Energy Boss Attacks Price Comparison Websites

The boss of Co-operative Energy has accused price comparison websites of misleading customers and pushing up energy bills.

Group General Manager Ramsay Dunning has called on the likes of uSwitch, MoneySupermarket.com and Energy Helpline to disclose how much they charged in commission each time a business or household moves supplier.

Sky News Business Presenter Joel Hills said it was his understanding the rate of commission could be as much as £60 per account switched.

In a speech at a conference held by Cornwall Energy, Mr Dunning said that far from improving competition, price comparison websites were a negative influence.

He added: "It's time all the advertising costs and fat profits were returned to hard pressed households.

"There is a lot of money spent through the comparison websites - because they charge companies likes us and the Big Six and independents a rate of commission.

"If that rate was a lot lower, or non-existent, the bills to customers would be lower, because our costs would be lower."

Co-operative Energy uses price comparison websites and says it has gained 60,000 customers in the nine months through to the end of last year.

Mr Dunning refused to say how much his company paid the websites in commission, claiming the contracts were commercially confidential, but called for full disclosure.

According to the Department of Energy and Climate Change, almost five million gas and electricity accounts switched in the year through to the end of September 2013.

Ofgem, the regulator, said price comparison websites play an "important role" in the energy market, but admitted it does not know how much they charge in commission.

A spokesperson said: "Ofgem runs a code of practice for these sites and we are reviewing it to ensure that its objectives are in line with our reforms for a simpler, clearer, fairer energy market. We will be consulting on this in spring.

"The code of practice protects consumers in a number of ways. For example switching sites have to state which suppliers they earn commission from.

"They also have to make sure that they do not rank tariffs in accordance with which suppliers from which they are earning commission."

Adam Scorer, director of Consumer Futures, said price comparison websites are popular but there were issues of trust and transparency with their services.

He said: "Consumers should not automatically assume that a price comparison website will save them money on their purchase. In our research this was only true in 21% of cases.

"Without price comparison websites millions of people would be on higher tariffs than they are now."

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16.01 | 0 komentar | Read More

High Street Chain Bathstore Groomed For Sale

By Mark Kleinman, City Editor

Another prominent UK high street chain is poised to change hands with the sale of Bathstore, the specialist bathrooms retailer.

Sky News understands that Endless, the investment fund which acquired Bathstore in May 2012, has decided to explore a sale of the company, which operates more than 150 shops across the country.

Rothschild, the investment bank, has been appointed to sound out interest from potential buyers.

Plumbing firm Wolseley acquired Bathstore for £15m

Bathstore was acquired for just £15m from Wolseley, the FTSE-100 plumbing group, which had been struggling to satisfy the City with its financial performance and had decided that the retailer was a non-core asset.

Watford-based Bathstore made a profit of £6.5m on sales of £95m in 2011, a reasonable result at a time when the UK economy was relatively weak.

In a statement, a spokesman for Endless said: "We are pleased with the performance of Bathstore since we made our investment in May 2012.

"There has been encouraging inbound interest in the business and we continue to work with management to support its growth."

It is thought unlikely that Endless will pursue a stock market listing for Bathstore, and will instead opt for a private sale of the business.

However, that will make Bathstore a relative rarity as the owners of thousands of high street shops examine flotations in an effort to take advantage of strong equity markets and a rebounding economy.

Fat Face, House of Fraser, Pets At Home and Poundland are among the private equity-backed retailers looking to go public this year.

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Royal Mail Rides The Online Parcel Wave

The newly-privatised Royal Mail has revealed a rise in parcel delivery revenue of 8% in the nine months to December 29.

The spike in like-for-like earnings comes as the shift to online purchases continues.

The company said the figures were boosted by strong demand over Christmas.

Despite parcel volumes remaining flat, price delivery changes pushed revenue upwards.

Meanwhile, revenue for its letter delivery service was down 3% in the same period - blamed on the rise of email and social media.

Royal Mail said the trading performance was in line with expectations and it has confidence it will deliver results consistent with key value targets for the full year.

The postal firm's part-flotation last October by the Government was fiercely opposed by unions and Labour.

The Government still has a 30% stake but was widely criticised for potentially short-changing the taxpayer on the flotation price.

Shares in the firm closed at 588p on Thursday, up 78% from the 330p per share price.

In early Friday trading shares were flat. The company is valued at around £5.9bn.

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IMF Upgrades UK Growth Forecast Above Rivals

By Ed Conway, Economics Editor

The International Monetary Fund is on the brink of upgrading its growth forecast for the UK more than any other major economy, Sky News has learnt.

The Fund is poised to increase its projection for UK growth in 2014 from 1.9% to 2.4%. Although the Fund will also lift its forecasts for world economic growth, the UK upgrade is significantly stronger.

