Debt Time Bomb? New Record Sum 'On Tick'

Mortgage approvals have hit their highest level since February 2008 while total household debt reached a new record last month, according to figures released by the Bank of England.

The Bank reported that 67,701 home loans worth £10.5bn were dished out in October - just 24 hours after confirming that its Funding for Lending Scheme (FLS) would no longer support mortgage borrowing from January to help prevent the market overheating and future debt risks.

It also highlighted rising consumer debt levels in separate figures which reflected concern over the property market, as total household debt hit a new high of £1.43trn in October.

The figures add weight to fears of a 'perfect storm' for the economy amid unsustainable debt levels, rising prices and low wage growth.

Earlier this week, the Money Advice Service reported that only a fraction of the nine million people with serious debts were getting help.

People concerned about debts are advised to seek free help from charities

Nationwide said earlier on Friday that a monthly house price increase of 0.6% in November took average UK values to £174,566 from £173,678 in October, though prices were still around 6% below their 2007 peak.

A shortage of property on the market and incentives to help borrowers under Government schemes such as Help to Buy have been cited as reasons for national price growth, though it has been largely driven by soaring values in London and the South East.

Yesterday, the Bank of England took the first step in putting the brakes on the property market as it scrapped an initiative that has had a significant part to play in encouraging mortgage lending.

Governor Mark Carney said the FLS stimulus would instead focus purely on helping small business borrowing, which remains muted.

FLS has offered lenders access to cheap finance on condition that they pass on the benefits to borrowers, and experts yesterday said that the Bank's move could spell the "beginning of the end" for ultra-cheap mortgage deals.

Nationwide provides a respected monthly report on house prices

Fears of a looming property bubble have been growing in recent months amid a string of reports suggesting demand in the housing market far outstrips the growth in the supply of homes.

The latest phase of Help to Buy, which offers state-backed mortgages to people with deposits as low as 5%, was launched in October and this is expected to inject further activity into the market among credit-worthy buyers who have particularly struggled to get on the housing ladder or move up it since the financial crisis struck because they have a lack of upfront funds.

Lenders representing around two-thirds of the mortgage market have committed to coming on board the scheme and there are also signs of competition increasing to attract low-deposit borrowers from lenders which are outside the Help to Buy scheme.

The expansion in mortgage lending comes at a time of growing concerns about wider household debt, which hit a new high of £1.43trn in October - slightly above the total registered in 2009.

But the bank's figures showed a sharp drop in growth of consumer credit, made up of lending on credit cards, personal loans and overdrafts - growing by £457m over the month, halving a £1.1bn rise the previous month.

Experts suggested the figure was a sign that people remain wary of taking on more debt, despite some evidence of increasing confidence in recent months.

Matthew Pointon, a property economist at Capital Economics, said the mortgage lending and credit figures suggested that household finances were "not strong enough" to support a countrywide house-price boom.

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Bankers' Pay: Top Earners Net 35% Rise

The number of high earners in British banks rose 11% last year, with more than 2,700 people raking in above €1m (£833,000) at an average £1.6m - a rise of 35%.

The revelation from the European Banking Authority (EBA) threatens to reignite the row on bankers' pay in the wake of the financial crisis and various mis-selling and misconduct scandals.

News of the average total 2012 pay - including salaries, pensions and bonuses - for London's top earning bankers sparked a bitter response from the TUC.

The union organisation's general secretary Frances O'Grady said: "Britain's bankers are not suffering a cost of living crisis.

"The economic crash has led to the longest decline in living standards since the nineteenth century for ordinary people yet the bankers who caused it get richer every year."

According to the EBA, more than 3,500 bankers in Europe earned €1m or more in total - representing a big rise across the EU as a whole though Britain, with its larger financial services industry, had 12 times as many high earners as any other country.

The figures were released as the EU prepares to introduce caps, which would have easily been broken in London.

Regulators in Brussels decided that from 2014 bonuses for "risk-taking" staff can not exceed annual salary, or twice that if shareholders give their approval.

The data showed that banks in Britain and France in particular needed to adjust pay structures to meet new the rules because variable pay was almost four times fixed pay.

At least 10,000 bankers, most of them in London, are expected to be affected by the new bonus cap.

Banks such as Barclays, Deutsche Bank and HSBC are expected to cut bonuses and raise fixed pay to comply with the new rules.

The EBA figures, part of data-gathering efforts as the EU finalises the bonus cap rules, offer a rare glimpse into the pay of bankers across Europe.

