Post Office Staff In Fresh Wave Of Strikes

Workers at Crown post offices are launching a fresh wave of strikes today in a five-month row over jobs, pay and closures.

A UK-wide stoppage is being held today, staff in Scotland will strike on Monday, and union members in England, Wales and Northern Ireland will stop work on Tuesday.

The Communication Workers Union said the dispute involves up to 4,000 staff and shows no sign of being resolved.

The industrial action is linked to plans to franchise or close more than 70 Crown sites - the larger branches usually found on high streets.

The 373 Crown offices, which are usually the larger ones, represent just 3% of the total post office network.

But the CWU says its staff deal with a fifth of all customers and handle 40% of financial transactions involving things like banking and credit cards.

Dave Ward, CWU deputy general secretary, said: "This is the first time we have announced two days of strikes at the same time and the first time we have announced back-to-back days of strike action.

"Coupled with the 90% yes vote by members for industrial action short of strike, the message can't be much stronger to Post Office management.

"Crown post office workers do not agree with management's slash-and-burn approach and are prepared to take prolonged industrial action to defend jobs and services and win a fair pay rise.

"This is a company which made £94m profit last year and paid out £15.4m in bonuses to senior managers.

"It's a clear case of double standards and trampling those at the bottom for the benefit of those at the top. Enough is enough. It's time to resolve this."

Kevin Gilliland, network and sales director at the Post Office, said he was "extremely disappointed" at the CWU's decision to call further strike action.

"This action can only cause disruption to customers, cost our people money and place further pressure on the Crown network which is currently losing £37m a year.

"We must continue with our plans to turn around the Crown network to ensure we keep these branches on high streets and in city centres across the UK.

"We remain open to discussions with the CWU on pay options which do not add to the current loss of public money."

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Countryside Fears Over Solar Energy Growth

By Emma Birchley, East of England Correspondent

Rural campaigners say the push to generate green energy through giant solar farms is having an unacceptable impact on Britain's rural landscape.

Developments like Burntstalks Solar Farm in Norfolk, which has nearly 50,000 photovoltaic panels and captures enough of the sun's rays to power nearly 4,000 homes, are heralded as a sensible solution to the UK's energy needs.

However, some claim the sites are yet another blot on the landscape and are ruining the countryside.

David Hook, from the Campaign to Protect Rural England, told Sky News: "I think that if policy is not changed ... the industrialisation through solar farms and extra wind turbines is going to have a dramatic effect on the countryside, and a very negative effect."

It is only two years since the UK's first large scale sun park began generating electricity in Lincolnshire.

There are now nearly 160, mostly in rural areas, with a further 229 under construction or awaiting approval.

David Hook wants policy to change

Lightsource Renewable Energy owns and operates dozens of solar farms, including Burntstalks, near King's Lynn.

Mark Turner, the company's operations director, said: "The balance we have to strike is between a solar farm that can generally only be seen by people very close up to it and usually by fleeting glimpses through hedgerows as you are driving along, versus potential wind farms or the other alternatives of non-renewables including nuclear power stations and coal-fired power stations.

"The amount of ground taken up by the farm is minimal and what we then try to do, as far as possible, is to use the land for dual use.

"We graze sheep or plant wild flowers, so the land is used for the kind of purpose it would be used for before the panels were here."

The Government has made it clear it backs the production of solar energy, which it hopes will eventually produce 20GW of energy every year - eight times more than at present and enough to power around six million homes.

Its priority is for panels to be put on brownfield sites and the roofs of factories, hospitals and houses but according to Mr Turner, that is not always possible.

"Finding roof tops that are owned by companies we can rely on to be there in the 25 years we need to return the investment is extremely difficult," he said.

"And finding brownfield sites that are sufficiently far enough south to generate enough electricity, are close enough to the grid and aren't dedicated to other purposes, is extremely difficult."

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Millions To Share £1.3bn Bank Compensation

CPP Mis-Selling Scandal Q&A

Updated: 11:27am UK, Thursday 22 August 2013

As the UK's battered financial services industry prepares to tell seven million people they may have been the victim of the latest mis-selling scandal, here are some answers to common questions.

:: Why is this happening?

Regulator the Financial Conduct Authority (FCA) has found widespread mis-selling of card protection and identity protection policies which were provided by CPP and sold by several banks, credit card issuers and directly by the firm.

