Customers To Switch Energy Firms In 24 Hours

By Anushka Asthana, Political Correspondent

Consumers should not need to be "stock market analysts" to be able to switch energy firms simply, the Energy Secretary has said.

Ed Davey said he was preparing to introduce plans to make it simpler for "ordinary people" to be able to find the cheapest tariffs.

Speaking to Sky News, Mr Davey said that he was introducing a number of measures, which will be unveiled in his yearly review in the House of Commons later today, to help customers reduce their bills.

He said that people would be easily able to find out the cheapest tariff on offer from their current supplier and that bills would have QR (quick response) codes on them which people could scan with their mobile phones to enable them to switch to the cheapest provider.

He said that volunteers, including people from the Citizens Advice Bureau and Age UK, would be available in the community to help people face-to-face to work out what was the best thing for them.

Mr Davey said: "This is the way to make sure you don't have to be a stock market analyst to switch but ordinary people, people who wouldn't normally think of witching are given the support to switch."

He said that he had switched this year as part of a collective and saved £200 on his annual bill.

The big six energy firms are under fire over pricing

The Energy Secretary, who has said customers should be able to switch in just 24 hours, is expected to say later today that the Bix Six energy firms will be subject to rigorous checks in three key areas - competition, profit and customer engagement.

It follows a storm of controversy around energy prices after four of the big six companies raised prices by an average of 9.1%, causing customer bills to exceed £1,400 a year and leading to allegations of cartel behaviour.

The annual check is designed to drive up competition in the market, which is still heavily dominated by the big six.

Despite a number of new entrants to the market, British Gas, SSE, Powergen, EDF, E.ON and Scottish Power still provide gas and electricity to 99% of British homes.

The annual review will aim to crack down on practices seen as preventing new firms from entering the market.

One supposed method revealed earlier this week involved British Gas. The energy giant was said to have a dedicated team that contacted customers who had switched away and offered them lower rates to go back.

Stephen Fitzpatrick, managing director of Ovo Energy, made the claims at a select committee hearing in which companies faced MPs.

Sources told Sky News the review would also look at how to force companies to offer clearer information to customers who want to switch and to reduce the time it takes to change companies.

There are already plans to reduce the number of tariffs on offer so that customers can easily compare them.

And the review will be expected to push companies to be more transparent about their profits.

While companies say they only make margins of around 5% on their retail products, they enjoy much bigger percentages in power generation - and the profits made through trading are not disclosed.

The review will be carried out by three regulators - Ofgem, the Office of Fair Trading and the Competition Markets Authority.

A source said the plans were "very much about transparency and asking the (big six) to open their books".

Deputy Prime Minister Nick Clegg, who admitted he was with one of the Big Six, told lbc during his weekly question session: "If the Big Six are going to keep their customers with them, they must be straightforward with them. Ed Davey is going to explain in Parliament how to switch in 24 hours to show it is easy - and I think this will make a dramatic difference."

 :: Watch Energy Secretary Ed Davey give his energy statement live on Sky News from 11.15am.

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House Prices Rise 1% But Are 7% Below Peak

House price growth accelerated in October amid continuing fears of a price bubble but the average cost of a home is still 7% below the record level measured in 2007.

The latest Nationwide House Price Index charted a 1% increase over the month following a 0.9% increase in September - with London and the South East continuing to drive the growth.

Sky News has learned that concern over the effects of massive foreign investment in property in the capital has prompted the Chancellor to considering taxing such purchases.

Nationwide said national annual price growth rose to 5.8% from 5% the previous month - the strongest increase seen since July 2010 - raised the cost of the average property to £173,678.

Commenting on the figures, the lender's chief economist Robert Gardner said: "The UK housing market appears to be following the more resilient upward trend evident in the wider economy in recent quarters.

There are concerns of unsustainable price increases because of low supply

"The ability and willingness of potential buyers to transact has been steadily increasing.

"The ability to buy has been supported by continued gains in employment and policy measures such as the Help to Buy and Funding for Lending schemes, which have improved the availability and lowered the cost of credit.

"Mortgage rates are close to all time lows. The willingness of potential buyers to step into the market has also been increasing."

But he warned: "House price growth has accelerated as buyer demand has picked up more quickly than the supply of new homes.

"The risk is that if demand continues to strengthen while the supply of property remains constrained affordability could become stretched."

The launch of a new phase of the Government's flagship Help to Buy scheme offering state-backed mortgages to people with deposits as low as 5% was brought forward to this month, following expectations that the initiative would not start until January 2014.

Critics argue that rather than launching initiatives to unleash more aspiring buyers into the market, which will contribute to the upward pressure on house prices, the Government should instead be concentrating efforts on trying to address the lack of housing supply.

Ministers have consistently dismissed talk of price bubbles, suggesting the market recovery is only just beginning outside of London and the South East.

The property website Rightmove recently measured a 10% jump in house prices in the capital during October alone - prompting further debate on whether a boom and bust cycle loomed.

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House Prices: 'Tax To Tackle London Bubble'

By Ed Conway, Economics Editor

George Osborne is considering slapping new taxes on foreign property investors in an effort to tackle what many see as a house price bubble in London and the South East of Britain.

The Chancellor is actively investigating imposing capital gains tax on foreign owners of British property at the Autumn Statement in December.

The Treasury has already provisionally costed the measures and is awaiting a final decision from Mr Osborne in the coming weeks.

While those living in Britain have to pay capital gains tax (CGT) of 18% or, more commonly, 28%, if they make a profit when reselling all but their main home, non-resident property owners are currently exempt for all their properties.

Mr Osborne could make foreign buyers liable for CGT

Britain's comparatively generous regime is thought to be one of the factors behind the sharp increase in foreign ownership of properties in London.

House prices in London rose by nearly 9% in August, compared with around 2% elsewhere in the UK, according to the Office for National Statistics.

Fast-rising property prices have fuelled fears about a housing bubble in so-called 'prime' London areas such as Kensington & Chelsea, where the average home is now worth almost 30 times the average local salary.

