Fastest Growth In Retail Sales Since 2004

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

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

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

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

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

Debenhams had a poor Xmas despite department stores seeing strong trade

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

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

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

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

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

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

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

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Miliband Promises 'Reckoning' With Big Banks

Is The Banking System Broken?

Updated: 12:36pm UK, Friday 17 January 2014

By Joel Hills, Business Presenter

Folklore at Tesco has it that any internal business pitch to the former boss Sir Terry Leahy which didn't include the word "customer" in the first sentence was bound to end in failure and, on occasion, humiliation.

Sir Terry's time at Tesco is in the process of being reassessed, but there's surely no doubting that the supermarket's spectacular growth in the late 90s was down, in great part, to Tesco's obsession with delivering what customers wanted (no quips about horse burgers, please).

The reason banks are so unpopular, of course, is that they have demonstrably failed to put their customers at the heart of what they do.

In fact they have, on the whole, treated us appallingly.

As Bill Michael of KPMG put it to a group of bank bosses at their annual conference in 2012, far from treating their customers like kings, banks had behaved as if we were "captive geese that can be force-fed, or sold more product to - whether appropriate or not".

Here's the remarkable thing though: the litany of recent scandals and abuses (Payment Protection Insurance, interest rate swaps, Libor-fixing, money laundering, tax avoidance) doesn't seem to have cost the big banks any customers.

Take Barclays. Broadly speaking, the bank has the same number of personal accounts and business accounts today that it did before the financial crisis.

Now the likes of Barclays, Lloyds, RBS and HSBC will tell you that's because ultimately we are all satisfied with the service we are getting from them. Ed Miliband believes it indicates there is something seriously wrong.

The Labour leader's view - that the market isn't functioning properly - is one some of the bosses of smaller banks share.

Last October, a month after the new seven-day switch guarantee was introduced, I chaired a session at the British Bankers' Association's 2013 conference.

Jayne-Anne Gadhia, the chief executive of Virgin Money, complained that the playing field was still horribly skewed in favour of her rivals. 

Paul Lynam, the chief executive of Secure Trust bank, also thinks he's kicking a ball uphill and struggles to steal business from his much bigger rivals as a result.

Interestingly, while both of them share Ed Miliband's diagnosis of the problem, they both also think his prescription of forced branch sales and market share caps are wrong-headed.

Mr Lynam's grumble is that bigger banks can lend more freely than he can because they can borrow more cheaply (they're still too big to fail and therefore continue to enjoy an implicit taxpayer guarantee) and they are not obliged to retain as much capital to protect themselves against losses as he is (Basel rules – don't worry, I'm not going there).

He also believes that the Payments System is deeply flawed.

Now stay with me, please, because his last point is important. Think of the Payments System like the National Grid, but instead of moving gas and electricity around the country the Payments System moves money.

If Mr Lynam wants to send a payment on behalf of one of his customers to a customer at another bank he has to use the Payments System. Here's the rub: the Payments System is effectively owned by the big banks and they charge Mr Lynam up to 40 pence to "clear" each transaction. He says the real cost is closer to 1p.

The whole issue of competition in banking is nuanced and fiercely contested, but it is also desperately important that it's resolved.

It is imperative that we all have faith that the banking system is working well and in our interests.

Perhaps Mr Miliband's suggestion of a full, independent competition inquiry, however long, isn't such a bad idea.

After all, the Competition Commission investigation into the supermarket sector in 2008 went some way to sorting fact from myth and, I would argue, helped to restore some public trust in the likes of Tesco. And public trust in our banks has surely never been so low.

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EU Rules Spur Base Pay Hike For Goldman Staff

By Mark Kleinman, City Editor

Goldman Sachs is to hand substantial rises in fixed pay to hundreds of London-based staff as it contends with new European restrictions on bankers' remuneration.

Sky News has learnt that the Wall Street giant has decided to introduce role-based allowances for its most senior City employees in a bid to head off a growing number of requests for transfers to offices outside Europe, where they would be exempt from new European remuneration rules.

Goldman, which reported mixed fourth-quarter results on Thursday, has taken the unusual step of delaying informing European staff about their new salaries because it is still determining the number of individuals who will be eligible for the new fixed-pay awards it plans to introduce this year.

The shift from variable to fixed pay, about which staff will be informed shortly, will in some cases be worth hundreds of thousands of pounds, although the sums are not expected to impact the total amounts that Goldman's top risk-takers in London will earn.

