Fracking Water Warning As Tax Break Announced

UK water companies have warned shale gas 'fracking' should not be allowed to compromise public health as the Chancellor unveiled plans for a "generous" tax relief regime for the industry.

Water UK policy and business adviser Dr Jim Marshall said public health should not be put at risk by attempts to cash in on the controversial energy resource.

"Provision of drinking water is a cornerstone of our public health and as such a service that cannot be compromised," he said.

"There are arguments for and against fracking and the water industry is not taking sides. If it goes ahead, we want to ensure corners are not cut and standards compromised, leaving us all counting the cost for years to come.

"We want greater clarity from the shale gas industry on what its needs related to water are really going to be and a true assessment of the impacts."

George Osborne's planned new shale gas allowance will more than halve the tax due on a proportion - which will be determined following consultation - of income from production in order to encourage exploration of the unconventional energy resource in the UK.

Supporters say fracking will reduce the UK's reliance on energy imports

The backing from the Treasury comes after a recent report from the British Geological Survey revealed there was twice as much shale gas in the north of England as previously thought. Other areas of the country could also be exploited for the gas.

Ministers believe the experience of the US, which has seen a shale gas boom, shows it could boost tax revenues, create jobs, reduce energy imports - which have reached record highs in the UK - and bring down household fuel bills.

George Osborne said: "Shale gas is a resource with huge potential to broaden the UK's energy mix. We want to create the right conditions for industry to explore and unlock that potential in a way that allows communities to share in the benefits.

"This new tax regime, which I want to make the most generous for shale in the world, will contribute to that. I want Britain to be a leader of the shale gas revolution - because it has the potential to create thousands of jobs and keep energy bills low for millions of people."

But opponents warn that the process for extracting shale gas, by fracturing rock with high-pressure liquid to release the gas, or "fracking", can cause earthquakes, pollute water supplies, blight the countryside and affect house prices.

Questions have also been raised about how much of an impact efforts to develop home-grown shale resources will have on household energy bills, and environmental campaigners warn a new "dash for gas" will undermine efforts to develop clean energy, cut emissions and create green jobs and growth.

Environmentalists warn against 'industrialising' the countryside

Greenpeace energy campaigner Lawrence Carter said: "The Chancellor is telling anyone who will listen that UK shale gas is set to be an economic miracle, yet he's had to offer the industry sweetheart tax deals just to reassure them that fracking would be profitable.

"Experts from energy regulator Ofgem to Deutsche Bank and the company in receipt of this tax break, Cuadrilla, admit that it won't reduce energy prices for consumers.

"Instead we're likely to see the industrialisation of tracts of the British countryside, gas flaring in the Home Counties and a steady stream of trucks carrying contaminated water down rural lanes."

New planning guidance on shale gas is set to be published by the Communities Department as the Government attempts to drive forward exploration.

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OECD Warns Of 'Double-Tax Chaos' For Firms

By Ed Conway, Economics Editor

The OECD has raised the prospect of a global tax war, with companies caught having to pay double the levels of previous years, unless countries agree to a new international deal on corporate tax avoidance.

In a landmark report, the Organisation for Economic Co-operation and Development has warned that the international agreements set up in the 1920s to prevent companies paying double the tax on their profits in different countries could be abandoned, leaving "chaos" in their wake.

The warning came as it presented a 15-point action plan aimed at tackling tax avoidance by multinational companies such as Google and Starbucks.

It said that many companies - particularly those involved in the digital and internet sectors - were able to reduce their tax bills by shifting profits around the world to areas where rates are lowest, taking advantage of 90-year old rules aimed at preventing them being charged tax twice in different countries.

The perverse upshot of these League of Nation "double taxation" rules, it pointed out, was "double non-taxation".

However, it warned that unless Governments agreed an international scheme to police this, countries were likely to throw away the existing rules, resulting in "the replacement of the current consensus-based framework by unilateral measures, which could lead to global tax chaos marked by the massive re-emergence of double taxation".

