Supermarkets Back New Price Promotion Rules

What The Supermarkets Say

Updated: 3:19am UK, Friday 30 November 2012

Eight major supermarkets have signed up to a new code on special offers and price promotions, while Asda is considering whether to take part. Here is what some of the retailers had to say...

Lidl: "At Lidl, we consider customer satisfaction and transparency to be at the forefront of our business, and the OFT's set of principles for fair pricing practices is fully in line with our own pricing policies we have set ourselves.

"For example we do not inflate prices of products before a promotion to artificially imply a saving to the customer.

"For this reason the pricing of products in Lidl stores will not be affected as we will continue to apply these principles to our prices in stores."

Tesco: "We work hard to ensure we offer competitive prices and fair, meaningful promotions to our customers.

"We always try to use simple and clear information, so we welcome the OFT's clarity on good practices and support their wish to see a consistent approach to promotions across the sector."

Waitrose: "Waitrose already has clear principles in place to ensure that our pricing is clear and transparent for our customers - so we are supportive of the OFT's code announced today."

Morrisons: "We are happy to sign up to the Office of Fair Trading's principles because they reflect good promotional practice and we are working towards convergence."

Sainsbury's: "These principles are in line with what we already do at Sainsbury's as we have always been committed to fair and transparent pricing. We will continue to ensure that our pricing and promotions are as clear as possible for our customers."

Co-Operative: "We understand how important it is for shoppers to be able to easily understand what the promotional offer is, so they can spot the best deal, and we are committed to providing clear and accurate labelling for our customers so they can make informed purchasing decisions.

"We have been working closely with the Office of Fair Trading, and are fully supportive of the principles set."

Asda: "We're not sure (the OFT's draft code) best helps customers in these challenging times, so we are taking the time to consider its proposals in detail."

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Autumn Statement: CPS Calls For Action On Debt

George Osborne should introduce cash freezes to avoid missing his debt target, a right-wing think tank has said just days before the Autumn Statement.

The Centre for Policy Studies (CPS) claimed the country's debt will be between £20bn and £30bn higher than Government forecasts in 2015/16.

To avoid this, the organisation urged the Chancellor to save money by introducing freezes on international aid and all benefits except for the state pension.

The halt on public sector pay rises should also be clarified, it added, as "many departments have interpreted the existing freeze very differently".

These measures need to be part of a plan to reduce Government spending to 38% of GDP within four years, the CPS said, adding that a simplification of the UK's "dysfunctional tax system" is also needed.

The calls come ahead of the Autumn Statement on December 5, when Mr Osborne will reveal his latest economic plans to Parliament.

The CPS' head of economic research, Ryan Bourne, said it is clear that assumptions about the potential underlying growth of the economy have been over-optimistic.

"It's increasingly obvious that a further spending review is necessary, and this should go further in looking at the scope of government activity," he said.

And Tim Knox, the director of the CPS, stressed that need for a "great reduction in Government activity".

"The Chancellor has a choice: will he put the long-term economic health of the country above the temptations of short-term political gain?" he said.

"If he tweaks the numbers to meet his rules and if he announces a wide range of policy initiatives which might grab a few headlines, then we will know that this is a statement inspired more by politics than economics."

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KPMG Calls For Corporation Tax Transparency

Companies that operate in the UK have been urged to accept greater transparency over their complicated tax structures by a top professional services firm.

KPMG described it as a "sea change" for companies as they learn to disclose more account details.

The firm's head of tax Jane McCormick said: "We believe that corporates are going to have to embrace transparency to explain what taxes they are paying and where they are paying them."

But resistance still remains with some top firms to greater openness, according to a KPMG survey of 57 senior tax executives at leading British and UK subsidiaries of foreign multinationals (MNCs).

Some 40% of the executives still oppose a General Anti-Abuse Rule (GAAR) targeting highly abusive or artificial tax planning.

Ms McCormick added: "By doing so they will also illustrate how their presence contributes to the economies in which they operate whether that be by generating employment (income taxes), sales (indirect taxes), paying business rates or through corporation tax."

The push for transparency comes amid unprecedented public outcry over multinational corporations' (MNC) tax avoidance through complex offshore mechanisms.

Ms McCormick added: "The risk is that, without this transparency, the current debate may turn into a witch-hunt, deterring businesses from investing in the UK."

Her comments come just days before the Commons Public Accounts Committee (PAC) is expected to release a report on its questioning of executives from three leading MNCs.

The PAC questioned representatives of Starbucks, Amazon and Google about the amount of corporation tax they pay in Britain.

When grilled by PAC chair Margaret Hodge, Starbucks chief financial officer Troy Alstead said his firm had only made a profit once in the 15 years it has been doing business in the UK.

Amazon director of public policy Andrew Cecil was forced to explain why a CD or a book bought in pounds on Amazon.co.uk delivered from a UK warehouse by the Royal Mail is registered in Luxembourg.

Earlier in the year it was reported Amazon - Britain's largest online retailer - generated UK sales over the past three years of between £7.6bn and £10.3bn, but paid virtually no corporation tax.

Google's UK unit paid just £6m to the Treasury in 2011 on revenue of £395m, according to another news report.

Despite the reluctance from some top tax executives KPMG believes that details of tax arrangements will increase in annual company reports as firms seek to clarify their positions to the public, the media and politicians.

"We predict that a tax report will, in time, become as much a feature of the annual report as a Corporate Social Responsibility statement is today," Ms McCormick said.

"With improved transparency on tax, hopefully the 'bigger picture' of how a business-friendly tax system can attract corporates will emerge, demonstrating how the UK's ambition to create the most competitive tax regime in the G20 can play a key role in rebuilding the economy and fuelling the recovery."

She added: "The risk is that without this transparency, the current debate may turn into a 'witch-hunt' deterring businesses from investing in the UK."

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Dixons 'To Benefit' From Comet As Sales Rise

This year's summer of sport gives Dixons Retail Group a boost in the UK, as it prepares to benefit as a result of Comet entering administration.

Like-for-like sales at the retailer - which owns Currys and PC World - were up 3% in the UK for the six months to October 13, helping its UK and Ireland division post a profit for the first time in five years.

Dixons said it expects its market position in Britain to go "from strength-to-strength" following the collapse of its rival Comet, which called in administrators earlier this month.

"While there may be some disruption while Comet completes the 'fire-sale' of its stock in the short term, Currys and PC World will benefit from the consolidation and we look forward to re-investing further gains into the offer for customers," the company said in a statement.

Despite increasing sales, Dixons still reported a loss

Retails analysts Conlumino said there were crucial differences between the business models of Dixons and Comet.

"In the UK and Ireland, Dixons has given a great example of how to get back to basics and has been left with a leaner, more competitive business as a result," analyst Matt Piner said.

"Improvements to service and instore experience meant Dixons was able to compete against the rise of non-specialist rivals in a way that Comet was unable to."

He said Comet's collapse would provide some "much needed relief" for the company, especially in sales of tablets, smart televisions and small kitchen appliances.

"There will be further pain along the way but in two to three years time Dixons is likely to be a more efficient business excellently poised to capitalise on a market recovery," he added.

The group reported a loss before tax, including one off charges, of £79.5m - compared with a profit of £2.4m over the same period last year.

When these exceptional charges are deducted, its underlying loss before tax narrowed from £25.3m to £22.2m.

Dixon's chief executive, Sebastian James, said the company had made good progress in the first half of the year.

"I am particularly encouraged by our performance in the UK and Ireland and in Northern Europe and we were particularly busy during the sporting and cultural events during the summer," he said.

"While August and September were, as expected, a bit quieter, we remain cautiously optimistic about the outlook."

It comes after Comet's administrators, Deloitte, confirmed a further 125 shops would shut before Christmas, unless a last-minute buyer is found.

In response, Comet's former owner, OpCapita, spoke out for the first time since the chain collapsed.

"We are sorry for all the Comet employees who have served the business and customers with great loyalty and have lost their jobs at such a difficult time," the firm said in a statement.

"OpCapita... did their utmost to revive the loss-making Comet business, but a combination of adverse factors, including the withdrawal of credit insurance and the consequent reluctance of suppliers to supply the business on normal terms meant it became impossible for the business to carry on trading."

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Ryanair Customers Face New Card Charges

No frills airline Ryanair is to introduce two new charges from Friday but its reason for imposing a credit card booking fee has been questioned by a regulator.

The carrier said it was bringing in a 2% credit card processing fee on all new bookings made from tomorrow in order to comply with a recent Office of Fair Trading (OFT) ruling.

However, the OFT said: "We have not required any airline to introduce new payment charges, increase their credit card charges, or scrap any discounts they wish to offer.

"We took action to make sure that debit card charges are included in the headline price and credit card charges are transparent and not sprung on shoppers towards the end of the booking process."

Ryanair also announced that its passengers would have to pay a £6 administration fee to cover the airline's website costs.

The only exceptions will be bookings made using Ryanair's "cash passport" scheme in Ireland, Germany and Spain, where administration fees can be avoided until February 1, February 15 and March 21 2013 respectively.

Ryanair defended the move saying it was continuing to "deliver the lowest fares and a no-fuel surcharges guarantee to all our passengers" and that passengers could avoid credit card fees by paying with a debit card.

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Energy Bills 'Will Be Lower' Under New Policy

Energy Secretary Ed Davey has said the Government's long-delayed Energy Bill would see consumers pay less for energy in the long-run.

As he introduced the legislation to Parliament, Mr Davey insisted: "The net effect of Government policy on energy bills is downwards not upwards."

The Government forecasts that - unlike what many critics claim - energy bills will be £94 less in 2020 if the measures are introduced.

