Ed Miliband Proposes New Energy Price Controls

Ed Miliband has proposed new controls on energy prices to give small businesses "equal protection" with households from "unacceptable" treatment by energy companies.

The Labour leader said annual energy bills for small businesses had risen by an average of £10,000 since 2010.

He called for a new regulator to be formed with powers to ban suppliers from changing people's tariffs without their consent, or hitting them with "crippling" back-dated bills.

Sticking to his cost of living agenda, he also reiterated plans for a 20-month price freeze for households and businesses when he addressed the Federation of Small Businesses (FSB) in Manchester later.

He said the move would save small fiirms, on average, £5,500.

"It is unacceptable that companies like yours do not have even basic protections that are available to households under the law from unfair energy contracts," Mr Miliband said.

"Since the turn of the century, the number of people working for themselves has increased by over one million.

"Small businesses are now the bedrock of our economy - and they will be even more so in the future.

"Some of the costs of running a small business have got larger and larger in recent years. The next labour government is determined to tackle this problem, and give every sort of business the chance to succeed."

Mr Miliband also pledged new legal rights for business organisations like the FSB to take cases such as late payment by firms to court on behalf of members.

Labour would also invite the FSB to help set the agenda for the new Competition and Markets Authority's investigations - like Which? and Citizens Advice already do - to ensure a fair deal for consumers and businesses.

It comes after energy watchdog Ofgem on Thursday referred the sector to the CMA amid concerns over profits, price co-ordination and barriers to new suppliers.

The competition inquiry could lead to the so-called 'big six' firms being broken up.

Mr Miliband said following the announcement there could be "no justification for further price rises".

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FCA Probes Millions Of 'Bad Deal' Investments

The City watchdog is to scrutinise millions of finance products sold to consumers over three decades, because of fears they are shackled by unfair terms and conditions.

It is estimated around 30 million policies, including pensions, endowments, life insurance and investment bonds were sold by companies between the 1970s and the end of the century.

The Financial Conduct Authority (FCA) is expected to announce the decision on Monday, as part of its annual business plan.

The investigation, due to begin in the summer, comes amid suspicion new customers receive better deals while long-term customers receive poor service and higher fees.

Many of the suspect policies penalise consumers if they try to swap to better deals offered by rivals.

The share price for many of the big insurance companies fell on Friday, with early trades in Resolution down 7%, Aviva down 6% and Legal & General trading more than 4% lower.

According to the FCA, some people risk losing half of their investments if they change provider from the so-called zombie funds.

The funds are closed to new customers and many of those who invested are suspected of subsidising other products because of the high charges.

FCA director of supervision Clive Adamson told The Daily Telegraph: "We want to find out how closed-book products are being serviced by insurance companies.

"As we are concerned insurers are allocating an unfair amount of overheads to historic funds.

"As firms cut prices and create new products, there is a danger that customers with older contracts are forgotten.

He added: "We want to ensure they get a fair deal. As part of the review we will collect information to establish whether we need to intervene on exit charges."

The FCA was born out of the now-defunct Financial Services Authority, which was abolished by the current Government in the wake of the financial crisis.

Next week it also takes responsibility for the consumer credit market.

Earlier this week, it imposed a £12.4m fine on Santander UK for failings in its investment advice to customers.

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Business Round-Up And Week Ahead

Sky's Naomi Kerbel offers a round-up of what's coming up in the week's business news.

: Monday March 31

From Monday, energy suppliers are required to publish the price at which they will buy and sell on wholesale markets up to two years in advance and the cost of a first class stamp goes up from  60p to 62p.

:: Tuesday April 1

The Competition and Markets Authority (CMA) takes on its full powers on Tuesday. Regulator, Ofgem has referred the energy market to the CMA for a full investigation into the competitiveness of the market and air passenger duty is due to rise in line with the Retail Price Index.

:: Wednesday April 2

On Wednesday, ASOS will report half year results. The online clothing retailer has faced stiff competition from other web-based companies like the recently-floated Boohoo which also targets people in their 20s.