The report added: "In fact, if the Action Plan fails to develop effective solutions in a timely manner, some countries may be persuaded to take unilateral action for protecting their tax base, resulting in avoidable uncertainty and unrelieved double taxation."

The report was delivered as finance ministers from the G20 group of nations met in Moscow for their annual meeting.

The OECD's hope is that the action plan is adopted either at this conference or at the heads-of-state meeting in St Petersburg next month.

However, some countries, including Russia and the United States, have expressed concern about the consequences of rewriting international corporate tax agreements that have been in place for almost a century.

The OECD plan suggests an investigation into measuring the creation of value in internet firms (in order to identify where taxes ought to be paid), as well as proposals to tackle complex structures which help companies avoid tax.

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Mothercare Mulls Sale Of Early Learning Centre

By Mark Kleinman, City Editor

Mothercare is considering the sale of its loss-making Early Learning Centre (ELC) chain as it bids to meet a target of restoring its UK operations to profitability by 2015.

Sky News has learnt that Mothercare has been holding talks with potential advisers about a sale in recent weeks, although the company has not yet made a formal decision to offload the specialist retailer of educational toys for young children.

Analysts believe that disposing of the business, which has perennially underperformed during the six years that it has been owned by Mothercare, may be difficult because of its poor track record.

It may, however, appeal to firms which are accustomed to investing in struggling high street chains, such as Hilco, which snapped up HMV for a token price earlier this year.

In a trading update published on Thursday, Mothercare said that it had continued to close stores in the UK amid difficult trading conditions.

"The UK market has been very competitive during the last quarter and we have continued to focus on delivering cash margin," it said.

"In line with our plan, we closed a further 13 loss-making stores (four Mothercare and nine Early Learning Centre) during the first quarter of the year.

"We now have 242 stores (192 Mothercare and 50 Early Learning Centre) in the UK. Space is down 7.7% year-on-year and is reflected in the 7.9% decline in total UK sales for the first quarter."

The talks with banks about a sale of ELC could result in an appointment imminently, with Lazard understood to be in the frame for the role.

Mothercare paid £85m for ELC but is unlikely to recoup anything like that sum if it manages to sell the chain.

The group wants to cash in on the imminent birth of the royal baby with the launch of a range of themed products, Simon Calver, the former Lovefilm executive who now runs Mothercare, said on Thursday.

Mothercare, which has a market value of around £400m, now has a much larger business outside the UK than in its home market. It's share price has rebounded strongly since Mr Calver's arrival.

A Mothercare spokeswoman declined to comment.

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Petrol Prices Set To Soar By 5p Over Summer

Petrol pump prices could soar 5p a litre - burning a hole in the pockets of holiday motorists, the AA has warned.

A surge in the wholesale cost of petrol across Europe has already led to a rise in UK petrol and diesel prices, with more misery possibly to come, the AA said.

On average, UK petrol prices have risen from 134.61p a litre in mid-June to 135.78p now, while diesel has gone up from 139.16p a month ago to 140.24p now.

The AA said: "A $100-a-ton increase in the cost of petrol across northwest Europe, combined with a weaker pound, heralds a potential 5p increase in pump petrol costs."

It added that should petrol go up 5p a litre then a family from Hounslow in west London, for example, heading off on holiday in a typical family car to Cornwall will pay £2.90 more for the return trip than it would have done in June.

The AA said a survey of last year's visitors to Cornwall found that 26% of visitors came from London and southeast England so that for every 100,000 trips to Cornwall from London and the South East, with 86% of visitors coming by car, the petrol price spike could siphon nearly £250,000 away from the tourism industry into the pockets of the fuel industry.

At present, London and the North West have the cheapest petrol, at 135.5p a litre on average.

Northern Ireland, although enjoying the smallest price rise over the past month, is still the most expensive region for petrol at 136.6p.

Scotland and East Anglia share the position of most expensive areas in the UK for diesel, both averaging 140.8p a litre, while the North West has the cheapest, at 139.7p.

