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Malaysia Airlines Offers Passenger Refunds

Written By Unknown on Sabtu, 19 Juli 2014 | 11.46

Malaysia Airlines is to refund fares for passengers no longer wishing to travel on the carrier, Sky News has confirmed.

Previously booked passengers due to fly up to and including July 25 can seek a refund without incurring any penalty.

The decision comes amid a wave of concern following the downing of MH17 over eastern Ukraine.

It is unclear how many passengers will cancel their flights.

Nevertheless, the refund will further harm the perception of the carrier both for passengers and investors.

Shares in Malaysia Airlines closed down more than 10% on Friday.

The Kuala Lumpur-listed company saw its stock fall more than 17% at one point before easing prior to the market close.

"Perception-wise it really hits home - It's very challenging. It's very difficult to fight against negative perception," Maybank aviation analyst Mohshin Aziz said.

"I can't comprehend of anything they can do to save themselves."

A woman prays for passengers onboard the missing Malaysia Airlines flight MH370 at Kechara retreat centre in Bentong Many of the carrier's woes precede the loss of MH370 earlier this year

The company has struggled recently, and its accounts have been in the red for the last three years.

In 2013, the airline's full-year losses grew to £215m - up almost threefold on the 2012 loss of £80m.

The Malaysian government owns 69% of the firm.

As a state-owned flag carrier, it is required to fly unprofitable domestic routes, and its strong union has resisted operational changes.

Plane Attack: special report

Budget rivals have adapted to the changing air market, particularly in Asia, with greater speed than legacy carriers such as Malaysia.

Many of its woes precede the mysterious loss of flight MH370 in the Indian Ocean.

Airline Weekly managing partner Seth Kaplan described it as being in "worse shape" financially than almost all other carriers - even before MH370 vanished.

"It's just hard to imagine that they could have even survived the first incident without a lot of government help and now they're going to need even more," Mr Kaplan said.


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Top City Banker To Pay £450,000 FCA Penalty

By Mark Kleinman, City Editor

One of the City's top financiers is poised to pay a £450,000 fine after deciding to accept a market abuse ruling by the Financial Conduct Authority (FCA).

Sky News understands that Ian Hannam, a banker who became known as the 'king of mining M&A' after engineering some of the world's biggest natural resources mergers, is to accept the watchdog's original verdict after losing an appeal in May.

An insider said on Friday that a statement from the FCA confirming that the original decision is to be upheld is expected as early as next week.

Mr Hannam, who had a long career at JP Morgan Cazenove before leaving in 2012, was accused by the FCA of inappropriately disclosing inside information in 2008 about Heritage Oil, a client, to a potential buyer.

He had argued that the FCA's ruling was erroneous and that he acted in accordance with City rules, vowing to fight the decision.

The regulator did not accuse or find Mr Hannam guilty of deliberately setting out to commit market abuse or accuse him of lacking honesty or integrity.

The Upper Tribunal of the High Court rejected his appeal in a judgement which was greeted by relief at the FCA but which raised questions about the clarity of guidelines about acceptable City conduct.

Both parties are understood to have made representations about the scale of the fine following the verdict of the Upper Tribunal, which said:

"Although the parties' written submissions did say something about the appropriate penalty if Mr Hannam had been engaged in market abuse, we consider that we cannot properly deal with this aspect of the case without giving the parties the opportunity to make further submissions in the light of our findings on the substantive issues.

The tribunal and the parties will need to consider the best way forward procedurally for dealing with the question of penalty."

The ruling left open the question of whether the penalty imposed on Mr Hannam should be increased or decreased.

Mr Hannam, who received backing from a number of prominent City figures and company bosses during his appeal, is said to have racked up legal fees of approximately £1m during his case.

Since leaving JP Morgan, he has rebuilt his career, taking control of a number of businesses in the mining and resources industries.

He has also given financial backing to Heathrow Hub, one of the shortlisted candidates for expanding runway capacity in south-east England.

