Annual UK House Price Growth 'Hits 6.5%'

The rate of annual house price growth accelerated to 6.5% in November, its fastest pace since July 2010 according to Nationwide.

The monthly survey suggested prices have now risen every month for the last year but the surge could now be threatened after the Bank of England confirmed on Thursday that its Funding for Lending Scheme (FLS) would no longer support mortgage borrowing from January.

Nationwide said the latest monthly house price increase of 0.6% took average UK values to £174,566 from £173,678 in October.

Its chief economist Robert Gardner said it was important to point out that prices were still around 6% below their 2007 peak.

He said: "Activity in the housing market has picked up strongly in recent months. The number of mortgage approvals for house purchase reached 66,735 in September, 34% higher than the same period of 2012.

A large part of the improvement can be attributed to further improvements in the labour market and the brighter economic outlook, which has helped to bolster sentiment amongst potential buyers."

A shortage of property on the market and incentives to help borrowers under Government schemes such as Help to Buy have been cited as reasons for national price growth, which has soared in London and the South East.

Yesterday, the Bank of England took the first step in putting the brakes on the property market as it scrapped an initiative that has had a significant part to play in encouraging mortgage lending.

Governor Mark Carney said the FLS stimulus would instead focus purely on helping small business borrowing, which remains muted.

FLS has offered lenders access to cheap finance on condition that they pass on the benefits to borrowers, and experts yesterday said that the Bank's move could spell the "beginning of the end" for ultra-cheap mortgage deals.

Fears of a looming property bubble have been growing in recent months amid a string of reports suggesting demand in the housing market far outstrips the growth in the supply of homes.

London in particular has seen strong demand this year, and Land Registry figures released on Thursday showed that house prices in London were up by 8.7% year-on-year in October.

But the market remains patchy and prices in the North East have dropped by 3.1% year-on-year, according to the registry.

The latest phase of Help to Buy, which offers state-backed mortgages to people with deposits as low as 5% was launched in October and this is expected to inject further activity into the market among credit-worthy buyers who have particularly struggled to get on the housing ladder or move up it since the financial crisis struck because they have a lack of upfront funds.

Lenders representing around two-thirds of the mortgage market have committed to coming on board the scheme and there are also signs of competition increasing to attract low-deposit borrowers from lenders which are outside the Help to Buy scheme.

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Maternity Leave: New Shared Rights Unveiled

By Darren McCaffrey, Sky News Reporter

Fathers will have the option of sharing parental leave under proposals to be announced by Nick Clegg, who has branded the current system antiquated.

The Government has published final details of a significant shake-up which they will hope cater for a growing desire by men to play a more hands-on role in a baby's first months.

From 2015 a fully flexible system of parental leave will be introduced in England, Scotland and Wales which will allow new mothers to trigger flexible leave at any point after the first two weeks' of giving birth.

Mothers and fathers will be able to share the remaining 50 weeks between them as they like by taking the leave in turns, in different blocks, or at the same time.

Reforms will also extend parents' existing right to request flexible working to all employees in an attempt to reflect the increased role of grandparents and other carers.

In an effort to allay fears of the impact on smaller firms, bosses will have to agree any proposed pattern of time off and will retain the right to insist it be confined to a continuous block, with no more than two subsequent changes.

The proposal had met strong resistance within government.

The Liberal Democrats fought to stop last ditch attempts by their Conservative partners to drop the policy.

But father-of-three Mr Clegg said change was long overdue.

"Women deserve the right to pursue their goals and not feel they have to choose between having a successful career or having a baby," he said.

Labour's Gloria De Piero claims the plans hold nothing new for parents

"They should be supported by their employers, rather than being made to feel less employable or under pressure to take unchallenging jobs.

"Many businesses already recognise how productive and motivated employees are when they are given the opportunity to work flexibly, helping them retain talent and boost their competitive edge.

"This is good for families, good for business and good for our economy."

The changes, however, have been branded "a nightmare" which would heap more burdens on already-struggling firms by the Institute of Directors (IoD).

Deputy director of policy Alexander Ehmann said: "The IoD understands the case for a system of shared parental leave and how it could help to widen the talent pool available to employers.

"Unfortunately, today's announcements heap yet more burdens on struggling employers at a time when government should be freeing them to create jobs and wealth."

