Ireland Digs Deep For Economic Recovery

By David Blevins, Ireland Correspondent, in County Mayo

Seismic surveys are to be carried out to ascertain if Ireland has enough oil and gas reserves to export fuel.

Shell is already building the longest gas tunnel in Europe (4.9km) to transport fuel from one field, 85km off the west coast.

If Russia ever turns off the supply, Ireland may soon be able to offer an alternative.

Michael Crothers, managing director of Shell Ireland, explained: "Because Ireland is beside a major market, and the UK is looking at decommissioning nuclear facilities, having to shut down coal-fired power plants because of greenhouse gas emissions, there's an enormous opportunity for Ireland, if gas can be found, to export into that ready market."

At the peak of its 20-year life, gas from the Corrib field will meet two thirds of Ireland's need. 

The ambitious project has created 1,400 construction jobs in County Mayo, a remote region previously blighted by unemployment and emigration.

Bernadette McManamon, a civil engineer, said: "Sixty percent of my class, if not more, have emigrated and most of them are in Malaysia or Australia and some in America so I definitely wouldn't be working in Ireland … if it wasn't for the Corrib gas project."

The exploration has not been without its opponents. In 2005, five local protesters - the so-called 'Rossport Five' - went to prison.

Civil engineers will carry out the seismic surveys

Lessons have been learned about the need for greater engagement with communities along the coastline before any prospecting takes place.

Gerry Coyle, a Fine Gael councillor, said: "You cannot come in and go telling them what to do. You have to explain in great detail.

"Sometimes, it's very difficult on communities. This community were cast into the middle of this. They didn't go looking for gas. Gas came to them."

Mr Crothers agreed: "I really think it depends upon how they are approached. Any project is a balance between the social, the environmental and the economic and getting that balance right is key."

The gas has brought an estimated 6bn euros (£5bn) for Ireland's GDP.

Tommy Talbot, who opened a local hotel during the recession, said: "You drive from here to Dublin and there's a lot of towns on the way out - Roscommon, Leitrim, there's nothing in them. They really are struggling.

"Down here, we really have been cushioned by the development."

To date, they have found one trillion cubic feet of gas in the Corrib field, boosting the country's energy security.

If the seismic surveys turn up enough fuel for export, Ireland could have found the solution to its economic problems.

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Swansea Bay Tidal Lagoon May Open In 2017

By Rhiannon Mills, West of England Correspondent

Exploratory work is underway off the coast of south Wales where scientists hope to build the world's first tidal lagoon power station.

As Britain continues to search for more sustainable forms of energy, plans are in place for a 9.5km-long, U-shaped sea wall in Swansea Bay that would harness the strength of the tides.

The £650m project's 26 hydro turbines would be permanently under water, generating energy on both the incoming and outgoing tides.

It is hoped the power station could produce enough electricity to power every home in Swansea, saving over 200,000 tonnes of CO2 and offering predictable zero-carbon electricity for 120 years.

The project is yet to receive planning permission but teams are already drilling to assess the make-up of the seabed.

Alex Herbert, head of planning for Tidal Lagoon Swansea Bay, told Sky News: "We hope this will be the first in a network of lagoons around the British coast which could produce up to 10% of our energy requirements.

The power station's 26 turbines would be permanently underwater

"With the first one happening in Wales, we're on the map and we're producing jobs locally, as well as expertise we can take elsewhere."

Promotional videos describe the power station's potential to help regenerate the area and attract tourists.

The sea wall would be used for walking, running and cycling, while the lagoon itself would be used for watersports.

However some groups have concerns about the environmental and visual impact of the project.

"It's concerning a number of people," Swansea councillor Tony Colburn said. "It's basically going to cut the bay in half and we'll be looking at a very large wall as opposed to the magnificent view we've got."

Sarah Kessell, of the Wildlife Trust, added: "There could be a loss of breeding ground or of spawning areas for fish that birds feed on.

The 9.5km-long sea wall would be used by walkers and cyclists

"We don't know what the long-term impact will be ... but there are certainly opportunities for mitigation along the way."

A planning application will be submitted later this year with a decision expected in early 2015.

If the development is approved it could be open by 2017, with similar schemes possible in Colwyn Bay, north Wales, and in locations near Liverpool.

Canada, France and South Korea already have tidal power plants but the one planned for Swansea would be the first to utilise both the incoming and outgoing tides.

The bay is considered an ideal location for the project because of its shallow water and 10-metre tidal range - the second highest in the world.

"It's a fantastic proposal because it diversifies how we produce energy," Barry Stewart, a local wildlife enthusiast, said.

"Obviously a project of this scale is always going to have an adverse effect on some ecological features. The wildlife can be accommodated but time will tell."

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Lads Mags: Tesco To Restrict Sales To Over 18s

Supermarket giant Tesco says it will sell lads mags only to those aged 18 or over.

The chain also said it had struck a "modesty deal" regarding the front covers of magazines such as Zoo, Nuts and Front and that Bizarre will be supplied in a bag.

