Tory Donor Ross In Frame To Chair Ofsted

By Mark Kleinman, City Editor

David Ross, the co-founder of the Carphone Warehouse high street chain, is a leading candidate to become the next chair of Ofsted, the education watchdog.

Sky News can exclusively reveal that Mr Ross, who has donated hundreds of thousands of pounds to the Conservative Party, is among a number of names being considered for the role by Michael Gove, the Education Secretary.

If Mr Ross is offered the post, it could ignite a political row with Labour at a time when Ofsted's handling of the 'Trojan Horse' schools extremism row has sparked furious divisions within the Government.

It could also spark opposition from within the Coalition - David Laws, a Liberal Democrat, is Mr Gove's deputy at the Department for Education (DfE).

Mr Gove decided in February not to renew the term of Baroness Sally Morgan, the current Ofsted chair and a Labour Peer, triggering claims - denied by Mr Gove - that the leadership of one of Britain's most important quangos was being damaged by political interference.

More recently, the education watchdog has been ordered to step up school inspections in the wake of the Trojan horse affair in Birmingham.

An investigation into some schools in the city saw five of them downgraded to inadequate and placed in special measures amid claims of takeovers by hardline Muslims.

Mr Ross is principally known for his involvement in the creation of Carphone Warehouse, which he set up during the 1980s with Sir Charles Dunstone.

In recent years, he has also become a prominent figure in the education sector, sitting on the council of Nottingham University and founding a series of academy schools through the David Ross Education Trust.

Friends of Mr Ross describe him as being "incredibly passionate" about education.

Academic results at the schools in his network were improving significantly since he began working with them, according to a spokesman.

Havelock Academy in Grimsby was Mr Ross's first academy, opening in 2007. His network now stands at 25 academies, educating 8,500 children at primary and secondaries, with a special school and a grammar school also part of the group.

Mr Ross's status as a donor to the Conservatives is nonetheless likely to be contentious if he does land the Ofsted role.

The precise sums given by Mr Ross are unclear but they are understood to amount to several hundred thousand pounds over the last decade.

A source close to the businessman said he had not given a "substantial" sum for some years.

Asked in February about whether Theodore Agnew, a financier who has also given substantial sums to the Tories, was a contender for the role, Mr Gove said that no candidate "should be ruled out on the grounds of political allegiance".

It is unclear whether Mr Agnew is being considered for the Ofsted chairmanship alongside Mr Ross, or who the other remaining candidates are.

The Carphone Warehouse co-founder, whose fortune is estimated at £892m by The Sunday Times Rich List, also made headlines in 2009 when he was cleared by City regulators of any impropriety over the mortgaging of some of his shares in the retailer.

DfE officials are being assisted in the selection process by GatenbySanderson, a recruitment firm.

A spokesman for Mr Ross declined to comment. The DfE also refused to comment.

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Watchdogs Pursue 'Debt Letter' Tactics

The City watchdog has urged people to send it copies of letters from debt recovery companies purporting to be working on behalf of high street names.

The Financial Conduct Authority's request comes amid reports that some banks and utility companies have sent 'bullying letters' to those in arrears over payments.

The letters may appear to be written by outside debt agencies, with only a passing mention of an in-house connection between debt collector and creditor.

The City regulator told Sky News: "The FCA is unable to comment on the activities of individual firms, but we are aware of these reports.

"We would request that anybody who has further information about this type of practice passes it onto the FCA."

The Solicitors' Regulation Authority (SRA) said it was investigating a number of complaints that have given it "cause for concern".

SRA executive director Richard Collins said: "We will shortly be issuing guidance for in-house solicitors on our existing requirement that publicity must not be misleading.

"This will make it clear that they cannot use forms of words that give the impression that they are an independent law firm and not employed solicitors."

Lloyds Banking Group confirmed that it owned a Scottish-based subsidiary, Blair Oliver & Scott Ltd (BOS), which was used for sending out letters.

The bank insists BOS, which operated from 1991 to 2013, did not undertake legal recoveries - only debt collection.

It told Sky News: "Blair, Oliver & Scott Ltd ... functioned as a debt collection company collecting debts owed to companies within what is now Lloyds Banking Group (previously HBOS plc and Bank of Scotland groups) in relation to a range of accounts including Bank of Scotland and Halifax overdrafts, loans and credit cards.

