsidies to encourage investment in more storage could save consumers almost £1bn over 10 years.

It examined four scenarios, three of which showed a net reduction in gas bills.

The UK stores gas in huge tanks - but Germany has five times more

But Energy Minister Michael Fallon rejected subsidies based on the one scenario to show an increase in costs. He also ignored long-term savings, making the costs look worse.

Speaking to Sky News, he was unrepentant, saying. "The money would ... be put on consumers' bills now.

"I would have had to be persuaded that this was a subsidy worth paying. I don't think it is worth it."

Three projects to increase storage capacity have been shelved in the wake of the decision.

Stag Energy had planned to pump gas into caverns under the Irish Sea, but said the scheme was now too expensive. Company boss George Grant said the Government had been shortsighted.

He said: "We view gas storage as an insurance policy for consumers.

"The Redpoint analysis shows there is a net benefit to consumers, but that's a point the Government glossed over."

:: Watch a day of special coverage on energy costs all day on Sky News - on Sky 501, Virgin Media 602, Freesat 202, Freeview 82, Skynews.com and Sky News for iPad.

There will also be a special programme on the energy industry on Jeff Randall Live this evening at 7pm.

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Public Pay '£56m Rip-Off' On Government Calls

More than 100 million calls by the public to Government departments were charged at premium rates - costing an estimated £56m, an influential committee of MPs has said.

A Public Accounts Committee report said of 208 million calls in 2012/13, some 63% were made to higher rate numbers with the Department for Work and Pensions (DWP) receiving 100 million of the calls and HM Revenue and Customs (HMRC) taking 68 million calls.

Committee chairwoman Margaret Hodge said: "Customers of Government services should be able to contact those services easily and cheaply. Charging customers higher rates by making them use 0845 or other high rate numbers is not acceptable, especially when the customers are often vulnerable people.

"We found that one third of customer telephone lines across Central Government used higher rate numbers. Half of those lines serve the poorest people.

"Customers spent an estimated £56m on calls using higher rate numbers, from the lines run by the Department for Work and Pensions, to helplines for victim support and the Bereavement Service and the inquiries and complaints line of the Student Loans Company."

Chairwoman Margaret Hodge has said the practice is 'not acceptable'

In its report, the committee also said calls to Government departments take too long to answer. It found most departments have no targets at all, despite a normal industry benchmark demanding calls be answered within 20 seconds.

It said HM Revenue and Customs only answered 16% of calls made to its tax credit helpline on July 31, the deadline day for notifying change of circumstances.

And across the first quarter of 2013/14, average call waits at HM Revenue and Customs were seven minutes, the report said.

Mrs Hodge said: "Performance by departments varies but is often astonishingly bad. HMRC managed to answer only 16% of the calls it received on its tax credits helpline on the deadline day for notifying the department of changes of circumstances.

"Citizens should not as a matter of principle have to put up with standards of service from government which are significantly worse than industry standards."

Richard Lloyd, executive director of consumer group Which?, said it was "ridiculous" that people face a bumper bill to call a public body.

HMRC has taken 68 million calls on higher rate numbers in the past year

"The Cabinet Office must now act fast to ensure the Government and public bodies lead by example and put an end to costly calls," he added.

The DWP has already said it will phase out the use of 0845 numbers.

A Government spokesman said: "We agree that it is inappropriate for vulnerable people to pay high charges for accessing vital public services and we are clear that a more consistent approach is needed.

"The Cabinet Office now runs a cross-departmental group to consider customer telephone lines. This group has made good progress in drafting guidance on prefix number selection and establishing best practice.

"We will publish this guidance and have a standing remit to ensure it is kept up to date."

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Mobile Spending 'Could Be Worth £23bn' By 2018

By Poppy Trowbridge, Business and Economics Correspondent

This year has been dubbed "The Mobile Christmas" and with 48% growth in mobile shopping, retailers are increasingly targeting shoppers through digital devices.

British retailers will spend nearly £400m on advertising during the last three months of 2013, and consumer spending via mobiles and tablets is worth about nearly £8bn a year, according to research firm Verdict.

But over the next five years, the spread of smartphones and tablets will see our spending on these devices triple to £23bn.

Spending via mobiles and tablets is expected to triple over five years

Two thirds of that shopping is done at home, as buyers often wait until they are logged in to a secure network before purchasing items.

