City Figures To Back New Tamara Mellon Brand

By Mark Kleinman, City Editor

Tamara Mellon, the businesswoman who built Jimmy Choo into a globally-prominent fashion brand, is plotting a $25m comeback that will see her name adorning stores in leading cities around the world.

Sky News can exclusively reveal that Ms Mellon has lined up figures including Michael Spencer, the boss of broking firm Icap and former Conservative Party treasurer, and Tommy Hilfiger, the tycoon behind the eponymous fashion business, as investors in her new business.

Expected to be called Tamara Mellon, her lifestyle business will mark an ambitious return to the business world 15 months after she left Jimmy Choo. A non-compete agreement signed when she departed expires this month.

Ms Mellon has set her sights on securing the funds in the hope of replicating her success at the maker of upmarket women's footwear.

Her other backers will include David Ross, co-founder of The Carphone Warehouse, Lord Marland, who recently stepped down as a trade minister in the Coalition government, and Tory Burch, the fashion entrepreneur who is a close friend of Ms Mellon's.

People close to the fundraising said that Ms Mellon was keen to secure a significant amount of British investment for her new venture.

Although she now lives in the US, Ms Mellon is a British citizen and remains a Business Ambassador for the Government, which involved promoting British trade on overseas visits. She also sits on the board of Revlon, the global cosmetics group.

WH Ireland, the City broking firm, is believed to have been assembling the fundraising for Ms Mellon, which is at an advanced stage.

The new venture is understood to include plans for flagship stores selling a wide range of upmarket fashion and other products in London, Los Angeles and New York, with further openings likely as the business expands.

City sources said the fundraising deal could be announced within the next few weeks.

Ms Mellon's track record is impressive, having walked away from Jimmy Choo with an £85m fortune following its sale to Labelux, the Swiss-based fashion label collection, in 2011.

In an interview with The Sunday Times last year, Ms Mellon was candid about leaving the company she had founded and worked for since 1996.

"I didn't like the equity plan that had been put in place. The management team were asked to invest their own money in the business and hold their shares for seven years, which would then be subject to income tax and not come under capital gains. I felt it was unfair," she told the newspaper.

Ms Mellon began her fashion career from the modest foundation of a stall on Portobello Road in London, where she sold T-shirts. She later worked at the UK edition of Vogue magazine, where she met Jimmy Choo, a Malaysian-born Hackney cobbler. She went into business with him, launching a store in Knightsbridge.

The company was a huge success, making big returns for a succession of private equity-owners, although Ms Mellon has since been critical of the buyout industry, telling another newspaper last year:

"What happens in private equity is they come in and they say we're going to be a great partner. We want to hold this long term and we're going to help you nurture and build this brand, [but] the day after signing, they talked about selling the business."

A spokesman for Ms Mellon declined to comment.

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Twitter Hacked: Up To 250,000 Passwords Taken

Around 250,000 Twitter users may have had their accounts compromised by computer hackers.

The social networking site said usernames, email addresses and encrypted passwords may have been taken during an "extremely sophisticated" attack on its systems.

It said one attack was shut down moments after it was detected, adding that the passwords of users who may have been affected had been reset.

In a blog posting, Bob Lord, director of information security at Twitter, said there had been "a recent uptick in large-scale security attacks aimed at US technology and media companies", with the New York Times among those targeted.

He said: "Our investigation has indicated the attackers may have had access to limited user information - usernames, email addresses, session tokens and encrypted/salted versions of passwords - for approximately 250,000 users.

"As a precautionary security measure, we have reset passwords and revoked session tokens for these accounts."

"This attack was not the work of amateurs and we do not believe it was an isolated incident," he added. "The attackers were extremely sophisticated and we believe other companies and organisations have also been recently similarly attacked."

One expert said the hackers may have gained access through an employee's home or work computer by exploiting vulnerabilities in Java, a widely-used computing language.