The Bill is designed to create a "low carbon economy" by pumping more investment into renewable and "green" power generation to help bolster the country's ability to withstand energy shortfalls.

"In an era of rising global energy prices, by shifting to more home grown sources of power and by becoming more energy efficient, we can cushion our economy and households from the fluctuations of world gas markets," Mr Davey said.

He added that energy companies will be put under pressure to help lower consumers' costs.

"We intend to underpin this with reforms to the retail market to simplify tariffs and make sure consumers are able to get the best deal for them," he said.

The legislation gives ministers the authority to boost investment in green power from £2.35bn a year to £7.6bn in 2020.

More follows...

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Heating Bills 'Rise 63% In Five Years'

The average cost of heating a home has soared by 63% over the past five years, according to research.

The price comparison website, uSwitch, calculates that the bill is up £227 over the period - hitting a new annual average total of £587.

It said the string of recent price hikes announced by energy companies will add around £40 to the average household heating bill for winter 2012.

The typical total household energy bill stands at £1,334 a year, uSwitch found, showing a £515 increase in the space of five years.

The website's research suggested that three quarters of homes went without heating at some point to keep their costs down last winter and predicted that 87% of families are planning to ration their heating this winter.

Ann Robinson, director of consumer policy at uSwitch.com, said: "It now costs households a staggering 63% more a year to heat their home than it did five years ago.

"This increase has knocked consumers for six, leaving many fearful of how they will afford to keep warm during the winter months and leading to growing numbers rationing their energy use even during the harshest weather."

Households have been urged to shop around to cut their bills, with a difference of more than £300 between the cheapest and the most expensive energy tariffs.

Energy companies have largely blamed rising wholesale costs for the latest increases in bills.

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Comet: 125 More Stores Face Closure In Weeks

Comet's administrators have confirmed a further 125 stores will close by the end of the year if they fail to get a firm offer for the whole business.

Around 70 stores of the original 236 will remain open until the electricals retailer's remaining stock is sold, Deloitte added. 

Some 5,000 jobs remain in the balance at the embattled retailer, which called in the administrators earlier this month.

Deloitte's Chris Farrington said a "small number of interested parties" remained and he hoped a positive outcome could still be achieved.  

"Should any acceptable offers be received for stores we will delay the closure process," he said.

"Unfortunately, in the absence of a firm offer for the whole of the business, it has become necessary to begin making plans in case a sale is not concluded."

Stores will begin closing in December, he added.

Since Deloitte was appointed to work for the electricals chain, some 1,500 jobs have already been axed.

Last week, the entrepreneur behind Appliances Online confirmed he had tabled a bid for Comet's web-based operations - but not for the whole business.

John Roberts said he had put in a "seven-figure offer" for Comet's website, although the deal would see the business disappear from the UK's high streets.

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Thomas Cook: Restructuring Causes £590m Loss

Restructuring at Thomas Cook takes its toll, as the holiday company's turnaround plan causes its losses to deepen.

The world's oldest travel company reported a statutory loss of £590m for the twelve months to the end of September - worse than the £518m loss recorded in the previous year. 

Although debt at the embattled firm - which was forced to request an emergency loan in 2011 to avoid collapse - was reduced by £103m to £788m.

Thomas Cook's new chief executive Harriet Green admitted the results represented "major issues" faced by the company last year, but insisted they masked improvement.

"Our brand has demonstrated its strength by recovering all the ground lost during last year's difficulties and we have identified significant further efficiency improvements," she said.

Trading towards the end of the summer was strong, the company said, adding that winter bookings were "off to a good start" in major markets.

The 171-year-old firm is in the process of reorganising its business, and last year cut its aircraft fleet to 35 planes in total and sold off 149 stores.

"The year ahead is the initial stage in this recovery and as we embark upon our first year of business transformation, we are optimistic about the future," Ms Green added.

She announced a further £100m of cost-cutting measures and warned of more to come.

The company's underlying loss - when one-off items are not included - narrowed from £103m to £37m in the year, but the group's revenue fell 3% to £9.49bn.

Shares in Thomas Cook fell more than 3% after the results were published.

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GDP Unrevised At 1% In Third Quarter

Britain's gross domestic product for the third quarter has been unrevised by the Office for National Statistics, with growth confirmed at 1%.

The ONS confirmed the strongest rise in household spending in more than two years helped drive the UK's dramatic bounce back to economic growth between July and September.

The second estimate includes figures on the spending side of the economy for the first time, which revealed that the Olympics and Paralympic Games helped household spending grow by 0.6%, the strongest rate since the second quarter of 2010.

The unchanged headline GDP figure remains the fastest rate of quarterly growth in five years and marked the end of the longest double-dip recession since the 1950s.

GDP is seen as a broad measure for the health of the total UK economy.

Although the headline figure was unrevised, it was still largely driven by one-off factors and is unlikely to alter the view that the underlying health of the economy is much weaker.

The third quarter had one more working day than the previous quarter, due to the Queen's Diamond Jubilee, the ONS said.

Looking further ahead, growth is expected to fall back sharply between October and December amid a series of weak purchasing managers' surveys for services, manufacturing and construction industries.

Construction growth was revised downward from -2.5% to -2.6%

Bank of England governor Sir Mervyn King recently warned that output could even shrink in the fourth quarter.

The economy remains 3.1% below its peak in the first quarter of 2008, the ONS said.

And fourth-quarter output was cut from flat growth to a decline of 0.1%, although this was due to methodology rather than revisions to previous quarters.

The second estimate saw output in the construction sector revised from a 2.5% decline to a steeper drop of 2.6%, while industrial production was downgraded from 1.1% growth to 0.9%.

The services sector grew at 1.3% - unchanged from the previous estimate - as ticket sales for the Olympics and Paralympics were booked in the third quarter.

This was the fastest growth in five years.

A more complete breakdown of household spending will be given in the final estimate next month but the ONS said it was likely driven by ticket sales, hotels and restaurants, and transport.

Elsewhere, new figures revealed an improvement in the UK's trade position during the third quarter with imports falling 0.4% and exports rising by 1.7% when compared with the previous quarter.

However, the rise in exports can partly be attributed to higher spending by foreign tourists during the Olympics as this spending is recorded as an export.

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Lloyd's Of London In Global Insurance Warning

The world's biggest insurance market has warned that more than a dozen emerging economies are at risk of major rebuilding costs due to minimal insurance cover for natural disasters.

Lloyd's of London said there is a global insurance deficit of $168m (£104m) now affects at least 17 countries.

Its warning comes after a string of natural disasters caused £3.6trn damage in 2011.

Last year major incidents included the Japanese earthquake and tsunami, major floods in Thailand, a New Zealand earthquake and a Filipino typhoon.

A devastating series of tornadoes in the United States also caused $35bn (£22bn) damage.

The string of events prompted a £516m loss for 324-year-old Lloyd's. It was its first loss since the terror attacks of 2001.

The industry paid out $107bn (£66bn) in claims, making it the most expensive year ever for insurers.

This year's superstorm Sandy in the US has been estimated to cost up to $50bn (£31bn), and claims from the grounding of the Costa Concordia cruise ship off Italy are still pending.

Lloyd's research, carried out by the Centre for Economic and Business Research (CEBR), said the cost of disasters had increased by £540bn in real terms.

It said booming countries, with fast-growing affluent middle- classes, include China, Colombia, Mexico, Poland, Thailand and Saudi Arabia.

CEBR chief executive Douglas McWilliams said: "The 'insurance gap' has a huge and lasting impact on the ability of businesses, governments and people to recover from the earthquakes, hurricanes, flooding and forest fires that affect us all every year.

"This means lost orders, lost jobs and wasted taxpayer money as a failure to prepare ahead of such events creates costs that are more severe and unmanageable."

The CEBR said China was top of the list for shortfalls of insurance, with just 1.4% of losses between 2004 and 2011 being covered.

According to The Guardian, damage from the Sichuan earthquake in 2008 totalled $125bn (£78bn) but only 0.3% was covered by insurance.

But insurers may need to reassess their own expectations of insurance cover based on economic vitality and cultural norms in developing nations.

Lloyd's chief executive Richard Ward said: "China is a very rich country with phenomenal foreign reserves.

"There could be an attitude that this is a loss the state can bear."

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Nationwide Profit Slumps After PPI Charge

Nationwide, Britain's biggest customer-owned financial services group, has reported a drop in half-year profits despite seeing a sharp increase in new customers.

The bank said its pre-tax profit fell by almost 50% to £124m for the six months to the end of September, down from £238m a year earlier.

The slump is mainly caused by the cost of the compensation for the rising level of payment protection insurance (PPI) claims.

Nationwide has had to set aside a further £45m to compensate victims of loan insurance mis-selling, which means the total figure for compensating customers will now cost £173m.

However, that is a fraction of the costs incurred by the other big banks.

Barclays, for example, has had to set aside £2bn after mis-selling the product to its customers.

PPI policies were typically taken out alongside a personal loan or mortgage to cover repayments if customers fell ill or lost their job, but they were often sold to people who would not have been eligible to claim on the policies.

In addition to the PPI hit, a £193m impairment on commercial property also dragged Nationwide's figures down.

Chief executive, Graham Beale, said: "Losses on our commercial property loans have increased over the past 12 months and, in addition, we continue to see elevated levels of PPI claims."

Nationwide competes with the 'Big Four' high street banks - Lloyds, Royal Bank of Scotland (RBS), HSBC and Barclays - in the financial services sector.

It has confirmed it is "potentially interested" in buying the 316 branches of RBS that are up for sale as it looks to expand into business lending.

Virgin Money and JC Flowers are also reportedly in the frame to buy the RBS branches.