The supermarket is bringing in a raft of measures across its 3,000 stores in the UK in response to customer concerns about the racy images.

A Tesco spokesman said: "We have had in depth conversations with our customers about this issue and we're putting new measures in place based on what they have told us they want.

"We've listened carefully to the concerns raised by the campaign groups but our priority is to make sure we meet our customers' needs and expectations.

"To do that we have secured agreement from the publishers of Zoo, Nuts and Front that their magazine covers will be more modest from now on and the publishers of Bizarre will now supply the magazine in a bag.

"We are restricting the sale of these magazines to people over the age of 18 to reassure parents who do not want their children to be able to purchase these titles.

"And we will ensure these titles are always placed on the back tier of the magazine shelves so that the cover is obscured with only the title visible."

Feminist campaign group Lose The Lads' Mags has been part of a driving force in a campaign maintaining it is unacceptable to treat women like sex objects.

It has been targeting high street supermarkets and newsagents which stock the magazines, declaring that it is "a national scandal" they are putting them up for sale.

The group states: "Lads mags aren't just a bit of harmless fun. By portraying women as dehumanised sex objects they fuel attitudes that underpin discrimination and violence against women.

"Displaying lads' mags in everyday spaces like supermarkets sends the deeply harmful message that treating women like sex objects is normal and acceptable."

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Money Troubles: Half Of UK 'Living On Edge'

Around nine million more adults are struggling with money compared to seven years ago, a report into the health of the nation's finances has found.

More than half (52%) of those surveyed are living on the edge, equating to 26 million people across the UK, Government-backed body the Money Advice Service (MAS) said.

This is a sharp increase from 35% of people who were having difficulty keeping up with bills the last time similar research was carried out in 2006.

The service found that many people are suffering from poor financial skills and the squeeze on families following the economic downturn has encouraged a "live for now" culture which is dragging down people's ability to save enough for their future.

Income per hour has dropped by 6% in real terms since the previous research was carried out, making it harder for people to make ends meet.

More than 5,000 people took part in the latest financial capability survey and more than 70 families were followed over the course of a year for the Financial Capability Of The UK report, which found "a general feeling that people worry about their ability to make it to the next pay day".

It continued: "And because of this, people are focusing more on the here and now than on planning for the future, including for unforeseen emergencies."

One in five people surveyed said they would rather have £200 now than £400 in four months' time. Two-fifths also said they would have to think about how they could cover an unexpected £300 bill and one quarter said they prefer to live for today rather than plan for tomorrow.

Caroline Rookes, chief executive of the service, said: "In theory, money management is easy - spend less than you earn and consider your future - but the difficulty comes when applying this to the real world."

A Treasury spokesman said: "We recognise that times are still tough for families, but Britain is holding its nerve, we are sticking to our plan, and the British economy is on the mend.

"The Government has taken continued action to help households with the cost of living, including cutting tax for 25 million people by raising the personal allowance and freezing fuel duty."

MAS, an independent body set up by Government, has a statutory objective to raise public understanding and awareness about financial matters. It is due to publish a strategy on how people can be helped to improve their finances next year.

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RBS Sees Profit Of £1.37bn In First Half

RBS' McEwan: Man Behind The Name

Updated: 8:01am UK, Friday 02 August 2013

Ross McEwan was the nearly man of Australian banking before his ascent to one of the most sensitive jobs in the UK financial world.

His appointment as chief executive of Royal Bank of Scotland (RBS) comes two years after a surprise decision saw him passed over in the race to become head of Commonwealth Bank of Australia (CBA).

Mr McEwan, who was head of CBA's retail business, was widely seen as having been groomed for the role.

The New Zealander, a married father-of-two, then accepted an offer to become head of RBS's retail arm, joining the state-backed lender just 12 months ago.

The resignation in June of his boss Stephen Hester, amid claims of political interference, paved the way for Mr McEwan to take charge - especially after a leading external candidate, BlackRock's Mark McCombe, withdrew from the field.

His appointment is being seen as a politically-acceptable move to indicate a shift in emphasis towards the bank's more traditional high street branches as opposed to its investment side - associated by many with high-rolling City risk-takers.

Mr McEwan is also reportedly seen as a "carbon-copy of Antony Jenkins", the Barclays boss hired last year to clean up the group's image.

He has already launched a £700m plan to improve RBS's branches and services, and has been scathing about the state of UK high street banking.

Mr McEwan reportedly told analysts earlier this year: "Having come into this market six months ago I've been quite surprised at how bad this industry is from a retail banking perspective. I'd even go as far as to say that there's not a good retail bank, and our job is to create that."

His spell at RBS so far has not been without its challenges - notably a series of IT glitches that hit customers trying to log in to their accounts, as well as the announcement of 1,400 job cuts earlier this year as Mr McEwan said resources were being re-focused on "things that matter most" to customers.

However the turbulent period will have been eased by the £3.2m share award he was reportedly given as a "golden hello" when he joined last August.