:: Thursday April 3

It will be the Chancellor's chance to be grilled on Thursday. George Osborne will give evidence at Treasury Committee on this year's Budget. 

:: Friday April  4

On Friday, the U.S. will release its employment figures. It is expected that the unemployment situation will improve as the market shakes off the effects of severe winter weather. 

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Candy Crush Firm Slumps In Market Debut

The British creator of the popular mobile game Candy Crush Saga has been given the cold shoulder as it made its public trading debut on Wall Street.

The stock price for King Digital Entertainment plc dropped 15.6% on its first day of trading, ending the session at $19 (£11.46).

The slump gives King a market value of $5.98bn (£3.6bn) - well below the estimate of $7.1bn (£4.2bn) that was made hours before its debut on the New York Stock Exchange.

The initial public offering (IPO) valued the shares at $22.50 (£13.60), but they opened at $20.50, down almost 9%.

The company raised $500m (£302m) in its IPO to help fund future development and expansion.

King has become hugely profitable based on the success of three games - Candy Crush Saga, Pet Rescue Saga and Farm Heroes Saga - even though it has 180 titles in total.

Candy Crush Saga is one of three key games for King Digital

The company has more than 324 million monthly unique users and operates a website with 14 languages.

However, many investors have been wary of games firms with a limited range of products.

They cite the demise of Zynga - a one-time market leader on Facebook with its Farmville game - as an example to avoid.

King has offices in Stockholm and London, and games studios in several European cities.

It was founded in London originally as Midasplayer Ltd in 2003 before King Digital was registered in Dublin last July, to assist in inter-country transfer pricing, and "intended to provide us worldwide tax efficiencies".

Midasplayer directors include Swedes Sebastian Knutsson 45, and Lars Markgren, 50, and Italian CEO Riccardo Zacconi, 46.

Its website, through which players can buy "freemium" game tokens, is domiciled in Malta.

In January, it posted a blog explaining its reasons to buy the EU trademark for the word "candy" and application for the US equivalent.

It said the reason was to protect its intellectual property (IP) and thwart competitors trading on its name.

In its February US IPO listing document, King warned potential investors that unauthorised distribution or piracy, particularly in Asia, might harm its revenue and entail costly litigation to protect its IP.

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'Big Six' Energy Firms May Be Broken Up

The energy watchdog has ordered a competition inquiry into the household supply market that could lead to the so-called 'big six' firms being broken up.

Ofgem charted a quadrupling in profits between 2009 and 2012 and said it was acting to "remove uncertainty" by referring the sector to a full investigation by the new Competition and Markets Authority (CMA).

Its State of the Market Assessment accused suppliers of "consistently setting higher prices for consumers who have not switched."

It found little evidence of households engaging in the market, with 43% distrusting firms to be open and transparent.

The review also reinforced concerns about excessive profits and barriers to entry for independent suppliers.

It found that retail profits soared from £233m in 2009 to £1.1bn in 2012.

Ofgem said there was clear evidence of suppliers becoming more efficient in reducing their own costs, although further evidence would be required to determine whether firms have had the opportunity to earn excess profits.

The market investigation, Ofgem said, would conclusively determine whether there should be more separation between the largest companies' supply businesses and generation arms, in a bid to provide more clarity on profits.

One of the 'big six, SSE, confirmed on Wednesday it was to legally separate its supply and generation businesses in a bid to improve transparency as it announced a price freeze until January 2016.

Such a move could be forced on its competitors by the CMA if it decides it would be in the public interest.

While Ofgem found no evidence of collusion on pricing, the review discovered "evidence of possible tacit coordination" in the timing and size of price announcements and new evidence that prices rise faster when costs rise than they reduce when costs fall."

The regulator also confirmed that from June 1 it would substantially increase the level of penalties it imposes on energy firms who break its rules to give "sufficient focus within businesses."