Of the British bankers earning more than €1m, 2,188 worked in investment banking, 62 were in retail banking, 198 were in asset management and 266 were in other areas.

In Spain, which had to bail out its banking sector last year, the number earning at least €1m fell by a fifth to 100.

However, the average remuneration for those 100 was €2.2m, higher than Britain and Germany.

The figures include high earners from employees based in each country, rather than the domicile of the bank, so the UK figures - because of its dominance in financial services - include high earners from international lenders such as Goldman Sachs and JPMorgan.

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Maternity Leave: New Shared Rights Unveiled

By Darren McCaffrey, Sky News Reporter

Fathers will have the option of sharing parental leave under proposals to be announced by Nick Clegg, who has branded the current system antiquated.

The Government has published final details of a significant shake-up which they will hope cater for a growing desire by men to play a more hands-on role in a baby's first months.

From 2015 a fully flexible system of parental leave will be introduced in England, Scotland and Wales which will allow new mothers to trigger flexible leave at any point after the first two weeks' of giving birth.

Mothers and fathers will be able to share the remaining 50 weeks between them as they like by taking the leave in turns, in different blocks, or at the same time.

Reforms will also extend parents' existing right to request flexible working to all employees in an attempt to reflect the increased role of grandparents and other carers.

In an effort to allay fears of the impact on smaller firms, bosses will have to agree any proposed pattern of time off and will retain the right to insist it be confined to a continuous block, with no more than two subsequent changes.

The proposal had met strong resistance within government.

The Liberal Democrats fought to stop last ditch attempts by their Conservative partners to drop the policy.

But father-of-three Mr Clegg said change was long overdue.

"Women deserve the right to pursue their goals and not feel they have to choose between having a successful career or having a baby," he said.

Labour's Gloria De Piero claims the plans hold nothing new for parents

"They should be supported by their employers, rather than being made to feel less employable or under pressure to take unchallenging jobs.

"Many businesses already recognise how productive and motivated employees are when they are given the opportunity to work flexibly, helping them retain talent and boost their competitive edge.

"This is good for families, good for business and good for our economy."

The changes, however, have been branded "a nightmare" which would heap more burdens on already-struggling firms by the Institute of Directors (IoD).

Deputy director of policy Alexander Ehmann said: "The IoD understands the case for a system of shared parental leave and how it could help to widen the talent pool available to employers.

"Unfortunately, today's announcements heap yet more burdens on struggling employers at a time when government should be freeing them to create jobs and wealth."

Labour attacked the announcement for providing nothing new to help families struggling with the rising cost of living.

Shadow minister for women and equalities Gloria De Piero said: "Nick Clegg claims to be on parents' side but he and David Cameron have done nothing to support families in the last three years.

"This reheated announcement contains nothing new for families suffering from this government's cost-of-living crisis. It proves you can't trust a word Nick Clegg says."

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Energy Bills: Govt Wants Price Freeze Until 2015

The Energy Secretary has written to the big six energy providers asking them to freeze their prices until after the 2015 general election, according to Sky sources.

The call, barring any big increase in wholesale fuel costs, is to try to avoid another round of price rises that could be blamed on Government green levies, industry sources have said.

Annual bills could be cut by around £50 by the move, it is claimed.

Ed Davey has promised to help firms by introducing changes to the green levies that Prime Minister David Cameron and Chancellor George Osborne have pledged to "roll back".

Energy Secretary Ed Davey is believed to be seeking a deal with firms

He first wrote to the firms last week and followed-up his appeals with fresh letters this week.

It is understood the companies have so far given no commitment to his proposal.

Ministers are proposing to change the Energy Company Obligation (ECO) - one of the green levies branded "green crap" by a Tory source last week.

The Government wants to be able to announce a pledge or deal in the Autumn Statement on December 5.

The Department of Energy & Climate Change described the claims as speculation, stating there would be no comment on the issue ahead of next week's statement.

Bills are burned during a protest this month against prices and budget cuts

The move comes ahead of a speech by Ed Miliband later in which he will pledge to end the energy "rip-off".

The Labour leader is to call for a tough new regulator with powers to order firms to pass on wholesale savings to customers, and intervene in the market to ensure they get good value in the future.

An independent Energy Security Board would be created modelled on the Office for Budget Responsibility, to help draw up and implement a timetable for building energy capacity and ensure the lights stay on.