Products offered by banks and card issuers were often sold when customers called to register or activate a debit or credit card.

Customers were given misleading and unclear information about the policies so they bought cover that either was not needed, or to cover risks that had been exaggerated.

:: Which banks and credit card issuers have agreed to the compensation scheme?

Customers bought and renewed about 23 million policies from CPP, a bank or credit card issuer.

The 13 companies which have signed up to the redress scheme are Bank of Scotland, Barclays, Canada Square Operations (formerly Egg Banking), Capital One, Clydesdale Bank, Home Retail Group Insurance Services, HSBC, MBNA, Morgan Stanley, Nationwide Building Society, Santander, RBS and Tesco Personal Finance.

The involvement of the banks and credit card issuers reflects their involvement in introducing customers to CPP's products and so they must share responsibility for putting the situation right.

:: What sort of sum are those entitled to compensation likely to receive?

The total compensation bill could be up to £1.3bn, with redress per customer depending on the type of policy or policies owned and the length of time they were held for.

If you are entitled to compensation you will have the premiums you have paid since January 14 2005 returned to you, less any sums paid out under the policy, plus 8% interest on the amount owed.

This date in 2005 has been chosen because it is the date that the sale of general insurance products came under the scope of FCA regulation.

Card protection costs were around £30 a year and identity protection costs were about £80 a year.

:: What do customers need to do to get their compensation?

Nothing at this stage and they will not have to pay a claims management firm to chase compensation.

CPP is going to write to affected policyholders from August 29 to explain how the compensation scheme will work and what they need to do next.

:: How will the compensation scheme work?

Compensation payouts are expected to be made from next spring and there are several approval hurdles which will need to be cleared first.

After policyholders have received their initial letter from CPP, they will be invited as the scheme's "creditors" to vote on whether they want it to go ahead. This process is a legal requirement.

If the vote goes in favour of the scheme, the High Court will be asked to approve it. If the scheme gets the green light from the High Court, CPP will write to policyholders again to ask whether they want to be considered for compensation.

This would include a claim form that must be completed, signed and returned to CPP before a specified deadline.

Customers who voted against the scheme going ahead would still be able to submit a claim for compensation.

If a customer does make a claim, their policy will be cancelled - even if their claim is rejected.

The FCA advises customers to therefore think carefully about whether they find some features of the product useful before they make a claim.

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John Lewis Admits £40m Salary Blunder

The John Lewis Partnership says an error in calculating pay to staff who work Sundays and bank holidays could cost it £40m to fix.

The retailer, which runs department stores and the upmarket Waitrose supermarket chain, said 69,000 of its 85,500 workers - known as partners - will this month receive additional one-off payments reflecting the amounts due to them back dated to 2006.

It said individual payments will vary according to pay and shift patterns, with more than half of the recipients receiving under £120.

John Lewis said the payment error came to light following a recent review of its holiday pay policy.

Its statement said: "It became clear that partners who receive certain additions to pay, such as premiums for working on Sunday or bank holidays, have not been paid correctly under the Working Time Regulations legislation."

John Lewis will account for the £40m, which includes repayments plus associated administration costs, in its half year results due to be published on September 12, but will not deduct the sum from this year's partnership bonus.

It expects future pension liabilities to increase by about £7m as a result of the mistake, while annual pay costs will rise by about 0.5%.

John Lewis said its pay systems had been updated to ensure that all future holiday payments are correct.

Tracey Killen, Director of Personnel, added: "As soon as we established that we were not implementing the Working Time Regulations correctly, we worked quickly to make the repayments to our Partners in a way that is both fair and responsible."

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Threat To 250 Jobs At Heinz UK And Ireland

Food giant Heinz has warned that almost 250 jobs could be cut in the UK and Ireland.

The firm said it had developed a new "streamlined structure", which could include the loss of 248 office jobs, adding it regretted the impact it would have on its employees.

Earlier this month, Heinz laid off 600 employees in the United States. 

Heinz said in a statement: "As part of our transition to a private company, the senior leadership team has examined every part of our global business to better position Heinz for accelerated growth in a very competitive global market.

"The proposal is subject to a consultation process with employees and their representatives, and Heinz is committed to ensuring all employees are treated with the utmost respect and compassion."

It added that if a decision is made to proceed with the proposals, the company would offer enhanced severance benefits and help affected employees to pursue new career opportunities.

