Interest Rate Rise 'Signals End Of Crisis'

George Osborne Acts To Curb Housing Bubble

Updated: 1:25am UK, Friday 13 June 2014

By Jon Craig, Chief Political Correspondent

Barely a few minutes into his Mansion House speech, George Osborne said: "So while I know this is my fifth speech to you as Chancellor, I hope it is not my last."

I'll bet he does!

But whether he's back this time next year addressing the bankers and City money men and women, or listening to Ed Balls make it, could depend on the success or not of the measures he announced in this year's speech.

He wouldn't admit it. But the Chancellor now appears to accept that the threat of a "housing bubble" in London and some other parts of the country is a potential problem.

He doesn't want interest rates to rise before next year's general election to curb house price inflation. We know that from no lesser source than Her Majesty the Queen last week.

"To strengthen the economy and provide stability and security, my ministers will continue to reduce the country's deficit, helping to ensure that mortgage and interest rates remain low," she said right at the outset of her speech at the State Opening of Parliament.

So instead, the Chancellor plans to give the Bank of England powers to curb big mortgages being offered to people who can't afford the repayments.

Excuse me, though. Aren't many of the big lenders doing that already? Some lenders are limiting loans to four times salary and scrapping loans of more than £500,000. There has been a clampdown on interest-only mortgages too.

But the price of an average house rose by £223 a day last month and by 16% over the past year. It's not as if Mr Osborne hasn't been warned.

For months, the Liberal Democrat Business Secretary Vince Cable has been warning about a "housing bubble". But until now he has been slapped down by the Tory Chancellor.

Not any more. Mr Osborne told his City audience: "If London prices were to continue growing at these rates that would be too fast for comfort."

In other words, the Chancellor now recognises what critics of his Help to Buy scheme have been telling him: there is a problem in the capital, particularly, and elsewhere.

It doesn't take a genius to work out why: demand massively outstrips supply. So Mr Osborne is proposing to relax planning laws on so-called "brownfield sites", while protecting the green belt in those Tory constituencies in the shires.

Relaxing planning laws? How many times have we heard that before from senior Conservative politicians? The "Nimbys" in the leafier parts of Britain have other ideas.

To tackle the supply and demand problem in the capital, the Chancellor is promising "new housing zones across London backed by new infrastructure". Thousands of new homes for London families is the promise. We've heard a lot about that before, too.

No wonder Ed Balls MP, Labour's Shadow Chancellor, said: "George Osborne is still failing to tackle the root cause of the housing crisis which is that we are not building enough homes to match rising demand.

"And the danger of the Chancellor's failure to act on housing supply is that we see a premature rise in interest rates to rein in the housing market which ends up hitting millions of families and businesses."

A rise in interest rates before the election? No chance, Mr Balls.

But despite Mr Osborne's attempts to cool the housing market to avoid a rate rise before voters go to the polls in May 2015, I predict the so-called "housing bubble" will lead to interest rates going up after the election.

Whoever it is delivering the Mansion House speech this time next year.

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Carney Boosts Lloyds Plan For £1.3bn TSB Float

By Mark Kleinman, City Editor

The state-backed Lloyds Banking Group is this weekend considering increasing the price at which it sells shares in TSB, its high street subsidiary, amid strong demand from investors.

Sky News has learnt that Lloyds could announce early next week that it is revising the 220p-290p range for the flotation of TSB by raising the bottom end to approximately 240p.

Investment banking sources said Lloyds would make a decision after consulting its advisers during the next couple of days.

One insider said that the Mansion House address by Mark Carney, Governor of the Bank of England, had bolstered sentiment among City investors for TSB shares, with further interest registered on Friday.

Mr Carney said it was conceivable that interest rates would rise from their historic low of 0.5% sooner than markets expected, implying that a rate hike could come before the end of this year.

That would potentially benefit TSB, the profitability of which is geared to interest rates to a greater degree than most of its high street rivals.

One insider said the City's assumptions about TSB's profitability, outlined in its prospectus last week, might need to be revised given the boost to margins on mortgages and current accounts which could result from an early rate rise.

At the 255p mid-point of the 220p-290p range announced last Monday, TSB would be valued at £1.275bn, roughly 15% below its book value of just over £1.5bn.

The expectation that shares in the UK's seventh-largest lender will be sold for less than its book value disappointed some City analysts.

Yet even at that level, Lloyds would still attract a price for TSB that is significantly higher than the £750m which the Co-operative Group planned to pay for the 631-branch network before a deal collapsed last year.

The prospectus revealed that TSB made an after-tax profit of £172m last year on revenue of £798m, although the earnings figure included a £105m tax gain.

Banking sources also said that approximately 60,000 retail investors had applied for shares, lured by the offer of free bonus stock.

That figure could increase significantly by Tuesday, when the window for retail applications closes.

Lloyds is selling between 25% and 27.5% of TSB in the flotation.

It is required to offload the remainder by the end of next year under a state aid deal agreed with Brussels following the bank's taxpayer bail-out in 2008.

Lloyds, which is being advised by Citi, JP Morgan, UBS, Investec, Royal Bank of Canada and Rothschild, declined to comment.

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Retailers Set Goals On World Cup Success

By Emma Birchley, Sky News Correspondent

England fans are not the only ones hoping the players can find the back of the net as their World Cup campaign finally gets under way.

Retailers too are banking on success.

The Centre for Retail Research has estimated that every time England scores - shops, restaurants and pubs will benefit to the tune of almost £200m.

At Sainsbury's, designers started working on the merchandise more than a year ago.

Corporate affairs director Alex Cole said: "The longer England stays in the tournament, the more excuse we have got for parties as a nation.

"But also the sun is really important so the sunnier it is the more likely we are to say, yes, we will have a BBQ and get some people round to watch the match with us."