"It also acted as a debt collection agent for companies outside the Group such as utilities companies."

RBS previously used independently regulated in-house law firm Green & Co, along with Triton Credit Services.

An RBS spokesperson said: "Our customers should never be in any doubt about who they are communicating with.

"We have reviewed our policies in this area and will stop the use of any solicitor or debt collection brand names in correspondence with our customers that could cause confusion."

A Barclays spokesperson said its in-house firm was being wound down and told Sky News: "All debt collections are now carried out under the Barclaycard name, following a decision we took in April this year to end the use of separate companies.

"Mercers Debt Collections Ltd previously managed some collections work on behalf of Barclaycard but it was made clear to customers that they were a company within the Barclays Group and collecting on our behalf."

The Student Loan Company (SLC) was recently revealed to have used a similar tactic, since 2005, over university tuition fee arrears beyond three months.

On July 1, SLC said: "We (have) developed new letters which removed reference to the Student Loans Company as a 'client' and increased the font size of the footer which said 'Smith Lawson & Company is a trading name of the Student Loans Company Limited.'"

The revelation of apparent widespread use of the third party letters comes after payday loan firm Wonga issued fake legal letters to 45,000 customers.

The FCA made Wonga pay more than £2m in compensation for the practice carried out over a number of years, including charging some borrowers administration fees.

The Law Society said Wonga's action may have amounted to blackmail. Shortly afterwards, City of London police said it would reopen its 2013 examination into Wonga's activities.

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Asda To Cut More Than 1,350 Jobs Within Weeks

Asda is to cut a total of 1,360 within the next three months, it has been confirmed.

The supermarket chain, which is owned by US-based Walmart, had previously said there would be job losses but it did not reveal the number of cuts.

The plan will affect the management structure across its 578 UK stores.

The retailer said the redundancies will help create more flexible store management.

It said this would include greater emphasis on online services, removing so-called back office administration and increase the number of workers on the shop floor.

Asda chief executive Andy Clarke outlined a proposal to restructure store management last May.

At the same time, store staff were told of the new proposals, which were set to affect 4,100 people.

A formal 45-day consultation period then followed the announcement.

Asda was formerly equal second in the supermarket size ranking, alongside Sainsbury's, but has been losing ground with the rise of the deep discounters Aldi and Lidl.

Market leader Tesco has also seen its dominance whittled away by the discounters and the drift of some shoppers to the premium offerings of M&S and Waitrose.

Mr Clarke said: "Every supermarket must adapt to the intense changes in UK retailing or they will get left behind.

"We spotted this nearly two years ago, responding with a new strategy and taking time to thoroughly examine our structures, test scenarios, talk to our colleagues and adjust our proposals accordingly.

"This thorough process has helped us to reach this difficult decision today."

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Dow Jones Closes Above 17,000 For First Time

The US stock index made up of some of the biggest global firms has closed at above 17,000 for the first time ever.

Shares soared after a US jobs report showed unemployment was at its lowest rate in six years.

The government said on Thursday morning that the American economy added 288,000 workers in June, far more than analysts expected.

The Dow - a group of 30 big corporations from American Express to Walt Disney - closed up 92 points at 17,068. 

The S&P 500 - the index more closely tracked by investors - also closed at a record level, hitting 1,985.

The Nasdaq, meanwhile, ended at its highest since 2000.

Trading closed early on the eve of America's July 4 holiday, and the results leave investors with much to celebrate.

The Dow Jones' climb means that the index has gained more than 10,000 points since the depths of the US recession in 2009.

"Right now the story is onward and upward," Neil Massa, senior trading at John Hancock Asset Management, told AP news agency.

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Heathrow Sorry For T5 Baggage Fiasco

By Siobhan Robbins, Sky Reporter

Bosses at Heathrow have said they cannot confirm when passengers still waiting for bags, stranded after a computer glitch, will receive them.

The issues began at Terminal 5 last week and affected thousands of departing British Airways passengers.

Some had to fly without their luggage after the problems meant bags had to be manually processed, which takes a lot longer.