"The difficult actions we are proposing to take will, if implemented, better position the company to support and fund our next chapter of growth while further strengthening our world-leading brands," it added.

"Our new organisational structure will simplify, strengthen and leverage the company's global scale, while enabling faster decision-making, increased accountability, and accelerated growth."

In June, Berkshire Hathaway, the private equity firm operated by former richest man in the world Warren Buffett, and 3G Capital, which owns Burger King, acquired Heinz for £14.85bn. 

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Banks Hit By £1.5bn ID Theft Mis-Selling Bill

By Mark Kleinman, City Editor

Britain's banks will face up to another major mis-selling scandal on Thursday when the City regulator announces details of a compensation scheme for insurance customers that could cost the culpable lenders up to £1.5bn.

Sky News has learnt that the Financial Conduct Authority (FCA) is finalising a statement that will set out the terms of a redress scheme for consumers who bought identity theft and credit card protection from CPP, a York-based company, over a period of several years.

The FCA is to announce that about a dozen financial institutions – including all the major high street names, such as Barclays, Lloyds Banking Group, HSBC and Royal Bank of Scotland – have signed up to the deal.

Insiders said the figure contained in the FCA statement, which will be timed to coincide with the credit card insurer's half-year results announcement, would fall between £1bn and £1.5bn – slightly lower than some recent estimates.

Some of the banks involved will make separate announcements detailing their individual financial exposure.

Under the terms of the agreement, the banks which sold CPP products will write to customers to inform them that they may be eligible for compensation.

The industry along with CPP and the FCA will then administer a mechanism called a solvent scheme of arrangement, sanctioned by the courts, to deliver the funds.

The initiative will be unusual because CPP customers will be asked to vote in favour of it before it can get underway.

Although the £1.5bn payout pot is significant, it is tiny by comparison with the deluge of funds that banks have had to set aside for compensating customers who were mis-sold payment protection insurance.

Recent additions to the provisions by the biggest banks have taken the total to more than £15bn, while they are also confronting a multibillion pound bill for mis-selling products designed to protect against sharp movements in interest rates.

Details of the CPP compensation scheme will emerge almost a month after it secured its immediate future by negotiating a new financing deal with its lending banks.

The agreement involves deferring £23m of commission payments due to be paid to the banks over the next year, and a £13m borrowing facility.

The agreement with Barclays, HSBC, Royal Bank of Scotland and Santander UK came as a relief to hundreds of CPP staff employed who have faced an uncertain future during on-off talks about a takeover of the company.

Under the terms of the new financing deal, however, CPP would be in default if more than 25% of its customer base successfully applies for compensation as part of the redress scheme.

CPP, which calls itself an "international life assistance provider", operates across more than a dozen countries and expanded rapidly after listing on the London Stock Exchange in 2010.

It was accused by the regulator of overstating the risks of identity theft, and of providing expensive insurance policies which were effectively already provided automatically by the banks.

The company sold more than four million policies to customers, many of which were the result of introductions by the major high street banks.

It recently disposed of its US business in an attempt to raise funds following a £10.5m mis-selling fine imposed by the City regulator last year.

CPP is one of several specialist insurers to have fallen foul of regulators in recent times. Homeserve, which provides insurance against household mishaps, was also the subject of mis-selling allegations in 2011.

CPP, the FCA and the major banks all declined to comment on Wednesday.

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Tax Office Warns Football Clubs Over Low Pay

By Enda Brady, Sky News Correspondent

Dozens of top-flight English football clubs are to receive a letter from tax inspectors warning them that they must pay staff the minimum wage or face a fine of up to £5,000 and potential prosecution.

HM Revenue and Customs (HMRC) says it will soon begin "targeted checks" amid claims that some club mascots are not paid at all for their match-day work.

National minimum wage laws make it illegal not to pay people classed as workers.

"Paying the National Minimum Wage (NMW) is not a choice, it's the law," said Michelle Wyer, assistant director of HMRC's minimum wage team.

"It can't be right that as some players are paid millions of pounds, other members of staff are paid below the legal limit.

"HMRC enforces the rules, protecting workers from rogue employers and ensuring they get at least the wage to which they are legally entitled.

"Where an employer ignores these rules, we will take steps to ensure arrears are paid out in full and the employer fined. In the most serious cases, criminal prosecution can follow."