The further in the competition England progress, the better for retailers

But it is not just sales of sausages and beer that soar. TVs are selling well. So too are souvenirs and sportswear.

Takeaway pizzas are expected to sell in their millions but many people will head straight from work to bars or restaurants to watch the matches.

Phil Collinson, manager at Rileys Sports Bar in central London, is expecting 30,000 fans to come through the doors during the tournament.

"It's our responsibility to make sure everyone from all the different nations has the chance to see the matches," he said. "It will be an incredible atmosphere and great to be part of."

Reaching the final 16 is expected to see the takings by retailers, bars and restaurants rise by more than £1.3bn while a place in the final would be worth almost £2.6bn to the economy.

Michael Jarman says success equals spending

With England taking on Italy in their first game, it can mean split loyalties if you are running an Italian business in the heart of London.

But while there is no surprise who Lorenzo Mariotti, manager of the restaurant Little Italy in Soho, wants to win, he knows the importance of the home nation staying in the competition.

"We really need both teams to play well and go (as) far as they can and hopefully meet in the semi-final or final," he said. "It will be the most great game of the World Cup."

Former footballer and city trader Michael Jarman says success in the tournament will see football fans out spending.

"You find the general morale and momentum of the UK consumer is going to be more upbeat, a bit more optimistic," he said.

"You then have the new football season starting. Naturally there will be a better feel-good factor."

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Google In Talks To Take Virgin Galactic Stake

By Mark Kleinman, City Editor

Google is in talks with Virgin Galactic about a deal that will hand it crucial access to satellite-launch technology and an equity stake in Sir Richard Branson's $2bn (£1.2bn) space tourism venture.

Sky News can exclusively reveal that the discussions with Virgin Galactic are part of Google's ambitious project to put hundreds of satellites in low-Earth orbit in an attempt to extend internet access to billions of people.

Negotiations between the two companies have been taking place for months, and are said to be at an advanced stage.

The talks are likely to lead to a deal with two main elements, according to insiders.

Sir Richard Branson plans to be on the first commercial flight

The first will see Google inject hundreds of millions of dollars into a joint venture, with Virgin Galactic folding in the technology it has developed as part of its efforts to build the world's first space tourism business.

The second component will involve Google spending roughly $30m (£17.8m) in return for a small stake in the Virgin Galactic holding company.

The terms of the alliance have not yet been finalised and could yet be altered before a deal is struck.

A person close to Google said, though, that its £17.8m investment could value Virgin Galactic at as much as £1.2bn, equating to a shareholding of approximately 1.5%.

The deal could be reputationally valuable for Virgin Galactic, which has had to defend itself against frequent suggestions that problems with its development will curb its viability.

The company has insisted that flights should begin this year, although there is no firm date, while rivals such as Elon Musk, the billionaire businessman, are developing competing projects.

Celebrities including Ashton Kutcher, Katy Perry and Sir Richard himself are said to have paid $200,000 (£119,000) to secure seats on the venture's inaugural flights.

News of the talks with Virgin Galactic comes a day after Google said it was buying Skybox Imaging, a start-up satellite venture, for $500m (£297m).

SpaceShipTwo's first rocket-powered test flight took place last year

Skybox has developed small, comparatively cheap satellites which are capable of taking high-quality photographs and videos of the Earth.

Google is engaged in a race with internet rivals to extend web access to the billions of people who do not currently have it, by using balloons, drones and satellites.

Doing so contains powerful commercial incentives for Google, which would see usage of its services and advertising revenues benefit from a significantly-enlarged customer base.

Google has bought solar-powered drone maker Titan Aerospace

Its other acquisitions aimed at broadening internet access include Titan Aerospace, which it bought in April with the aim of building jet-sized drones which would utilise solar power to fly uninterrupted for years. The drones could be used to provide online access in remote parts of the world.

Virgin Galactic is about one third-owned by Aabar Investments, an Abu Dhabi-based group, which paid about $280m (£166m) for a 32% stake in the venture's holding company.

That deal valued Virgin Galactic at approximately $900m (£535m), meaning that the transaction with Google, if it is completed, would mean that the company's equity value had more than doubled since 2009.

Sir Richard and Larry Page, Google's co-founder, are close friends, and have registered the name Virgle for use on potential future business collaborations.

Google and Virgin Galactic both declined to comment.

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Carney Upstages Chancellor At Mansion House

George Osborne Acts To Curb Housing Bubble

Updated: 1:25am UK, Friday 13 June 2014

By Jon Craig, Chief Political Correspondent

Barely a few minutes into his Mansion House speech, George Osborne said: "So while I know this is my fifth speech to you as Chancellor, I hope it is not my last."

I'll bet he does!

But whether he's back this time next year addressing the bankers and City money men and women, or listening to Ed Balls make it, could depend on the success or not of the measures he announced in this year's speech.

He wouldn't admit it. But the Chancellor now appears to accept that the threat of a "housing bubble" in London and some other parts of the country is a potential problem.

He doesn't want interest rates to rise before next year's general election to curb house price inflation. We know that from no lesser source than Her Majesty the Queen last week.

"To strengthen the economy and provide stability and security, my ministers will continue to reduce the country's deficit, helping to ensure that mortgage and interest rates remain low," she said right at the outset of her speech at the State Opening of Parliament.

So instead, the Chancellor plans to give the Bank of England powers to curb big mortgages being offered to people who can't afford the repayments.

Excuse me, though. Aren't many of the big lenders doing that already? Some lenders are limiting loans to four times salary and scrapping loans of more than £500,000. There has been a clampdown on interest-only mortgages too.

But the price of an average house rose by £223 a day last month and by 16% over the past year. It's not as if Mr Osborne hasn't been warned.

For months, the Liberal Democrat Business Secretary Vince Cable has been warning about a "housing bubble". But until now he has been slapped down by the Tory Chancellor.

