Cyber Attacks On UK Businesses 'Soaring'

The number of cyber attacks hitting businesses has soared in the past year, Government-commissioned research has revealed.

The survey showed 87% of small firms - up 10% - experienced a security breach last year and 93% of large organisations had also been targeted.

The Information Security Breaches Survey, commissioned by the Department for Business, Innovation and Skills (BIS), found some of the attacks caused more than £1m of damage.

Affected companies experienced around 50% more attacks on average than a year ago.

The median number of breaches suffered by large organisations has risen from 71 to 113, while the figure for small firms is up from 11 to 17.

The Government has increased support for small firms to help them protect against electronic attacks.

The Technology Strategy Board has extended a scheme to allow small and medium enterprises to bid for up to £5,000 from a £500,000 pot to improve their cyber security by bringing in outside expertise.

BIS is also publishing guidance to help small firms make cyber security part of their normal risk management procedures.

Universities and Science Minister David Willetts said that keeping electronic information secure is crucial to a business's bottom line.

"Companies are more at risk than ever of having their cyber security compromised, in particular small businesses, and no sector is immune from attack," he said.

"But there are simple steps that can be taken to prevent the majority of incidents.

"The package of support we are announcing today will help small businesses protect valuable assets like financial information, websites, equipment, software and intellectual property, driving growth and keeping UK businesses ahead in the global race."

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Independent Scotland Could Lose The Pound

The Treasury has warned it may not be in the UK's best interests for an independent Scotland to retain the pound in a currency pact.

The Scottish government has outlined plans to keep the pound if the country becomes independent after next year's referendum.

But in a new report, the Treasury said the economic case for creating a "sterling zone" was not clear and cast doubt on whether a deal could be reached.

Chancellor George Osborne and Chief Secretary to the Treasury Danny Alexander will launch the report to an audience of business leaders in Glasgow later.

It outlines four options for currency if voters north of the border decide to leave the UK.

One would see Scotland keep using the pound in a formal agreement with the rest of the UK, creating a sterling currency union.

Alternatively, it could continue to use the pound unilaterally with no such deal in place, or join the euro, or introduce a new Scottish currency.

Scottish First Minister Alex Salmond is pushing for independence

The Scottish Government wants the "sterling zone" and economic experts there have concluded it is "sensible" and an attractive choice for the rest of the UK.

But the Treasury report said a formal sterling currency union "would only be possible if both an independent Scotland and the continuing UK could reach an agreement that satisfied both countries' economic interests".

It argues a formal sterling currency union would be "very different to the current arrangements and would be a profound economic change for both states".

An independent Scotland would "need to agree a negotiated set of constraints on its economic and fiscal policies", the report said.

It added: "In practice, this would be likely to require rigorous oversight of Scotland's economic and fiscal plans by both the new Scottish and the continuing UK authorities.

"Even with constraints in place, the economic rationale for the UK to agree to enter a formal sterling union with a separate state is not clear.

"The recent experience of the euro area has shown that it is extremely challenging to sustain a successful formal currency union without close fiscal integration and common arrangements for the resolution of banking sector difficulties."

Treasury warning: Chancellor George Osborne

The paper argues the "current currency and monetary policy arrangements within the UK serve Scotland well", describing the UK as "one of the most successful monetary, fiscal and political unions in history".

It concluded: "All of the alternative currency arrangements would be likely to be less economically suitable for both Scotland and the rest of the UK."

It also claims both the Scottish and UK governments would need to agree for the commercial banks in an independent Scotland to continue issuing sterling notes as part of a currency union.

The Treasury has said the role of the Bank of England, as the central bank of the UK responsible for issuing notes by all commercial banks, would have to be reviewed under independence.

Scottish Finance Secretary John Swinney condemned suggestions that Scottish banknotes could be lost under the SNP's plans as "insulting" and insisted they would be kept.

He also claimed that the pound was "every bit as much Scotland's currency as it is England, Wales and Northern Ireland's".

He said: "If this scare story is the best George Osborne can do in advance of his visit to Scotland then it betrays the utter weakness of his case."

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EE Reports 'Strong Demand' For 4G

EE - which owns the Orange and T Mobile brands - has said almost 320,000 customers have signed up for its 4G services.

It is the first time Britain's largest mobile network operator has given subscriber numbers since it launched its super-fast broadband service earlier than rivals.

The company used its existing airwaves to launch 4G in October last year - but competitors have to wait until later this year, following the auction of the UK's 4G spectrum.

EE - a joint-venture owned by France Telecom and Deutsche Telekom - said it was "firmly on track" to meet its target of more than one million 4G customers by the end of 2013.

