First-Time Homebuyers At Five-Year High

The number of first-time homebuyers has risen to the highest level in five and a half years, porviding further evidence of a recovery in the housing market.

According to the Council of Mortgage Lenders (CML), 25,100 loans worth £3.4bn were advanced to people taking their first step on the property ladder during May.

The figure is up 42% on the same time last year, and is the highest volume since November 2007.

It was a marked contrast to the low point of the global financial crisis when just 8,500 loans were given, in January 2009.

The overall £8.4bn of lending for house purchases accounted for 57% of all mortgage lending in May, by value.

Meanwhile remortgaging of £4bn accounted for 27% of all lending.

Other lending, including lifetime, buy-to-let and further advances, amounted to £2.3bn - or 16% of the total.

Paul Smee, director general of the Council of Mortgage Lenders, said: "Although monthly lending is still running at far less than half its typical monthly level during the peak, there is no doubt that the mortgage market is firmly open for business.

"Both the borrowing appetite of first-time buyers, and the availability of attractive mortgages for them, have improved markedly since a year ago.

"What is interesting is that, in contrast to some recent assertions, this is happening in parallel with the strengthening buy-to-let market."

Mr Smee added: "It is perfectly possible for both the buy-to-let market and the first-time buyer market to improve at the same time, as the evidence clearly demonstrates.

"It is important that the supply of housing steps up, as increased housing supply is a crucial factor in ensuring that housing is affordable over the long term."

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Twitter Takes On Tax Expert To Avoid Woes

By Pete Norman, Sky News Online

Twitter is bolstering its international operations ahead of an expected flotation by employing its first full-time tax manager, to ensure complex company structures comply with laws across Europe.

Based in its international headquarters in Dublin, it will include oversight of the preparation and filing of all business tax returns.

The social media giant described the new role as being "in a fast-moving, challenging yet fun environment".

Sky News understands Twitter is hiring a number of new key finance personnel as part of its extensive international expansion plan.

The tax manager will be responsible for taxation affairs across Europe, the Middle East and Africa (EMEA) and is expected to "implement and monitor transfer pricing strategy".

Transfer pricing is a system whereby goods or services are supplied and charged between arms of a multinational firm, sometimes across national borders and jurisdictions.

Twitter UK Ltd answers to Twitter International Company in Ireland, which is wholly-owned by Twitter Inc - one of at least three companies California-based Twitter has formed in the US state of Delaware.

However, leading American multinationals have been under increasing UK parliamentary scrutiny in recent months over transfer pricing.

The tax expert role advertised by Twitter International

Last week the UK arm of Twitter filed its abbreviated accounts for the year ended December 31, with the business regulator Companies House.

Twitter declined to confirm that UK sales were routed through Ireland.

But its accounts revealed that "turnover represents the value of services provided to other Twitter group companies".

A Twitter UK spokesperson told Sky News: "Since Twitter UK opened in 2011 we have been steadily building our team, focusing on promoting great uses of Twitter by all elements of UK society - the arts, sport, Government, and brand partners."

UK profit for 2012 was listed as £108,907, up from £16,499 in the previous year. Twitter UK was formed in June 2011.

The company's taxation and social security liability also increased from £36,800 in 2011 to £326,949 in 2012.

"There have been a number of significant changes and you can see the company's tangible assets in the 2012 accounts have substantially increased to £504,595 from £2,696 in 2011," Maung Aye, corporate solicitor and Mackrell Turner Garrett associate, told Sky News.

"Another factor to consider is whether the assets and equipment of the now dissolved TweetDeck Ltd were absorbed into Twitter UK Ltd so that the application can be continued for its users."

Last December Sky News revealed that Twitter UK and its sister firm TweetDeck Ltd were fined by Companies House for failing to file their 2011 accounts on time.

Twitter CEO Dick Costolo resigned his role as Twitter UK director

Two of Twitter's top American officials, chief executive Dick Costolo and head of trust Alex Macgillivray, were directors of the TweetDeck. The two executives, along with chief operating officer Ali Rowghani, were directors of Twitter UK.

Although Twitter UK finally filed its 2011 accounts TweetDeck did not and was forcibly dissolved by the business regulator on May 7 this year.

On May 9, Mr Costolo resigned his remaining British directorial role - with Twitter UK - and his position was taken by Irish ex-'Big Four' chartered accountant Laurence O'Brien, who is in charge of international operations in Dublin.

Forbes magazine has reported that Twitter may seek a public flotation in 2014, saying it could be worth more than $11bn (£6.8bn) to investors if it successfully monetises the service without disenfranchising users.

Meanwhile, the micro-blogging site has fought against spam attacks masquerading as legitimate tweets.

In January, hashtags for the World Economic Forum in Davos were bombarded with so-called spam bots and porn bots, while a recent swamping involved diet aid spams.

In both cases Mr Costolo responded to complaints personally by tweeting that the company was dealing with the problems.

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UK Motor Industry Gets £1bn Hi-Tech Boost

Britain's motor industry is to receive more than £1bn in new funding over the next decade to improve its global competitiveness.

The joint UK motor industry and Government automotive strategy has agreed to the deal to help secure the growth and development of the vehicle and component manufacturing sector.

This new funding supports multi-billion pound investments announced in the last few years by global automotive companies to boost production levels and develop new technologies and models.

Developed under Automotive Council guidance, both industry and the Government will fund the investments.

The range of projects include the creation of an Advanced Propulsion Centre (APC), thousands of new motor industry apprenticeships and the development of an Automotive Investment Organisation.

The APC is expected to research, develop and commercialise technologies for the vehicles of the future.

What Car? editor-in-chief Chas Hallett told Sky News: "The British motor industry is booming at the moment but companies are still struggling to attract top quality young people.

"Any incentives to provide apprenticeships in order to attract the brightest and best should be welcomed."

The UK car industry covers several major regional areas

The development of the strategy also sees the provision of finance for tooling investments in the supply chain, and a renewed commitment to encourage the UK as a lead market in the production and sale of low emission vehicles.

