Tories To Freeze Train Fares For Five Years

Rail fares will be frozen in real terms for five years if the Tories win the General Election, David Cameron has pledged.

The Prime Minister said extending the Retail Price Index inflation cap on regulated ticket prices until 2020 would save the average commuter £400.

The coalition has imposed the same restrictions for the past two years, and also removed the "'flex" train that allowed operators to increase some fares by more than inflation as long as others went up by less.

According to the Conservatives, the policy means commuters are already paying £75 less than they would have been.

The announcement is part of an effort to blunt the Labour attack over the cost of living, and accusations that most people are not benefiting from the economic recovery.

Video: Prime Minister Explains Fare Rises

Mr Cameron, who is campaigning in the south west today, said: "The cost of commuting is one of the biggest household bills that hardworking families face and it is something we are determined to bear down on.

"It shouldn't just be taken for granted that people across the country who get up early and come home late, spend a large amount of the money they earn travelling to and from work.

"Because of the difficult decisions that we have taken to repair the economy, we have been able to hold down commuter fares for the past two years.

Video: Passengers Want 'Value for Money'

"If elected in May, we would freeze them in real terms for the next five."

But Mick Cash, leader of the Rail, Maritime and Transport union, said: "This latest stunt would still mean annual fare increases that would institutionalise the harsh reality that the British passenger pays the highest fares in Europe to travel on rammed out and unreliable trains.

"The only solution is to end the rip off of rail privatisation which would allow us to free up the hundreds of millions of pounds drained off in profits to invest in services and cut fares."

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Easyjet 'Rescue' Flights For Kids After Strike

Easyjet is laying on "rescue" flights to bring schoolchildren home after a French air traffic strike saw hundreds of flights axed.

The budget carrier is running five special flights: Luton to Paris, Paris to Barcelona, Barcelona to Luton, Gatwick to Madrid, and Marrakech to Gatwick.

Larger planes may be used to ease delays caused by the two-day controllers' strike, which started on Wednesday.

Easyjet, one of the worst-hit airlines, had to cancel 331 flights on Thursday and 248 on Wednesday.

Others, including Ryanair, Flybe and BA, were also affected by the industrial action.

Passengers queue at Nice airport during the strike

Ryanair axed more than 250 flights on Wednesday alone. The Irish carrier's services from the UK to Alicante and Malaga in Spain were among those hit.

French air traffic controllers are set to stage further stoppages in the next few weeks. The first will be from 16-18 April and the second from 29 April to 2 May.

An Easyjet spokesman said: "We recognise that there are a number of passengers across the network who have been affected by these cancellations and still require flights as soon as possible.

"We are operating five rescue flights, prioritising the repatriation of three groups of schoolchildren."

Nathan Thorne, 23, from Goole on Humberside, has been trying to get home from Limoges to Leeds Bradford since his Ryanair flight was cancelled.

He and his younger sister have been unable to get another flight home until next Thursday, when the next strike begins.

Mr Thorne said: "All the flights before next Thursday are booked up and the Eurostar train is extremely expensive."

The controllers were striking over restructuring proposals and government plans to change the retirement age.

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M&S Sourcing Chiefs Set For Lavish Payday

By Mark Kleinman, City Editor

Two brothers hired to boost the efficiency of Marks & Spencer's (M&S) clothing business are in line for multimillion pound paydays which could make them the company's best-paid employees over a three-year period.

Sky News can reveal that Mark and Neal Lindsey, who were recruited just over a year ago, will receive a fixed proportion of the savings generated by the improvement in M&S's gross margin, in addition to basic salaries of £400,000 each.

The retailer said earlier this month that it remained on course to record a gross margin improvement of between 150 and 200 basis points, which analysts say would translate into an increase in profits worth tens of millions of pounds.

Sources said on Friday that the Lindseys had been hired on a three-year contract, with one adding that while their payout for 2014-15 would be substantial, it was likely to be far higher in the subsequent two years.

M&S refused to disclose the brothers' remuneration arrangements to Sky News because they are not on the company's main board.

However, company insiders said that their financial rewards would be aligned with the long-term interests of M&S shareholders, who have been boosted by third-quarter results showing the first improvement in general merchandise sales for more than three-and-a-half years.

One person close to the retailer insisted that the Lindseys would not be the highest-paid M&S employees for 2014-15, but conceded that their bonuses were directly tied to margin improvements in the general merchandise business.

A number of institutional shareholders have told Sky News that while they welcomed greater efficiency within the business, they were keen to understand the potential scale of the rewards that could accrue to them over the duration of their contract.

Unlike at banks and insurance companies, listed businesses in other sectors are not obliged to disclose - even anonymously - the remuneration of their most highly-paid employees.