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UBS Fined £29m Over London Rogue Trader

The City watchdog has fined the Swiss investment bank UBS £29.7m over the biggest fraud in British history.

The Financial Services Authority (FSA) fined the bank for system and control failings within its corporate structure that allowed London rogue trader Kweku Adoboli to cause £1.4bn losses through unauthorised trading.

The FSA originally fined UBS £42.4m but discounted the penalty for early settlement.

At one point, Adoboli had stood to run up losses of £7.5bn for his employer.

The FSA said in a statement: "The systems and controls failings revealed serious weaknesses in the firm's procedures, management systems and internal controls."

In a damning judgment of UBS' internal controls, the FSA said the bank's computerised risk management system was "not effective".

UBS boss Oswald Gruebel resigned over the massive fraud

It said Adoboli exploited "significant deficiencies" in the disparate trading system to conceal his unauthorised trades.

The FSA said Adoboli's actions on the Exchange Traded Funds Desk (ETFD) were helped by a culture of support sections working on the principle of efficiency and not risk management.

The Global Synthetic Equities (GSE) division was responsible for managing the ETFD.

The FSA said "the supervision arrangements within GSE were poorly executed and ineffective".

UBS was fined 15% of the revenue of the GSE division by the FSA.

Tracey McDermott, FSA director of enforcement and financial crime, said: "UBS' systems and controls were seriously defective.

"UBS failed to question the increasing revenue of the desk and failed to ensure that there was a corresponding increase in the controls in place over the desk.

"As a result Adoboli, a relatively junior trader, was allowed to take vast and risky market positions, and UBS failed to manage the risks around that properly.

Kweku Adoboli was jailed for seven years over the fraud

"Failures of this type in firms of the size and standing of UBS not only damage the firms concerned but also wider confidence in the integrity of the markets and the financial system.

"It is imperative that the markets we regulate are seen by investors to be orderly and a safe place to do business."

Last week Adoboli, 32, was found guilty - he admitted to the bad trades, but denied any wrongdoing.

He was sentenced to seven years for one count of fraud and four years for the other, to be served concurrently.

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VAT May Have To Rise To 25%, Warns IFS

Chancellor George Osborne may have to hike VAT to 25% as he continues his battle to restore Britain's economic health, analysts have suggested.

The Institute for Fiscal Studies (IFS) warned struggling Britons could face yet more spending cuts and tax rises because of weaker economic growth and lower tax revenues.

If these problems are permanent, the Chancellor will need to plug a £23bn black hole if he is to meet his financial targets by 2018, according to the respected think tank.

Achieving this from tax hikes alone would be "roughly equivalent to increasing the main rate of VAT from 20% to 25%", the IFS said.

Mr Osborne is due to reveal his latest economic plans next week when he unveils his Autumn Statement on December 5.

But the lack of scope for tax increases has been laid bare by a new spending power report by Lloyds TSB.

Its research found the squeeze on family budgets - as a result of stubborn inflation and weak wage growth - was just as strong in October as it was a year earlier.

It warned that rising energy bills this winter would only exacerbate the situation.

The IFS suggested Mr Osborne may also have to tear up one of his key austerity goals because Government borrowing is likely to rise this year.

The era of austerity could run for eight more years, according to the IFS

The Chancellor has been battling to keep his financial targets on track as the economy continues to stay in the doldrums.

He has already extended the planned period of spending cuts by two years, well beyond the next election in 2015, and warned of further welfare cuts.

But poor growth since his Budget in March means more bad news is expected next week, including the embarrassment of higher borrowing this year than last.

"Since the budget, the outlook for the UK economy has deteriorated and Government receipts have disappointed by even more than this year's weak growth would normally suggest," said IFS deputy director Carl Emmerson.          

"The planned era of austerity could run for eight years - from 2010-11 to 2017-18."

The think-tank estimates Mr Osborne may need to find another £11bn in tax rises or welfare cuts for the post-election period.

This is on top of extending the same squeeze on public spending already planned and the extra welfare cuts that have already been discussed.

It predicted that borrowing would reach £133bn for the year ending March 2013 if current trends continue, £13bn above the Office for Budget Responsibility's spring forecast.

"This would mean that underlying borrowing rose between 2011-12 and 2012-13 rather than fell as the Chancellor George Osborne had intended," the IFS said.

Rising borrowing would be a major blow to the Tories, who promised to all but eliminate a record budget deficit by the time of the 2015 election and to get Britain's public sector net debt falling as a percentage of national output by 2015/16.

The IFS said Mr Osborne might have to scrap the latter target.       

"The Chancellor would likely be best advised to abandon the rule and consult on replacing it with something that better ensures long-run sustainability rather than engage in significant further fiscal tightening in order to remain on course to comply with this target," it said.

The report came as the "quad" of Mr Osborne, David Cameron, Deputy Prime Minister Nick Clegg and Chief Secretary to the Treasury Danny Alexander were gathering in Downing Street to finalise next week's statement.

There are hopes the Chancellor will cancel the planned 3p hike in fuel duty due in January. Fresh taxes aimed at the wealthy are also expected.

A Treasury spokesman said: "Action taken by the Government has cut the deficit by a quarter, whilst over a million new jobs have been created in the private sector, inflation is down, and the economy is healing.

"Britain still faces economic challenges at home and abroad but the Government is taking the tough decisions needed to deal with our debts and equip our economy for the global race."

But TUC general secretary Brendan Barber insisted the IFS report was further proof that the coalition's strategy is "failing on all counts".

"The UK should be on the road to recovery by now. Instead we could be set for a prolonged period of debilitating austerity well beyond the next election," he said.

"The Chancellor should use his Autumn Statement next week to change course. Sadly he looks set to drive the economy even faster in the wrong direction."

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UK Transport Projects 'Stuck In Slow Lane'

The British Chambers of Commerce says too many transport schemes crucial to business growth are being sidelined by the Government.

Of 13 key projects identified as vital before the 2010 general election, just three are going ahead, with two having some funding committed and eight delayed, cancelled or under consideration.

BCC director of policy Dr Adam Marshall told Sky News that bold action was needed from the Government to improve transport infrastructure.

"We need to see projects delivered with some pace and some urgency," he said.

"We know there are limited resources available but business can deliver growth and jobs if it has the transport infrastructure it needs."

Crossrail construction at Moorgate station in London

The three BCC-earmarked projects going ahead are:

:: Birmingham Motorway Scheme - Variable speed limits and cars using hard shoulder on M5, M6, M40 and M42, with work due to be completed in spring 2014

:: Forth Replacement Crossing: A replacement for the deteriorating existing road bridge was given the go ahead by the Scottish Government and Transport for Scotland in January 2011 and will be complete by 2016

:: Crossrail, London: The cross-London rail link is well under way and expected to be fully operational in 2019, improving capacity across the capital.

The BCC said it had awarded an "amber light" to two projects where some funding had been committed and a planning process was under way, but there was no date for final delivery.

One of these was the so-called Northern Hub rail improvement scheme to deliver £4bn of benefits to the economy of northern England.

The BCC said the Government committed to the scheme in summer 2012, that planning was still in the very early stages and delivery of all projects was uncertain, "but there have been confident steps forward in recent months".

The other "amber" scheme was the A453 widening from the M1 junction 24 to the A52 at Nottingham in the East Midlands.

The M4 relief road scheme in Wales has been given a red light

The BCC said construction was due to start in 2013 following a Government commitment to the project, but "more concrete steps need to be taken to push the project to its conclusion".

The rest of the 13 projects received the BCC "red" signal, including the scrapped third runway plan at Heathrow airport in west London and the delayed A14 road improvement scheme in East Anglia.

Others given a red light included the Cardiff-Newport M4 relief road scheme in Wales, the M1 Westlink project in Northern Ireland, the A19 improvement work around the Tyne Tunnel in north east England and the A303/A358 road improvement scheme to improve links to southwest England.

The BCC said: "While the Government has taken important steps to boost infrastructure funding and delivery since the first Budget, the updated assessment shows that too many transport projects, which are crucial to business growth, are stuck in the slow lane."

But Transport Minister Norman Baker insisted the issue was a "top priority" for the Government.

He said: "That is why, despite the economic challenges we face, we have committed to building HS2, a hugely ambitious infrastructure project which will support and sustain long-term growth across the whole country.

"In addition, our massive programme of investment - the biggest since the 19th Century - in the current railway system includes substantial investment to increase capacity on the East Coast Main Line over the next two years as well as £240m for the industry to spend on the route between 2014 and 2019.

"This is on top of the £1.8bn we are spending on local major transport projects and the £3bn we are providing to start work on 20 major road schemes and to complete work on another eight between 2010 and 2015."

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'Black Friday' Discount Day Reaches UK

Some of the UK's biggest retailers are cashing in on a US tradition which sees millions of frenzied shoppers make the most of discounted prices.

Amazon, Asda and Apple are among the companies that have launched so-called Black Friday sales in Britain - despite many consumers being unaware of the custom.

In the US, thousands of stores discount their prices the day after Thanksgiving, and many open for longer hours.

Last year a record number of people visited stores over the Black Friday weekend, spending a total of $52bn (£32.6bn) - an average of around $400 (£250) each, according to the National Retail Federation.

And this year, some eager shoppers have been caught on camera phones battling to get to the best bargains first, after queuing for hours. 

Many retailers opened their stores at midnight, and this year the trend to open at 8pm on Thursday started to spread.

Some US stores were frantic

While the shift was denounced by some store employees and traditionalists as pulling people away from families on Thanksgiving, many shoppers welcomed the chance to shop before midnight.