Eyebrows may be raised in the City about the background of a chief executive who reportedly spent his early career working in human resources, and once told an interviewer that he was "more comfortable with people than with figures".

In the article for an alumni magazine at New Zealand's Massey University, where he gained a business degree in the 1970s, Mr McEwan also admitted that he had twice failed accounting exams.

His background is likely to come under further scrutiny after being named as head of a bank that is 80% owned by the taxpayer.

Mr McEwan has worked in the insurance and investment industries for more than 25 years, including as managing director of stockbroking business First NZ Capital Securities and chief executive of AXA New Zealand.

In Australia, he was executive general manager in charge of CBA's branch network before becoming head of retail banking services in 2007, and is said to be a keen water skier and cyclist.

On the announcement that he was joining RBS last year, he told an Australian newspaper: "It's certainly going to be a challenge to turn the retail business around. It's a tough economic environment and there are political aspects too."

Mr McEwan now faces an even greater challenge as he seeks to take RBS on to a successful future just a few years after it so nearly collapsed - and having to do so under the watchful eye of the ministers who can ultimately pull the plug.

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BA Owner IAG In £300m Half-Year Loss

Losses have deepened for IAG, the owner of airlines BA and Iberia, as it reports a half-year operating loss of 345m euros (£300m).

The six-month figure to June 30 compares to a loss of 253m euros (£220m) in the same period last year.

However the airline group saw passenger revenue rise by 4% to 7.498bn euros, with total revenue up 2.1% to 8.707bn euros compared to last year.

IAG said the operating loss for the half-year was 33m euros before exceptional items were added.

Chief executive Willie Walsh told Sky News: "All the exceptional items were in the first quarter and they related to restructuring at Iberia.

"The second quarter results were actually very impressive, where we reported an operating profit of 245m euro, up from the 4m euro loss last year."

The company has been implementing a significant restructuring on Iberia, which has resulted in industrial action and major job cuts.

Mr Walsh said: "The restructuring plan is proving to be effective, but there's still a long way to go.

"To date, about 1,700 people have left Iberia, by the end of the year that will have increased to about 2,400 and there will be more next year."

He added: "I'm pleased with the way the restructuring programme is progressing."

BA's performance in the group further strengthened, with operating profit at 247m euros in the period, compared to 94m euros in 2012.

The airline boss explained: "The London market and transatlantic traffic remains strong, legacy costs from the BMI integration have ended and the airline remains focused on cost control."

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Nazi Gold Moved And Sold By Bank Of England

The role the Bank of England (BoE) played in moving and selling gold looted by the Nazis has been revealed in a previously unpublished file.

A record from the bank's archive shows it transferred £5.6m of gold from Czechoslovakia on behalf of Germany's Reichsbank, following the Nazi invasion in 1939.

The gold was moved from the National Bank of Czechoslovakia's account at the central Bank for International Settlements (BIS) to an account managed on behalf of the Reichsbank.

Some of the gold was later sold in London.

The 10-page document, published on the BoE's website, was produced following the Second World War amid fears the bank's position had "never been thoroughly appreciated" and that "their action at the time was widely misunderstood".

It states: "On March 21, 1939, the Chief Cashier received the request to transfer about £5.6m gold from the BIS No.2 Account to their No.17 Account.

"The bank, although it was no business of theirs, was fairly sure that the No.2 Account was a Czech National Bank Account and they believed, although they were not sure at the time, that No.17 was a Reichsbank.

"The amount was transferred on the same day and a small further amount on March 22.

"Between March 21 and 31, the gold received on the No.17 Account was disposed of, (with) about £4m going to the National Bank of Belgium and the Nederlandsche Bank and the remainder being sold in London."

The BoE document said its actions were "widely misunderstood"

The report also reveals the Governor of the Bank of England rejected a call from his French counterpart to prevent the transfer of Czech assets, believing such a move would be "wrong and dangerous for the future of the BIS".

Patrick Jenkins, banking editor of the Financial Times, told Sky's Jeff Randall: "There is some sense that this was being done without full disclosure to the UK Government.

"Clearly the UK Government was at the time on the brink of war and not keen to help the Nazis in any way politically or financially.

"It seems the Bank of England was undermining that position."

The report shows the Government was powerless to prevent the BoE obeying any instructions received from the BIS without violating its obligations under international law.

It also states how, in May 1939, the governor of the BoE declined to tell the Chancellor whether it still held any of the Czech gold.

"The Governor ... did not answer the question but pointed out that the bank held gold from time to time for the BIS and had no knowledge whether it was their own property or that of their customers," the report says.

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British Gas Defends Cold Winter Profits Boost

British Gas has said higher costs largely wiped out profit growth from the unusually cold winter in the first half of its financial year.

Profits for the residential energy business in the six months to June 30 grew by 3.2% to £356m.

While the company admitted a benefit from the bitter conditions between January and June - with gas consumption rising by 13% - it insisted that profits were curtailed by "significantly higher environmental and commodity costs".