AA president Edmund King said: "After the price of petrol stabilised at around 134.6p a litre through much of this June, and weeks were filled with beautiful weather and sporting excellence, it was perhaps inevitable that oil and fuel market speculators would cast a black cloud over what was promising to be a glorious summer."

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Vodafone Hit By Declines Across Europe

Mobile phone giant Vodafone has seen its quarterly revenue decline across key markets in Europe and the UK.

Total group service revenue for the first quarter, ending June 30, was down 3.5% at £10.15bn.

Vodafone said conditions in Europe remain "challenging", with its revenue in Italy down 17.6%, Spain down 10.6% and other southern European markets down 13.6%.

The company said quarterly revenue was also down 4.5% in the UK and down Germany 5.1%.

It cited a "challenging macroeconomic and competitive environment" for its decline in Italy and Spain.

Although it was the first phone operator in Spain to launch faster 4G services, in May, the loss of customers was not stemmed.

However, it did see good growth in Africa, the Middle East and Asia Pacific regions.

Revenue was up 13.8% in India, with data usage up 29% compared to the previous quarter.

The overall performance in Q1 was in line with management's expectations.

Chief executive Vittorio Colao said: "We have made a good start to the year in our areas of strategic focus - growth in emerging markets has accelerated.

"Although regulation, competitive pressures and weak economies, particularly in southern Europe, continue to restrict revenue growth, we continue to lay strong foundations for the longer term."

Net debt at the end of June was £24.9bn, a reduction of £2.1bn on the previous quarter.

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2012 Olympics Have Given UK A £10bn Boost

By Paul Kelso, Sports Correspondent

The UK economy has received a massive trade and investment boost from the London Olympic and Paralympic Games, according to a new report.

It is the result of firms securing new contracts (£1.5bn), additional export sales (£5.9bn) and new foreign investment (£2.5bn), the report said.

The latter includes the redevelopment of London's Battersea Power Station by a Malaysian consortium and projects involving the Chinese technology company Huawei.

Prime Minister David Cameron said: "This £9.9bn boost to the UK economy is a reminder to the world that, if you want the best, if you want professionalism, if you want jobs done on time and on budget then you should think British.

"With companies across the country we are harnessing the Olympic momentum and delivering the lasting business legacy of the Games that will help make Britain a winner in the global race.

"But that's not where the good news ends. The Games are also delivering a strong social legacy.

The success of UK athletes has not had a dramatic effect on participation

"Last summer, Games Makers changed the way Britain views volunteering. Since then, thousands of people have been inspired to get involved with their local sports clubs."

Research carried out for the Government suggests that over the long term the total benefit could reach up to £41bn by 2020.

But a poll conducted exclusively for Sky News suggests a lasting legacy for sport and volunteering is proving harder to achieve.

The poll found that while more than half of respondents believe the Games delivered on their promise to "inspire a generation", the vast majority were unmoved to take up a new sport or commit to volunteering.

Asked if London 2012 had inspired them to take up a new sport or recreation activity, 88% said it had not.

With four golds, David Weir was one of Britain's star performers

Among existing participants there was also very little impact, with 80% of those asked saying the Olympics had not prompted them to do more sport.

Among volunteers there was a similar picture, with 89% of respondents saying they had not increased the amount of time they gave as a result of the Olympic example.

Just 6% said they had done more and 3% said they had done less.

While the results challenge the notion that the Olympics could transform behaviour, they do offer some comfort to organisers of what was otherwise a hugely successful Olympics.

Among 16 to 18-year-olds, responses were more positive, with 20% saying they had tried a new sport, 31% saying they had done more sport and 21% saying they had spent more time volunteering.

The Aquatics Centre may encourgage the public when it opens next year

The poll also revealed mixed attitudes to the Games one year on.

Asked if the Olympics were value for the near £9bn spent on staging them, 41% of people said they were good or very good value for money, while 30% felt they were not worth the investment.

As to whether Britain should stage the Games again the poll revealed a split, with 40% in favour and the same percentage opposed to repeating the 2012 experiment.