The price increases have been driven in part by foreign investment, with around 70% of the most expensive London newly-built properties being bought by non-UK citizens, according to estate agency Knight Frank.

It calculates that 65% of overseas buyers intend to rent their London properties rather than live in them.

At present, these buyers do not have to pay tax on the gains if they go on to sell the property in the future.

Under plans being mulled by Mr Osborne, even overseas buyers would become liable for CGT, as they are in many other countries throughout Europe.

According to the Treasury's own internal research, the tax would be unlikely to raise significant sums - tens of millions rather than billions - but would address concerns that overseas investors might enjoy favourable treatment when it comes to property investment.

In last year's Budget, the Chancellor introduced a series of measures levying annual charges on foreign investors who attempt to avoid paying taxes by holding properties through so-called 'wrapper' companies.

The charges have brought in more revenue than expected, something the Chancellor is likely to outline at the Autumn Statement.

However, although imposing new capital gains taxes on overseas investors might address concerns about a destabilising influx of cash into the capital, some within Whitehall fear that they would undermine the Government's message of keeping Britain 'open for business'.

Others are worried that they would cause a sharp fall in foreign demand for London property, which in turn could undermine the broader UK housing market ahead of the next election.

The Prime Minister's spokesman said today it was "speculation" to talk of a tax to tackle a London housing bubble.

But he added: "We need a range of approaches on housing which very much recognise in large parts of the country the value of homes has barely increased."

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Pensions: 'Rip-Off' Charges Targeted By Govt

Plans to stop "rip-off" pension charges could see people getting an extra £100,000 in their retirement savings pot.

The Government is to unveil plans that could include a ban on all charges above 0.75% a year as it rolls out landmark reforms to automatically place people into workplace pensions.

The industry has been working to improve transparency and the average charge on new pension schemes set up in 2012 is around 0.51%.

But the Office of Fair Trading (OFT) estimates there are more than 186,000 pension pots with £2.65bn worth of assets which are subject to an annual charge of above 1%.

Small variations in charges can make huge differences over time to the eventual size of the pension pot that someone ends up with.

The Government said that someone who saves £100 a month over a typical working lifetime of 46 years could lose almost £170,000 from their pension pot with a 1% charge and over £230,000 with a 1.5% charge.

A pension saver with a 0.75% annual charge on their pension pot could eventually end up £100,000 better off than if they had been charged a rate of 1.5%, the Government said.

Pensions Minister Steve Webb said: "The Government believes that enough is enough on charges.

"People need to know they are getting value for money when they save into a pension and not being ripped off by excessive charges."

Other options for caps being considered by the Government include a higher charge cap of 1% and a "two-tier" cap.

The two-tier cap would involve a standard cap of 0.75% and as well as a higher cap of 1% if employers explain to the Pensions Regulator why their scheme charges more than 0.75%.

Any final cap could lie somewhere between the two levels suggested, depending on the evidence received.

The Government wants to hear from the industry and the public on how it can best design a charging cap that can protect people's savings before putting its plans in place next year.

Otto Thoresen, director general of the Association of British Insurers (ABI), said: "The industry is committed to making pension reform a success and of course will engage fully with this consultation."

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Barclays In Currency Probe As Profits Dive

Barclays has confirmed a 26% fall in quarterly pre-tax profits and admitted it is facing international regulatory scrutiny over the possible manipulation of currency trading.

The third quarter brought in £1.39bn, amid higher spending to achieve its transformation objectives and a halving in income at its investment banking operations - blamed on uncertainty about when the US Federal Reserve would start to slow its massive quantitative easing programme to support economic recovery.

Profits from its investment bank dropped 53% to £463m while profits from UK retail and business banking were 2% down at £351m.

Antony Jenkins' Transformation plan has cost £741m over the year so far

Over the first nine months of the year, group pre-tax profits were down 20% to £4.97bn but Barclays did not add to its £3.95bn total provision for the cost of the payment protection insurance mis-selling scandal, unlike rival Lloyds on Tuesday.

Barclays confirmed it was reviewing its foreign exchange trading over several years to August 2013 amid a worldwide regulatory inquiry into the market.

While authorities have not named individual banks at the centre of the probe, UBS and Deutsche Bank said on Wednesday that they were under investigation.

Barclays said a number of regulatory and enforcement authorities were investigating foreign exchange trading, including attempts to manipulate benchmark exchange rates.

The Barclays statement said: "It is not possible at this stage for Barclays to predict the impact of these investigations on it." 

The bank has had to pay a string of penalties for the mistakes of its past - most notably a £291m fine for allegations relating to the rigging of the interbank lending rate, Libor.

Most recently it revealed it was facing a £50m fine over claims it acted recklessly in its multibillion-pound bailouts from Qatar in 2008.

Antony Jenkins, the chief executive appointed last summer after Bob Diamond quit over the Libor revelations, launched a campaign to overhaul the culture of the bank, with a major restructuring programme called Transform that has cost £741m so far this year.

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Back-To-Work Schemes 'Legally Flawed'

By Tom Parmenter, Sky News Correspondent

The Government's back-to-work schemes, under which people on benefits work for free, are legally flawed, the Supreme Court has ruled.

Judges upheld an earlier Court of Appeal ruling which found that 2011 regulations underpinning the schemes, which have been criticised as "slave labour", were invalid.

However, the judges ruled that regulations did not constitute forced or compulsory labour, leaving both sides claiming victory.

The legal battle focused on several cases including graduate Cait Reilly who had been made to work for two weeks cleaning and stacking shelves in a Poundland store in Kings Heath, Birmingham.

The 24-year-old graduate said she gained nothing from the fortnight and felt as though she was simply giving her labour for free.

The other case was that of 40-year-old unemployed HGV driver Jamieson Wilson, from Nottingham, who had to do unpaid work cleaning furniture and was stripped of his jobseeker's allowance for six months.

The Supreme Court dismissed Secretary of State Iain Duncan Smith's appeal on the issue of the legality of the back-to-work schemes, holding that the regulations were "invalid" as they did not give sufficiently detailed "prescribed description" of the schemes.

