Scottish Independence: Defence Jobs Warning

By Alistair Bunkall, Defence Correspondent

Thousands of jobs could be lost in the defence industry if Scotland votes for independence, the Defence Secretary will warn.

Philip Hammond will set out the commercial benefit of the Union as he speaks at an Edinburgh defence technology firm. 

"The Scottish people deserve to know what the impact of independence would be on the jobs and livelihoods of the many thousands of people in Scotland that are employed in the UK armed forces or in the defence industry that equips and supports them," he will say.

"Less than a year before the Scottish people go to the ballot box to take one of the most important decisions in the history of Scotland, the SNP's plans remain insultingly vague - a two-page wish list that is neither costed nor credible."

Mr Hammond's speech coincides with the publication of an 86-page consultation paper.

Mr Hammond says thousands of defence industry jobs would be lost

It concludes that the UK investment and legal exemptions which protect jobs in the defence sector cannot and would not transfer to an independent Scotland.

Companies with a base in Scotland would be exempted from contracts deemed sensitive by the Westminster Government.

It is probable that BAE Systems would close its two Scottish shipyards in the event of independence.

The UK has not commissioned a naval ship to be made outside of UK sovereign territory since World War II for national security reasons, so BAE would likely seek to protect its primary source of work.

More than 12,600 people are employed by the defence industry in Scotland.

The SNP has made it clear that it would not allow the UK nuclear deterrent to remain in Scotland.

However, Nato has insisted that Scotland would have to earn its place in the alliance, and any Scottish attempts to remove Trident would be viewed in a dim light.

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Child Benefit Penalties Faced By Thousands

Tens of thousands of parents face being fined for failing to register the child benefit they received this year with the taxman.

An estimated 165,000 people missed Saturday's deadline, meaning they could face penalties as well as losing the handout.

HM Revenue and Customs has urged those who have not registered to do so now to avoid further costs.

A spokesman for HMRC said: "More than 29,000 people registered for self-assessment over the weekend, taking the total registrations to 160,000.

"This means that 165,000 people still need to take action and on past experience we expect more people to register in the coming days.

"Although we are past the deadline, people should still register for self-assessment to minimise any penalties they may face."

Fines for failing to register will be decided on a case-by-case basis, HMRC said.

Under Government reforms, households where one parent earns more than £60,000 a year have to return the entire amount through the self-assessment system unless they have opted out of receiving it in the first place.

It will be taken away on a sliding scale where mothers or fathers earn between £50,000 and £60,000.

The system for recovering the money has proved highly controversial as families where both parents earn just under £50,000 each will keep their payments.

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Help To Buy Scheme: First Rates Are Revealed

The first mortgage rates on offer under the latest phase of the Government's Help to Buy scheme have been described by the lender as "fair and competitive."

The latest phase of the controversial scheme will see 15% of a property's value guaranteed by taxpayers, in return for a fee from the lender, to help homebuyers obtain mortgages worth up to 95% of a property's value.

RBS and its Natwest subsidiary said they would be offering two and five-year fixed rate deals at 4.99% and 5.49% interest rates respectively with no fee. The brands expect a rush of interest - signing up 25,500 first and next time buyers over three years.

The banks confirmed 740 of their branches would extend opening hours for two weeks to cope with expected demand but Lloyd Cochrane - their head of mortgages - told Sky News there would be no reckless lending with potential customers facing tough affordability checks.

He said: "We ensure based on what they earn and what they spend that they can afford the mortgage now but really importantly we ensure they can afford the mortgage at a rate of 7% so that gives us and our customers the confidence that they can afford the mortgage into the long term."

Virgin Money is among the lenders taking part

Halifax - owned by Lloyds Banking Group - later confirmed its offering: A two-year fixed rate at 5.19% with a £995 product fee and said customers would be able to apply for the mortgages from Friday.

HSBC said it would be taking part later in the year, making it the first major player with no taxpayer support to sign up.

Virgin Money and the start-up Aldermore Bank will join from January.

The scheme had initially not been expected to start until the new year but was brought forward by three months.

It will offer £12bn in mortgage guarantees over three years and some estimates suggest 180,000 loans could be taken out under the initiative.

Lenders can start offering the mortgages from today, and they will be guaranteed by the Government from January 2014.

