The Week's Big Business Stories

Watchdog's Warning Over In-App Purchases

Updated: 2:24pm UK, Friday 11 July 2014

A consumer watchdog has warned parents to check settings on their mobile devices, after Amazon was sued over children making unauthorised in-app purchases.

Britain's Competition and Markets Authority (CMA) told Sky News: "Our advice to parents is to check their device settings, play their child's games themselves and read the game's description online.

"The CMA (and its predecessor the Office of Fair Trading) has been working closely with the online and apps based games industry, both in the UK and Europe, to put safeguards in place to ensure children are protected from making unauthorised payments and that customers are always treated fairly.

"If they have any concerns at all, they should contact Citizens Advice."

The warning comes after the US Federal Trade Commission (FTC) launched legal action over claims the online retail giant has not done enough to stop children spending money without parental consent.

The company said it would not agree to an out-of-court settlement with the FTC.

Amazon previously said that it was prepared for a court battle and that it had refunded parents who complained after being billed for the apps.

The dispute centres on children's games downloaded via Kindle tablets, and the difficulty differentiating virtual and real currency for purchase of virtual items.

In-app charges were introduced in 2011 and no password was required for purchases between $0.99 and $99 (£57).

The following year passwords were introduced for purchases over $20 (£11.60).

But the FTC said that although it updated password procedures last year, there was a period where children could still buy apps.

One customer complained that her daughter had incurred charges of more than $350 (£200) while playing a game.

The FTC said thousands of consumers had been affected and unauthorised charges ran into the millions.

FTC consumer protection director Jessica Rich said: "A central tenant in consumer protection is that you need to obtain consumer consent before placing charges on their bills.

"That applies all places, from brick-and-mortar stores to app stores."

The legal action seeks both refunds for consumers and a ban on billing account holders for in-app charges made without their consent.

Last week the FTC launched a similar lawsuit against T-Mobile, and in January it reached a $32.5m (£19m) settlement with Apple over in-app charges.

Charges racked up by children without parental consent has also caused concern for PayPal, which is owned by eBay.

In April, Sky News revealed PayPal was changing its terms and conditions for account users.

A new clause, activated last month, said users must agree to "take all reasonable steps to protect the security of the personal electronic device through which you access the Services (including, without limitation, using pin and/or password protected personally configured device functionality to access the Services and not sharing your device with other people)."

Paypal denied it was banning account users sharing their computers.

A spokesman said: "The new wording in our User Agreement says that users should take reasonable care when sharing devices so their PayPal account is not compromised."

Meanwhile, the celebrated children's author Allan Ahlberg revealed he turned down a lifetime achievement award after learning it was sponsored by Amazon.

In a letter to the Bookseller, he complained about Amazon's UK tax arrangements, whereby revenue earned in Britain is accounted for in low-tax Luxembourg.

Amazon's UK subsidiary reached sales of £4.3bn last year but it paid only £4.2m in tax.

Amazon.co.uk saw a 56% rise in profit to £17m during 2013, along with a 13% rise in UK revenue.

Mr Ahlberg wrote: "Tax, fairly applied to us all, is a good thing. It pays for schools, hospitals - libraries!

"When companies like Amazon cheat - paying 0.1% on billions, pretending it is earning money not in the UK, but in Luxembourg - that's a bad thing.

"We should surely, at the very least, say that it is bad and on no account give it any support or, by association, respectability."

Approached by Sky News, Amazon UK declined to comment on Mr Ahlberg's action and it was awaiting a response from the US parent firm about the FTC action.

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Shareholders Slam £23m Burberry Boss Pay Deal

More than half of shareholders at the annual general meeting (AGM) for luxury retailer Burberry have rejected a pay deal worth up to £23.6m for the chief executive.

Some 52% of votes cast in the non-binding ballot did not support the remuneration report for Christopher Bailey or the other executive directors of the 158-year-old retailer's plan.

Included in the payment is his annual salary of £1.1m – which has not changed since his last role – and a golden handshake worth £7.25m provided to Mr Bailey if he loses his job.

It would also include his £440,000 allowance, which Burberry said does not include allowances for clothing or a company car.

A large part of the package includes a performance-based bonus and participation in the firm's executive share plans, any awards from which will vest from 2017.

Chairman John Peace defended Mr Bailey's pay at the meeting, arguing that the pay is comparable with competitors.

Burberry defended the pay deal for CEO Christopher Bailey

He said: "We know the amount paid to Christopher is a lot of money but much of it is performance related."

Mr Bailey took on the role of chief executive alongside his role as chief creative officer last May. He joined the firm in 2001.

Burberry also defended Mr Bailey ahead of the AGM.

It said: "The board believes that Christopher's vision and leadership will keep Burberry on the forefront creatively, digitally and financially."

But the Institute of Directors (IOD) said the revolt was a "warning shot" over pay concerns.

IOD director of corporate governance Dr Roger Barker said: "Burberry shareholders have fired a warning shot with today's vote.

"They are clearly not convinced that executive pay at the company has been transparently linked to tough performance targets.

"The onus in now on the board to urgently engage  with shareholders to convince them they are responding to their understandable concerns."

Burberry also mentioned in its 2013/14 annual report that Mr Bailey's promotion would "create further value for shareholders in the next exciting stage of its evolution".

Earlier this week, the Investment Management Association gave Burberry an "amber top" rating on the proposed pay policies, hinting that its members, who account for 15% of the stock market, should carefully read into Mr Bailey's awards before making a final decision.

As well as the controversial pay deal, other issues debated at the London AGM include the directors' remuneration policy and report.

The meeting comes after shares in the designer brand rose 2% on the FTSE 100 early on Thursday, when like-for-like sales were up by 12% in the three months from June 30.

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World Cup Betting Set To Smash £1bn Barrier

Bookmakers are expecting to smash betting records for Sunday's Fifa World Cup, as punters embrace placing wagers through mobile devices.

Ladbrokes, Britain's second biggest bookie, has predicted an industry-wide taking for the tournament to break the £1bn barrier.

It said an estimated £40m would be waged with it on Sunday's final, beating the figure gambled on the 2012 Champions League final between Chelsea and Bayern Munich.

Market leader William Hill said that its prediction of seeing £200m in bets for the full tournament has already been smashed.

The total is double that achieved by it during the 2010 tournament and shows the growth in football betting among younger gamblers who have grown up on a diet of live televised matches.

It said: "On top of the predicted turnover having been obliterated, the pre-tournament forecast of 17 million bets being placed has been broken as well."

