Starbucks Sales Fall For First Time In 16 Years

Starbucks' turnover dropped last year for the first time, in the wake of revelations about its corporate tax practices.

Sales for the year to September 29 were £399m, a decline of 3.4% compared to the previous year.

The company said the decline, the first since it started UK operations 16 years ago, was due to the closure of unprofitable outlets and not the result of other reasons.

It reduced its average UK workforce by 11.6% in the financial year to 7,726.

Starbucks was able to increase its gross profit by 13% to £79.7m, before deductions of £100.5m were taken into account.

Its pre-tax loss was £20.4m in the period, down from the £30.4m recorded in the 2011-12 financial year.

The company's tax liability in the period was £3.4m, but including deferred taxation was reduced to £2.25m.

A Starbucks spokesman told Sky News: "The UK business is moving in the right direction, but the turnaround will take time.

Protests outside Starbucks stores were held during this accounting period

"The continued loss is largely because the reforms we have introduced are yet to take full effect.

"Many of the expensive leases we have renegotiated occurred after our financial year started in October 2012. The benefits of this action will be shown in the accounts for this current year."

It said the £10m fall in the pre-tax loss was largely due to the rise in gross profits. Its staff costs dropped £13.5m in the tax year compared to the previous year.

In October and December 2012, key executives were grilled by MPs about multinational corporate (MNC) arrangements.

Revelations about royalty, licensing and transfer pricing structures used by MNCs to minimise UK tax burden became a focus for Westminster's Public Accounts Committee.

Seattle-based Starbucks was quizzed on why it remained a loss-making business for tax purposes while telling investors it was profitable.

Groups such as UK Uncut urged boycotts of Starbucks and organised store protests and the company's unmoderated website blog was flooded with hundreds of critical comments.

But the company said the latest sales drop was not related to the 2012 tax furore and says Britain is its star EU performer.

Executives from Amazon, Google and Starbucks were grilled by MPs in 2012

"The UK is our fastest growing market in Europe. We are on schedule to open 100 new stores this year and expect the business to continue to grow as economic growth picks up," the spokesman said.

However, the latest accounts filed with Companies House show that it is acutely aware of the impact certain issues may have on the company.

It said there was potentially a "significant risk" of "adverse impacts resulting from negative publicity regarding the company's business practices".

Responding to the widespread criticism in late 2012 it offered to pay a voluntary £20m in tax over two years, and has already given £15m of that to HM Revenue and Customs.

It also dropped total remuneration for its three directors by almost a fifth to £886,000, with the highest paid executive's salary falling by more than half to £268,582.

At the end of last September Starbucks had 549 company-operated stores in the UK, down 44 in the period.

It also had 125 licensed and 57 franchised operations. Although it has a planned franchise expansion, the company's website says it is not looking for new partners.

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Mortgage Lending Clampdown Comes Into Force

Homebuyers will face more scrutiny by mortgage lenders under new regulations which take effect today.

The industry-wide changes affect home buyers and people looking to re-mortgage and they will mean that lenders have to take a much stronger interest in people's spending habits and how their life plans could affect their ability to meet their repayments.

Mortgage applicants will need to sit through longer interviews, and provide more evidence that they can afford a home loan before being offered one.

Each lender will have their own interpretation of the new rules, but in general people are likely to be asked for more detail about regular outgoings such as childcare, food, household bills, loans, credit cards and leisure activities.

The changes also mean lenders will have to test whether homebuyers will be able to afford their mortgage payments if interest rates rise sharply, to 7% or above.

The Mortgage Market Review (MMR) rules aim to ensure there is no return to any irresponsible lending practices of the past, but there are some concerns that it could slow down the housing market.

The changes come amid growing consternation about rising house prices

Paul Broadhead, head of mortgage policy for the Building Societies Association, said: "The Mortgage Market Review was introduced in order to ensure that a common sense approach to mortgage lending is applied by all lenders and that people are not borrowing more than they can afford to pay.