Speaking to Sky News on his first day as chief executive of Heathrow, John Holland-Kaye apologised to customers and said the issues had now been resolved.

However, he could not confirm when customers would receive their belongings, saying: "I can't give an exact time scale for that, we should have put all of the bags into the system here at Heathrow today that are remaining.

Pic: Navjot Gill

"It will then take a few days for British Airways to manage the process of getting them back into the hands of passengers.

"The best advice would be to contact British Airways to see how we can best do that.

"I would like apologise once again to any passengers who have been affected by this.

"We need to do better and as chief executive, starting today, it's my determination we should do".

Coleen Rooney was among those affected by the IT issues, which lasted from June 26 to 29.

The wife of England and Manchester United footballer Wayne took to Twitter to vent her frustration, writing: "Feel sick ... just received my 4 cases 2 days late from BA Heathrow to Las Vegas. Opened them all and they have been completely ransacked."

British Airways said it had been in touch with Mrs Rooney to apologise and confirmed it had launched an investigation.

In a statement regarding the delays, a spokesperson from the airline said: "We have been working round the clock to reunite customers with their bags since the airport's baggage system in Terminal 5 first started experiencing IT faults last Thursday morning."

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Sainsbury's Energy Hit By Mis-Selling Scandal

By Mark Kleinman, City Editor

British Gas is being forced to compensate thousands of customers for providing inaccurate savings estimates in the latest mis-selling episode to blight the utility sector.

Sky News has learnt that the UK's biggest energy provider, which is part of the FTSE-100 group Centrica, is paying out around £500,000 to approximately 4,300 people who signed up to Sainsbury's Energy and British Gas tariffs between February 2011 and March 2013.

Insiders said on Tuesday that British Gas had overstated the potential savings for consumers by providing inaccurate quotes for the following year's gas and electricity bills.

Details of the compensation package are understood to have been agreed with Ofgem, the industry regulator, and are expected to be confirmed in a public statement in the coming days.

A source said that British Gas had notified Ofgem of the mistake itself, and that the watchdog was satisfied with the proposed remedy, which has seen customers' accounts credited with average repayments of around £130.

The news comes days after the gas and electricity sector was referred by Ofgem to the Competition and Markets Authority for a full investigation.

The inquiry, which came in the wake of intense pressure from Ed Davey, the energy and climate change secretary, and Ed Miliband, the Labour leader, is unlikely to be completed until towards the end of next year.

British Gas was in April for blocking business customers from switching

Mr Miliband has sought to depict rising household energy bills as a central theme of the "cost of living crisis" that is likely to form the defining narrative of Labour's General Election campaign.

Sainsbury's Energy has operated in partnership with British Gas for several years, and has been in trouble with regulators before.

In 2012, dozens of British Gas employees were suspended for reportedly trying to persuade Sainsbury's customers to sign up to more expensive energy tariffs through an aggressive sales push inside its stores.

The supermarket chain ceased selling energy policies through British Gas staff in its stores last year, but retains a relationship with the Centrica subsidiary.

The latest payout comes after a series of fines and compensation packages imposed upon the major utilities.

In April, British Gas was fined £5.6m for unfairly blocking business customers from switching to rivals.

Npower, EDF Energy and Scottish Power, which have German, French and Spanish owners respectively, have also been hit by stiff penalties for mis-selling or misleading customers.

British Gas is also expected to face a record fine from Ofgem for failing to meet targets set under a household insulation scheme called Cert, which was funded from levies on consumers' bills.

Sources said that that penalty, which may not be finalised for several months, could run to tens of millions of pounds.

EnergyUK, the industry lobbying group, has responded to the string of scandals by pledging to reduce the time it takes for customers to switch providers.

Ofgem said, however, that growing consumer mistrust of the Big Six gas and electricity providers was a factor in its decision to refer the industry for a full competition probe.

British Gas, Sainsbury's and Ofgem all declined to comment on Tuesday.

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Spy Agency Plans Human-Like Computer Neurons

A secretive United States intelligence organisation has organised a conference to find firms capable of creating computer algorithms that learn in a similar manner to the human brain.

The Intelligence Advanced Research Projects Activity (IARPA) has announced a so-called Proposers' Day for its Machine Intelligence from Cortical Networks (MICrONS) programme.