Matthew Rubin, retail analyst with Verdict Research, said: "While we are expecting growth in successive years, we are expecting this year to be the highest level of growth. Retailers really need to invest in their mobile websites now."

John Lewis announced its £7m Christmas television advertising campaign on Friday. The ad is set to a cover of Keane's 2004 hit Somewhere Only We Know, sung by Lily Allen.

Supermarket chain Morrisons launched its Christmas TV advertising campaign during the prime-time slot of ITV's Coronation Street.

Some 20% of home shopping business at Asda is done via mobile or tablet

Asda says 20% of its home shopping business is done via a mobile or tablet, and that figure is growing by 1% each month.

The living room is becoming a key location for retailers to target consumers, as 67.2% of all online shoppers making a purchase from their home do so in their living room.

Wealthy young shoppers currently dominate mobile and tablet expenditure, but with increased access to cheaper, high-specification devices, older shoppers will have a much bigger impact over the next five years, Verdict research shows.

Still, window shopping hasn't entirely given way to digital methods yet.

Around 38% of online shoppers still research goods by viewing them in a store before purchasing them online.

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PM Targets Overseas Funds With New Trade Body

By Mark Kleinman, City Editor

Ministers are preparing to back the launch of an inward investment body that will target key British trading partners with the aim of raising billions of pounds from overseas to fund urban regeneration projects.

Sky News has learned that the Government is to unveil plans for the Regeneration Investment Organisation (RIO), a new 'one-stop shop' for foreign direct investors in the UK, within days.

RIO would, according to people familiar with its brief, be set up to attract inward investment into urban regeneration projects in the UK at a time when foreign investors have demonstrated a continuing appetite to pour money into infrastructure assets such as airports and utilities.

The new body has been developed under the auspices of UK Trade and Investment (UKTI), the Government's principal trade promotion organisation.

Its remit has been borne out of a frustration expressed by many major overseas investors about the bureaucracy and complexity of finalising major deals in the UK, according to one insider.

RIO has already begun appointing a senior management team, including Nahid Majid, an experienced urban planner who has worked for the Mayor's Fund for London, who will be RIO's chief operating officer.

According to details posted on LinkedIn, the professional networking website, Ms Majid's role is to work with sovereign wealth funds, pension funds, developers and international governments and UK embassies.

RIO's objective, it says, is to to develop "a pipeline of credible UK large-scale regeneration investment opportunities to market to overseas investors on ministerial and key overseas visits".

"This includes prioritising and promoting high quality opportunities; assessing the commercial viability (and) due diligence of projects and their suitability for promotion to overseas investors; analysing them against investor appetite and Ministerial priorities."

It will also involve "communicating and negotiating in resolving barriers to UK project delivery with UK government/ developers, and resolving investment barriers with international investors in the developed markets, Asia, Asia Pacific and the Middle East working with our network of UK global embassies," according to the website.

Employment adverts also accessible on the internet indicate that the RIO will aim to deliver £1.5bn of inward investment to the UK, although insiders said its ultimate ambition would be to achieve much higher figures.

The launch of the RIO could be announced as soon as this week, with David Cameron, the Prime Minister, due to make a key foreign policy speech at the Lord Mayor's Banquet on Monday.

Downing Street sources declined to comment on whether the new inward investment organisation would feature in his remarks at the event.

Mr Cameron is expected to visit China next month on a trade mission that will mark a continuing thaw in relations between the two countries following his meeting with the Dalai Lama last year.

George Osborne, the Chancellor, and Boris Johnson, the Mayor of London, were in China last month on separate efforts to drum up trade, although both trips were relatively light on specific deal announcements.

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BT Sport Secures Champions League Rights

BT Sport has signed a £1bn deal to broadcast Champions League and Europa League matches for three years from 2015.

BT has agreed to pay around £299 million a season for the rights to all 350 matches in the two Uefa competitions each season.

The Champions League is currently broadcast by Sky Sports and ITV.

In a statement, Sky said: "We bid with a clear view of what the rights are worth to us. It seems BT chose to pay far in excess of our valuation.

"There are many ways in which we can invest in our service for customers. We take a disciplined approach and there is always a level at which we will choose to focus on something else. If we thought it was worth more, we'd have paid more. 

"Nothing changes until 2015 and we look forward to 18 more months of live Champions League on Sky Sports.

"We will now redeploy resources and continue to bring customers the best choice of TV across our offering."