Its chief executive Dermot Nolan said: "Ofgem believes a referral offers the opportunity to once and for all clear the air and decide if there are any further barriers which are preventing competition from bearing down as hard as possible on prices.

"The CMA has powers, not available to Ofgem, to address any structural barriers that would undermine competition.

"Now consumers are protected by our simpler, clearer and fairer reforms, we think a market investigation is in their long-term interests."

News of the competition investigation was welcomed by politicians, consumer groups and some the 'big six' firms.

Centrica, which owns the biggest supplier British Gas, said its was committed to "an open, transparent and competitive British energy market" and backed moves to restore trust.

But its statement rejected "any suggestion of possible tacit coordination with other market participants."

E.On's chief executive Tony Cocker said: "A full market investigation by the CMA is the only way to restore full public confidence to the energy sector and depoliticise the whole issue.

"Whilst we have already made a large number of changes such as running our businesses separately, simpler tariffs, simpler bills and further investment in levels of service, a full investigation will once and for all get to the heart of any structural issues that exist or are perceived to exist and help us to all deal with many of the myths and misinformation that surround the energy market."

More follows...

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Ukraine Crisis: IMF Agrees $18bn Bailout Fund

The International Monetary Fund has agreed rescue funds of up to $18bn (£10.8bn) for Ukraine in return for strict economic reforms.

Under the conditions of the proposed deal, Ukraine's interim government has announced a 50% increase in the price of domestic gas from May 1.

The IMF has pushed for a cut in energy subsidies which accounted for 7.5% of Ukraine's GDP in 2012.

Ukraine has said it needs the bailout to avoid a possible debt default.

The so-called Stand-By Arrangement (SBA) with the IMF will not be ratified until the executive board meets next month.

Ukraine soldiers patrol near the Russia border in Kharkiv

If it is agreed, it could open Ukraine up to further financial support from the US, EU and Japan amounting to a total of $27bn (£16.3bn) over the next two years.

Ukrainian Prime Minister Arseniy Yatsenyuk said on Thursday the price for Russian gas could reach $480 (£290) per 1,000 cubic metres from April 1. The current level is $268.5 (£162).

The country's finance minister has predicted Ukraine's economy will contract 3% this year after years of mismanagement and political turmoil.

A statement from the IMF said: "Following the intense economic and political turbulence of recent months, Ukraine has achieved some stability, but faces difficult challenges.

"The mission has reached a staff-level agreement with the authorities of Ukraine on an economic reform programme that can be supported by a two-year Stand-By Agreement (SBA) with the IMF.

"The financial support from the broader international community that the programme will unlock amounts to $27bn over the next two years.

"Of this, assistance from the IMF will range between $14-18bn, with the precise amount to be determined once all bilateral and multilateral support is accounted for."

The agreement will help Ukraine to meet debt payments after months of anti-government protests which saw President Viktor Yanukovych flee the country and Russian troops enter the Crimea region.

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Facebook In $2bn Oculus Virtual Reality Deal

Facebook has announced it is to splash out $2bn to buy Oculus, a virtual reality company.

The deal includes $400m in cash and some 20 million shares worth about $1.6bn.

A statement released by Facebook chief Mark Zuckerberg said Oculus' technology opened the possibility of "completely new kinds of experiences" in communications, media, entertainment and education.

"Imagine enjoying a court-side seat at a game, studying in a classroom of students and teachers all over the world or consulting with a doctor face-to-face - just by putting on goggles in your home," the statement said.

Mark Zuckerberg: 'The future is coming and we can build it together'

"One day, we believe this kind of immersive, augmented reality will become a part of daily life for billions of people.

"Virtual reality was once the dream of science fiction. But the internet was also once a dream, and so were computers and smartphones. The future is coming and we have a chance to build it together."

The Oculus Rift headset has brought virtual reality to the sporting world. England Rugby and its partner O2 say the Wear The Rose experience gives fans the chance to train with the national squad.

The deal comes hot on the heels of Facebook's WhatsApp takeover

It lets them participate in drills directed by coach Mike Catt, making them feel as though they have just received their very first England call-up. Catt told Sky News the technology could help players make better decisions on the field.