The two sourcing chiefs were lured out of semi-retirement by M&S after an impressive track record as the architects of rival Next's widely-envied supply chain.

As the Hong Kong-based sourcing directors for general merchandise, the Lindseys have specific responsibility for clothing and footwear, overseeing M&S's network of regional sourcing offices around the world and its large London-based central sourcing team.

Although little-known in the UK, they played an important role in assisting Next's rise to prominence on the high street and its establishment as a darling of the City.

Speaking on 2 April, Marc Bolland, M&S's chief executive, said: "We have made strong progress over the quarter.

"We continued to deliver on General Merchandise gross margin, and are pleased that we have achieved this whilst also improving General Merchandise sales.

"M&S.com has returned to growth, as planned, with further improvement in customer metrics."

M&S shares were trading at just over 574p on Friday afternoon, giving the company a market value of £9.3bn.

The shares are up by 30% over the last 12 months.

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Tories To Freeze Train Fares For Five Years

Rail fares will be frozen in real terms for five years if the Tories win the General Election, David Cameron has pledged.

The Prime Minister said extending the Retail Price Index inflation cap on regulated ticket prices until 2020 would save the average commuter £400.

The coalition has imposed the same restrictions for the past two years, and also removed the "'flex" train that allowed operators to increase some fares by more than inflation as long as others went up by less.

According to the Conservatives, the policy means commuters are already paying £75 less than they would have been.

The announcement is part of an effort to blunt the Labour attack over the cost of living, and accusations that most people are not benefiting from the economic recovery.

Video: Prime Minister Explains Fare Rises

Mr Cameron, who is campaigning in the south west today, said: "The cost of commuting is one of the biggest household bills that hardworking families face and it is something we are determined to bear down on.

"It shouldn't just be taken for granted that people across the country who get up early and come home late, spend a large amount of the money they earn travelling to and from work.

"Because of the difficult decisions that we have taken to repair the economy, we have been able to hold down commuter fares for the past two years.

Video: Passengers Want 'Value for Money'

"If elected in May, we would freeze them in real terms for the next five."

But Mick Cash, leader of the Rail, Maritime and Transport union, said: "This latest stunt would still mean annual fare increases that would institutionalise the harsh reality that the British passenger pays the highest fares in Europe to travel on rammed out and unreliable trains.

"The only solution is to end the rip off of rail privatisation which would allow us to free up the hundreds of millions of pounds drained off in profits to invest in services and cut fares."

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HSBC Tax Scandal: France Starts Criminal Probe

HSBC has expressed outrage at being placed on €1bn bail amid a criminal investigation in France into historical tax issues.

The UK-listed bank said it was informed on Wednesday that French magistrates were examining the "conduct of its Swiss private bank in 2006 and 2007 for alleged tax-related offences."

Its statement said the court's decision is "without legal basis and bail is unwarranted and excessive".

The bank added that it intended to appeal and "defend itself vigorously in any future proceedings".

Activities at the private bank are being examined in several other countries including Germany and Argentina in the wake of the publication of stolen files.

Video: HSBC Boss 'Sorry' For Tax Scandal

The papers claimed the Swiss operation had helped clients in more than 200 countries, including Britain, evade and avoid tax.

The accounts in question were said to contain £77bn ($119bn).

HSBC chief executive Stuart Gulliver apologised earlier this year for past practices at the Swiss arm.

He and chairman Douglas Flint told a committee of MPs in February they had completed a series of reforms to help restore trust and confidence.

Video: HSBC Whistleblower Speaks Out

Argentina last month stepped up its tax evasion row with HSBC by demanding it repatriates $3.5bn (£2.32bn) of cash allegedly moved from the country to its Swiss private bank.

The country's tax authorities issued the request weeks after the Central Bank of Argentina temporarily suspended HSBC Bank Argentina's operations of transferring money and assets abroad for a period of 30 days.

Argentina accuses HSBC of aiding more than 4,000 clients to evade taxes by shifting assets offshore.

HSBC Argentina denied the claim - insisting it respected Argentine law.

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Oil Find Near Gatwick May Be 'World Class'

The estimated size of an oil find near Gatwick Airport has been upgraded to 100 billion barrels by a company backing exploration of the area.

UK Oil & Gas Investments (UKOG) said the Horse Hill-1 well in the Weald Basin was now thought to hold 158 million barrels per square mile.

In May 2014, the British Geological Survey estimated the Weald Basin to hold around 4.4 billion barrels of shale oil.

UKOG described the find as a possible "world class" resource with the potential for "significant daily oil production".

The site at Horse Hill in Sussex

The company's chairman David Lenigas claimed it would create "many thousands of jobs" but cautioned that it would take a long time to begin production. 