"I think it's better earlier. People are crazier later at midnight," hotel worker Renee Ruhl, 52, said as she shopped at a Target store in Orlando, Florida.

Online retailer Amazon was one of the first companies to bring the trend to the UK.

It launched a week-long Black Friday sale on Monday, which it claims "offers millions of pounds of savings on hundreds of Christmas gifts".

Tech giant Apple and Asda, owned by Walmart, are also hoping to make the most of the Christmas shopping rush by offering one-day discounts of their own.

Hotel Chocolat emailed customers to say that as it offered US customers 20% off it would do the same for UK buyers.

"There are more retailers launching sales this year than ever before - and many British consumers are becoming aware of the tradition for the first time," Retail Week's Gemma Goldfingle told Sky News.

"In the US it is an absolute phenomenon, with people queuing up all night to snap up the best deals."

Amazon launched its sale on Monday

In Orlando at least one family camped outside a Best Buy shop for a full week, sleeping in two tents.

"It has not reached that level here and whether it ever will is another matter," Ms Goldfingle said.

She said that Americans have Thanksgiving to kick-start the event – whereas in the UK it is just a normal day. Boxing Day, when UK sales traditionally begin, is a normal work day for Americans.

"A lot of British retailers would prefer not to have it," Ms Goldfingle said.

"They want to be selling items at full price ahead of Christmas, especially given the tough economic conditions."

While a limited number of UK chains have labelled their sales as Black Friday, many others have needed to show weekend price drops to lure customers.

Furniture chain dfs has taken to advertising in newspapers about its discounts while Topshop offered online weekend deals.

Black Friday, which is thought to refer to the first day of the year that retailers go "into the black", comes just ahead of Cyber Monday - which the marketing industry claims is the busiest day in the online shopping calendar.

18.56 | 0 komentar | Read More

Cameron: EU Deal 'Just Not Good Enough'

What Now For EU Budget?

Updated: 10:16pm UK, Friday 23 November 2012

By Adam Boulton, Political Editor

The 27 EU member states did not agree a budget for the next seven years at the summit in Brussels. But David Cameron will be able to go home and tell Eurosceptic conservative backbenchers "so far, so good".

In his own words the Prime Minister "successfully defended" Britain's contributions rebate and rejected a deal which "was just not good enough".

Mr Cameron also insisted that Britain had not been isolated but was joined in its demands for lower spending by other big net contributors including Denmark, Sweden, Finland, Norway and Holland.

This Nordic European grouping also claims the support of the key deal-maker and biggest funder, Germany. But in her public comments Chancellor Angela Merkel was more circumspect, merely noting, as she had since arriving in Belgium, that the gap between the want-mores and the want-lesses was too big to bridge at this meeting.

She and the hapless Herman Van Rompuy, who has the thankless task of chairing these negotiations, have the same message - it is more important to get it right than to rush for a deal.

Mr Van Rompuy now has "weeks" to try to find an agreement. When EU leaders come back to the budget early next year (having put the matter to one side at the next summit in December) they will be on deadline.

If an agreement is not reached then, funding will be rolled over on an annualised basis - bad news for Britain because budgets will automatically increase, and worse news for countries such as Denmark and Holland who have not yet secured their rebates.

So doesn't that mean that all the countries who want more have to do is sit it out? Not quite. Of the 27 member states nine countries are net contributors, including all the Nordic holdouts, and around 15 are significant recipients. Ultimately all the winners are vulnerable, especially if Germany joins in so much as threatening to turn off the tap.

The leaders calling for further cuts all make the same argument - they are imposing austerity at home and it is not acceptable to their voters that the European slice of their budgets simply should be exempted from a squeeze.

The Council President, Mr Van Rompuy, and Jose Barosso his counterpart at the EU Commission probably made a mistake in refusing to table any cuts in the administration budget - pay and perks for bureaucrats. Mr Cameron contrasted this with the "difficult decisions" being imposed on the UK civil service and insisted that the EU could not live "in a parallel world".

But ultimately these are points of principle rather than matters of real significance to national budgets. The UK's government spending now runs to about one trillion euros a year - the EU is arguing about one trillion euros over seven years divided between 27 nations. Of that the "administration" budget is just 6%. Which means that when Mr Cameron talks about saving a billion euros by, for example, stopping automatic promotion of civil servants, he really is talking about a drop in a bucket.

This is perhaps why the economics professor who now is Prime Minister of Italy, Mario Monti, accused Mr Cameron of being an irrational "demagogue". Italy is now in an alliance with France supporting the claims of those who want a bigger budget in the interests of "solidarity". Both Italy and France are net contributors to the EU overall but they are also big recipients of the Common Agricultural Policy, which accounts for some 40% of EU spending.

Perhaps the most significant thing that happened at this summit was that there was no Franco-German axis. Chancellor Merkel and President Francois Hollande took opposing positions.

What's more Germany now seems concerned not to isolate the UK, because of fears that another confrontation could move Britain out of the Union altogether - ceding much greater influence inside to socialist-led France and its Mediterranean allies.

As the European Union scrambles to find a deal Germany, Britain and their North European allies would seem to have the stronger hand - following the time-honoured principle of who pays, plays - provided that their alliance holds together.

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Tax Backlash Prospect For Independent Shops

By Poppy Trowbridge, Business & Economics correspondent

Independent businesses could benefit from public uproar over low rates of corporation tax paid by global giants Starbucks, Amazon and Google, according to retail experts.

The backlash has been prompted by the revelation that Starbucks has paid just £8.6m UK corporation tax in the past 13 years, on sales of £3.1bn, when most businesses will pay a corporation tax rate of 24% this year.

In 2011, Google paid £6m tax against sales of £395m, while Amazon paid no tax at all in the UK - despite sales here reaching £3.3bn.

Matthew Stych, research director at analysts Planet Retail, believes British retailers can make the most of the furore by highlighting their own contributions and good practices.

"It's a golden opportunity that comes along once in a decade or so, to really capitalise on the negative publicity that some global retailers are receiving at the moment," he says.

"I think it's a huge opportunity that independent retailers in the community must seize now".

Google and Amazon are also accused of paying low taxes on big profits

Independent booksellers in Hertfordshire are doing just that. With support from the Booksellers Association they have launched an advertisement campaign to publicise the fact they pay their taxes.

"People need to think about where they are spending their money and we are hoping that this campaign will bring that to their attention," said Sheryl Shurville, co-owner of Chorleywood Bookshop.

But other analysts are not convinced such consumer campaigns will have any long-term benefit.

"We're unlikely to see any massive dip in the sales of these companies under scrutiny," says Douglas McNeill, chief analyst at Charles Stanley.

"Whilst ethical issues can temporarily make people pause for thought, consumers make their choices on the basis of eternal basics of price, quality and convenience."

Mr Stych says large brands may yet find a way to turn around the negative publicity.

"As far as Amazon and Starbucks are concerned, I think there's an opportunity to strike a more conciliatory note," according to Mr Stych. 

"This is for them also an ideal opportunity to regain or re-forge that bond with local consumers".

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'Black Friday' Discount Day Reaches UK

Some of the UK's biggest retailers are cashing in on a US tradition which sees millions of frenzied shoppers make the most of discounted prices.

Amazon, Asda and Apple are among the companies that have launched so-called Black Friday sales in Britain - despite many consumers being unaware of the custom.

In the US, thousands of stores discount their prices the day after Thanksgiving, and many open for longer hours.

Last year a record number of people visited stores over the Black Friday weekend, spending a total of $52bn (£32.6bn) - an average of around $400 (£250) each, according to the National Retail Federation.

And this year, some eager shoppers have been caught on camera phones battling to get to the best bargains first, after queuing for hours. 

Many retailers opened their stores at midnight, and this year the trend to open at 8pm on Thursday started to spread.

Some US stores were frantic

While the shift was denounced by some store employees and traditionalists as pulling people away from families on Thanksgiving, many shoppers welcomed the chance to shop before midnight.

"I think it's better earlier. People are crazier later at midnight," hotel worker Renee Ruhl, 52, said as she shopped at a Target store in Orlando, Florida.

Online retailer Amazon was one of the first companies to bring the trend to the UK.

It launched a week-long Black Friday sale on Monday, which it claims "offers millions of pounds of savings on hundreds of Christmas gifts".

Tech giant Apple and Asda, owned by Walmart, are also hoping to make the most of the Christmas shopping rush by offering one-day discounts of their own.

Hotel Chocolat emailed customers to say that as it offered US customers 20% off it would do the same for UK buyers.

"There are more retailers launching sales this year than ever before - and many British consumers are becoming aware of the tradition for the first time," Retail Week's Gemma Goldfingle told Sky News.

"In the US it is an absolute phenomenon, with people queuing up all night to snap up the best deals."

Amazon launched its sale on Monday

In Orlando at least one family camped outside a Best Buy shop for a full week, sleeping in two tents.

"It has not reached that level here and whether it ever will is another matter," Ms Goldfingle said.

She said that Americans have Thanksgiving to kick-start the event – whereas in the UK it is just a normal day. Boxing Day, when UK sales traditionally begin, is a normal work day for Americans.

"A lot of British retailers would prefer not to have it," Ms Goldfingle said.

"They want to be selling items at full price ahead of Christmas, especially given the tough economic conditions."

While a limited number of UK chains have labelled their sales as Black Friday, many others have needed to show weekend price drops to lure customers.

Furniture chain dfs has taken to advertising in newspapers about its discounts while Topshop offered online weekend deals.

Black Friday, which is thought to refer to the first day of the year that retailers go "into the black", comes just ahead of Cyber Monday - which the marketing industry claims is the busiest day in the online shopping calendar.