Labour attacked the announcement for providing nothing new to help families struggling with the rising cost of living.

Shadow minister for women and equalities Gloria De Piero said: "Nick Clegg claims to be on parents' side but he and David Cameron have done nothing to support families in the last three years.

"This reheated announcement contains nothing new for families suffering from this government's cost-of-living crisis. It proves you can't trust a word Nick Clegg says."

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Energy Bills: Govt Wants Price Freeze Until 2015

The Energy Secretary has written to the big six energy providers asking them to freeze their prices until after the 2015 general election, according to Sky sources.

The call, barring any big increase in wholesale fuel costs, is to try to avoid another round of price rises that could be blamed on Government green levies, industry sources have said.

Annual bills could be cut by around £50 by the move, it is claimed.

Ed Davey has promised to help firms by introducing changes to the green levies that Prime Minister David Cameron and Chancellor George Osborne have pledged to "roll back".

Energy Secretary Ed Davey is believed to be seeking a deal with firms

He first wrote to the firms last week and followed-up his appeals with fresh letters this week.

It is understood the companies have so far given no commitment to his proposal.

Ministers are proposing to change the Energy Company Obligation (ECO) - one of the green levies branded "green crap" by a Tory source last week.

The Government wants to be able to announce a pledge or deal in the Autumn Statement on December 5.

The Department of Energy & Climate Change described the claims as speculation, stating there would be no comment on the issue ahead of next week's statement.

Bills are burned during a protest this month against prices and budget cuts

The move comes ahead of a speech by Ed Miliband later in which he will pledge to end the energy "rip-off".

The Labour leader is to call for a tough new regulator with powers to order firms to pass on wholesale savings to customers, and intervene in the market to ensure they get good value in the future.

An independent Energy Security Board would be created modelled on the Office for Budget Responsibility, to help draw up and implement a timetable for building energy capacity and ensure the lights stay on.

He will also promise action to boost competition among suppliers, simplify bills for customers and "secure energy which is affordable and available".

Labour leader Ed Miliband is to pledge to end the energy "rip-off"

The shake-up - described by Mr Miliband as the biggest since privatisation in the 1980s - would be implemented during the 20-month price freeze he has pledged if Labour wins the general election.

Launching the party's energy green paper at Manchester Town Hall, Mr Miliband will refer to the famous "Tell Sid" campaign advertising British Gas privatisation under Margaret Thatcher.

"In the past three years it has become clear to everyone but this government that the energy market is broken," he is expected to say.

"Prices are rising year on year without justification. And Britain is not getting the investment in energy we need to secure supplies for the future...

"We have a new message for Sid: We will freeze your bills for 20 months. We will reset the market with real competition and proper regulation so that prices are affordable. We will secure the investment we need.

"We will stop you being ripped off and, together, we will power Britain into the next century."

Other commitments include preventing power generation companies doing exclusive deals with their retail arms and ensuring all environmental and policy levies on bills are delivering "value for money".

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Student Loans: £5bn Unaccounted For Says NAO

More than £5bn paid out in student loans is unaccounted for because the Government does not have enough information about the recipients.

There are 368,000 student borrowers for whom there is no current employment record, or other details on earnings, according to a study by spending watchdog the National Audit Office (NAO).

This could be because they are unemployed students living in the UK, EU students who have returned home or UK students who have moved overseas.

It means the Government does not have enough information to decide whether these students should be making repayments on their loans, and if so, how much.

Students currently only repay their loans when they earn £21,000, and repayments are linked to earnings.

The NAO report claims the Business Department (BIS) is not doing enough to find out whether borrowers are earning enough to start repayments.

It also says there are around 14,000 former students, with a total debt of £100m, living overseas who are behind on their repayments.

The Student Loans Company, which helps collect the payments, could take a "more targeted approach" to this group, says the NAO.

Earlier this week, the Government sold off older student loans totaling nearly £900m to a private debt collection agency for £160m.

Universities minister David Willetts called the sale "good value for money" and said it would help reduce public sector debt.

More than a third (35%) of new loans taken out are not expected to be repaid, according to Government figures, and around half of students are not expected to repay their debt fully.

Under a major overhaul of higher education, which saw tuition fees at English universities treble to a maximum of £9,000, student loans are now written off after 30 years.