Telecommunications company BT launched two sports channels on August 1 this year.

Gavin Patterson, BT chief executive, said: "I am thrilled that BT Sport will be the only place where fans can enjoy all the live action from the Uefa Champions League and Uefa Europa League.

"Both tournaments are world class and firm favourites with many."

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Mobile Spending 'Could Be Worth £23bn' By 2018

By Poppy Trowbridge, Business and Economics Correspondent

This year has been dubbed 'The Mobile Christmas' and with 48% growth in mobile shopping, retailers are increasingly targeting shoppers through digital devices.

British retailers will spend nearly £400m on advertising during the last three months of 2013 and consumer spending via mobiles and tablets is worth about nearly £8bn a year, according to research firm Verdict.

But over the next five years, the spread of smartphones and tablets will see our spending on these devices triple to £23bn.

Spending via mobiles and tablets is expected to triple over five years

Two thirds of that shopping is done at home, as buyers often wait until they are logged in to a secure network before purchasing items.

Matthew Rubin, retail analyst with Verdict Research, said: "While we are expecting growth in successive years, we are expecting this year to be the highest level of growth. Retailers really need to invest in their mobile websites now."

John Lewis announced its £7m Christmas television advertising campaign on Friday. The ad is set to a cover of Keane's 2004 hit Somewhere Only We Know sung by Lily Allen.

Supermarket chain Morrisons launched its Christmas TV advertising campaign during the prime-time slot of ITV's Coronation Street.

Some 20% of home shopping business at Asda is done via mobile or tablet

Asda says 20% of its home shopping business is done via a mobile or tablet, and that figure is growing by 1% each month.

The living room is becoming a key location for retailers to target consumers, as 67.2% of all online shoppers making a purchase from their home do so in their living room.

Wealthy young shoppers currently dominate mobile and tablet expenditure, but with increased access to cheaper, high-specification devices, older shoppers will have a much bigger impact over the next five years, Verdict research shows.

Still, window shopping hasn't entirely given way to digital methods yet.

Around 38% of online shoppers still research goods by viewing them in a store before purchasing them online.

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Miliband Slams Payday Lenders' Kids Ads

Payday loans companies should be banned from advertising during children's TV shows, Labour leader Ed Miliband has said.

Mr Miliband used a piece in the Sun on Sunday newspaper to claim youngsters are targeted by firms keen to exploit "pester power".

Calling for them to be treated the same as gambling and junk food promotions, he said that, if the Advertising Standards Authority failed to act, a Labour government would legislate.

Accusing the companies of using "cartoon characters, trendy puppets or cute plasticine figures" to attract children, he writes: "We all know kids learn about values of family and friendship from what they watch.

Payday loan firms such as Wonga are accused of preying on children

"We also know how easily they can be influenced. That's why I really worry when payday lenders target our kids and young people.

"And that's what the evidence suggests they are doing. How else do we explain hundreds of thousands of pounds being spent by pay day lenders for adverts during children's TV programmes.

"And why else are they using cartoon characters, trendy puppets or cute plasticine figures in some of their ads?

"They aren't simply doing it to appeal directly to parents. They want to use pester power to get kids and teenagers to put pressure on their parents."

He cited a recent survey that showed more than one in three people with youngsters under 10 said their children had repeated payday loan ad slogans to them.

Father-of-two Mr Miliband is concerned about the influence of ads on kids

"The next Labour government will ask the Advertising Standards Authority to prevent irresponsible advertising by pay day lenders that targets or exploits children and young people," he said.

"This is not just about content but also the time of day when such adverts are shown. There is no justification for ever selling pay day loans during children's TV."

Martin Lewis, the founder of MoneySavingExpert.com, backed Mr Miliband's views - having previously told a Commons committee the companies' behaviour amounted to "grooming".

Bosses from the industry - which is under investigation by the Competition Commission - defended their practices when they appeared before MPs.

Henry Raine, head of regulatory and public affairs at Wonga, told the committee: "Wonga's business is aiming to lend to people who can pay us back, that's how we make money.

"The vast majority of people pay us back on time. We freeze interest after 60 days and 25% of people pay us back early."

Mr Raine said around 3% of loans, equating to around 40,000 of Wonga's 1.25 million customers, go to the 60-day period.

He said Wonga's record compared favourably with the rest of the loan industry, including credit card companies and banks.

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