18.56 | 0 komentar | Read More

Cameron: EU Deal 'Just Not Good Enough'

What Now For EU Budget?

Updated: 10:16pm UK, Friday 23 November 2012

By Adam Boulton, Political Editor

The 27 EU member states did not agree a budget for the next seven years at the summit in Brussels. But David Cameron will be able to go home and tell Eurosceptic conservative backbenchers "so far, so good".

In his own words the Prime Minister "successfully defended" Britain's contributions rebate and rejected a deal which "was just not good enough".

Mr Cameron also insisted that Britain had not been isolated but was joined in its demands for lower spending by other big net contributors including Denmark, Sweden, Finland, Norway and Holland.

This Nordic European grouping also claims the support of the key deal-maker and biggest funder, Germany. But in her public comments Chancellor Angela Merkel was more circumspect, merely noting, as she had since arriving in Belgium, that the gap between the want-mores and the want-lesses was too big to bridge at this meeting.

She and the hapless Herman Van Rompuy, who has the thankless task of chairing these negotiations, have the same message - it is more important to get it right than to rush for a deal.

Mr Van Rompuy now has "weeks" to try to find an agreement. When EU leaders come back to the budget early next year (having put the matter to one side at the next summit in December) they will be on deadline.

If an agreement is not reached then, funding will be rolled over on an annualised basis - bad news for Britain because budgets will automatically increase, and worse news for countries such as Denmark and Holland who have not yet secured their rebates.

So doesn't that mean that all the countries who want more have to do is sit it out? Not quite. Of the 27 member states nine countries are net contributors, including all the Nordic holdouts, and around 15 are significant recipients. Ultimately all the winners are vulnerable, especially if Germany joins in so much as threatening to turn off the tap.

The leaders calling for further cuts all make the same argument - they are imposing austerity at home and it is not acceptable to their voters that the European slice of their budgets simply should be exempted from a squeeze.

The Council President, Mr Van Rompuy, and Jose Barosso his counterpart at the EU Commission probably made a mistake in refusing to table any cuts in the administration budget - pay and perks for bureaucrats. Mr Cameron contrasted this with the "difficult decisions" being imposed on the UK civil service and insisted that the EU could not live "in a parallel world".

But ultimately these are points of principle rather than matters of real significance to national budgets. The UK's government spending now runs to about one trillion euros a year - the EU is arguing about one trillion euros over seven years divided between 27 nations. Of that the "administration" budget is just 6%. Which means that when Mr Cameron talks about saving a billion euros by, for example, stopping automatic promotion of civil servants, he really is talking about a drop in a bucket.

This is perhaps why the economics professor who now is Prime Minister of Italy, Mario Monti, accused Mr Cameron of being an irrational "demagogue". Italy is now in an alliance with France supporting the claims of those who want a bigger budget in the interests of "solidarity". Both Italy and France are net contributors to the EU overall but they are also big recipients of the Common Agricultural Policy, which accounts for some 40% of EU spending.

Perhaps the most significant thing that happened at this summit was that there was no Franco-German axis. Chancellor Merkel and President Francois Hollande took opposing positions.

What's more Germany now seems concerned not to isolate the UK, because of fears that another confrontation could move Britain out of the Union altogether - ceding much greater influence inside to socialist-led France and its Mediterranean allies.

As the European Union scrambles to find a deal Germany, Britain and their North European allies would seem to have the stronger hand - following the time-honoured principle of who pays, plays - provided that their alliance holds together.

18.56 | 0 komentar | Read More

Tax Backlash Prospect For Independent Shops

By Poppy Trowbridge, Business & Economics correspondent

Independent businesses could benefit from public uproar over low rates of corporation tax paid by global giants Starbucks, Amazon and Google, according to retail experts.

The backlash has been prompted by the revelation that Starbucks has paid just £8.6m UK corporation tax in the past 13 years, on sales of £3.1bn, when most businesses will pay a corporation tax rate of 24% this year.

In 2011, Google paid £6m tax against sales of £395m, while Amazon paid no tax at all in the UK - despite sales here reaching £3.3bn.

Matthew Stych, research director at analysts Planet Retail, believes British retailers can make the most of the furore by highlighting their own contributions and good practices.

"It's a golden opportunity that comes along once in a decade or so, to really capitalise on the negative publicity that some global retailers are receiving at the moment," he says.

"I think it's a huge opportunity that independent retailers in the community must seize now".

Google and Amazon are also accused of paying low taxes on big profits

Independent booksellers in Hertfordshire are doing just that. With support from the Booksellers Association they have launched an advertisement campaign to publicise the fact they pay their taxes.

"People need to think about where they are spending their money and we are hoping that this campaign will bring that to their attention," said Sheryl Shurville, co-owner of Chorleywood Bookshop.

But other analysts are not convinced such consumer campaigns will have any long-term benefit.

"We're unlikely to see any massive dip in the sales of these companies under scrutiny," says Douglas McNeill, chief analyst at Charles Stanley.

"Whilst ethical issues can temporarily make people pause for thought, consumers make their choices on the basis of eternal basics of price, quality and convenience."

Mr Stych says large brands may yet find a way to turn around the negative publicity.

"As far as Amazon and Starbucks are concerned, I think there's an opportunity to strike a more conciliatory note," according to Mr Stych. 

"This is for them also an ideal opportunity to regain or re-forge that bond with local consumers".

18.56 | 0 komentar | Read More

Comet Bid Made By Online Retailer

The entrepreneur behind Appliances Online has tabled a bid for Comet in a move that could see the failed electrical chain disappear from retail parks and high streets.

John Roberts, who set up Appliances Online in 2000, confirmed he had put in a "seven-figure offer" for Comet's website after it collapsed into administration earlier this month.

He said his Bolton-based business would hope to run the Comet brand online, but said a deal would depend on whether he could rescue the brand before too much damage was done through the administration process.

Administrator Deloitte is also understood to have received a bid for 140 of the 195 Comet stores, which could save more than 2,000 jobs, according to a report in The Sun newspaper.

Deloitte said it had been in discussions with a number of interested parties over different parts of the Comet business.

Some 1,500 posts at the collapsed electricals chain have already been axed, including 603 home delivery network jobs on Monday.

A further 57 head office posts in Rickmansworth in Hertfordshire, 56 employees from a call centre in Clevedon, and 17 from an office in Hull also went this week.

The sites were already the subject of 330 redundancies last week.

Deloitte has also closed 27 of the 41 shops it announced it would shut by the end of the month.

Mr Roberts, who said Comet's poor attitude to its customers caused its downfall, wants a quick sale of the business.

He said it was unlikely Comet would survive in any form on the retail parks.

The collapse of Comet marks one of the biggest high street casualties since the demise of Woolworths in 2008 and came a month after the failure of JJB Sports.

The group was hit by weak high street trading conditions, competition from online rivals and being unable to secure the trade credit insurance needed to safeguard suppliers.

In particular, it was knocked by the lack of first-time home-buyers, who had been key customers for Comet, according to Deloitte.

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'Black Friday' Discount Day Reaches UK

Some of the UK's biggest retailers are cashing in on a US tradition which sees millions of frenzied shoppers make the most of discounted prices.

Amazon, Asda and Apple are among the companies that have launched so-called Black Friday sales in Britain - despite many consumers being unaware of the custom.

In the US, thousands of stores discount their prices the day after Thanksgiving, and many open for longer hours.

Last year a record number of people visited stores over the Black Friday weekend, spending a total of $52bn (£32.6bn) - an average of around $400 (£250) each, according to the National Retail Federation.

And this year, some eager shoppers have been caught on camera phones battling to get to the best bargains first, after queuing for hours. 

Many retailers opened their stores at midnight, and this year the trend to open at 8pm on Thursday started to spread.

While the shift was denounced by some store employees and traditionalists as pulling people away from families on Thanksgiving, many shoppers welcomed the chance to shop before midnight.

Amazon launched its sale on Monday

"I think it's better earlier. People are crazier later at midnight," hotel worker Renee Ruhl, 52, said as she shopped at a Target store in Orlando, Florida.

Online retailer Amazon was one of the first companies to bring the trend to the UK.

It launched a week-long Black Friday sale on Monday, which it claims "offers millions of pounds of savings on hundreds of Christmas gifts".

Tech giant Apple and Asda, owned by Walmart, are also hoping to make the most of the Christmas shopping rush by offering one-day discounts of their own.

Hotel Chocolat emailed customers to say that as it offered US customers 20% off it would do the same for UK buyers.

"There are more retailers launching sales this year than ever before - and many British consumers are becoming aware of the tradition for the first time," Retail Week's Gemma Goldfingle told Sky News.

"In the US it an absolute phenomenon, with people queuing up all night to snap up the best deals.

In Orlando at least one family camped outside a Best Buy shop for a full week, sleeping in two tents.

"It has not reached that level here and whether it ever will is another matter," Ms Goldfingle said.

She said that Americans have Thanksgiving to kick-start the event – whereas in the UK it is just a normal day. Boxing Day, when UK sales traditionally begin, is a normal work day for Americans.

"A lot of British retailers would prefer not to have it," Ms Goldfingle said.

"They want to be selling items at full price ahead of Christmas, especially given the tough economic conditions."

While a limited number of UK chains have labelled their sales as Black Friday, many other have needed to show weekend price drops to lure customers.

Furniture chain dfs has taken to advertising in newspapers about its discounts while Topshop offered online weekend deals.

Black Friday, which is thought to refer to the first day of the year that retailers go "into the black", comes just ahead of Cyber Monday - which the marketing industry claims is the busiest day in the online shopping calendar.

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Steel Giant Tata Cuts 900 Jobs Across UK

Indian-owned Tata Steel confirms it will close 12 plants in Britain.