It said Germany are 4/6 to win the World Cup while Argentina is at 6/5.

Bookmakers had viewed the World Cup as an opportunity to build market share before the introduction of new taxes over the next year - expected to cost the industry about £400m.

William Hill said the best game for punters was the Brazil v Croatia match, after it enhanced the price of Brazil winning to even money.

On Wednesday, bookies said that four gamblers struck gold after laying money on Germany to beat Brazil by 7-1 in the semi-final.

Meanwhile, the biggest single bet for the market leader was in the group stages when a punter in Nevada put down $350,000 (£200,000) for Argentina to beat Iran.

In addition to a greater turnover compared to the last tournament, the biggest difference is how bets have been placed this year.

Ladbrokes said: "The most memorable thing about this tournament for the industry will be the fact that it has been the biggest event for mobile betting by some way in history.

"That's because a total of 60% of digital bets have been placed via mobile devices."

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Church Of England Severs Ties With Wonga

The Church of England has announced it has withdrawn its investment from controversial payday lender Wonga.

It comes a week after the firm agreed to pay £2.6m in compensation to 45,000 customers after it was found to have sent letters from two fake law firms.

In a statement the Church of England said: "The Church Commissioners no longer have any financial or any other interest in Wonga.

Wonga recently paid £2.6m customers that received fake lawyer letters

"The Church Commissioners estimate that if they had had to sell their entire venture capital holdings they might have lost £3-9m to remove the exposure to Wonga, which was worth less than £100,000.

"The Commissioners are pleased that another way forward has been agreed given their fiduciary duties to clergy pensioners and to all the parts of the Church they support financially."

The statement continued: "The Commissioners' focus remains the mission they share with the Archbishop of Canterbury - supporting the ministry and growth of the Church of England. 

Complaints about payday lenders have doubled since 2012

"The Commissioners will also continue to seek ways, consistent with their fiduciary duties, to support the Church's priority of promoting responsible credit and savings."

The declaration comes a year after the leader of the Church of England -  the Archbishop of Canterbury - vowed to "compete" Wonga out of existence, when it was first revealed the Church invested in the company.

The Most Rev Justin Welby said in July 2013 that he wanted to force Wonga out of business by expanding the Church of England's credit union plans.

The number of complaints about payday lenders has doubled since 2012. The most common complaint was from people who had been pestered for cash even though they had not taken out a loan.

In almost two thirds of cases that the Financial Ombudsman took on, the office found in favour of the consumer.

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Amazon Sued Over Children's In-App Purchases

Amazon is being sued by the US government over claims the online retail giant has not done enough to stop children making unauthorised downloads of apps.

The legal action by the Federal Trade Commission (FTC) comes after the company said it would not agree to an out-of-court settlement.

Amazon previously told the FTC that it was prepared for a court battle and that it had refunded parents who complained after being billed for the apps.

The dispute centres on children's games downloaded via Kindle tablets, and the difficulty differentiating virtual and real currency for purchase of virtual items.

In-app charges were introduced in 2011 and no password was required for purchases between $0.99 and $99 (£57).

The FTC has tried to reach a settlement with Amazon over the issue

The following year passwords were introduced for purchases over $20 (£11.60).

But the FTC said that although it updated password procedures last year, there was a period where children could still buy apps.

One customer complained that her daughter had incurred charges of more than $350 (£200) while playing a game.

The FTC said thousands of consumers had been affected and unauthorised charges ran into the millions.

FTC consumer protection director Jessica Rich said: "A central tenant in consumer protection is that you need to obtain consumer consent before placing charges on their bills.

"That applies all places, from brick-and-mortar stores to app stores."

The legal action seeks both refunds for consumers and a ban on billing account holders for in-app charges made without their consent.

PayPal has altered its user agreement to help stem unauthorised purchases

Last week the FTC launched a similar lawsuit against T-Mobile, and in January it reached a $32.5m (£19m) settlement with Apple over in-app charges.

Charges racked up by children without parental consent has also caused concern for PayPal, which is owned by eBay.

In April, Sky News revealed PayPal was changing its terms and conditions for account users.

A new clause, activated last month, said users must agree to "take all reasonable steps to protect the security of the personal electronic device through which you access the Services (including, without limitation, using pin and/or password protected personally configured device functionality to access the Services and not sharing your device with other people)."

Paypal denied it was banning account users sharing their computers.

A spokesman said: "The new wording in our User Agreement says that users should take reasonable care when sharing devices so their PayPal account is not compromised."

Meanwhile, the celebrated children's author Allan Ahlberg revealed he turned down a lifetime achievement award after learning it was sponsored by Amazon.

Amazon routes its UK sales through an office in Luxembourg for tax purposes

In a letter to the Bookseller, he complained about Amazon's UK tax arrangements, whereby revenue earned in Britain is accounted for in low-tax Luxembourg.

Amazon's UK subsidiary reached sales of £4.3bn last year but it paid only £4.2m in tax.

Mr Ahlberg wrote: "Tax, fairly applied to us all, is a good thing. It pays for schools, hospitals - libraries!

"When companies like Amazon cheat - paying 0.1% on billions, pretending it is earning money not in the UK, but in Luxembourg - that's a bad thing.

"We should surely, at the very least, say that it is bad and on no account give it any support or, by association, respectability."

:: Sky News has tried to reach Amazon for comment on both the in-app charges and Mr Ahlberg's action, but no spokesperson was available.

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MPs: Taxpayer Short-Changed On Royal Mail Sale

By Mark Kleinman, City Editor

The controversy over the £3.3bn privatisation of Royal Mail has erupted again as an influential group of MPs has criticised Vince Cable over his handling of the sale.

In a coruscating report, the Business, Innovation and Skills (BIS) Select Committee endorsed the view of the National Audit Office (NAO) that taxpayers had been left short-changed by Royal Mail's flotation.

MPs said the taxpayer may have lost out by up to £1bn.

Cable was criticised for referring to the share price increase as 'froth'

The MPs said that Mr Cable and his officials had been gripped by "a fear of failure", placing undue emphasis on the risks of a strike by Royal Mail workers when pricing shares in the company at 330p last autumn - well below the projections of some investment banks.

Confirming Sky News' exclusive report earlier this week the committee said Mr Cable had been wrong to label the instant post-privatisation surge in Royal Mail's share price as "froth".

"The Secretary of State's initial use of the term referred to the 'immediate aftermath' of the flotation. This was subsequently extended to months and then possibly years," the report said.