He said: "You've got to work through government process and to work with the local community. Everybody expects you to snap your fingers and all of a sudden the magic panacea is there. The key thing is there is a potential resource of significance here - but the fast track or slow track nature is really going to be determined by Westminster".

But Solo Oil PLC, another stakeholder in the exploration, was cautious about the potential. 

UK Oil and Gas insist there will be no fracking at Horse Hill

Solo Oil chief executive Neil Ritson told Sky News: "We're not actually putting out that number of a hundred billion barrels. I know that a leading academic - Professor Fraser at Imperial - is talking about 40 billion.

"Certainly those numbers are possible, but that's not where we are at the moment. It's early days."

The US-based firm which studied the reservoir estimated that recovery of the oil would be limited at between 3% and 15% of the total.

Local residents are concerned about damage to the countryside

It also insisted there was no need to use the controversial extraction process, known as fracking, to get access to the oil.

Mr Lenigas said:  "Horse Hill is a conventional well, with conventional testing and we've got permission from the government authorities for a conventional programme. There will be no fracking at Horse Hill."

But local campaigners believe fracking will be necessary at some point in the future.

Anti-fracking campaigner Charles Metcalfe said: "South East England is the most densely populated corner of England. To start drilling holes all over the place will completely change the nature of our countryside forever. And if the result is that you're not getting very much oil out of it, then that's awful".

Environmental group Greenpeace urged people to focus on clean technologies.

Greenpeace's chief scientist Dr Doug Parr said : "To gleefully rub your hands at a new fossil fuel discovery you need to turn the clock back to the 19th century and ignore everything we have learnt about climate change since. We already have more than enough coal, oil, and gas reserves to fry the planet".

The UK currently produces 770,000 barrels of oil per day, compared to 11.1 million in the United States and 11.7 million in Saudi Arabia.

The announcement helped shares in UKOG rise more than 300% during trading on Thursday. 

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FTSE-100 Giants Poised To Warn Over EU Vote

By Mark Kleinman, City Editor

Some of Britain's biggest companies will begin issuing formal warnings about uncertainties associated with an exit from the European Union if the outcome of the General Election triggers a timetable for a referendum on the issue.

Sky News can reveal that directors at dozens of major listed companies – ranging from banks and insurers to engineers and consumer goods groups - have begun discussing with their auditors and lawyers the potential requirement to include such warnings in corporate announcements from as early as this summer.

The need for FTSE-100 companies to highlight the risks of a British withdrawal from the EU would be sparked by a Conservative victory in next month's poll, company directors say.

The Tories have pledged to hold an "in-out" referendum on EU membership by the end of 2017, while Labour insists that it is committed to remaining in a reformed EU.

:: Full Coverage Of General Election 2015

Video: Blair Throws Weight Behind Miliband

The two parties' division over Europe raises the prospect of an imminent flood of corporate warnings over a British exit if the Tories win an outright majority or take the lead in a second-term Coalition administration.

Company directors approached by Sky News confirmed that many FTSE-100 companies would start to formally raise the issue as soon as next month if it became clear that a referendum would take place.

They cited banks including Barclays and HSBC, insurers such as Legal & General and consumer goods manufacturers including Diageo and Unilever as being among those likely to be obliged to make public statements on the subject.

Video: PM: Britons Should Have Say On EU

It is not unusual for major companies to cite political events in lists of risk factors attached to their financial results or annual results.

Last year, in the build-up to the Scottish referendum, companies including Lloyds Banking Group, Royal Bank of Scotland, Standard Life and Weir Group, the engineering firm, all highlighted potential disruption that could be triggered by a vote for independence.

However, many company directors are loathe to make formal references to an EU exit vote as early as this year because of concerns about how they may be perceived by customers, employees and other stakeholders.

Video: UKIP: 'Well, Bravo Tony Blair...'

Earlier this week, Tony Blair, the former Prime Minister, warned of the "chaos" that would ensue from "the possibility, never mind the reality, of Britain quitting Europe".

"There would be significant business uncertainty in the run-up to the vote but should the vote go the way of exit then there would be the most intense period of business anxiety... and instability since the war," he said.

As the country's biggest trading partner, an EU exit would have profound ramifications for the UK economy, although critics of Brussels argue that a framework could be agreed which would avoid significant harm to UK interests.

Video: Labour: UK's Future Lies In EU

Speaking after his company's annual results last month, Sir Martin Sorrell, the WPP Group chief executive, said there could be "no good outcome" for business from next month's election.

He said the poll presented a choice between an anti-business Labour leadership and a Tory team committed to an EU referendum which would fuel uncertainty.

