Autumn Statement: CPS Calls For Action On Debt

George Osborne should introduce cash freezes to avoid missing his debt target, a right-wing think tank has said just days before the Autumn Statement.

The Centre for Policy Studies (CPS) claimed the country's debt will be between £20bn and £30bn higher than Government forecasts in 2015/16.

To avoid this, the organisation urged the Chancellor to save money by introducing freezes on international aid and all benefits except for the state pension.

The halt on public sector pay rises should also be clarified, it added, as "many departments have interpreted the existing freeze very differently".

These measures need to be part of a plan to reduce Government spending to 38% of GDP within four years, the CPS said, adding that a simplification of the UK's "dysfunctional tax system" is also needed.

The calls come ahead of the Autumn Statement on December 5, when Mr Osborne will reveal his latest economic plans to Parliament.

The CPS' head of economic research, Ryan Bourne, said it is clear that assumptions about the potential underlying growth of the economy have been over-optimistic.

"It's increasingly obvious that a further spending review is necessary, and this should go further in looking at the scope of government activity," he said.

And Tim Knox, the director of the CPS, stressed that need for a "great reduction in Government activity".

"The Chancellor has a choice: will he put the long-term economic health of the country above the temptations of short-term political gain?" he said.

"If he tweaks the numbers to meet his rules and if he announces a wide range of policy initiatives which might grab a few headlines, then we will know that this is a statement inspired more by politics than economics."

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Corporation Tax Transparency Call From KPMG

Companies that operate in the UK have been urged to accept greater transparency over their complicated tax structures by a top professional services firm.

KPMG described it as a "sea change" for companies as they learn to disclose more account details.

The firm's head of tax Jane McCormick said: "We believe that corporations are going to have to embrace transparency to explain what taxes they are paying and where they are paying them."

But resistance still remains with some top firms to greater openness, according to a KPMG survey of 57 senior tax executives at leading British and UK subsidiaries of foreign multinationals (MNCs).

Some 40% of the executives still oppose a General Anti-Abuse Rule (GAAR) targeting highly abusive or artificial tax planning.

Ms McCormick added: "By doing so they will also illustrate how their presence contributes to the economies in which they operate whether that be by generating employment (income taxes), sales (indirect taxes), paying business rates or through corporation tax."

The push for transparency comes amid unprecedented public outcry over MNCs' tax avoidance through complex offshore mechanisms.

Ms McCormick added: "The risk is that, without this transparency, the current debate may turn into a witch-hunt, deterring businesses from investing in the UK."

Her comments come just days before the Commons Public Accounts Committee (PAC) is expected to release a report on its questioning of executives from three leading MNCs.

The PAC questioned representatives of Starbucks, Amazon and Google about the amount of corporation tax they pay in Britain.

When grilled by its chair Margaret Hodge, Starbucks' chief financial officer Troy Alstead said his firm had only made a profit once in the 15 years it has been doing business in the UK.

Amazon director of public policy Andrew Cecil was forced to explain why a CD or a book bought in pounds on Amazon.co.uk delivered from a UK warehouse by the Royal Mail is registered in Luxembourg.

Earlier in the year it was reported Amazon - Britain's largest online retailer - generated UK sales over the past three years of between £7.6bn and £10.3bn, but paid virtually no corporation tax.

Google's UK unit paid just £6m to the Treasury in 2011 on revenue of £395m, according to another news report.

Despite the reluctance from some top tax executives KPMG believes that details of tax arrangements will increase in annual company reports as firms seek to clarify their positions to the public, the media and politicians.

"We predict that a tax report will, in time, become as much a feature of the annual report as a Corporate Social Responsibility statement is today," Ms McCormick said.

"With improved transparency on tax, hopefully the 'bigger picture' of how a business-friendly tax system can attract corporates will emerge, demonstrating how the UK's ambition to create the most competitive tax regime in the G20 can play a key role in rebuilding the economy and fuelling the recovery."