"A number of building societies implemented the process early and have been lending this way, without problems, for a number of weeks."

Andrew Montlake, a director at broker Coreco, said that for people considering applying for a mortgage: "It's important for people to prepare a lot earlier, potentially six months before you apply. Start looking through your documentation and go through a budget."

He said most lenders will want to know whether mortgage applicants are planning to increase their spending for any reason in the near future and if they are expecting a change in their income.

Martin Wheatley, chief executive of the Financial Conduct Authority was asked this week about reports that some people are being asked if they are planning to have children.

He told the Daily Mail: "If you are eight months pregnant, that is a reasonable question. But most of the time that is probably too invasive - and that is not committed expenditure. People have a right to a certain degree of privacy.

"People should be expected to talk about known costs, such as school fees and car loans, but planning for future unknown events is a much more difficult space."

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Barclays Board Face Angry Shareholders At AGM

Senior management of Barclays bank have faced angry shareholders at the bank's annual general meeting, with its chairman forced to defend its bonus payments.

Sir David Walker told shareholders there would have been an exodus of top executives if it did not raise bonus levels.

The meeting, held at London's Royal Festival Hall and attended by 840 people, was the scene of successive hostile questions and jeering from the audience.

Laughter erupted after one angry investor told the board of directors: "We're paying for Manchester United but we are getting Colchester United."

Outside the venue, protesters took potshots at the board over bonuses and alleged tax haven support.

In 2012 Sir David Walker told MPs that banking culture must change

Despite the criticism, the proposals to pay £2.4bn in bonuses in 2013 were rejected by just 24% of shareholders who voted while a resolution to pay bonuses of 200% salary in future was overwhelmingly supported.

Standard Life - with a 1.9% stake in the bank - went public ahead of the vote and said it would not support the remuneration committee's proposals.

Standard Life governance and stewardship director Alison Kennedy said its remuneration report recommendations had harmed the bank's brand.

"We are unconvinced that the amount of the 2013 bonus pool was in the best interests of shareholders," she said.

"Particularly when we consider how the bank's profits are divided amongst employees, shareholders and ongoing investment in the business."

CEO Antony Jenkins did not take a bonus last year over the pay furore

On Tuesday, Sky News City Editor Mark Kleinman revealed the board would receive a mixed response from its powerful institutional investors.

The chairman told the AGM the bank was losing staff to US rivals as they paid up to 15% more.

He said the resignation rate for senior Barclays employees in the US almost doubled in 2013, amid increasing rejection of job offers at his bank.

Sir David said: "The challenge was the need for damage limitation and franchise protection... Despite all the reservations that have been expressed, I remain confident in my view that we took the right decision."

Chief executive Antony Jenkins also faced the hostile shareholders.

He has come under increasing criticism for bonus awards approved under his tenure.

Mr Jenkins is reviewing the future of the group's investment bank and will unveil the details on May 8.

As previously revealed by Kleinman, the CEO is expected to axe thousands of jobs to cut costs and help improve returns.

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GM Profit Skids To A Halt Due To Recalls

General Motors (GM) has seen its first-quarter profit plunge 85%, due to a series of vehicle recalls.

America's biggest car maker said net profit was $125m (£75m) for the first three months of the year.

The company was hit by a $1.3bn (£775m) charge for the cost of a worldwide recall of seven million vehicles.

The Detroit-based firm said it also spent $300m (£180m) for its ongoing restructure of its European operations.

Net revenue in the first quarter was $37.4bn (£22bn), up 1.35% from the first quarter of 2013.

"The performance of our core operations was very strong this quarter, reflecting the positive response of customers to the new vehicles we are bringing to market," GM chief executive Mary Barra said in a statement.

"Our focus remains on creating the world's best vehicles with the highest levels of safety, quality and customer service, while aggressively addressing our business opportunities and challenges globally."

GM has also been hit by successive investigations and legal actions because of a delay in recalling cars with a potential ignition switch fault.

The problem has been linked to 13 deaths in the US and a number of injuries.