Lord Coe says he believes more young people are now playing sport

Despite these findings, key figures in the Olympic project insist that the Games are delivering on the legacy promises.

Lord Sebastian Coe, chairman of the organising committee and now the Prime Minister's legacy ambassador, told Sky News: "I think in large part we have inspired.

"Look at waiting lists in sports clubs, they are both optimistic and challenging, but I think there are more people playing sport, and a good chunk of them are young people."

Lord Coe said his experience was that the appetite was particularly keen in schools.

"I've spent a lot of time in the last year, particularly with my legacy work in schools, in primary schools, secondary schools and even in colleges.

"And there's no doubt at all that PE teachers - and certainly teachers - that did not get sport up until the Games recognise that there is a very powerful momentum and that young people want more sport and so do their parents."

Sports minister Hugh Robertson said participation was growing, citing Sport England figures that show 1.4 million more people doing sport at least once a week than before London successfully bid for the Games.

"The legacy is undoubtedly genuine," said Mr Robertson.

"More people are playing sport now than when we started on the Olympic journey, but this was never ever going to be one smooth uphill journey.

"I am delighted to say that for the first time, with stability of funding and the same policies in place year after year after year, we are beginning to see the participation dividend that we all looked for at the time of the bid."

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Barclays Fined For Rigging US Energy Market

Barclays and four of its traders have been fined a total of $488m (£322m) for manipulating the energy markets in the United States.

Regulators said the energy market-rigging in western states took place between November 2006 and December 2008.

Barclays denies the allegations and says it intends to "vigorously defend this matter".

The fines have been imposed by the Federal Energy Regulatory Commission (FERC) which said the bank must pay $435m within 30 days, while the ex-managing director of the power trading team, Scott Connelly, must pay $15m (£10m).

Three former Barclays traders, Daniel Brin, Karen Levine and Ryan Smith, were also ordered to pay $1m (£660,000) each.

The penalty includes a $34.9m (£23m) levy from Barclays which will go to a low-income home energy assistance programme in the states of California, Arizona, Oregon and Washington.

The record fines, first proposed by the regulator's staff in October 2012, were upheld in an order after assessment by FERC commissioners.

But Barclays said in a statement: "We are disappointed by the action that FERC took.

"We believe the penalty assessed by the FERC is without basis, and we strongly disagree with the allegations made."

Barclays spokesman Marc Hazelton added: "We have cooperated fully with the FERC investigation, which relates to trading activity that occurred several years ago.

"We intend to vigorously defend this matter."

The penalty order said the FERC commissioners agreed with earlier findings by regulatory staff, which said the bank deliberately lost money in physical power markets to benefit its financial positions between 2006 and 2008, and that the traders knew their activity was unlawful.

The case will likely now move to federal court where Barclays intends to defend itself against the allegations that it has long disputed.

The case is expected to be a major test of FERC's enforcement powers, expanded by Congress in 2005 legislation that had its genesis in the Enron electricity manipulation scandals in the western US earlier in the decade.

Ron Wyden, the chairman of the Senate's Energy and Natural Resources Committee, said FERC sent a strong message to traders and banks.

"Consumers have the right to heat and power their homes without fear that traders are stacking the deck against them to rack up unjust profits," Mr Wyden said.

Investigators used scrutiny of email and other correspondence to build its case against Barclays.

Since 2005, FERC has increased its enforcement division's staff to more than 200 from about a dozen, led by a number of high-profile law enforcement recruits.

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Jobless Fall Of 57,000 In Three Months To May

The number of those unemployed fell by 57,000 in the three months to the end of May, official figures have revealed.

The total jobless count sat at 2.51 million people in the quarter, according to the Office for National Statistics (ONS).

Meanwhile, the number of people claiming Jobseeker's Allowance last month fell by 21,200 to 1.48 million, the ONS said.

It was the fastest rate of fall in three years. Total unemployment was at the lowest level since last autumn.

The ONS added that average earnings increased by 1.7% in the year to May, 0.2% up on the previous month.