"As a result we do not find the argument of 'froth' as a credible response to the significant increase in the share price."

The MPs added that the Government had been served poorly by its City advisers, who they argued had made insufficient effort to maximise Royal Mail's value during the privatisation process.

And they said that taxpayers would miss out on future increases in the value of potentially lucrative property assets.

Friday's report comes nine months after Royal Mail was sold in the biggest state sell-off for a generation.

It threatens to prolong the debate over the sale even as ministers contemplate the future of taxpayers' remaining 30% shareholding in the company.

The Government sold 60% of Royal Mail to outside investors last October, including a significant chunk to more than a dozen so-called priority investors who were earmarked as long-term shareholders.

Shares in Royal Mail surged more than 35% on the first day of trading

These institutions, some of which sold their stakes within days of the flotation after the shares surged, included the Kuwait and Singapore sovereign wealth funds as well as the asset management arm of Lazard - ministers' independent adviser on the sale.

The BIS Committee's recommendations include a ban on independent advisers to the Government being allowed to buy shares during future asset sales.

People close to Lazard pointed out that its fund management arm is segregated from the advisory business which worked on the sale.

The post-flotation hike in Royal Mail's share price, which included a rise of more than 35% on the first day of trading, sparked criticism that the stock had been undervalued.

Although the shares have retreated from their post-privatisation peak, they were trading on Wednesday at around 474p, roughly 45% higher than the price at which they were sold by the Government.

Mr Cable embarked on an attempt to head off criticism over the sale earlier this week when he announced that Lord Myners, the former City minister, would undertake a review of the structure of Government privatisations.

Shadow business secretary Chuka Umunna said Mr Cable had presided over a "first-class short-changing of the taxpayer".

"Taxpayers have been short-changed to the tune of hundreds of millions of pounds while large City investors, who were placed at the front of the queue by ministers, have been laughing all the way to the bank at the public's expense," he said.

"There are a huge number of questions which ministers need to answer on the mistakes which have been made."

A further report on Royal Mail's sale is expected to be published by the Commons Public Accounts Committee within weeks.

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PM Plots Anti-Strike Law Amid National Walkout

Unions: Workers Can't Feed Their Families

Updated: 8:59am UK, Thursday 10 July 2014

Unions say they are angry at 'abysmal pay', working conditions and pensions. Here is a snapshot of each union's main complaints.

:: Unite

Members: 1.4 million from various sectors, ranging from industry and manufacturing to education and agriculture - 70,000 of them are in local government and are directly affected by Thursday's strike.

Unite national officer for local government Fiona Farmer said: "Our members have endured four years of pay cuts in real terms and they voted overwhelmingly to strike on July 10 to drive home the message to ministers that poverty pay in local government must end.

"The depth of feeling on the pay issue is reinforced by the fact that local government unions, GMB and Unison, and members of the National Union of Teachers are all taking action on tomorrow.

"Poverty pay is widespread across local councils. Household bills continue to soar, but our members' buying power is constantly being eroded. The national minimum wage will soon overtake local government pay scales; members are choosing between heating and eating."

:: NUT

Members: 300,000 qualified teachers

Christine Blower, General Secretary National Union of Teachers, said: "Despite months in talks with Government officials, the real issues of our dispute have not been addressed. Teacher morale is at a low ebb.

"Changes to pay, pensions and a workload of 60 hours are unacceptable and unsustainable. Thousands of good, experienced teachers are leaving or considering leaving their job and a teacher shortage crisis is looming.

"The fact that teachers are prepared to take strike action is an indication of the strength of feeling and anger about the Government's imposed changes. Strike action is a last resort but, due to the intransigence of the coalition Government, it is one which we cannot avoid."

:: Unison

Members: 1.3 million workers from a range of roles within all public service areas, including people employed by public service authorities, private companies and community organisations.

Dave Prentis, Unison General Secretary, said: "Unison's local government and school members in England, Wales and Northern Ireland hold their first one day strike over an abysmal 1% pay offer. Faced with soaring food, fuel and housing costs, they have had to put up with three years of frozen pay, and now yet another below inflation offer.

"They have seen the value of their pay fall by nearly 20% since the coalition came to power and many struggle to make ends meet, to feed their families and pay their bills. Our charity is seeing more and more people asking for help and we know that many have had to resort to food banks to put food on the table.

"This is a national disgrace that these workers, who keep vital services running for their communities should be paid so badly, that they can't pay all their bills. And the lowest paid are still waiting for £250 promised by the Chancellor for two years' running. They have now voted to take strike action; that is not something they do lightly. But they are saying enough is enough. Work should pay enough for people to be able to live on."

:: GMB

Members: 617,000 workers, including school meal servers, street cleaners, binmen and carers.

GMB National Secretary, Brian Strutton, said: "We have tried sensible discussions, we've sought to negotiate reasonably, we've said we are willing to accept ACAS arbitration rather than go on strike - but to everything we've tried the employers have said 'no'. So we have no choice.

"GMB members serving school meals, cleaning streets, emptying bins, looking after the elderly, helping children in classrooms and in all the other vital roles serving our communities are fed up with being ignored and undervalued.

"Their pay has gone up only 1% since 2010 and in October even the national minimum wage will overtake local authority pay scales. Their case is reasonable, the employers won't listen and don't care, no wonder they have turned to strike action as the only way of making their voices heard."

:: PCS

Members: 270,000 civil servants.

A PCS spokesman said: "We're striking because, as well as tens of thousands of job being cut from the civil service since 2010 and the ongoing threat of more of the civil service being privatised, wages have been frozen and capped to such an extent that by next year incomes for many civil servants will be 20% lower than they would have been if they'd kept pace with increases in the cost of living. That is a huge hit in salary to take.

"There are other endemic issues, such as unequal pay. For example, staff in the Passport Office - in the eye of the storm at the moment - can be paid £3,000 less than their colleagues doing similar work elsewhere in the Home Office.

"Across the civil service, women are paid 10% less than men, 14% less for part-time workers. We've tried to negotiate but the Government refuses. Faced with this, it's inevitable that people will want to take industrial action."

:: RMT

Members: 80,000, of whom 361 TfL (Transport for London) backroom staff will be on strike.

RMT's Acting general secretary Mick Cash said: "While the political class, the bankers and the idle rich have all got their snouts in the trough, of course we are right to stand up and fight for the millions of workers told to take a hit despite the fact that they had no part in creating the financial crisis.