It is the latest boost to the fortunes of the Chancellor, coming barely 24 hours after the Ernst & Young ITEM Club also increased its projection for UK economic growth this year.

Although the Fund's forecast for growth this year will be shy of the 2.7% predicted by the ITEM Club, the scale of the upgrade underlines how quickly sentiment about Britain's economy has turned in recent months.

The updated forecasts may also be construed as a reputational blow for the Fund itself, whose chief economist warned less than a year ago that the economic policies being carried out by George Osborne amounted to "playing with fire".

Since then, the Fund has already increased its growth projections for Britain once, last October, before this week's anticipated upgrade.

The news comes amid growing optimism about the speed of the UK recovery. In spite of concerns about retailers' fortunes over Christmas, retail sales grew in December at the fastest annual rate in almost a decade.

The Office for National Statistics is expected to announce next week that growth in the final quarter of 2013 remained relatively strong at around 0.7%.

However, some have voiced concern that Britain has been reliant for much of the growth on household spending rather than the exports and manufacturing sector.

The IMF itself has voiced concern that, having failed to rebalance the economy, the government is now reliant, through policies such as Help to Buy, on boosting the housing market and encouraging consumers to take out more debt.

Nonetheless, the IMF upgrade represents the latest evidence that Britain's recovery is starting to take real hold, pushing the country towards robust growth this year.

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16.02 | 0 komentar | Read More

OneSavings Heeds Miliband Call In Float Push

By Mark Kleinman, City Editor

A lender backed by a prominent Wall Street financier is stepping up plans for a stock market flotation that it hopes will help it to become a serious challenger to the main high street banks.

Sky News has learnt that OneSavings Bank, whose Kent Reliance and other trading brands have hundreds of thousands of customers, has hired Barclays, Royal Bank of Canada and Canaccord Genuity to work on the listing.

The flotation is expected to take place this year, and would offer at least a partial exit route for Christopher Flowers, the American tycoon whose investment vehicle helped to devise a rescue plan for the struggling Kent Reliance Building Society in 2010.

The appointment of the investment banks follows calls by the Labour leader, Ed Miliband, for greater competition in Britain's banking sector.

In a speech last week, Mr Miliband said that a Labour government would create two new challenger banks to the 'big five' by forcing established players to shrink their market share.

JC Flowers injected £50m of new capital into KRBS four years ago in exchange for roughly 40% of OneSavings, which describes itself as part of a "unique mutual hybrid arrangement", under which the bank is a subsidiary of an industrial and provident society called the Kent Reliance Provident Society (KRPS).

The restructuring was designed to allay members' fears about the loss of its mutual ethos when it agreed the deal with JC Flowers, one of Wall Street's most prolific investors in financial institutions.

Insiders insisted that a flotation would not diminish that mutual ethos, echoing a vow made by the Co-operative Group as part of its ongoing £1.5bn restructuring.

In a statement issued to Sky News last month, a spokeswoman for OneSavings Bank said:

"I can confirm that OneSavings Bank is reviewing various options to continue to build the business for the long term benefit of all its stakeholders whilst maintaining the bank's mutual ethos - to make any further comment would be premature."

the bank declined to comment on the appointment of advisers.

If it does float, it would herald a return to the stock market in the banking sector for Sir Callum McCarthy, the former boss of the Financial Services Authority, who is among OneSavings' non-executive directors. Stephan Wilcke, the bank's chairman, was one of the architects of the improved deal won by the Co-op Bank's private investors last month.

Since injecting funds into Kent Reliance in 2010, JC Flowers has sought to acquire other lenders in order to create a much larger organisation. However, it has been thwarted in its efforts to buy the Principality Building Society and more than 300 branches being offloaded by Royal Bank of Scotland (RBS).

It did succeed earlier this year in snapping up a package of performing loans from Northern Rock Asset Management, the taxpayer-owned "bad bank", which added 70,000 customers to its ranks.

OneSavings discloses some information about its financial performance because it has subordinated debt instruments which trade on the London Stock Exchange.

In August, it announced that it made a post-tax profit of £12.4m during the first half of the year, against a post-tax loss of £1.8m during the same period a year earlier.

There is an unprecedented pipeline of British banks waiting to list their shares publicly, including branch networks being sold under European state aid rules by both RBS and Lloyds Banking Group.

Metro Bank, which is raising £385m to fund its expansion, plans to float in 2016. Aldermore, a specialist lender to small and medium-sized companies, and Santander UK are also likely to pursue listings in the next two years.

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Motorway Pub Opens Despite Opposition

A new £1m pub opens at a motorway service station today, in the face of fierce criticism from road safety and alcohol campaigners.