Iain Duncan Smith is pleased with the ruling on 'slave labour'

It also held that the Secretary of State had failed to provide sufficient information about the schemes to Ms Reilly and Mr Wilson.

Following the judgment Miss Reilly, who said she had been unfairly labelled a 'job snob' for challenging the scheme, said: "I am really pleased with today's judgment, which I hope will serve to improve the current system and assist jobseekers who have been unfairly stripped of their benefits.

"I brought these proceedings because I knew that there was something wrong when I was stopped from doing voluntary work in a local museum and instead forced to work for Poundland for free.

"I have been fortunate enough to find work in a supermarket but I know how difficult it can be. It must be time for the Government to rethink its strategy and actually do something constructive to help lift people out of unemployment and poverty."

Following the Court of Appeal ruling in February, the Government retrospectively passed legislation to correct problems in the system.

That new legislation rendered much of today's Supreme Court ruling academic but the Government trumpeted its success.

Mr Duncan Smith said: "We are very pleased that the Supreme Court today unanimously upheld our right to require those claiming jobseeker's allowance to take part in programmes which will help get them into work.

"We have always said that it was ridiculous to say that our schemes amounted to forced labour, and yet again we have won this argument.

"Ultimately this judgment confirms that it is right that we expect people to take getting into work seriously if they want to claim benefits."

On Tuesday, Health Secretary Jeremy Hunt lost his appeal against a Court of Appeal ruling, which found he had no power to announce cuts to A&E and maternity services at Lewisham Hospital.

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Lloyds Profits Hit As PPI Bill Tops £8bn

Lloyds Banking Group has set aside another £750m to cover the costs of the payment protection insurance (PPI) scandal, taking its total provision past £8bn.

The part-nationalised lender confirmed the news - broken by Sky's City Editor Mark Kleinman on Monday night - when it announced its third quarter results. 

Its statutory profit before tax of £1.694bn for the nine months to September 30 reflected the additional PPI writedown and compared to a loss of £607m for the same period last year.

But the group, which is 33% owned by the taxpayer, recorded pre-tax losses of £440m in the quarter compared with a £151m loss in the same period last year - a result of PPI claims remaining higher than expected.

The total PPI provision of £8.02bn includes £1.7bn for administration costs alone.

PPI compensation is said to have helped boost consumer spending

Lloyds said it received an average 11,000 complaints a week over the three month period though monthly complaint volumes were starting to fall.

The results were the first since the Treasury began the process of returning its stake in Lloyds to the private sector, selling a 6% chunk for £3.2bn to institutional investors last month.

Antonio Horta-Osorio, the bank's chief executive, said of the performance: "The third quarter was a significant one for the group.

"We returned the TSB brand to the high street, launched a revitalised Lloyds Bank, and I am pleased that the progress we have made enabled the UK government to begin the process of returning the Group to full private ownership and getting taxpayer's money back at a profit.

"These are key milestones for Lloyds Banking Group and UK banking," he said.

The continuing nature of the PPI scandal underlines how one of the banking sector's most profitable products in the years after 2000 has become a giant millstone around its neck.

The British Bankers' Association has been holding talks with the Financial Conduct Authority about the imposition of a time limit on PPI claims, although these discussions have so far been fruitless.

The rest of the major high street banks are likely to have to increase their own PPI provisions, with Barclays and Royal Bank of Scotland also reporting third-quarter results later this week.

In February, the Financial Times quoted one unnamed Lloyds shareholder as saying that it would review its investment in the bank if PPI costs continued to rise.

"If PPI costs rise further, then that could tip the balance in our decision on whether to hold or sell our shares in the company," they are reported to have said.

That sentiment has not held back the Lloyds share price despite the fact that its PPI bill has escalated further.

On Monday, the owner of Halifax saw its share price close at 79.62p, a near-doubling during the last 12 months.

As Sky News revealed at the weekend, Mr Horta-Osorio has a vested interest in seeing the shares remain above 73.6p until the second half of November. If they do, the performance over 30 consecutive trading days would crystallise a bonus that on paper is currently worth just under £2.5m.

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Energy Prices: MPs To Turn Up Heat On 'Big Six'

Energy: Who Are The Big Six?

Updated: 10:56am UK, Tuesday 29 October 2013

By Anushka Asthana, Political Correspondent

As energy bills continue to dominate in Westminster, MPs will today hear from the "Big Six" companies – who together supply over 99% of British homes. So who are they?

:: British Gas

Much to the annoyance of MPs and the public, five out of six of the companies have failed to put up their chief executives. British Gas will instead put up Ian Peters, managing director of energy.

He will be seen as a key witness because British Gas (which also operates as Scottish Gas) is the UK's largest supplier of energy to households with almost 10 million residential customers.

British Gas has announced that the bills for dual-fuel customers will rise by 9.2% from 23 November. That is an 8.4% increase in gas prices and 10.4% in electricity.

The average annual bill will go up by £123 to £1,444. That is despite an overall profit in 2012 of over £600m.

:: E.ON

Tony Cocker is the only chief executive agreeing to stand in the spotlight today. His company, E.ON, has yet to announce price rises although it is expected to do so soon.

E.ON – which used to be called Powergen – operates in over 30 countries, serving 26 million customers.

Its price increases last year brought the average bill to £1,370. Its sales revenues in 2012 rose by 5% to £132.1bn with profits in excess of £800m

But the previous chief executive said the results were down to one-off effects and warned that parts of the business remained barely profitable.

:: EDF

Martin Lawrence, the managing director of energy sourcing and customer supply, will represent EDF today.

The company – which supplies around 3.7 million households in Britain - has also not announced a price increase as yet although it was one of the later ones to do so last year as well.

In 2012 it put up the average dual-fuel bill by 10.8%

The company's UK retail arm made a loss of £92m in 2012. But the success of its power generation arm – with nuclear power stations, coal plants and a gas power station – meant it was able to announce profits above £900m in the summer.