"We would be foolish not to maximise the unity of the trade union movement in the face of an aggressive, anti-union government that is mired in its own cesspit of scandal. We will take no lectures in morality from them.

"The front line of defence against cuts and austerity is the organised working class and that is why the Tories and big business want to tighten the legal noose around our necks. They will have a fight on their hands."

:: FBU

Members: 44,000 firefighters

Matt Wrack, FBU general secretary, said: "The government must realise that firefighters cannot accept proposals that would have such devastating consequences for their futures, their families' futures  - and the future of the fire and rescue service itself.

"We have tried every route available to us to make the government see sense over their attacks.

"Three years of negotiations have come to nothing because the government is simply unwilling to compromise or even listen to reason despite a huge amount of evidence showing their planned scheme is unworkable."

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Cable Orders Mail Sale Review After 'Blunder'

The Business Secretary has ordered a review of how Governments handle privatisations ahead of a stinging review which is set to criticise his handling of the Royal Mail sale.

Sky News revealed on Wednesday how the the Business, Innovation and Skills (BIS) Select Committee had agreed a hard-hitting report, to be released on Friday, which endorsed the view that taxpayers were left short-changed by Royal Mail's £3.3bn flotation.

Its recommendations will include a ban on independent City advisers to the Government being allowed to buy shares during future asset sales, as well as the way future flotations are marketed to investors.

But it emerged hours later that Vince Cable had called in the former Labour City minister Lord Myners to head an inquiry that would help establish new rules for future sales, in a move seen as an attempt to head off criticism in the MPs' report.

Following the Royal Mail privatisation last year, an earlier study by the National Audit Office accused the Government of losing £750m of taxpayers' money by under-valuing the sale.

Sources told Sky's City Editor Mark Kleinman that the MPs' report would be critical of Mr Cable's remarks in the wake of the flotation that the 35% increase in its share price on day one was "froth" which would subside within six months.

He appeared before MPs on several occasions during the course of their inquiry, defending the Government against their assertion that the privatisation was botched.

A source familiar with the report said that it would also be critical of the Shareholder Executive, the body responsible for managing state-owned businesses, accusing it of not providing clearer guidance about its expectations of the value of Royal Mail ahead of the sale.

Announcing the inquiry, Mr Cable said: "I have asked Lord Myners to conduct this review, following the recommendations of the National Audit Office, to help me assess whether changes are needed to the current system Government operates for the sale of its assets.

"Lord Myners is uniquely qualified to carry out this work – with a background in Government and the City.

"I look forward to reviewing his findings and recommendations in due course".

BIS added that it was in the process of appointing a panel to support Lord Myners over the summer.

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Thousands Walk Out As Strike Gets Under Way

Unions: Workers Can't Feed Their Families

Updated: 8:59am UK, Thursday 10 July 2014

Unions say they are angry at 'abysmal pay', working conditions and pensions. Here is a snapshot of each union's main complaints.

:: Unite

Members: 1.4 million from various sectors, ranging from industry and manufacturing to education and agriculture - 70,000 of them are in local government and are directly affected by Thursday's strike.

Unite national officer for local government Fiona Farmer said: "Our members have endured four years of pay cuts in real terms and they voted overwhelmingly to strike on July 10 to drive home the message to ministers that poverty pay in local government must end.

"The depth of feeling on the pay issue is reinforced by the fact that local government unions, GMB and Unison, and members of the National Union of Teachers are all taking action on tomorrow.

"Poverty pay is widespread across local councils. Household bills continue to soar, but our members' buying power is constantly being eroded. The national minimum wage will soon overtake local government pay scales; members are choosing between heating and eating."

:: NUT

Members: 300,000 qualified teachers

Christine Blower, General Secretary National Union of Teachers, said: "Despite months in talks with Government officials, the real issues of our dispute have not been addressed. Teacher morale is at a low ebb.

"Changes to pay, pensions and a workload of 60 hours are unacceptable and unsustainable. Thousands of good, experienced teachers are leaving or considering leaving their job and a teacher shortage crisis is looming.

"The fact that teachers are prepared to take strike action is an indication of the strength of feeling and anger about the Government's imposed changes. Strike action is a last resort but, due to the intransigence of the coalition Government, it is one which we cannot avoid."

:: Unison

Members: 1.3 million workers from a range of roles within all public service areas, including people employed by public service authorities, private companies and community organisations.

Dave Prentis, Unison General Secretary, said: "Unison's local government and school members in England, Wales and Northern Ireland hold their first one day strike over an abysmal 1% pay offer. Faced with soaring food, fuel and housing costs, they have had to put up with three years of frozen pay, and now yet another below inflation offer.

"They have seen the value of their pay fall by nearly 20% since the coalition came to power and many struggle to make ends meet, to feed their families and pay their bills. Our charity is seeing more and more people asking for help and we know that many have had to resort to food banks to put food on the table.

"This is a national disgrace that these workers, who keep vital services running for their communities should be paid so badly, that they can't pay all their bills. And the lowest paid are still waiting for £250 promised by the Chancellor for two years' running. They have now voted to take strike action; that is not something they do lightly. But they are saying enough is enough. Work should pay enough for people to be able to live on."

:: GMB

Members: 617,000 workers, including school meal servers, street cleaners, binmen and carers.

GMB National Secretary, Brian Strutton, said: "We have tried sensible discussions, we've sought to negotiate reasonably, we've said we are willing to accept ACAS arbitration rather than go on strike - but to everything we've tried the employers have said 'no'. So we have no choice.

"GMB members serving school meals, cleaning streets, emptying bins, looking after the elderly, helping children in classrooms and in all the other vital roles serving our communities are fed up with being ignored and undervalued.

"Their pay has gone up only 1% since 2010 and in October even the national minimum wage will overtake local authority pay scales. Their case is reasonable, the employers won't listen and don't care, no wonder they have turned to strike action as the only way of making their voices heard."

:: PCS

Members: 270,000 civil servants.

A PCS spokesman said: "We're striking because, as well as tens of thousands of job being cut from the civil service since 2010 and the ongoing threat of more of the civil service being privatised, wages have been frozen and capped to such an extent that by next year incomes for many civil servants will be 20% lower than they would have been if they'd kept pace with increases in the cost of living. That is a huge hit in salary to take.

"There are other endemic issues, such as unequal pay. For example, staff in the Passport Office - in the eye of the storm at the moment - can be paid £3,000 less than their colleagues doing similar work elsewhere in the Home Office.