Pub chain JD Wetherspoon says The Hope & Champion will be open from 4am to 1am, seven days a week.

The venue is located in the Extra Motorway Service Area at junction 2 of the M40 in Beaconsfield, Buckinghamshire.

It is the first pub ever to be opened at a motorway service area, and will sell real ale from local and regional brewers.

But critics say the location of the pub is "at odds" with public opinion.

The RAC said a survey of 2,000 people showed only 12% of respondents supported putting pubs into motorway service stations.

Around two-thirds said they did not agree with the move, with older drivers more likely to oppose the sale of alcohol at motorway service areas.

Only 8% of over-55s were in favour, with 71% against, while almost one in five of those aged between 18 and 34 were in support.

The RAC's head of external affairs Pete Williams said: "The public appear to be very much against the introduction of motorway pubs.

"In our view this is a risky and frankly unnecessary move. The question we are struggling to answer is - of all the places to open a pub, why choose a motorway service station?

"The temptation to drink and drive can only be increased by easier access to alcohol."

But Steve Baldwin, manager of the new pub, said the venue would serve the local community.

"The Extra Motorway Service Area, now including The Hope & Champion, primarily serves the motorway users, but its facilities are also available to the surrounding community from the local road network," he said.

Sir Ian Gilmore, Royal College of Physicians special adviser on alcohol and chair of the Alcohol Health Alliance, said: "I am disappointed by the decision to open a JD Wetherspoon on the M40.

"We are trying to prevent harm from alcohol-related traffic accidents and this sends out completely the wrong message."

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16.02 | 0 komentar | Read More

Bingo Hall Burden: MPs Call For Tax Cuts

By Adele Robinson, Sky News Correspondent

The UK's bingo hall business will "stagnate" if the Government does not cut tax on it, campaigners say.

More than 50 MPs are backing calls to reduce duty and bring levies on the game in line with other forms of gambling.

Bingo hall profits are currently taxed at 20% compared with a 15% rate for most other gambling activities.

Campaigners estimate that reducing bingo duty is expected to raise around £40m for the Exchequer over four years.

Miles Baron, from the Bingo Association, says investment is vital for growth.

"By building new clubs and investing in new clubs, attendances would improve that would generate more income, that would generate new taxes, that would employ more people ... this is at the heart of the community, this is a vital and important part of some people's social repertoire."

Campaigners claim gambling taxes are forcing more and more clubs to close

The Government says it would have to carefully consider before reducing the rate because its priority is to cut the budget deficit.

Jim Cunningham, Labour MP for Coventry South, says if more support is not given then the "social service" side of bingo will be lost.

"The implications can be that some of these places may have to close because they're not profitable and if that happens then there is a problem for some of these elderly people, during the day in particular, to find somewhere else to go."

Nearly 400 bingo clubs across England, Scotland and Wales are hosting free bingo games this weekend to support the campaign to cut tax.

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16.01 | 0 komentar | Read More

Ex-Barclays Executive Plots New Business Bank

By Mark Kleinman, City Editor

A former Barclays executive is setting up a new bank to target small and medium-sized businesses (SMEs) in a test of the City regulator's pledge to accelerate approvals for new lenders.

Sky News understands that OakNorth, which has secured backing from a group of prominent investors, is one of 20 fledgling banks which are pursuing licences from the Financial Conduct Authority (FCA).

OakNorth has been established by Richard Davies, who rose to become the head of UK operations within Barclays' corporate bank before resigning last November.

He is being joined by a team including Chris Dailey, who was an executive at Aldermore, one of the new banks which have emerged in Britain in the aftermath of the financial crisis.

The emergence of lenders such as OakNorth comes at an important moment in the political debate about banking competition, with the Labour leader Ed Miliband vowing to make the creation of new banks a central plank of his economic policy.

Last summer, the FCA said it would relax capital and liquidity rules for new entrants to the banking market, two of the major obstacles for start-up banks to gain regulatory approval.

London-based OakNorth, which declined to comment further on its plans, intends to "focus on the entrepreneurial community in the UK - working with fast growing small and medium sized enterprises, property developers, high net worth individuals and venture capital firms," according to a website it has set up.

"OakNorth will offer a wide range of lending and saving products to assist SMEs and investors in financing their future growth. The business model will seek to augment traditional banking practices with digital / new form lending techniques."

Sky News has also learnt that Vince Cable, the Business Secretary, held talks earlier this month with a group of so-called challenger banks to discuss the hurdles confronting them.

Among those attending the meeting were executives from Aldermore, Metro Bank, Shawbrook and TSB, as well as Treasury ministers, regulators and the chief executive of Mr Cable's new British Business Bank, which will become operational this year.