The financial commitment is backed by 27 companies in the motor industry sector, including supply chain companies, and it is expected to secure at least 30,000 jobs currently linked to producing engines and create many more in the supply chain.

It was also announced that the Automotive Council, co-chaired by Mr Cable and Professor Richard Parry-Jones, is aiming to recruit more than 7,600 apprentices and 1,700 graduates over the next five years.

In addition, the newly-created Automotive Investment Organisation will aim to double the number of jobs created or secured in the automotive supply chain over the next three years to 15,000.

In a further announcement, the Technology Strategy Board launched a £10m competition that could see successful projects fast-tracked for commercialisation through the APC.

Businesses are being invited to bid for support on innovative, collaborative low-carbon vehicle projects.

Announcing the total initiative with Prof Parry-Jones at the Goodwood Festival of Speed in West Sussex on Friday morning, Mr Cable said: "The UK automotive sector has been incredibly successful in recent times, with billions of pounds of investment and new jobs.

"With the next generation of vehicles set to be powered by radically different technologies we need to maintain this momentum and act now. Our industrial strategy will ensure we keep on working together to make our automotive industry a world leader."

Prof Parry-Jones said: "Businesses prefer consistency, stability and a clear path to the future in order to make investment plans.

"This is critical to sustaining and growing a thriving UK automotive sector in a highly competitive global industry."

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GlaxoSmithKline Denies China Drug Bribes

Britain's biggest drug maker has told Sky News it rejects claims by Chinese authorities that it offered bribes to doctors and hospitals.

GlaxoSmithKline (GSK) had been accused by China's Public Security Bureau (PSB) of offering free travel as "large bribes".

It said the bribes were "to open new sales channels and increase drug revenues" and given to doctors, hospitals, foundations and medical associations.

In a statement to Sky News, GSK said: "We take all allegations of bribery and corruption seriously. We continuously monitor our businesses to ensure they meet our strict compliance procedures

"We have done this in China and found no evidence of bribery or corruption of doctors or government officials."

It added: "We are aware of the statement from the PSB. We are willing to co-operate with the authorities in this inquiry.

"But this is the first official communication GSK has received from the PSB in relation to the specific nature of its investigation."

The Chinese authorities allegedly identified employees only as "high officials" but gave no details of the size of payments or who received them.

The Chinese authorities said the investigation took place in Shanghai and the cities of Changsha and Zhengzhou.

"After questioning, the suspects confessed to the crime," the PSB statement said.

Sky sources confirmed that a British national was detained and questioned by Chinese authorities in Shanghai and has has now been released.

Sources revealed that dozens of Chinese police entered the GSK Shanghai offices on June 27, entered the offices of senior British staff and seized paperwork.

After the raid GSK circulated an internal memo which said: "At this stage, it is unclear about the precise nature/purpose of their visit and investigation.

"We will of course cooperate with their inquiries, but are unable to comment further at this stage."

It added: "Generally speaking, travel to China can continue as planned, unless you are planning to visit the GSK Pharmaceuticals offices to meet with senior management, in which case you should check with your host to ensure that the current meeting arrangements still stand."

A Foreign Office spokesman told Sky News: "We are aware of the Chinese investigation, and we are providing consular assistance to a British national.

"We are in contact with GSK and are in the process of seeking further information from the Chinese authorities."

Sky News Asia Correspondent Mark Stone, reporting from Beijing, said: "This comes a week after police in a city in south-central China said they were investigating high level Chinese staff."

Police in Changsha announced two weeks ago that GSK employees had been detained for questioning about unspecified "economic crimes".

Brentford-based GSK said in June that it had investigated an accusation that its salespeople in China bribed doctors and found no evidence of wrongdoing.

Last week Chinese state media reported that the government was investigating production costs for 60 foreign and domestic drug companies in a possible first step toward changing state-set maximum prices.

The announcement gave no indication any companies were suspected of wrongdoing.

:: In late Thursday trading in London shares in GSK remained virtually flat.

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China Tops 'Air Travel Delays' List

Passengers using China's airlines and airports continue suffer the worst flight delays in the world, according to a travel industry monitor.

Less than one-in-five planes leave on time from its capital's airport.

A survey of flight times last month showed that Beijing's airport had the lowest proportion of flights leaving on time among 35 leading airports at just 18.3%, FlightStats Inc said.

Shanghai was slightly better at 28.72%, but still 10 percentage points below the next-worst performer, Istanbul.

Among airlines, mainland Chinese carriers made up eight of the 10 worst performing airlines.

Flag carrier Air China came in sixth from the bottom, with just 54.54% of its flights arriving on time.

No reasons were given for the poor performance.

Industry analysts frequently blame the country's air force's tight restrictions on airspace for heavy congestion along available corridors.

Air travel has more than quadrupled in China along with rising incomes and cheaper tickets.

Alongside that growth, routine delays, shoddy service and ill-mannered passengers have fuelled an epidemic of air rage incidents, video footage of which is often shown on television.

:: The survey comes as London's Heathrow airport saw passenger traffic of 6.5 million in June, up 4.6% on the same period last year. More than 34 million people used Britain's most congested airport in the first six months of 2013.

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UK Motor Industry Gets £1bn Hi-Tech Boost

Britain's motor industry is to receive more than £1bn in new funding over the next decade to improve its global competitiveness.

The joint UK motor industry and Government automotive strategy has agreed to the deal to help secure the growth and development of the vehicle and component manufacturing sector.

This new funding supports multi-billion pound investments announced in the last few years by global automotive companies to boost production levels and develop new technologies and models.

Developed under Automotive Council guidance, both industry and the Government will fund the investments.

The range of projects include the creation of an Advanced Propulsion Centre (APC), thousands of new motor industry apprenticeships and the development of an Automotive Investment Organisation.

 The APC is expected to research, develop and commercialise technologies for the vehicles of the future.