He will also promise action to boost competition among suppliers, simplify bills for customers and "secure energy which is affordable and available".

Labour leader Ed Miliband is to pledge to end the energy "rip-off"

The shake-up - described by Mr Miliband as the biggest since privatisation in the 1980s - would be implemented during the 20-month price freeze he has pledged if Labour wins the general election.

Launching the party's energy green paper at Manchester Town Hall, Mr Miliband will refer to the famous "Tell Sid" campaign advertising British Gas privatisation under Margaret Thatcher.

"In the past three years it has become clear to everyone but this government that the energy market is broken," he is expected to say.

"Prices are rising year on year without justification. And Britain is not getting the investment in energy we need to secure supplies for the future...

"We have a new message for Sid: We will freeze your bills for 20 months. We will reset the market with real competition and proper regulation so that prices are affordable. We will secure the investment we need.

"We will stop you being ripped off and, together, we will power Britain into the next century."

Other commitments include preventing power generation companies doing exclusive deals with their retail arms and ensuring all environmental and policy levies on bills are delivering "value for money".

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Student Loans: £5bn Unaccounted For Says NAO

More than £5bn paid out in student loans is unaccounted for because the Government does not have enough information about the recipients.

There are 368,000 student borrowers for whom there is no current employment record, or other details on earnings, according to a study by spending watchdog the National Audit Office (NAO).

This could be because they are unemployed students living in the UK, EU students who have returned home or UK students who have moved overseas.

It means the Government does not have enough information to decide whether these students should be making repayments on their loans, and if so, how much.

Students currently only repay their loans when they earn £21,000, and repayments are linked to earnings.

The NAO report claims the Business Department (BIS) is not doing enough to find out whether borrowers are earning enough to start repayments.

It also says there are around 14,000 former students, with a total debt of £100m, living overseas who are behind on their repayments.

The Student Loans Company, which helps collect the payments, could take a "more targeted approach" to this group, says the NAO.

Earlier this week, the Government sold off older student loans totaling nearly £900m to a private debt collection agency for £160m.

Universities minister David Willetts called the sale "good value for money" and said it would help reduce public sector debt.

More than a third (35%) of new loans taken out are not expected to be repaid, according to Government figures, and around half of students are not expected to repay their debt fully.

Under a major overhaul of higher education, which saw tuition fees at English universities treble to a maximum of £9,000, student loans are now written off after 30 years.

The NAO wants the Government to improve the information it holds about student borrowers so taxpayers get more of their money back.

A BIS spokesman said: "We are continually improving the collection process for borrowers and we will carefully consider the NAO's recommendations as part of this programme."

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David Cameron 'U-Turn' Over Cigarette Packaging

By Jon Craig, Chief Political Correspondent

David Cameron is set to be accused of a major U-turn over the introduction of plain packaging of cigarettes.

The Government is poised to announce it is pressing ahead with the measure aimed at making smoking less attractive to youngsters.

Mr Cameron's decision to shelve the measure last July caused an outcry after it emerged his election strategist Lynton Crosby, now employed full time by the Conservatives, is a partner of Crosby Textor, which worked with Philip Morris Ltd as it lobbied the UK government against plain packaging.

That prompted the accusation from Ed Miliband in the Commons: "He is the Prime Minister for Benson and Hedge funds, and he knows it.

The PM was accused of pandering to his election strategist Lynton Crosby

"Can he not see that there is a devastating conflict of interest between having a key adviser raking it in from big tobacco and then advising him not to go ahead with plain packaging?"

Campaigners for plain packaging feared a pause on consultation in July had effectively ruled out any prospect of its introduction until after the next election, while lobbyists for the tobacco industry were confident of having defeated the proposal.

Now Earl Howe, the health minister, is to introduce an amendment to the Children and Families Bill in the House of Lords, possibly as early as next week, to give the Government enabling powers to introduce plain packaging.

At the same time the Government will announce another review of what has happened in Australia to report back next March. Its findings are expected to strongly back the case for plain packaging.

One of the most recent studies from the country, the first in the world to ban branded cigarettes cartons, found that those using cigarettes sold in standardised plain brown cartons were 81% more likely to consider quitting.

A Government source told The Times: "This will nail Labour's ridiculous smears. Now the pressure will be on Labour to get behind this amendment to enable the introduction of standardised packaging."

Luciana Berger MP, Labour's shadow public health minister, said: "We need immediate legislation for standard cigarette packaging, not another review. The Government needs to stand up to the tobacco industry's vested interests.