Not any more. Mr Osborne told his City audience: "If London prices were to continue growing at these rates that would be too fast for comfort."

In other words, the Chancellor now recognises what critics of his Help to Buy scheme have been telling him: there is a problem in the capital, particularly, and elsewhere.

It doesn't take a genius to work out why: demand massively outstrips supply. So Mr Osborne is proposing to relax planning laws on so-called "brownfield sites", while protecting the green belt in those Tory constituencies in the shires.

Relaxing planning laws? How many times have we heard that before from senior Conservative politicians? The "Nimbys" in the leafier parts of Britain have other ideas.

To tackle the supply and demand problem in the capital, the Chancellor is promising "new housing zones across London backed by new infrastructure". Thousands of new homes for London families is the promise. We've heard a lot about that before, too.

No wonder Ed Balls MP, Labour's Shadow Chancellor, said: "George Osborne is still failing to tackle the root cause of the housing crisis which is that we are not building enough homes to match rising demand.

"And the danger of the Chancellor's failure to act on housing supply is that we see a premature rise in interest rates to rein in the housing market which ends up hitting millions of families and businesses."

A rise in interest rates before the election? No chance, Mr Balls.

But despite Mr Osborne's attempts to cool the housing market to avoid a rate rise before voters go to the polls in May 2015, I predict the so-called "housing bubble" will lead to interest rates going up after the election.

Whoever it is delivering the Mansion House speech this time next year.

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Interest Rates May Rise 'Sooner Than Expected'

George Osborne Acts To Curb Housing Bubble

Updated: 1:25am UK, Friday 13 June 2014

By Jon Craig, Chief Political Correspondent

Barely a few minutes into his Mansion House speech, George Osborne said: "So while I know this is my fifth speech to you as Chancellor, I hope it is not my last."

I'll bet he does!

But whether he's back this time next year addressing the bankers and City money men and women, or listening to Ed Balls make it, could depend on the success or not of the measures he announced in this year's speech.

He wouldn't admit it. But the Chancellor now appears to accept that the threat of a "housing bubble" in London and some other parts of the country is a potential problem.

He doesn't want interest rates to rise before next year's general election to curb house price inflation. We know that from no lesser source than Her Majesty the Queen last week.

"To strengthen the economy and provide stability and security, my ministers will continue to reduce the country's deficit, helping to ensure that mortgage and interest rates remain low," she said right at the outset of her speech at the State Opening of Parliament.

So instead, the Chancellor plans to give the Bank of England powers to curb big mortgages being offered to people who can't afford the repayments.

Excuse me, though. Aren't many of the big lenders doing that already? Some lenders are limiting loans to four times salary and scrapping loans of more than £500,000. There has been a clampdown on interest-only mortgages too.

But the price of an average house rose by £223 a day last month and by 16% over the past year. It's not as if Mr Osborne hasn't been warned.

For months, the Liberal Democrat Business Secretary Vince Cable has been warning about a "housing bubble". But until now he has been slapped down by the Tory Chancellor.

Not any more. Mr Osborne told his City audience: "If London prices were to continue growing at these rates that would be too fast for comfort."

In other words, the Chancellor now recognises what critics of his Help to Buy scheme have been telling him: there is a problem in the capital, particularly, and elsewhere.

It doesn't take a genius to work out why: demand massively outstrips supply. So Mr Osborne is proposing to relax planning laws on so-called "brownfield sites", while protecting the green belt in those Tory constituencies in the shires.

Relaxing planning laws? How many times have we heard that before from senior Conservative politicians? The "Nimbys" in the leafier parts of Britain have other ideas.

To tackle the supply and demand problem in the capital, the Chancellor is promising "new housing zones across London backed by new infrastructure". Thousands of new homes for London families is the promise. We've heard a lot about that before, too.

No wonder Ed Balls MP, Labour's Shadow Chancellor, said: "George Osborne is still failing to tackle the root cause of the housing crisis which is that we are not building enough homes to match rising demand.

"And the danger of the Chancellor's failure to act on housing supply is that we see a premature rise in interest rates to rein in the housing market which ends up hitting millions of families and businesses."

A rise in interest rates before the election? No chance, Mr Balls.

But despite Mr Osborne's attempts to cool the housing market to avoid a rate rise before voters go to the polls in May 2015, I predict the so-called "housing bubble" will lead to interest rates going up after the election.

Whoever it is delivering the Mansion House speech this time next year.

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Osborne's Market Clean-Up: Too Little Too Late?

Another year, another probe into the misbehaviour of City bankers.

Thursday's announcement by George Osborne, the Chancellor, of a review called "Fair and Effective Markets" marks the fourth significant inquiry into the banking sector since the Coalition Government was formed in 2010.

The first three paved the way for profound reforms to the structure of the UK banking industry, and - to a lesser degree - of Royal Bank of Scotland, the state-backed lender.

Mr Osborne's latest review has less to do with structure and more to do with standards.

In the wake of the Libor-rigging inquiry, which has seen a handful of banks fined with more to come, the Chancellor believes there is further political capital to be generated from trying to stamp out errant behaviour.

His crosshairs are focused on the foreign exchange and commodity markets, where arcane price-setting mechanisms based on cosy huddles of bankers predominate.

The head of the City watchdog has already said that forex abuse may have been committed on a grander scale than efforts to manipulate Libor.

Under plans to be announced by the Treasury, legislation to regulate Libor will be extended to other financial benchmarks, with criminal sanctions among possible punishments.

The City's senior managers regime will be extended beyond UK-headquartered lenders to cover all banks with a British presence, while the Chancellor will create another dividing line with Brussels by not opting into EU rules covering criminal sanctions for market abuse.

The Treasury wants the new review to be complete within 12 months.

"The integrity of the City matters to the economy of Britain," Mr Osborne is expected to say in his annual Mansion House speech.