What Car? editor-in-chief Chas Hallett told Sky News: "The British motor industry is booming at the moment but companies are still struggling to attract top quality young people.

"Any incentives to provide apprenticeships in order to attract the brightest and best should be welcomed."

The UK car industry covers several major regional areas

The development of the strategy also sees the provision of finance for tooling investments in the supply chain, and a renewed commitment to encourage the UK as a lead market in the production and sale of low emission vehicles.

The financial commitment is backed by 27 companies in the motor industry sector, including supply chain companies, and it is expected to secure at least 30,000 jobs currently linked to producing engines and create many more in the supply chain.

It was also announced that the Automotive Council, co-chaired by Mr Cable and Professor Richard Parry-Jones, is aiming to recruit more than 7,600 apprentices and 1,700 graduates over the next five years.

In addition, the newly-created Automotive Investment Organisation will aim to double the number of jobs created or secured in the automotive supply chain over the next three years to 15,000.

In a further announcement, the Technology Strategy Board launched a £10m competition that could see successful projects fast-tracked for commercialisation through the APC.

Businesses are being invited to bid for support on innovative, collaborative low-carbon vehicle projects.

Announcing the total initiative with Prof Parry-Jones at the Goodwood Festival of Speed in West Sussex on Friday morning, Mr Cable said: "The UK automotive sector has been incredibly successful in recent times, with billions of pounds of investment and new jobs.

"With the next generation of vehicles set to be powered by radically different technologies we need to maintain this momentum and act now. Our industrial strategy will ensure we keep on working together to make our automotive industry a world leader."

Prof Parry-Jones said: "Businesses prefer consistency, stability and a clear path to the future in order to make investment plans.

"This is critical to sustaining and growing a thriving UK automotive sector in a highly competitive global industry."

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Debt Warning For Mortgage Payers Over Rates

Millions of people are at risk of entering a spiral of debt over mortgage interest rates, according to new research.

The study published by the Resolution Foundation think tank analysed the effects on families if interest rates rise by the expected 1.9% in four years.

It also considered the "adverse but plausible" scenario that they could increase by a further 2% by 2017.

It calculated that more than 800,000 families will be forced to spend half of their income on debt repayments by 2017 if interest rates rise by current predictions and household income is squeezed.

It found Britain could be left in a fragile position with a major surge in families with dangerous debt levels.

A "best case scenario" where interest rates rise by current expectations and family household income growth is strong will see 700,000 households spending more than 50% of their income on repayments.

But if household growth is weak and uneven, the figure increases to 810,000.

It further rises to 1.2 million if interest rates exceed expectations and reach 3.9% by 2017.

Resolution Foundation senior economist Matthew Whittaker said: "There is now the real prospect that a large number of households already burdened with debt could collapse under its weight if economic conditions tighten.

"Even if interest rates stay in line with expectations, we are likely to see a rise in the number of families struggling with heavy levels of repayment over the coming years.

"But if the squeeze on household incomes continues, Britain could be left in a fragile position, with even moderate additional increases in interest rates leading to a major surge in families with dangerous debt levels - especially among worse-off households.

Since 2007 the number of households spending at least 50% of their income on repayments has dropped by 270,000 to 600,000 because of falling interest rates.

But a rise in interest rates in the next four years could see Britain return to higher levels of household debt than before the financial crisis, which was sparked by US homeowners being unable to service their mortgage debt.

Meanwhile, according to the Office of National Statistics, Britain is now a more unequal country than at any point since 1986.

It said benefits and tax credits have helped protect the incomes of the poorest amid ongoing wage stagnation.

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Regional Growth Fund Winners Are Announced

Regional Growth Fund Bidders

Updated: 7:58am UK, Thursday 11 July 2013

A list of bidders to the Regional Growth Fund with conditional offers by region.

North West

:: Accelerating Business Growth PLUS (Blackburn with Darwen Borough Council -Programme)

:: Bright Future Software Limited

:: Unleashing Cumbria's Potential (Cumbria County Council - Programme)

:: Cygnet Group Limited

:: EA Technology Limited

:: Turning Discovery Science and Knowledge into Jobs and Growth (GM Local Enterprise Partnership - Programme)

:: Helical Technology Limited

:: Liverpool City Region Small Business Support Fund (Liverpool City Region LEP - Programme)

:: N Brown Group Plc (Programme)

:: Novartis Vaccines & Diagnostics Ltd

:: Patterson & Rothwell Limited

:: Redx Pharma Ltd

:: Sidcot Investments Limited

:: St Helens Jobs and Growth Fund (St Helens Chamber - Programme)

:: Tratos Ltd

:: Unilever UK Central Resources Limited

:: Catalyst for Growth (University of Chester - Programme)

:: Vix Technology (UK) Ltd

Yorkshire and Humber

:: Beatson Clark Ltd

:: Paull Strategic Employment Site : Capturing Siemens Tier 1 Suppliers (East Riding of Yorkshire Council)

:: Harrison Spinks Beds Ltd

:: The enhanced Business Growth Programme (Leeds City Region LEP - Programme)

:: Developing the UK's Leading Food Manufacturing Cluster in Greater Lincolnshire (North East Lincolnshire Council - Programme):: Optare Plc

:: Really Useful Products Limited

:: Unlocking (more) Business Investment (Sheffield Council - Programme)

:: Silkstone Finance Limited

:: Centre for Innovation in Rail (University of Huddersfield)

:: York, North Yorkshire & East Riding Business Grant Programme West Midlands

:: GBS Mezzanine Funding Programme (Birmingham City Council Programme)

:: Coventry and Warwickshire Business Finance (Coventry and Warwickshire LEP - Programme)

:: The Marches and Worcestershire Redundant Building Grant Programme (Herefordshire Council - Programme)

:: Jaguar Land Rover Ltd

:: King Automotive Systems Ltd

:: Malvern Instruments Ltd

:: NVC Lighting Ltd

:: Robinson Brothers Ltd

:: Growing Priority Sectors in the Black Country (Sandwell MBC - Programme)

:: Innovative Growth in Stoke on Trent and Staffordshire (Stoke on Trent City Council - Programme):: Tata Steel UK Ltd

:: TRW Automotive - College Road

:: Wade Ceramics Limited

:: Worcestershire Expansion Fund (Worcestershire County Council - Programme)

North East

:: Air Fuel Synthesis Ltd / Crane Services (UK) Ltd

:: JDR Cable Systems Limited

:: JDR Enterprises Limited

:: Molplex Limited

:: NET Power Europe

:: Tees Valley Innovation and Skills Growth Hub (Stockton Borough Council - Programme)

:: Sunderland City Deal Infrastructure Development (Sunderland City Council - Programme)

:: Bringing Finance to Businesses in the North East (Sunderland City Council - Programme)

:: Thomas Swan & Co. Ltd.

