PPI Scandal: Lenders To Re-Open 2.5m Claims

The City regulator says banks and other lenders are to reassess more than 2.5 million payment protection insurance (PPI) complaints.

The Financial Conduct Authority (FCA) says the claims, which were made in 2012 and 2013, may have either been unfairly rejected or paid too little.

It intervened after investigating falling 'uphold' rates in relation to complaint volumes.

The scandal has resulted in 13 million complaints in total since 2007 - with victims receiving more than £16bn in redress since the FCA started tracking payments in 2011.

The sum is widely tipped to have risen above £20bn.

Lloyds has set aside more than £10bn for PPI compensation

The FCA added that seven-in-ten claims had been upheld in the consumer's favour since the scandal broke.

Martin Wheatley, its chief executive, said: "Making sure anybody previously mis-sold PPI is treated fairly now, and paid redress where its due, is an important step in rebuilding trust in financial institutions.

"In around two-and-a-half million complaints this was not necessarily the case so, at our request, firms will be looking at these complaints again.

"The process is now working well; in just over three years £16bn has been put back into the pocket of the consumer - that is unprecedented.

"Given the enormity of this exercise it is no surprise that there have been some issues along the way but our approach is delivering a good result for consumers."

The FCA issued its update as the Financial Ombudsman Service remains jammed with complaints about PPI.

It has received over one million complaints from people unhappy with the response from their provider, equal to about a quarter of all rejected complaints.

The cash which has found its way back to PPI mis-selling victims has been credited with boosting the UK's economic recovery - particularly the car and property markets - but also wider consumer spending.

:: In a separate announcement Coutts, the private bank that counts the Queen among its clients, has set aside £110m to compensate thousands of customers who may have been sold unsuitable investments.

Its review of advice to clients dated back as far as 1950.

Coutts confirmed the news days after its parent firm, Royal Bank of Scotland, was fined £14.5m for "serious failings" in its advice to mortgage customers from June 2011 to March 2013.

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Tesco Shares Slump As Trading Woes Deepen

Tesco's share price took its biggest one-day hammering in more than two years on Friday after it slashed its profit forecast following a sales slump.

The supermarket chain, which has seen its position as the UK's market leader slowly eroded amid a price war with rivals, underlined the sense of internal crisis by announcing that its new chief executive Dave Lewis would now start work on Monday September 1 - a month early.

He replaces Philip Clarke who paid the price for a string of problems with the company's UK offering.

Tesco, which now issued three profit warnings this year, said Mr Lewis would review all aspects of the business and Mr Clarke would be available to him as a source of information though he would relinquish his position on Friday.

The chain now expected trading profit for 2014/15 to be in the range of £2.4bn to £2.5bn, compared with an analyst forecast of around £2.8bn.

Dave Lewis will review Tesco's business

The group also cut its interim dividend by 75% to 1.16p-per share - a move that will hit many pension funds - and confirmed that its store refresh programme which was ordered by Mr Clarke as part of efforts to improve Tesco's customer appeal, would be slowed.

It said the move would hold back £400m from its planned annual capital expenditure.

Tesco said: "The combination of challenging trading conditions and ongoing investment in our customer offer has continued to impact the expected financial performance of the group."

Chairman Sir Richard Broadbent added: "The board's priority is to improve the performance of the group.

"We have taken prudent and decisive action solely to that end."

Tesco's shares opened almost 9% lower at one stage before recovering some of that ground - while those of its rivals also suffered when the FTSE 100 opened for business.

Sainsbury's lost more than 5% while Morrisons' value slipped by 3.5%.

Hard discounters are challenging the dominance of the 'Big Four'

Asda is owned by US retailer Walmart and not listed in London.

The problems at Tesco underline a big challenge for the so-called 'Big Four' from hard discounters.

According to industry figures by Kantar Worldpanel released earlier this week, Tesco sales declined 4% in the 12 weeks to August 17 compared to the same period last year.

Kantar estimated the drop in sales cost Tesco £300m.

Tesco's turnaround efforts have included a new fuel offer

Morrisons has also been suffering in the battle with Aldi and Lidl, with Asda the only member of the Big Four to be growing its share.