Prime Minister David Cameron said: "Help to Buy is going to make the dream of home ownership a reality for many who would otherwise have been shut out."

Chancellor George Osborne said: "Too many people are still being denied the dream of owning their own home, which is why we have brought forward the launch of this scheme, so as of today borrowers can start applying for a mortgage with a 5% deposit."

The new scheme means homebuyers will only have to find as little as 5% on homes worth up to £600,000. Depending on the size of the deposit, the Government will then guarantee up to 15% of the property value in return for a fee from the lender.

An earlier phase of the scheme, offering 20% loans on new-build properties, has already helped more than 15,000 people buy a new home since it was launched six months ago.

Help to Buy is controversial because critics fear it could fuel further rises in a housing market where prices are already going up.

But the Treasury said that while house price inflation stands at 3.3%, it is only 0.8% when the property hotspots of London and the South East are removed.

The latest report on the market from the Royal Institution of Chartered Surveyors (Rics) suggested prices were likely to surge further ahead in London and the South East because the supply of homes was lagging behind burgeoning demand.

It measured home sales at a four-year high last month but remaining historically low.

Commenting on the launch of phase two of Help to Buy, shadow chief secretary to the Treasury Chris Leslie said: "If ministers are serious about helping first-time buyers, they should bring forward investment to build more affordable homes.

"Rising demand for housing must be matched with rising supply, but under this Government house-building is at its lowest level since the 1920s."

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Help To Buy: Doubts Over Success Of Scheme

By Poppy Trowbridge, Business and Economics Correspondent

The second phase of the government mortgage guarantee scheme Help to Buy launches today, three months earlier than expected - but experts are sceptical the initiative will help buyers.

Lack of capacity in the housing market, and a statement from one bank saying it cannot confirm whether it will take part in the scheme, means some would-be buyers could be left empty-handed.

Exclusive research by Sky News shows interest from potential buyers has skyrocketed since the Government surprised the market.

Property website Rightmove says clicks on its Help to Buy pages numbered 14,807 on Saturday, the day before last Sunday's surprise announcement.

When David Cameron revealed, on the eve of the Conservative Party conference, that the launch date had been brought forward from January - clicks, measuring potential buyer interest, spiked to 59,571.

Now, almost a week later, they remain far above average at 23,660.

There is concern that pent-up demand cannot be met by existing market services, while Barclays has issued a statement saying it is not able to guarantee a launch date.

The policy offers homebuyers loans of up to 20% towards a property

"Whilst we cannot take a decision over participation in the new scheme before the terms are set, we are encouraged by the tone of the discussions so far," the bank said.

RBS and Natwest however, have said they are ready to take part in the scheme when it goes live and are planning to extend opening hours in many branches to deal with demand.

"From launch date customers will be able to visit any of our 2000 branches or call us to see how we can help them to get ahead on the property ladder through the scheme," said a statement.

Lloyds Banking Group will also be participating in the second stage of Help to Buy - but exact timings are currently unclear.

"We will be introducing a range of products shortly through our Halifax (and Bank of Scotland) brand, enabling customers to benefit from 95% borrowing this year," said a spokesperson.

However, some estate agents are still worried about a lack of capacity to deal with interest in the scheme.

Robert Ellice, of Clarke Hillyer, told Sky News: "At the moment we've got big delays in the whole process anyway, mortgages are still taking a long time to be offered and taking a long time to be verified on values."

Despite the concerns, the government insists that the scheme is still on track to be a success.

A Treasury statement said: "Two major lenders - Lloyds and RBS representing around 30% of total mortgage lending - have already announced that they will be launching new mortgage products because of Help to Buy.

"This is great news for those who can't get on - or move up the property ladder because of the huge cost of deposits."

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Royal Mail Sale: Fears For Small Investors

Fears have been raised over small-time investors buying shares in Royal Mail, as big City firms are set to buy the majority of those on offer.

Hedge funds and City banks are allowed 70% of the shares being offered in the majority sell-off of the postal delivery firm.

City investors have also been tipped to make up to 40% instant profit amid claims that the business has been undervalued by more than a third.

The Government has valued the Royal Mail at £3.3bn and is selling up to 62% of the business - including a 10% stake being handed for free to Royal Mail employees.