However, long-term unemployment has increased to a 17-year high, despite the fall in the number of people claiming Jobseeker's Allowance.

Meanwhile the claimant count, at 1.48 million, was the best figure for more than two years.

Vacancies were up by 24,000 to 529,000, the highest since the autumn of 2008.

But long-term unemployment has reached its highest level since 1996, with 915,000 people out of work for more than a year, an increase of 32,000.

Just over 460,000 people have been jobless for more than two years, the highest figure since 1997.

The number of people classed as economically inactive also increased in the latest quarter, up by 87,000 to 9.04 million.

The figure included a 44,000 increase in economically inactive students, a 26,000 rise among the long-term sick and 8,000 more people who retired early.

The ONS also reported that 29.7 million people were in employment in the three months to May, up 16,000 on the previous quarter, and an increase of 336,000 on a year ago.

Unemployment is 72,000 lower than a year ago, with a jobless rate of 7.8%.

Youth unemployment fell by 20,000 to 959,000, giving a jobless rate for 16 to 24-year-olds of 20.9%.

Average earnings increased by 1.7% in the year to May, up by 0.2% on the previous month, giving an average weekly wage of £476.

Full-time employment increased by 28,000 to 21.6 million, but the number of part-time workers fell by 12,000 to 8.04 million.

The number of self-employed people fell by 28,000 to 4.1 million.

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Heathrow: New Location For Third Runway?

Bosses of London's Heathrow airport are expected to reveal the new proposed location for a third runway today.

In pressing for a third runway at Heathrow, the airport's chiefs will explain why they think additional capacity at the UK's biggest airport is vital for Britain's economic success.

It is thought the Heathrow executives may suggest the third runway be sited to the south-west of the airport rather than to the north as was originally envisaged.

The Heathrow runway proposals will be presented to the Whitehall-appointed Airports Commission, headed by former Financial Services Authority chairman Sir Howard Davies.

The commission will also receive this week proposals announced on Monday from London Mayor Boris Johnson, who is firmly opposed to expansion at Heathrow.

While Heathrow chiefs see expansion there as the best answer to the UK's major hub airport question, Mr Johnson does not.

He favours three sites for a four-runway hub airport - on the Isle of Grain in Kent, on an artificial island in the Thames Estuary or at an expanded Stansted airport in Essex.

The south-west siting is expected to be one of a number of proposals put forward by Heathrow chief executive Colin Matthews and his management team.

The original third runway plan to the north of the airport would have affected the villages of Harmondsworth and Sipson.

This plan was given the go ahead by the Labour government in January 2009, with work expected to start in 2015 and be completed by 2019.

But when the coalition Government came to power in May 2010, the third runway scheme was ruled out.

Building the new runway towards Stanwell Moor village in Surrey might mean fewer properties would need to be demolished and would mean less noise for those close to the two existing runways.

Last week Mr Matthews, speaking at a public session of the Davies Commission, warned that Heathrow would soon be left behind by rivals in Europe if it was not allowed to expand.

He said Amsterdam, Frankfurt, Madrid and Paris airports had already committed to, or were in the process of, developing enough capacity to accommodate an average of 700,000 flights a year.

Meanwhile, Heathrow was limited to 480,000.

The Davies Commission is due to deliver its first report to the Government by the end of this year and its final report by the summer of 2015.

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Horsemeat: MPs Criticise 'Slow' Investigation

MPs have condemned the "slow pace" of an investigation into the horsemeat crisis in the UK as no one has been prosecuted six months after the scandal erupted.

Horsemeat contamination was first revealed in January by officials in the Irish Republic and the food crisis then spread across Europe.

Several supermarket products and school dinners across the UK were found to contain horse DNA.

But authorities in both the UK and Ireland are yet to acknowledge the scale of the illegal activity involved, the Environment, Food and Rural Affairs Committee said.

"The evidence suggests a complex network of companies trading in and mislabelling beef or beef products which is fraudulent and illegal," said committee chair Anne McIntosh.

"We are dismayed at the slow pace of investigations and seek assurances that prosecutions will be mounted where there is evidence of fraud or illegality."