The move is being described as "pre-emptive" ahead of a "series of targeted checks" within football after HMRC received complaints about non-payment from at least one current club mascot.

In April Swansea City and Reading advertised for unpaid interns, including one position which lasted for a year.

Many people will be surprised that this happens within football - where some players can earn as much as £250,000 per week - but given the high profile nature of the English game clubs will always have a ready supply of young people keen to break into what they see as a glamorous, attractive industry.

Last year HMRC enforcement action resulted in 708 employers receiving automatic penalty charges of up to £5,000 and 26,519 employees receiving back pay totalling over £4m, topping up wages that had previously been below the legal minimum rate.

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Top Taxman Takes Foxtons' Estate Agency Role

By Mark Kleinman, City Editor

Britain's top taxman is joining the board of Foxtons as the estate agency chain seeks to exploit the buoyant housing market with a £500m-plus flotation.

Sky News understands that Ian Barlow, the lead non-executive director at HM Revenue & Customs (HMRC), will be among a crop of new board members unveiled alongside Foxtons' intention to list on the stock market next week.

Mr Barlow, who spent 37 years with KPMG, will join the resurgent company alongside Annette Court, a former boss of Direct Line Group and Zurich Financial Services, and Garry Watts, the one-time chief executive of SSL International, the consumer products group.

News of the appointments comes on the day that figures from the Council of Mortgage Lenders (CML) showed that borrowing by homebuyers soared last month to its highest level since the 2008 financial crisis.

The CML said gross mortgage lending rose to £16.6bn in July, with Caroline Purdey, an analyst at the trade body, adding that the data "reinforces a growing evidence base of a strengthening in the housing and mortgage markets".

Part of the housing market revival is down to Government stimulus packages such as Help to Buy, George Osborne's initiative to offer assistance to first-time buyers. The scheme will be extended to a wider pool of buyers early next year.

Mr Barlow also serves as a director of companies including Smith & Nephew, the medical devices maker, but his appointment at Foxtons will be intriguing because of the importance attached to efficient tax-planning by private equity-backed companies.

Foxtons' owner, BC Partners, is expected to announce the flotation plan next week.

The estate agency chain, known for its garish shops and fleet of cars, rode the property boom under its founder, Jon Hunt, before selling to BC for £375m in 2007 - a deal which catapulted him into the ranks of Britain's super-rich.

The subsequent financial crisis and recession-hit UK economy, however, led to a sharp downturn in the property market, and left estate agents such as Foxtons unable to service their debts.

The company was taken over by its lenders before BC bought them out in 2012. Foxtons' profits have surged during the last two years, buoyed by the booming London housing market, which has increasingly diverged from much of the rest of the country.

The rival chain Countrywide took advantage of buoyant equity markets to go public, while Romans, a smaller estate agents based in Berkshire, is on the verge of being sold to Bowmark Capital, another private equity firm, for about £50m.

A BC Partners spokesman declined to comment on the appointment of the new board members.

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Anti-Fracking Protesters Cleared By Police

Police have been forcibly clearing protesters from a road outside a potential site for fracking in Balcombe, West Sussex.

Activists are taking part in a six-day Reclaim The Power demonstration after Cuadrilla began carrying out exploratory drilling at the site.

Hundreds of people have staged noisy protests in the face of a police presence of more than 400 officers.

Campaigners have submitted a formal complaint about the "violent" arrest of one protester, claiming he was detained by an officer without any identifying number.

Police said that 29 people had been arrested at Balcombe for public order offences, including Green Party MP Caroline Lucas.

They were held after Sussex Police served a notice under section 14 of the Public Order Act, believing the crowd might cause public disorder, serious damage to property or serious disruption to the life of the community.

Caroline Lucas joined protesters at the site, and was among those arrested

Shouts of "shame on you" and "no violence" erupted from the crowd as police tried to move the protesters back to the main gate of the site.

Demonstrators chanted: "We are peaceful, what are you?"

The No Dash For Gas group said that the "excessive force" used on one man was caught on camera and is demanding the police officer be suspended.

A protester is removed from the Cuadrilla HQ in Lichfield

It claims: "He was violently arrested, wrestled to the floor, his head pushed into the ground by an officer's hands and knees, whilst the officer in question was not wearing epaulettes with an ID number."