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Oil Find Near Gatwick May Be 'World Class'

The estimated size of an oil find near Gatwick Airport has been upgraded to 100 billion barrels, though extraction may be limited to just 3% of the total.

The surprise announcement was made by UK Oil & Gas Investments, which said the Horse Hill-1 well in the Weald Basin was now thought to hold 158 million barrels per square mile.

In May 2014, the British Geological Survey estimated the Weald Basin to hold around 4.4 billion barrels of shale oil.

Stephen Sanderson, the CEO of UK Oil and Gas Investments described the find as a possible "world class" resource with the potential for "significant daily oil production."

He said: "Drilling the deepest well in the basin in 30 years, together with the ability to use concepts, techniques and technology unavailable in the 1980s, has provided new cutting-edge data and interpretations to comprehensively change the understanding of the area's potential oil resources."

More follows...

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Co-op Group Back In Profit As Rebuild Starts

The Co-operative Group is back in annual profit following the near-collapse of its bank and a series of botched mergers and scandals.

The chief executive of the UK's largest mutual said it had made "solid progress" in its recovery during 2014 amid an overhaul of its governance and sale of businesses including farm and pharmacy operations.

The Co-op cited its rescue programme as a core reason for its return to profit and said it would have broken even at best without its disposals.

Profit-before-member payments of £124m for the year to 3 January, against a loss of £255m a year earlier, came on the back of £9.4bn in revenue.

It said sales growth of 0.4% in its food business and efficiencies in funeralcare offset losses in its insurance arm.

The Co-op said a 2% fall in funeral sales was down to "a year affected by a particularly low death rate".

The Co-op was left reeling in 2013 when it emerged that its banking arm was facing a £1.5bn black hole as it tried to acquire more than 630 branches from Lloyds Banking Group.

The bank's chairman Paul Flowers was subsequently exposed by a tabloid newspaper as a serial drug-user, plunging the Co-op name deeper into crisis even as it surrendered control of the high street lender to American hedge funds.

There was further turmoil at the top last year when Euan Sutherland quit as the group's chief executive after details of his pay package were leaked to the media.

Mr Sutherland was replaced by Richard Pennycook who, along with new chairman Allan Leighton, are presiding over a rebuilding of the Co-op's structure.

Mr Pennycook said: "We made solid progress in 2014 as we successfully concluded the rescue phase of our turnaround.

"The hard work of rebuilding the Co-operative Group for the next generation, and restoring it to its rightful place at the heart of communities up and down the UK, is now under way.

"We significantly reduced net debt, even after meeting our outstanding contributions to The Co-operative Bank.

"This followed the successful sales of our Farms and Pharmacy businesses and detailed work to ensure we have the right cost base in place."

He added: "Given the need to invest in all our businesses, the Board will not be recommending a dividend to members and believes that a resumption of dividend payments is unlikely until the rebuild phase is complete and we have returned to sustainable profitable growth."

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UK Bank Scandal Costs Hit £39bn - Report

Britain's biggest banks have collectively racked up a £39bn bill as a result of financial scandals over just three years, a report has found.

A study by auditors KPMG covered financial results from Royal Bank of Scotland (RBS), Lloyds, Barclays, HSBC and Standard Chartered from 2011 to 2014.

It found that more than 60% of their total profits were wiped out by customer remediation, conduct failings and fines over the period, with costs totaling £38.7bn.

Conduct costs last year stood at £9.9bn, just 8% down on 2013, with almost half of the cash relating to the continuing cost of Payment Protection Insurance (PPI) and interest rate hedging mis-selling.

However, the report showed the banks were "in a healthier shape and returning to profitability" in 2014.

Video: BBA: Banks Being Driven Overseas

Their combined pre-tax profits reached £20.6bn, up £7.9bn or 62%.

The boost in profits was against a backdrop of total income falling by 12% to £127.2bn, as banks focused on less riskier activities in the wake of the financial crisis.

It meant, the study said, that shareholders were still getting a low return on equity.

Head of financial services at KPMG, Bill Michael, said: "Banks are undergoing a once-in-a-lifetime change, as they face evolving regulation, technology and society's expectations. 

"At the same time, competition is increasing as new challenger banks and peer-to-peer platforms offer customers new ways to borrow and deposit and technology-led services such as PayPal and e-wallets change the way money is transferred and goods and services paid for.

"Domestically focused banking arms are focused on restructuring their business. Those with active investment banking arms face significant challenges around ring-fencing their retail and investment banking activities, which will become mandatory in 2019.

"The UK as a financial centre has largely been built on non-retail banking. If further regulation creates too many strictures on non-retail banking, the industry risks losing its global relevance."

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