:: SSE

This latest storm of controversy around energy bills began with an announcement by SSE of an 8.2% increase in dual-fuel prices. This pushed up the average to £1,380

That is despite profits of over £400m in 2012. The company blamed wholesale prices but also green levies attached to bills through Government policy. The row led David Cameron to pledge to roll back the levies.

The company is putting forward Will Morris, managing director of retail.

:: npower

With 3.5 million UK customers npower is a huge player in the UK and one of the largest gas and electricity companies across Europe.

The company has announced its price rises to come in at the start of December. The electricity price will increase by 9.3% with gas going up by 11.1% – making the average bill 10.4% higher – up to £1,459.

In March the company faced controversy when it announced a 34% increase in profits to £413m – although the figure relating to domestic supply is lower.

The company is putting up Guy Johnson, its external affairs director.

:: Scottish Power

Neil Clitheroe, CEO retail and generation, will appear in front of MPs. The company is the most recent to announce price rises this winter of 8.6% - an 8.5% rise in in gas and 9% in electricity.

That means the average household bill will go up by £113 to £1,424.

It revealed that it had more than doubled pre-tax profits to £712m in July – and an £890m divided to its Spanish parent, Iberdrola, also caused anger.

:: Watch MPs question representatives from the Big Six on Sky News from 2.30pm.

:: Watch a live debate on energy between shadow energy minister Caroline Flint and energy minister Michael Fallon at 5.30pm on Sky News.

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Fox's Eyes Joint Bid For Rival Biscuit-Maker

By Mark Kleinman, City Editor

Fox's, one of the UK's biggest biscuits brands, is in talks with private equity funds about a joint bid for rival Burton's Foods, the maker of Jammie Dodgers and Wagon Wheels.

Sky News understands that Clayton Dubilier & Rice (CD&R), the US buyout firm, has opened discussions with 2Sisters, the food producer, about a carve-up of Burton's, which has been put up for sale for about £350m.

The two parties have not yet reached a definitive agreement about a joint bid but insiders believe that such an outcome is likely if CD&R emerges as the winning bidder for Burton's.

The potential alliance is being driven by Vindi Banga, a former Unilever executive who is now a senior executive at CD&R, although it is unclear which assets are coveted by Fox's. owner.

Competing bidders in the auction include the private equity arm of the Ontario Teachers' Pension Plan, one of the world's largest pension funds.

A sale of Burton's will entail a change of ownership for another portfolio of prominent UK food brands following the sale several months ago of the snacks division of United Biscuits (UB), which included Hula Hoops and KP Skips among its products.

Burton's is Britain's second-largest biscuits manufacturer by sales, behind UB, which is also owned by two private equity groups, Blackstone and PAI Partners.

As well as Wagon Wheels, Burton's produces Cadbury Biscuits, Lyon's and Maryland cookies.

Based in St Albans, Hertfordshire, Burton's traces its roots back to the mid-1800s when it was founded by George Burton.

It employs more than 2,200 people around the UK in three manufacturing facilities in Llantarnam, Edinburgh and Blackpool, a chocolate refinery in Moreton and a central distribution hub in Liverpool.

Burton's is one of a sizeable number of mid-sized British companies which has been through several phases of private equity ownership.

In 2009, Apollo and CIBC, the Canadian bank, seized control of the company after Duke Street Capital, its previous owner, was forced to surrender control to the biscuit-maker's lenders.

Another private equity group, HM Capital, had bought the company in 2000 from Associated British Foods, owner of the Primark retail chain.

The auction of Burton's will pre-empt that of UB, which is expected to be put up for sale in the next couple of years.

UB, which now consists solely of a biscuits business, owns the McVitie's brand, which includes products such as Jaffa Cakes and Penguin.

CD&R declined to comment.

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HS2 Alternative 'Will Cause Years Of Gridlock'

By Anushka Asthana, Political Correspondent

Railway services between the north and south of England will be crippled by 14 years of weekend closures if HS2 is abandoned for an alternative, ministers will claim this week.

The warning will be part of a Coalition "business case" for the high-speed rail link published on Tuesday in a bid to fight off critics of the increasingly controversial project.

It will paint a picture of chaos for commuters if other investments are chosen instead of HS2.

The closest alternative would require 2,770 weekend closures - equivalent to 144,000 hours - on the East Coast Mainline, Midland Mainline and West Coast Mainline, the report will say.

That will increase a typical journey from London to Leeds by two hours and 10 minutes to more than four-and-a-half hours overall.

Map of the HS2 route

The Government has drawn the evidence from a study by Network Rail and transport consultant Atkins. It also finds that houses and businesses would have to be demolished.

A Government source said: "We need to do something because our railways are nearly full but the alternative to HS2 is a patch and mend job that would cause 14 years of gridlock, hellish journeys and rail replacement buses.

"The three main routes to the north would be crippled and the economy would be damaged."

The strong language is a response to heavy criticism of HS2 - including from the Labour Party which is no longer promising to support the project.

The party wants to introduce a "cancellation trigger" to the legislation, forcing the Government to reveal if total costs rise about £50bn. Ministers may support the amendment.

Labour's role is seen as key after David Cameron admitted that "multi-year, multi-parliament infrastructure projects … can't go ahead without all-party support".

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Mangaung: G4S Prison In 'Torture' Claims Probe

A South African prison run by British security firm G4S has been accused of torturing inmates with electric shocks and subjecting them to forced injections.

Insiders at Mangaung Correctional Centre, near Bloemfontein, said water was thrown over inmates to increase the impact of the electric charge.

The South African government has temporarily taken over the running of the jail from G4S and launched an investigation.

In a statement, it said G4S had "lost effective control of the facility" following "recent stabbing and hostage incidents".

G4S - which is trying to recover from a series of damaging incidents with the UK government - says it has seen no evidence of abuse by its employees.

The Wits Justice Project - part of the journalism department of the University of Witwatersrand in Johannesburg - obtained footage showing alleged abuse inside the high security prison.

It collected accounts of electric shocks and beatings from almost 30 prisoners during a year-long investigation.

In one video, the click of electrified shields and shrieking can be heard. It also shows a prisoner resisting a medication.