"Across the civil service, women are paid 10% less than men, 14% less for part-time workers. We've tried to negotiate but the Government refuses. Faced with this, it's inevitable that people will want to take industrial action."

:: RMT

Members: 80,000, of whom 361 TfL (Transport for London) backroom staff will be on strike.

RMT's Acting general secretary Mick Cash said: "While the political class, the bankers and the idle rich have all got their snouts in the trough, of course we are right to stand up and fight for the millions of workers told to take a hit despite the fact that they had no part in creating the financial crisis.

"We would be foolish not to maximise the unity of the trade union movement in the face of an aggressive, anti-union government that is mired in its own cesspit of scandal. We will take no lectures in morality from them.

"The front line of defence against cuts and austerity is the organised working class and that is why the Tories and big business want to tighten the legal noose around our necks. They will have a fight on their hands."

:: FBU

Members: 44,000 firefighters

Matt Wrack, FBU general secretary, said: "The government must realise that firefighters cannot accept proposals that would have such devastating consequences for their futures, their families' futures  - and the future of the fire and rescue service itself.

"We have tried every route available to us to make the government see sense over their attacks.

"Three years of negotiations have come to nothing because the government is simply unwilling to compromise or even listen to reason despite a huge amount of evidence showing their planned scheme is unworkable."

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Nike Ends Manchester United Sponsorship Deal

Sportswear giant Nike has decided not to renew the kit deal for Manchester United after next season.

The American company has supplied the Old Trafford club since 2002 when it replaced Umbro in a lucrative deal which has cost Nike around £24m a season.

Although some reports at the weekend suggested a new record-breaking deal was set to be concluded, Nike revealed on Tuesday that it had opted to walk away from negotiations, claiming United were demanding too much money.

A Nike statement read: "Manchester United is a great club with passionate fans. We are proud to have partnered with them for the last 12 years and will continue to sponsor the club until the end of the 2014/15 season.

"Any partnership with a club or federation has to be mutually beneficial, and the terms that were on offer for a renewed contract did not represent good value for Nike's shareholders.

"We look forward to a successful final season with the club."

Some reports have suggested Adidas is now in pole position to step in and clinch a deal which could see the club earn £60m a year from 2015.

Nike's original deal was worth £303m, with extra income from a profit share agreement from merchandise sold worldwide.

On Monday, United unveiled their new home kit for the 2014-15 season - which will be the last designed by Nike and the first to bear the logo of new sponsor Chevrolet.

United announced they would be entering a seven-year agreement - worth a reported £53m per season - with the US car giant from this summer back in 2012.

Incoming manager Louis van Gaal will head to the United States after the World Cup to pick up the reins for the first time as United begin their overseas tour on July 18.

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Celebrities Among Hundreds Who 'Avoided Tax'

Several names from the world of showbiz have been accused of hiding their money in an aggressive tax avoidance scheme.

George Michael, Sir Michael Caine and Katie Melua all invested in the Liberty tax strategy, according to a report in The Times newspaper.

Some 1,600 people - including QCs, doctors, top businessmen, celebrities, criminals and a judge - are said to have invested in the scheme and tried to shelter a total of £1.2bn in Liberty which ran between 2005 and 2009.

Sir Michael Caine has made 'no comment'

The scheme worked by making huge artificial "losses" offshore, which members could then use to avoid paying tax on other income.

It meant that for every £1 earned, investors could reduce the amount they paid to 7p in tax instead of 40p - and higher rate taxpayers could earn £1m each year tax free.

To do the latter, they had to pay £70,000 in fees to Mercury Tax Group, the company which ran the scheme.

According to a document leaked to The Times, Michael is said to have paid £443,000 seeking to shelter £6.2m he earned from record and tour sales.

Katie Melua says she has paid the tax to HMRC she would have owed

The newspaper said the singer told the Big Issue in 1996 he would be happy paying 50% to 60% tax under a Labour government.

The singer's spokesman told the paper his "busy schedule" meant he could not answer questions at present.

Singer Melua tried to shelter £850,000. Her lawyers said it was her accountants that did so, and when she found out she paid the money back.

Sir Michael, who is accused of sheltering £600,000, made "no comment", while four members of the Arctic Monkeys, who are each said to have sheltered between £557,000 and £1.1m, also declined to speak.

All four members of the Arctic Monkeys declined to comment

Sky's political correspondent Anushka Asthana said: "All of these celebrities are going to be targeted by a change of rule.

"HMRC is going to take this tax scheme to court next March, but in the meantime, the new rules mean they have to pay the money back.

"If they don't, the Government can go directly into their bank accounts and take it."

A number of other celebrities have been identified as having used tax avoidance schemes in the past including Take That star Gary Barlow, who used another scheme set up by Icebreaker Management, and Jimmy Carr, who was said to have channelled cash through Jersey-based K2.

David Cameron has called tax avoidance schemes "morally wrong"

Tax avoidance is legal. However, David Cameron has described it as "morally wrong".

Asthana added: "The Prime Minister stuck the boot in when the newspaper first outed comedian Jimmy Carr as a tax avoider.

"He was a little less willing to do so when it was Conservative-supporting Gary Barlow, who had also invested in this scheme we are talking about today."

A HMRC spokesman said it did not comment on individual cases, "but we are always happy to help the increasing numbers who want to disentangle themselves from the increasingly fruitless practice of tax avoidance".

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Shop Prices Fall At Steepest Rate Since 2006

The prices of goods in UK stores fell for a 14th consecutive month in June and at their steepest level since December 2006.

The calculation - in the latest British Retail Consortium/Nielsen shop price index - showed deflation hit 1.8% in the month from a year ago, accelerating from a figure of 1.4% in May.

The report stated that the tumbling cost of clothing and electrical goods - attributed mainly to discounting - led the charge and while food prices rose, the pace of price growth was also at an eight-year low at 0.6%.

Clothing deflation soared to 13.7% from 11.4% while electrical goods fell 4% in June compared to 3.1% in May.

The report said a price war among supermarkets - as major chains battle the challenge from hard discounters - was a major factor in keeping food cost increases in check.

But it also highlighted the effect of a strong pound on import costs and cheaper commodity costs.

British Retail Consortium director general Helen Dickinson said: "This is the deepest level of deflation in non-food and the lowest rate of inflation for food since 2006 when our records began.

"The backdrop was equally promising with stable commodity markets and the continued strength of sterling suggesting inflation is set to remain low in the medium term."