Ashkan Soltani, an independent privacy and security researcher, said such a move would give attackers "a toehold" in Twitter's internal network, potentially allowing them to track user information as it travelled across the company's systems or break into specific areas, such as the authentication servers that process users' passwords.

Although the hackers are unlikely to have gained any confidential information, Mr Soltani said the stolen credentials could be used to access other services for which a person has signed up using the same username and password.

Mr Lord said that although "only a very small percentage" of users were potentially affected, everyone who uses the site should ensure their password is secure.

He said passwords should be at least 10 characters long, contain upper and lowercase letters, numbers and symbols, and be different to passwords used for other online accounts.

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Red Tape 'Strangling Youth Jobs Drive'

Attempts to get more than a million young people into work are being hampered by excessive bureaucracy and central government control, council leaders have claimed.

The Local Government Association (LGA) says a new, more local approach to tackling youth unemployment could reduce the number of young jobless people by a fifth.

In a report it complains of an "overly complicated" system of tackling youth unemployment, with 33 different national schemes covering 13 different age boundaries and costing £15bn a year.

The report says more than 94,000 people completed hair and beauty courses last year, even though there were only 18,000 new jobs in the sector.

By contrast, just 123,000 people were trained for around 275,000 advertised jobs in construction - more than two vacancies for every qualified person, said the LGA.

Young people at a jobs fair

David Simmonds of the LGA, said: "Youth unemployment is a worrying trend for us all, particularly long-term youth unemployment which has doubled since 2008 and continues to grow.

"All the evidence in this report points to the success that local organisations, such as councils, businesses and education providers, can achieve when working together... but this is being hampered by successive centrally-driven government approaches."

He added: "Councils are in a unique position and can play a pivotal role in identifying young people that are likely to slip into periods of long-term unemployment.

"But we need to be given the powers to prevent this happening and help equip future jobseekers with the skills, confidence and real-life experience they need to find work in their area."

The LGA said councils should be the main commissioners of employment programmes aimed at young people, not central government.

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Dragons' Den Star Peter Jones Buys Jessops

Dragons' Den star Peter Jones has bought the brand of collapsed camera retailer Jessops to run it as an online company.

Rob Hunt, joint administrator and partner at PwC, said: "We can confirm that we have sold the brand and certain other assets to a number of buyers including entrepreneur Peter Jones CBE."

Jessops closed all 187 of its stores in earlier this month, but the deal is not thought to include any of them.

The camera retailer was forced to call in the administrators after talks with its lender and suppliers broke down following a poor Christmas.

It had struggled since 2007 after suffering from online competition and a boom in camera phones hitting demand for digital cameras.

Mr Jones, 46, was awarded his CBE in 2009.

He made his fortune after setting up the Phones International Group, which he sold a part of in 2011.

He has appeared on the BBC show Dragons' Den since it started in 2005.

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Horse DNA: Burger King Dumps Irish Supplier

Burger King has issued full page newspaper apologies after discovering horse DNA in patties from its supplier in Ireland.

The fast food chain said sorry to customers as it confirmed it was cutting ties with Silvercrest, the food processing plant that supplied contaminated burgers to UK supermarkets.

Burger King said its own tests for equine DNA in its burgers had come back negative and that four samples from the Silvercrest plant that did test positive were from a product that did not make it into restaurants.

The Miami-based chain said the failure to deliver 100% British and Irish beef patties was a violation of contracts.

The UK newspaper ads include a statement from Diego Beamonte, Burger King Corporation's vice president for global quality, who said: "While the Food Safety Authority of Ireland has stated that this is not a food safety issue, we are deeply troubled by the findings of our investigation and apologise to our guests, who trust us to source only the highest quality 100% beef burgers.

"Our supplier has failed us and in turn we have failed you. We are committed to ensuring that this does not happen again."

The Irish authorities said that their investigations had traced filler product used in the burger processing facility to a supplier in Poland.

It contained a mixture of beef and horse offcuts.

Experts from the Food Standards Agency (FSA) yesterday told the Commons Environment Committee that they could not be sure whether the contaminated burgers were being sold for more than a year.