The move will result in 900 job losses, the company confirmed, including 580 in South Wales, 155 in Yorkshire, 120 in the West Midlands and 30 on Teesside.

Sites to close include Tafarnaubach and Cross Keys in South Wales, and it will also reduce shifts at Rotherham and Hartlepool in response to lower demand for products.

The chief executive of the company's European operations, Karl Kohler, said the move was part of a strategy to become an "all-weather steel producer", able to withstand the difficult economic conditions.

Demand for steel in Europe had fallen by 25% since 2007 and was forecast to slump by another 10% this year, Tata said.

Mr Kohler added: "The job losses are regrettable and I know this will be a difficult and unsettling time for the employees and their families affected.

"We will be working with our trade unions and government at a national and local level to ensure we provide them with as much assistance and support as possible."

The company employs 19,000 in the UK and said it remained committed to investing in the business to help create long-term stability.

It confirmed plans to re-start one of two blast furnaces at Port Talbot in the first quarter of next year as part of a £250m investment programme.

Michael Leahy, general secretary of the Community trade union, said it was "sad news" for those affected by the job losses.

"We will be seeking an urgent meeting with the company to ensure our principle of no compulsory redundancies is upheld, although we are pleased to see the company has already committed to offering a package of training and support for those affected by these changes," he said.

"Sadly, these potential job losses are symptomatic of the continuing failure of the Government's economic policy and yet another reason why we are calling on the British Government to take urgent action to stimulate economic growth and help revive the manufacturing sector."

A Welsh Government spokesman added: "This is very disappointing news, and a massive blow to those who will be losing their jobs.

"Tata's decision reflects the serious and ongoing challenges faced by manufacturing industries during these very difficult economic times.

"In addition to these challenges, it is clear that high energy costs and uncertainty over UK Government energy policy are having a significant impact on business investment decisions.

"As a Government, we have warned for some time of the need for these costs to be reduced."

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Mothercare Reports A Loss As UK Sales Fall

Mothercare's chief executive insists the business is "on track", despite reporting another fall in UK sales.

Like-for-like sales in Britain fell 3.4% in the UK in first half of the year - although this is an improvement on the 7% slide seen a year ago.

Sales overseas, where the retailer plans to open 150 stores this year, grew by 4.4% in the six months to October 13.

Although sluggish demand in the eurozone - its biggest international market - hit the rate of growth outside the UK.

After one-off charges, Mothercare, which sells prams, car seats and childrens' clothing, reported a loss before tax of £27.4m.

Its underlying performance - if the one-off items are stripped out - was stronger, with its pre-tax loss shrinking from £4.4m to £0.6m.

New chief executive Simon Calver has been charged with cutting prices and improving Mothercare's delivery service to help it better compete with rivals, including supermarkets.

His three-year turnaround strategy saw the group close 31 stores in the UK in the first six months, with plans to close 19 more this year.

He told Sky News the results showed progress at the company, which has failed to keep up with its competitors over recent years.

"We've done a lot on the management team, we've done a lot on our products and the value we offer to the consumer," he said.

But he added that the group had expected sales to "take a while" to turnaround.

"Early signs are encouraging but we're definitely on track," he said.

Mothercare has over 1,300 stores across the world, including 280 in the UK.

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Big Brewer Slams 40% Beer Tax Rise

The world's second biggest brewing company, London-listed SABMiller, has slammed soaring UK beer duty taxes.

As it announced a 12% rise in half-year profits to £1.72bn, the firm behind the Foster's and Peroni brands hit out at a 40% rise in tax endured by drinkers over the past four years.

It has been claimed that the beer duty escalator, which raises the tax annually by 2% above inflation, has added 55p to a pint since it was introduced in 2008.

The policy has been bitterly criticised by fellow brewers and the pub industry, which continues to suffer from closures due to the consumer spending squeeze.

According to the British Beer & Pub Association, pub beer sales declined by almost 5% - more than 50 million pints - between July and September.

An angry e-petition response to the tax from drinkers has already prompted a Parliamentary debate.

Gary Haigh, the UK boss of SAB, was quoted in The Sun newspaper on Thursday as saying that duty rises were the "crime of the century".

Chief Financial Officer Jamie Wilson told Sky News: "It's very important that Governments look at the effect of excise across the business as a whole and decide whether it is an equitable way to tax beer across all different alcohol categories.

"Taxing beer more and more tends to be counter-productive in terms of a revenue-raising policy because if you start reducing the volume of beer that is then being drunk then clearly you're not making any more money by putting the taxes up.

"It's a factor in our business - we have been successful because of the strength of our brand in attracting consumers in drinking our products but clearly if we had a different pricing policy then perhaps we would be able to do even better."

In its results, SAB said its acquisition of Australian brewer Foster's and strong growth in Latin America helped boost profits against a backdrop of a 10% fall in earnings in Europe.

The company raised its interim dividend by 12% but said it was cautious on its prospects for the second half of the year, in part due to tough economic conditions in some of its markets.

Despite the warning, its share price rose 6% in morning trade.

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EU Budget: Proposed Rise 'Quite Wrong' Says PM

David Cameron has insisted that the proposed rise in European Union spending is "quite wrong" as he arrived in Brussels for marathon budget negotiations.

The Prime Minister said he would be fighting "very hard" for a good deal for British taxpayers and to keep the rebate negotiated by Margaret Thatcher in the 1980s.

"These are very important negotiations. Clearly at a time when we are making difficult decisions at home over public spending it would be quite wrong - it is quite wrong - for there to be proposals for this increased extra spending in the EU," he said.

Mr Cameron is calling for a real-terms freeze, or even a cut, in the budget for 2014-20 - the sole subject on the agenda for the summit, which is being attended by leaders from all 27 EU member states.

The British PM is the first in line this morning for a meeting with European Commission president Jose Manuel Barroso and European Council president - and summit chairman - Herman Van Rompuy.

Other EU leaders will be ushered in throughout the day to see the two presidents as part of an unusual pre-summit effort to avoid deadlock when the summit gets under way tonight over dinner.

The budget is a complex and deeply divisive process, with the UK balking at the European Commission's opening gambit - to increase the overall spending ceiling to a maximum one trillion euro.

This was flatly rejected by Britain and nearly all the net contributors to the European Union.

The European Council, which represents the interest of the member states, chimed in with its own plan, which represents a real-terms 2% cut from the spending ceiling approved for the current seven-year period.

But the proposal, penned by Mr van Rompuy, would reduce Britain's rebate and only contains a 1% reduction under so-called "Heading 4", which details the EU's spending on administration costs.

Mr Cameron, and other leaders, believe Brussels should accept some symbolic reductions in red tape and make deeper cuts to the legions of Eurocrats who work in the EU institutions.

The British Prime Minister believes Mr van Rompuy's proposals are moving in the right direction, but he needs to go further.

He has also insisted that the UK's £3bn a year rebate, which was negotiated to compensate Britain for money disbursed to other nations, is not up for discussion.

The budget has to be agreed by all 27 members and by a majority in the European Parliament.

Other countries also have reservations with the proposals on the table: France and Ireland want to protect agricultural payments to their farmers, Italy is unhappy that other countries' rebates due to expire in 2013 might be renewed while Denmark wants to negotiate its own rebate.

Earlier this month Mr Cameron was blindsided by a Tory rebellion calling for a budget cut, not just a freeze. He may yet face their wrath.

The budget being discussed is about setting an absolute limit on EU spending, but the money spent is always considerably less.

So while the PM might be able to claim a victory in securing a freeze in total EU spending limits, UK taxpayers may still have to fork out more cash to Brussels.

If no agreement is reached, more summits will be held in the new year.

If there are still problems, the annual budget will roll over with an extra 2% added to take account of inflation.

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Tax Avoidance: UK Missing Out On Billions

The Treasury is losing billions in revenue because officials are failing to clamp down effectively on agressive tax avoidance, according to Whitehall's spending watchdog.

The National Audit Office (NAO) revealed that HM Revenue and Customs (HMRC) has a backlog of 41,000 cases worth £10.2bn in tax revenue.

They relate to schemes aimed at small businesses and individuals in what has been described by MPs as "eye-watering" potential avoidance.

The NAO said officials are struggling to cope with the volume of schemes being "mass-marketed", often by small specialist tax advisers.

HMRC believes most of the schemes are not valid and would be "defeated" if tested in court but closing them down can take years of legal wrangling.

Margaret Hodge, the chair of the Commons Public Accounts Committee which oversees the NAO's work, called on HMRC to get a grip on the problem.

"People who pay their taxes promptly and in full will be dismayed to discover that the enormous level of tax avoidance taking place is overwhelming HMRC's efforts to combat it. The scale of the problem is staggering," she said.

"Without a credible plan to resolve these cases and to stamp out future avoidance, the public will lose confidence in the tax system's ability to collect even-handedly what is due from all individuals and companies."

She urged officials to step up enforcement and impose more fines so that they act as a deterrent.

Experts who design and sell such schemes have to notify HMRC under a regime known as Disclosure of Tax Avoidance Schemes (Dotas).

The NAO said this had helped target legal loopholes but that it had little effect on the overall scale of tax avoidance activity.

"There is little evidence that HMRC is making progress in addressing this problem and it must now be vigorous in seeking more effective counter-measures, proposing legislative change where necessary," it said.

Between 2004 and 2011, around 2,300 avoidance schemes were disclosed to HMRC, with over 100 new schemes emerging in each of the past four years.

Since April 2010, litigation has been opened in 110 avoidance cases. Of the 60 cases where judgments have been reached, HMRC was successful in 51.