Nielsen's head of retail and business insight Mike Watkins said: "Food inflation is still low, many supermarkets are price cutting and non-food prices remain deflationary, so the high street continues to generate little inflationary pressure."

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Digital Banking Growth Poses Risk To Branches

A report for the banking industry has boosted its case for reductions in high street branches in favour of digital banking.

The study by the British Bankers' Association (BBA) and Ernst & Young, known as EY, found that mobile phone and internet banking transactions had reached nearly £1bn a day in the UK.

It meant, the report said, that the technology was used for transactions worth £6.4bn a week, up from £5.8bn in the previous year while banking apps for mobile phones and tablets were being downloaded at a rate of around 15,000 a day in 2014.

The study, titled The Way We Bank Now, said contactless cards were also increasingly popular and were expected to see spending rise to £6.1 million a week this year,  up from #3.2 million in 2013.

BBA chief executive Anthony Browne said: "This report shows just how enthusiastically the British public is embracing mobile banking, contactless cards and a range of other consumer-friendly banking technologies.

"The way we bank now has made it a lot easier for us to keep track of our finances, with far more options about how we spend our money and talk to our bank."

Tariq Khatri, EY partner for digital financial services, said: "Digital banking is really shaking up the market, driving competition and innovation.

This is great news for consumers and also potentially for the UK economy.

"The British public's adoption of digital banking has reached critical mass this year and we believe the UK has a unique opportunity to achieve a leading position in digital banking."

The report was released as a growing number of banks announce plans to shut branches, as part of moves to save costs and shift investment towards digital banking.

Back in April, RBS cited a 30% fall in branch transactions since 2010 for its decision to shut 44 branches, including 12 classed as "last banks in town."

More recently it confirmed that as part of efforts to boost digital customer growth it would be placing iPads in branches to help customers get to grips with mobile banking technology.

Barclays, which like Lloyds has been considering branch closures, is looking at a possible move to opening services in supermarkets as banks face pressure to ensure all customers have reasonable access to their money.

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Channel Tunnel Passengers Face More Disruption

Eurotunnel passengers are facing continued delays and cancellations after a broken-down train forced an evacuation.

Four Eurostar services - carrying passengers between St Pancras and Paris - were cancelled on Tuesday morning as engineers worked to repair "unresolved and ongoing" damage to the power supply inside the tunnel.

An update from Eurotunnel - which takes passengers and their vehicles from Folkestone to Calais - said one-third of the tunnel remained closed at 7am, it was expected to be fully open by mid-morning.

Stranded motorists faced long delays on Monday

Car traffic was experiencing a one hour delay, while commercial vehicles were having to wait slightly longer.

Almost 400 passengers from a Eurotunnel train were evacuated from a train about 7.5 miles into the 30-mile long tunnel on Monday morning when the France-bound shuttle came to a halt amid an overhead power line problem.

Eurostar said its services were also experiencing delays of around 60 minutes.

Services from London's St Pancras Station were disrupted

"These technical issues, which are beyond Eurostar's control, have, regrettably, led to significant disruption to Eurotunnel shuttle and Eurostar services, a spokeswoman said.

"As a consequence of the ongoing loss of power, Eurotunnel has informed Eurostar that some further disruption should be expected to services on Tuesday morning."

The cancelled services are:

:: London to Paris, 7.31am departure, service 9006

:: Paris to London, 11.43am departure, service 9025

:: London to Brussels, 8.58am departure, service 9116

:: Brussels to London, 8:52am departure, service 9117

One delayed passenger had a costume on hand

Passengers who were due to travel on the cancelled services will be offered full refunds or given the chance to exchange tickets, free of charge, for travel at a future date.

Passengers on all other services should check-in as usual, the company added.

Eurostar said it was contacting affected passengers to alert them to the disruption to services.

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M&S Clothing Sales: 12 Quarters Of Decline

Marks & Spencer (M&S) has reported some improvements in trading, but has seen a 12th consecutive quarter of declining clothing sales.

The company blamed the roll-out of its new website, which it had previously warned would take time to settle in, and said it had been less promotional in the period with an increased focus on margin.

Sales at M&S.com sank by a whopping 8.1% during the 13 weeks to 28 June on the same quarter last year.

Like-for-like clothing sales fell 0.6%, confirming 12 successive quarters of falling sales, but womenswear sales saw growth, as reported by Sky News on Monday night. 

Marks and Spencer's like-for-like food sales were up 1.7% for the same period.

The performance in clothing and the "settling in" of the new website are likely to feature heavily at the company's AGM in London today.

The firm has invested £150m in the improved online offering as it bids to become an international multi channel retailer.

The teething problems - reported to include issues with re-registration and navigation - also hit wider general merchandise sales which fell 1.5% on a like-for-like basis.

Chief executive Marc Bolland said ahead of the shareholder meeting: "We have seen a continued improvement in clothing, although as anticipated the settling in of the new M&S.com site has had an impact on sales.

"We are pleased that the womenswear business was in growth, driven by full price sales, in line with our increased focus on margin.

"Our food business had another great quarter, continuing to outperform the market, through our focus on differentiation through quality and innovation".

Mr Bolland said M&S was simplifying parts of the website, which currently has 3.2 million users, and expected the online business to be back in growth by the retailer's peak trading period which begins in November.

Shares in M&S rose 0.6% in early trading on the FTSE 100.

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Taylor Wimpey Ups Housebuilding By 11%

Housebuilder Taylor Wimpey has increased its construction rate by 11% in the first six months of the year.

The company said it completed 5,766 homes in the first half, with an average selling price of completed properties at £206,000.

The average price was up 10% on the same period last year.

In a trading statement, the company said it expected to see profit margin increase to around 16% in the period.

The company said: "Customer confidence remains good - with increased employment security and a more affordable and accessible mortgage market underpinning demand."

The boost to building comes amid concerted calls to reduce the imbalance between supply and demand in the sector.

The Bank of England (BoE) has warned that the biggest instability to the UK economy is surging house prices in some areas.

Recent home price data has indicated a growing regional divide between price growth.

While London has seen prices rise by around a fifth in a year, some regions have seen prices remain flat.

In April, new home loan rules were brought in to ensure mortgagees would be able to afford increased repayment if the BoE base rate increases.

The Mortgage Market Review stress testing has cooled loan approvals in the latter part of the first half, and forced lenders to closely scrutinise applicants.

A new cap has also been placed on the number of approvals given to those seeking high loan-to-income ratios.