"The evidence to support standardised packaging is clear. The consensus is overwhelming. We don't need any further delay while 570 children are lighting up for the first time every day."

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Cable Faces Scrutiny Over £4m Royal Mail Bonus

By Mark Kleinman, City Editor

Vince Cable, the Business Secretary, will come under pressure on Wednesday to cancel a £4m bonus fee for investment bankers as MPs step up their scrutiny of Royal Mail's controversial £3.3bn privatisation.

Sky News has learnt that members of the Business, Innovation and Skills (BIS) Select Committee will demand that Mr Cable abandon any prospect of the Government's advisers receiving the money despite his belief that the surge in Royal Mail's share price reflects "frothy" investor demand.

Mr Cable is braced for a stormy session, which will be his second attempt to justify to the Committee the 330p-a-share price at which 60% of Royal Mail's shares were sold last month.

The seven banks which worked on the privatisation have received around £12m in fees for their work to date, with a further £4.2m payable at Mr Cable's discretion.

Aides to the Business Secretary insist that he will not make a decision about paying them for several months, although they point out that the decision to award them is to be based on a series of pre-determined criteria, such as the success of the share offer, the level of demand generated by the banks for the stock, and the quality of investors' feedback.

Such factors are common in deciding fees to flotation advisers, but they have become contentious in Royal Mail's case because of the allegation that the 330p pricing significantly undervalued the company and deprived the taxpayer of hundreds of millions of pounds.

One insider pointed out that some of the criteria listed in the privatisation prospectus for awarding the discretionary fees were ambiguous, including the final price achieved for the offer and the aftermarket performance of the shares.

"The aftermarket performance has been spectacular but all that has done is embarrassed (Mr) Cable," said a banker who worked on the deal. "The criteria are there for a reason but he'll be crucified if he awards the bonus."

Mr Cable was not questioned about the discretionary element of the fee pool when he appeared before the Committee last month and is expected to say on Wednesday that a decision will not be made for some time.

However, a person close to him described it as "inconceivable that a sensible Secretary of State would feel able to hand bankers millions of pounds in this way".

He may also be questioned over a disclosure in the annual report of the Shareholder Executive (ShEx), the department of BIS responsible for the sale, that Royal Mail's value had increased "as expected" with the injection of private capital into the company.

MPs are likely to ask why Mr Cable decided not to increase the sale level if they expected the share price to increase, as indicated by the ShEx annual report. Advisers to the Government said last week that they had considered raising the price but were deterred from doing so by a hostile reaction from institutions.

Adrian Bailey, chairman of the BIS Select Committee, told Sky News this week: "If the price was expected to go up, why did the Government not increase the sale price during its last-minute deliberations?"

A spokesman for BIS said: "We always made clear that the Government would retain a stake in Royal Mail so that the taxpayer could benefit from any increase in the company's value following private sector involvement. We have retained a 30% stake which represents good value for money for the taxpayer."

Mr Cable will appear before the BIS Committee alongside Michael Fallon, the Business Minister; Mark Russell, chief executive of ShEx; and William Rucker, chief executive of Lazard, the independent adviser to the Government.

Royal Mail will announce its maiden results as a public company on Wednesday, just hours before the Committee hearing. Last week, the MPs heard from a number of investment banks, some of which did not work on the privatisation but which pitched valuations of more than £9.5bn for Royal Mail.

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Scottish Independence: £600 Better Off Claim

Key Economics Of An Independent Scotland

Updated: 3:23pm UK, Tuesday 26 November 2013

For those without the time to sift through all 650 pages of the Scottish White Paper, here are some of the key points on the economics of an independent Scotland.

:: The Big Picture

At present, Scotland has only limited autonomy to change taxes or spending - with many of the key decisions taken in Westminster.

An independent Scotland would have the autonomy to determine its own taxes and spending plans. However, the White Paper says that the country will accept some constraints on these in order to keep the pound.

It would have the independence to control the flow of both people and goods across its borders - though, again, the White Paper says the plan would be to leave this flow unchanged.

The paper presents a vision of a country which could become a small, independent dynamic economy with a vital corporate sector, low taxes and high exports.

Whether this is possible remains a matter for debate. The Scottish economy is indeed a dynamic, relatively prosperous area, albeit with a high reliance on oil revenues.

However, attractive as independence might seem to many, it would come with some costs and constraints, as the White Paper reflects (occasionally).