Aldi is the latest supermarket to suspend supplies over burger content

Bosses at the Food Safety Authority of Ireland (FSAI), who identified and publicised the controversy, or Department of Agriculture chiefs have yet to be questioned at a similar level in Dublin.

At least 10 million burgers were put into storage following the scandal. Silvercrest's parent company ABP Food Group initially said they would be destroyed.

Silvercrest had a contract to supply Burger King in the UK, Ireland and Denmark. It is understood the deals with the fast food chain and Tesco were worth in the region of £39m.

The Ballybay processing factory, closed since the scandal broke two weeks ago, employed 112 people.

Burger King said it had carried out its own internal investigation including scientific tests, inspection of the Silvercrest facility and scrutiny of traceability records over the last fortnight.

It has been using approved suppliers from Germany and Italy as a precaution since.

Burger King's apology came after Aldi suspended its contract with beefburger supplier Dalepak, having found small traces of horsemeat DNA in its products.

The supermarket withdrew three beefburger lines earlier this month after traces of pig meat and horsemeat were discovered, and launched an investigation.

"Aldi UK's customers are our absolute priority," a spokesman said. "This is why we immediately withdrew these products until such a time that we could verify that there was no risk to our customers.

"We are deeply angry and feel let down by our supplier and we are pursuing more tests until we are certain that we understand how the production line was contaminated."

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Mexico: Pemex Oil Company HQ Blast Kills 25

Twenty-five people are dead and at least 100 injured after an explosion at the headquarters of Mexican oil company Pemex.

Injured workers were seen being evacuated after the blast at the state-owned firm blew out windows and damaged three floors of the tower in Mexico City's commercial centre.

There are reports that as many as 30 people could be trapped in the debris from the explosion, which occurred in the basement of an administrative building next to the iconic 52-storey skyscraper.

Ana Vargas Palacio was distraught as she searched for her missing husband, Daniel Garcia Garcia, 36, who works in the building. She last heard from him at 1pm.

"I called his phone many times, but a young man answered and told me he found the phone in the debris," she said.

The two have an 11-year-old daughter. His mother, Gloria Garcia Castaneda, collapsed on a friend's arm, crying "My son. My son."

Television images showed people being carried out of the building on office chairs and gurneys. Most of them showed injuries likely to have been caused by falling debris.

Petroleos Mexicanos, or Pemex, said in a Tweet that several workers were injured in the blast but no one answered at its offices.

The blast happened in a busy central district of Mexico City

There was no immediate cause given for the blast, but in an earlier Tweet, the company said it had evacuated the building because of problems with the electricity.

"It was an explosion, a shock, the lights went out and suddenly there was a lot of debris," employee Cristian Obele told Milenio television, adding that he had been injured in the leg. "Co-workers helped us get out of the building."

The tower, where several thousand people work, was evacuated. The main floor and the mezzanine of the auxiliary building, where the explosion occurred, were heavily damaged, along with windows as far as three floors up.

"Right now they're conducting a tour of the building and the area adjacent to the blast site to verify if there are any still trapped so they can be rescued immediately," Interior Ministry spokesman Eduardo Sanchez told Milenio.

"We were talking and all of sudden we heard an explosion with white smoke and glass falling from the windows," said Maria Concepcion Andrade, 42, who lives on the block of Pemex building.

"People started running from the building covered in dust. A lot of pieces were flying."

Police landed four rescue helicopters to remove the dead or injured. About a dozen tow trucks were furiously moving cars to make more landing room for the helicopters.

Streets surrounding the building were closed as evacuees wandered around, and rescue crews loaded the injured into ambulances.

"I profoundly lament the death of our fellow workers at Pemex. My condolences to their families," President Enrique Pena Nieto said via his Twitter account.

Shortly before the explosion, Operations Director Carlos Murrieta reported via Twitter that the company had reduced its accident rate in recent years. Most Pemex accidents have occurred at pipeline and refinery installations.