Goldman partners are usually paid annual salaries of approximately $600,000 (£367,000) but are often awarded many times that sum in performance-related bonuses.

Under the new pay framework imposed by Brussels, the bank will only be able to pay double the level of salaries in variable pay to London-based staff in any given year.

That would mean that if Goldman retained the existing framework for fixed pay, the maximum sum its top City staff would be able to earn annually would be around £1.1m.

The bank's 2013 results released on Thursday revealed that Goldman had avoided many of the legal penalties faced by its rival, JP Morgan Chase, but experienced choppy trading in its fixed income division.

Goldman announced a net profit of $2.33bn (£1.4bn) for the fourth quarter of the year, a decline on the same quarter in 2012.

Goldman typically informs employees about their bonuses for the past year and salary changes for the coming 12 months on the day of its annual results.

However, an insider said that Goldman had on Thursday afternoon told the 6,000 staff who work for it in Europe, the Middle East and Africa (EMEA) that their fixed pay awards and 2014 salaries would not be communicated to them until the end of January.

Goldman's employees in the region did receive news of their 2013 bonuses as planned on Thursday although the bank does not break down overall pay at its London operations.

Senior Goldman executives are said to have opted for the delay in informing EMEA-based staff about the fixed-pay awards because hundreds of employees will become eligible for the new role-based allowances.

The bank is expected to identify the senior risk-taking staff who will be eligible for the new pay awards in the next fortnight.

The new European Union rules will restrict the amount that banks operating within the trading bloc can pay to their staff as a proportion of their basic pay.

From this year, banks will be allowed to pay up to 100% of salaries as bonuses, or double that sum with the approval of the company's shareholders.

The need to secure investor approval was used by Ed Miliband to apply pressure to the Conservatives on Wednesday. The Labour leader demanded that the Government block a move by Royal Bank of Scotland (RBS) to secure the ability to pay the higher sum to its staff.

At Goldman, the new allowances will count towards base salaries for the purposes of calculating bonus entitlements, although they are unlikely to be included in the calculation of pension contributions.

Last year, Goldman employed 115 senior risk-takers whose pay now has to be disclosed anonymously under rules introduced by the City watchdog.

That number is likely to grow substantially from this year under the new rules, insiders indicated.

The precise method of augmenting staff pay at Goldman has not yet been decided but could include stock awards and may be awarded on a lump-sum basis at the end of the next financial year, they added.

Barclays and HSBC are among the other banks which have devised methods for enhancing the remuneration of key staff as they seek to avoid a defection to rivals who are less hindered by the EU ratio cap.

Goldman is one of the City's largest employers and among the biggest overseas contributors to the UK Exchequer through corporate and personal taxation.

It said on Thursday that its compensation-to-revenue ratio was 36.9% in 2013, down from 37.9% a year earlier, equating to a total pay and benefits bill of $12.61bn (£7.7bn).

A defection of staff away from the UK would dent the Treasury's coffers, although there has been little evidence since the financial crisis of an overseas exodus of City workers despite measures such as the Coalition's bank levy.

Goldman's historic status as a lightning rod in the debate about bank pay means that its decision to introduce the role-based allowances may fuel the debate about bank pay.

In 2010, it imposed a £1m cap on the total compensation of its London-based partners as it sought to minimise its exposure to the then Labour government's one-off tax on bank bonuses.

Last year, the Wall Street ditched a plan to defer some pay increases until after the reduction in the top rate of income tax following criticism that was also directed at other banks.

A Goldman spokeswoman declined to comment on Thursday.

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Miliband Promises 'Reckoning' With Big Banks

Ed Miliband has promised to force the big five banks to give up "significant" numbers of branches to make way for new competitors if Labour wins the next general election.

In a keynote speech on the economy at the University of London, Mr Miliband will say the financial services industry has been "an incredibly poor servant of the real economy".

He will blame a lack of competition in the sector for misselling scandals and a £56bn drop in lending to business since 2010.

The Labour leader is attempting to flesh out his party's economic policy for the next Parliament.

Ed Miliband will set out the Labour Party economic policy

But he risks being overshadowed by Chancellor George Osborne's backing of a significant rise in the national minimum wage.

Mr Miliband will promise to introduce a legal maximum threshold for any bank's share of the market in personal accounts and small business lending, with powers to force the sale of branches and block mergers and acquisitions to prevent it being breached.

Under the proposals, the Competition and Markets Authority would report within six months of the May 2015 general election on the level the threshold should be set at and the timetable for the sell-off of branches, which would be completed by 2020.