But analysts at Panmure Gordon told The Daily Telegraph the company could be worth as much as £4.5bn.

The shares have been priced at the high end of the £2.60p to £3.30p estimate, but are expected to rise in value when the company floats on the stock market next week.

The deadline for applications to buy stock closes at midnight on Tuesday, and veteran City expert David Buik said big investors had already applied for hundreds of millions of shares.

The minimum investment allowed is £750, which is forecast to return a profit of £300 if sold after flotation.

Former home secretary Alan Johnson, who worked as a postman as a teenager, told the newspaper: "There is a vast difference between pricing Royal Mail shares conservatively and undervaluing them by £1bn.

"This is ripping off the taxpayer on an epic scale."

On Sunday, Labour slammed the privatisation and said the process should be halted.

Shadow business secretary Chuka Umunna, speaking on Sky's Murnaghan programme, said scrapping the move would prevent a "massive bonanza" for City speculators.

He said to proceed with the sell-off would not only have "huge consequences for consumers and businesses" - but the taxpayer would also be left "short-changed".

The prospectus also highlights sites in London at Mount Pleasant and Nine Elms as being "surplus", with reports saying they are worth between £500m and £1bn each, according to Labour.

Meanwhile, Royal Mail chief executive Moya Greene has written to employees offering them £300 not to take part in impending industrial action.

Workers have been offered a pay increase of 8.6% over three years, including a £300 lump sum in year one if there is no strike.

The Communication Workers Union is asking members to vote on industrial action and the ballot closes later this month.

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JAL Picks Airbus A350 Over Boeing Dreamliner

Japan Airlines has signed its first-ever purchase from Airbus, in a blow to Boeing as the Dreamliner saga continues to affect the American firm.

JAL announced a decision to buy 31 A350 planes, with a catalogue value of £5.9bn.

The deal signed in Tokyo on Monday also includes an option for JAL to buy 25 more Airbus jets.

JAL's fleet has historically been dominated by Boeing, partly because of the defence and security ties between the two countries and reconstruction arrangements after the Second World War.

In July an Ethiopian Airlines plane suffered fire damage at Heathrow

The deal was announced after markets closed in Tokyo but investors cheered reports of the purchase earlier on Monday as JAL's shares closed up 3%.

The push by the European plane maker comes as JAL and domestic rival All Nippon Airways (ANA) - whose fleet is also dominated by Boeing - have been sideswiped by problems with the next generation Dreamliner.

The lightweight plane -- hailed for its fuel-efficiency but marred by years of production delays -- was grounded globally in January after lithium-ion batteries overheated on two different planes, with one of them catching fire while parked.

The Japanese carriers -- the single biggest operators of the Dreamliner -- have put their fleets back into service but they are seeking compensation from Boeing of more than $200m (£120m) amid a global grounding of the model.

Airbus says its A350 improves fuel efficiency by around 25%

"Considering the recent troubles with the Dreamliner, JAL may have reached the conclusion that it wants to avoid the risks," SMBC Friend Research Center senior analyst Mitsuru Miyazaki said.

"The aviation sector is a global industry so it's natural that Japanese airlines want to secure multiple sourcing options for their planes."

But JAL president Yoshiharu Ueki denied the decision to turn to the European manufacturer for replacements for Boeing jets was related to the problems that have plagued the rival 787 Dreamliner.

Months of problems with Dreamliner fleets have eased recently, however Poland's LOT grounded its fleet in September over missing fuel filters.

A battery fire in Boston prompted concerns about the 787 design, in January

The Scandinavian carrier Norwegian Long Haul also reportedly replaced one of its two 787s with a leased Airbus after the Boeing aircraft broke down six times last month.

Airbus said its next-generation A350 is 25% more fuel-efficient than its existing  wide-bodied aircraft and has an order book approaching 800 planes.

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Twitter IPO: Company Hopes To Raise $1bn

Twitter has unsealed the documents for its initial public offering of stock, saying it hopes to raise up to $1bn.

It generated $317m (£200m) in revenue in 2012, driven largely by advertising.

Twitter had more than 215 million active users as of the end of June, up 44% from the previous year - compared to Facebook's nearly 1.2 billion and LinkedIn's 240 million.