Analysts have speculated that the savings Tesco is planning could allow it to cut prices further to tackle the discount threat.

Nicla Di Palma of Brewin Dolphin told Sky News: "Refreshing the stores and cutting costs are the two priorities. They need to get customers in."

Mike Dennis of Cantor Fitzgerald believed it could go further: "Tesco's investment in margin and recovery plan could easily wipe-out the majority of its main competitors' trading margins, forcing them to reduce their dividends and capital expenditure and also forcing the discounters back to a loss making position, as they were in 2009".

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Lib Dems Promise Six Weeks' Paternity Leave

The Liberal Democrats will promise fathers an extra four weeks' paternity leave under new manifesto plans due to be announced.

The policy would extend the total parental leave to 58 weeks by extending fathers' current entitlement of two weeks to six.

Under the plans, the law would be amended to provide parental rights to cover six weeks reserved for working fathers and six weeks for working mothers.

The remaining time would be available to share between partners.

For same-sex couples, each partner would be entitled to six weeks' reserved leave, with the rest available to share.

The policy goes further than the Coalition's introduction of shared parental leave from next April.

Business and Equalities Minister Jo Swinson said shared paternal leave plays an essential part in building a stronger economy and a fairer society.

"It allows couples to choose how to split time off work to look after their new baby," she said.

"Extending paternity leave is an important next step to encouraging new dads to spend more time with their child in those vital early weeks and months after birth.

"When parents share caring responsibilities, more equality in the workplace will follow.

"It is a nonsense to think it is only the mother's job to look after children. Parenting is a shared responsibility."

A Lib Dem spokeswoman said the policy would also encourage fathers to spend more time with their children.

"It's very important to us. We have done lots in government so far to make sure fathers get more rights," she said.

"This is just the extra step in encouraging them to spend more time with their children."

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Annual House Price Growth Hits 11% Says Report

The slowdown in house price growth of recent months could have been short-lived, with home costs accelerating in August.

The Nationwide study calculated growth of 0.8% - the sixteenth successive monthly price rise - leaving the annual pace of house price growth up to 11% from 10.6% in July.

The report said that while the figures highlighted a growing gulf between housing costs and wage rises - most recently measured at -0.2% - affordability was not stretched by historic standards.

Robert Gardner, Nationwide's chief economist, said: "The outlook for the housing market remains highly uncertain.

"The number of mortgage approvals fell by almost 20% between January and May, suggesting that activity was cooling.

"However, there was a modest rebound in June and it is unclear how much of the slowdown was due to the introduction of Mortgage Market Review rather than an underlying loss of momentum.

"Surveyors report that new buyer enquiries have moderated somewhat in recent months, and the prospect of interest rate increases together with subdued wage growth may temper demand in the quarters ahead.

"However, the brightening economic outlook is likely to provide ongoing support for housing demand.

"Consumer sentiment remains buoyant thanks to declining inflation and sustained increases in employment."

He also pointed to the continuing weak supply of homes on the market as a factor likely to support price growth.

But separate research released by property analyst Hometrack has found the gap between house sellers' asking prices and the amounts that buyers are willing to pay is widening.

Hometrack said this pointed to the pace of house price increases slowing in the coming months.

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Malaysia Airlines Shake-up After Planes Lost

The impact on Malaysian Airlines from the disappearance of MH370 and shooting down of MH17 has forced it to cut 6,000 jobs.

More follows...

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Tesco Shares Slump As Trading Woes Deepen

Tesco's share price has taken a hammering after it confirmed it was slashing its trading profit forecast after a slump in sales.

The supermarket chain, which has seen its position as the UK's market leader slowly eroded amid a price war with rivals, said its new chief executive Dave Lewis would now start work on September 1 - a month early.

He replaces Philip Clarke who paid the price for a string of problems with the company's UK offering.

Tesco, which issued a profit warning in July, said Mr Lewis would review all aspects of the business.

It now expected trading profit for 2014/15 to be in the range of £2.4bn to £2.5bn, compared with an analyst forecast of around £2.8bn.