He will say: "We need a reckoning with our banking system, not for retribution, but for reform.

"If we carry on as we are, we will end up stuck with the same old banks dominating our high street: the old economy.

"In America, by law, they have a test so that no bank can get too big and dominate the market. We will follow the same principle for Britain and establish for the first time a threshold for the market share any one bank can have of personal accounts and small business lending."

Earlier this week, Bank of England governor Mark Carney said a cap on banks' market share "would not result in substantial improvement to competition".

He told the Commons Treasury Committee: "Just breaking up an institution doesn't necessarily create or enable a more intensive competitive structure."

Business Secretary Vince Cable said he agreed with Mr Miliband's desire for increased competition but insisted that "many of the things he is calling for have actually happened".

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Lidl To Remove Sweets From Checkouts

By Poppy Trowbridge, Consumer Affairs Correspondent

I understand that Lidl will announce plans to remove all chocolate and sweets from the checkout queues in their supermarkets later this week.

The move is likely to be welcomed by consumer groups and parents alike, in the face of growing concerns about childhood obesity on the rise in the UK.

According to Sky sources, the discount retailer has been in consultation with customers for several months and the move is in response to preferences expressed by shoppers.

Parents face 'pester power' at the till while waiting with their children to pay for groceries.

Today, the National Obesity Forum said the UK is in danger of surpassing predictions of a 2007 report which estimated that 50% of the nation would be obese by 2050.

Lidl's action will likely increase the pressure on other supermarkets to take more definitive action.

All of the major supermarkets have committed to removing artificial 'trans fats' from their products.

But according to a Which? report published in December 2012, while Sainsburys and Tesco have banned sweets from supermarket checkouts, the policy does not apply to their smaller convenience stores.

Asda, Iceland and Morrisons all aim to 'limit' the sale of sugary treats near checkouts, but do not impose a blank ban like the one Lidl is proposing.

Waitrose does not have any policy in place on sweets at the checkout.

Last year, Lidl UK increased the number of 'healthy tills' in stores nationwide to 1,200.

The tills replaced 'treat' items such as chocolate with products of a higher nutritional value such as multivitamin juice and fresh fruit, as part of a healthy initiative to promote fresh fruit and vegetables to customers.

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Argos Owner Set To Name Walden As New Boss

By Mark Kleinman, City Editor

The owner of Argos is close to naming the chain's boss as its new group chief executive, a move that will also hand him oversight of the DIY retailer Homebase.

Sky News understands that Home Retail Group is poised to end a four-month search for a successor to Terry Duddy, the long-serving executive who announced last autumn that he would step down this year.

Insiders said on Monday that John Walden, who joined Argos as managing director nearly two years ago, was the board's preferred candidate to take the helm. An announcement could be made alongside Home Retail's Christmas trading update on Thursday, they said.

Mr Walden joined Argos as the company's managing director in February 2012

Argos is understood to have seen reasonable growth in like-for-like sales during the crucial festive period despite experiencing some problems with its website caused by an upgrade undertaken in mid-December, according to one insider.

If he does get the nod for the top job, it would reflect early signs of success in Mr Walden's efforts to reinvigorate Argos, the catalogue chain which has struggled in the face of competition from Amazon and other Internet-based retailers.

Last autumn, Home Retail announced the launch of a trial with eBay, the online auctioneer, that involves 150 Argos shops being used as collection points for selected eBay merchants.

Mr Walden previously worked at BestBuy, the US electrical goods group, and Sears. His nomination as group chief executive remains subject to final board approval and could be delayed beyond this week, another source said.

A Home Retail spokesman declined to comment.

Argos's Christmas sales performance is likely to mark it out as one of the high street's more successful general merchandise retailers during the period.

Major losers included Debenhams, which on Monday saw nearly 5% of its shares acquired by Sports Direct International, the chain led by Newcastle United owner Mike Ashley.

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China Bets Big On 'Iron Bird' Of The Skies

By Mark Stone, China Correspondent in Shanghai

In a vast hanger on the outskirts of Shanghai, the banging of hammers and screeching of drills indicates a company in a hurry.

Sky News has been granted exclusive access to the headquarters of Comac - China's answer to Airbus and Boeing. The vast campus forms the heart of China's attempt to take on the aviation giants.

Comac was only founded five years ago and yet it has already produced one passenger jet and, within a decade, it hopes to be selling planes to western airlines including Ryan Air and British Airways.

Jack Lee, a Comac executive, says: "This is a really exciting event for China. This is the first time in China's history that we have manufactured (passenger) aircraft by Chinese people.