It added that the super-fast broadband services had boosted the average amount each customer paid - by 2.2% in the first quarter of the year.

Chief financial offer, Neal Milsom, said the company was making "good progress" and the results were in-line with expectations

"We're announcing 318,000 4G customers after just five months of trading, strong postpaid net adds and continued growth in our underlying average revenue per user," he said.

"We expect to strengthen our industry leadership position in the year ahead as the 4G roll out continues and we introduce double-speed 4GEE."

Average speeds will climb to 20Mbps in ten UK cities by the end of June, the company said.

The existing 4G service already offers speeds around five times faster than 3G, meaning quicker downloads and internet browsing.

EE added that it was on track to expand its 4G coverage to cover 55% of the population by the end of June, and 70% by the end of the year.

The company, which now has around 27 million customers, was formed when Orange and T-Mobile joined forces in 2010.

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Ofgem Changes: Warning Over New Energy Tariffs

More than three million households could be paying more than they need to under new energy tariffs proposed by Ofgem, according to new research.

The consumer group Which? estimates energy customers could face bills of an extra £55m in total.

Ofgem's proposed tariff comparison rate aims to simplify energy tariffs and allow consumers to compare tariffs across the market.

Consumers will be advised on their best deal based on medium usage of gas and electricity, but only 26% of consumers use this level of energy.

The remaining 74% will be directed to tariffs which could be unsuitable for their usage and would cost them more, Which? claimed.

Which? estimates around 500,000 low energy users, who tend to be on the lowest incomes, could be advised on the wrong tariffs.

Richard Lloyd, executive director at Which?, said: "Rising energy bills remain one of consumers' top financial concerns yet six in 10 of us have never switched supplier as people are left baffled by the vast array of complicated tariffs.

"These current proposals are far too complicated and will fail to achieve their aim of making it easier for people to find the best deal, with three-quarters of people being asked to compare prices that are not based on their energy usage.

"The Government should introduce single unit prices for each energy tariff so people can easily see the best deal for them at a glance. Only then will people have the confidence to switch, injecting much-needed competition into the broken energy market."

But an Ofgem spokesman said the reforms would "deliver a simpler, clearer and fairer energy market for consumers and will make it much easier for consumers to choose the right deal for them".

He added: "Which? is misrepresenting the purpose of the tariff comparison rate and how it fits into the full scope of Ofgem's reform package. The tariff comparison rate acts as a prompt to consumers to take a look at comparative deals.

"The tool is similar to the 'typical APR' used in financial services marketing. But it is partnered with personalised consumption information necessary to make a full and accurate cross market comparison, which every supplier must provide via bills and annual statements. Ofgem's reforms will also see suppliers' cheapest deals on your bill.

"We share the desire with Which? to see an at-a-glance tariff comparison. We are taking forward our innovative proposals to put the market cheapest deal on consumers bills - even if it is from a rival supplier - and this will remove the need to compare tariffs altogether. We hope Which? will respond positively to our invite to them to join this next stage of our work."

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Mediterranean Resort Holiday Costs 'Plunging'

Prices have plunged in popular Mediterranean resorts, according to a holiday cost-comparison report.

The tumbling prices mean favourite spots in Portugal and Spain are more affordable for Britons despite the weakness of the pound against the euro, the report from Post Office Travel Money showed.

The survey looked at in-resort prices, such as meals and drinks, at 20 locations, including Bournemouth and Blackpool in England.

Judged on 10 items, Albufeira in the Portuguese Algarve had the lowest prices, with the items costing £46.34.

Torremolinos in southern Spain was the second cheapest on the list

The most expensive resort on the list was the Jumeirah region of Dubai in the United Arab Emirates, where items cost £103.23.

A cup of coffee in a bar or cafe in Albuefeira was 93p, but as much as £3.91 in Dubai.

Albufeira was only fractionally cheaper than in Torremolinos in southern Spain, where the items cost £46.50, and Javea on Spain's Costa Blanca (£47.14)

Prices at these three resorts are between 15% and 20% lower than this time last year.

Andrew Brown of Post Office Travel Money said: "The pound may be worth less in Europe than a year ago but fierce competition means that lower prices in several of the resorts we surveyed can easily offset the falling value of sterling.

The survey found Jumeirah region of Dubai the most expensive

"Taking some time to check out resort costs and add them to package prices to find the best overall deal will pay dividends this summer. "

Back in the UK, Blackpool, where the items cost £65.96, ranked 11th cheapest in the 20-strong list, with Bournemouth (£78.01) 14th.