She added: "The risk is that without this transparency, the current debate may turn into a 'witch-hunt' deterring businesses from investing in the UK."

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Data Watchdog Gives Christmas Warning

By Pete Norman, Sky News Online

The data protection watchdog has told Sky News that consumers need to be increasingly wary of what companies do with credit card details given over the phone or online.

The warning from the Information Commissioner's Office (ICO) comes as record numbers use internet and telephone shopping services ahead of Christmas.

ICO head of strategic liaison Jonathan Bamford told Sky News: "Although Christmas is the season for giving, be very, very careful when you give your personal details.

"It's really valuable - treat it like your money."

He added: "You should be very wary of who you are dealing with in an online transaction, if you are not confident with the organisation don't proceed with it."

Card details given online can carry data breach risks

Further concerns have been raised by the increasing use of audio recording of customers' telephone calls by companies.

While many firms tape calls for "training and quality purposes", recordings which contain bank or card details are at risk of fraudulent use if proper precautions are not taken.

"Organisations that do use audio recordings need to make sure they don't hold those for any longer than they need to really verify the transaction," Mr Bamford said.

"Data protection law requires them to get rid of information when they don't need it any longer and that applies to audio recordings, along with any other personal details, which may have credit card information."

Banks have long used audio recordings to pursue internal fraud investigations but retail firms are using the audio technology too.

Many firms increasingly record customers' card details

The watchdog can impose penalties of up to £500,000 data protection breaches by organisations.

Earlier this month the Prudential was hit with a £50,000 fine over errors on two customer accounts.

Greater Manchester Police was also fined £120,000 after an unencrypted memory stick was stolen that contained details of more than 1,000 people with links to serious crime investigations.

"If there are real concerns about what happens to our information we have rights of access to find out about that," Mr Bamford told Sky.

"If the worst comes to the worst, the Information Commissioner has powers to make sure companies look after our information properly."

Corporate solicitor Maung Aye, of Mackrell Turner Garrett, told Sky News: "Companies should take their data protection obligations very seriously.

"There are not only substantial financial penalties which the Information Commissioner can impose but a number of other potential ramifications including adverse publicity affecting the company's image, brand and reputation and even criminal liability for directors which could ultimately result in imprisonment."

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Energy Bills 'Will Be Lower' Under New Policy

Energy Secretary Ed Davey has said the Government's long-delayed Energy Bill would see consumers pay less for energy in the long-run.

As he introduced the legislation to Parliament, Mr Davey said: "The net effect of Government policy on energy bills is downwards not upwards."

His comments come despite admissions by the Department for Energy and Climate Charge (DECC) last week that the additional investment in green power would add £95 to energy bills by 2020. 

When considered alongside all other energy efficiency policies, however, the Government insists that bills will be £94 less in 2020 if the measures are introduced.

The cost to consumers is "the greatest concern", Mr Davey said, stressing that energy companies will come under pressure to help lower bills.

"We intend to underpin this with reforms to the retail market to simplify tariffs and make sure consumers are able to get the best deal for them," he said.

The Government estimates an extra £110bn is needed over the next ten years to restore the UK's ageing energy infrastructure, much of which is set to be allocated to low-carbon power sources.

By pumping more money into these renewable and "green" power generation, it also hopes to help bolster the country's ability to withstand energy shortfalls.

Any new coal plants built must have carbon capture and storage

The Bill outlines a rise in the amount of investment in green power from £2.35bn a year in 2012 to £7.6bn in 2020.

"In an era of rising global energy prices, by shifting to more home grown sources of power and by becoming more energy efficient, we can cushion our economy and households from the fluctuations of world gas markets," Mr Davey said.

Measures detailed in the Bill included a requirement that any new coal plants built have carbon capture and storage, and plans for long-term contracts that see firms paid a guaranteed price for the electricity they generate from low-carbon sources.

A "capacity mechanism" scheme, which would see companies bid for support to provide power sources or reduce demand during peak demand, was also outlined.