"Markets here set the interest rates for people's mortgages, the exchange rates for our exports and holidays, and the commodity prices for the goods we buy.

"I am going to deal with abuses, tackle the unacceptable behaviour of the few and ensure that markets are fair for the many who depend on them."

The Chancellor will, nevertheless, face the charge that he is closing the stable door long after the horse's departure.

Evidence of misconduct has, after all, been apparent since the financial crisis, with little concerted effort to tackle it until now.

Cathy Jamieson MP, Labour's Shadow Financial Secretary to the Treasury, said: "This review is too little, too late.

"We pressed Ministers to regulate commodities markets and the full array of financial benchmarks back in 2012, but the Chancellor failed to act."

Potentially more troubling for the Chancellor is that he will require widespread international backing to impose an effective clampdown on trading practices.

He may find that without it, his latest attempt to regulate the banking sector looks like little more than tinkering around the edges.

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Osborne To Crack Down On Money Markets

By Jon Craig, Chief Political Correspondent

New moves to clean up money markets and stamp out abuses like the Libor interest rate-fixing scandal are to be announced by George Osborne in his annual Mansion House speech later.

The Chancellor plans to bring in criminal sanctions with tough penalties for rigging financial markets and opt out of EU rules on market abuses because they are not tough enough, he claims.

Addressing the City's top bankers, investors, economists and analysts, Mr Osborne will vow to raise standards of conduct in the London's financial system by beefing up the regulatory and enforcement regime.

He will also launch a joint review by the Treasury, the Bank of England and the Financial Conduct Authority (FCA) into the way key wholesale financial markets operate.

In his speech, Mr Osborne will say strong and successful financial services that set the highest standards are an essential part of building a resilient economy.

"The integrity of the City matters to the economy of Britain," he is expected to say. "Markets here set the interest rates for people's mortgages, the exchange rates for our exports and holidays, and the commodity prices for the goods we buy.

Mr Osborne plans to get even tougher on market abuse

"I am going to deal with abuses, tackle the unacceptable behaviour of the few and ensure that markets are fair for the many who depend on them."

His pledges will include:

:: Extending legislation the Government put in place to regulate Libor to cover foreign exchange, fixed income and commodity markets, including bringing in new criminal sanctions;

:: Extending City banking rules to cover all banks that have a presence in the UK, bringing in foreign banks that have branches here;

:: Expanding the tough UK criminal regime for market abuse. As part of this, the UK will not opt in to EU rules, says Mr Osborne.

"Our own rules will be as strong or stronger than those of the EU, but will preserve flexibility to reflect specific circumstances in the UK's globally important financial sector," Mr Osborne will claim. He says the Government will consult on these steps in the Autumn.

Labour says the Chancellor's proposals are 'too litttle, too late'

The review of markets proposed by Mr Osborne comes at a time of serious allegations of misconduct in the financial markets, in foreign exchange, commodities and fixed income. The review will consider the scope of regulation, the role of industry standards and the need for additional resources, he says.

The review will run for 12 months and make recommendations for further action to strengthen the operation of fair and effective global financial markets, some of which may require international agreement, the Chancellor will say.

The review will be led by the Bank of England's new Deputy Governor for Markets and Banking, Minouche Shafik, with Martin Wheatley, Chief Executive Officer, FCA, and Charles Roxburgh, Director General Financial Services, HM Treasury as co-chairs.

A panel of market practitioners will also be appointed, to involve and reflect the views of the financial services industry in the Review. This panel will be chaired by Elizabeth Corley, CEO of Allianz Global Investors.

Dismissing the Chancellor's proposals, Cathy Jamieson MP, Labour's Shadow Financial Secretary to the Treasury, said: "This review is too little, too late. We pressed Ministers to regulate commodities markets and the full array of financial benchmarks back in 2012, but the Chancellor failed to act."

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Regulator 'To Reverse Car Insurance Hikes'

The competition regulator has announced a series of measures it says will help bring down the costs of insuring a car.

The proposals outlined by the Competition and Markets Authority (CMA) include imposing a cap on replacement vehicle costs passed on to an 'at fault' driver following an accident - estimated to currently total up to £180m annually.

It also wanted to ban price parity agreements between price comparison websites and insurers which stop insurers from making their products available to consumers elsewhere more cheaply.

The CMA called too for better information for consumers about their rights following an accident and on the benefits of no-claims bonus protection.

The CMA did not examine the impact of personal injury claims on premiums

It recommended the Financial Conduct Authority (FCA) examine how insurers inform consumers about other private motor insurance add-on products.

The CMA investigated after a previous study suggested many drivers were paying unnecessary costs arising from a "complex chain", inflating insurance premiums by as much as £200m a year. 

Alasdair Smith, chair of the private motor insurance investigation group and CMA deputy panel chair, said: "There are over 25 million privately registered cars in the UK and we think these changes will benefit motorists who are currently paying higher premiums as a result of the problems we've found."

The CMA said it did not consider the impact of personal injury claims in its investigation, citing recent changes implemented by the Ministry of Justice including the banning of referral fees for claims and other changes being considered.

The reforms are said to have already had a significant impact on premiums.

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Tycoons To Argue Case For Scottish Tax Revamp

By Mark Kleinman, City Editor

Scotland could become one of the world's five leading advanced economies if it adopts tax reforms designed to promote long-term investment, a group of economists and businesspeople will argue this week.

Sky News understands that N-56 will set out on Wednesday its argument for a series of measures that should be implemented regardless of the outcome of September's independence referendum.

Established by Dan Macdonald, the chief executive of property developer Macdonald Estates, N-56 is a new pro-business organisation which has consulted prominent researchers including Capital Economics about the viability of its proposals.