The problem was first spotted in pre-production in 2001, however it was not until early 2014 that it instigated a recall.

It appointed a new head of safety and Ms Barra was called before a Senate hearing to testify about the cars.

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Facebook Profits Triple As Apple Sales Jump

A surge in advertising sales helped Facebook triple its profits in the first three months of 2014, the social networking site has revealed.

The company posted a Q1 profit of $642m (£383m) on the back of a 72% surge in revenues.

The amount of money it makes from advertising is up 82% on the same period last year, with mobile ads accounting for about 60% of all sales.

Facebook chief executive Mark Zuckerberg said: "Facebook's business is strong and growing and this quarter was a great start to 2014."

In an apparent nod to the company's $19bn (£11.4bn) acquisition of WhatsApp, he added: "We've made some long term bets on the future while staying focused on executing and improving our core products and business.

"We're in a great position to continue making progress."

Facebook released its figures at almost the same time as Apple, which reported first-quarter sales of $45.6bn (£27.2bn) - up about 5% year-on-year - and a $10.2bn (£6.1bn) profit.

The company's CEO, Tim Cook, promised "new products and services that only Apple could bring to the market".

Much of Facebook's growth is linked to soaring mobile use among its 802 million daily active users.

Around eight in every 10 users log in to the site using a mobile device - up more than 40% year-on-year.

Apple said it sold 44 million iPhones between January and March - a rise of 17% on the first three months of 2013.

It shifted 16 million iPads and four million Macs in the same period but iPod sales continued to slump, down more than 50% on the start of last year.

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Gym Fees 'Could Stop Mortgage Approvals'

By Ed Conway, Economics Editor

Homebuyers could find themselves turned down for a mortgage because of their gym memberships, phone bills and pension payments, under new rules introduced this weekend, experts have warned.

Mortgage advisors said new restrictions introduced under the Mortgage Market Review (MMR) would drastically increase the intrusiveness of checks undergone by applicants.

The warning coincided with advice from economists, who claim the rules could dampen down activity in the housing market.

The new rules, part of a push to prevent lenders handing out loans to those unable to afford them, will stipulate banks and building societies must inspect customers' spending commitments to ensure they can keep up their monthly payments.

Those commitments might include items as innocuous as informal club memberships, according to Peter Marriott of Westexe Mortgage Solutions.

He said: "They might have a gym membership, they might be contributing to a pension plan - anything that's deemed by a mortgage lender to be a commitment could be held against them as an ongoing expense, which would in turn affect the affordability and the lender's decision on how much they can borrow."

The MMR changes will also mean lenders have to test whether homebuyers will be able to afford their mortgage payments if interest rates rise sharply, to 7% or above.

The Bank of England's Financial Policy Committee has recommended it should be able to change the suggested stress test rate in future, giving it an extra lever to influence house prices.

The changes come amid growing consternation about rising house prices.

According to the Office for National Statistics, house prices across the UK have increased by 9.1% in the past year.

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GSK In £8.5bn Deal With Swiss Rival Novartis

British drug giant GlaxoSmithKline (GSK) is to sell its oncology business to Novartis for $14.5bn (£8.5bn) and will buy the Swiss company's vaccines division.

Novartis is expected to pay another $1.5bn (£900m) if certain milestones on the deal are met.

Under a "major three-part transaction" GSK and Novartis have agreed also to create a consumer healthcare business, GSK confirmed in a statement.

GSK will own 63.5% of the newly-created consumer healthcare business.

The British firm said it would use proceeds from the deals to return £4bn to its shareholders.

Shares in the company were up more than 4% in midday Tuesday trades.

GSK chief executive Sir Andrew Witty said the deals are expected to be completed during the first half of 2015.

He said they would accelerates the firm's "strategy to generate sustainable, broadly sourced sales growth and improve long-term earnings".

Novartis confirmed it signed several multi-billion dollar deals with GlaxoSmithKline and US company Eli Lilly, which may affect up some 15,000 of its employees.