Spokesmen for Mr Hannam and the FCA declined to comment on Friday.


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Germans Seek To Land Gatwick Air Traffic Role

Written By Unknown on Jumat, 18 Juli 2014 | 11.46

By Mark Kleinman, City Editor

Germany's state-owned airspace controller is vying with its principal British rival to land a 10-year deal to run air traffic services at the UK's second-busiest airport.

Sky News has learnt that London Gatwick's shareholders have been running a secret process to appoint a partner to run the airport's air traffic control tower until 2025.

Sources said the final two shortlisted bidders were the UK's National Air Traffic Services (NATS) and Deutsche Flugsicherung (DFS).

A decision is expected to made imminently, with an announcement about the winner possible as early as Friday.

The contest represents the biggest UK airport to consider moving oversight of its airspace to a foreign administrator to date.

The Civil Aviation Authority's approval would be required to approve such a change.

Gatwick handles 36 million passengers annually and has 55 air traffic movements every hour, making it the busiest single-runway airport in the world.

An aviation industry source said the tender process to run Gatwick's air traffic services would prioritise capability ahead of costs.

The contract will be awarded at a time when expansion at London's capacity-constrained airports is a serious political issue.

An independent commission chaired by Sir Howard Davies, the former head of the Financial Services Authority, is due to make a final recommendation about the location of new runways after next year's general election.

If Gatwick is selected as the venue for an additional runway, construction would begin during the operation of the new air traffic control contract.

The competition between NATS and DFS is intriguing because the German group was bidding a year ago to buy a big shareholding in its British counterpart.

DFS lost out to the Universities Superannuation Scheme, a UK pension fund, despite tabling a higher offer for a stake in The Airline Group, which controls 41.9% of NATS.

If the German group was to win the Gatwick contract, which will come into effect when NATS' existing deal expires next year, it would be seen as disappointing news for the UK operator.

Last month, it emerged that top managers at NATS had had bonuses withheld because of a December computer failure which caused hundreds of flights to be delayed or grounded.

NATS handles 2.2 million flights and 220 million passengers in UK airspace every year.

Gatwick could not be reached for comment on Thursday.


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Microsoft Cuts 18,000 Jobs In Nokia Cull

Microsoft has confirmed plans to "eliminate" up to 18,000 jobs worldwide as part of efforts to simplify the company's operations and cut costs.

The announcement was made in an email to staff entitled 'Starting to Evolve Our Organization and Culture' by new chief executive Satya Nadella, who is moving to reshape Microsoft into a cloud-computing and mobile-friendly software company.

The $7.2bn (£4.2bn) purchase of Nokia's mobile division - which is being integrated into Microsoft - was to account for the majority of the losses, Mr Nadella said, as overlaps were identified.

The deal, completed in April, added 28,000 positions to Microsoft's payroll.

The company, which now employs 127,104 people globally, has 3,500 staff in the UK but no announcement was made on exactly where the cuts would be made, apart from identifying 1,300 losses in Seattle.

It estimated costs of up to $1.6bn (£1bn) initially before any savings would be felt.

Mr Nadella told staff: "The first step to building the right organisation for our ambitions is to realign our workforce.

"With this in mind, we will begin to reduce the size of our overall workforce by up to 18,000 jobs in the next year.

"Of that total, our work toward synergies and strategic alignment on Nokia Devices and Services is expected to account for about 12,500 jobs, comprising both professional and factory workers.

"We are moving now to start reducing the first 13,000 positions, and the vast majority of employees whose jobs will be eliminated will be notified over the next six months.

"It's important to note that while we are eliminating roles in some areas, we are adding roles in certain other strategic areas.

"My promise to you is that we will go through this process in the most thoughtful and transparent way possible.

"We will offer severance to all employees impacted by these changes, as well as job transition help in many locations, and everyone can expect to be treated with the respect they deserve for their contributions to this company."

Microsoft's share price rose more than 1% in pre-market trading after news of the plan was confirmed.