"Some said they would pass out when the shocks became too intense," said Ruth Hopkins, a journalist with the project.

Prisoners also complained about suffering broken limbs and other serious injuries, she said.

G4S is trying to recover from a series of damaging incidents in the UK

A staff member at the prison hospital said inmates were injected with Clopixol Depot, Risperdal, Etomine and Modecate - anti-psychotic drugs that can cause memory loss, muscle rigidity and strokes.

Former inmate Thabo Godfrey Botsane claims he was beaten by security officers because a cell in his unit had been set alight.

"They stripped me naked, poured water over me, electroshocked and kicked me," he said. "They left me naked and bleeding on the floor. A guy from the prison intelligence unit - not a nurse - came back and he injected me in my buttocks."

Former warders Pule Moholo, Dehlazwa Mdi and Themba Tom said they remember the sound of inmates screaming.

"There was a sound-proof room called the 'dark room'. EST members would bring inmates there, strip them naked, pour water over them and electroshock them," Mr Tom said. "We would try not to hear the crying and screaming. It was awful."

A G4S spokesman told Sky News it was investigating the claims.

"G4S staff at Manguang Correctional Services do not have access to medication nor do they administer medication," he said.

"All medical decisions for inmates are handled and addressed by independent certified medical staff, who may diagnose certain conditions, including any possible mental disorders, and prescribe medication in accordance with the relevant condition.

"We cannot verify the video where allegations of torture are made, however, we can confirm that we do not use any form of torture or shock treatment.

"There is an active an independent inspection regime in place at the prison - 365 days per year - and there have never been any allegations or concerns regarding anything of this nature."

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Storm Causes Major Headache For Commuters

Hurricane-strength winds have brought travel chaos to large parts of the UK.

Hundreds of rail services were cancelled as more than 200 trees fell on lines in the South and South East.

Parts of the network were so badly damaged that several operators, including East Coast Trains, Virgin Trains and East Midlands Trains, urged customers heading to or from London not to travel.

Passengers at London Waterloo were going nowhere fast

Greater Anglia was forced to suspected services across its entire network because of damage to overhead wires and fallen trees.

Asked whether train companies had overreacted to the risk posed by the storm, Prime Minister David Cameron said:  "Everyone has to act on the basis of the evidence that they are given.

"Afterwards we'll be able to look back and see whether people made the right decisions.

A tree on the tracks at Keymer, West Sussex. Pic: Network Rail/Twitter

"But right now what matters is listening to the evidence, working together and getting things back to normal."

The strong winds and heavy rain also caused disruption on the roads, with a number of major routes affected.

Both Severn estuary crossings were closed, as well as the Queen Elizabeth II Bridge and the Sheppey Crossing in Kent.

The clean up begins in London. Pic: madebymartha/madebymartha/Twitter

A lorry overturned on the M11 in Essex, the A2 was shut in west Kent because of the number of fallen trees and flooding affected parts of the M6 in Merseyside.

Countless local roads were also closed, as emergency services and council crews worked to remove trees and other debris.

Meanwhile, rough seas caused the Port of Dover to suspend ferry crossings temporarily, while Brittany Ferries cancelled services between Plymouth and Roscoff, Poole and Cherbourg and Portsmouth and Bilbao.

More than 130 flights were cancelled from Heathrow airport, although Gatwick said it was operating a "near normal service".

Among the transport operators affected by the storm are:

Trains

:: Southern Railway is reporting a number of large trees blocking lines on its network. The Brighton mainline has been cleared of trees and Gatwick Express services have resumed.

:: South West Trains said a "significantly reduced timetable" would operate for the remainder of the day while dozens of trees are removed. Its trains can run at a maximum speed of 50mph.

:: Southeastern Railway is running a high speed service between Ashford and St Pancras International but warned passengers the service would be "very busy". Its metro and mainline routes are suspended because of the number of branches and trees on the line.

:: East Coast Trains said customers are advised not to travel today. It has no trains running in or out of London King's Cross and "no firm indication" about when services will be resumed.

:: East Midlands Trains advised customers travelling to or from London not to attempt their journeys. It has suspended services between Bedford and London St Pancras for the rest of the day because of fallen trees. Services are also suspended between Ely and Norwich.

:: Virgin Trains has urged customers not to travel "unless absolutely necessary" on services to and from London using the West Coast Main Line. Services to and from London Euston are suspended.

:: Greater Anglia Trains services are suspended until further notice, with customers advised not to travel for the rest of the day.

:: First Capital Connect advised passengers not to travel. Many of its services are suspended or severely disrupted.

:: London Overground services have been part suspended, although trains are running between Highbury and Islington and New Cross/New Cross Gate.

:: C2C trains said all services are suspended between Shoeburyness and London Fenchurch Street.

:: Eurostar cross-channel services are running, although speed restrictions are in place.

Planes

:: Heathrow airport cancelled about 130 flights, with passengers advised to contact their airline before travelling.

:: Gatwick said it was operating a "near normal service", while Stansted, Luton and Bristol airports have not yet announced any cancellations.

Ferries

:: Brittany Ferries has announced cancellations between Plymouth and Roscoff, Poole and Cherbourg and Portsmouth and Bilbao.

:: The Port of Dover has reopened after a temporary closure, although passengers are urged to contact their ferry operator before travelling.

:: Ferries have been cancelled between Penzance and the Isles of Scilly.

Roads

:: The Highways Agency has issued a severe weather alert for high-sided vehicles, caravans, motorbikes and other vulnerable vehicles.

:: Both crossings over the Severn estuary were closed but have since reopened.

:: Queen Elizabeth II Bridge, the southbound Dartford Crossing, is closed with traffic diverted through the tunnel.

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McDonald's To Drop Heinz After CEO Change

McDonald's has announced it will end a 40-year relationship with Heinz as the sauce company is now led by the former chief of rival Burger King.

"As a result of recent management changes at Heinz, we have decided to transition our business to other suppliers over time," McDonald's said in a statement.

"We have spoken to Heinz and plan to work together to ensure a smooth and orderly transition."