And Italy is still proving an expensive place to visit. Sorrento (£101.79) and the region of Tuscany (£94.92) were the second and third dearest destinations.

While a three-course evening meal for two, with wine, was just £20.56 in Albufeira, it was as much as £70.09 in Tuscany.

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Pub Industry Gets New Code Of Conduct

New plans to protect pub landlords against high rent and beer costs to try and shore up the ailing industry have been unveiled by the Government.

Under the proposals, a code of practice and an independent adjudicator with the power to investigate and settle disputes would be introduced.

The Department of Business claims the moves will ensure fair treatment and could save landlords £100m a year.

The new code would contain mandatory rules for all pub companies who own more than 500 pubs, who are the source of 90% of complaints.

It will particularly focus on stopping firms abusing the beer tie, under which landlords are forced to buy beer from the pub owner instead of on the open market.

Ministers hope the changes will also boost small British beer and ale manufacturers by opening up pubs to select independent beers.

The adjudicator would be able to impose sanctions and fines in cases of abuse - ending the self-regulation which has been in place since 2004.

The Government is putting the plans out for consultation and wants to look at whether the ownership threshold is fair.

Business Secretary Vince Cable said: "We gave pub companies every chance to get their house in order. But despite four select committee reports over almost a decade highlighting the problems faced by publicans, it is clear the voluntary approach isn't working.

"Pubs are small businesses under a great deal of pressure, many of which have had to close. Much of that pressure has come from the powerful pub companies and our plans are designed to rebalance this relationship."

It is claimed that more than 3,500 pubs have shut since 2009 because of overcharging for rent and beer.

Figures cited by the Department of Business suggest almost half of tied pubs - which make up 48% of all the pubs in the UK - earn less than £15,000-a-year.

At the Devonshire Arms in the affluent village of Dore in Sheffield's commuter belt, licensee Tina Gage says the new code cannot come soon enough.

The pub is a bustling community hub, but she says her landlord charges £150,000 each year for rent and the drink she sells, leaving her with no salary at all.

"There's no other business in the world where you would rent a building from somebody and they would force you to buy their product," she said.

Ten years after taking on the lease she has won a rent reduction after going to court, but says unless she makes a profit soon, this year will be her last behind the bar.

"I've got to try to turn it road this year or I will have to call it a day," she warned. "And if I go, someone else will come in and take the pub and the same thing will happen to them."

The Liberal Democrat MP Greg Mulholland, who leads the all-party Save the Pub group, has campaigned for legislation to stop what he calls wholly unacceptable rents.

"The problem here is the large pub companies in this country are based on a business model of taking more than is fair and reasonable in pub profits," he said.

"The code will address that, and the key phrase is the Government have committed that a tied licencee will not be worse off than a free-of-tie licencee."

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Fitch Strips UK Of AAA Rating On Debt Outlook

Ratings agency Fitch has stripped the UK of its AAA rating, citing a "weaker economic and fiscal outlook".

The agency placed the UK on an AA+ rating, following Moody's downgrade of UK debt in February.

A Fitch statement said: "The downgrade of the UK's sovereign ratings primarily reflects a weaker economic and fiscal outlook and hence the upward revision to Fitch's medium-term projections for UK budget deficits and government debt."

The downgrade will place further pressure on the Government ahead of next week's first quarter GDP figures, which will reveal if Britain has managed to avoid an unprecedented triple-dip recession.

The agency now expects Government debt to peak at 101% of GDP in 2015-16, only declining gradually in 2017-18. That is worse than its previous forecast of debt peaking at 97% of GDP and declining in 2016-17.

Fitch, which waited until stock markets had closed before announcing the downgrade, had already warned that Government failure to stabilise debt below 100% of GDP and set it on a firm downward path would trigger a downgrade.

Chancellor George Osborne had pledged to retain the UK's AAA status

The statement said: "Despite the UK's strong fiscal financing flexibility underpinned by its own currency with reserve currency status and the long average maturity of public debt, the fiscal space to absorb further adverse economic and financial shocks is no longer consistent with an AAA rating."

Fitch slashed the UK's growth forecast to 0.8% this year, from its earlier expectation of 1.5%. Next year it expects the UK economy to grow by 1.8%, down from its previous 2% forecast.

Earlier this week, the International Monetary Fund also cut the UK's growth forecast growth from 1% to 0.7% this year and 2014's projection from 1.9% to 1.5%, noting the recovery was "progressing slowly".

IHS Global Insight economist Howard Archer said the downgrade was "no surprise" and is likely to have minimal market impact.