As part of the Facebook deal, Oculus employees are eligible for a $300m bonus if the company achieves certain targets.

Facebook's purchase of Occulus follows the company's $19bn deal to snap up messaging service WhatsApp in February.

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Lloyds Bank Shares Worth £4.2bn Sold

Taxpayers have been left with a 25% stake in Lloyds Banking Group as the Government announced plans to sell £4.2bn in shares.

The taxpayer owned 33% of Lloyds but the Treasury has continued with plans to fully return the lender to the private sector.

Some 5.6bn shares were sold to City investors on Tuesday night - raising £4.2bn based on the closing share price of 79.1p.

The shares were bought for 73.6p each, generating £106m profit for the taxpayer.

Lloyds was bailed out by the Government in 2008

A Treasury spokesman said: "The Government set out its objectives for its shareholdings in the banks in the Chancellor's annual Mansion House address last June - getting the best value for the taxpayer, maximising support for the economy and restoring private ownership.

"And, as set out in that address, the Government will only conclude a sale if these objectives are met.

"Building a stronger banking system is a core part of the Government's long-term economic plan to deliver greater economic security."

The Government injected roughly £21bn into Lloyds in October 2008 during the financial crisis, giving it a 43% stake.

In April 2010 Lloyds returned to profit for the first time since its bailout.

The Government made a profit of £61m selling off the first tranche of its shares in September last year.

Antonio Horta-Osorio, chief executive of Lloyds

Antonio Horta-Osorio, chief executive of Lloyds, said: "I am pleased that the Government intends to sell a further stake in Lloyds Banking Group and allow taxpayers to get more of their money back.

"I believe this reflects the hard work undertaken over the last three years to make Lloyds a safe and profitable bank that is focused on helping Britain prosper."

Lloyds posted statutory profits of £415m for 2013 against losses of £606m in 2012 - its first bottom-line profit since 2010.

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Energy Firm SSE To Freeze Household Bills

'Big Six' energy firm SSE is to freeeze household bills until January 2016, it has been confirmed.

The announcement comes amid the ongoing controversy over energy bill price hikes for consumers and businesses.

SSE chief executive Alistair Phillips-Davies said: "We're setting out a positive agenda for customers, including our price freeze to 2016.

"We're making sure our own house is in order for the future by streamlining and simplifying our business.

"And we're making clear we wish to work with people to find more ways of taking costs out of energy bills."

In conjunction with the tariff freezing, SSE announced a swathe of measures to keep its overheads down.

It said "further operational efficiencies" will see it reduce costs by £100m in the coming two years, including a staff reduction of 500.

SSE said it would also legally separate its retail and wholesale segments by March next year.

The big energy providers have come under sustained fire over profits, with critics saying although retail earnings may be modest the firms' wholesale and distributions margins are too high.

The company also said it would limit the size of its deepwater Project Beatrice wind farm, located 12 miles off Scotland's Moray Firth, north-east of Inverness.

Further cost savings are expected to come from reducing the amount of capital and investment expenditure in the coming years.

It said although investment outlay would be around £1.6bn in 2014/15, this figure would drop by nearly 20% for the following three years.

SSE said it expects to report a full-year annual pre-tax profit of around 9% when it releases its results on May 21.

It expects operating profit to be 10% higher from its network distribution sector and 20% higher from its wholesale division, primarily due to greater gas production.

However, as householders become more aware of reducing energy consumption, SSE expects to see a retail profit reduction of about 25%.

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Fortnum Boss Warns of Scots Vote 'Disaster'

By Mark Kleinman, City Editor, in Dubai

The chief executive of Fortnum & Mason, the upmarket London-based grocer has warned that a 'yes' vote in the Scottish independence referendum would be a "disaster" for the country.

Speaking exclusively to Sky News, Ewan Venters, a Scot by birth, said that a break-up of the United Kingdom would create a damaging period of uncertainty for businesses.