It said a new duty to deliver energy efficiency measures in customers' homes drove its environmental costs up 37% in the period.

The supplier raised its domestic tariffs by 6% last December, saying it would put additional revenues over the period to limit further bill increases in future but campaigners have pushed for price cuts to help consumers.

Most energy suppliers raised their prices ahead of winter

It said it could not rule out further increases to tariffs ahead of the coming winter because an "upward pressure on costs" remained.

Nick Luff, finance director of parent firm Centrica, sought to shift part of the blame for any future rises to the Government-backed ECO (Energy Companies Obligation) scheme.

He said: "We will keep prices as low as we can for as long as we can for as long as we can. If prices do have to go up, we will delay it for as long as possible."

He defended the £11m rise in profits, saying it represented just 70p per customer.

Chief executive of Centrica, Sam Laidlaw, added: "With our customers using more gas to stay warm during the unusually cold winter, we're doing everything we can to help them keep their energy costs under control and make bills simpler and clearer."

Centrica posted a 2% rise in adjusted profits over the first half, spurred by higher output from North Sea gas fields.

The company made £767m as overall revenue rose 14% to £13.7bn though the focus remained on earnings at British Gas amid the continuing row over energy supplier profits.

On Tuesday, French-owned energy firm EDF said its profits had risen to a record £903m in the wake of the cold spell though its residential business, the company said, continued to operate at a loss.

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Car Insurers Rapped On Whiplash Fraud

Insurance companies have been told to "get their house in order" and end the additional cost to drivers from fraud and exaggeration in whiplash injury claims.

A report by the House of Commons Transport Committee said industry practices encouraged bogus cases and ministers should consider imposing several measures if insurers fail to act.

While companies insist progress has been made in bringing down premiums as a result of identifying fraud, they admit whiplash still costs UK motorists over £2bn a year, adding £90 to the average premium.

Among the committee's recommendations were reducing the limitation period for road accident insurance claims and requiring whiplash claimants to produce more supporting evidence of injury.

In their report the MPs concluded: "We were surprised to hear that insurers will sometimes make an offer to personal injury claimants even before a medical report has been received.

"We also note that our previous recommendation on making the links between insurers and other parties involved with claims more transparent has been ignored.

"Insurers must immediately get their house in order and end practices which encourage fraud and exaggeration. If not, the Government should take steps to protect motorists."

The committee's chairman Louise Ellman added: "The Government should consider requiring claimants to provide proof that they have either been seen by a doctor or attended A&E shortly after the accident.

"There should be a presumption against accepting claims where adequate proof of injury is not provided."

Justice Minister Helen Grant said: "Honest drivers should not have to bear the price of a whiplash claims system which has been abused and has contributed to increased insurance costs.

"We have already made major law changes to turn the tide on compensation culture to help ordinary people with the cost of living."

The Association of British Insurers said the committee was right to identify the need to tighten the rules.

Its motor insurance head, James Dalton, said: "There has been a growth in recent years in claimant lawyers and claims management companies encouraging people to submit an increasing number of frivolous or exaggerated claims.

"Following recent reforms to the civil litigation system, insurers committed to pass on cost savings to motorists. We have delivered on that commitment and average premiums have reduced by 10% in the last year."

But he added: "The committee's report has kicked into the long grass making the tough calls for reform that are needed to help insurers combat the whiplash epidemic and deliver further premium reductions for hard-pressed motorists."

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Coalition's £5bn Export Scheme Yet To Launch

A £5bn scheme designed to boost exports which was due to be launched last year has yet to help a single British firm.

Ministers said details of the export refinancing scheme, which was due to be up and running by the end of 2012, were still being worked on.

Shadow business secretary Chuka Umunna said it was a "huge disappointment" and claimed the Government was "letting down businesses across Britain".

The refinancing facility was announced 12 months ago and should have been available later in 2012.

Michael Fallon: Scheme still being developed

The scheme aimed to provide long-term loans for overseas buyers of UK exports at competitive rates by guaranteeing a series of short-term bank loans.

But in a written parliamentary answer Business Minister Michael Fallon has admitted the policy is still being finalised.

"The parameters of the Export Refinancing Facility are still being developed and therefore no businesses have yet received support through the facility," he said.

Mr Umunna said: "The Tory-led Government promised to increase exports to £1 trillion by 2020, but our trade deficit is now at its highest level in six months and the UK has the largest goods trade deficit of any EU member state.

"To build a balanced and sustained recovery we need to help more businesses to export.

"Ensuring that firms have access to the finance they need to export is a crucial element of this.

"Ministers like to talk about the global race, but their failure is letting down businesses across Britain which are being held back from competing".

A UK Export Finance spokesman said the scheme had to comply with European Union state aid rules and provide value for money for the taxpayer.

She said: "The scheme is being designed to ensure that it helps businesses to export whilst providing good value for the taxpayer and complying with state aid rules.

"We want to make sure we get it right and are making progress.

"In the meantime, UK Export Finance is providing considerable assistance to UK exporters through its existing facilities.