:: Tinsley Special Products Limited

South West

:: AgustaWestland Limited

:: Atlantic Inertial Systems Limited

:: Avanti Communications Group plc

:: Cooper Tire & Rubber Company Europe Ltd

:: Johnson Matthey Fuel Cells Ltd (JMFC)

:: Marine Current Turbines Ltd

:: GAIN Growth Fund Plus (Plymouth City Council - Programme)

:: Trackwise Designs Ltd

:: Innovation for Growth Programme (University of the West of England - Programme)

East of England, South East

:: Eastern England Agri-Tech Growth Initiative (Cambridgeshire County Council - Programme)

:: Coast to Capital City High Growth and Innovation Fund (Coast to Capital LEP - Programme)

:: Cummins Power Generation Limited (CPG)

:: e2v Technologies (UK) ltd.

:: East Sussex Invest (East Sussex County Council - Programme)

:: Element Six Limited

:: Fianium Limited

:: GE Aviation Systems

:: Harwell Science and Innovation Campus GP

:: SUCCESS - Southeast Urban Coast Creative Enterprise Support Scheme (Hastings Borough Council - Programme)

:: Escalate - the Innovation and Growth Fund (Kent County Council - Programme)

:: Portsmouth/Southampton (Programme)

:: STRUCTeam Ltd

:: New Anglia Growing Business Fund (Suffolk County Council - Programme)

:: TAG Farnborough Airport Ltd

:: The Oxford Trust/Science Oxford

:: SPI Lasers UK Ltd

East Midlands

:: UK Stem Cell Provision (Anthony Nolan)

:: Bifrangi UK Limited

:: Chinook Sciences Limited

:: "Global Derbyshire" Small Business Support Programme (Derbyshire County

Council - Programme)

:: Dynex Semiconductor Limited

:: Fairline Boats Limited

:: Frontier Agriculture Ltd (Programme)

:: Leicester and Leicestershire Enterprise Partnership Accelerating Prosperity Programme (Leicester City Council - Programme)

:: Northamptonshire Enterprise Partnership (Programme)

:: Oclaro Technology Ltd

:: Toyota Motor Manufacturing (UK) Ltd

:: The Lincoln Growth Fund (University of Lincoln - Programme)

:: VF Northern Europe Limited

Nationwide

:: Tooling Loan Fund (Birmingham)

:: Community Development Finance Association

:: Creative England

:: Deutsche Leasing UK Ltd

:: Five Arrows Leasing Group Limited (FALG)

:: HSBC

:: Wave 2 City Deals Growth Hubs

:: RBS

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GSK: GlaxoSmithKline Denies China Drug Bribes

Britain's biggest drug maker has told Sky News it rejects claims by Chinese authorities that it offered bribes to doctors and hospitals.

GlaxoSmithKline (GSK) had been accused by China's Public Security Bureau (PSB) of offering free travel as "large bribes".

It said the bribes were "to open new sales channels and increase drug revenues" and given to doctors, hospitals, foundations and medical associations.

In a statement to Sky News, GSK said: "We take all allegations of bribery and corruption seriously. We continuously monitor our businesses to ensure they meet our strict compliance procedures

"We have done this in China and found no evidence of bribery or corruption of doctors or government officials."

It added: "We are aware of the statement from the PSB. We are willing to cooperate with the authorities in this inquiry.

"But this is the first official communication GSK has received from the PSB in relation to the specific nature of its investigation."

The Chinese authorities allegedly identified employees only as "high officials" but gave no details of the size of payments or who received them.

Sky News Asia Correspondent Mark Stone, reporting from Beijing, said: "What we don't know if the accused are British nationals or Chinese nationals.

"Last week police in a city in south-central China said they were investigating high level Chinese staff."

It said the investigation took place in Shanghai and the cities of Changsha and Zhengzhou.

"After questioning, the suspects confessed to the crime," the PSB statement alleged.

Police in Changsha announced two weeks ago that GSK employees had been detained for questioning about unspecified "economic crimes".

The company said at that time it was cooperating but did not know what authorities were investigating.

Brentford-based GSK said in June that it had investigated an accusation that its salespeople in China bribed doctors and found no evidence of wrongdoing.

Last week Chinese state media reported that the government was investigating production costs for 60 foreign and domestic drug companies in a possible first step toward changing state-set maximum prices.

The announcement gave no indication any companies were suspected of wrongdoing.

:: In early Thursday trading in London, shares in GSK remained virtually flat against a buoyant market.

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City Watchdog Boss Got £86,000 Bonus In 2012

By Mark Kleinman, City Editor

Martin Wheatley, the boss of the new City conduct regulator, received a near six-figure bonus last year despite criticism of its handling of a string of mis-selling scandals.

Sky News can reveal that Mr Wheatley, chief executive of the Financial Conduct Authority (FCA) was paid an annual bonus of £86,000 in 2012-13, part of a total package worth more than £650,000.

The pay deal, which will be disclosed in the FCA's annual report due to be published on Wednesday, made Mr Wheatley one of the UK's best-paid public servants.

He is understood to have been paid a base salary of about £430,000 and received pension contributions and other benefits of approximately £150,000 on top of his annual bonus.