But the company revealed that it lost $69.3m in the first six months of 2013, compared with a loss of $49.1m for the same period last year.

The losses come as Twitter rolls out a massive infrastructure and staffing expansion programme.

The company's total income in 2012 more than doubled from 2011, with 87% of the revenue comes from ad sales.

The San Francisco-based social network unsealed the papers with the Securities and Exchange Commission (SEC) on Thursday.

Last month Twitter announced that it had filed confidential initial public offering (IPO) papers with the SEC to start the process of going public.

The newly released document showed that private investors have ploughed $759m (£470m) into the company and it still has $375m (£230m) cash reserves remaining.

Twitter did not say which stock exchange it plans to list its shares on, however the company said it intends to use the ticker symbol "TWTR".

Facebook is listed on the Nasdaq exchange in New York.

The underwriters of the offering are Goldman Sachs, Morgan Stanley, JP Morgan, BofA Merrill Lynch, Deutsche Bank Securities and CODE Advisors.

Twitter's expansion plans have seen huge growth in staff across Europe, with many based at the regional headquarters in Dublin.

Its UK subsidiary gains all of its revenue from services rendered to the Irish intermediary.

Last year Sky News revealed that its UK company was fined by the business regulator for failing to file accounts on time.

Companies House also dissolved its sister company, TweetDeck, earlier this year for repeated failures to file accounts.

Afterwards, an Irish chartered accountant was made director of Twitter UK and San Francisco-based CEO Dick Costolo resigned his role in the British arm.

:: Twitter recently advertised for a tax manager to "implement and monitor transfer pricing strategy" to minimise the amount of tax paid in its Europe, Middle East and African businesses.

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Help To Buy: Doubts Over Success Of Scheme

By Poppy Trowbridge, Business and Economics Correspondent

The second phase of the government mortgage guarantee scheme Help to Buy is due to launch next week, three months earlier than expected - but experts are sceptical the initiative will help buyers.

Lack of capacity in the housing market, and a statement from one bank saying it cannot confirm whether it will take part in the scheme, means some would-be buyers could be left empty-handed.

Exclusive research by Sky News shows interest from potential buyers has skyrocketed since the Government surprised the market.

Property website Rightmove says clicks on its Help to Buy pages numbered 14,807 on Saturday, the day before last Sunday's surprise announcement.

When David Cameron revealed, on the eve of the Conservative Party conference, that the launch date had been brought forward from January - clicks, measuring potential buyer interest, spiked to 59,571.

Now, almost a week later, they remain far above average at 23,660.

There is concern that pent-up demand cannot be met by existing market services, while Barclays has issued a statement saying it is not able to guarantee a launch date.

The policy offers homebuyers loans of up to 20% towards a property

"Whilst we cannot take a decision over participation in the new scheme before the terms are set, we are encouraged by the tone of the discussions so far," the bank said.

RBS and Natwest however, have said they are ready to take part in the scheme when it goes live and are planning to extend opening hours in many branches to deal with demand.

"From launch date customers will be able to visit any of our 2000 branches or call us to see how we can help them to get ahead on the property ladder through the scheme," said a statement.

Lloyds Banking Group will also be participating in the second stage of Help to Buy - but exact timings are currently unclear.

"We will be introducing a range of products shortly through our Halifax (and Bank of Scotland) brand, enabling customers to benefit from 95% borrowing this year," said a spokesperson.

However, some estate agents are still worried about a lack of capacity to deal with interest in the scheme.

Robert Ellice, of Clarke Hillyer, told Sky News: "At the moment we've got big delays in the whole process anyway, mortgages are still taking a long time to be offered and taking a long time to be verified on values."

Despite the concerns, the government insists that the scheme is still on track to be a success.

A Treasury statement said: "Two major lenders - Lloyds and RBS representing around 30% of total mortgage lending - have already announced that they will be launching new mortgage products because of Help to Buy.

"This is great news for those who can't get on - or move up the property ladder because of the huge cost of deposits."

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Goldman Fund Wins £720m Battle For Hastings

By Mark Kleinman, City Editor

A fund managed by the Wall Street banking giant Goldman Sachs will next week emerge as the biggest shareholder in Hastings, one of Britain's fastest-growing insurance companies.