"It's a challenge ahead of us. We already laid out our plan. The schedule is tight. We must fight for this schedule and fight for this milestone," he says.

Mr Lee and I are sitting in the cockpit of a full-size model of the C919, Comac's equivalent to the work-horses of the skies, Boeing's 737 and Airbus' A320. This is the plane which Comac hopes will launch its global success.

The 'iron bird' test platform fuselage simulator at the Comac hanger

Mr Lee is Chinese by birth but has spent most of his life living and working in the United States. His expertise from his previous career at General Electric and Raytheon are vital to the success of Comac.

The company is learning from mistakes and design failures made over decades by Boeing and Airbus in an attempt to get itself ahead.

"The advantage is that we have already learnt something from previous successful experiences or failures," says Mr Lee. "Lots of people here come from overseas and they bring lots of knowledge and talent.

"Also, there's lots of workers here and they work very hard."

The company is owned by the Chinese state who are as keen as Mr Lee that it is a success. The government recently pumped $3bn into the company and it has promised even more.

Taking on Boeing and Airbus is as much a project of national pride as it is a business necessity.

For China, taking on Boeing and Airbus is a project of national pride

"There are a few reasons," adds Mr Lee. "The first is that there are tremendous market needs. In the future we need more and more airlines and aircraft to serve our people.

"Also, we like to use aircraft industry as our sign to improve - because the aircraft industry is very complex - so the aircraft industry brings the whole Chinese industry to a higher level."

The C919 is the key to their success. The company initially gave itself six years to design, build and sell the C919. It should have been in our skies in 2014.

That deadline has now been pushed to the right a little. Staff have been asked to work longer hours to ensure it will be in the sky by 2015.

To the untrained eye, the C919 looks almost identical to the Airbus A320. It has the same wingspan and is almost the same length.

The new passenger jet will seat 190 passengers

Many of the components are the same too. The difference is that the C919 was designed and put together entirely in China by Chinese hands.

It seats 190 passengers and if the real thing is anything like the replica we are in, the cabin will have a modern, airy feel. It feels a bit like a smaller version of Boeing's Dreamliner. That's no surprise either because Comac has learnt lots from the troubled Dreamliner project. They have cherry-picked all that worked and avoided the aspects which did not.

On the ground outside the replica C919 is the evidence this plane is essentially an outsourced airliner even if it is designed and built in China.

The massive wooden crates containing airline parts have been shipped from Europe and America. One has come from Miami; another from Germany.

The C919's power-supply system is made by America's UTC Aerospace; the on-board entertainment will be provided by Thales of France, and the 'Engine Interface Control Unit' will probably be made by a UK company called Meggitt.

The jet's engine interface control unit is likely to be made by a UK firm

Mr Lee is keen to talk about safety. It is, he says, natural that people will have concerns about Chinese-made passenger jets. After all, historically at least, China's record on safety and quality is not great.

"These will be as safe as any other aircraft in the sky - Boeing or Airbus," he insists, repeating himself. "The safety level is the same as other aircraft that fly in the sky. So very safe."

It is true that in order to fly, Comac will need to get approval from the US Federal Aviation Administration and the Chinese equivalent, the CAAC.

If the C919 passes those tests, then there is only one other obstacle in the way of success for Comac.

Even without American Fedearl Aviation approval, Comac can still sell its planes in the massive domestic market. The state-run Chinese airlines will probably be pushed to buy a Chinese-made plane.

But in order to succeed with the C919 abroad, Comac must make it cheaper and more efficient than the Boeing and Airbus equivalents. Mr Lee believes it will be, which is why there are already 400 orders for the C919.

Many of the C919's components are similar to those used by Airbus

There is no published price for the C919 yet but speculation suggests it will be about $75m, which is $10m less than a B737 or an A320.

That has pricked the ears of one savvy Airline boss from Ireland; Ryanair CEO Michael O'Leary. At the 2011 Paris Airshow, Mr O'Leary signed a cooperation deal with Comac. He hopes the company will build him a bespoke passenger jet which will increase his profits.

Aviation rules stipulate that airlines must provide one flight attendant for every 50 passengers. So a plane with 200 passengers on board must have at least four flight attendants.

However, a plane with just 199 seats in it can legally have three flight attendants on board. Ryanair is reportedly interested in Comac's willingness to build a 199 seater jet.

On safety and passengers' willingness to fly on a jet made in China, Mr O'Leary is unconcerned, pointing out in a recent interview that 99% of his customers have no idea what model or make of plane they are travelling in.