The BoE has kept the base rate at an historic low of 0.5% since 2009, but there has been an increasing concern that it will increase, either later this year or early in 2015.

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Travellers To US Face Losing Uncharged Devices

Uncharged mobile phones, tablets and laptops will not be allowed on US-bound flights after a warning al Qaeda could be planning to blow up an airliner.

The US Transportation Security Administration (TSA) said passengers at certain international airports may be asked during security screening to turn on their electronic devices.

If they do not have power the devices will not be allowed on planes, said the agency.

The TSA would not specify which airports would be subject to the extra screening.

US officials fear new 'phone bombs' could evade detection. Pic: File

However, Britain's Department for Transport warned UK passengers: "If your device doesn't switch on, you won't be allowed to bring it onto the aircraft."

US security officials said last week they fear bombmakers from the Yemen-based al Qaeda in the Arabian Peninsula (AQAP) have worked out how to turn phones into explosive devices which can avoid detection.

American authorities had already singled out Apple iPhones and Samsung Galaxy handsets for extra security checks.

In a statement on Sunday, the TSA said: "As the travelling public knows, all electronic devices are screened by security officers. 

"During the security examination, officers may also ask that owners power up some devices, including cell phones.

The latest measures may spell more queuing for passengers

"Powerless devices will not be permitted onboard the aircraft. The traveller may also undergo additional screening."

Homeland Security Secretary Jeh Johnson recently ordered the TSA to implement extra security measures at some international airports with direct flights to the US.

"We know that there remains a terrorist threat to the United States. And aviation security is a large part of that," he told NBC.

The restrictions would apply to US-bound direct flights from Europe, the Middle East and Africa, the officials said.

US authorities are also concerned that hard-to-detect bombs could be built into shoes or other items of clothing.

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Network Rail '£53m Fine' For Low Punctuality

Network Rail (NR) has "failed to deliver" on punctuality for major routes over the past year, according to the industry regulator.

The Office of Rail Regulation (ORR) said that during 2013/14 Network Rail saw long-distance and major commuter line punctuality was 86.9%.

The ORR said the figure "fell significantly short" of the average punctuality target of 92%.

The watchdog said that as a result, NR has been ordered to return £53.1m to the Treasury.

The ORR said NR "did not deliver all of its plans to improve performance" for long-distance punctuality, in the five years to the end of March.

It added: "And, particularly in the early years of the (five-year) funding period, had insufficient knowledge of the condition of its key assets, such as earthworks, electrical equipment and drainage".

Routes around the capital were slightly better than across the country but still fell short of expectations.

London and South East England (LSE) passenger services in 2013/14 saw punctuality levels of 89.6% against a target figure of 93%.

The ORR added: "As a result of missing its funded obligations, and to address issues which have disrupted services for passengers, the company has committed extra funds to improve the resilience of the rail network in LSE.

"Plans expected to include projects costing at least £25m must be in place by December 2014."

Between 2009 and 2014, the ORR said around 73,100 additional late trains over and above funded obligations, while for the LSE area there were some 265,500 additional late trains.

However, the ORR said NR did achieve infrastructure targets, bringing in rail enhancement plans on time and within budget.

NR chief executive Mark Carne, who joined in February, said: "We accept that we have fallen short of the regulatory targets for train punctuality and that this is, in part, down to our failure to reduce infrastructure faults quickly enough.

"At the same time, the sharp increase in passenger demand has led us to run more trains at peak times, even when we know this will lead to a more congested railway and punctuality targets may suffer."

Meanwhile, there has been a pledge to spend up to £90m to improve free railway internet wifi access across England and Wales, in part funded by the fine imposed on NR over punctuality failures.

Passengers on busy routes will be able get wifi connections said to be at least 10 times faster than those currently available.

Commuters on routes into London from Bedford, Brighton, Kent and Portsmouth are expected to benefit, along with those using services into Leeds, Sheffield and Manchester.

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CBI's Rake Bows Out Of Race For Barclays Job

By Mark Kleinman, City Editor

The CBI president Sir Mike Rake has bowed out of the race to become the next chairman of Barclays, even as the bank attempts to contain the fall-out from a string of new regulatory probes.

Sky News has learnt that Sir Mike told Sir John Sunderland, the non-executive director leading the search, in the last couple of weeks that he no longer wished to be considered as a potential successor to Sir David Walker.

Headhunting sources said that Sir Mike, who also chairs BT Group, had concluded that he would be unable to commit to other roles if he became chairman of Barclays.

His decision makes it likely that Barclays will opt for an external appointment to replace Sir David at a critical point of the turnaround strategy being implemented by Antony Jenkins, the bank's chief executive.

In May, Mr Jenkins outlined plans to cut around 20,000 jobs by the end of 2016 in an attempt to improve the performance of its investment bank and deploy capital where it can generate more productive returns.

Since then, however, his efforts have continued to be hampered by new regulatory investigations.

Last month, the New York attorney-general Eric Schneiderman accused Barclays of misleading investors in its 'dark pool' - a private stock-trading platform - and issued a civil lawsuit against the bank.

Just weeks earlier, Barclays was fined £26m by the City watchdog after one of its traders was found to have sought to manipulate the daily gold price-fix.

The bank also faces months of uncertainty about the outcome of a Serious Fraud Office inquiry into fees paid to Middle Eastern investors during the financial crisis.

The ongoing regulatory woes make the appointment of a credible figurehead as Barclays' chairman especially important.

Sir David joined just under two years ago and vowed to assist with an overhaul of culture and standards at the bank.

He insisted, however, that he would only be prepared to stay for three years, and in February Spencer Stuart, a search firm, was appointed to identify his successor.

One of Britain's most prominent businessmen, Sir Mike has been on the board of Barclays since January 2008, becoming senior independent director in 2011 and then deputy chairman in July 2012.

His decision to withdraw from the search for a new chairman has echoes of the summer of 2012, when Barclays was reeling from the Libor rate-rigging scandal that triggered a £290m fine and the departure of chairman Marcus Agius and chief executive Bob Diamond.

Sir Mike also pulled out of the race then, with Sir David Walker, another City grandee, eventually getting the nod.

The fact that Sir John had assumed oversight of the recruitment process for a new chairman had been interpreted in the City as a signal that Sir Mike was keen on the role; searches for public company chairs are typically overseen by the senior independent director.

Institutional shareholders in Barclays are understood to have expressed mixed views about Sir Mike's candidacy.