In a report called Scotland Means Business, the new group will call for the removal of tax disadvantages for equity versus debt financing in an attempt to promote long-term investment.

"(This would make) Scotland an attractive location for equity providers and other financial institutions; suppor the equity model of long term business finance, so providing long term patient finance; help to address the impact in pension funds of the removal of advance corporation tax in the UK; and encourage increased equity investment in growing Scottish businesses," according to a source with knowledge of the report.

Such a system could be structured through a 'dividend imputation system' such as that used in New Zealand which avoids the double taxation of dividend income.

N-56, which is named after Scotland's latitudinal position, is understood to be keen to remain distant from the politics of the intensifying independence debate.

One source said that the brother of Sir Nicholas Macpherson, the permanent secretary to the Treasury, was among those consulted about the new group's proposals.

Sir Nicholas was at the centre of a political row in April about a letter he wrote to rebuff Nationalists' claim that an independent Scotland would continue to use the pound.

He denied the SNP's suggestion that the Chancellor, George Osborne, had put pressure on him to argue against a continued currency union in the event of a 'Yes' vote.

"I would advise you against entering into a currency union with an independent Scotland. There is no evidence that adequate proposals or policy changes to enable the formation of a currency union could be devised, agreed and implemented by both governments in the foreseeable future," Sir Nicholas wrote in his letter.

N-56 will say in its report that it has examined the policy-making approach of successful economies including Denmark, Norway, Singapore and Switzerland.

A full list of founder supporters is likely to be published this week, which marks the milestone of 100 days until September's vote.

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Time Warner In Talks About $2.2bn Vice Deal

By Mark Kleinman, City Editor

Vice Media, the digital group which has mounted an aggressive assault on traditional news providers, is in talks to sell a major stake in itself to Time Warner.

Sky News has learnt that the two companies have been holding detailed negotiations about a deal.

One potential structure under discussion would see Time Warner injecting HLN, a news platform owned by its Cable operations, into Vice in return for roughly half the enlarged company.

A deal is expected to value Vice at roughly $2.2bn, about 50% more than last year's sale of a stake in the mini-conglomerate.

Sources said on Monday that talks between Time Warner and Vice were at an advanced stage but that some final details had yet to be agreed.

A deal could still fall apart, however, or assume a radically different structure, they added.

Founded in 1994 as a "punk zine" for music enthusiasts in Montreal, Vice has attracted huge attention from the global media industry with its provocative mix of content and rapid diversification: it now houses an advertising agency, a record label and a television show.

The company has built a significant presence in Shoreditch in London, one of 35 offices it now has around the world.

Among the "news events" for which it has become known was a TV show in which Vice's crew took the US basketball star Dennis Rodman to North Korea.

Shane Smith, the company's Canadian co-founder and chief executive, has repeatedly referred to Vice as "the Time Warner of the street" but has denied any intention of surrendering outright control of the group.

Vice operates some of Youtube's most popular channels and has content partnerships with a broad range of digital media providers, including Facebook and Twitter.

Its digital channels now include The Creators' Project, Motherboard and Noisey, a music discovery platform.

"I want us to be the next MTV, ESPN and CNN rolled into one - and everyone always rolls their eyes," Mr Smith told a newspaper last year.

"The reality is that MTV was bought by Viacom and CNN went to Time Warner. We have set ourselves up to build a global platform but we have maintained control."

Vice's management, led by Mr Smith, are expected to retain operational control of the business as part of a deal with Time Warner.

It was unclear on Monday how Vice's existing minority shareholders, which include WPP, the FTSE-100 marketing services group, would respond to a transaction.

Vice's other investors also include 21st Century Fox, which acquired a 5% stake last year in a deal valuing the company at $1.4bn, and Raine, a New York-based merchant bank.

The increase in Vice's purported value since then underlines the extent to which major media groups are keen to forge an alliance with the company.

The original Vice magazine now accounts for less than 5% of the company's revenues, which reached $175m in 2012, with video content dominating its business model.

A deal with Time Warner would provide Vice with the ability to expand its international operations more quickly.

Mr Smith has signalled his desire for Vice to make a significant impact in fast-growing markets such as China, India and South Korea, where multinational consumer brands are keen to align themselves with youth-focused content platforms.

Time Warner and Vice both declined to comment on their talks.

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Tesco Bank Challenges High Street Rivals

Tesco Bank has launched its first current account, claiming it will bring competition back to a market offering "ridiculously poor value" to consumers.

The bank's chief executive Benny Higgins said its first foray into the current account market would challenge the dominance of the major players on the high street despite having only a minimal branch presence.

Tesco said it was launching an account without the "smoke and mirrors" offerings, such as charges and introductory deals, used by others.

It would give 3% interest on balances but would charge a £5 fee unless holders paid in £750 a month.

Benny Higgins is Tesco Bank's boss

The account, which Tesco said could only be opened and managed online but with telephone support, would also allow deposits to be paid at 300 Tesco stores.

It aims to capture business from the six million existing customers who already use its savings, insurance and loans but also has its parent supermarket's 16 million Clubcard holders also in its sights.

Debit card spending on the current accounts will offer Clubcard points, both at Tesco and elsewhere.

Mr Higgins said it would bring a "fiercely competitive" customer focus from the retail sector which did not exist in banking.

He saw Tesco's offering as a rival to the so-called 'big four' of RBS, Lloyds, HSBC and Barclays - brands which have endured a public backlash for mis-selling in the wake of the financial crisis.

Another challenger bank will be TSB, which is being spun off from Lloyds in a flotation.

Mr Higgins said: "It is a market dominated by smoke and mirrors and we have tried to be as transparent as possible.

"The vast majority of current accounts are languishing with ridiculously poor value.

"There is still very little switching taking place in the UK and it's because people think that all the banks are the same."

Tesco chief executive Philip Clarke added: "Customers have told us that in banking they want us to deliver in the same way we do for millions of customers across the UK every day."