Describing the project, IARPA said: "The overall and specific goal of the MICrONS program is to create a new generation of machine learning algorithms derived from high-fidelity representations of cortical microcircuits to achieve human-like performance on complex information processing tasks."

IARPA explained that the human brain uses a combination of algorithm "primitives", where neurons communicate in a localised, three-dimensional pattern.

"Today's state-of-the-art algorithms for machine learning take a similar form, but deviate significantly in the details of implementation," it said.

Researchers have previously coloured protein to see how neurons interact

"Presumably, a significant part of the performance gap separating artificial and biological computing today is due to these deviations."

Although science has built up more than a century's worth of neurological data, most relates to knowledge about large-scale behaviour involving millions of neurons - or on a microscale involving single or a few neurons.

The plan is to find business and research companies capable of understanding interactions in between these areas.

"MICrONS seeks to use emerging technologies in high-resolution and high-throughput brain mapping - such as serial electron microscopy and volumetric calcium imaging - to address this gap," the agency said.

The July 17 conference in College Park, Maryland, gives prospective companies time to deliver presentations and slide shows of their existing research.

The Director of National Intelligence is responsible for IARPA, which operates in a cross-agency manner.

IARPA says it is involved in "high-payoff research programmes to tackle some of the most difficult challenges of the agencies and disciplines in the intelligence community".

It undertakes research for more than a dozen organisations, including the Pentagon, the CIA and the National Security Agency.

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Mortgage Approvals Fall To 11-Month Low

UK mortgage approvals have dropped to their lowest level since June last year, according to the Bank of England (BoE).

It said 61,707 loans were agreed in May, down from the April figure of 62,806.

The May figure was a fifth below January's peak of 76,000.

Those loans totalled £15bn, which was also the lowest since June 2013.

New capping rules, known as the Mortgage Market Review (MMR), were brought in at the end of April to ensure borrowers have sufficient ability to increase repayments if rates rise.

Under MMR, lenders have been forced to increase their scrutiny of potential customers.

Applicants are asked detailed questions about their spending habits, such as gym fees, monthly expenditure on toiletries, and the ratio of fresh produce to other food types.

Would-be customers are also quizzed on what they consider to be essential and non-essential outgoings.

Meanwhile, the total amount of consumer credit continued to rise in May compared to April, up 13% to £740m.

But the net change in credit card lending dropped by more than half in May.

April's £428m new credit card lending plunged to £182m in May, possibly because people decided to clear outstanding debt ahead of applying for a mortgage.

On the weekend, homeowners were told to expect interest rates returning to their pre-recession levels within a decade.

In an exclusive interview with Sky News, BoE deputy governor Sir Charlie Bean, the Bank's longest-serving senior policy maker, said that this lower rate was only caused by a range of temporary factors.

Last week bank Governor Mark Carney suggested that even once borrowing costs rise, the "new normal" for them to settle at would be around 2.5% - significantly lower than the long-term average of 4-5%.

However Sir Charlie said that in the "long term", meaning beyond five or ten years, it could easily rise again towards 5% - the level traditionally considered "neutral".

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Rates 'May Return To Pre-Recession Levels'

Homeowners should expect interest rates to return to their pre-recession levels within a decade, the Deputy Governor of the Bank of England has warned.

Last week the Bank's Governor Mark Carney suggested that even once borrowing costs rise, the "new normal" for them to settle at would be around 2.5% - significantly lower than the long-term average of 4-5%.

But in an exclusive interview with Sky News Sir Charlie Bean, the Bank's longest-serving senior policy maker, said that this lower rate was only caused by a range of temporary factors.

Sir Charlie said that in the "long term", meaning beyond five or ten years, it could easily rise again towards 5% - the level traditionally considered "neutral".

"It might be reasonable to think that in that long term you would go back to 5% but it's probably quite a long way down the road," he said.

Sir Charlie's comments will be welcomed by savers who have suffered ever since the Bank lowered interest rates to just 0.5% five years ago.

However, they may also alarm millions of mortgage holders who may struggle to make their repayments.

The deputy governor, whose term comes to an end on Monday, also said that markets' expectations that the first increase in interest rates would come at the turn of the year seemed "reasonable".