Birds Eye products were found to contain horse DNA

The committee complained that there was still a "lack of clarity" over where responsibility lay in dealing with the contamination, and that role of the Food Standards Agency (FSA) was not clear.

"The FSA must become a more efficient and effective regulator and be seen to be independent of industry," Ms McIntosh said.

"It must have the power to be able to compel industry to carry out tests when needed.

"It must also be more innovative in its testing regime and vigilant in ensuring every local authority carries out regular food sampling."

Major supermarkets in the UK have been caught up in the scandal

The MPs were also "surprised" that in EU-mandated tests, 14 out of 836 samples of horsemeat from the UK tested positive for the painkiller bute.

But the committee acknowledged that horsemeat contamination was limited to a "relatively small" number of beef products sold in the UK, with 99% of products tested containing no horse DNA.

They said more regular testing of products is necessary to protect consumers.

"Regular and detailed DNA tests are needed on all meat or meat-based ingredients which form part of a processed or frozen meat product," the MPs said.

"Consumers need to know that what they buy is what the label says it is."

The committee also said there were clearly "many loopholes" in the current system of horse passports and called for assurances that horse movements were being properly monitored.

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Fuel Blamed For Inflation Rise In June

Inflation surged to a 14-month high in June as rising prices at the fuel pumps and shallower discounting by fashion retailers intensified pressure on households.

The Consumer Prices Index (CPI) inflation rose to 2.9% last month, from 2.7% in May, the Office for National Statistics (ONS) said.

It is the highest level since April 2012, although inflation was prevented from climbing higher by falls in the prices of fruit, vegetables, bread, air fares and package holidays.

The ONS said: "The largest upward contributions to the change in the rate came from motor fuels and clothing and footwear.

"The largest downward contribution came from air transport."

The figure was weaker than economists' forecasts of a 3% level, and is expected to fall later in the year as commodity prices ease.

Meanwhile the headline rate of retail price index (RPI) inflation rose to 3.3% in June, up 0.2% from the May figure.

The Bank of England's main task is to use monetary policy as a tool to keep annual inflation close to the Government-set target level of 2%, in order to preserve the value of money.

However, the annual CPI rate has held stubbornly above the target since November 2009.

More follows...

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Energy Bills 'To Increase By £240 By 2020'

British consumers are forecast to pay £240 more for their annual energy bills within seven years, according to a utility firm report.

RWE npower predicted the average yearly bill - for all energy customers, not just its own - will rise from £1,247 to £1,487 by 2020.

The company believes official forecasts for future energy savings have been too optimistic when it comes to green technology.

It said support for low-carbon technologies would add £82 to the average energy bill by the end of the decade, up from £34 this year, and £12 in 2007.

Support for low-carbon power sources accounts for less than 3% of the average household bill, which will rise to 5.5% in 2020, the company predicted.

Meanwhile, energy company profits have risen from £18 on the average dual fuel bill in 2007 to £59 this year.

In 2020, npower predicted profits would rise to £71, staying constant at around 5% of the bill.

The cost of measures to help people save energy and money through greater efficiency, such as insulation, has increased from £17 in 2007 to £69 now and £88 at the end of the decade.

Onshore and offshore wind farms have been a key low-carbon strategy

Npower said the total cost of Government policy and regulation, which includes general tax on energy and support for vulnerable households, will rise from £185 today to £329 by 2020 on the average bill.

It said total operating costs will rise from £208 now to £241 in the same period.

The wholesale cost of gas and electricity currently makes up 45% of the bill, or £565, but npower said Government data showed gas and electricity will become £50 cheaper by the end of the decade.

The firm's chief executive, Paul Massara, said: "Government policy is rightly delivering the transformation we need to address the UK's poor housing stock and encourage investment required in new infrastructure.

"But achieving these aspirations comes at a cost, and this is what needs to be clearly communicated to consumers."

Greg Barker, minister for energy and climate change, rejected parts of the npower report and said: "Global gas prices, not green policies, have been primarily pushing up energy bills.