Sussex Police said it was looking into the video and that the officer's epaulette may have fallen or been pulled off.

Vanessa Vine, founder of Frack Free Sussex and Britain and Ireland Frack Free, said the police presence was disproportionately heavy and added that Reclaim The Power were "not nasty, violent people" but "altruistic people who are challenging what the Government is doing".

Protesters glued their hands together through a plastic pipe

Earlier, Sussex Police said on Twitter: "We would like to reiterate that protesters aren't being kettled and are free to leave the site as they wish."

Cuadrilla condemned the "illegal direct actions" against its staff and operations.

Campaigners opposing the controversial process of extracting shale gas blockaded the firm's headquarters while others superglued themselves to the building occupied by a PR firm used by the energy company.

The action at Cuadrilla in Lichfield, Staffordshire, and at PR company Bell Pottinger in central London comes on the first of two days of "mass civil disobedience" which campaigners have pledged to carry out.

Protesters' tents outside the office in Lichfield

In a statement, Cuadrilla said: "Protesters broke into our Lichfield office, harassed our staff and chained themselves to filing cabinets.

"The police are on site dealing with this. We condemn all illegal direct actions against our people and operations."

The firm insisted that the morale of its staff at various sites is "fine", and they and the teams supporting the company are "doing a magnificent job".

"They know that what we are doing is legal, approved and safe, and that shale gas is essential to improve our energy security, heat our homes, and create jobs and growth," the firm said.

"Cuadrilla is rightly held accountable for complying with multiple planning and environmental permits and conditions, which we have met and will continue to meet.

"Clearly we are held to one set of legally enforceable standards while some protesters believe that they can set out and follow their own."

Campaign group No Dash For Gas said six protesters superglued themselves to the glass door of Bell Pottinger at 8am and deployed reinforced arm tubes to stop anyone else getting inside.

Meanwhile, it said 20 protesters shut down the Cuadrilla site in Lichfield by blockading it with their bodies. It said two people inside the building had also hung banners from it saying: "Reclaim the power" and "Power to the people".

A group of around 20 protesters also demonstrated outside the constituency office of Balcombe MP and Cabinet Office minister Francis Maude.

Activists also targeted the home of former Tory minister and George Osborne's father-in-law Lord Howell, who drew criticism recently when he said fracking should take place in England's "desolate" North.

The group erected an estate agent's sign outside the Peer's house reading 'For Shale - Desolate Properties Ltd'.

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Petrol Price Warning As Retailers Forecast Hikes

Fuel prices are set to rise by as much as 5p a litre, according to the Petrol Retailers' Association (PRA).

It comes amid civil unrest in Syria and Egypt as well as a reduction in Libya's oil exports, which are down by a third.

The PRA's forecast follows a rise in Brent crude oil, which pushed past the $110 a barrel mark last week, a 10% increase since the end of June.

Goldman Sachs Group has also predicted that oil prices could go up to $115 a barrel in the 'very near term'.

Brian Madderson chairman of the PRA said: "UK petrol prices have not yet seen the full impact of this crude oil increase due to the rapid and slightly unexpected revaluation of pound sterling from $1.48 to $1.56.

"Therefore it was concerning to read recent comments from the City that the 'pound is overblown' and will soon come hurtling down towards the $1.45 level."

He added: "We calculate at current wholesale prices that this will add a further 5p per litre at the pump before the end of September and hit businesses and households in the pocket at a time when pundits are forecasting a continued increase in retail sales to drive growth in the economy. 

"Should the Middle East tensions escalate further and crude oil prices react accordingly, the Bank of England's new inflation targets could be significantly challenged.

"The sooner the EU Competition investigation into allegations of oil price fixing is completed, the more certain we can be that our retail fuel prices are only being influenced by macro-economic and political factors and not anti-competitive actions of the oil companies."

The average price of petrol across the UK is currently £1.37 a litre, according to Experian Catalist.

The PRA explained that if its predictions are right and prices rise, it will be fast approaching the record high of £1.42 a litre, which the nation saw in April.

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Osborne's Help Fuels £50m Estate Agency Deal

By Mark Kleinman, City Editor

George Osborne's effort to stimulate the UK housing market is fuelling a flurry of corporate activity among estate agency owners, with one entrepreneur poised to reap a multimillion pound windfall from the sale of his business.