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Minimum Wage Dodgers 'Named And Shamed'

Twenty-five employers who failed to pay their staff the national minimum wage have been "named and shamed" by the Government.

It is the biggest number of employers publicly named since a new crackdown was announced last year.

Between them, they owe workers more than £43,000 in arrears, and face fines of over £21,000.

The minimum wage is currently set at £6.31 an hour.

Business Minister Jenny Willott said: "Paying less than the minimum wage is not only wrong, it's illegal. If employers break the law they need to know that they will face tough consequences.

"Any worker who is entitled to the minimum wage should receive it. If anyone suspects they are not being paid the wage they are legally entitled to they should call the Pay and Work Rights helpline on 0800 917 2368."

The Government also plans to increase fines, so that an employer underpaying 10 workers could face fines of up to £200,000.

TUC general secretary Frances O'Grady said: "Under-paying your lowest paid staff is immoral and illegal. Employers caught in the act deserve to be fined and have their reputation ruined.

"This should send a clear message that dodging the minimum wage does not pay. All minimum wage cheats should be named and shamed, and HMRC need greater resources to catch even more crooks."

The 25 employers are as follows:

:: Christine Cadden and Nicola Banks of Renaissance, Wirral, neglected to pay £7,310.65 to three workers.

:: Alan King and John King of Arthur Simpson & Co, Bradford, neglected to pay £6,426.12 to a worker.

:: Central Heating Services Ltd, Hampshire, neglected to pay £6,200.28 to four workers.

:: Cargilfield School Ltd, Edinburgh, neglected to pay £3,739.58 to a worker.

:: A2ZEE Construction Ltd, Cramlington, neglected to pay £3,375.51 to 14 workers.

:: Mr and Mrs Balasco of Eugenio, Bristol, neglected to pay £3,037.53 to two workers.

:: Mr and Mrs Hampton of The Wheatsheaf Inn, Cheshire, neglected to pay £2,057.88 to five workers.

:: Steven Stainton of Steven Stainton Joinery, Cumbria, neglected to pay £1,415.82 to a worker.

:: Runbaro Ltd, Swindon, neglected to pay £1,413.88 to a worker.

:: Satwinder Singh Khatter and Tejinder Singh Khatter of The Bath Hotel, Reading, neglected to pay £1,237.79 to two workers.

:: Richard Last of Classic Carpentry, Godalming, neglected to pay £1,236.72 to a worker.

:: We are Mop! Ltd, London, neglected to pay £1,018.05 to two workers. 

:: Mrs Sue English of Legends Hairdressers, Colchester, neglected to pay £823.40 to a worker. 

:: Saftdwin Ltd, Hampshire, neglected to pay £806.37 to two workers.

:: Master Distribution Ltd, Essex, neglected to pay £718.62 to a worker.

:: Perth Hotels Ltd, Perth, neglected to pay £556.80 to a worker.

:: Bryants Nurseries Ltd, Hertfordshire, neglected to pay £494.07 to a worker.

:: Dove Mill Retail Outlet Ltd, Bolton, neglected to pay £461.84 to a worker.

:: Luigi's Little Italy Ltd, Yorkshire, neglected to pay £281.04 to five workers.

:: CPS SW Ltd, Exmouth, neglected to pay £261.29 to a worker.

:: Mr Gary Calder, Mr Richard Calder and Mr Neil Calder of Avenue Agricultural, Northamptonshire, neglected to pay £256.55 to a worker.

:: Dakal Ltd, Northampton, neglected to pay £252.00 to two workers.

:: Zoom Ltd, Havant, neglected to pay £242.28 to three workers.

:: HSS Hire Service Group Ltd, Manchester, neglected to pay £149.00 to 15 workers.

:: Sun Shack Ltd, Hamilton, neglected to pay £134.35 to eight workers.

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F1 Investor Weighs Bid For Auctioneer Bonhams

By Mark Kleinman, City Editor

The biggest shareholder in Formula One (F1) motor racing is turning its attention to classic cars with a bid to take control of Bonhams, one of the world's largest auction houses.

Sky News understands that CVC Capital Partners was among a group of private equity firms which tabled preliminary offers for the company ahead of a deadline last week.

Bonhams, which has become a well-known name in the global auctioneering sector, specialises in selling fine art, classic cars and antiques.

The company was founded in 1793, and now claims market leadership in a number of areas, including the sale of Alfa Romeo, Aston Martin and Maserati cars for world record prices.

It is unclear exactly how much Bonhams is valued at although City sources indicated that it would be several hundred million pounds.

Bonhams is a relatively small business for CVC to contemplate an offer for, but if it is successful, it would extend the buyout firm's connection to the world's premier motorsport.

Key sales in 2013 included a 1954 Mercedes F1 car driven by the legendary Argentine racer Juan Manuel Fangio, which fetched £19.6m, and the Madonna Laboris, which became the most expensive Russian painting sold at auction when it attracted a £7.9m bid.

Last year, Bonhams saw profits more than double to £25m as wealthy buyers looked for alternative investment opportunities in a continuing environment of low interest rates.

It is jointly-owned by two businessmen: Robert Brooks, a former motor racing driver who has chaired the British Racing Drivers' Club, and Evert Louwman, a Dutchman.

Mr Brooks has said in the past that he wants to take advantage of Bonhams' strong balance sheet by building the company into a credible rival to Christie's and Sotheby's, the most famous name in the auction world.

It is unclear whether either of the existing shareholders would countenance an outright sale of their stakes.

Greenhill, an investment bank, was drafted in in March to recruit a new investor, with Bain Capital and Bridgepoint among the other private equity groups examining bids.

Headquartered on New Bond Street in London, the current Bonhams was formed from a merger with Brooks in 2000, and has established a presence in Dubai, Hong Kong and the US.