The NAO said there was no evidence that this level of litigation was proving an effective deterrent.

Its chief, Amyas Morse, said: "HMRC must push harder to find an effective way to tackle the promoters and users of the most aggressive tax avoidance schemes.

"It is inherently difficult to stop tax avoidance as it is not illegal. But HMRC needs to demonstrate how it is going to reduce the 41,000 avoidance cases it currently has open."

HMRC said it had successfully challenged more than 40 avoidance schemes in the courts over the last two years, protecting around £4bn but admitted it had to stay vigilant.

"As the avoidance landscape changes, so must our approach. The Government is building on Dotas to give HMRC stronger powers to obtain information," a spokesman said.

"These, together with the introduction of an anti-abuse rule in 2013 will further strengthen our anti avoidance work."

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Arcadia's Philip Green Says Time To 'Up Game'

Arcadia Group has reported 25% rise in pre-tax profit as its owner said businesses need to stop moaning about the tough economic conditions.

Sir Philip Green - whose family is ranked 17th on the Sunday Times UK rich list - said retailers had to adjust their business models to survive.

"We've got to trade. I can't keep listening to all these people making it up as they go along," Sir Philip told Reuters.

"We're here in the streets, we've got 45,000 staff, we've got a £500m payroll - we've got to make it work."

His company owns some of the high street's most recognisable chains, including Topman, Burton, Miss Selfridge, Evans and Wallis.

The 60-year-old, who has an estimated fortune of £3.3bn, said it was time for retailers to "up their game".

Earlier this month, Sir Philip joined US-based reality television stars the Kardashian sisters at the launch of their clothing collection for Arcadia brand Dorothy Perkins.

He added: "If we sit there and cry and put on my front window the Bank of England said X, it isn't going to help me take any money."

The comments come after the Bank warned of years of poor economic growth and rising prices in the UK, as consumers struggle with little wage growth and Government austerity.

Arcadia reported a pre-tax profit before one-off items of £166.9m for the year to August 25, up from £133.1m last year.

But total sales across its 2,500 UK stores and 615 outlets globally were flat at £2.68bn, while like-for-like sales fell 3.2% in the UK and 0.7% internationally.

Sir Philip said he was focussed on expanding in the US and growing Arcadia's global websites.

"We have focused our efforts on being efficient in both stock management and delivering newness as regularly as possible, resulting in improved markdown and margin," he said.

The entrepreneur, who bought BHS in 2000 and Arcadia in 2002, said he had not ruled out another big acquisition if the right deal came along.

"There's sort of two or three things in my head. If they ever turned up, we'd have to look at them," he said, but would not give more details.

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Economy: Weak Tax Receipts Stoke Borrowing

The Government borrowed more than forecast in October as a 10% fall in Corporation Tax receipts hurt Treasury coffers.

Public Sector Net Borrowing, excluding financial interventions such as bank bailouts, came in at £8.6bn.

It means that for the tax year-to-date, the total stands at £73.3bn - £5bn higher than the year before.

The Chancellor wants borrowing for the full year 2012/2013 of £120bn and the latest figures leave George Osborne facing tough choices ahead of his Autumn Statement to the Commons on December 5.

As he remains under pressure to loosen the austerity drive that his critics argue is damaging economic growth, Mr Osborne is equally squeezed on the option of imposing more spending cuts to cover weaker than expected income.

Economists suggest one of his golden rules - ensuring that the UK's debt-to-GDP ratio starts falling toward 2015 - may be abandoned.

The chances of such a move were heightened after Bank of England governor Sir Mervyn King effectively endorsed it last week, on condition that the global economy was growing slowly.

The Office for National Statistics said total tax receipts were 1.8% higher at £47.5bn in October but total expenditure rose 7.4% to £52.8bn.

Tax revenues were dragged down by corporation tax raising only £8.1bn while spending on social benefits, such as state pensions, jumped 7.7% to £16bn.

In response a Treasury spokesman said: "The economy is healing but it still faces many challenges. These numbers illustrate that, but also show the Government's plans to bring spending under control are on track for the year."

Labour dismissed that argument, with sh adow chief secretary to the Treasury Rachel Reeves saying: "George Osborne is borrowing billions more simply to pay for the cost of his economic failure. Having failed on jobs and growth, the government is now failing on the deficit too.

"With long-term unemployment rising and our economy flatlining, the welfare bill is now soaring while business tax receipts are down. By squeezing families and businesses too hard, choking off the recovery and so pushing borrowing up not down, the government's economic plan has completely backfired.

"The Chancellor cannot rely on a short term bail out from the Bank of England's quantitative easing scheme to get him out of his hole. Smoke and mirrors will fool nobody. People will want to see borrowing and debt figures without the impact of a £35 billion transfer of money from the Bank of England so they can make proper comparisons and judgements."

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Payday Lenders Face Regulator Inquiry

Several payday lending firms are facing a formal investigation over aggressive debt collection tactics amid concerns about poor practice in the wider industry.

The announcement was made by the Office of Fair Trading (OFT) which said it was taking several actions in the wake of a progress report on the sector during its continuing compliance review.

The OFT said it was unable to name the specific companies at the heart of its inquiry into debt collection but David Fisher, its director of consumer credit, said: "We have uncovered evidence that some payday lenders are acting in ways that are so serious that we have already opened formal investigations against them.

"It is also clear that, across the sector, lenders need to improve their business practices or risk enforcement action."

The OFT said it was writing to all 240 lenders in the market to outline its concerns but expects to warn the majority of 50 firms it has inspected that they risk enforcement action if they do not improve their standards.

Mr Fisher continued: "Our report shows that a large number of payday loans are not repaid on time. I would urge anyone thinking about taking out a payday loan to make sure they fully understand the costs involved so they can be sure they can afford to repay it."

Payday loans are products designed to cover a person's costs until a salary is paid but have stiff penalties if repayments are missed with some imposing annual interest rates of more than 4,000%.

Recent research from Which? suggested 57% of customers had incurred penalties while 20% who took part in the survey complained about being hit by unexpected charges.

Among the OFT's biggest concerns was the adequacy of checks made by some lenders on whether loans will be affordable for borrowers and the proportion of loans that are not repaid on time.

The industry has previously insisted it has high customer satisfaction levels.

In reaction to today's report the UK's biggest payday lender Wonga said: "We welcome the on-going OFT review of payday and short-term lending, which seeks to provide further protection for consumers and clamp down on unscrupulous lenders.

"We provide a valued, transparent service to more than a million customers and want to see rogue practices rooted out across all financial services.

"Consumers are crying out for clear pricing, more control and fair treatment, while robust credit checks are essential to ensure appropriate lending."

The regulator had cited concerns in its interim report that lenders' advertising often appears to target people who are already in financial difficulty and encourage them to roll over loans.

Around a third of payday lending websites looked at by the OFT included statements such as "no credit checks", "loan extension guaranteed" and "extend loans up to four or five times".

The OFT said it would publish in the New Year a full report setting out further findings on compliance, including whether wider action is needed to tackle problems in the sector.

The regulator has also updated its Debt Collection Guidance, focusing on the continuous payment authority mechanism commonly used by payday lenders to collect repayments.

According to the OFT, it makes clear the minimum standards expected of traders.

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Bankers' Body Urged To Merge After Libor Loss

By Mark Kleinman, City Editor

Britain's banking lobby group is under pressure to consider a merger with another trade body as it seeks to fill a funding deficit triggered by the loss of its role setting the interbank borrowing rate Libor.

I have learned that the British Bankers' Association (BBA) has been urged by a number of banks to examine a combination with the Council of Mortgage Lenders (CML) or another trade association.

The issue was discussed at a recent BBA board meeting, according to my sources, and is expected to form part of a new strategy for the banking group that will be unveiled by Anthony Browne, its chief executive, in the new year.

The BBA, which does not publicly disclose its accounts but circulates them among its members on an annual basis, generates millions of pounds each year from selling licences to data providers to allow them to publish Libor benchmark data.

Fees for membership of the BBA are paid on a sliding scale dictated by a bank's size, with major high street lenders such as Barclays and Royal Bank of Scotland paying the largest sums. Insiders say that the biggest banks pay several million pounds a year to fund the BBA's work.

It is unclear what proportion of the BBA's income is generated by Libor-related activities, but one bank executive said the major lenders were reluctant to pay more to replace the lost revenue.

"They have to cut their cloth," the banker said.

The BBA's council voted in September to relinquish its role in setting Libor rates following the scandal which engulfed Barclays in June. The UK bank paid £290m in fines for attempting to manipulate Libor rates before and during the 2008 financial crisis, and heavy penalties for other banks are expected to follow from regulators around the world before the end of the year.

The Government has said that it will implement the recommendations of a review by Martin Wheatley, head of the new Financial Conduct Authority, for Libor rates to be overseen by a new body. Companies including Bloomberg have expressed an interest in taking on a role in the new Libor-setting regime.

Sources close to the BBA insisted that it was not in talks about a merger or other alliance with the CML, although insiders confirmed that such a move had been explored under the leadership of Angela Knight, Mr Browne's predecessor, who now runs the utilities' lobbying group, EnergyUK.

In a statement issued to Sky News, the BBA said:

"We are confident any changes to BBA revenues can be managed efficiently and we are currently exploring options to propose to our board."

A CML spokeswoman said it was not in talks about merging with the BBA.

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UBS 'Rogue Trader' Kweku Adoboli Guilty Of Fraud

UBS 'rogue trader' Kweku Adoboli has been found guilty of a £1.4bn fraud.

More follows...

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HMRC Puts Directors' Tax Under Microscope

HM Revenue and Customs has stepped up investigations into unpaid taxes by directors, according to an international law firm.