Ryanair boss Michael O'Leary has signed a co-operation deal with Comac

Airbus has already shown its commitment to and belief in China. In 2009 it opened an assembly plant in the northern Chinese city of Tianjin. Chinese-constructed versions of its A320 have been rolling off the production line ever since.

The manager of the plant, German executive Andreas Ockel, gave Sky News an exclusive look inside the plant. He explained that China's aviation industry is now so huge, it is vital for Airbus to have a physical footprint here.

And on safety, he insists, the planes are identical, wherever they are put together.

"When you build an aircraft, safety is about what is designed into the process and into the aircraft itself," Mr Ockel says.

"What we have here is a process that's exactly the same as we have in Europe. You will not be able to differentiate a plane that comes out of here from any plane that comes out of Hamburg or Toulouse," he says.

Back at the Comac plant, Mr Lee hints at just how far China has come in such a short time.

"I can't imagine," he says. "So few years, such tremendous changes, I couldn't have imagined it. And of course the next 30 years? Who knows!?"

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'Fracking' Councils Could Pocket Millions

By Becky Johnson, North of England Correspondent

Financial rewards worth over a million pounds a year will be given to councils that give permission for "fracking" projects in their areas.

The move, announced by David Cameron, has angered campaign groups who are opposed to the controversial method of extracting shale gas from deep underground.

The Prime Minister has declared that shale gas exploration is part of his long-term economic plan and says local authorities that allow drilling will receive 100% of the business rates collected from the scheme - double the current 50%.

Whitehall officials estimate that could be worth £1.7m extra a year for each site a council agrees.

The move comes as French energy giant Total is expected to announce it is investing millions of pounds in firms with drilling licences in the UK.

Anti-fracking protesters at a rally at a driling site in Salford on Sunday

The news is a blow for hundreds of people who object to fracking in their communities.

On Sunday, protesters gathered from across the country to take part in a march in Salford close to an exploratory drilling site in an area known as Barton Moss.

Among the campaigners was Jackie Anderson, a teacher who lives within a mile of the site.

She told Sky News: "For the local residents it's got no benefit whatsoever. More and more the businesses and the councils are going to benefit because the incentives are going to them and we're getting none of the benefits at all."

Hydraulic fracturing, commonly known as fracking, is a process that involves drilling thousands of feet down into the earth to create a narrow well. Water and chemicals are then pumped in at high pressure to create fractures in the rock. Gas then flows from the cracks and is captured.

Vanessa Vine, who founded the British Anti-Fracking Action Network, travelled to Salford for the demonstration.

She has taken part in a long-running protest against a test site near her home in Balcombe in Sussex.

The protest was against an exploratory drilling site known as Barton Moss

She told Sky News: "Concerns of local residents range from everything from heavy traffic through villages, damage to the roads, right up to triggering of earthquakes and permanent, potentially permanent contamination of the groundwater, of the aquifer, of drinking water."

The Government estimates the industry could attract £3.7bn a year in investment and support 74,000 jobs.

Last year, new data from the British Geological Survey showed up to double the amount of shale gas could be extracted in the UK than previously thought.

Then, the Government pledged to give local communities £100,000 for each test-drilling project and a further 1% of the revenues if shale gas was discovered.

It is thought there may be as much as 1,300 trillion cubic feet at the Bowland site in Lancashire alone.

Tory peer Lord Howell of Guildford sparked anger in northern communities in July by suggesting fracking should take place in "desolate areas" in the north, a comment he later apologised for.

Announcing the latest financial incentives, David Cameron said: "A key part of our long-term economic plan to secure Britain's future is to back businesses with better infrastructure.

Vanessa Vine, founder of the British Anti-Fracking Action Network

"That's why we're going all out for shale. It will mean more jobs and opportunities for people, and economic security for our country."

Writing in the Sun on Sunday, business minister Michael Fallon said it could "drive down the cost of power for hard-working families and businesses".

But environmentalists have dismissed those claims.

Lawrence Carter, from Greenpeace, said: "This is a naked attempt by the government to bribe hard-pressed councils into accepting fracking in their area.

"Cameron is effectively telling councils to ignore the risks and threat of large-scale industrialisation in exchange for cold hard cash.

"But the proposal reveals just how worried the Government is about planning applications being turned down.

"Having had their claims that fracking will bring down energy bills and create jobs thoroughly discredited, the Government is now resorting to straight up bribery to sell their deeply unpopular fracking policy."