"Nevertheless, Fitch's move is another slap in the face for the government - particularly as the Chancellor (George Osborne) made keeping the AAA rating a key focus for the UK," he said.

Fellow ratings agency Standard & Poors held the UK's debt rating steady at AAA earlier this month, but warned over the economy's "negative outlook".

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George Osborne Urged To Rethink Economic Plan

Lagarde's Support For Osborne

Updated: 4:29pm UK, Saturday 20 April 2013

By Ed Conway, Economics Editor

A few weeks ago, eagle-eyed Twitter users would have noticed a rather unusual tweet from one household name to another.

"Welcome to Twitter @George_Osborne," read the public message from @Lagarde, "see you in two weeks at the 2013 IMF/WB spring meetings in Washington, DC".

It was, it turns out, the only personal tweet that Christine Lagarde sent to any other finance minister in the run-up to this past week's Spring Meetings in Washington DC.

This is no coincidence. Lagarde and Osborne really are good friends. They talk regularly (and not just on Twitter); they have a genuinely warm personal and professional relationship.

Osborne was the first major finance minister to endorse Lagarde for her post as managing director of the International Monetary Fund and she, in turn, has always been steadfastly and publicly supportive of his economic policy.

Last summer, Lagarde made a personal appearance at the UK Treasury to unveil the Fund's annual assessment of the British economy, and endorsed the Osborne economic plan.    

She memorably said that when she tried to imagine what the public finances would have looked like without the Chancellor's austerity measures, "I shiver."

Even as the Fund's professional assessment of the UK economy's health turned negative, Lagarde's support for Osborne has remained unwavering.

Earlier this week in Washington, the IMF chief economist, Olivier Blanchard (who, like Lagarde, is French) said Osborne would have to reduce the pace of his spending cuts, adding that the Chancellor was "playing with fire".

The World Economic Outlook said, in black and white, that "greater near-term flexibility in the path of fiscal adjustment" was necessary in the UK – economese for "you need to consider plan B".

And yet when asked about Britain, Lagarde offered a far more equivocal verdict: there was "nothing new" in the Fund's assessment that the UK should be ready to change course if and when economic growth disappointed - though she conceded that "the growth numbers are not particularly good."

This difference in tone has been useful for the Chancellor. When asked in a press briefing about Blanchard's criticism, Osborne quoted Lagarde's comments at length, saying that the chief economist was "just one voice".

However, the reality, according to a range of Fund insiders, is quite the contrary. They point out that the institutional IMF view is far closer to Blanchard's opinion than Lagarde's. That it is Lagarde who is the outlier.

In fact, some Fund officials were privately aghast when they heard Lagarde claim in that press conference that there was "nothing new" in the Fund's position on the UK.

One told me that within the Fund some were muttering that Lagarde's good relationship with the Chancellor - and her consequent efforts to be diplomatic - were undermining the overall message: that Britain must change course.

However, if there were any doubt about the Fund's true position, it has now been laid to rest by Lagarde's deputy, David Lipton. In an interview with Sky News, he said, explicitly, that when it comes to Britain's budget, "the pace of consolidation ought to be reconsidered".

The precise numbers, he signalled, would have to wait until the Fund's official survey begins next month, but the verdict could hardly be clearer.

The intervention is particularly significant given who it has come from. Lipton is not a household name; he is not on Twitter. But not only is he Lagarde's deputy, he is the man who will take her place to unveil the ominous findings of the IMF assessment in London next month. It's enough to make George Osborne shiver.

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Arsenal Co-Owner Is Now UK's Richest Man

Britain has a new richest man - Russian co-owner of Arsenal Football Club Alisher Usmanov has taken the top spot from the previous Rich List number one Lakshmi Mittal.

Mr Usmanov, who has a near-30% stake in Arsenal, is worth £13.3bn, putting him into the top spot of the 25th annual Sunday Times Rich List.

Researchers found the 1,000 richest people in Britain have wealth totalling almost £450bn.

There are now a record 88 billionaires among the country's wealthiest 1,000 individuals and families, up from 77 billionaires in 2012 and just nine in 1989.

The combined wealth of the top 200 people in the 2013 Sunday Times Rich List is £318.2bn, a more than eightfold rise on the £38bn for the combined wealth of the 200 people featured in the first Rich List in 1989.

In 1989, the Queen was Britain's richest person.

Russian businessman Mr Usmanov started off making plastic bags, but went on to found a business empire with numerous interests.

As well as Metalloinvest, the country's biggest iron ore producer, he owns a stake in mail.ru, the largest internet company, and has a big holding in MegaFon, a mobile phone operator that listed on the London and Moscow stock markets last year.