The switch will be more apparent outside the United States, as McDonald's only serves Heinz sauce in Pittsburgh and Minneapolis.

Heinz has had a 40-year-old relationship with McDonald's

Heinz is now run by Bernardo Hees, former head of Burger King, 

Sauce packages handed out at McDonald's restaurants in the United States often say only "fancy ketchup". Most in-store sauce dispensers are not branded.

The move by McDonald's could benefit Heinz rivals Hunt's, owned by ConAgra Foods Inc., and Del Monte.

Warren Buffett's Berkshire Hathaway and an investment fund affiliated with 3G Capital bought Heinz for $28bn (£17bn) in June and immediately named Hees CEO.

Burger King went public in June 2012, less than two years after it was privatised by 3G Capital Management LLC, which retains a stake in the fast-food chain.

Burger King has been a Heinz customer for "decades" and uses its products in roughly 80% of markets around the world, spokesman Miguel Piedra said.

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Osborne To Stop Short Of Full RBS Break-Up

By By Mark Kleinman, City Editor

George Osborne will stop short of ordering a full break-up of Royal Bank of Scotland (RBS) following a review that will aim to redeploy billions of pounds of capital for lending into the British economy.

Sky News understands that the Chancellor and senior Treasury officials will next week finalise a blueprint for the future of RBS, in which UK taxpayers hold an 82% stake, which avoids the need for a formal vote by independent City shareholders.

The key recommendations of a four-month review led by Rothschild, the investment bank, and BlackRock, the world's largest asset manager, are understood to focus on "internal surgery" rather than a wholesale break-up of the RBS group.

They will include the creation of a more formal internal "bad bank", a further reduction in the size of RBS's investment banking operations, a more aggressive strategy to resolve the future of impaired loans, and a number of other asset sales.

An announcement about the outcome of the review, launched by the Chancellor in June, could be made as soon as next Friday, when RBS publishes its third-quarter results.

"He will want to present it as a break-up, but it won't quite be at the most radical end of the spectrum of options," said a source close to the situation.

Treasury and RBS officials cautioned that final decisions had not yet been taken and that the shape of the proposals could yet shift significantly.

The announcement of the restructuring is expected to be made by the bank itself, rather than Mr Osborne.

Under the currently-envisaged plans, the shake-up would involve in the region of £40bn of RBS's bad assets being held within a rebranded non-core asset division, or "bad bank". That figure is at the lower end of a range considered during the review, according to insiders, and roughly corresponds to the size of RBS's existing non-core unit.

It will not require the separation of those loans from RBS by injecting them into an independent taxpayer-owned vehicle, and so will not trigger a vote from which the Government would be excluded under stock market rules.

That will enable Mr Osborne to present decisions about RBS's future as a fait accompli - presuming that he has the agreement of RBS's negating the risk of an embarrassing defeat at the hands of institutional investors.

As Sky News revealed in June, many big RBS shareholders are opposed to a full break-up, arguing that it would be costly, time-consuming and further delay - possibly by years - the sale of the Government's shareholding in the bank.

The bad assets identified by the review largely comprise loans within RBS's Ulster Bank and property lending portfolios, and will be more aggressively run off in the coming months by the bank's executives.

The commitment to accelerate this process may trigger further writedowns to their value, with the bank raising additional capital by selling other assets.

Citizens, the US retail bank, is likely to be floated earlier than a previous target date of 2015, while the international arm of Coutts, the wealth manager owned by RBS, is also a candidate for sale.

It was unclear this weekend whether Rory Cullinan, the executive who has overseen the massive shrinkage of RBS's portfolio of bad assets during the five years since it was bailed out, will continue to run the unit.

One challenge facing Mr Osborne will be the scrutiny of Andrew Tyrie, the MP who chaired the Parliamentary Commission on Banking Standards. In its report earlier this year, it called for radical action to transform RBS into a bank that could support the UK economy.

The resolution of the dispute over the future of RBS, whose shares languish well below the level at which taxpayers injected £45.5bn of equity in the autumn of 2008, will bring relief to RBS managers tired of repeated conflicts between the Chancellor and Stephen Hester, who stepped down as RBS chief executive last month.

Mr Osborne said in June that he would only proceed with a major shake-up at RBS if it delivered clear benefits to taxpayers and the UK economy through increased lending capacity and appetite.

A Treasury official said on Saturday that the Chancellor had been keen to identify a "headline number" that would demonstrate that inflated capacity.

He added that the structural review would be linked to a separate piece of work led by Sir Andrew Large, former deputy governor of the Bank of England, which has been examining the flow of credit from RBS to small and medium-sized businesses (SMEs).

The views of UK Financial Investments (UKFI), which manages the taxpayer's stake in RBS, will also be important.

James Leigh-Pemberton, the investment banker who on Monday takes the helm of the Treasury agency, was asked by Mr Osborne last year to conduct a review of RBS's structure.

Mr Leigh-Pemberton argued in favour of a more radical break-up of RBS than the Chancellor is expected to favour.

Since becoming RBS's chief executive several weeks ago, Mr McEwan has been working with the management consultancy Bain & Co on a review of RBS's operations and an examination of core client services.

In a memo to staff earlier this month, he said that the location of RBS's bad assets was less important than the bank's need to focus on improving service to customers.

"The future of this company will not be about whether we operate in particular areas or where our problem assets sit," he wrote.

"The future of this company is about how good a job we do for our customers, including those who are having difficulty repaying their loans. And it will be about how well we live up to all our responsibilities, particularly those we have to the UK."

RBS and the Treasury declined to comment.

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Twitter 'Test Float' To Avoid Facebook Flop

Twitter has had a 'test run' of its flotation on the stock market – to help avoid a similar flop of Facebook last year.

The mock market launch by the New York Stock Exchange on Saturday was done to avoid social media competitor's launch on the rival Nasdaq exchange.

The NYSE regularly does systems testing on the weekends, but this was the first time it had run a simulated initial public offering (IPO).

The test was done at the request of its member firms - many of whom took part in Facebook's 2012 IPO on the Nasdaq.