"I think it would be a disaster. The UK is better as one. We are a small enough island as it is, we don't need to become smaller," he said.

"The consequences of an independent Scotland and an independent England could be very unfavourable economically. That uncertainty is not what the country needs."

Mr Venters, who has run the Queen's grocer since 2012, is one of the most senior English-based Scottish businessmen to articulate his views about the implications of the referendum vote which takes place in September.

A former executive at companies including J Sainsbury and Selfridges, which is owned by the same family as Fortnum & Mason, Mr Venters also criticised the fact that he would not be allowed to take part in the vote.

"It is very disappointing that Scots like myself are not allowed a vote, when someone could be from any nation, move to Scot and be allowed a vote.

Fortnum & Mason is a favourite of the Royal Family

"It is an ill-conceived set-up of the referendum by those in the establishment who know that many of those who have moved away from Scotland to build careers elsewhere are in favour of the union remaining intact."

He is the latest in a growing number of executives and companies to speak out on independence.

In recent weeks, Alliance Trust, Standard Life and Royal Bank of Scotland have highlighted contingency planning being undertaken to prepare for a 'yes' vote.

In its annual report published this week, the defence contractor BAE Systems also said a vote in favour of independence could be disruptive.

Mr Venters, 41, was speaking in Dubai during a trip to mark the opening of Fortnum & Mason's first overseas store, opposite the Burj Khalifa, the world's tallest skyscraper.

Fortnum & Mason, which operated solely from its shop on London's Piccadilly for more than 300 years, was founded in 1707, the year that the Act of Union binding England and Scotland came into being.

Mr Venters wants the Dubai store, which has been developed in conjunction with AKI, a local partner, to be the first step in a carefully and gradually orchestrated expansion of the business.

"It is a very important milestone because customers from this region are hugely important at our Piccadilly store," he said.

"Fortnum has a long history of taking products to customers around the world," he said, which included exporting Christmas hampers to 112 countries towards the end of last year.

Dubai was chosen as Fortnum's first international outpost because of the Emirates' status as the most important luxury retail centre in the world, behind London, he added.

"Tea is the most popular drink after water here. As tea merchants for more than three centuries, we felt it was important to be here," he said.

Mr Venters cautioned against expectations that the Dubai opening would lead to a chain of Fortnum & Mason stores opening around the world, although he has now overseen the launch of two outlets in little more than six months.

Last autumn, the company opened a shop next to the Eurostar terminal at London's St Pancras station, with sales understood to be performing strongly.

"We will carefully consider other opportunities in what I call surging economies rather than emerging markets.

"This is a good moment to look at taking firmer positions in the world on a gradual basis."

"Over half of our business is made up of consumers living in the UK. That trend has increased in recent times as we have tried to make it more relevant to domestic consumers," Mr Venters said.

He described Britain's economy as "two-tier", with London the dominant force, adding that this week's Budget statement by George Osborne was "business-friendly and broadly friendly to working people of Britain by ensuring there's more money in people's pockets".

Mr Venters also waded into the debate about the future of Britain's troubled high streets, calling for a significant increase in residential development in order to stimulate wider usage.

"The opportunity for the high street has never been so good. The drive to buy more online means people are shopping on a more frequent basis.

"With some proactive housing policies on high streets and sensible movement on business rates, there is no reason why you couldn't start to see a revival."

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Leahy Firm Leads Race For £1bn Dubai Group

By Mark Kleinman, City Editor, in Dubai

The private equity firm which employs Sir Terry Leahy, the former boss of Tesco, is leading the race to buy a German industrial group which has key operations in northern England.

Sky News understands that Clayton Dubilier & Rice (CD&R) is heading a field of four remaining bidders for Mauser, a German-based industrial packaging group owned by the ruler of Dubai.

Mauser, which makes drums for transporting medical waste and other hazardous materials, operates two UK facilities, at Batley in West Yorkshire and Littleborough in Lancashire.