The NAO wants the Government to improve the information it holds about student borrowers so taxpayers get more of their money back.

A BIS spokesman said: "We are continually improving the collection process for borrowers and we will carefully consider the NAO's recommendations as part of this programme."

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David Cameron 'U-Turn' Over Cigarette Packaging

By Jon Craig, Chief Political Correspondent

David Cameron is set to be accused of a major U-turn over the introduction of plain packaging of cigarettes.

The Government is poised to announce it is pressing ahead with the measure aimed at making smoking less attractive to youngsters.

Mr Cameron's decision to shelve the measure last July caused an outcry after it emerged his election strategist Lynton Crosby, now employed full time by the Conservatives, is a partner of Crosby Textor, which worked with Philip Morris Ltd as it lobbied the UK government against plain packaging.

That prompted the accusation from Ed Miliband in the Commons: "He is the Prime Minister for Benson and Hedge funds, and he knows it.

The PM was accused of pandering to his election strategist Lynton Crosby

"Can he not see that there is a devastating conflict of interest between having a key adviser raking it in from big tobacco and then advising him not to go ahead with plain packaging?"

Campaigners for plain packaging feared a pause on consultation in July had effectively ruled out any prospect of its introduction until after the next election, while lobbyists for the tobacco industry were confident of having defeated the proposal.

Now Earl Howe, the health minister, is to introduce an amendment to the Children and Families Bill in the House of Lords, possibly as early as next week, to give the Government enabling powers to introduce plain packaging.

At the same time the Government will announce another review of what has happened in Australia to report back next March. Its findings are expected to strongly back the case for plain packaging.

One of the most recent studies from the country, the first in the world to ban branded cigarettes cartons, found that those using cigarettes sold in standardised plain brown cartons were 81% more likely to consider quitting.

A Government source told The Times: "This will nail Labour's ridiculous smears. Now the pressure will be on Labour to get behind this amendment to enable the introduction of standardised packaging."

Luciana Berger MP, Labour's shadow public health minister, said: "We need immediate legislation for standard cigarette packaging, not another review. The Government needs to stand up to the tobacco industry's vested interests.

"The evidence to support standardised packaging is clear. The consensus is overwhelming. We don't need any further delay while 570 children are lighting up for the first time every day."

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Carney: Bank Has No Help-To-Buy Veto

The governor of the Bank of England Mark Carney has rejected suggestions by ministers that it has the power to "turn off" the Help to Buy scheme aimed at boosting the housing market.

In a letter to Andrew Tyrie, the chairman of the Treasury Select Committee of MPs, Mr Carney confirmed that the Bank's Financial Policy Committee (FPC) "does not have a veto on the scheme", though it can make recommendations on it.

Last month, Chancellor George Osborne asked the FPC - which monitors risks to financial stability - to take part in an annual review of Help to Buy, starting from September next year, after fears were expressed the scheme risked stoking a house price bubble.

The Bank's committee has also been asked to offer advice to the Treasury in the event that it wishes to extend the scheme after three years.

But Mr Tyrie wrote to Mr Carney to clarify what powers the Bank had, after Deputy Prime Minister Nick Clegg told a newspaper that it could "turn off" the scheme.

Mr Tyrie has welcomed the clarification

He also quoted Conservative party chairman Grant Shapps who made similar comments.

But in his reply to Mr Tyrie, Mr Carney said: "For the avoidance of doubt ... the FPC has no power to require HMT (the Treasury) to vary the terms of, or close, the Help to Buy scheme.

"The FPC only has the authority to make recommendations in connection with such matters."

However, the governor added that the FPC was not "constrained by the Government's timetable for any such advice" which could be made at any time rather than only at the annual review

Help to Buy, designed to help aspiring home buyers struggling to find a deposit, began its latest phase last month, offering £12bn of mortgage guarantees to encourage lenders to offer home loans worth up to 95% of the value of properties.

However, critics say that without improving supply, it will simply create a price boom that will increase difficulties for those struggling to climb onto the housing ladder.

For its annual review of the policy, the FPC has been asked to look at whether the cap on the price of any home bought under the scheme - currently set at £600,000 - or the range of fees charged to lenders to access the guarantee remain appropriate.

But in his letter, Mr Carney made clear that the FPC already had broad powers to give advice including "recommendations on Government policies" and that Mr Osborne's request had not extended its statutory role.