EU directives restrict the life span of conventional coal power stations

"That is why it is vital we crack on with securing investment in a diverse energy mix that includes renewables and new nuclear, as well as gas.

"We must also continue to drive up the energy efficiency of the nation's housing stock, particularly the homes of the most vulnerable households."

He said Government policies were keeping bills lower than doing nothing, with a typical household saving £65 today and £166 by 2020, compared with if the UK remained reliant on fossil fuels, failed to tackle climate change and did not make homes more efficient.

A separate report also found that while Britons are prepared to pay for a shift to renewables, they do not trust the Government or power companies to deliver a clean, secure and affordable energy system.

Researcher Dr Catherine Butler said: "If Government or energy companies are saying your bills are going up because of renewables, that isn't necessarily going to be taken on trust."

She added: "There's a real sense of anger about the profit-making nature of energy companies when it's seen as a basic need, not a consumer good."

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Welfare Cap Of £500-A-Week Comes Into Force

How The Benefit Changes Work

Updated: 8:36am UK, Monday 15 July 2013

The coalition is pushing through radical changes to the welfare system in a bid to slash the benefits bill and make it pay to work. Here is a full breakdown:

Benefit cap

:: A cap on the total amount of benefit people aged 16-64 can receive

:: Limited to £500 per week for a family and £350 per week for a single person

:: Some 56,000 households affected

:: Average loss of £93 per week

Housing Benefit

:: Cuts for people living in council or housing association properties if they have more bedrooms than they need

:: Those with one spare bedroom will have their benefit cut by 14%

:: Households with more than one spare bedroom will lose 25%

:: An estimated 660,000 claimants affected

:: Average loss of £14 per week

:: Introduced April 1

Council Tax Benefit

:: Current schemes scrapped and replaced by Local Council Tax Support

:: Government funding for new schemes reduced by 10%

:: Average loss of £2.64 per week

:: Some 3.1 million households affected

:: Rolled out from April 1

Disability Living Allowance

:: Replaced from April 8

:: New benefit called the Personal Independence Payment (PIP) introduced

:: New system includes face-to-face assessments and regular reviews

Universal Credit

:: A single monthly payment of benefits

:: Replace means-tested benefits including Income Support, income-based Job Seekers Allowance, income-related Employment and Support Allowance, Housing Benefit, Child Tax Credit, Working Tax Credit

:: Rolled out from October

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Company Directors 'To Face New Scrutiny'

Fraudulent or negligent directors could be forced to compensate creditors, under new plans expected to be outlined by the Business Secretary.

Vince Cable will announce proposals to boost transparency and trust in British business in a speech to the London Stock Exchange.

He will float a range of options for discussion including making errant bosses liable for losses, and disqualifying directors who are already banned outside of the UK.

Mr Cable will also raise making the safety and stability of firms the main responsibility of bank directors - an idea suggested by the Parliamentary Commission on Banking Standards.

In an interview with The Sunday Telegraph, he warned that the failure to punish executives in the wake of the banking crisis had undermined public faith in regulation.

"I think the public are a little baffled by the current regime," he said.

"There is an issue around the people who used to run Lloyds and RBS, and there is a worry about how the system operates."

People who operate "rogue companies" or are involved in "serial failure" should be punished through disqualification, the Cabinet minister added.

However, he indicated that he wanted any new measures to be proportionate.

"We don't want to get into a situation where we're penalising good business people who take risks but whose business fails for whatever reason," he added.

Tougher rules are not expected to be retrospective, despite persistent calls for action against figures such as former RBS chief executive Fred Goodwin.

There also appears little chance that final proposals will reach the statute books before the 2015 general election.

On transparency, Mr Cable is to moot ending 'concealed ownership' of companies, by requiring businesses to supply information on their owners and controlling shareholders.

This could mean scrapping bearer shares, which confer ownership without requiring the holder of the shares to be identified in public, and demanding more information about nominee directors.

But shadow business secretary Chuka Umunna said Labour had been leading the charge for a "more responsible capitalism".