The shake-up was seen as central to the company's shift from being software-focused to one that sells online services, apps and devices it hopes will make people and businesses more productive - challenging the dominance of firms like Samsung, Apple and Google.


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Economy: Weakest Pay Growth For Five Years

Written By Unknown on Kamis, 17 Juli 2014 | 11.46

The Biggest Five-Year Drop In Wages Since 1864

Updated: 4:28pm UK, Wednesday 16 July 2014

By Ed Conway, Economics Editor

Let's begin at the beginning.

Britain is poorer ... much poorer ... than it was five or six years ago.

If you don't believe me, take a look at gross domestic product - simply, the amount of income generated in the country in a given year.

Divided by the number of people in the UK, this income (or, as economists call it, GDP per capita) is still about 6% lower today than in 2008.

Mull over that for a moment, because in the end that's what almost every domestic economic story comes down to these days: that diminished national income and the question of how it is shared among households.

Today's labour market figures are a vivid illustration of the answer.

In years gone by, British workers tended to insist on keeping their real pay rising. So when there were recessions and the country became poorer, the pain was delivered through job cuts rather than wage cuts.

This time around, a cocktail of factors - including globalisation, the decline of unions and, perhaps, more sensible monetary policy - has persuaded workers to allow their incomes to diminish in exchange for keeping their jobs.

The upshot is that unemployment never rose as high as in previous recessions (peaking at 8.4% in late 2011, compared with peaks of 10.7% in early 1993) despite the fall in national income being even greater.

Today the unemployment rate is down at 6.5% (incidentally the level the Bank of England recently cited as the "equilibrium" rate, which would suggest that it should start raising rates, well, yesterday - but that's another story).

The employment rate has reached 73.1%, equalling the 1974/2005 record for the highest level ever.

Admittedly, this includes many self-employed and part-time workers who would rather be in full-time employment, but it is good news, and a massive improvement, all the same.

But since the fall in national income isn't necessarily reflected in the total number of people in work, it is instead reflected in their wages.

The annual rate of wage inflation excluding bonuses is now down to the lowest level on record, 0.7%, and is comfortably below overall CPI inflation of 1.9%.

Whenever inflation outpaces wages it means families' real earnings are falling (as the increase in their salaries isn't enough to compensate for the erosion of that money's spending power).

According to my calculations, the five-year fall in real wages was greater between 2009 and 2013 (8%) than in any comparable period going all the way back to 1864.

So how long until wages recover?

The problem, some suspect, is that the real wage growth of the past few decades, which tended to average about 2.5% plus inflation, was the exception rather than the rule.

According to some employment economists, the pressures of globalisation might mean that the long-term trend will be closer to 1% or even zero.

It is a worrying thought. Britons have patiently absorbed enormous cuts in their real pay over the past few years - but one presumes that this was on the basis that wages would soon bounce back.

If they don't, I would expect a real backlash against those forces of globalisation (particularly immigration), which have pushed them down.


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Liberty In Talks To Buy BSkyB Stake In ITV

By Mark Kleinman, City Editor

The owner of Virgin Media was in advanced talks on Wednesday night to buy a stake in ITV in a deal that would seal BSkyB's exit from the commercial broadcaster's share register.

Sources said Liberty Global was closing in on an agreement to buy BSkyB's remaining 7.2% stake in ITV.

The Virgin Media owner is understood to have lodged an interest in buying the shares owned by BSkyB after learning of its intention to sell them to institutional investors through a placing.

An announcement about the transaction is likely to be made on Thursday.

There is a slim possibility that the stake could be sold to institutional investors if a deal with Liberty Global fell apart.

News of BSkyB's intention to sell the shares after nearly eight years as a shareholder in ITV paves the way for a further shake-up of the UK's media landscape.

It is unclear whether Liberty Global, which bought Virgin Media last year, would view the purchase of a minority stake in ITV as a passive investment or as the prelude to discussions aimed at collaborating in areas such as content and distribution.