Sky News understands that Dale Norton, who established the Berkshire-based Romans Group in 1987, has decided to cash in by offloading the company to Bowmark Capital, a private equity group, for around £50m.

Bowmark has seen off competition from rival bidders including LDC and Inflexion and could conclude a takeover of Romans, which operates more than 20 branches and employs more than 350 people, within days.

The deal will trigger speculation that Bowmark will merge Romans with Leaders, a chain of letting agents in which it invested in 2010.

Analysts said that Bowmark would be able to reap significant cost savings by combining the two businesses.

One insider pointed out that the private equity group had grown Leaders from 42 to 72 branches through 29 separate acquisitions which it had then integrated during the last three years.

However, one person familiar with the deal said that a merger was "not on the cards" at the moment and that Romans would be an "independent acquisition" by Bowmark.

The transaction comes amid growing optimism about the state of parts of Britain's housing market as the Chancellor seeks to use a string of measures to accelerate a wider economic upturn.

Mr Osborne's Help to Buy scheme, which launched in April, has seen 10,000 first-time buyers sign up for state-sponsored financial support to buy new-build homes, triggering a surge in house builders' share prices.

Countrywide, an estate agency chain, has seen its shares soar since a flotation earlier this year, while Foxtons, a rival, is likely to announce its intention to list its shares later this month.

Although housing transaction volumes remain low by historical standards, figures published this weekend by the Halifax show that mortgages are now typically more affordable than at any time since 1999.

The second phase of the Help to Buy initiative is due to kick off early next year, and is proving to be more politically contentious.

It will enable lenders to use Government-backed guarantees to offer £130bn-worth of mortgages with smaller deposits of at least 5% on new and older properties.

The Chancellor is, though, being urged to abandon the scheme to prevent another housing bubble, with data published this month revealing that lending to first-time buyers has risen to its highest level since the beginning of the financial crisis.

The takeover of Romans will effectively be structured as a management buyout, with the existing executive team rolling over some of their stake into the new ownership structure.

The size of Mr Norton's shareholding is unclear, although insiders said he would crystallise "a considerable fortune" by selling the company he founded 26 years ago.

Bowmark declined to comment on Sunday.

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CBI Lifts Growth Forecast Amid Optimism

The CBI has lifted its forecast for economic growth for this year from 1% to 1.2% amid signs of a pick-up in business confidence.

Optimism about performance across the services, construction and manufacturing sectors has added to hopes that the recovery is gathering pace after 0.6% growth in the second quarter.

The CBI, which represents 240,000 UK businesses, has also increased its forecast growth for 2014, from 2% to 2.3%, predicting that increasing disposable income and business and housing investment will boost demand.

However, the body warns that a hoped-for rebalancing of the economy to become less reliant on consumer spending and more focused on investment and trade is taking longer than expected.

Its upgrade comes after figures last week showed that the eurozone, Britain's biggest trading partner, had emerged from recession.

The CBI says improvements in Europe together with a broader global recovery will give a positive boost to exports.

CBI chief John Cridland says recovery is still in its early days

However a recovering domestic situation should also mean more imports so the trade contribution will remain small, it warns.

Meanwhile the organisation says that the Bank of England's recently-announced "forward guidance" policy - designed to provide reassurance that interest rates will remain low for some time to come - will add to positive sentiment.

CBI director-general John Cridland said: "The economy has started to gain momentum and confidence is picking up, but it's still early days.

"We need to see a full-blown rebalancing of our economy, with stronger business investment and trade before we can call a sustainable recovery. We hope that will begin to emerge next year, as the eurozone starts growing again."

Stephen Gifford, CBI director of economics, warned that while a gradual increase in UK investment and UK trade was expected, risks remained including from the eurozone and a new regulatory financial environment.

"Meanwhile, emerging markets are facing structural challenges, particularly as China rebalances towards domestic consumption, which indicates muted growth prospects," he added.

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Mortgages 'Most Affordable For 14 Years'

By Nick Martin, News Correspondent

Mortgages are more affordable now than at any time in the past 14 years, according to the latest figures.

Monthly payments now account for 27% of a new borrower's income in the second quarter of 2013, well below the average for the past 30 years.

Lower house prices and reduced mortgage interest rates have been the main drivers behind the significant improvement in affordability, according to the Halifax.