In addition, the Government published proposals to cut demand for energy in the UK, as the DECC estimates a 10% reduction in electricity use could save £4bn by 2030 and reduce carbon emissions significantly.

But Mr Davey's lack of a target to decarbonise the power sector led to criticism from Labour's Caroline Flint said.

The shadow energy secretary demanded "a clear commitment" to decarbonise the energy sector by 2030.

She added: "Not just businesses in the renewables sector but elsewhere are really concerned about the lack of a vision of the Government on this issue.

"I make no bones about it: we support a clear decarbonisation target on the face of the Bill."

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Nintendo Wii U: Games Fans Queue For Console

Games fans queued outside a store in London's Oxford Street, eager to be among the first in the UK to own the much-anticipated Wii U.

The first major home console launch since 2006 has already proved popular in the US, despite mixed reviews, and there has been a high demand for pre-orders in the UK, launch hosts HMV said.

The Wii U features the GamePad controller, a tablet-type device that allows users to continue playing after the connected television has been turned off or switched to another channel.

The controller boasts a 6.2in touchscreen display and a three to five-hour battery life.

Among the games expected to be best-sellers are ZombiU, which carries an 18 age restriction, NintendoLand - the Wii Sports for the new console - and New Super Mario Bros U.

The console launched in the US earlier in November, with most concerns surrounding the amount of games that will be available to justify the minimum £250 cost.

Others have mentioned the controller's weak battery performance, a lack of stand-out launch games and frustrating menus and online services.

Nintendo UK marketing director Shelly Pearce told Sky's Jeff Randall Live the Wii U's inbuilt screen "fundamentally changes the way you play video games".

She said all existing games can be played on the new console and it offers "a really deep gaming experience".

The new Wii U GamePad and Console launched at E3 2012 in Los Angeles

Earlier she said: "We can't wait to get the Wii U into the hands of our fans in the UK."

Over the summer at the Electronic Entertainment Expo in Los Angeles, Nintendo illustrated how New Super Mario Bros. U could be played on either a TV or the touchscreen controller.

The latest instalment in the brick-smashing, coin-collecting franchise lets up to four people play simultaneously with traditional controllers, while another can join in with the touchscreen controller to jab enemies and build platforms.

New Super Mario Bros. U and NintendoLand demonstrate what Nintendo calls "asymmetric gameplay" - where a group of people playing together are having very different play experiences on a single game.

And after taking on board criticism of the original Wii's awkward online system, Nintendo has boosted the new console's connected capabilities.

"The system will know when you're playing with your user account - everything that you've played in the past, what your preferences are," said Nintendo of America president Reggie Fils-Aime.

"So it will truly be an experience unique to you. Versus if your wife or your children want different experiences, they really are tailored for each particular consumer."

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Supermarkets Back New Price Promotion Rules

What The Supermarkets Say

Updated: 3:19am UK, Friday 30 November 2012

Eight major supermarkets have signed up to a new code on special offers and price promotions, while Asda is considering whether to take part. Here is what some of the retailers had to say...

Lidl: "At Lidl, we consider customer satisfaction and transparency to be at the forefront of our business, and the OFT's set of principles for fair pricing practices is fully in line with our own pricing policies we have set ourselves.

"For example we do not inflate prices of products before a promotion to artificially imply a saving to the customer.

"For this reason the pricing of products in Lidl stores will not be affected as we will continue to apply these principles to our prices in stores."

Tesco: "We work hard to ensure we offer competitive prices and fair, meaningful promotions to our customers.

"We always try to use simple and clear information, so we welcome the OFT's clarity on good practices and support their wish to see a consistent approach to promotions across the sector."

Waitrose: "Waitrose already has clear principles in place to ensure that our pricing is clear and transparent for our customers - so we are supportive of the OFT's code announced today."

Morrisons: "We are happy to sign up to the Office of Fair Trading's principles because they reflect good promotional practice and we are working towards convergence."