Analysts said that Tom Mockridge, a former board member of BSkyB who is now chief executive of Virgin Media, was likely to have been instrumental in pursuing the ITV stake.

Liberty Global has been actively expanding its operations in the UK.

The cable group headed by John Malone swooped for the independent production company All3media in a £550m joint takeover with Discovery Communications in May.

A sale by BSkyB of its ITV shareholding would complete the company's exit from an investment made in 2006, when the pay-TV broadcaster snapped up 17.9% of its terrestrial rival for 135p-a-share, or £940m.

That move was widely perceived at the time as an attempt to thwart a takeover of ITV by NTL, the cable group which eventually became part of Virgin Media - a suggestion denied by BSkyB at the time.

BSkyB was subsequently ordered by regulators to reduce its ITV shareholding to below 7.5% and fought a two-year legal battle before a final ruling by the Court of Appeal.

It complied with that instruction in February 2010, offloading the majority of its holding for just under £200m or 48.5p-a-share, crystallising a substantial loss.

ITV's shares are now trading at more than 183p, meaning that BSkyB would make a substantial profit on the sale of its remaining shares.

The possibility of a stake sale was recently highlighted by analysts at UBS, the investment bank.

BSkyB and ITV declined to comment. Liberty Global could not be reached.

The likely completion of the disposal by BSkyB on Thursday would mean it being announced the day after the prospect of a much larger deal emerged in the US.

21st Century Fox, which owns a large stake in BSkyB, the owner of Sky News, made an $80bn bid for Time Warner, owner of the Warner Bros film studio, last month.

The offer was rejected, but a surge in Time Warner's share price after the disclosure of the approach reflected expectations on Wall Street that 21st Century Fox would renew its interest.


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Banks Summoned Over 'Doomsday' Stress Tests

Written By Unknown on Rabu, 16 Juli 2014 | 11.46

By Mark Kleinman, City Editor

Britain's biggest lenders have been summoned to the Bank of England (BoE) as the industry prepares to undergo a searching test of its ability to withstand a sterling and housing market crash.

Sky News has learnt that the eight groups which are being subjected to the new series of annual stress tests have been called in by BoE officials to discuss the exercise in recent days.

The individual meetings with the seven banks and Nationwide, the UK's largest building society, follow the submission of each institution's data under the terms set out by the Prudential Regulation Authority (PRA) in April.

The lenders will have to demonstrate their capacity to cope with a series of economic shocks, including a sharp depreciation in sterling and a build-up of inflationary pressures in the UK; a tightening of monetary policy and a rise in long-term interest rates; a decline in GDP of about 3.5% from its 2013 Q4 levels, and a rise in unemployment to around 12%; and a slump in house prices and commercial real estate prices fall of approximately 35% and 30% respectively.

The BoE has requested that each of the major lenders presents its data to a group of PRA and Bank officials.

It will then scrutinise the submitted information for up to two months, during which it may challenge the banks or request re-submissions, according to insiders.

The stringency of the stress tests has raised concerns among senior bankers that some lenders could be forced to raise billions of pounds of new capital.

However, City analysts have played down that prospect, arguing that the five big listed banks would have to incur total losses of £112bn before slipping below the BoE's minimum capital threshold.

"Much has been achieved in recent years to put the UK banking system on a sounder footing, so that it can support the UK recovery," Mark Carney, the Bank of England Governor, said in April.

"The challenge now is to secure a strong, sustainable and balanced economic expansion. The Bank's annual stress test will help ensure our banks support that expansion by remaining resilient."

In addition to Nationwide, the institutions participating in the stress tests are Barclays, Co-operative Bank, HSBC, Lloyds Banking Group, Royal Bank of Scotland, Santander UK and Standard Chartered.

The PRA declined to comment.


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Jaguar Banned Rover: Carmaker Rapped Over Ad

Carmaker Jaguar Land Rover has had a second advertisement in as many months banned for promoting speed and unsafe driving.