"In 2012/13 UKEF provided £4.3bn of support to British firms."

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Barclays Half-Year Profit Down 17% To £3.59bn

Barclays has reported a 17% drop in half-year adjusted profit of £3.59bn, as it announced a £5.8bn capital-raising rights issue.

It said adjusted income decreased 3% to £15bn, in the six months to June 30.

Barclays said a payment protection insurance (PPI) mis-selling provision of £1.3bn had been made and £650m had been put aside for provisions in relation to interest rate swaps.

The total mis-selling bill for the bank, which had been criticised previously for its aggressive corporate culture, now stands at £5.5bn.

The lender, which was hit last year by the Libor rate-rigging crisis, said it would seek a capital boost in order to meet capital requirements laid down by the Bank of England (BoE).

Past problems continue to haunt Barclays and its cash-call comes after the BoE last month told it to increase its leverage ratio - a measure of equity to assets - to reduce its risk.

Barclays was criticised for its ethics under former CEO Bob Diamond (c)

The rights issue will be for one new ordinary share for every four existing ordinary shares held and priced the issue at 185p per new ordinary share.

Barclays said: "This represents a discount of approximately 40.1% to the closing price on the London Stock Exchange of 309.05p per ordinary share on 29 July 2013 ... and a discount of approximately 34.9% to the theoretical ex-rights price based on the closing price."

The bank said its fundraising was a "bold but balanced plan" which would see it meet regulator demands by June next year.

It stressed it would not impact on its aims to boost lending to households and businesses.

However, shares fell around 5% in early trading as the rights issue was far higher than expected and as Barclays admitted its plans will put back some of the financial targets under its overhaul, dubbed Project Transform.

The bank will also issue £2bn of bonds that are turned into shares or wiped out if the bank gets into trouble.

Chief executive Antony Jenkins said the capital-raising plan enabled the bank to keep growth in its planned level of lending.

"I am certain the decisive and prompt action we are taking will leave Barclays stronger," Mr Jenkins said.

:: The bank said an estimated £42bn of Funding for Lending (FLS) capital was made to UK households and businesses in the six-month period.

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BP's $20bn Oil Disaster Fund Nearly Drained

BP's $20bn (£13bn) Gulf of Mexico oil spill compensation fund has almost run out after provision for costs so far climbed by $1.4bn (£910m) in the second quarter.

The British oil giant now has just $300m (£200m) left in the fund, and the deadline to file a business economic loss claim among Gulf coast businesses - which make up the bulk of claims - is not until April 2014.

BP has said claims beyond what the fund can pay will be taken straight off future profits.

The firm revealed the extra cost in its second quarter results, which missed forecasts due to the lagging effect of tax in Russia where the price of Urals crude was weaker.

It also said it was due to the tax effects of a stronger dollar on a basket of currencies.

Adjusted net profit for the three months was $2.712bn (£1.35bn) compared with expectations of $3.410bn and $3.6bn (£2.5bn) a year ago.

The Deepwater Horizon explosion caused environmental damage

Of the extra $1.4bn of spill costs - which come on top of a $500m (£300m) cost in the first half - some $900m is for extra claims, while about $500m is for the administration costs of the claims administrator.

It also faces a resumption of its trial on civil charges in September.

BP remains locked in a legal battle over the compensation payouts, some of which it claims are spurious, and has increased its overall provision for the spill to $42.4bn (£27.7bn) from $42.2bn.

It set up a hotline for whistleblowers to give tip-offs about fraudulent claims.

Eleven workers died after the explosion on board the floating oil rig

The oil giant alleges that the handling of the settlement has sparked a "feeding frenzy" and is allowing businesses from the area to claim for "non-existent, artificially calculated losses".

The blow-out of the Deepwater Horizon well off the Louisiana coast in 2010 claimed 11 lives and damaged fishing, tourism and wildlife habitats, forcing BP to agree a multi-billion compensation deal in April 2012.

But it has warned in court filings that it will be "irreparably harmed" unless the compensation system is reformed, saying the cash drain could put its dividend at risk and make it vulnerable to a takeover.

However, chief executive Bob Dudley said the latest results showed there had a been a strong underlying pre-tax performance from its businesses, with growth in production from new projects and good progress in exploration.

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Energy Watchdog 'Failing Consumers', Say MPs

By Tadhg Enright, Business Reporter

The energy watchdog, Ofgem, is failing consumers and undermining trust in the market, a group of MPs have said - urging it to "use its teeth a bit more".

A report by the Energy and Climate Change Select Committee has said there is a "lack of transparency" about profits made by the Big Six energy providers.

Committee member and Lib Dem MP Sir Robert Smith said: "At a time when many people are struggling with the rising costs of energy, consumers need reassurance that the profits being made by the Big Six are not excessive.

"Unfortunately, the complex, vertically integrated structure of these companies means that working out exactly how their profits are made requires forensic accountants."