A fire at a pipeline metering centre in northeast Mexico near the Texas border killed 30 workers in September, the largest-single toll in at least a decade for the company.

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Banks Face Up To Hefty New Mis-Selling Bill

By Mark Kleinman, City Editor

The City regulator will pave the way for Britain's big banks to pay out billions of pounds in compensation over the industry's latest mis-selling scandal.

I have learnt that the Financial Services Authority (FSA) is to set out a revised framework for small business customers (SMEs) to pursue redress for the mis-selling of interest rate hedging products, which were designed to provide insurance against steep rate rises.

Sources said that a crucial element of the FSA announcement would relate to a change in the definition of "sophisticated" customers, or those who would not be eligible to pursue compensation.

The new regime to be outlined by the FSA will alter the bracket of SMEs which will be eligible for compensation by increasing a £6.5m turnover threshold, according to people briefed on the details.

The changes will be an admission that the criteria used during a pilot scheme that ended recently failed to meet the needs of businesses which required the regulator's help.

The methodology was being thrashed out on Wednesday during talks between the FSA and Barclays, HSBC, Lloyds Banking Group and Royal Bank of Scotland, which between them accounted for the overwhelming majority of interest rate hedging product sales.

However, people close to the situation said a deal would be announced at 7am. A number of other banks which participated in the pilot programme are also likely to sign up to the new terms in the near future.

The new framework follows a seven-month pilot scheme involving a small sample of SMEs whose cases had been scrutinised by the banks with the oversight of an independent reviewer. Those reviewers will continue in their roles, potentially racking up huge fees for a small number of accounting and law firms.

Last June, the FSA announced that it had found widespread evidence of mis-selling of products such as swaps, which enabled customers to "fix" interest rates, and collars, which allowed them to limit interest rate fluctuations within a defined range.

"The greatest volumes were sold in the period 2005-2008, before the base rate fell sharply to its current, sustained, historic low," the FSA said in June.

Many SMEs have complained that they were left facing bills of tens or even hundreds of thousands of pounds because of these products.

The major banks have argued that while there were limited cases of mis-selling, most customers understood the risks inherent in hedging products and should not be compensated for costs triggered by the wider financial crisis' impact on interest rates rather than any venality on the part of lenders.

The four banks have now, though, agreed on a set of standards for reviewing thousands more swaps cases during a six-to-twelve month period.

Crucially, the wording of the FSA statement is expected to include a stipulation that the banks will be held liable for "consequential losses" incurred by customers who were mis-sold the hedging products.

While legally difficult to prove, it would mean that SMEs will have the opportunity to pursue significant damages from banks where they can establish that they lost out financially because their capital was wrongly deployed paying for the cost of the swaps.

Further details of the agreement will be announced in the FSA statement.

The FSA and the banks all declined to comment.

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EU Referendum Debate 'Damaging Economic Growth'

By Ursula Errington, Business Correspondent

An influential group of economists has said the government debate over having an "in or out" referendum over Europe is damaging economic growth.

The London School of Economics Growth Commission also branded Government investment in a long-term growth strategy as "inadequate", "unstable" and "failing".

The commission's 35-page report says the debate over whether to hold a referendum "is analgous to the needless self-inflicted wounds that the US is causing in its debates over the debt ceiling and fiscal cliff".

The co-chair of the panel, Professor John Van Reenen, went further saying: "The idea of leaving the EU would be very, very damaging for the UK, so I personally think the uncertainty around having the referendum is actually going to retard growth and retard investment, so I don't think there is a strong case for having that referendum."

Talks of an "in out" referendum on Europe are damaging to the economy

The report examined the key factors in fostering growth, years and even decades in the future.

The findings of the nine economists are grim. They conclude that years of under-investment in education, infrastructure and innovation has left the UK economy structurally weak, with UK institutions less able to compete globally.

They accuse politicians of "short-termism" when, in their view, investment in promoting long-term growth would reap dividends now by establishing certainty in policy direction in areas such as transport and energy.