Dave Lewis will review Tesco's business

The group also cut its interim dividend by 75% to 1.16p-per share - a move that will hit many pension funds and confirmed its store refresh programme - ordered by Mr Clarke as part of efforts to improve Tesco's customer appeal - would be slowed.

It said the move would hold back £400m from its planned annual capital expenditure.

Tesco said: "The combination of challenging trading conditions and ongoing investment in our customer offer has continued to impact the expected financial performance of the group."

Chairman Sir Richard Broadbent added: "The board's priority is to improve the performance of the group.

"We have taken prudent and decisive action solely to that end."

Tesco's shares opened almost 9% lower - while those of its rivals also suffered when the FTSE 100 opened for business.

Sainsbury's lost more than 5% while Morrisons' value slipped by 3.5%.

Asda is owned by US retailer Walmart and not listed in London.

The problems at Tesco underline a big challenge for the so-called 'Big Four' from hard discounters.

According to industry figures by Kantar Worldpanel released earlier this week, Tesco sales declined 4% in the 12 weeks to August 17 compared to the same period last year.

Kantar estimated the drop in sales lost Tesco £300m.

Morrisons has also been suffering in the battle with Aldi and Lidl with Asda the only member of the Big Four to be growing its share.

More follows...

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PM: UK Trade Supports A Million Scottish Jobs

David Cameron is expected to say that UK trade supports one million Scottish jobs as he argues against an independent Scotland.

The Prime Minister will address the business organisation CBI Scotland's annual dinner in Glasgow tonight.

He will use the trip north to make the case for Scotland remaining in the UK by hailing long-standing trade ties.

"Scotland does twice as much trade with the rest of the UK than with the rest of the world put together ... trade that helps to support one million Scottish jobs," Mr Cameron is expected to say.

"For some industries, the proportion of trade with the rest of the UK is even higher - 90% of Scottish financial services' customers are in England, Wales and Northern Ireland.

"Then there's the world-famous gaming industry, cutting-edge sub-sea technology and life-saving biomedicine - all selling far more outside Scotland than inside."

Mr Cameron's comments come with just three weeks to go until the independence referendum.

They also follow an open letter signed by 130 business leaders in Scotland which declared that the case for leaving the UK "has not been made".

Scottish First Minister Alex Salmond has challenged Mr Cameron to use his visit to explain what extra powers would come to Scotland if a No vote is successful.

"As we approach September 18, people and business leaders are waking up to the opportunities of independence.

"With full control over economic powers, we have the opportunity to tailor economic policy to our needs, which means a jobs policy that puts the interests of Scotland first."

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Parents 'Cut Back On Food To Pay For Homes'

By Rachel Younger, Sky News Correspondent

Three million working parents in England are being forced to cut back on food so they can afford to pay for their homes.

A YouGov poll of working families has found that rising housing costs mean more and more of our wages are needed to keep a roof over our heads.

The problem has got so bad that more than one in 10 parents - over 750,000 people - admit to skipping meals rather than risk losing their home.

Recent figures from the government's English Housing Survey show households are spending 28% of their weekly income on housing costs alone - and that rises to 40% for private renters.

With rent or the mortgage swallowing so much of the monthly budget, many ordinary families are finding that regardless of how hard they work, any sudden drop in income from an unexpected job loss or illness can quickly put their homes at serious risk.

The poll found parents are facing tough choices. Some 13% say they have put off buying their children new shoes, with one in 10 delaying buying new school uniforms over the past year.

Now charities like Shelter are calling on the Government to provide a safety net strong enough to catch families who fall on hard times.

"This is a really terrible situation for many, many parents across the country," said the CEO of Shelter, Campbell Robb.

"What we're seeing is that people are just struggling to keep up their costs. Housing has gone up ... but other costs have gone up too.

"Generally speaking it's not about people being in places they can't afford. It's the places they're in becoming unaffordable."

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Business Leaders Back Scottish Independence

An open letter signed by more than 200 business figures in support of Scottish independence has been published, 24 hours after opponents made a similar pitch.

The document, printed in the Herald newspaper, argues a split from the UK is in Scotland's economic interest as the biggest threat to business was a possible exit from the EU amid fierce debate in Westminster.