Halifax mortgage director Craig McKinlay said: "Substantial mortgage rate reductions and lower house prices have led to a significant improvement in mortgage affordability since the peak of the housing market six years' ago.

"The Funding for Lending Scheme has helped lenders to cut mortgage rates causing a further modest improvement in affordability over the past year despite the modest rise in house prices nationally."

It is good news for first-time buyers.

James Almond from Bramhall near Stockport has just got on to the properly ladder.

The 38-year-old bar manager said he felt the right deals were available to take the plunge.

He said: "I used a mortgage broker to look at the best deals and in the end it was quite affordable.

"Many of my friends aren't so lucky and are still living with their parents because the deposits required are so large."

But there remains a clear north-south divide when it comes to mortgage affordability, according to the Halifax.

Mortgage payments are at their lowest in Northern Ireland where they are just 17% of incomes compared to 36% in Greater London.

Independent mortgage consultant Richard Ignatowicz said the market can change quickly.

 "We can't just say mortgages are now more affordable than ever. It doesn't mean much in isolation.

"Borrowers need to be cautious about changes on the horizon. Will they still be able to afford a mortgage when the rate reverts to 5%? Tthat's the real question."

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Swedes Plot £1bn Swoop For UK Manufacturer

By Mark Kleinman, City Editor

Another slice of Britain's industrial base is poised to fall into European hands with a near-£1bn takeover of Edwards Group, a Sussex-headquartered high-tech manufacturer.

Sky News can reveal that Edwards, which is listed on New York's Nasdaq stock exchange, is in advanced talks about a takeover by Atlas Copco, a major Swedish industrial combine.

A deal for Atlas Copco to buy Edwards could be announced as soon as next week, according to banking sources in the US.

Although it is not quoted in London and specialises in making products such as high-pressure vacuum pumps which are unfamiliar to the general public, the deal will nevertheless be closely-watched in Britain.

Edwards' takeover by Atlas Copco will follow a recently-agreed £3.4bn deal for Schneider Electric of France to buy Invensys, another British manufacturing stalwart.

Edwards employs hundreds of people at its Crawley head office and manufacturing facilities and is widely-held to be among the world's most advanced companies in its field. Its products are an important component in the supply chains of flat-screen television and solar cell manufacturers.

Vince Cable, the Business Secretary, would be alarmed if the deal was predicated upon the closure of any UK facilities but such a move from Atlas Copco was unlikely, said one banker.

Wall Street insiders said the Swedish group, which has a market capitalisation of more than £20bn, planned to offer around $9.20-a-share for Edwards, a healthy premium to the $8 at which it listed on Nasdaq last year.

It is unclear whether Edwards' board has formally voted to approve the bid, but insiders said that investment bankers at Barclays and Lazard, who are advising the British-based company, had recommended that it should do so.

Edwards opted for a listing on Nasdaq over London last year after concluding that it would achieve a higher rating for its shares if it went to the US, and next week's deal will signal the end of its brief tenure on the technology-focused exchange.

A supplier of vacuum pumps to the world's largest semiconductor manufacturers, Edwards was spun out of the BOC gases group after it was acquired by Linde, a German rival, in 2006.

Large chunks of Edwards' shares are still held by CCMP Capital and Unitas, the two private equity firms which acquired it from BOC.

Edwards had a market value of just over $950m (£608m) at Friday's closing share price of $8.45.

The offer from Atlas Copco, which is larger than Electrolux and Volvo, two other big Swedish manufacturers, is expected to crystallise another big financial gain for CCMP and Unitas.

It will also add another dimension to the Stockholm-based company's operations, which include making machines for the mining industry, air compressors and power tools.

Edwards employs more than 3000 people around the world, although it has shifted some jobs from the UK to lower-cost manufacturing sites overseas, including in Asia, recently unveiling plans for a vast factory in China's Shandong Province.

The company is now chaired by Nick Rose, a former finance director of Diageo, the drinks company, who is on the boards of BAE Systems, BT Group and Williams Grand Prix Holdings, the owner of the Formula One team.

Atlas Copco's bid comes six months after Edwards named Jim Gentilcore, who already sat on the company's board, as its chief executive, replacing former Jaguar Land Rover and JCB executive Matthew Taylor.

It was unclear on Saturday whether Mr Gentilcore would remain in place if the takeover of Edwards is completed.

Neither Atlas Copco nor Edwards could be reached for comment.

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