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.

14.47 | 0 komentar | Read More

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.

14.47 | 0 komentar | Read More

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.

14.47 | 0 komentar | Read More

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."

14.47 | 0 komentar | Read More

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.

14.47 | 0 komentar | Read More

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.

14.47 | 0 komentar | Read More

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."

14.47 | 0 komentar | Read More

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.

14.47 | 0 komentar | Read More

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.

14.47 | 0 komentar | Read More

Metro Bank Seeks £285m In New Cash Call

By Mark Kleinman, City Editor

Metro Bank is to tap shareholders for nearly £300m in a larger-than-expected fundraising that will see the high street lender delaying a flotation until 2016.

Sky News has learnt that Metro Bank told its existing investors on Friday that it plans to raise £250m with the option of a top-up offer to increase that sum to £287.5m, more than it has received so far in its brief existence.

The new capital will be used to fuel the further growth of the first new British high street bank in more than a century, as it accelerates the opening of new branches and its expansion into London's broader commuter belt.

According to sources familiar with a prospectus issued as part of the fundraising process, Metro Bank's board wants to grow its branch network from 21 stores today to 150 by 2020, and is targeting 280,000 customers by the end of the year, up from 238,000 on September 30.

The bank has already been a beneficiary of a new seven-day current account-switching regime launched by the Government earlier this autumn as ministers attempt to kickstart a more competitive retail banking market.

Sky News revealed earlier this week that Metro Bank had decided to shun an immediate stock market listing in favour of a private fundraising, with existing shareholders able to subscribe to new stock commensurate with their existing holdings.

The much larger-than-expected scale of the new share offer, which closes on December 6, underlines the pace at which Metro Bank's board wants to grow its balance sheet but may stoke fears about escalating losses at the company.

Bank of America Merrill Lynch and Royal Bank of Canada have been appointed to identify buyers for any new shares not acquired by current Metro Bank investors.

Among the lender's existing shareholders are the billionaire Reuben brothers and Steven Cohen, the head of the US hedge fund SAC Capital, which was this week the subject of the biggest-ever insider trading settlement in the US.

A recent circular to shareholders outlined the escalating losses at Metro Bank, which lost £14.3m before tax in the three months to September and £38.6m in the year-to-date. That took the lender's total losses since being set up to nearly £140m.

However, Vernon Hill, chairman, and Craig Donaldson, chief executive, told shareholders that the second quarter of 2013 "will therefore have marked the peak quarterly loss and that quarterly losses will now fall until the bank achieves profitability".

The losses underline the costs associated with breaking into the UK's retail banking sector at a time when Government ministers are attempting to foment new competition through a string of new policy measures, including reducing capital and liquidity requirements for new entrants

In the prospectus published on Friday, Metro Bank said that it would have "increasing capital needs" and reminded shareholders that its longer term objective was to "seek an IPO on the main market of the London Stock Exchange as early as possible to enable Metro Bank to seek significant additional capital to support future growth in new stores and balance sheet assets and also provide liquidity to Shareholders".

Metro Bank's first branch opened in Central London in July 2010, and it now has 21 open, with aggressive expansion plans set out over the next five years.

Among the innovations it has introduced to the UK are dog-friendly and drive-through branch facilities, reflecting Mr Hill's determination to revolutionise the British consumer banking experience.

Mr Hill enjoyed huge commercial success with the launch of similar banking ventures in the US before encountering difficulties with regulators.

The fundraising prospectus includes further insight into Metro Bank's structure and operations, including an ownership ceiling of 9.9% contained in its articles of association.

In a lengthy list of risk factors, the company warned of the potential impact of various reforms to banking regulation and said it could be adversely affected by property market volatility.

"Fluctuations in the London residential and commercial property market, in particular, could expose Metro Bank to a heightened level of risk of customer default or depreciation of the value of property securing mortgages," it said.

It also highlighted a hitherto little-known risk relating to the use of its name, according to one insider who had seen the prospectus.

"Although the Company has acquired the trade mark "Metrobank" in the UK... There is a risk that Metro Bank's trade mark registration for the word "Metrobank" and the wider use of the "Metro Bank" name might be challenged by the owner of another similar trade mark. In the event that such a challenge was to be successful it may result in Metro Bank having to re-brand under a new name at considerable cost and disruption to the business."

A Metro Bank spokeswoman was unavailable for comment on Friday.

14.47 | 0 komentar | Read More