The panel identified that the singular greatest influence on economic growth was education, holding up Germany and Finland as exemplary models.

Greater autonomy for schools, longer probation periods and a shift to more "on-the-job" assessment for teachers would help redress systemic imbalances against disadvantaged youngsters.

It concedes radical change to the way teachers are hired, monitored and fired could take 30 to 40 years to achieve.

Apprenticeships were singled out for comment with the report concluding: "Apprenticeships need to be longer, they should pay a training wage (English apprenticeships are relatively highly paid by international standards) and their administration must be radically simplified."

Arguments over Heathrow should be based on economic merits

However, the panel stopped short of advocating a cut in apprentice wages to encourage employers to join the scheme.

It also suggests Maths and English should be a compulsory element of apprenticeships.

To boost action and investment on infrastructure, the panel is recommending a radical re-structure of the current system.

It suggests an infrastructure strategy board should be created to take a long-term view impervious to changes in government and ministers.

An Independent Planning Commission would have to deliver on that strategy, funded by a specialist "Infrastructrue Bank."

By de-politicising issues such as an extra runway at Heathrow and basing arguments purely on their economic merits, the Growth Commission believes genuine progress would be swift.

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BSkyB Sees Half-Year Profit Up 8% to £647m

BSkyB, the parent company of Sky News, has reported an 8% increase in operating profit for the first half of the financial year.

The company said operating profit for the period was £647m.

Revenues increased 5% to £3.5bn in the same period.

BSkyB added 88,000 net new customers to the service in the three months to the end of December, compared with a forecast of 58,000.

The net new customer total was up 271,000 year-on-year to reach 10.74 million.

Chief executive Jeremy Darroch said: "We have delivered another good performance in the first half with strong progress across the board.

"In what remains a tough consumer environment, our broadly-based growth strategy is working well.

"Good product growth in the quarter means that our total base of subscription products has grown by 10% year on year."

More follows...

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Icesave In Court Win Over UK Bank Deposits

Iceland was right to refuse to repay billions to Britain and the Netherlands for bailing out depositors in a failed Icelandic bank, a European court has ruled.

After the collapse four years ago of Iceland's top lenders during the credit crunch, the British and Dutch governments stepped in to repay savers in the online "Icesave" account run by Landsbanki and wanted Iceland to pay them back directly.

Iceland did not comply, triggering a row between the governments and potentially complicating the island's bid to join the European Union.

But the court of the European Free Trade Association bloc (Efta) found Iceland did not break depositor protection laws by refusing to return the money.

Last week, Iceland's president told Sky News Economics Editor Ed Conway that his nation would "never forget" Gordon Brown for the treatment it was given by the then British leader.

Icelanders twice voted in referendums against repayment schemes drawn up by their government to satisfy the British and Dutch claims, leaving the estate of Landsbanki to pay back the funds, which it has steadily done.

Protesters outside the Icelandic parliament

"It is of considerable satisfaction that Iceland's defence has won the day in the Icesave case - the Efta court ruling brings to a close an important stage in a long saga," the Icelandic foreign ministry said in a statement.

The Efta court, a cooperation group of which Iceland is a member and which has links to the European Union, rejected the case brought by the Efta Surveillance Authority - the body which oversees the bloc's rules.

In a ruling on its website, the court dismissed all three of the claims brought by the Surveillance Authority against Iceland, partly on the grounds of the massive nature of Iceland's bank collapse.

It also said the depositor protection rules did not mean a country itself had to fund the deposit guarantee scheme.

The foreign ministry said in a statement that 660 billion crowns (£3.2bn) had already been paid out from the estate of Landsbanki, of which 585 billion crowns (£2.9bn) had gone to claims related to Icesave, or more than 90% of the total which the UK and Dutch authorities advanced to cover the minimum deposit guarantee for Icesave.

"It is important to bear in mind that payments from the estate of the failed Landsbanki will continue regardless of the ruling of the Efta court," the Icelandic foreign ministry added.

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