The Bank governor has previously said more generally that the Bank of England would intervene to restrict mortgage lending if surging property prices create an unsustainable bubble.

Mr Tyrie said Mr Carney's letter was a "step forward" and added: "It brings some much-needed clarity to the Government's Help to Buy scheme. We now know who is responsible for what.

"The Bank of England has no power of veto over Help to Buy. Responsibility for it lies with the Government."

:: The Bank's semi-annual Financial Stability Report, which takes in the housing market, is released at 10.30 GMT on Thursday.

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Cable Faces Scrutiny Over £4m Royal Mail Bonus

By Mark Kleinman, City Editor

Vince Cable, the Business Secretary, will come under pressure on Wednesday to cancel a £4m bonus fee for investment bankers as MPs step up their scrutiny of Royal Mail's controversial £3.3bn privatisation.

Sky News has learnt that members of the Business, Innovation and Skills (BIS) Select Committee will demand that Mr Cable abandon any prospect of the Government's advisers receiving the money despite his belief that the surge in Royal Mail's share price reflects "frothy" investor demand.

Mr Cable is braced for a stormy session, which will be his second attempt to justify to the Committee the 330p-a-share price at which 60% of Royal Mail's shares were sold last month.

The seven banks which worked on the privatisation have received around £12m in fees for their work to date, with a further £4.2m payable at Mr Cable's discretion.

Aides to the Business Secretary insist that he will not make a decision about paying them for several months, although they point out that the decision to award them is to be based on a series of pre-determined criteria, such as the success of the share offer, the level of demand generated by the banks for the stock, and the quality of investors' feedback.

Such factors are common in deciding fees to flotation advisers, but they have become contentious in Royal Mail's case because of the allegation that the 330p pricing significantly undervalued the company and deprived the taxpayer of hundreds of millions of pounds.

One insider pointed out that some of the criteria listed in the privatisation prospectus for awarding the discretionary fees were ambiguous, including the final price achieved for the offer and the aftermarket performance of the shares.

"The aftermarket performance has been spectacular but all that has done is embarrassed (Mr) Cable," said a banker who worked on the deal. "The criteria are there for a reason but he'll be crucified if he awards the bonus."

Mr Cable was not questioned about the discretionary element of the fee pool when he appeared before the Committee last month and is expected to say on Wednesday that a decision will not be made for some time.

However, a person close to him described it as "inconceivable that a sensible Secretary of State would feel able to hand bankers millions of pounds in this way".

He may also be questioned over a disclosure in the annual report of the Shareholder Executive (ShEx), the department of BIS responsible for the sale, that Royal Mail's value had increased "as expected" with the injection of private capital into the company.

MPs are likely to ask why Mr Cable decided not to increase the sale level if they expected the share price to increase, as indicated by the ShEx annual report. Advisers to the Government said last week that they had considered raising the price but were deterred from doing so by a hostile reaction from institutions.

Adrian Bailey, chairman of the BIS Select Committee, told Sky News this week: "If the price was expected to go up, why did the Government not increase the sale price during its last-minute deliberations?"

A spokesman for BIS said: "We always made clear that the Government would retain a stake in Royal Mail so that the taxpayer could benefit from any increase in the company's value following private sector involvement. We have retained a 30% stake which represents good value for money for the taxpayer."

Mr Cable will appear before the BIS Committee alongside Michael Fallon, the Business Minister; Mark Russell, chief executive of ShEx; and William Rucker, chief executive of Lazard, the independent adviser to the Government.

Royal Mail will announce its maiden results as a public company on Wednesday, just hours before the Committee hearing. Last week, the MPs heard from a number of investment banks, some of which did not work on the privatisation but which pitched valuations of more than £9.5bn for Royal Mail.

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Nine Million In Severe Debt Told To Get Help

Fewer than 20% of the nine million people trapped in a severe debt spiral are getting any help to break free.

Research by the Government-backed Money Advice Service (MAS) found 8.8 million people are "over-indebted", meaning they have fallen at least three months behind with their bills in the last six months or they feel their debts are a heavy burden.

But just 17% of this group said they were getting advice to help them deal with their debt, while around 40% said they did not feel able to talk to their creditors and 44% did not know where to turn for help.