Labour MP John Robertson added: "Ofgem needs to use its teeth a bit more and force the energy companies to do everything they can to prove that they are squeaky clean when it comes to making and reporting their profits."

There has been long standing criticism of the UK energy market in which six major competitors show little evidence of competing with each other on price.

Rising prices for consumers in recent years has been blamed on higher wholesale prices for energy providers but the Committee notes that many of Britain's major providers are generators of energy and therefore profit from higher wholesale prices too.

The Big Six have also been criticised for offering a confusing range of tariffs which give the impression of greater consumer choice but offer little in the way of discounts.

British Gas and EDF customer Mary Phillips told Sky News that in the winter she frequently has to choose between spending on food or fuel, and that competition in the energy market has done nothing to help.

She said: "I keep getting notes from all these different energy companies saying that they're making their bills much easier to understand. You're joking!

"Every single different supplier says that they're going to give me a much better deal than all the other suppliers. I don't believe it really. I think they might do it for about three months and then it will all go up suddenly."

As the industry's watchdog, Ofgem has the power to order an inquiry into competition in the energy market but has chosen not to do so.

Instead it hopes that the threat of such a forensic analysis of the Big Six's energy practices will encourage them to clean up their acts.

Ofgem's Rachel Fletcher said: "We share the committee's goal of restoring consumers' trust. We agree with the committee that suppliers have been poor at communicating with their customers.

"Ofgem has made energy companies produce yearly financial statements, which have been reviewed twice by independent accountants and found to be fit for purpose."

The report also criticises the Government for not doing enough to help millions of low-income families living in poorly insulated homes and who struggle with fuel poverty.

The MPs argue that programmes to help protect the most vulnerable should be funded through direct taxation rather than levies on the bills of those who can afford it.

Sir Robert said: "Fuel poverty is getting worse as energy prices rise making it all the more critical that the Government must respond to the Hills Review as a matter of urgency.

"Tax-funded public spending is a less regressive mechanism than levies on energy bills, which can hit some of the poorest hardest. Shifting the emphasis from levies to taxation would help protect vulnerable households."

Angela Knight, chief executive of the industry trade association Energy UK, defended the profits firms make, insisting they are vital to allow for investment in infrastructure.

She said: "Profit is actually a good thing and a very important thing because of the huge amount of investment that needs to be made in this country."

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Ryanair Profit Plunges 21% In First Quarter

Budget carrier Ryanair has seen its first quarter year-on-year profit fall by 21%, despite a growth in passenger numbers.

Ryanair, Europe's largest low-cost carrier, said profit for the quarter ending June 30 was 78m euros (£67m).

It said the that in the same period traffic grew 3% to 23.2 million passengers.

The company said the timing of Easter and impact from a French air traffic controllers' strike in June were contributing factors to the fall.

It said revenue per passenger rose 1% due to "strong ancillary growth".

Ryanair added that unit costs rose 4%, mainly because of a 6% increase in fuel costs.

"As previously guided, higher fuel costs and the timing of Easter led to profits falling," chief executive Michael O'Leary said.

Ryanair boss Michael O'Leary

"As ever, our outlook remains cautious for the full year as market conditions are tough with recession, austerity, high fuel costs and excessive government taxes impacting air travel demands and yields."

Total revenue jumped 5% to 1.342bn euros (£1.15bn), up from 1.284bn euros (£1.1bn) in the same period last year,

He added: "While we expect full year traffic to grow 3% to 81.5 million, we still have no visibility over next winter's yields, and on the basis that the summer yield weakness in close-in summer bookings does not continue.

"We see no reason to change our full year profit after tax guidance which remains at between 570m euros to 600m euros (£504m)."

The airline saw "ancillary revenues" grow by 25% to 357m euros (£308m) - 27% of total revenues - driven by development of reserved seating, priority boarding, and higher administration and credit card fees.

Mr O'Leary added: "We are in ongoing negotiations with MAG, the new owners of Stansted airport to reverse six years of record traffic declines, but there is no guarantee that any deal will be agreed."

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Saudi Prince: Fracking Is Threat To Kingdom

A Saudi prince has warned that his oil-reliant nation is under threat because of fracking technology being developed elsewhere around the world.

Billionaire Prince Alwaleed bin Talal said the Gulf Arab kingdom needed to reduce its reliance on crude oil and diversify its revenues.

His warning comes as rising shale energy supplies in the United States cut global demand for Saudi oil.

In an open letter to his country's oil minister Ali al Naimi and other government heads, published on Sunday via his Twitter account, Prince Alwaleed said demand for oil from Organisation of the Petroleum Exporting Countries (Opec) member states was "in continuous decline".

State-owned Saudi Aramco was hit by a huge cyberattack last year

He said Saudi Arabia's heavy dependence on oil was "a truth that has really become a source of worry for many".

He added that the world's biggest crude oil exporter should implement "swift measures" to diversify its economy.

Prince Alwaleed, owner of international investment firm Kingdom Holding, is unusually outspoken for a top Saudi businessman.

But his warning reflects growing concern in private among many Saudis about the long-term impact of shale technology.