Some are understood to have been unhappy at the prospect of him replacing Sir David because of his vocal support in the past for Mr Diamond's leadership of the bank.

His six-and-a-half years on the Barclays board had also led a number of investors to demand a fresh pair of eyes to replace Sir David, particularly in the wake of a new row over pay at this year's annual meeting.

Just over one-third of shareholders decided not to support Barclays' remuneration report, reflecting anger at the payment of a £2.4bn bonus pool despite a slump in annual profits.

Sir Mike's withdrawal from the search for a new chairman leaves Tim Breedon, the former boss of Legal & General, as one of the few potential non-executives who could step up to replace Sir David.

It is unclear which external candidates are under consideration for the chairmanship.

Barclays declined to comment on Saturday, while Sir Mike could not be reached.

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Watchdogs Pursue 'Debt Letter' Tactics

The City watchdog has urged people to send it copies of letters from debt recovery companies purporting to be working on behalf of high street names.

The Financial Conduct Authority's request comes amid reports that some banks and utility companies have sent 'bullying letters' to those in arrears over payments.

The letters may appear to be written by outside debt agencies, with only a passing mention of an in-house connection between debt collector and creditor.

The City regulator told Sky News: "The FCA is unable to comment on the activities of individual firms, but we are aware of these reports.

"We would request that anybody who has further information about this type of practice passes it onto the FCA."

The Solicitors' Regulation Authority (SRA) said it was investigating a number of complaints that have given it "cause for concern".

SRA executive director Richard Collins said: "We will shortly be issuing guidance for in-house solicitors on our existing requirement that publicity must not be misleading.

"This will make it clear that they cannot use forms of words that give the impression that they are an independent law firm and not employed solicitors."

Lloyds Banking Group confirmed that it owned a Scottish-based subsidiary, Blair Oliver & Scott Ltd (BOS), which was used for sending out letters.

The bank insists BOS, which operated from 1991 to 2013, did not undertake legal recoveries - only debt collection.

It told Sky News: "Blair, Oliver & Scott Ltd ... functioned as a debt collection company collecting debts owed to companies within what is now Lloyds Banking Group (previously HBOS plc and Bank of Scotland groups) in relation to a range of accounts including Bank of Scotland and Halifax overdrafts, loans and credit cards.

"It also acted as a debt collection agent for companies outside the Group such as utilities companies."

RBS previously used independently regulated in-house law firm Green & Co, along with Triton Credit Services.

An RBS spokesperson said: "Our customers should never be in any doubt about who they are communicating with.

"We have reviewed our policies in this area and will stop the use of any solicitor or debt collection brand names in correspondence with our customers that could cause confusion."

A Barclays spokesperson said its in-house firm was being wound down and told Sky News: "All debt collections are now carried out under the Barclaycard name, following a decision we took in April this year to end the use of separate companies.

"Mercers Debt Collections Ltd previously managed some collections work on behalf of Barclaycard but it was made clear to customers that they were a company within the Barclays Group and collecting on our behalf."

The Student Loan Company (SLC) was recently revealed to have used a similar tactic, since 2005, over university tuition fee arrears beyond three months.

On July 1, SLC said: "We (have) developed new letters which removed reference to the Student Loans Company as a 'client' and increased the font size of the footer which said 'Smith Lawson & Company is a trading name of the Student Loans Company Limited.'"

The revelation of apparent widespread use of the third party letters comes after payday loan firm Wonga issued fake legal letters to 45,000 customers.

The FCA made Wonga pay more than £2m in compensation for the practice carried out over a number of years, including charging some borrowers administration fees.

The Law Society said Wonga's action may have amounted to blackmail. Shortly afterwards, City of London police said it would reopen its 2013 examination into Wonga's activities.

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Tory Donor Ross In Frame To Chair Ofsted

By Mark Kleinman, City Editor

David Ross, the co-founder of the Carphone Warehouse high street chain, is a leading candidate to become the next chair of Ofsted, the education watchdog.

Sky News can exclusively reveal that Mr Ross, who has donated hundreds of thousands of pounds to the Conservative Party, is among a number of names being considered for the role by Michael Gove, the Education Secretary.

If Mr Ross is offered the post, it could ignite a political row with Labour at a time when Ofsted's handling of the 'Trojan Horse' schools extremism row has sparked furious divisions within the Government.

It could also spark opposition from within the Coalition - David Laws, a Liberal Democrat, is Mr Gove's deputy at the Department for Education (DfE).

Mr Gove decided in February not to renew the term of Baroness Sally Morgan, the current Ofsted chair and a Labour Peer, triggering claims - denied by Mr Gove - that the leadership of one of Britain's most important quangos was being damaged by political interference.

More recently, the education watchdog has been ordered to step up school inspections in the wake of the Trojan horse affair in Birmingham.

An investigation into some schools in the city saw five of them downgraded to inadequate and placed in special measures amid claims of takeovers by hardline Muslims.

Mr Ross is principally known for his involvement in the creation of Carphone Warehouse, which he set up during the 1980s with Sir Charles Dunstone.

In recent years, he has also become a prominent figure in the education sector, sitting on the council of Nottingham University and founding a series of academy schools through the David Ross Education Trust.

Friends of Mr Ross describe him as being "incredibly passionate" about education.

Academic results at the schools in his network were improving significantly since he began working with them, according to a spokesman.

Havelock Academy in Grimsby was Mr Ross's first academy, opening in 2007. His network now stands at 25 academies, educating 8,500 children at primary and secondaries, with a special school and a grammar school also part of the group.

Mr Ross's status as a donor to the Conservatives is nonetheless likely to be contentious if he does land the Ofsted role.

The precise sums given by Mr Ross are unclear but they are understood to amount to several hundred thousand pounds over the last decade.

A source close to the businessman said he had not given a "substantial" sum for some years.

Asked in February about whether Theodore Agnew, a financier who has also given substantial sums to the Tories, was a contender for the role, Mr Gove said that no candidate "should be ruled out on the grounds of political allegiance".

It is unclear whether Mr Agnew is being considered for the Ofsted chairmanship alongside Mr Ross, or who the other remaining candidates are.

The Carphone Warehouse co-founder, whose fortune is estimated at £892m by The Sunday Times Rich List, also made headlines in 2009 when he was cleared by City regulators of any impropriety over the mortgaging of some of his shares in the retailer.

DfE officials are being assisted in the selection process by GatenbySanderson, a recruitment firm.

A spokesman for Mr Ross declined to comment. The DfE also refused to comment.

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