Twitter will be floated on the New York Stock Exchange in early November

The NYSE testing was done to see if its systems could handle the amount of message traffic that might be generated by the IPO and to make sure that transactions were executed correctly.

Industry experts also believe the operation was part of NYSE's struggle with Nasdaq for supremacy in technology listings.

Both exchanges vied to be home to Twitter's stock, and many analysts said the trading disruptions that occurred on Facebook's Nasdaq debut likely played to NYSE's favour.

Twitter, which intends to sell 70 million shares at between $17 and $20 each, will be holding the biggest Internet IPO since Facebook, which sold a much larger 421 million shares at $38 each.

Facebook was launched on the rival Nasdaq exchange

Twitter's initial price will be announced on November 6 and it is expected to start trading as early as the next day.

In the case of Facebook, the tremendous volume of orders on the first day of trading exposed a glitch in Nasdaq's system, ultimately preventing timely order confirmations for many traders.

They were left unsure about their exposure for hours, and in some cases for days afterwards and a collective loss of $500m occurred in the IPO.

Nasdaq was fined $10m by the US Securities and Exchange Commission - the largest fine ever for an exchange - and said it would voluntarily pay up to $62m to compensate firms that had been harmed.

Facebook founder Mark Zuckerberg launched the float remotely in California

On Friday, Nasdaq said $41.6m of claims put forward qualified for the compensation plan.

The chaotic debut also contributed to a decline in Facebook's share price, which hit a low of $17.55 in August, though it has since more than recovered the losses, closing on Friday at $51.95, well above its IPO price.

While Nasdaq had tested its systems in the lead-up to the IPO, allowing member firms to place dummy orders to a test symbol over a specific period, it limited the total number of orders that could be received in the simulation to 40,000.

On the day of the IPO, over 496,000 orders were placed before it opened, with around 82 million shares traded.

By the end of the day, more than 500 million shares had traded hands, a record for an IPO.

Related Stories

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UK Economy: GDP Growth Accelerates To 0.8%

The Chancellor claims there is now "real momentum" in the UK's economic recovery after GDP growth of 0.8% was measured in the third quarter.

The Office for National Statistics (ONS) said it marked the strongest period of growth in more than three years - with services, construction and manufacturing all expanding.

It was also the third successive period of improving output, in line with the expectations of economists, though some had forecast growth to have reached 1%.

The ONS said construction - a sector bolstered by Government initiatives such as Help to Buy - surged by 2.5%.

George Osborne said: "This shows that Britain's hard work is paying off & the country is on the path to prosperity."

Prime Minister David Cameron tweeted: "Today's encouraging #GDP growth figures are another sign we are turning a corner."

Labour argued the growth was "long overdue".

Overall GDP was 1.5% ahead of the same period last year - a time when the economy was being boosted by the Olympics and Paralympics.

But the economy remains 2.5% off its pre-recession peak at the start of 2008.

During the third quarter, construction was boosted by new work on private housing and private commercial building as well as domestic home repair and maintenance but remained 12.5% off its 2008 high.

Housebuilders have been buoyed by the Government's Help to Buy scheme, which recently launched a new phase offering mortgage guarantees.

Production grew by 0.5%, though this remains 12.8% off its 2008 level, while within this manufacturing improved 0.9% in the third quarter.

The powerhouse services sector, which represents three-quarters of economic output, grew by 0.7% and is now 0.6% above its pre-crisis peak.

The largest contributions here came from business services and finance, followed by distribution, hotels and restaurants.

But the wider statistics highlighted one piece of bad news - in terms of UK growth.

The contribution from utilities - including gas and electricity - tumbled by 6.8% in the period, possibly a result of the warm summer compared to the same period last year which was largely a washout and cool.

The figure was seen as a potential factor behind the decision among energy suppliers to increase household bills - to make up for lower demand.

Chris Williamson, chief economist at Markit, said: "Britain is booming again with the economy showing the most sustainable and robust-looking upturn since the financial crisis."

But Alan Clarke of Scotiabank said the figure was a "tad disappointing" - given survey data indicating growth nearer 1% - and "wasn't a home run".

Shadow chancellor Ed Balls said: "After three damaging years of flatlining, it's both welcome and long overdue that our economy is growing again.

"But for millions of people across the country still seeing prices rising faster than their wages this is no recovery at all."

Dave Prentis, general secretary of the Unison union, said growth figures will "mean nothing to the vast majority of people in this country faced with mounting household bills and stagnant wages."

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Family Not Seeing 'Green Shoots' Of Recovery

By Emma Birchley, East Of England Correspondent

The green shoots of economic recovery might be growing stronger but the Horton family is not feeling the effects.

"It's been really, really tough. We are struggling to make ends meet," said Spencer, 39, from Felixstowe.

He has his own recording studio and band, Mohawk, but he makes much of his money from teaching guitar, bass and drums as well as vocal coaching.

The past year has been difficult as the luxury of music lessons has been dropped by those struggling to meet the cost. Pub closures mean fewer gigs.

But there are tentative signs that things may be on the up.

He said: "The lessons have started picking up in the last month or so. I've got five new students so that helps but I don't know how much of that is a sign that the economy is improving."

His wife, Morgan, is training to be a counsellor and volunteers her skills, but is also a self-employed massage therapist and has seen her business suffer.

She said: "I used to have a lot of clients who have a massage as a luxury or to treat chronic back pain but it got to the point that they had to make a choice because of money and the massage went.

"We have both chosen to be in professions that give back to the community and that keeps us going yet the Government does not value or recognise that."

The couple have two children, April, five, and Coby, two.

Keeping the house warm and the family well fed has meant putting up with increasing costs.

Mrs Horton said: "We don't buy luxuries very often and our food bill is still big. It's gone up by about a third in the last year or so.

"Energy is really expensive too. They say the national average is £1,400 a year and we pay close to double that in gas and electricity."

Keeping up with the bills meant they recently had to get a £10,000 loan.

She added: "It really frustrates me because I wanted to spend it on doing up the house but the overdraft kept creeping up so we had to pay that off."