The video - called The Art Of Villainy - on the company's YouTube channel featured actor Tom Hiddleston playing a suave British villain who drives a Jaguar F-Type out of a car park and along a public road.

A viewer contacted the Advertising Standards Authority (ASA) complaining that the ad was socially irresponsible because it encouraged unsafe driving.

The company defended the ad, saying it was set almost entirely in an underground car park, with the car stationary for much of the time.

Jaguar also said police were present during filming and the car was not speeding at any time after it left the car park and accelerated briefly on The Embankment in London.

Jaguar on Embankment Jaguar said the car did not speed along The Embankment

The ASA accepted that the ad focused on the car's appearance and performance rather than speed.

But it said acceleration and speed did feature when the car was shown driving up a ramp to exit the underground car park and when it was shown on a public road at night.

The advertising watchdog said: "Whilst we acknowledged the sequences were brief, we considered that the second part of the ad suggested that the car was being driven at excessive speeds and that the ad therefore encouraged irresponsible driving."

It ruled that the ad must not appear again in its current form, adding: "We told Jaguar Land Rover not to portray speed or driving behaviour that might encourage motorists to drive irresponsibly in future."

Last month the ASA banned a set of four video ads on Jaguar's website showing a car travelling at speed through a tunnel and crossing over the single white lines in the middle of a road, before driving across a mountain road at night.


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IFS: Recession Has Hit Young Adults Hardest

Written By Unknown on Selasa, 15 Juli 2014 | 11.46

Young people have "borne the brunt of the recession" with their pay and job prospects hit much harder than older generations, a leading economic think tank has said.

The Institute for Fiscal Studies (IFS) found that among those aged 22-30 household incomes fell 13% between 2007-2013, wages plunged 15% and employment levels dropped by four points.

For those aged 31-59, income fell by 7%, wages by 6% and employment stayed stable, while the over-60s saw almost no impact on those measures.

The gap would have been even more pronounced but for the 25% of young adults still living with their parents, the IFS said.

The think tank - working with the Joseph Rowntree Foundation (JRF) social research charity - based its conclusions on the Government's Household's Below Average Income data.

It also found there was "no clear north-south divide" in recession-hit areas - with a wide spread in falls in median income from 8% in Northern Ireland to 2% in the East Midlands.

The IFS pointed out that a sustained period of low interest rates and real-terms falls in private rents had benefited young people's finances but that home ownership continued to plummet - spelling further costs for a generation of renters.

Only 21% of people born in the mid-1980s had bought their own place by the age of 25 - compared with 34% of those a decade earlier and 45% born in the mid-1960s, it said.

IFS research economist Jonathan Cribb said: "Pay, employment and incomes have all been hit hardest for those in their 20s. A crucial question is whether this difficult start will do lasting damage to their employment and earnings prospects."

JRF head of poverty research Chris Goulden said the research showed how a shortage of affordable homes and rising rent costs were forcing some 600,000 people to live below the poverty line after paying housing costs.

He said: "We need a comprehensive strategy and sufficient political will to get to grips with poverty. That means addressing low pay, the high cost of essentials, such as housing and childcare, and reform to the tax and benefits system to ensure work is a route out of poverty."

Labour Treasury spokeswoman Catherine McKinnell said: "While David Cameron denies there is a cost-of-living crisis, these figures show people have seen a substantial fall in their income since 2010.

"The IFS's research shows that young people have been hit particularly hard over the last few years.

"Labour will act by boosting apprenticeships and making sure young people who don't have the skills they need to get a job are in training, not on benefits."

A Treasury aide said: "This shows just how hard Labour's great recession hit young people and why it's vital we keep working through our long-term economic plan which is cutting the deficit, creating jobs and equipping people with the skills they need for the future."


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City Watchdog To Unveil Payday Loan Cap

By Mark Kleinman, City Editor

The City regulator will unveil plans later for a lower-than-expected cap on the cost of payday loans in a move that will create one of the world's most stringent regulatory regimes for the fast-credit industry.