It is unclear whether the FCA annual report will detail the precise performance criteria on which Mr Wheatley's bonus was decided. If it does not, it will provoke accusations of hypocrisy given the scrutiny to which the watchdog subjects the pay plans of the firms it supervises.

The former head of the markets regulator in Hong Kong, Mr Wheatley was recruited back to London in 2011 while the Financial Services Authority was still in existence.

In March, the FSA was abolished under George Osborne's plans to overhaul City regulation and was replaced by the FCA and Prudential Regulation Authority, which has responsibility for the safety of the financial system.

Mr Wheatley has played a key role in changes to the operation of the scandal-hit Libor interbank borrowing rate. Sky News revealed on Tuesday that Libor's administration would be taken on by NYSE Euronext, owner of the New York Stock Exchange.

However, the FCA has faced criticism for not moving swiftly enough to force banks to pay compensation to victims of the interest rate swaps mis-selling scandal.

The FCA chief's base salary in 2012-13 was similar to his pay the previous year, when he also received a £29,000 bonus for seven months' work. His total package that year amounted to £399,657.

A source pointed out that Mr Wheatley's remuneration was significantly lower than that of Sir Hector Sants, the former FSA chief executive who now works in a highly-paid job at Barclays.

In a speech in London on Tuesday, Mr Wheatley said the FSA had been guilty of "implausible economic assessments" and a "flawed approach" to regulation.

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CVC Signals Royal Mail Interest As Float Looms

By Mark Kleinman, City Editor

The private equity firm that tabled a bid for Royal Mail four years ago has told the Government that it will revive its interest if attempts to privatise the postal services group through a stock market listing are unsuccessful.

Sky News can reveal that CVC Capital Partners has signalled that it is ready and willing to invest in Royal Mail as ministers draw up contingency plans for the failure of an initial public offering (IPO) expected to value the company at up to £3bn.

CVC, which owns stakes in high-profile businesses including Formula One motor racing and the AA breakdown recovery group, would only make a fresh bid for Royal Mail as a 'Plan B' option if a flotation proved impossible, insiders said.

The private equity group recently sold part of its stake in the Belgian postal service through a public  flotation. It was among a group of investment firms sounded out by Government advisers in recent months about its appetite to inject capital into Royal Mail as an alternative to a flotation.

News of CVC's renewed interest in Royal Mail comes on the day that Vince Cable, the Business Secretary, sets out details of Government plans to float the company as early as the autumn.

Trade unions are opposing the privatisation although their antipathy would be exacerbated if ministers ultimately elected to sell Royal Mail to a private equity firm rather than through a stock market listing.

Sky News disclosed on Tuesday that ministers have decided after months of deliberations that tens of thousands of Royal Mail employees will be handed up to £300m in shares for free rather than at a discount.

As a further sweetener, staff will be guaranteed a proportion of the retail element of the IPO, meaning that postal workers could end up owning significantly more than 10% of Royal Mail.

Mr Cable will announce the plans in a statement to the House of Commons this afternoon.

The share giveaway to staff will encompass 10% of Royal Mail's equity, in accordance with the Postal Services Act that paved the way for the sell-off of the company two years ago.

At an overall valuation of between £2.5bn and £3bn, that would value the employees' stake at up to £300m.

Roughly 150,000 of Royal Mail Group's 165,000 staff are expected to be included in the share distribution, with workers at the European parcels subsidiary GLS likely to be excluded from the deal.

A rough valuation of employees' windfalls would mean each eligible member of staff could receive shares worth more than £2000, although that would depend on the value of Royal Mail's shares when it floats on the London Stock Exchange.

UK-based staff will not receive all of the shares on the day that Royal Mail becomes a public company.

Under the Act, the Government pledged to hand 10% of the company to staff by the time the state's shareholding is reduced to zero, a process that could take several years.

Whitehall sources said the share giveaway to staff would take place in several tranches and employees would be obliged to hold onto the initial chunk of shares for at least three years.

Members of the public will also be able to buy shares in Royal Mail through intermediaries, a website and possibly through Post Office branches, although a deal has not yet been finalised with the Post Office, which is now a separately-owned organisation.

People close to Mr Cable, who has been working alongside Michael Fallon, the Business Minister, on the privatisation plans, dismissed the prospect of a 'Tell Sid'-style public information campaign such as those which accompanied the major state sell-offs of the 1980s.

Ministers hope the free share offer and the guaranteed component of the retail offering will be sufficient sweeteners for staff as union bosses continue to oppose the privatisation.

Writing in Wednesday's Daily Telegraph, Mr Fallon said Royal Mail needed private capital to compete with rivals.

"This [an IPO] is a practical, logical and commercial decision. It cannot be right for a £9bn-a-year business to come cap in hand to ministers each time it wants to innovate or commit future investment."

Martin Gilbert, chief executive of Aberdeen Asset Management, has become the first prominent City fund manager to publicly endorse a Royal Mail flotation, telling Sky News that talk of industrial unrest was just "union noise".

Labour said the privatisation was a "fire-sale" and criticised ministers for pursuing it without what it said were adequate safeguards surrounding the future of Royal Mail.

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Royal Mail Privatisation Plans To Be Unveiled

The process of selling off the Royal Mail begins today with the promise of free shares for workers weighed against fears about layoffs and higher postage costs.

Business Secretary Vince Cable will outline details of the flotation to MPs in the Commons at 12.30pm.

He will be hoping the offer of shares worth £2,000 each to its 150,000 staff, as earlier revealed by Sky News, will stave off fierce opposition to the sale among workers and union ranks.

The Initial Public Offering (IPO) will value the business at up to £3bn while the stake offered to staff would represent a 10% interest.

Moya Greene, chief executive of Royal Mail, has held talks with scores of potential investors in recent months in an attempt to persuade them to back the plans.

But she faces opposition from unions and many employees, who fear privatisation will lead to a shake-up of services, higher prices and job cuts.