The research, from more than 5,000 people, found 21% of those classed as over-indebted, equating to 1.8 million people across the UK, did not recognise that they had a problem.

A further 11% were not concerned about being in debt, the Indebted Lives study concluded.

Just 12% of over-indebted people said they were thinking about trying to get help soon.

The report also identified the UK's five most over-indebted areas as Hull, Nottingham, Manchester, Knowsley and Liverpool.

Around two-fifths of adults in these areas were struggling with debt, according to the research.

At the other end of the scale, Richmond upon Thames in southwest London had just 1.2% of its population struggling with debt.

The study said 75% of those with severe debt problems were under 45 years old and nearly two-thirds of them were women, while 48% had to forego basic necessities.

The MAS, which is an independent body set up by Government and funded by the financial services industry, offers free money advice and has statutory responsibility for coordinating debt advice in the UK.

Its chief executive Caroline Rookes said: "Millions of people could escape their spiral of debt by accessing free advice.

"However, this study presents us with a fundamental challenge: the majority of people with debt difficulties do not seek advice.

"This is the first time we've had such a detailed understanding of the complexity of their lives. So now, armed with greater insights, we will work with advice agencies, creditors and public bodies to help as many people as possible access free, high-quality, debt advice."

:: People in worsening debt are advised to get free charity advice as soon as possible - the Money Advice Service website can help.

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Royal Mail Reports £283m First Half Profits

Royal Mail has reported a near-doubling of operating profits to £283m for the first half of its financial year amid its controversial privatisation.

In the wake of the sale of the 60% stake - which remains gripped by suggestions the taxpayer was short-changed - the newly privatised firm said rising parcel revenue and continuing cost cutting was mainly responsible for the performance.

The operating profit for the six months to September 29 was 96.5% ahead of the £144m posted in the same period a year ago, helped also by a one-off VAT credit of £35m and lower than expected transformation costs in the half.

The group said it still intended to propose a final dividend of £133m for the full-year.

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Big Six Energy Firms Face New Profits Storm

The big six energy companies made £23 more in average profit from each UK household on aggregate last year - a rise of 75% on 2011 - and profits are still rising, according to the industry's regulator.

Ofgem said the latest average profit for all suppliers from the average dual fuel customer hit £53 in 2012 but was measured at double that on November 21 this year at £105.

The regulator announced the figure after releasing its analysis of the companies' accounts for 2012, which found average profit margins of 20% for energy generation.

The revelation prompted the watchdog to suggest it may insist on greater clarity in future to ensure that the profits are a fair reflection of investment in future power generation.

It found that the average profit margin for supply to household customers was 4.3% - in line with the claims made by the industry - as energy use rose and bills went up.

EDF is involved in the planned new Hinkley Point nuclear power station

But it calculated the profit margin made in generating energy in 2012 at 20% - slightly lower on the previous two years - but still high in the context of rising household bills.

The study sought to explain the disparity between supply margin and that for generation by pointing out that the generation part of a business needed significant sums of money over the long term to invest in building new power stations.

Ofgem said it was now considering whether companies needed to provide additional profit measures in generation which took account of capital investment to help ensure greater transparency.

The big six - SSE, E.ON, EDF Energy, Scottish Power, npower and Centrica's residential arm British Gas - have faced a backlash from politicians and consumer groups since the latest round of bill increases - up to 11% in some cases - was announced.

npower's Pembroke power station replaced old gas capacity

Of the firms, only E.ON is yet to confirm its increase ahead of the coming winter.

Ofgem's report follows analysis of statements the companies have had to submit annually since 2009 as part of efforts to subject the firms to greater financial scrutiny.

The statements showed that across all six suppliers, overall profits for energy supply and generation fell from £3.9bn in 2011 to £3.7bn in 2012.

However, profits in supply to households and businesses increased from £1.25bn in 2011 to £1.6bn.

Energy companies have insisted their profits are fair, reflect wholesale costs and the country's need to invest in future supply.

Amid the criticism of the industry over the latest rises to bills, the firms highlighted the growing cost to households from so-called green levies.

The environmental and social charges could be placed under general taxation by the Government in the coming Autumn Statement.

The firms have pledged to cut the rises to bills to match any reduction to the charges confirmed by the Chancellor on December 5.

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