It will sell the vaccines business to GSK, excluding its flu sector, for $7.1bn (£4.2bn), plus royalties.

Eli Lilly will buy the Basel-based firm's animal health division for about $5.4bn (£3.2bn)

No details have been released on the potential impact of the deal on jobs for the Brentford-based GSK.

Sir Andrew added: "Opportunities to build greater scale and combine high quality assets in vaccines and consumer healthcare are scarce.

"With this transaction we will substantially strengthen two of our core businesses and create significant new options to increase value for shareholders."

Meanwhile, US pharma giant Pfizer may renew its bid for British drug company AstraZeneca, after its reported £60bn takeover approach was rejected.

AstraZeneca topped the FTSE 100 top risers on Tuesday morning, up more than 7% on the potential deal before easing slightly.

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Center Parcs' Term-Time TV Advert Banned

A TV advert for Center Parcs which "irresponsibly encouraged parents" to take their children on holiday during term time has been banned.

The ad, which promoted four-night midweek breaks at the luxury resorts and featured families with school-aged children, aired with a small print disclaimer warning the offer "excludes school holidays".

Although only two viewers complained, the Advertising Standards Authority (ASA) ruled the advert emphasised a "family break" and said it suggested families could take advantage of an offer that was not available at weekends or during school holidays.

An on-screen message stating 'your family, your time' was "likely to be an encouragement for parents to take up the offer", a spokesman for the ASA said.

"Because the ad focused on a family break to promote an offer which was available only during term time, we concluded it irresponsibly encouraged parents to take their children out of school," he added.

The ban comes weeks after an online petition signed by more than 170,000 people triggered a debate among MPs over the cost of school holiday breaks.

Pupils are only allowed absence outside of school holidays except in "exceptional circumstances" and parents can be fined for taking their children on term-time breaks.

The e-petition accused travel companies of "cashing in" and demanded parents be allowed some "guilt-free family time".

A spokesman for Center Parcs said the company had "always adhered to the ASA processes and guidelines" and insisted the commercial had been cleared for broadcast.

"Our ad shows a number of families, with children of varying ages, enjoying some of the activities that are available at Center Parcs," he said.

"We do not believe the ad encourages parents to take their children out of school and it is very clear that the price displayed excludes school holidays."

He added: "In our opinion, this ASA ruling represents a new interpretation of the guidelines.

"However, whilst we believe this ruling to be extremely harsh, we do of course take on board the ASA's comments and will continue to work within their guidelines."

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British Gas Bonus Claims To Be Investigated

Claims that British Gas workers have been paid large bonuses to inflate customer bills are to be investigated by the energy regulator, Ofgem.

It comes after a former employee claimed the energy company encouraged its sales staff to sign up charities, churches and small businesses to its highest-priced tariffs in order to boost their own earnings.

British Gas has strongly denied the allegations.

The whistleblower, who worked for the company between 2010 and 2013, told the Daily Mail the firm's policies were designed "to rip off" customers.

He claimed sales agent typically earned between £4 and £37 in commission per deal if they persuaded existing customers to renew contracts.

But by moving a customer to a more expensive deal they could earn more than £400 a time, he alleged.

"People were desperate to make the salaries they had been promised, so everyone inflated the prices," he told the paper.

"Scout clubs was a favourite one; churches, charities, small businesses, where people would just go for the maximum 5p notch-up," he added.

Ofgem will investigate whether the sales activities were 'honest and fair'

A British Gas spokeswoman said: "British Gas strongly refutes any suggestion that employees are paid commission on any prices charged to residential customers."

British Gas Business managing director Stephen Beynon said his sales agents are paid commission, but he denied any suggestion that contracts were negotiated inappropriately.

"This is a highly regulated market, and every part of the sales negotiation process is closely monitored," he said.

"Sales agents in British Gas Business do receive commission, but we are reducing its importance.

"We're leading the way in addressing the variability in price that customers face in this market, and we'll continue to do so."