Sky News understands that the Financial Conduct Authority (FCA) will announce at 7am a plan to restrict the total cost of credit charged by payday lenders to "significantly less" than £30 for each £100 lent to customers.

The £30 figure had been cited in several weekend newspaper reports, but City sources said on Monday night that the actual figure would be substantially lower, underlining the looming challenge to the profitability of Britain's quick credit providers.

The FCA's figure will comprise the overall cost of credit, including fees and other charges, as well as the headline interest rate levied by payday loan firms.

Martin Wheatley, the FCA chief executive, has previously expressed scepticism about the potential efficacy of a cap.

He has effectively been forced to implement one by George Osborne, the Chancellor, who used an amendment to the banking reform bill last November to "put a duty on the FCA to use [its] powers to impose a cap".

The FCA declined to comment on the level of the cap ahead of its announcement, but said it had examined similar measures in Australia and Florida, and had sifted through data relating to 20m short-term loans made by 33 firms.

It also recently introduced a mandatory affordability test for every loan as well as other curbs on companies' lending practices such as limiting the number of loan rollovers to two.

"This [cap] will be one of a number of powerful measures that the FCA proposes to use to ensure consumers are treated better when applying for, and repaying, payday loans," the regulator said in December.

"We believe these measures will protect consumers but also allow businesses to operate successfully."

In an interview with The Independent last week, Mr Wheatley said that the objective of the cap was not to drive lenders out of business.

"The reality is that, despite some politicians and members of the public regarding payday lenders as an evil that should be banned, many people use them and there are legitimate reasons to use short-term high-cost credit, as a million people did last Christmas," he told the newspaper.

"Our role is to find that balancing point between stopping the excesses which are designed to abuse vulnerable consumers, but still allowing the availability of loans to those who can use them in a mature and responsible way.

Details of the FCA proposals will come less than 24 hours after Wonga appointed Andy Haste, a City veteran, as its new chairman with a brief to overhaul the company's image.

Mr Haste, who will initially be paid £500,000 a year, will oversee a review of the business which he said would aim to make it more transparent and strive to avoid "inadvertently" targeting vulnerable consumers.

The FCA also said on Monday that Dollar, which trades in the UK as The Money Shop, had agreed to refund more than £700,000 of interest and default charges to 6,247 customers who had received loans which exceeded Dollar's own lending criteria.


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Labour Steps Up Pressure On Royal Mail Fees

Written By Unknown on Senin, 14 Juli 2014 | 11.46

By Mark Kleinman, City Editor

Labour is intensifying the pressure on Vince Cable to clarify whether millions of pounds of public money will be paid to bankers who worked on the controversial privatisation of Royal Mail.

Chuka Umunna, the shadow business secretary, has told Sky News that paying more than £4m in discretionary fees to City advisers would "add insult to injury" after a parliamentary report accused the Government last week of costing taxpayers £1bn by undervaluing the postal operator.

Mr Cable has the ability to award the fees, according to Royal Mail's privatisation prospectus issued last autumn, although doing so would further stoke the controversy over the sell-off.

People close to the Business Secretary insisted that no decision had been formally taken about the fees, although one conceded that criticisms by the Business, Innovation and Skills Select Committee "offered an ideal chance to lay the issue to rest".

Royal Mail was floated on the stock market nine months ago, valuing it at £3.3bn, but an instant surge in its share price prompted accusations that it had been undervalued.

Last week, Mr Cable commissioned an "informal review" of the sell-off to assess whether publicly-owned assets should be sold using alternative means in future.

"Despite launching an inquiry into the failings of the Royal Mail fire sale, and seeking to shift blame for their mistakes onto advisers, ministers have still not confirmed whether or not the banks advising the sale will be receiving discretionary fees," Mr Umunna said.