It is allowing the US and Canada to tap unconventional oil deposits which they could not reach just a few years ago.

Small towns, like Carroll County in Ohio, have been boosted by fracking

Chancellor George Osborne has also announced support for fracking in Britain and in offshore waters, to ease a reliance on foreign oil and gas.

Some analysts think this may push demand for Saudi oil, as well as global oil prices, down sharply over the next decade.

Over the past couple of years the Saudi government has taken some initial steps to develop the economy beyond oil.

It has sought to liberalise the aviation sector and provided finance to small, entrepreneurial firms in the services and technology sectors.

Cuadrilla has been exploring for gas in Britain, despite public protests

Mr Naimi said publicly in May that he was not concerned about rising US shale oil supplies.

Prince Alwaleed told Mr Naimi in his open letter, which was dated May 13 this year, that he disagreed with him.

The prince said: "Our country is facing a threat with the continuation of its near-complete reliance on oil, especially as 92% of the budget for this year depends on oil.

"It is necessary to diversify sources of revenue, establish a clear vision for that and start implementing it immediately."

The prince said Saudi Arabia should move ahead with plans for nuclear and solar energy production to cut local consumption of oil.

The shale oil threat means Saudi Arabia will not be able to raise its production capacity to 15 million barrels of oil per day (mbpd), Prince Alwaleed argued.

George Osborne reveals tax breaks to spur fracking investment

Current capacity is about 12.5mbpd; a few years ago the country planned to increase capacity to 15mbpd, but then put the plan on hold after the global financial crisis.

While most Saudi officials have in public insisted they are not worried by the shale threat, Opec has recognised that it needs to address the issue.

In a report earlier this month, Opec forecast demand for its oil in 2014 would average 29.61mbpd, down 250,000bpd from 2013. It cited rising non-Opec supply, especially from the US.

Riyadh has announced a metro system to ease car usage

:: The fracking warning comes as Saudi Arabia announced three foreign consortiums  - led by US, Spanish and Italian firms - have won a $22.5bn contract to build Riyadh's 110-mile, six-line metro train network.

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Royal Baby: George Gives UK Business Boost

By Emma Birchley, Sky News Correspondent

The UK's newest Prince might be less than a week old but he is already proving to be a trendsetter as aspiring parents race to keep up with the Cambridges.

Sales of Britax Baby Safe seats have trebled at Kiddicare superstores since the newborn set off in one on his first car journey after leaving St Mary's Hospital on Tuesday.

And there has been a surge in orders of the £45 hand-finished merino wool shawl made by GH Hurt and Son in Nottingham that Prince George of Cambridge was wrapped in for his first photo shoot.

Alex Fisher, commercial director at Kiddicare, said: "I think it's fabulous news in terms of parents engaging with the fact there is a Royal baby.

"I think it will encourage people to renew and buy new products.

"Parents look at what is the latest product, who is the latest celebrity, and I think on the back of that the seat by default becomes aspirational."

There was so much interest in the dress worn by the Duchess of Cambridge that the designer's website crashed earlier in the week.

But it later emerged that the Jenny Packham design was a one-off and not for sale.

The royal seal of approval has been a blessing for some companies

The Centre for Retail Research predicts the new arrival will end up boosting the UK economy by close to £250 million.

That includes everything from the champagne sipped to help celebrate the baby's safe arrival to commemorative mugs.

And Richard Cope, director of trends at market researchers Mintel, believes spending inspired by the young Prince will be sustained by visitors to the UK.

"Tourist numbers are up by about 10% compared with a year ago. They're going to be here throughout the summer and they buy into the concept of the Royal Family.

"The tourist factor is going to drag out spending for months and months."

But it is not just retailers enjoying the Royal feelgood factor.

William and Kate's chosen charities are already benefiting, including East Anglia's Children's Hospices (EACH), of which the Duchess is patron.

Melanie Chew, fundraising director of EACH, said: "The donations are coming in from the UK, but overseas as well.

"We have had all kinds of generous offers from an ornate handmade cradle from Poland, we've had children's bedroom furniture from Slovenia and we have a charm bracelet on its way, so it's been terrific."

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Barclays Faces Fresh Customer Mis-Selling Bill

By Mark Kleinman, City Editor

Barclays will face up to mis-selling misdemeanours on three fronts next week when it sets aside hundreds of millions of pounds more for historical malpractice.

Sky News understands that the bank will make provisions for compensation for customers who were mis-sold payment protection insurance (PPI), interest rate derivatives and identity theft cover through the stricken credit card insurer CPP.

Insiders said this weekend that Barclays chief executive Antony Jenkins had been told by its regulators to be "conservative" in topping up its previous £2.6bn provision for PPI and an £850m bill for mis-selling swap products - designed to insure customers against sharp interest rate movements - to small businesses.

Barclays directors are also understood to have discussed taking its first hit for compensating CPP customers at a board meeting this week.