"2013 was a year where we saw the Bonhams brand establish itself further on the global stage," Mr Brooks said earlier this year.

"We have put significant investment behind growing a brand that can compete effectively in the key auction markets of the world."

A CVC spokesman declined to comment.

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Scots Independence: Business Pros And Cons

Scots Independence: BAE Systems Boss' Fears

Updated: 1:50pm UK, Wednesday 04 June 2014

The boss of Britain's biggest defence company has become the latest business leader to warn against Scottish independence.

BAE Systems chief executive Ian King said that a "yes" vote would damage the "certainty and stability" necessary for investment.

Mr King's comments were made on a company blog, as the official campaign over independence was launched.

The defence giant currently employs 3,600 people in Scotland.

He said the company was pinning its hopes on an official decision for naval procurement, as it overhauls shipbuilding operations in Glasgow.

Mr King said the company was "investing in facilities for the future" in Scotland "based on an expectation that the Government will make their major production decision for the next generation Type 26 frigate by the end of this year".

He said: "If Scotland became independent, we would no longer have that certainty and stability.

"We would then have to talk to our major UK customer, the Ministry of Defence, and jointly work out a plan for the future."

Supporters of the "yes" vote in the forthcoming referendum insist Scotland will be better off as an independent state within the EU.

First Minister Alex Salmond said independence will make Scottish homes £2,000 richer, while the Treasury says Scots will be £1,400 richer if they stay in the union.

But Mr King also voiced concerns about staff pensions post-independence.

He said: "If Scotland became independent and subsequently joined the European Union, our pension schemes, along with many other UK company schemes, may be caught up in EU regulations relating to cross-border pensions.

"The reality today is we can't say how our pension schemes would be affected.

"There would be a number of possible outcomes and we would use our consultation processes to discuss the options."

His comments come amid a growing business chorus questioning Scottish independence.

On Friday Kingfisher chief executive Sir Ian Cheshire, the boss of B&Q's parent firm, said there were too many uncertainties around tax, currency and Scottish EU membership.

Last month, the British Chambers of Commerce, which itself remains impartial in the debate, surveyed close to 2,500 of its members, and whilst 11% said Scotland should vote yes, some 85% preferred the union to remain.

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White Van Woman 'Held Back By Sexism'

By Clare Fallon, Sky News Reporter

Campaigners are calling for more help to encourage women to enter traditionally male professions, including plumbing, building and plastering.

Despite headlines about the rise of the so-called white van woman and claims a record number of females are working in the trades, industry experts say the proportion is still worryingly low. 

According to Women and Manual Trades, a national organisation which offers support to women, only around 1% of people in skilled trade occupations are female. 

Campaigners say part of the problem is sexist abuse still suffered by some women working in male-dominated professions. 

Hattie Hasan set up Stopcocks, an all-woman plumbing company, after working in the profession for more than two decades. 

She says sexist attitudes are still a problem.

"Unfortunately even after my own 25 years in plumbing things haven't changed much ... girls are still not encouraged to get into the trades.

"Firstly they're not encouraged at school. When I was at school, I just wanted the boys to fancy me, I didn't want to be a plumber and I think that's the pressure for most girls.

Hattie Hassan, who set up her own plumbing firm, calls for more role models

"The second thing is that there are not enough role models. The more female plumbers there are the more there will be because the more people see us the more they'll realise it is a possibility for them.

"There are a lot of things that people say women can't do such as carrying heavy things but health and safety rules mean even if you're a bloke you still can't carry over a certain amount of weight.

"Also I think people seem to forget that women carry babies ... and women do that on a regular basis so I don't think there are barriers where heavy things are concerned."

She added: "The barriers for women are that once women have trained where do they go? The opportunities for getting employment in plumbing are not as widespread as they used to be. It's difficult for lads coming out, but it's even more difficult for girls.

"So really the only route for them is self-employment."

However, there are signs things may improve in the future.

Training centres where construction skills are taught report an increase in the number of women enrolling. 

At Access Training in South Wales, women account for one in 10 of those signing up for courses including plastering, plumbing and electrics.

Mary Henderson swapped her admin job for plumbing

Mary Henderson quit her office job to retrain as a plumber, saying she was fed up being patronised by workmen she had hired. 

"I feel like it's a useful thing to have a trade in this competitive, career-driven industry - it just made sense.

"I used to work in admin, from when I left school, and basically I had a lot of trouble with my own bathroom ... I wanted to do something more practical so plumbing just seemed to pop out at me."

She believes there should be more encouragement for women to get into the trades.

"I don't think practical things are pushed at children leaving education  It's not gender specific, it's just something that boys tend to fall into whereas girls are pushed into the first job that comes and then it just rolls into admin.

"I think there should be more focus on school leavers. I think it's a really good thing to have a trade and it should be suggested to students because exams are forced on them and teachers can't afford to have an interest in what they do after that."

Although she is in a minority, Ms Henderson says she is content being a woman in a man's world.

"There is slight banter and it's a little less PC than what you find in an office, but to be honest I find that refreshing rather than threatening."

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Oil Giant Shell Kicks Off Hunt For New Chair

By Mark Kleinman, City Editor

Royal Dutch Shell, the biggest company on London's stock market, has kicked off the hunt for a new chairman.

Sky News has learnt that the oil giant has asked Egon Zehnder International, the executive search firm, to identify a successor to Jorma Ollila, who is expected to step down next year.

Mr Ollila will have served as Shell's chairman for nine years by next year's annual meeting, marking a natural departure point for the Finnish former Nokia boss.

It was unclear this weekend whether a successor could be drawn from Shell's existing ranks of non-executive directors, who include Guy Elliott, the former finance director of Rio Tinto; Sir Nigel Sheinwald, a former British ambassador to the US; and Linda Stuntz, a top American lawyer.