Signatories include Sir George Mathewson - the ex-chair of Royal Bank of Scotland - Stagecoach chairman Sir Brian Souter, former William Hill boss Ralph Topping and Jim McColl - the chairman of Clyde Blowers.

The publication aimed to counter an open letter sent to the Scotsman a day earlier by 130 business figures which warned of substantial risks of casting a Yes vote on September 18, saying the business case had not been made.

Their argument will be supported by the Prime Minister in a speech to a CBI Scotland business dinner in Glasgow on Thursday night in which he will point to the value of UK trade.

Debate over the economy has largely dominated the independence campaign.

The latest spat between the warring camps emerged at an event organised by the Federation of Small Businesses in Edinburgh.

Labour's finance spokesman Iain Gray slammed SNP proposals to cut corporation tax, warning it could turn an independent Scotland into a tax haven for large multinational companies.

He said: "If you deliberately set your corporation tax, not at what you think is right, but less than the country next door to you, what you're doing is you're trying to create yourself as a tax haven.

"The example we're often given about how great a policy this would be is Ireland, who significantly cut their corporation tax rate.

"And what happens there of course is that multinational companies like Google and Microsoft set up in Ireland, move their money through Ireland but don't employ people there, they simply use it as a conduit in order to pay less tax.

"I don't think that's what we should be looking to build Scotland's future on."

But Finance Secretary John Swinney pledged that multinationals would pay their fair share in the event of a Yes vote, saying it would make Scotland a more competitive place to do business and create an incentive for growth.

He said he had already taken steps on tax avoidance with the Revenue Scotland and Tax Powers Bill which includes an anti-avoidance rule.

Mr Swinney added: "We have got to make sure that those who've got tax responsibility to pay, they pay, they pay in full and they do it effectively to support our public finances.

"That's the commitment that I will give you in an independent Scotland."

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Tax Fugitives Brought To Justice By HMRC

Five of the UK's top tax fugitives have been brought back to the UK to face justice following a global HM Revenue and Customs (HMRC) initiative, the organisation has said.

HMRC said it is "excellent news for all honest taxpayers" and released images of a further five people it wants to track down.

These are: Ahmed Salim Khezri, Norbert Dombo, Mohammed Kasim Farook (aka Mohammed Kasim), Paul Edwards and Murugasan Natarajan (aka Murucasan Natarajan and Raj Natarajan).

The five fugitives HMRC wants to apprehend

Those who have been apprehended in the last year are:

:: John Sabin, who fled to Spain after being convicted for his role in smuggling more than 150 million illicit cigarettes into the UK

:: Malcolm McGowan, who also fled to Spain before he could be sentenced for smuggling more than 28 million cigarettes

:: Magdalena Ferkova, returned from the Czech Republic after being found guilty of tax credit and child benefit fraud

:: Michael Voudouri, who fled to northern Cyprus prior to sentencing after being found guilty of an £11.6m money laundering scam

:: Michael Fearon, who fled to the Republic of Ireland while on trial for his part in smuggling more than 8 million cigarettes

Malcolm McGowan, one of those who has been caught in the last year

Jennie Granger, HMRC's Director General of Enforcement and Compliance, said: "This is down to the determination of our people with the help and support of the general public.

"We would like to thank the public for that help, and ask them to look at the 2014 list and help us to bring back the rest.

"These fugitives were involved in frauds that have collectively cost the UK more than  £844 million but the success of our campaign means those on the run should know that HMRC will relentlessly pursue them."

HMRC said it had also received "important information" on the location of five other people on its "most wanted" list.

It is two years since HMRC first published images of its top tax fraud absconders, and since then the pictures have been viewed three million times, leading to the capture of some of the fugitives.

There is also a map showing where HMRC believes the remaining people on the list to be.

HMRC says that, where legally possible, it will seek extraditions with the help of the Crown Prosecution Service and other partners in the UK and abroad to ensure they are brought back to the UK. 

:: Anyone with information should contact the Tax Evasion Hotline on 0800 788 887 or email via the HMRC website. Alternatively, contact Crimestoppers anonymously on 0800 555 111.

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