Ofgem said in a statement: "There are strict rules in place which require suppliers to take all reasonable steps to ensure information provided is accurate and not misleading, and that sales activities are conducted in a fair, honest, transparent and professional manner.

"Ofgem is an evidenced-based regulator and we would encourage anyone with information that an energy company is not complying with Ofgem rules to provide us with this."

Energy and Climate Change Secretary Ed Davey said: "This is a very serious and deeply disturbing allegation that comes as we are doing all we can to make the energy markets work better for all consumers - whether domestic or businesses.

"The Government fully supports Ofgem's recommendation for a full market investigation.

"In the meantime, we'll continue to help people pay less for the energy they use, driving the competition that has seen the number of energy suppliers triple since 2010 and people switching supplier in record numbers."

The allegations come days after Ofgem fined British Gas Business for a series of failures including blocking firms from switching to other suppliers.

Ofgem said British Gas Business would pay a total penalty of £5.6m of which £800,000 would be in fines, on top of £1.3m already paid to 1,200 customers who paid higher bills because they were not notified when their contracts were due to expire.

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Best Of British Gear Up For China Car Show

Western Firms Need To Heed China Potential

Updated: 8:33am UK, Tuesday 14 January 2014

By Roland Boal, Designer, Priestmangoode

Western companies need to pay a lot more attention to what is happening in China and Britain's presence here is more limited than it could be.

There is a lot more potential here than is being tapped because Britain's creative industries are extremely well regarded in China.

There is a hunger for new and exciting things. China is moving really fast and moving forward.

There is a certain sense of excitement among people and I think they want products that reflect that; whether it is a train or a plane.

If it is a high-speed train, then make it look really fast.

For us, that is liberating, it is nice to be able to let your imagination run more freely.

In terms of design work, there is no sense of "that will be too difficult to make" or "that will be uneconomical to make" - within reason.

Quality control can sometimes be an issue, but like with any manufacturing facility anywhere in the world, as long as it is subject to the right level of on-going scrutiny and support I do not think that should be a problem.

Apple's products are an obvious example of beautifully-made things that are made here in China.

I get very upset when I hear things like "of course it broke, it was made in China" or "I don't buy that company's products because they're made in China", I think there is such an out-of-date attitude towards the capability of manufacturing in China.

I think we really do need to re-evaluate how we perceive manufacturing in China.

Yes, you can get low-quality products but manufacturing is, by definition, a supply activity so they are not creating the demand for low-quality low-cost electronics, they are fulfilling our demand for the instant gratification of, say, a $300 television.

Undeniably, there are examples of unscrupulous manufacturers ripping off products and knowing exactly what they are doing, but I think those are the exceptions rather than the rule.

I think we get a little bit obsessed by the idea of fake products in China and blatant rip-offs.

But nobody who could afford the original, particularly in China, would be seen dead with it.

I have come across no examples of dishonesty or seen anybody behave poorly. I think China recognises the importance, particularly internationally, of addressing this negative stigma attached to corruption.

There are plenty of markets yet to be exploited in China. We are looking at an explosion in the popularity of private jets and helicopters.

At the moment I think there are fewer than 500 private aircraft in all of China because you were not really allowed to fly them.

Now that you are, people will buy them and they will buy a combination of Chinese products and internationally-designed helicopters.

China is such a huge country, they have an enormous amount of experience manufacturing products for domestic consumption, it seems to have taken them a little while to start looking internationally.

As they do so, they are looking for products designed for international consumption.

So as Chinese airframe manufacturers are selling more products in Africa and South America, if those have been made in China, great, and designed in Britain, also great. Everyone wins.

:: Watch Sky News live on television, on Sky channel 501, Virgin Media channel 602, Freeview channel 82 and Freesat channel 202.

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British Gas Bonus Claims To Be Investigated

Claims that British Gas workers have been paid large bonuses to inflate customer bills are to be investigated by the energy regulator, Ofgem.