Some leading investors in Shell are likely to be keen for the company to appoint an outsider as its new chairman as the oil group continues to refine its strategy under its recently-appointed chief executive.

Ben van Beurden took over at the helm of Shell at the beginning of the year, having previously run its downstream operations.

Mr van Beurden was a surprise appointment to replace Peter Voser, another veteran Shell executive who was well-regarded in the City but who quit to spend more time with his family.

The process of finding Mr Ollila's successor is not thought to be especially well-advanced although an announcement about an appointment is likely to be made this year.

The leadership transition will represent another important moment for Shell, with Mr Ollila having taken over as chairman in 2006 in the wake of a scandal which involved the company dramatically overstating its reserves.

With a market capitalisation of more than £153bn, Shell's value outstrips that of every other British company, beating HSBC into second place. It is more than 50% larger than BP, its rival energy group.

Shell attracted some disquiet over its executive pay policies at its annual meeting last month, although it averted the scale of revolt witnessed at a large number of public companies in recent weeks.

The oil giant has also faced searching questions about its strategy since Mr van Beurden took over, after being forced into a profit warning in January which it blamed on weaker refining margins and higher exploration costs.

Like BP, it is engaged in a process of offloading non-core assets, which is expected to generate tens of billions of pounds in proceeds in the coming years.

A number of US shale assets are among those that Shell is likely to divest.

Shares in Shell have risen roughly 12% during the last year, a performance which has trailed that of the FTSE-100.

In his AGM speech, Mr Ollila acknowledged concerns about the company's progress.

"Our cashflow growth has been competitive in the last few years, and our cash flow, $40bn in 2013, was strong in our peer group.

"However, that's not the whole picture, since we have also had weak financial performance from some of our more mature businesses, from Downstream and North America upstream.

"The remuneration policies in the company reflect this performance, with total compensation for the executives reduced by some 50% from 2012 levels, including the use of downwards discretion on bonuses by the remuneration committee."

A Shell spokesman declined to comment on the search for Mr Ollila's successor.

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Minimum Wage Dodgers 'Named And Shamed'

Twenty-five employers who failed to pay their staff the national minimum wage have been "named and shamed" by the Government.

It is the biggest number of employers publicly named since a new crackdown was announced last year.

Between them, they owe workers more than £43,000 in arrears, and face fines of over £21,000.

The minimum wage is currently set at £6.31 an hour.

Business Minister Jenny Willott said: "Paying less than the minimum wage is not only wrong, it's illegal. If employers break the law they need to know that they will face tough consequences.

"Any worker who is entitled to the minimum wage should receive it. If anyone suspects they are not being paid the wage they are legally entitled to they should call the Pay and Work Rights helpline on 0800 917 2368."

The Government also plans to increase fines, so that an employer underpaying 10 workers could face fines of up to £200,000.

TUC general secretary Frances O'Grady said: "Under-paying your lowest paid staff is immoral and illegal. Employers caught in the act deserve to be fined and have their reputation ruined.

"This should send a clear message that dodging the minimum wage does not pay. All minimum wage cheats should be named and shamed, and HMRC need greater resources to catch even more crooks."

The 25 employers are as follows:

:: Christine Cadden and Nicola Banks of Renaissance, Wirral, neglected to pay £7,310.65 to three workers.

:: Alan King and John King of Arthur Simpson & Co, Bradford, neglected to pay £6,426.12 to a worker.

:: Central Heating Services Ltd, Hampshire, neglected to pay £6,200.28 to four workers.

:: Cargilfield School Ltd, Edinburgh, neglected to pay £3,739.58 to a worker.

:: A2ZEE Construction Ltd, Cramlington, neglected to pay £3,375.51 to 14 workers.

:: Mr and Mrs Balasco of Eugenio, Bristol, neglected to pay £3,037.53 to two workers.

:: Mr and Mrs Hampton of The Wheatsheaf Inn, Cheshire, neglected to pay £2,057.88 to five workers.

:: Steven Stainton of Steven Stainton Joinery, Cumbria, neglected to pay £1,415.82 to a worker.

:: Runbaro Ltd, Swindon, neglected to pay £1,413.88 to a worker.

:: Satwinder Singh Khatter and Tejinder Singh Khatter of The Bath Hotel, Reading, neglected to pay £1,237.79 to two workers.

:: Richard Last of Classic Carpentry, Godalming, neglected to pay £1,236.72 to a worker.

:: We are Mop! Ltd, London, neglected to pay £1,018.05 to two workers. 

:: Mrs Sue English of Legends Hairdressers, Colchester, neglected to pay £823.40 to a worker. 

:: Saftdwin Ltd, Hampshire, neglected to pay £806.37 to two workers.

:: Master Distribution Ltd, Essex, neglected to pay £718.62 to a worker.

:: Perth Hotels Ltd, Perth, neglected to pay £556.80 to a worker.

:: Bryants Nurseries Ltd, Hertfordshire, neglected to pay £494.07 to a worker.

:: Dove Mill Retail Outlet Ltd, Bolton, neglected to pay £461.84 to a worker.

:: Luigi's Little Italy Ltd, Yorkshire, neglected to pay £281.04 to five workers.

:: CPS SW Ltd, Exmouth, neglected to pay £261.29 to a worker.

:: Mr Gary Calder, Mr Richard Calder and Mr Neil Calder of Avenue Agricultural, Northamptonshire, neglected to pay £256.55 to a worker.

:: Dakal Ltd, Northampton, neglected to pay £252.00 to two workers.

:: Zoom Ltd, Havant, neglected to pay £242.28 to three workers.

:: HSS Hire Service Group Ltd, Manchester, neglected to pay £149.00 to 15 workers.

:: Sun Shack Ltd, Hamilton, neglected to pay £134.35 to eight workers.

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