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Snow-Hit Sheep Farmers Fear Worse Is To Come

By Becky Johnson, North of England Correspondent

Farmers will have to prepare for the impact of more extreme weather on livestock and crops, according to the National Farmers Union.

The Union's deputy president has told Sky News he believes climate change may be to blame for unseasonal conditions like the damaging spring snowfall in 2013.

Meurig Raymond told Sky News: "The industry is facing the volatility of weather - maybe climate change. So feeding the world is going to be important going forward. We as farmers have to face up to that, but wake up for society as well."

His comments come as farmers say it will take years to recover financially from losses suffered during the coldest spring in 50 years.

Months on from snowfall that struck during lambing season, farmers have told Sky News their industry is still reeling from the heavy losses of livestock.

On the hills above Llanfairfechan in North Wales farmer Gareth Wyn Jones feeds the sheep that survived the heavy snow.

In March and April he spent weeks digging through feet of snow to recover the bodies of sheep and lambs that had perished.

Farmer Gareth Wyn Jones tends to his livestock in North Wales

Now, on a cold, sunny winter morning he surveys the surrounding hillsides that offer a stunning view across the Irish Sea.

He says the snow came at the worst possible time for sheep farmers. Most of the animals that died were new born lambs.

He estimates hundreds died on his farm alone.

"We lost about eighty breeding ewes and we lost a hundred ponies but we were fortunate - we dug eighty or ninety ewes out. A neighbour of ours lost half his hill flock overnight - gone," he said.

"There are some massive losses just in this little valley in North Wales."

Farmers in Northern Ireland, Scotland, Shropshire, Cumbria, Yorkshire and the Isle of Man also lost thousands of sheep and lambs.

The number of deaths forced the Welsh Assembly and Defra to temporarily relax strict EU rules that prevent farmers from burying dead animals. Usually farmers have to pay for carcasses to be removed.

Hundreds of sheep have been lost due to bad weather

Since the snowfall Defra says it has been working with farmers and  the insurance industry to ensure farmers are protected for future weather events.

They have also been working with the Met Office to publish detailed weather forecasts for farmers.

Joanne Briggs, from the National Sheep Association, told Sky News: "The time it will take for affected sheep farms to recover cannot be underestimated - it's not just the financial implications, which will take at least two or three years for business to overcome, but the loss of genetics from their flocks.

"Some bloodlines can never be replaced and that can mean a backward step of a decade or more for elite pedigrees.

"Like the animals that they care for, sheep farmers in general are incredibly resilient, but the spring of 2013 came at the end of an incredibly difficult 12 months and will leave a legacy for many years to come.

"But everyone can do their bit to support them, by making sure that when they buy lamb it is sourced from the UK."

Back on the farm in North Wales Mr Wyn Jones keeps an anxious eye on the long-term forecast.

He says he's not sure if they could cope with another spring snowfall. Most of his ewes are pregnant again and he's counting on the lambs due to be born this spring to help rebuild his livelihood.

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Ski Hosting Ban: British Company Leads Appeal

By Harriet Hadfield, Sky News Reporter

A British ski holiday company is leading an appeal against a ban on ski hosting in the French Alps.

The appeal comes after a court in Chambery in France said that the informal on-piste group tours led by ski reps are illegal.

The judge ruled that all future hosts must be fully qualified ski instructors certified by the notoriously tough French examining system.

Yorkshire-based Le Ski has joined forces with 12 other British tour operators to argue that the decision is in breach of European law.

Nick Morgan from Le Ski told Sky News: "I think that somebody somewhere has gone a little bit too far in the formation of the law and we are hoping that that is seen by the appeal court and if not is taken up by the European Court in Luxembourg."

In 2012 a ski rep was arrested on the piste and the company was then prosecuted for compromising safety.

Some British skiers say they miss the social side of skiing in a group

Simon Atkinson from the French Ski School says: "Even when they say they're only there to help them round the slopes, the people who are on holiday actually do think that they're responsible for them.

"So when they go on to the slopes, they put their whole confidence in that person to take them round and they follow them."

Some British skiers on holiday in Courchevel told Sky News they are missing the social side of skiing in a group this season.

Julie Tate said: "I miss the guiding more than I thought I would, it's really important to me because I come skiing by myself and skiing with a small group of people with a guide is a really good way to get to know people on the slopes."

John Willis explained: "Rather than spend all day looking at the map and planning my route, the guide used to be there and I could follow them. I'm totally lost without them."

The next step in the legal process will be an appeal heard in a French court in Albertville.

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