:: The Public Finances

Scotland generates more tax than the rest of the UK thanks largely to North Sea oil revenues.

However, it also spends more, per head, than the rest of the UK. The upshot is that its net position is remarkably similar. In 2012/13 Scotland had a primary deficit (eg borrowing before interest costs) of 5.3% of GDP deficit. So did the rest of the UK.

However, the estimates for where Scotland will be in the coming years differ depending on whose numbers you use.

The White Paper calculates that the deficit will be between 1.6% and 3.2% of GDP by 2016/17 – the potential year of independence if there is a "yes" vote in next year's referendum.

However the Institute for Fiscal Studies thinks the deficit will be significantly higher at just over 4% of GDP by then.

The real difference of opinion occurs in the following years. The IFS thinks that as North Sea oil revenues decline and Scotland's growth rate remains steady, it could be left with a big hole in its public finances, equivalent to 4.1% of national income.

This is what Danny Alexander's claim of a £1,000 tax rise for each Scot is based on.

Alex Salmond, by contrast, believes that North Sea revenues will last longer, and that Scotland will be able to generate enough growth as a small, dynamic independent economy, akin to Singapore or Hong Kong, to avoid such an outcome.

However, the SNP has not provided any long-term forecasts to compare with the IFS's numbers.

:: The National Debt

Britain has a sizeable pile of debts built up over recent decades - by 2016/17 they will stand at £1.6 trillion. The White Paper accepts that some of this should be borne by an independent Scotland (which in turn means Scotland will have to service that debt, paying interest on it for many years into the future).

It suggests two ways of calculating the scale of that debt:

1. A population share: under this, the national debt would be split between Scotland and the rest of the UK based on their population sizes. Under this, the White Paper says Scotland would take responsibility for around £130bn - leaving it with total debts equivalent to 76% of GDP. This is a relatively high debt-to-GDP ratio by international standards.

2. An historical share: under this plan, the national debt would be split based on how much in the way of debt (or surpluses) Scotland and the rest of the UK generated in recent years. Because Scotland has generated a series of budget surpluses due to North Sea oil revenues, its share of the debt would considerably lower at approximately £100bn - 55% of Scottish GDP.

:: Currency

The White Paper says that Scotland will keep the pound, becoming a part of an effective currency union with the rest of the UK.

It says that it is entitled to do so as an effective shareholder of the Bank of England. The Bank would set monetary policy (in other words, interest rates and various banking regulations) for the entire currency area.

Westminster politicians have raised questions over whether the UK Treasury, or indeed the Bank itself, would be willing to authorise this. The SNP suggests it will be a Scottish right.

The White Paper says that an independent Scotland would agree to be bound by fiscal rules and an independent Scottish Fiscal Commission to keep its public finances in check. What this might mean in practice is that the country will not have the tax-and-spend independence it would otherwise have with a fully independent currency.

It's a similar analogy to the euro, where the single currency's members are having to sign up to a "fiscal compact" barring them from borrowing excessively.

:: Financial Regulation

One area covered in only scant detail in the report is precisely what would happen in the event of a future financial crisis - a significant question given that Scottish banks (RBS, HBOS) were at the centre of the recent financial crisis.

The report says that the Bank of England would remain in place as a lender of last resort if a bank was in trouble. However, it also says that while the Bank of England would be partly responsible for broader "macroprudential" financial regulation in Scotland, Edinburgh would also have her own independent financial regulator which would take on the job of the Financial Conduct Authority in Scotland. Whether this complex system of structures would cohere remains an open question.

And there is a deeper, more worrying issue: the Bank of England's Lender of Last Resort function kicks in only if a bank is having cash-flow issues, not if it is fundamentally insolvent.

If a bank is to be bailed out, taxpayers tend to have to step in to rescue the failed institution. Quite which taxpayers that would be is left unclear in the document.

:: North Sea Oil

One of the key elements underlying the White Paper is that the UK Government has benefited from billions of pounds of North Sea oil related revenues over recent decades, and not been set aside for future generations (let alone for those in Scotland specifically).

Indeed, unlike in some countries, including Norway, where a chunk of the proceeds of revenues is put into a fund for the future, Britain's revenues went towards current spending, helping boost the overall economy and public finances through the 1980s and 1990s.

Even today, Scotland is responsible for 94% of North Sea oil revenue (though this is not an enormous total earner for Britain, at 0.4% of GDP).

As a result, the country, which has 8.3% of the population, pays 9.2% of total taxes. However, at present that extra revenue is compensated for by extra spending.