It comes after a former employee claimed the energy company encouraged its sales staff to sign up charities, churches and small businesses to its highest-priced tariffs in order to boost their own earnings.

British Gas has strongly denied the allegations.

The whistleblower, who worked for the company between 2010 and 2013, told the Daily Mail the firm's policies were designed "to rip off" customers.

He claimed sales agent typically earned between £4 and £37 in commission per deal if they persuaded existing customers to renew contracts.

But by moving a customer to a more expensive deal they could earn more than £400 a time, he alleged.

"People were desperate to make the salaries they had been promised, so everyone inflated the prices," he told the paper.

"Scout clubs was a favourite one; churches, charities, small businesses, where people would just go for the maximum 5p notch-up," he added.

Ofgem will investigate whether the sales activities were 'honest and fair'

A British Gas spokeswoman said: "British Gas strongly refutes any suggestion that employees are paid commission on any prices charged to residential customers."

British Gas Business managing director Stephen Beynon said his sales agents are paid commission, but he denied any suggestion that contracts were negotiated inappropriately.

"This is a highly regulated market, and every part of the sales negotiation process is closely monitored," he said.

"Sales agents in British Gas Business do receive commission, but we are reducing its importance.

"We're leading the way in addressing the variability in price that customers face in this market, and we'll continue to do so."

Ofgem said in a statement: "There are strict rules in place which require suppliers to take all reasonable steps to ensure information provided is accurate and not misleading, and that sales activities are conducted in a fair, honest, transparent and professional manner.

"Ofgem is an evidenced-based regulator and we would encourage anyone with information that an energy company is not complying with Ofgem rules to provide us with this."

Energy and Climate Change Secretary Ed Davey said: "This is a very serious and deeply disturbing allegation that comes as we are doing all we can to make the energy markets work better for all consumers - whether domestic or businesses.

"The Government fully supports Ofgem's recommendation for a full market investigation.

"In the meantime, we'll continue to help people pay less for the energy they use, driving the competition that has seen the number of energy suppliers triple since 2010 and people switching supplier in record numbers."

The allegations come days after Ofgem fined British Gas Business for a series of failures including blocking firms from switching to other suppliers.

Ofgem said British Gas Business would pay a total penalty of £5.6m of which £800,000 would be in fines, on top of £1.3m already paid to 1,200 customers who paid higher bills because they were not notified when their contracts were due to expire.

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Best Of British Gear Up For China Car Show

Some of Britain's most famous cars are on parade today at one of the most important days in the motoring calendar.

Ford cars on display at the 50 years celebration ceremony of Ford

UK brands such as Rolls-Royce, Jaguar and Land Rover are showing their new models at the China Motor Show in Beijing to help boost sales in an intensely competitive market.

An original 1965 Ford Mustang Convertible alongside today's model

More than 1,100 vehicles will be on display at the exhibition which will also be attended by General Motors, Toyota, Volkswagen and Hyundai, along with SAIC and Dongfeng, China's domestic carmakers.

Although sales growth is forecast to slow from last year's 15.7% to 8 to 10% this year, China remains the world's biggest auto market with 17.9 million vehicles sold last year.

Car sales are expected to slow in China this year

The expo comes as a growing number of Chinese cities are restricting the number of cars on the road in a bid to battle pollution and congestion, moves that analysts warn could cut into purchases.

The eastern city of Hangzhou, a popular tourist destination, last month became the sixth major city to implement such a restriction, with some estimates placing the limit at 80,000 cars a year.

More than 1,100 vehicles will be on display at the exhibition

The boss of Mercedez-Benz in China told Sky News earlier this year that survival in the automotive industry is based largely on success in China.

German auto giant Daimler also announced recently it had signed a $1.4bn deal with Chinese partner Beijing Automotive Industry Corporation to expand production at their joint venture in Beijing.     

Among the cars on display at the exhibition will be one of the first 1965 Ford Mustang Convertibles.

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British Gas Bonus Claims To Be Investigated

Claims that British Gas workers have been paid large bonuses to inflate customer bills are to be investigated by the energy regulator, Ofgem.