"Given taxpayers have already been short-changed by hundreds of millions of pounds and the government's "priority" investors have been laughing all the way to the bank, it would add insult to injury for even more money to be given away from the public purse in the form of discretionary fees when ministers have botched the privatisation so badly."

Shadow Business Secretary Chuka Umunna Chuka Umunna said paying the fees would 'add insult to injury'

Last week's BIS Committee report said Mr Cable had been wrong to label the instant post-privatisation surge in Royal Mail's share price as "froth".

"The Secretary of State's initial use of the term referred to the 'immediate aftermath' of the flotation," the report said.

"This was subsequently extended to months and then possibly years.

"As a result we do not find the argument of 'froth' as a credible response to the significant increase in the share price."

The MPs added that the Government had been served poorly by its City advisers, who they argued had made insufficient effort to maximise Royal Mail's value during the privatisation process.

And they said taxpayers would miss out on future increases in the value of potentially lucrative property assets.

Lazard, the Government's independent adviser, was paid a flat fee of £1.5m, although its asset management arm also made a significant profit by selling shares that it was allocated as a so-called priority investor in Royal Mail.


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Energy Complaints Soar To All-Time High

Ofgem's Energy Market Probe 'Will Restore Trust'

Updated: 1:22pm UK, Thursday 26 June 2014

Ofgem has announced an investigation in the energy market, to ensure there are no barriers to effective competition.

The regulator said it has referred the energy market to a probe by the Competition and Markets Authority (CMA).

It said the investigation is the best way to ensure that consumers are receiving the best quality, service and price availability.

The so-called big six energy providers have come under increasing scrutiny over profits, rising prices and how their wholesale and retail firms are structured.

The six big firms control around 95% of the UK retail market.

Ofgem said it would continue to protect consumers amid planned major changes to the energy market.

It said the CMA would begin its investigation immediately and a final report would likely be published before the end of next year.

Ofgem chief executive Dermot Nolan said: "Now is the right time to refer the energy market to the CMA for the benefit of consumers.

"There is near-unanimous support for a referral and the CMA investigation offers an important opportunity to clear the air.

This will help rebuild consumer trust and confidence in the energy market as well as provide the certainty investors have called for.

"The energy market is also going to change rapidly over the next few years with the roll-out of smart meters, the Government's electricity market reforms, and closer integration with European energy markets."

The energy watchdog said it has made an assessment, along with the Office for Fair Trading and the CMA, and found that competition is not working in consumers' best interests.

The regulator now expects the CMA  to consider action against the sector to improve competition and protect consumers.

Ofgem will also use its powers to address any "structural or behavioural issues" that may undermine competition.

After the announcement was made SSE chief executive Alistair Phillips-Davies said: "This reference will be an important opportunity to demonstrate the competitiveness of the energy market, address any issues of public concern and deliver good outcomes for consumers and a stable framework for investors.

"Throughout the reference SSE has an appetite for reform that is in the interests of customers and competition generally, as demonstrated by our price freeze until 2016."

Centrica CEO Sam Laidlaw, of the parent company of British Gas, said: "We want an energy market that is trusted by customers, and we believe that an in-depth and thorough review by an independent and respected authority can help to achieve this. So Centrica welcomes the investigation."


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Chinese Takeaway For £900m PizzaExpress Chain

Written By Unknown on Minggu, 13 Juli 2014 | 11.46

PizzaExpress is to be sold to a Chinese firm for £900m - a transaction described as the largest in the European restaurant sector in five years.

The British restaurant chain has 436 outlets in the UK and another 68 around the world, including 22 in China.

Owners Gondola Group said it agreed the sale with Chinese private equity firm Hony Capital which mostly invests in consumer, manufacturing and healthcare sectors.

John Zhao, chief executive of Hony, said: "Hony Capital is delighted to have acquired PizzaExpress, a well-established and exciting brand.

"With PizzaExpress, we have the opportunity to leverage our local expertise to accelerate its growth in the Chinese market, as well as to continue to drive its business forward in the UK."