Mr Cable told Sky News: "New banks entering the market should be encouraged as they provide choice to customers and are an important source of finance for small businesses.

"Regulators have taken moves to improve the way they authorise new entrants, working closely with the banks and providing time for those that need to get staff and investment in place.

"They have reported an increase in the number of potential new banks they are in talks with, which is promising.

"However, most applications under consideration are for niche banks and to have meaningful competition we need banks with the significant technological platform, the kind TSB and Williams and Glyn received from their parent banks [Lloyds Banking Group and Royal Bank of Scotland."

One of the executives who attended the meeting with Mr Cable said industry representatives had emphasised the need for new bank entrants to have access to robust technology platforms that were often prohibitively expensive to small start-up companies.

In a speech last week, Mr Miliband said that Britain's banking market was "broken" and said Labour would, if it won the next general election, create at least two new credible competitors to the country's five biggest lenders.

His pledge has sparked a row with the industry and political rivals, who have accused him of duplicating plans already being implemented through the creation of new high street players such as TSB.

Sky News revealed last month that Aldermore had raised £40m from two leading hedge funds ahead of a flotation this year, while Metro Bank had secured nearly ten times that sum in new funding.

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China GDP Growth Slows To A 14-Year Low

The world's second largest economy expanded at its slowest rate for more than a decade, official figures have revealed.

China's economy  was recorded at 7.7% in 2013, the worst growth performance since 1999.

Its government has now warned that there are "deep-rooted problems", which include the massive debt liabilities of local authorities.

GDP expansion in the fourth quarter was also recorded at 7.7, slowing from 7.8% in Q3.

The full 2013 GDF figure was static from the year previous, and the most disappointing rate since 1999, according to the official National Bureau of Statistics (NBS).

However, the figure remained 0.2% above the government target.

"Generally speaking China's economy showed good momentum of stable and moderate growth in 2013, which is (a) hard-earned achievement," NBS chief Ma Jiantang said.

"However, we should keep in mind that the deep-rooted problems built up over time are yet to be solved in what is a critical period for China's economy."

China has been warned about growing local authority debt building

Post-Mao, China has sought to dilute the isolationism of its communist command economy.

The strategy has seen blistering growth and data released this year now indicates it has cemented its position as the world's second largest economy.

But the country is widely expected to face slower expansion in the years ahead.

Its leaders under President Xi Jinping say they are committed to transforming China's growth model to one where consumers and other private actors play the leading role, rather than huge and often wasteful state investment.

Economists now expect China's growth rate to ease in 2014 to around 7.5%.

While China's growth rate in the early years of the 21st century regularly remained in double digits, the 2013 rate is the third consecutive year of single figures - a status not seen since 2002.

The NBS warned China faces problems including dealing with burgeoning local government debt.

"The foundation of economic growth remains to be consolidated, the internal driving forces of economic expansion need to be further fostered," Mr Ma said.

"The risk of local government debt should be prevented and greater efforts are to be made to weed out out-dated production capacity."

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Fastest Growth In Retail Sales Since 2004

Brisk business for smaller retailers ahead of Christmas helped sales volumes grow at their fastest annual pace since 2004 in December.

Figures from the Office for National Statistics (ONS) measured 2.6% growth during December to show an annual increase of 5.3% - easily topping the forecasts of economists.

The performance suggests a bigger contribution to GDP growth from consumer spending in the fourth quarter of 2013, after the sector was credited with driving recovery during the previous three months.

However, it will also raise more concerns about consumer debt levels and the extent to which people are digging into savings.

The surge in business for small stores may have been a result of the storms ahead of Christmas - prompting consumers to shop locally.

Debenhams had a poor Xmas despite department stores seeing strong trade

Small stores were found by the ONS to have outperformed their bigger rivals, with the amount spent in them increasing by 8.1% against growth of 2.6% for larger stores, compared with December 2012.

The figures follow news of upbeat trading from the likes of Argos, Halfords, Primark and Next over the festive season, though Marks & Spencer and Debenhams struggled.

The extent of their woes was laid bare by the ONS, which measured department store sales volume growth of 11.7% in December - the highest year-on-year growth since January 2000.

The slew of results from major chains suggested retailers who embraced online and high demand for gadgets and cheap fashion enjoyed robust trading.

The ONS said internet sales increased 11.8% by value compared with the same month last year, with average weekly spending online standing at £675.4m.

The statistical body also reported that the 2.6% growth in sales volumes month-on-month equalled the previous high set in February 2010.

The overall amount spent in shops was up 3.6% compared with the same month last year, with food stores improving by 2.2% and non-food stores by 4.4%.

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