The Tax Office's Large Business Service (LBS) is investigating directors and senior executives over taxes including PAYE, and National Insurance contributions.

Some £400m in being investigated, according to Pinsent Masons – a figure which is 43% higher than the £280m under investigation last year.*

LBS is responsible for oversight of the taxes paid by the 770 largest firms in the UK.

The increased scrutiny comes as it seeks to recover a greater amount after reduction in the top 50p tax rate.

"Tax under consideration" is seen to include both potentially underpaid tax and the risk to the Exchequer from companies litigating over amounts of tax they have overpaid.

Pinsent Masons said the sharp rise in directors' taxes under the microscope has been driven by the upswing in HMRC compliance activity, as well as investigations into avoidance linked to the 50p tax rate and the temporary special tax on bank bonuses.

Foreign multinationals have been slammed over tax avoidance

Partner Jason Collins said: "HMRC has increased its focus on executives as they are a potentially lucrative source of extra tax revenue - particularly with executive pay rocketing over recent times.

"HMRC has taken a particular interest in cases where income or an individual's role at a company has been structured to reduce their tax burden, particularly their PAYE or national insurance contributions."

He added: "The introduction of new taxes for higher earners, such as the 50p marginal tax rate, mean HMRC will be on increased alert for any new forms of tax avoidance.

"The 50p tax brought in less than expected, so this may have set alarm bells ringing for tax investigators."

With increased awareness of corporations avoiding liability, the Tax Office is expected to look at avoidance or evasion by top executives.

JP Morgan staff have been warned over 'disguised remuneration'

Recent legislation has empowered HMRC to tackle 'disguised remuneration', in particular against employee benefit trusts (EBTs).

Earlier this month Sky News revealed how former and present staff at JP Morgan had been warned of litigation if they did not resolve 'dependent funds' sent offshore to Jersey.

The investment bank's staff who were part of the employee benefit trusts of 1998, 2006, 2007 and 2008 and the 2010 executive retirement plan are affected by the HMRC action.

HMRC has estimated that up to £1.7bn of tax and NI contributions were at stake in EBTs.

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Cameron Declares 'Economic War' On Downturn

The Prime Minister has told Britain's business leaders that his coalition "gets it", as the Government promises to help boost the economy.

Speaking at the annual conference of the Confederation of British Industry (CBI), David Cameron also urged bureaucrats to use the same spirit that was needed to defeat Hitler during the Second World War, in order to get the economy back on track.

Mr Cameron warned the country is at the "economic equivalent of war".

He said: "When this country was at war in the 1940s, Whitehall underwent a revolution.

"Normal rules were circumvented. Convention was thrown out. As one historian put it, everything was thrown at 'the overriding purpose' of beating Hitler.

"Well, this country is in the economic equivalent of war today - and we need the same spirit."

Mr Cameron pointed the finger at lobbyists, as pressure from them creates "risk-averse" civil servants.

"Over the past two and a half years, I've worked with exceptional civil servants who are as creative and enterprising as any entrepreneur, and they are as frustrated with a lot of this bureaucratic rubbish as I am."

Britain came out of its longest double-dip recession since the 1950s

He now plans to cut excessive red tape, reducing bureaucratic hurdles for British businesses.

Mr Cameron argued: "Back in 1998 there were 4,500 applications for review and that number almost tripled in a decade. We urgently needed to get a grip on this."

This year's conference takes place against the backdrop of rebounding economic growth, but the outlook remains uncertain.

Recent data showed that gross domestic product jumped 1% in the third quarter, as Britain powered out of its longest double-dip recession since the 1950s with the help of the London Olympic Games.

However, the Bank of England forecast last week that the economy could shrink again in the fourth quarter, with low growth expected for the next three years due to the eurozone debt crisis, tight credit and inflationary pressures.

Today's conference will also be addressed by the coalition Government's Business Secretary Vince Cable, as well as opposition Labour party leader Ed Miliband and London mayor Boris Johnson.

Meanwhile, confidence about future job security for City workers continues to fall, according to a study by recruitment firm Astbury Marsden.

It said that only one in 10 bankers and hedge fund workers believed London will create the most new banking jobs over the next 12 months - down from 22% a year ago.

Some 75% of four of the 460 people polled said the major Asia Pacific centres of Hong Kong, Shanghai and Singapore will create the most new banking jobs.

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Supermarkets Slammed Over Multi-Buy Deals

Supermarket mult-deals can end up not saving consumers money, according to a new report.

Consumer watchdog Which? monitored more than 100 hundred products on sale over the course of a year at Britain's biggest supermarkets.

It found that many deals were put on products that were increased in price.

One example was Goodfella's Deep Pan Baked Pizza, which more than doubled in price at Asda when on multi-buy.

Another was Nestle Munch Bunch Yogurt at Tesco and Sainsbury's which, over a year was either £1 or two-for-£2. Meaning either way the yogurt still cost the same.

Waitrose were also accused of having misleading offers in their stores.

"With household budgets squeezed and rising food costs among the top worries for consumers," Which? said in a statement.

"It's all the more important that stores make it as easy as possible for people to spot the best value products."

Multi-deals have become increasingly popular with Britain's largest supermarkets. Out 115 products looked at by Which? 43% were on offer during the first part of 2012.

But it seems the public are getting wise to this kind of pricing tactic - with 73% of those asked saying they prefer discounts to multi-buy offers.

The food shop is among people's biggest weekly expenses, with increases in the price of food seen as the second largest contributor to last week's rise in inflation.

However, supermarkets have defended their promotions strategy.

"Customers tell us they want low prices, not a strategy that gives with one hand and takes with the other, we're making sure the cost of the weekly shop is consistently low, with no surprises," Asda said.

Meanwhile Sainsbury's added: "We never seek to mislead our customers."

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Jaguar Land Rover Launches China Expansion

By Mark Stone, China Correspondent

Jaguar Land Rover is to manufacture cars outside the United Kingdom for the first time.

The company has entered into a joint venture with one of China's largest car makers Chery.

The two firms began work to build a factory near Shanghai today.

"For the first time one of the most famous names in the British automotive industry, Jaguar Land Rover, is poised to begin manufacturing in a market outside the United Kingdom," the company's CEO Dr Ralf Speth said at the stone-laying ceremony.

"It seems only fitting that this new venture will take place here, in the People's Republic of China, the world's fastest-growing market for premium vehicles."

Kay Francis, the company's director of global corporate communications, told Sky News: "This is our first ever manufacture plant outside the UK."

"The facility here in China will include research and development, engine plants and production lines. Start to finish, the cars will be made in China," Ms Francis added.

Executives at Jaguar Land Rover have been in complicated negotiations with their counterparts at Chery for months.

Chery is a state-owned company and Chinese government approval was required before any deal could be signed.

The joint venture project was approved by China's National Development and Reform Commission last month.

The first bricks of the new factory were laid at a ceremony in Changshu, Jiangsu Province, to the northwest of Shanghai.

Yin Tongyao, the president of Chery Automobile, and Dr Speth were both there.

"Soon, on this very site, will be a fully-fledged manufacturing plant, to create employment, stimulate the supply chain and develop game-changing environmental technologies for China. A total of 10.9bn renmimbi (£1bn) will be invested in this joint venture," Dr Speth said.

"In our shared vision with Chery, this partnership will offer Chinese customers the latest generation models from Jaguar and Land Rover, as well as vehicles designed specifically for Chinese customers," he said.

The company hopes that the first cars will roll off the production line in 2014.

It is understood the first vehicle to be built at the factory will be the Land Rover Freelander.

The company would not confirm that suggestion.

"We intend to build Jaguar and Land Rover branded products here... It's likely that a Land Rover badged vehicle will be the first to come out of the plant when it opens in 2014," Ms Francis said.

Volkswagen already manufactures VWs, Audis, Skodas and Seats in China

China has become Jaguar Land Rover's largest market and experts say it has not even begun to reach its potential.

Sales of the company's cars reached 53,000 there in the first nine months of this year - that's up 80 per cent from the year before.

The reason behind the boost is China's demand for luxury goods.

Jaguar Land Rover has sold 20,000 Range Rover Evoques this year alone.

The firm hopes to boost last year's record £1.5bn profits when the new Chinese factory begins work.

Building cars in China rather than importing them from the UK allows the company to avoid massive import duties.

Chinese-made vehicles can be sold for less and the hope is that more will be bought.

The company insists the expansion to China is in addition to their business in the UK and that no UK jobs will be lost as a result.

"Everything we do in China is in addition to our UK operation. We are not shifting production and it doesn't impact the head count and state of play of the plants in Britain," Ms Francis said.

Jaguar Land Rover does have a factory in Pune, India, but that acts simply as an assembly plant, constructing flat-packed cars which are manufactured in the UK.

Compared with other European car makers, Jaguar Land Rover is very late in expanding production to China.

Volkswagen began its first joint venture in China in 1984. Volkswagen Group China now manufactures VWs, Audis, Skodas and Seats in China with year-on-year record sales.

Ageing Volkswagens are a common sight in Beijing; a sign of just how long the company has been operating here.

Audi is now the favoured brand for the political elite in China. Black Audi A6 cars, manufactured in China, are seen all over Beijing.

Jaguar Land Rover says that as well as building cars identical to those built in the UK, it plans to build a new vehicle designed specifically for the Chinese market. 

"We may also build a brand of car that is a blend of the two: a car that is new and designed and developed entirely in China," Ms Francis said.

"Having Chinese research and development means we can tailor cars for Chinese tastes."

British brands are very popular in China. Combine that with the fact that China has an increasingly wealthy urban population and there are significant opportunities which could help strengthen the UK economy.

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