It comes after a former employee claimed the energy company encouraged its sales staff to sign up charities, churches and small businesses to its highest-priced tariffs in order to boost their own earnings.

British Gas has strongly denied the allegations.

The whistleblower, who worked for the company between 2010 and 2013, told the Daily Mail the firm's policies were designed "to rip off" customers.

He claimed sales agent typically earned between £4 and £37 in commission per deal if they persuaded existing customers to renew contracts.

But by moving a customer to a more expensive deal they could earn more than £400 a time, he alleged.

"People were desperate to make the salaries they had been promised, so everyone inflated the prices," he told the paper.

"Scout clubs was a favourite one; churches, charities, small businesses, where people would just go for the maximum 5p notch-up," he added.

Ofgem will investigate whether the sales activities were 'honest and fair'

A British Gas spokeswoman said: "British Gas strongly refutes any suggestion that employees are paid commission on any prices charged to residential customers."

British Gas Business managing director Stephen Beynon said his sales agents are paid commission, but he denied any suggestion that contracts were negotiated inappropriately.

"This is a highly regulated market, and every part of the sales negotiation process is closely monitored," he said.

"Sales agents in British Gas Business do receive commission, but we are reducing its importance.

"We're leading the way in addressing the variability in price that customers face in this market, and we'll continue to do so."

Ofgem said in a statement: "There are strict rules in place which require suppliers to take all reasonable steps to ensure information provided is accurate and not misleading, and that sales activities are conducted in a fair, honest, transparent and professional manner.

"Ofgem is an evidenced-based regulator and we would encourage anyone with information that an energy company is not complying with Ofgem rules to provide us with this."

Energy and Climate Change Secretary Ed Davey said: "This is a very serious and deeply disturbing allegation that comes as we are doing all we can to make the energy markets work better for all consumers - whether domestic or businesses.

"The Government fully supports Ofgem's recommendation for a full market investigation.

"In the meantime, we'll continue to help people pay less for the energy they use, driving the competition that has seen the number of energy suppliers triple since 2010 and people switching supplier in record numbers."

The allegations come days after Ofgem fined British Gas Business for a series of failures including blocking firms from switching to other suppliers.

Ofgem said British Gas Business would pay a total penalty of £5.6m of which £800,000 would be in fines, on top of £1.3m already paid to 1,200 customers who paid higher bills because they were not notified when their contracts were due to expire.

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Best Of British Gear Up For China Car Show

Some of Britain's most famous cars are on parade today at one of the most important days in the motoring calendar.

Ford cars on display at the 50 years celebration ceremony of Ford

UK brands such as Rolls-Royce, Jaguar and Land Rover are showing their new models at the China Motor Show in Beijing to help boost sales in an intensely competitive market.

An original 1965 Ford Mustang Convertible alongside today's model

More than 1,100 vehicles will be on display at the exhibition which will also be attended by General Motors, Toyota, Volkswagen and Hyundai, along with SAIC and Dongfeng, China's domestic carmakers.

Although sales growth is forecast to slow from last year's 15.7% to 8 to 10% this year, China remains the world's biggest auto market with 17.9 million vehicles sold last year.

Car sales are expected to slow in China this year

The expo comes as a growing number of Chinese cities are restricting the number of cars on the road in a bid to battle pollution and congestion, moves that analysts warn could cut into purchases.

The eastern city of Hangzhou, a popular tourist destination, last month became the sixth major city to implement such a restriction, with some estimates placing the limit at 80,000 cars a year.

More than 1,100 vehicles will be on display at the exhibition

The boss of Mercedez-Benz in China told Sky News earlier this year that survival in the automotive industry is based largely on success in China.

German auto giant Daimler also announced recently it had signed a $1.4bn deal with Chinese partner Beijing Automotive Industry Corporation to expand production at their joint venture in Beijing.     

Among the cars on display at the exhibition will be one of the first 1965 Ford Mustang Convertibles.

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