The final bill will be signed off by Mr Jenkins, Sir David Walker, the bank's chairman, and the soon-to-depart finance director Chris Lucas on Monday.

A Barclays spokesman declined to comment on the size of the new compensation figures but it is understood that they will take the amount it has set aside for swaps mis-selling to well over £1bn.

The scale of the new provisions will partly explain why Barclays is also planning to announce a major capital-raising comprising conventional shares and contingent convertible (or 'coco') bonds alongside its results.

That follows pressure from the Prudential Regulation Authority for Barclays to meet a target measuring the strength of its balance sheet, called the leverage ratio, by the end of next year.

The announcement will be made as part of Barclays' half-year results on Tuesday, and could undermine Mr Jenkins' efforts to overhaul the bank's reputation following last summer's Libor rate-rigging scandal.

Barclays was fined £290m for its role in the affair, leading to the departure of Mr Jenkins' predecessor, Bob Diamond.

It was also recently hit with a £300m penalty by a US energy regulator for attempting to manipulate electricity prices, although the bank is appealing against it.

Barclays will not be the only lender to add to its PPI mis-selling provisions during next week's results, with Lloyds Banking Group and others also expected to belie suggestions that the tidal wave of compensation claims had abated.

Barclays has, though, been particularly affected by the way interest is calculated on PPI compensation claims because of its liabilities dating back many years.

Mr Jenkins will also spell out the progress of his overhaul of the bank, called Transform, in which he will say that Barclays is exceeding cost-reduction targets announced in February.

Barclays declined to comment.

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£2bn Lloyds Profit Triggers Stake Sale Talks

By Mark Kleinman, City Editor

The agency which manages taxpayers' £19bn stake in Lloyds Banking Group is expected to hold talks with City investors this week about a quick-fire sale of shares as Britain's biggest high street lender unveils a £2bn half-year profit.

Sky News understands that UK Financial Investments (UKFI) and the Treasury will discuss in the coming days the prospect of an accelerated placing of shares in Lloyds with major institutional investors on or around the day that Lloyds announces half-year results on Thursday.

Treasury sources said that the results would show a "stellar" first-half performance from the bank, which owns the Halifax brand and is in the process of spinning TSB off into a separately-listed company.

Lloyds, they said, would report a statutory profit of approximately £2bn - in line with the consensus forecast of analysts - and also provide further positive news in the form of better-than-expected cost reductions and a stronger-than-anticipated capital position.

The move into the black would contrast with a loss of more than £400m at the half-year stage in 2012.

"The stars are aligned for us to start selling shares now," said one Whitehall insider.

The Government is understood to believe that it has a window of a few days beginning on the day of Lloyds' results to place a chunk of stock before the markets slow down too far for the summer to make such a substantial transaction more difficult.

Lord Davies is assembling a consortium keen to buy part of Lloyds

If the discussions do not point to sufficient demand for an institutional placing of shares, the Government would postpone any attempt to begin selling its 39% stake in the bank until September at the earliest.

A Treasury spokesman said that no timetable for the sale of shares had been set and refused to comment on the prospect of a sale next week.

Earlier this month, UKFI hired JP Morgan Cazenove, the investment bank, to advise on its privatisation strategy for Lloyds and Royal Bank of Scotland, in which taxpayers hold an 82% stake.

The agency also appointed a roster of other banks to execute deals in the capital markets to sell down the shares in the two banks during the coming years.

One banker said on Saturday that a report suggesting that Lloyds was priming City investors for a sale was inaccurate, arguing that the deal would be orchestrated by UKFI rather than the bank itself.

The source added that it would be theoretically possible to brief a group of investors the night before the results announcement - making them insiders unable to trade in Lloyds shares - with the objective of announcing a deal alongside on Thursday.

Sky News revealed earlier this month that Lord Davies, the former trade minister, was assembling a consortium of investors keen to buy at least half of the Government's stake in Lloyds.

The half-year results are expected to include a modest new provision for payment protection insurance mis-selling, taking Lloyds' total bill so far to more than £7bn, one insider said.

However, unlike Barclays, the bank is not expected to have to set aside money to compensate small businesses for mis-selling interest rate swaps or customers of CPP, the identity theft insurer.

On Friday, Lloyds shares closed at 68.37p, which if sustained until after next week's results announcement would make a placing at or above 61p viable, banking sources said. Such a deal would be likely to take place at a discount to the prevailing share price.

The 61p figure is significant because Lloyds said in March that it had been notified by the Treasury that that was the average price at which taxpayers' support for Lloyds during the banking crisis had been recorded in the public finances.

Selling above that price would be significant for George Osborne, the Chancellor, because it would allow him to hail the return of funds injected by taxpayers into Lloyds after its initially disastrous merger with HBOS.

It would also be potentially meaningful for Antonio Horta-Osorio, Lloyds' chief executive, whose £1.48m deferred share bonus awarded in March will only vest under certain conditions, one of which is that at least one-third of the Government's shareholding is sold for at least 61p-per-share.

Lloyds declined to comment on Saturday.

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