Sainsbury's: "These principles are in line with what we already do at Sainsbury's as we have always been committed to fair and transparent pricing. We will continue to ensure that our pricing and promotions are as clear as possible for our customers."

Co-Operative: "We understand how important it is for shoppers to be able to easily understand what the promotional offer is, so they can spot the best deal, and we are committed to providing clear and accurate labelling for our customers so they can make informed purchasing decisions.

"We have been working closely with the Office of Fair Trading, and are fully supportive of the principles set."

Asda: "We're not sure (the OFT's draft code) best helps customers in these challenging times, so we are taking the time to consider its proposals in detail."

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Comet: Jobs At Risk As Shops Face Closure

Comet's administrators have confirmed a further 125 stores will close by the end of the year if they fail to get a firm offer for the whole business.

Around 70 stores of the original 236 will remain open until the electricals retailer's remaining stock is sold, Deloitte added. 

Some 5,000 jobs remain in the balance at the embattled retailer, which called in the administrators earlier this month.

Deloitte's Chris Farrington said a "small number of interested parties" remained and he hoped a positive outcome could still be achieved.  

"Should any acceptable offers be received for stores we will delay the closure process," he said.

"Unfortunately, in the absence of a firm offer for the whole of the business, it has become necessary to begin making plans in case a sale is not concluded."

Stores will begin closing in December, he added.

Since Deloitte was appointed to work for the electricals chain, some 1,500 jobs have already been axed.

Last week, the entrepreneur behind Appliances Online confirmed he had tabled a bid for Comet's web-based operations - but not for the whole business.

John Roberts said he had put in a "seven-figure offer" for Comet's website, although the deal would see the business disappear from the UK's high streets.

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BP Banned From New US Government Contracts

The US Environmental Protection Agency has suspended BP from new government contracts as three BP employees deny criminal charges.

The temporary ban stemmed from the British oil giant's conduct in the blowout at its Deepwater Horizon rig, which killed 11 workers in April 2010.

Meanwhile two BP rig supervisors and a former BP executive pleaded not guilty to criminal charges. BP well site leaders Robert Kaluza and Donald Vidrine are charged with manslaughter in the deaths of 11 rig workers and accused of disregarding abnormally high pressure readings.

BP's vice president of exploration for the Gulf David Rainey was charged separately with concealing information from Congress about the amount of oil that was leaking from the well. All three have been released on bail.

It comes after the company has agreed to plead guilty to charges over its part in the largest environmental disaster in US history, and to admit lying to Congress about the amount of oil that was spilling from the Macondo well.

"EPA is taking this action due to BP's lack of business integrity as demonstrated by the company's conduct with regard to the Deepwater Horizon blowout, explosion, oil spill, and response," the agency said.

"Suspensions are a standard practice when a responsibility question is raised by action in a criminal case."

The move prevents BP from getting new government contracts or grants "until the company can provide sufficient evidence to EPA demonstrating that it meets federal business standards," EPA added.

Existing agreements between the company and the government are not affected.

BP said it had made "significant enhancements" since the accident, including at its safety and risk operations, upstream business and drilling standards.

The company said it was working with EPA to demonstrate "present responsibility" and have the temporary suspension lifted.

"BP has been in regular dialogue with the EPA and has already provided both a present responsibility statement of more than 100 pages and supplemental answers to the EPA's questions based on that submission," it said in a statement.

The agency has informed BP that it is preparing an agreement that "would effectively resolve and lift this temporary suspension", the statement said.

Professor Joe Lampel from Cass Business School said EPA's decision dealt a blow to BP.

"The ban comes at the end of a complex process during which BP has settled most of the claims against it," he said.

"Therefore this suspension should be seen as an additional penalty rather than a pressure tactic that the US government often uses when it wants to force firms to concede liability."

He said the ban would most probably be lifted after a sufficient grace period has passed.

"BP has been working hard to repair its reputation and I suspect that it will do whatever it takes to satisfy regulators that it now meets all the necessary standards," he added.