Steve Butts, a Royal Mail staff member for the past 32 years, told Sky News: "I think privatisation will only bring a race to the bottom for employees.

"Any private investor would always want to make money and the way they are going to do that is to drive down our terms and conditions."

The scale of resistance will be underlined when the Communication Workers Union delivers a giant postcard to Royal Mail HQ protesting against the move.

Supporters of the privatisation argue that it would raise hundreds of millions of pounds to help modernise the mail system in Britain.

Robert Hammond, director of post and market analysis at Consumer Futures, told Sky News: "I would hope that a privatised Royal Mail would be looking to expand on their products and services, and to make those services ready for 21st century consumers."

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Rics, BRC And Deloitte Boost Growth Hopes

Optimism about Britain's recovery outlook have grown after a trio of surveys flagged rising house prices, improved business confidence and steady growth in retail sales.

The Royal Institution of Chartered Surveyors' (Rics) house price balance jumped to +21 in June from +5 in May - the best reading since January 2010 and the biggest improvement in a single month since 2009.

A survey from Deloitte also showed Britain's top firms are more willing to expand than at any point over the past two years, while the British Retail Consortium (BRC) reported healthy growth in sales last month.

The treble of promising forecasts comes ahead of an updated UK outlook announcement for 2013 and 2014 from the International Monetary Fund at 2.30pm today.

The Bank of England indicated last week it wanted monetary conditions to remain stimulative, mindful that higher bond yields could still snuff out Britain's burgeoning recovery.

But it does appear that new bank governor Mark Carney has taken the helm just as the economy is picking up.

"It is particularly encouraging to see the move towards growth among UK-facing companies," Deloitte chief economist Ian Stewart said.

"These companies have been consistently more defensive than their international-facing peers in the last two years."

The Deloitte survey showed that expectations for hiring and investment were at a two-year high, with a quarter of the chief financial officers polled saying they had shifted their focus from cutting costs to expansion.

The Rics survey showed a net balance of 45% of surveyors expect home sales to rise over the coming three months, up from 36% in May and the highest reading since the survey began more than a decade ago.

In another sign that market confidence is returning, new buyer enquiries rose for a sixth consecutive month and at a pace not seen since August 2009.

The survey chimes with data from mortgage lenders Halifax and Nationwide in suggesting the government's Funding for Lending and Help to Buy schemes are breathing new life into the market.

"After what has seemed like a very long wait we are finally starting to see what looks like the beginning of a recovery in the housing market," Rics global residential director Peter Bolton King said.

The BRC survey showed British retail sales grew in June, boosted by purchases of clothes and shoes as warmer weather tempted shoppers onto the high street.

Some two-thirds of households own their homes in Britain and rising house prices have typically gone hand-in-hand with rising consumer spending.

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M&S Clothing Sales Continue To Unravel

Retailer Marks and Spencer has seen a continued decline in its troubled clothing department, according to its latest trading update.

It said like-for-like clothing sales declined by 1.6% during the 13 weeks to the end of June.

Clothing sales have been a particularly disappointing area for the retailer in recent years.

It overhauled key staff in the department in an attempt to reconnect with shoppers but has been unable to halt the section's decline for eight straight quarters.

Meanwhile, like-for-like food sales increased 1.8% in the quarter and total UK like-for-like sales were up 0.3%.

The food business contributes over half of M&S sales.

The retailer's annual general meeting is to be held at 11am today.

The performance will ratchet up the pressure on management to deliver a swift turnaround when new season ranges start hitting the shops on July 25.

In May, the company revealed a pre-tax annual profit of £665.2m for 2012/13, down 6% on a reported profit for 2011/12 of £705.9m.

At the time boss Marc Bolland said: "In a challenging market, M&S sales grew by 1.3%. Three of the four parts of the business made strong progress.

"We are working hard to get the general merchandise performance back on track."

The 129-year-old group serves 21 million customers a week from 766 UK stores.

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Miliband Set To Reform Labour Ties To Unions

Ed Miliband will later take one of the biggest gambles of his leadership by vowing to radically reform Labour's relationship with the unions.

In a move that could cost his party millions in funding and lost membership, Mr Miliband will unveil steps to weaken union influence.

Under his proposals, sparked by the Falkirk ballot-rigging scandal, union members will no longer be automatically affiliated to Labour when they join.

Members will instead be given the chance to "opt in" to a £3 donation which currently goes straight to the party, Mr Miliband will announce this lunchtime.

"I do not want any individual to be paying money to the Labour Party in affiliation fees unless they have deliberately chosen to do so," he will say.

Mr Miliband is battling to head off a crisis sparked by events in Falkirk, where Unite is accused of trying to use its members to secure selection of a particular candidate.

Labour has given evidence to police in Scotland related to the claims but it has sparked wider questions and put the leader under major pressure to curb union influence.

On Monday, the Tories called on the Met Police to investigate the selection in two more constituencies - this time in Greater London.

Unite, which has given Labour more than £8m since 2010, denies any wrongdoing and branded the move an "obscene" political stunt which would waste police time.

Unite boss Len McCluskey

Party sources insist Mr Miliband had always intended to deliver reforms but there was no attempt to deny that the timing of the announcement was linked to the Falkirk scandal.

Crucially, however, it was emphasised that the changes would need to be "carefully implemented in detail and over time" and no explicit timetable has been given.

And even before the speech was delivered, Unite boss Len McCluskey - who is at the centre of the row - indicated he would oppose the proposals.

He said: "Switching to an 'opt-in' for the political levy wouldn't work. It would require Labour to unite with the Tories to change the law, would debilitate unions' ability to speak for our members and would further undermine unions' status as voluntary, and self-governing, organisations."

Mr Miliband's plans to end the "politics of the machine" would see millions of trade union members decide individually whether they wanted to be affiliated to the party.

Spending caps would apply in domestic and European parliamentary elections, covering both would-be candidates and any organisation backing them.

There would also be a new code of conduct for aspiring candidates, with the prospect of disqualification if they break the rules.