The White Paper suggests that in future the oil revenue could be put towards a sovereign wealth fund, called the Scottish Energy Fund. However, some will ask whether this is really compatible with the rest of the White Paper's calculations, which seem to imply a large role for North Sea revenues in paying off the country's net debt.

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Big Six Energy Firms Face New Profits Storm

The big six energy companies made £23 more in average profit from each UK household on aggregate last year - a rise of 75% on 2011 - and profits are still rising, according to the industry's regulator.

Ofgem said the latest average profit for all suppliers from the average dual fuel customer hit £53 in 2012 but was measured at double that on November 21 this year at £105.

The regulator announced the figure after releasing its analysis of the companies' accounts for 2012, which found average profit margins of 20% for energy generation.

The revelation prompted the watchdog to suggest it may insist on greater clarity in future to ensure that the profits are a fair reflection of investment in future power generation.

It found that the average profit margin for supply to household customers was 4.3% - in line with the claims made by the industry - as energy use rose and bills went up.

EDF is involved in the planned new Hinkley Point nuclear power station

But it calculated the profit margin made in generating energy in 2012 at 20% - slightly lower on the previous two years - but still high in the context of rising household bills.

The study sought to explain the disparity between supply margin and that for generation by pointing out that the generation part of a business needed significant sums of money over the long term to invest in building new power stations.

Ofgem said it was now considering whether companies needed to provide additional profit measures in generation which took account of capital investment to help ensure greater transparency.

The big six - SSE, E.ON, EDF Energy, Scottish Power, npower and Centrica's residential arm British Gas - have faced a backlash from politicians and consumer groups since the latest round of bill increases - up to 11% in some cases - was announced.

npower's Pembroke power station replaced old gas capacity

Of the firms, only E.ON is yet to confirm its increase ahead of the coming winter.

Ofgem's report follows analysis of statements the companies have had to submit annually since 2009 as part of efforts to subject the firms to greater financial scrutiny.

The statements showed that across all six suppliers, overall profits for energy supply and generation fell from £3.9bn in 2011 to £3.7bn in 2012.

However, profits in supply to households and businesses increased from £1.25bn in 2011 to £1.6bn.

Energy companies have insisted their profits are fair, reflect wholesale costs and the country's need to invest in future supply.

Amid the criticism of the industry over the latest rises to bills, the firms highlighted the growing cost to households from so-called green levies.

The environmental and social charges could be placed under general taxation by the Government in the coming Autumn Statement.

The firms have pledged to cut the rises to bills to match any reduction to the charges confirmed by the Chancellor on December 5.

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Royal Mail Rise 'As Expected', Say Ministers

By Mark Kleinman, City Editor

The Government has risked stoking the row over Royal Mail's £3.3bn privatisation by saying the share price rise since the company listed on the stock market was "expected" by ministers.

Sky News has obtained a copy of the annual review of the Shareholder Executive (ShEX), the body which manages the Government's stakes in state-owned businesses, which was quietly published late last week by the Department for Business, Innovation and Skills (BIS).

The document claims that ShEx showed "real strengths" in delivering the Royal Mail flotation, saying: "In challenging circumstances, and following years of failed attempts to privatise Royal Mail, ShEx delivered a sale of 60% of the shares in Royal Mail to a mix of long-term high-quality institutional investors and almost 700,000 members of the public.

"Nearly £2bn was raised for the Exchequer, and the Government still holds a 30% stake in a company that has, as expected, increased in value following the introduction of private sector ownership."

The remark is potentially inflammatory and is likely to attract the attention of MPs on the Commons BIS Select Committee, which will question the Business Secretary Vince Cable about the Royal Mail sell-off on Wednesday.

Mr Cable has consistently dismissed the surge in Royal Mail's shares as "froth" that will subside following the frenzy among both retail and institutional investors to secure an allocation of stock in last month's privatisation.

The stock dipped just over 1% on Monday to end the day at 533.5p, still more than £2-a-share higher than the offer price.

MPs are likely to ask why Mr Cable decided not to increase the sale level if they expected the share price to increase, as indicated by the ShEx annual report. Advisers to the Government said last week that they had considered raising the price but were deterred from doing so by a hostile reaction from institutions.

Adrian Bailey, chairman of the BIS Select Committee, asked: "If the price was expected to go up, why did the Government not increase the sale price during its last-minute deliberations?"