At the end of last month, BP revealed the disaster had cost it more than $38bn (£23.7bn) to date.

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Dixons 'To Benefit' From Comet As Sales Rise

This year's summer of sport gives Dixons Retail Group a boost in the UK, as it prepares to benefit as a result of Comet entering administration.

Like-for-like sales at the retailer - which owns Currys and PC World - were up 3% in the UK for the six months to October 13, helping its UK and Ireland division post a profit for the first time in five years.

Dixons said it expects its market position in Britain to go "from strength-to-strength" following the collapse of its rival Comet, which called in administrators earlier this month.

"While there may be some disruption while Comet completes the 'fire-sale' of its stock in the short term, Currys and PC World will benefit from the consolidation and we look forward to re-investing further gains into the offer for customers," the company said in a statement.

Despite increasing sales, Dixons still reported a loss

Retails analysts Conlumino said there were crucial differences between the business models of Dixons and Comet.

"In the UK and Ireland, Dixons has given a great example of how to get back to basics and has been left with a leaner, more competitive business as a result," analyst Matt Piner said.

"Improvements to service and instore experience meant Dixons was able to compete against the rise of non-specialist rivals in a way that Comet was unable to."

He said Comet's collapse would provide some "much needed relief" for the company, especially in sales of tablets, smart televisions and small kitchen appliances.

"There will be further pain along the way but in two to three years time Dixons is likely to be a more efficient business excellently poised to capitalise on a market recovery," he added.

The group reported a loss before tax, including one off charges, of £79.5m - compared with a profit of £2.4m over the same period last year.

When these exceptional charges are deducted, its underlying loss before tax narrowed from £25.3m to £22.2m.

Dixon's chief executive, Sebastian James, said the company had made good progress in the first half of the year.

"I am particularly encouraged by our performance in the UK and Ireland and in Northern Europe and we were particularly busy during the sporting and cultural events during the summer," he said.

"While August and September were, as expected, a bit quieter, we remain cautiously optimistic about the outlook."

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UK's First 'Green' Bank Opening For Business

The UK's first ever 'green' bank will be officially declared open for business later.

The Green Investment Bank (GIB) is funded with £3bn of Government money earmarked for helping develop a green economy.

It will be launched by Business Secretary Vince Cable at its headquarters in Edinburgh.

He will say: "The Green Investment Bank - a key coalition pledge - is now a reality.

"It will place the green economy at the heart of our recovery and position the UK in the forefront of the drive to develop clean energy.

"Three billion pounds of Government money will leverage private sector capital to fund projects in priority sectors from offshore wind to waste and non-domestic energy efficiency, helping to deliver our commitment to create jobs and growth right across the UK.

"Having the headquarters in Edinburgh is a powerful vote of confidence in the Union, and a testimony to our commitment to helping Scotland lead the green revolution."

First to benefit from the fund is a project in the north east of England that will generate energy from waste.

Around £8m will go to the construction of an anaerobic digestion (AD) plant at Teesside, the first of six planned over the next five years.

This will be matched with a further £8m from the private sector, according to the Government.

The GIB will also invest £5m to fit manufacturer Kingspan's UK industrial facilities with systems that will reduce its energy consumption by 15%.

Bank chief executive Shaun Kingsbury will set out his plans during the event, which will also be attended by Secretary of State for Energy and Climate Change Edward Davey.

Mr Davey said: "The Green Investment Bank will help attract the capital required to allow the green economy to blossom, encouraging investors to market and kick-starting low-carbon and energy efficiency projects.

"In combination with our electricity market reforms, there will be lasting economic benefit as a result, with new expertise and jobs created, that will give the UK a competitive edge."

Dan Barlow, of environmental group WWF Scotland, said the launch of the bank represented an exciting step towards a low carbon economy, while Scottish energy minister Fergus Ewing said it presented "huge opportunities" for green energy projects north of the border.

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