And standard constituency agreements with unions would aim to ensure no one involved in the selection process could be subjected to "undue local pressure".

Mr Miliband will also announce plans to use a system of US-style primaries to pick Labour's next candidate for mayor of London.

The approach could be extended to the selection of parliamentary candidates where the local constituency party is weak.

The Labour leader is expected to say: "What we saw in Falkirk is part of the death-throes of old politics. It is a symbol of what is wrong with politics. I want to build a better Labour Party - and build a better politics for Britain."

Officials acknowledge ending automatic affiliation will represent a financial "hit" for the party but Mr Miliband will argue it is also an opportunity to mobilise union members.

"I believe this idea has huge potential for our party and our politics. It could grow our membership from 200,000 to a far higher number, genuinely rooting us in the life of more people of our country," he will say.

Conservative Party Chairman Grant Shapps claimed the plans were meaningless.

"Under Ed Miliband's weak proposals, including a code of conduct that already exists, it would still be the same old Labour Party - bankrolled by the unions, policies rigged by the unions and candidates chosen by the unions," he said.

"The reality is Ed Miliband cannot change Labour because he cannot stand up to the union barons who elected him. That means he's too weak to stand up for hardworking people and too weak to run the country."

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Retailers Agree Bangladesh Factory Inspections

Leading names in European retail have backed plans for co-ordinated inspections of factories in Bangladesh, in an attempt to prevent a repeat of the building collapse that killed 1,129 people in April.

The collapse of Rana Plaza, a factory built on swampy ground outside Dhaka, ranked among the world's worst industrial accidents and galvanised brands to look more closely at their suppliers.

The new accord led to the creation of a team of inspectors to evaluate fire, electrical, structural and worker safety in factories supplying signatory brands.

Crowds gathered when news of the collapse spread on April 24

In a report published on Monday, the implementation team said the brands now had to provide full details of the Bangladesh factories from which they source goods - the first time such data would be collected or shared in such a comprehensive way.

The world's two biggest fashion retailers, Zara-owner Inditex and H&M, have agreed to accept legal responsibility for safety at their Bangladesh factories.

The scale of the disaster overwhelmed rescuers

But a number of US chains, including Asda parent firm Wal-Mart, Gap, Macy's, Sears and JC Penney have shunned the deal, saying that it gives labour unions too much control over ensuring workplace safety and have proposed a non-binding initiative.

Under the accord, every factory will undergo an initial inspection within the next nine months, with repairs initiated where necessary.

Relatives were desperate for news on their loved ones

"Brand signatories are responsible to ensure that sufficient funds are available to pay for renovations and other safety improvements," the report said.

Tesco, the world's third-largest retailer and one of the accord's backers, said last month that it had stopped sourcing clothes from a Bangladesh site because of safety concerns.

Some were lucky to make it out of the building alive

European, Bangladeshi and US officials will meet in Geneva on Monday for talks aimed at improving safety conditions and discussing the country's trade benefits, which the EU has threatened to suspend without greater action from the Bangladesh government.

Bangladesh has pledged to improve safety, but it has not offered new money to relocate dangerous buildings.

An estimated 3.6 million people work in Bangladesh's clothing sector, employing mostly women on wages as little as £30 a month.

Tax concessions offered by Western countries and the low wages paid by the manufacturers have helped to turn Bangladesh's garment exports into a £12.7bn a year industry, with 60% of clothes going to Europe.

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Jobs Market 'Soaring' In UK, Report Says

Recruitment firms say they are placing the highest number of people into permanent jobs for two years, amid strong evidence of rising wages.

The report by the Recruitment and Employment Confederation (REC) and professional services group KPMG found that demand for staff was at a three-year high, with vacancies also accelerating.

Pay for permanent staff rose at the fastest pace for two years, the survey suggested, while the position was even healthier for temporary and contract workers.

Bernard Brown of KPMG said: "The latest figures reveal permanent placements enjoying their highest growth rates for over two years and temporary roles being filled at the quickest pace since Christmas.

"Perhaps the sun has finally come out to shine on the jobs market and economy at large."

REC chief executive Kevin Green added: "The UK jobs market has been agile enough to weather the recession and emerge with more people in work than ever before and has performed considerably better than our European counterparts.

"Our main concern is that the soaring success of the jobs market and signs of economic recovery could be undermined if the Government does not do more to address the growing skills gap.

"Roles in engineering and IT are in ever increasing demand as recruiters struggle to source the talent that businesses need to succeed.

"However more roles, such as sales and digital marketing, have been added to this growing list in the last couple of months and show no signs of disappearing."

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TPG Swoops For Teachers' Bible In £400m Deal

By Mark Kleinman, City Editor

The publisher of the Times Educational Supplement is to be sold to an American buyout firm in a deal valuing the teachers' bible at around £400m.

Sky News has learnt that TPG Capital, one of the world's biggest private equity groups, is buying TSL Education from Charterhouse, another investment firm. The deal is expected to be announced later on Monday.

Charterhouse has owned TSL since 2007 and has been sounding out prospective buyers for months.

TPG is understood to have been enticed by the opportunity to exploit the global community of 52m teachers, which it believes are underserved by existing professional networks.

The American buyout firm's interest has been led by Karl Peterson, its managing partner in London and the former boss of Hotwire, the digital recruitment business.

The Times Educational Supplement was first published in 1910 as a pull-out in The Times newspaper.

Monday's deal will mark the third change of ownership for TSL in less than a decade. Previously owned by News International (now called News UK), the publisher of The Times, TSL was sold to   Exponent Private Equity in 2005.

The price of around £400m is expected to crystallise a modest loss for Charterhouse.

TPG, which declined to comment, has owned prominent British companies before, including Debenhams, the department store chain, and Spirit, the pubs group.

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Superfast Broadband Roll-Out Running Late

The Government programme to roll out superfast broadband to 90% of the population is running late and lacks strong competition to protect public value, the National Audit Office has reported.

It has already announced that superfast broadband will reach 95% of the population by 2017, just two years after the original target of 90%.