Harvey Smyth, chief executive of Gondola Group, said: "PizzaExpress is an iconic brand in the UK restaurant sector with a strong and growing international presence.

"This has been reflected in the considerable interest we received in buying the business and in today's transaction with Hony.

"PizzaExpress is stronger than ever and great credit for this goes to the teams there, who leave Gondola with our thanks and best wishes for the future."

Founded in 1965, the chain has been through multiple changes of ownership, including at one stage being run by restaurants entrepreneur Luke Johnson.

The business is now headed by Richard Hodgson, a former Asda and Wm Morrison executive, who joined a year ago.

Mr Hodgson said: "Today's acquisition of PizzaExpress is a very positive development at an exciting time for the business.

"Asia is a key part of our future growth strategy and Hony's expertise in this region will be invaluable. We are looking forward to working with them on this as well as our ambitious UK growth plans."


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Cable Plots Tougher Foreign Takeover Rules

By Mark Kleinman, City Editor

Vince Cable is to set out new proposals to force buyers of key British companies to make watertight commitments aimed at protecting jobs and research budgets.

The Business Secretary is expected to detail plans that would oblige foreign bidders for UK businesses to offer binding guarantees to the City's takeover watchdog in order to prevent the erosion of Britain's knowledge base.

His pledge will come less than two months after the American pharmaceuticals giant Pfizer's interest in a £69bn takeover of AstraZeneca ignited a political storm in Westminster about a perceived threat to scientific research and development in Britain.

Mr Cable is understood to want to strengthen the powers of the Takeover Panel, which oversees mergers and takeovers involving British companies, but his plans will nevertheless fall short of the more stringent regulatory framework for which Labour has been calling.

The Business Secretary's proposals are expected to be set out later this weekend.

It was unclear on Saturday whether Mr Cable would require legislative change to push through his proposals or whether there would be a formal threshold above which acquirers of UK companies would be forced to adhere to any new rules.

Currently, the formal public interest test which gives politicians power to intervene in corporate deals is restricted to areas such as media plurality and financial stability.

The Takeover Panel, which regulates mergers and acquisitions, can force foreign bidders for UK companies in any sector to make or clarify public statements about their intentions.

However, it is not deemed by ministers to have sufficiently robust powers to compel companies to make legally-binding commitments on issues such as jobs and R&D.

Kraft and Cadbury products Promises made by Kraft on UK jobs and manufacturing were reneged upon

That became a politically sensitive issue under the last Labour Government, when Kraft Foods of the US reneged on a pledge to retain a Cadbury manufacturing facility in the UK.

Speaking before a House of Lords select committee earlier this week, Mr Cable said he was not interested in introducing rules purely designed to protect the Union flag, pointing out that Britain's biggest manufacturer is Tata, the Indian conglomerate which owns Jaguar Land Rover.

"A crude nationality test has no merit," he said.

Hinting at a possible strengthening of the Takeover Panel's powers, he also said that an extension of the national interest test could risk breaching European Union law.

Ian Read, Pfizer's chief executive, said in May he regarded commitments to UK jobs made during the recent bid situation as legally enforceable.

When Pfizer abandoned its offer two months ago, Chuka Umunna, the Shadow Business Secretary, reaffirmed his commitment to subjecting the deal to a public interest test if a fresh approach was made under a Labour administration.

"While Labour was standing up for British jobs and British science throughout this takeover bid, David Cameron and his ministers were cheerleading for it when one of the primary motivations behind the deal was financial engineering - cited by the AstraZeneca board as one of the execution risks justifying rejection of the bid," he said at the time.

Pfizer was forced to walk away from its bid after a string of rejections by the AstraZeneca board, despite a desire from some of the UK company's shareholders for it to engage with its suitor.

AstraZeneca could invite Pfizer to enter fresh talks towards the end of August, although it would be late November before the US company could make a new unsolicited approach under Takeover Panel rules.


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