He added: "The market has rates going up to 2.5% over the next three years. That seems like broadly sensible judgement."

Sir Charlie also admitted that in the run up to the crisis he, along with other economists, was "not sufficiently cognisant of the risks building up in the financial system".

However, he said that he was leaving the Bank in safe hands, and the economy far more resilient than when he arrived in 2000.

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Parcelforce Starts Seven-Day Delivery Service

Parcelforce, the express parcels business of Royal Mail, will today become the first national parcels carrier in Britain to deliver on Sundays.

The business said it anticipates the new service will be of particular benefit to online shoppers.

Among the first retailers to sign up is the department store Fortnum and Mason.

Iain Anderson, director of communications agency Cicero Group, said the move was about Royal Mail "sharpening up its act".

He told Sky News: "This is all about parcels not letters and what Royal Mail really see as an opportunity to hold onto market share.

"There is a lot of competition and seven-day trading is about making sure they maintain and, if they can, grow their market share.

"The significance of this is that by 2017 the vast majority of revenues and profits are going to be coming from parcels.

"This is all about making sure they can continue that trajectory because the letters business, for all mail providers with the growth of email, is in long-term decline."

The Communication Workers Union said it had reached an agreement that Sunday working would be voluntary, while negotiations will be held on new shift patterns.

National officer Terry Pullinger said: "Talks with Parcelforce management established a very important principle as far as employment security is concerned and we are delighted that we have had an assurance that permanent employees will be used to deliver this new exciting innovation to customers."

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Rates 'May Return To Pre-Recession Levels'

Homeowners should expect interest rates to return to their pre-recession levels within a decade, the Deputy Governor of the Bank of England has warned.

Last week the Bank's Governor Mark Carney suggested that even once borrowing costs rise, the "new normal" for them to settle at would be around 2.5% - significantly lower than the long-term average of 4-5%.

But in an exclusive interview with Sky News Sir Charlie Bean, the Bank's longest-serving senior policy maker, said that this lower rate was only caused by a range of temporary factors.

Sir Charlie said that in the "long term", meaning beyond five or ten years, it could easily rise again towards 5% - the level traditionally considered "neutral".

"It might be reasonable to think that in that long term you would go back to 5% but it's probably quite a long way down the road," he said.

Sir Charlie's comments will be welcomed by savers who have suffered ever since the Bank lowered interest rates to just 0.5% five years ago.

However, they may also alarm millions of mortgage holders who may struggle to make their repayments.

The deputy governor, whose term comes to an end on Monday, also said that markets' expectations that the first increase in interest rates would come at the turn of the year seemed "reasonable".

He added: "The market has rates going up to 2.5% over the next three years. That seems like broadly sensible judgement."

Sir Charlie also admitted that in the run up to the crisis he, along with other economists, was "not sufficiently cognisant of the risks building up in the financial system".

However, he said that he was leaving the Bank in safe hands, and the economy far more resilient than when he arrived in 2000.

:: Watch the full interview with Sir Charlie Bean on the Murnaghan programme from 10am on Sunday.

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Parcelforce Starts Seven-Day Delivery Service

Parcelforce, the express parcels business of Royal Mail, will today become the first national parcels carrier in Britain to deliver on Sundays.

The business said it anticipates the new service will be of particular benefit to online shoppers.

Among the first retailers to sign up is the department store Fortnum and Mason.

Iain Anderson, director of communications agency Cicero Group, said the move was about Royal Mail "sharpening up its act".

He told Sky News: "This is all about parcels not letters and what Royal Mail really see as an opportunity to hold onto market share.

"There is a lot of competition and seven-day trading is about making sure they maintain and, if they can, grow their market share.

"The significance of this is that by 2017 the vast majority of revenues and profits are going to be coming from parcels.

"This is all about making sure they can continue that trajectory because the letters business, for all mail providers with the growth of email, is in long-term decline."

The Communication Workers Union said it had reached an agreement that Sunday working would be voluntary, while negotiations will be held on new shift patterns.

National officer Terry Pullinger said: "Talks with Parcelforce management established a very important principle as far as employment security is concerned and we are delighted that we have had an assurance that permanent employees will be used to deliver this new exciting innovation to customers."

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