"Since the Tory-led government came to office the number of actions taken against suspected fraudulent or reckless directors has fallen at the same time as the number of incidences of suspected fraud has increased," he said.

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China Sees Growth Slow In Second Quarter

By Mark Stone, Asia Correspondent

China's economy slowed in the second quarter of 2013 to 7.5% according to data released by the Chinese government.

The first quarter of 2013 saw economic growth at a level of 7.7%. The latest figure means growth slowed in all but two of the last 13 quarters for the world's second largest economy.

The slowdown to 7.5% was widely predicted and still represents an enviable growth rate. Analysts are split over whether the slowdown is a concern.

Goldman Sachs said the new figure represented "stable sequential growth at a low level". However, others said it represented a strained system.

"As of now, China's GDP has been staying under 8% for five straight quarters, a clear sign of distress. "said Xianfang Ren, an economist with IHS Global Insight in Beijing

"We are especially concerned about the rather significant downslide of investment growth, led by real estate investment. Construction sector could see lots of headwinds coming forth in the second half, if there is no marked change in policy course." she said.

China realised that it cannot rely on exports to maintain growth

The Chinese government announced the latest figure at a Beijing news conference. Officials defended the country's economic policies and insisted that they would meet their full year growth target for 2013 of 7.5%.

"Some measures, including the intensified property tightening campaign, new rules to curb misuse of public funds … will inevitably have some impact on growth in the short term, but they will benefit our economy in the long run," Sheng Laiyun, spokesman for the National Bureau of Statistics, said.

However, some analysts predict that by 2014 the GDP figure could dip below 7%.

"We downgraded our GDP growth forecast to 7.3% from 7.8% for 2013 and to 6.9% from 7.5% for 2014," Chen Shao, from Macquarie Economic Research, said.

If the Chinese government misses its annual growth target at the end of this year, it will be the first time it has done so since the financial crisis in Asia 15 years ago.

The leadership in China has said for many years that their goal is to fully rebalance their economy away from an over-reliance on exports - which have slowed markedly - and boost domestic consumer spending.

To achieve this, a slowdown in the short to medium term is inevitable but it requires certain reforms.

China has grown hi-tech businesses on knowledge built from foreign firms

It is not clear to what extent the Chinese government will push forward reforms or opt instead for a process of 'fine-tuning'.

According to official Chinese figures, which are not open to examination, the country's retail sales rose 13.3% in June compared with the same month last year.

Retail sales, widely seen as a key indicator for consumer spending, also increased 12.7% between January and June 2013, and China's industrial production rose 8.9% between in the year to June 2013.

Increased spending on infrastructure is a key tool to prompt economic growth. It is measured through fixed asset investment which rose 20.1% in the first six months of 2013 compared with the same period last year. 

"Discussions with people out in the provinces suggests that many expect a stimulus to start now and there is a genuine acceleration in infrastructure spending" Jeremy Stevens, an economist with Standard Bank in Beijing, said.

"(There are) many announcements about how the government will accelerate 'slum renovation', water projects, and roads," he said.

"Indeed, steel demand from infrastructure has outstripped demand from housing, which is a new thing this year. There is also the gargantuan urbanisation program, still in gestation."

China has seen a rise in worker disputes amid a rapid growth over 20 years

Managing expectations seems to form a large part of the Chinese government's economic game-plan.

Last Thursday, the Chinese Foreign Minister Lou Jiwei said that a growth rate of 6.5% this year would not be a 'big problem'. He said the target was 7%.

China's Xinhua News Agency later claimed that Mr Lou said the target was 7.5%, fuelling confusion over what the government really believes is a tolerably low rate.

At Monday's Beijing news conference, officials said that the government's bottom line for tolerating slower growth "is definitely changeable, it won't be fixed at one point".

"Two years ago, most would have never believed that panic wouldn't have swept the government with such a low print," Standard Bank's Jeremy Stevens said.

"Yet, fast-forward to 2013 and 7.5% is an achievement. Remarkable."

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