A spokesman for BIS said: "We always made clear that the Government would retain a stake in Royal Mail so that the taxpayer could benefit from any increase in the company's value following private sector involvement. We have retained a 30% stake which represents good value for money for the taxpayer."

Mr Cable will appear on Wednesday alongside Michael Fallon, the Business Minister; Mark Russell, chief executive of ShEx; and William Rucker, chief executive of Lazard, the independent adviser to the Government.

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Clegg: Too Many Mums 'Shoved Aside' At Work

The problem of mothers feeling "shoved aside" in the workplace is "far too common" and also bad for the economy, Deputy Prime Minister Nick Clegg has said.

The Liberal Democrat leader said there was a need to dramatically change working practices to adapt to the realities of modern family life.

Mr Clegg's comments came as a survey showed three-quarters of women who returned to work after having a child thought it made it harder to progress in their career.

The survey of 1,029 users of parenting site Mumsnet also found 60% of women felt less employable since having a child.

During pregnancy 17% of respondents felt that their employer of manager was not supportive, a figure which rose to 25% when asked about support on their return to work.

Mumsnet has recognised the efforts of five firms that consistently met family friendly criteria for employees, customers and for their internal policies.

The winners of Mumsnet's gold Family Friendly Awards were: Metro Bank, Matalan, Butlin's, Pizza Express and Starcom MediaVest Group.

Mr Clegg said: "There are many employers out there who do understand the need to retain the best staff and who want to help families better balance work and home. The companies being recognised today set a shining example.

"Modern families come in every thinkable shape and size. In many cases mothers want to work and fathers want to spend more time at home.

"We need to dramatically update our working practices to accommodate these realities, helping families juggle their lives as they see fit.

"That is why from April 2015, the coalition Government is introducing shared parental leave to ensure career options remain open to women after pregnancy."

Mumsnet chief executive Justine Roberts said: "While we have legislation designed to protect women against discrimination in the workplace it's clear that in many cases companies are simply not following the rules.

"Our survey reveals how important the culture created at work is ... but with over half of mums saying they felt less employable and three-quarters saying it was harder to progress in their career since having children, it's clear there's still lots of work to be done to ensure family-friendly practices are commonplace."

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Ministers To Unveil £900m Student Loan Sale

By Mark Kleinman, City Editor

Nearly £1bn of student loans will be offloaded by the Government to a private debt collection agency today in a move likely to stoke renewed controversy over coalition sell-offs.

Sky News can reveal that ministers will announce to the London Stock Exchange that the Government has agreed a deal to privatise a £900m portfolio of loans made to students who were enrolled at universities during the 1990s.

The disposal, to a debt recovery specialist, will be for a fraction of the debts' face value, and encompasses mortgage-style loans that are the last of their kind still in public ownership.

The sale, which does not include Income Contingent Repayment loans like the ones currently offered, comes as student groups step up their protest over the disposal of the loan portfolios.

The coalition is drawing up plans to sell the entire outstanding student loan-book, which has a face value of roughly £40bn.

Investment bankers from Barclays and Rothschild were appointed by the Department for Business, Innovation and Skills (BIS) last month to oversee the sale, which more than 15,000 people have signed an online petition to oppose.

Danny Alexander, the chief secretary to the Treasury, said during the summer that the Government hoped to raise £10bn from the sale of corporate and financial assets such as the student loan book by 2020.

Speaking in March, when the mortgage-style student loan auction was initiated, David Willetts, the universities and science minister, said: "Selling the remaining mortgage-style student loans will allow us to reduce public debt and maximise the value of one of the Government's assets.

"The private sector's expertise makes it well-placed to collect this debt and the sale will also help the Student Loans Company (SLC) to concentrate on providing loans to current students."

The low recovery rate on the 1990s loans means the sale price is likely to be only in the tens of millions of pounds, reflecting the distressed nature of the debts, people close to the situation said on Sunday.

The deal will come at a sensitive time, just weeks after Royal Mail was floated with a valuation of £3.3bn.

On Wednesday, Royal Mail will present its maiden results as a listed company, while Vince Cable, the Business Secretary, will make a further appearance before the BIS Select Committee amid allegations that the postal operator was sold too cheaply.

The Government insisted that bidders for the £900m loan portfolio, which was given the codename Project Ariel, would be assessed against a strict set of criteria, although it did not say publicly what these would be.

It added that the terms and conditions for borrowers whose loans were included in the sale would not change.