Sky News understands that GS Capital Partners, Goldman's private equity arm, is to invest £150m in return for just under 50% of Sussex-based Hastings.

The insurer's founders and management will retain the rest of the shares, with Neil Utley, Hastings' chairman, crystallising a fortune worth tens of millions of pounds from the sale of part of his stake.

Hastings will announce the equity investment alongside the launch of a bond issue that will raise approximately £420m.

In total, the transactions will value the insurance company at £720m, making it a strong candidate to enter the FTSE-250 index if it lists on the stock market as expected in several years' time.

Sumit Rajpal, a New York-based managing director at Goldman, is expected to join Hastings' board as part of the deal.

Hastings is focused on an aggressive expansion strategy following an acceleration in earnings before interest, tax, depreciation and amortisation (EBITDA) to roughly £70m last year.

The company has around one million customers, and Gary Hoffman, who joined last year as its chief executive, has stated a target of trebling that number by 2020.

Mr Hoffman led the turnaround of Northern Rock during its period in Government ownership following the run on the mortgage lender in the autumn of 2007 which heralded the start of Britain's banking meltdown.

He then spent two years as chief executive of NBNK Investments, a vehicle set up to acquire retail banking assets, but which was rebuffed in favour of the Co-operative Group in the contest to buy 632 branches from Lloyds Banking Group.

That deal collapsed amid a financial crisis at the Co-Op earlier this year.

Based in Bexhill, East Sussex, Hastings employs more than 1400 people, over 80% of whom are understood to be shareholders in the company.

Hastings' valuation from a deal has been buoyed by its recent financial performance as well as the successful flotation on the London Stock Exchange of rivals such as Direct Line Group, although another competitor, Esure, has seen its shares slide since listing.

Mr Hoffman's arrival last year triggered suggestions that Hastings would also look to go public, but the company has no plans to do so.

Acquired by Insurance Australia Group in 2006, Hastings changed hands again in 2009 when it was subject to Mr Utley's management buyout.

Evercore and Peel Hunt, two City firms, have been advising the company on the talks about a stake sale, while Credit Suisse and JP Morgan have been overseeing the bond issue.

Neither Goldman nor Hastings could be reached for comment on Saturday.

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Twitter IPO: Company Hopes To Raise $1bn

Twitter has unsealed the documents for its initial public offering of stock, saying it hopes to raise up to $1bn.

It generated $317m (£200m) in revenue in 2012, driven largely by advertising.

Twitter had more than 215 million active users as of the end of June, up 44% from the previous year - compared to Facebook's nearly 1.2 billion and LinkedIn's 240 million.

But the company revealed that it lost $69.3m in the first six months of 2013, compared with a loss of $49.1m for the same period last year.

The losses come as Twitter rolls out a massive infrastructure and staffing expansion programme.

The company's total income in 2012 more than doubled from 2011, with 87% of the revenue comes from ad sales.

The San Francisco-based social network unsealed the papers with the Securities and Exchange Commission (SEC) on Thursday.

Last month Twitter announced that it had filed confidential initial public offering (IPO) papers with the SEC to start the process of going public.

The newly released document showed that private investors have ploughed $759m (£470m) into the company and it still has $375m (£230m) cash reserves remaining.

Twitter did not say which stock exchange it plans to list its shares on, however the company said it intends to use the ticker symbol "TWTR".

Facebook is listed on the Nasdaq exchange in New York.

The underwriters of the offering are Goldman Sachs, Morgan Stanley, JP Morgan, BofA Merrill Lynch, Deutsche Bank Securities and CODE Advisors.

Twitter's expansion plans have seen huge growth in staff across Europe, with many based at the regional headquarters in Dublin.

Its UK subsidiary gains all of its revenue from services rendered to the Irish intermediary.

Last year Sky News revealed that its UK company was fined by the business regulator for failing to file accounts on time.

Companies House also dissolved its sister company, TweetDeck, earlier this year for repeated failures to file accounts.

Afterwards, an Irish chartered accountant was made director of Twitter UK and San Francisco-based CEO Dick Costolo resigned his role in the British arm.

:: Twitter recently advertised for a tax manager to "implement and monitor transfer pricing strategy" to minimise the amount of tax paid in its Europe, Middle East and African businesses.

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