Uzbekistan-born Mr Usmanov, 59, also owns Sutton Place, the former Surrey home of the late oil baron J Paul Getty, as well as a £48m mansion in north London.

He shares a passion for sport with his wife, Irina Viner, 64, head coach of Russia's rhythmic gymnastics team, whom he met when he was a young fencer.

Second in the list is Ukrainian Len Blavatnik, the highest riser in the list in wealth terms.

Mr Blavatnik is now worth £11bn, an increase of £3.4bn on last year.

Odessa-born Mr Blavatnik, who owns Warner Music, received £2bn last month for his stake in TNK-BP, when company was sold to state-owned Russian oil company Rosneft.

After eight years at the top of the Sunday Times Rich List, steel magnate Lakshmi Mittal has dropped down to fourth place.

Mr Mittal is now only worth £10bn, making him the biggest faller in wealth terms.

The 40% stake Mr Mittal and his wife Usha hold in the steelmaking giant ArcelorMittal has plummeted from £28bn at its peak to £5.95bn.

The highest placed UK-born person in the 2013 Sunday Times Rich List is The Duke of Westminster, ranked eighth and worth £7.8bn. The Duke's interests are mainly in London land and property.

Chelsea Football Club owner Roman Abramovic was fifth with £9.3bn.

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Osborne Issues Legal Challenge To EU Bank Tax

By Ed Conway, Economics Editor

George Osborne has launched an unprecedented legal challenge against European plans for a financial transactions tax.

The move, which will be seen as a further sign of fraying relations between the UK and the rest of the continent, is designed to force the European Commission to reconsider the levy on Europe-related financial activity.

The Chancellor revealed the details on the fringes of the International Monetary Fund meetings in Washington.

Mr Osborne told Sky News: "What I am against is the European Commission coming up with a financial transaction tax that damages Britain. I want to make it clear Britain doesn't want to be a part of that and doesn't want to be affected by a European financial transaction tax even if we're not directly part of it.

"And so we've mounted a legal challenge in the European Court of Justice - that is the correct way to handle these things - the challenge went in yesterday."

According to insiders, this is the first time the UK has challenged legislation of this kind. Under the Commission's current plans, there will be a small charge (0.1% for shares and bonds and 0.01% for derivatives) on all financial transactions within the 11 members of the European Union which have signed up to the tax.

This alone is forecast to knock 0.25% off economic growth according to the Commission's official assessment, although some economists fear this could be an understatement.

It is feared the EU tax plans will adversely affect banks in the UK

The Chancellor said the reason for the legal challenge was that the tax will also hit Britain itself in two ways: first because it will affect any euro-denominated transactions – many of which happen in London.

Second, the tax will apply to all transactions of banks with headquarters in the signed-up EU nations, even if they are in London or outside Europe.

Treasury insiders said the worry was that it could knock significant value off British pension funds and investments.

They characterised the legal challenge, which may take years to be heard, as an important insurance policy in the legislative battle to get the tax amended.

However, analysts said that the move marked a significant escalation in tension between the UK and the Commission.

Mats Persson of think tank Open Europe said: "The economic, legal and political implications of this move for future EU-UK relations are huge… Legally, it could set out the parameters for how a 'flexible Europe' involving different levels of participation in the EU – which Prime Minister David Cameron has said he champions – will be governed.

"Politically, it's a test of the extent to which the UK – as a non-eurozone member - can halt or change EU measures with a profound impact on its national interest. Therefore, it will be a key issue in the on-going debate about the UK's continued EU membership."

The Chancellor also defended Britain's economic reputation, which has been dealt a blow this week by comments by the IMF chief economist Olivier Blanchard that Mr Osborne is "playing with fire" with his fiscal policy.

The Fund is due to come to the UK next month to carry out its annual survey of the economy. It is expected to advise the Chancellor to slow the pace of his austerity program.

"When the IMF comes to town we will make it absolutely clear that what we're doing is both enhancing the credibility of the United Kingdom by dealing with our debts and deficits but also supporting the British economy,"  Mr Osborne said. 

"For example, through the new housing scheme - the help to buy scheme which I launched at the Budget, through the work we're doing on funding for lending, through the work we've done on tax, for instance to increase the personal allowance."

Asked about criticisms of the Help to Buy scheme, under which the Government will guarantee mortgages for homebuyers, Mr Osborne said: "We are at a period of real weakness in the housing market, so the risks of a housing bubble are pretty non-existent.

"The key thing is that this scheme is time limited and we've given the keys to it to the [Bank of England's] Financial Policy Committee so it can turn it off in the future."

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