The auction of Mauser, which is owned by Dubai International Capital (DIC), was narrowed in the last few days to CD&R, Ardian Partners, Pamplona Capital and Platinum Equity, according to insiders.

Blackstone did not table a formal offer for Mauser, while it is unclear whether Apollo Management, another party which had expressed interest in the group, did so.

The sale of Mauser, which is expected to fetch approximately £1bn, would leave DIC owning only two companies less than a decade after it pursued ambitious plans to become one of the world's leading private equity investors.

DIC is part of Dubai Holding, one of the groups owned by Sheikh Mohammed bin Rashid al Maktoum.

The Dubai-based group acquired Mauser in mid-2007, just as the first signs of stress in global financial markets were becoming apparent.

Dubai was forced to default on sovereign debt repayments in 2009 amid a slump in asset prices but has since successfully restructured its borrowings.

The emirate is now recovering from the financial crisis, with significant construction work resuming and international banks increasing staffing levels from the post-crisis trough of recent years.

Mauser has itself undergone a financial restructuring, announcing in May last year that it had won support from its lenders, which include HSBC and Royal Bank of Scotland, to amend the terms of its debt facilities.

DIC had contemplated a combined auction of Mauser, its UK-based aerospace group Doncasters and Almatis, a German aluminium manufacturer, but has decided to delay selling the latter two businesses.

Among DIC's other troubled investments was Travelodge, the British hotel operator, which it lost control of after its balance sheet became overstretched.

The auction of Mauser is being handled by Bank of America Merrill Lynch.

Mauser and CD&R, which owns companies such as the discount retailer B&M, declined to comment.

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Auction House Bonhams Eyes Sale Of Its Own

By Mark Kleinman, City Editor, in Dubai

It has secured a record bid for a painting in Russia and struck the most valuable purchase of an Old Master at auction.

Now Bonhams, the British auctioneer, is considering a deal of a different kind.

Sky News has learnt that the company's shareholders are bringing in City advisers to assess whether Bonhams itself should be put up for sale on the back of record profits.

Sources said on Saturday that Greenhill, an investment bank, had recently been appointed to conduct a strategic review, which will involve examining a range of options for bringing new capital into the business.

Bonhams, which has become a well-known name in the global auctioneering sector, specialises in selling fine art, classic cars and antiques.

It is jointly-owned by two businessmen: Robert Brooks, a former motor racing driver who has chaired the British Racing Drivers' Club, and Evert Louwman, a Dutchman.

Mr Brooks has said in the past that he wants to take advantage of Bonhams' strong balance sheet by building the company into a credible rival to Christie's and Sotheby's, the most famous name in the auction world.

It is unclear whether either of the existing shareholders would countenance an outright sale of their stakes.

Greenhill is expected to recommend the recruitment of a new investor, which is likely to attract interest from major private equity firms and sovereign wealth funds.

A stock market flotation is also expected to be considered although Mr Brooks has previously said that such a move was unlikely.

It is unclear exactly how much Bonhams would be valued at although City sources indicated that it would be several hundred million pounds.

Headquartered on New Bond Street in London, the current Bonhams was formed from a merger with Brooks in 2000, and has established a presence in Dubai, Hong Kong and the US.

The company was founded in 1793, and now claims market leadership in a number of areas, including the sale of Alfa Romeo, Aston Martin and Maserati cars for world record prices.

Last year, Bonhams saw profits more than double to £25m as wealthy buyers looked for alternative investment opportunities in a continuing environment of low interest rates.

Key sales in 2013 included a 1954 Mercedes Formula One car driven by the legendary Argentine racer Juan Manuel Fangio, which fetched £19.6m, and the Madonna Laboris, which became the most expensive Russian painting sold at auction when it attracted a £7.9m bid.

"2013 was a year where we saw the Bonhams brand establish itself further on the global stage," Mr Brooks told a newspaper last week.

'We have put significant investment behind growing a brand that can compete effectively in the key auction markets of the world."

A Bonhams spokesman refused to comment.

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