The mortgage-style loans were available between 1990 and 1998, with two tranches sold in 1998 and 1999. Repayments on them can be deferred for a year at a time if borrowers' income is below 85% of the national average earnings.

"The remaining loans owned by the Government are mostly in deferment or in arrears, so total annual repayments are low," BIS said in March, adding that it was likely to receive significantly less than £900m from a buyer.

A BIS spokeswoman declined to comment while the Student Loans Company referred questions to the Government.

PricewaterhouseCoopers, which has been handling the auction, also declined to comment.

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Cable Refers RBS To City Watchdog Over SMEs

By Mark Kleinman, City Editor

Business Secretary Vince Cable has referred the state-backed Royal Bank of Scotland (RBS) to the City regulator amid renewed allegations over its treatment of struggling business customers.

Sky News understands that Mr Cable has passed to the Financial Conduct Authority (FCA) a dossier of evidence compiled by Lawrence Tomlinson, a businessman who also advises the Department for Business, Innovation and Skills (BIS).

Among a string of claims made by Mr Tomlinson, according to people familiar with the dossier, is that RBS has engineered the transfer of a significant number of business customers into a specialist division in order to profit from the higher fees it can charge.

Run by veteran executive Derek Sach, the global restructuring group (GRG) is the division of RBS which manages the bank's problem loans.

Since the financial crisis led to it being rescued by taxpayers in 2008, RBS has become one of the biggest property owners in Britain through West Register, another arm of the bank.

Mr Tomlinson, who works for the Government under the title entrepreneur-in-residence, is said to have uncovered evidence that the taxpayer-backed bank sought to exploit distressed small business customers by accelerating their move into the unit.

The more intensive supervision of companies when they enter the work-out groups of banks - when, for example, they are in danger of breaching borrowing agreements - results in them being charged higher fees.

Mr Tomlinson is also understood to repeat an earlier criticism that banks such as RBS frequently appoint favoured accountancy firms to oversee the work-out process, resulting in the outcome desired by the lender but which sometimes entails companies being placed in administration.

RBS has already said that it will investigate the activities of the GRG division in response to a highly critical report on its SME lending practices published earlier this month by Sir Andrew Large, the former deputy governor of the Bank of England.

It is unclear whether the alleged misbehaviour by RBS amounted to a formal breach of the City regulator's rulebook.

RBS and a spokeswoman for Mr Cable declined to comment.

Mr Tomlinson could not be reached for comment on Saturday.

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Dreamliner Warning After Plane Engines Ice Up

Boeing has warned airlines to avoid flying some Dreamliner planes near high-level thunderstorms due to a risk of engine icing problems.

The warning applies to 15 carriers who have 747-8 and 787 Dreamliners with engines made by General Electric (GE).

It is the latest alert for an aircraft which has suffered a number of technical glitches since its launch, including overheating lithium-ion battery systems that caused the planes to be grounded worldwide for three months earlier this year.

The engine warning follows six incidents between April and November involving five 747-8s and one 787, all of which suffered temporary loss of thrust while flying at high altitude.

The problem was caused by a build-up of ice crystals, initially just behind the front fan, which ran through the engine, a GE spokesman said.

All of the aircraft landed at their planned destinations safely, he added.

Boeing has prohibited the affected aircraft from flying at high attitude within 50 nautical miles of thunderstorms that may contain ice crystals.

In response, Japan Airlines (JAL) pulled 787 Dreamliners from two international routes.

Other affected airlines include Lufthansa, United Airlines, an arm of United Continental Holdings and Cathay Pacific Airlines.

A Boeing spokesman said: "Boeing and JAL share a commitment to the safety of passengers and crews on board our airplanes. We respect JAL's decision to suspend some 787 service on specific routes."

JAL said it will replace Dreamliners on its Tokyo-Delhi and Tokyo-Singapore flights with other types of aircraft.

It also dropped plans to introduce 787s to its Tokyo-Sydney route from December.

The company will continue to fly the aircraft on other international and domestic routes, which are unlikely to be affected by cumulonimbus clouds for the time being.

A spokesman for GE, which is working with Boeing on software modifications to the engine control system in a bid to eliminate the problems, said: "The aviation industry is experiencing a growing number of ice-crystal icing encounters in recent years as the population of large commercial airliners has grown, particularly in tropical regions of the world."

All 747-8s are powered by GE's GEnx engines, while 787s are powered either by GE units or the rival Trent 1000 made by Rolls-Royce.

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