Just nine out of 44 local projects are expected to reach the original target, according to the report, with the delay partly attributed to the EU State Aid process taking six months longer than expected.

The NAO said that competition among suppliers had been "limited", leaving BT as the only active participant and expected to win all 44 local projects.

It warned that the Department for Culture, Media and Sport (DCMS) had "secured only limited transparency" over the costs in BT's bids.

And it said the DCMS now expected BT to provide just 23% of the overall projected funding of £1.5bn - £207m less than expected.

Amyas Morse, head of the NAO, said: "The rural broadband project is moving forward late and without the benefit of strong competition to protect public value.

"For this we will have to rely on the department's active use of the controls it has negotiated and strong supervision by Ofcom."

Public Accounts Committee chairwoman Margaret Hodge said. "The DCMS has not had a good enough grip on its rural broadband programme."

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Slump In Pound Signals Gloom For Holidaymakers

The pound has fallen heavily against the dollar for the second time this week after key US jobs figures showed better than expected evidence of an economic recovery.

While stock markets rallied, seemingly shrugging off recent fears about US stimulus being slowly withdrawn, sterling lost two cents against the world's reserve currency when news of the positive employment data from the US emerged.

The pound, which had also dropped heavily the previous day when the Bank of England confirmed the base rate of interest was to remain at its current level for at least two years, fell below the $1.48 mark.

While such exchange rates are good news for exporters, it will hit the spending power of British holidaymakers heading to America.

The euro has also strengthened against the pound.

The US payroll rose by 195,000 in June and the jobless rate remained the same at 7.6% - raising hopes for a stronger economy in the second half of 2013. The forecast was for around 165,000.

Hiring was more robust in the two previous months than earlier estimated, with some 70,000 net new jobs in May and April.

The positive data was seen as suggesting that the US Federal Reserve may start to ease off its support for the economy as early as this autumn - while quantitative easing and low interest rates will continue to push down the pound in the UK.

The US job market and the economy have proved surprisingly resilient this year. Hiring and consumer confidence have remained steady despite higher taxes and federal spending cuts.

The US economy has added an average of 202,000 jobs a month for the past six months, up from 180,000 in the previous six. That suggests businesses are growing more confident in the economy.

If the gains continue, the Federal Reserve might start to scale back its bond purchases before the year ends.

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Ex-Trade Minister Plots £10bn Raid On Lloyds

Lord Davies, the former trade minister, is masterminding a £10bn raid on Lloyds Banking Group that would allow the Government to offload a big chunk of its shareholding in Britain's biggest high street lender.

Sky News can exclusively reveal that Lord Davies, who served in the last Labour administration, has assembled a consortium of blue-chip City and international investors to buy as much as half of the taxpayer's 39% stake in Lloyds.

Lord Davies has been working on the plan for more than a year, according to insiders, and approached the Treasury about his proposal several months ago.

Corsair Capital, the financial services-focused private equity firm where he is a senior partner, would be part of the consortium but would not buy the stake on its own.

A former chairman and chief executive of Standard Chartered, the emerging markets bank, Lord Davies has enlisted the backing of sovereign wealth funds in Asia and major City institutions.

The deal would be structured to acquire the Lloyds stake at somewhere close to the current share price, which by one measure is now above the taxpayers' break-even price.

HSBC and JP Morgan, the Wall Street bank from which Corsair was spun out several years ago, are said to be helping Lord Davies to structure and finance a deal.

The Government paid more than £20bn to rescue Lloyds during the banking crisis of 2008, although it quickly recouped £2.5bn as a fee for the implicit guarantee the bank had enjoyed from its prospective participation in a giant scheme to insure toxic banking assets.

Lord Davies is understood to be in active dialogue with the Treasury about his proposal, which would be structured to allow the Government to share in any future rise in the Lloyds share price.

Arranging it in this way would allow George Osborne, the Chancellor, to avoid any future accusation that he had sold the Lloyds shares too cheaply.

Gordon Brown was dogged by criticism that he had sold Britain's gold reserves too cheaply, leading to broader questions about his economic competence.

The Government paid more than £20bn to rescue Lloyds

Institutions such as Standard Life Investments have been approached about participating in Lord Davies' deal, although sources played down the likelihood that Temasek Holdings, the Singaporean state-backed fund, would be involved.

The Treasury has not yet decided whether to proceed with a transaction with Lord Davies's consortium, although the former trade minister is said to be positive about the prospects of a deal.

However, one insider insisted on Saturday that it could still not happen because of competing proposals from other investors keen on buying the Government's Lloyds shares.

The exact size of the stake that the consortium would buy is unclear, although it is likely to be much larger than 10%, or a quarter of the Government's shareholding.

Lord Davies would not seek board representation as part of any deal, a source said, despite the fact that - if it bought 20% of the bank - it would become easily the biggest private sector shareholder in Lloyds.

At Friday's closing share price of 64.63p, Lloyds had a market capitalisation of £46.1bn.

Antonio Horta-Osorio, Lloyds' chief executive, will receive a larger bonus if the Treasury sells at least a third of its stake for more than 61p-a-share.

The bank's share price has recovered sharply during the last year as its underlying earnings power has become apparent.

Lloyds has been the most heavily punished of the UK banks from the scandal surrounding the mis-selling of payment protection insurance, having had to pay out well over £4bn to date.

Mr Osborne said in his Mansion House speech last month that he was actively considering proposals to sell Lloyds shares and it is conceivable that the first disposal could come as soon as  the next few weeks.

UK Financial Investments, the agency which manages the taxpayer's stake in Lloyds, is understood to be aware of Lord Davies's consortium.

The Lloyds stake is not the only state-backed banking asset for which Lord Davies is trying to make an offer. Corsair is also among three remaining bidders for more than 315 Royal Bank of Scotland branches, and has secured the backing of the Church Commissioners for England in an attempt to provide an ethical dimension to its plans.

Lloyds and Lord Davies were unavailable for comment.

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