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JPMorgan To Pay £3.2bn In Mortgage Settlement

JPMorgan has agreed to pay $5.1bn (£3.2bn) to resolve claims it misled mortgage lenders before the housing crash.

The deal settles a lawsuit brought by American regulators over the quality of mortgages sold to US loan giants Fannie Mae and Freddie Mac between 2005 and 2007.

The Federal Housing Finance Agency accused America's biggest bank of causing "billions of dollars" in losses to the two mortgage finance companies.

The two settlements - one of $4bn and another of $1.1bn - is less than half the amount JPMorgan is expected to pay for mortgage-related violations.

The $4bn fine relates to $33.8bn in residential mortgage-backed securities sold by JPMorgan to Fannie and Freddie between 2005 and 2007.

The remaining $1.1bn concerns claims JPMorgan made about single-family mortgages it sold Fannie and Freddie between 2000 and 2008.

JPMorgan CEO Jamie Dimon has been in talks with the US Justice Department

JPMorgan "falsely" told Freddie and Fannie the mortgages met the two agencies' standards for quality.

In reality, the assets were much lower quality than claimed. Many loans that were billed as safe later defaulted or were foreclosed.

The FHFA said JPMorgan's conduct "constitutes negligent misrepresentation, common law fraud and aiding and abetting fraud".

The securities were sold to Fannie and Freddie by JPMorgan and also by Bear Stearns and Washington Mutual, which were bought by the bank in 2008.

FHFA Acting Director Edward J DeMarco said: "This is a significant step as the government and JPMorgan Chase move to address outstanding mortgage-related issues."

JPMorgan is expected to pay a total of $13bn for mis-selling mortgage-backed securities in the run up to the 2008 financial crisis, say US reports.

A tentative deal has reportedly been reached between JPMorgan and the US Justice Department.

If the deal is finalised, it would be the biggest settlement of its kind ever paid by a US company.

Related Stories

JPMorgan Facing Record £8bn Fine: Reports

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UK Economy: GDP Growth Accelerates To 0.8%

The Chancellor claims there is now "real momentum" in the UK's economic recovery after GDP growth of 0.8% was measured in the third quarter.

The Office for National Statistics (ONS) said it marked the strongest period of growth in more than three years - with services, construction and manufacturing all expanding.

It was also the third successive period of improving output, in line with the expectations of economists, though some had forecast growth to have reached 1%.

The ONS said construction - a sector bolstered by Government initiatives such as Help to Buy - surged by 2.5%.

George Osborne said: "This shows that Britain's hard work is paying off & the country is on the path to prosperity."

Prime Minister David Cameron tweeted: "Today's encouraging #GDP growth figures are another sign we are turning a corner."

Labour argued the growth was "long overdue".

Housing market recovery is reflected in the GDP growth

Overall GDP was 1.5% ahead of the same period last year - a time when the economy was being boosted by the Olympics and Paralympics.

But the economy remains 2.5% off its pre-recession peak at the start of 2008.

During the third quarter, construction was boosted by new work on private housing and private commercial building as well as domestic home repair and maintenance but remained 12.5% off its 2008 high.

Housebuilders have been buoyed by the Government's Help to Buy scheme, which recently launched a new phase offering mortgage guarantees.

Production grew by 0.5%, though this remains 12.8% off its 2008 level, while within this manufacturing improved 0.9% in the third quarter.

Lower gas and electricity demand over the hot summer hurt growth

The powerhouse services sector, which represents three-quarters of economic output, grew by 0.7% and is now 0.6% above its pre-crisis peak.

The largest contributions here came from business services and finance, followed by distribution, hotels and restaurants.

But the wider statistics highlighted one piece of bad news - in terms of UK growth.

The contribution from utilities - including gas and electricity - tumbled by 6.8% in the period, possibly a result of the warm summer compared to the same period last year which was largely a washout and cool.

The figure was seen as a potential factor behind the decision among energy suppliers to increase household bills - to make up for lower demand.

Chris Williamson, chief economist at Markit, said: "Britain is booming again with the economy showing the most sustainable and robust-looking upturn since the financial crisis."

But Alan Clarke of Scotiabank said the figure was a "tad disappointing" - given survey data indicating growth nearer 1% - and "wasn't a home run".

Shadow chancellor Ed Balls said: "After three damaging years of flatlining, it's both welcome and long overdue that our economy is growing again.

"But for millions of people across the country still seeing prices rising faster than their wages this is no recovery at all."

Dave Prentis, general secretary of the Unison union, said growth figures will "mean nothing to the vast majority of people in this country faced with mounting household bills and stagnant wages."

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Serco Boss Quits Amid Contracts Scandal

Serco, the outsourcing firm at the centre of a Government contract scandal, has confirmed its chief executive has stepped down.

The company said Chris Hyman was leaving in a last ditch bid to restore its reputation amid a wider restructuring - splitting the British central government work into a separate unit - to improve transparency.

It was told in September it could be investigated by the Serious Fraud Office (SFO) alongside rival G4S after an audit showed they charged for tagging criminals who were either dead, in prison or never tagged at all.

The study resulted in Serco's £285m prison escorting contract - which covers London and East Anglia - being placed under administrative supervision in August.

Serco then agreed to repay all past profits made on the prison escorting contract and forgo any future profits but insisted that no member of the board had knowledge of the alleged fraudulent practice.

Mr Hyman - who has run Serco since 2002 - said today: "I have always put the interests of Serco first.  At this time, nothing is more important to me than rebuilding the relationship with our UK government customer.

"In recent weeks it has become clear to me that the best way for the company to move forward is for me to step back.

"I have been fortunate enough to have had the privilege of working at a great company with extremely talented people.  I wish everyone at Serco the very best for the future."

An inquiry, requested by both the Ministry of Justice and Serco's directors, is currently being carried out by City of London police.

It is investigating the actions of the staff working on the prison escorting contract.

Serco said Ed Casey, who has led its Americas Division, will become acting Group CEO and its board would be strengthened as part of its efforts to bolster scrutiny.

A Government spokesman responded: "The Government will take full account of all the changes Serco have made today.

"Whilst it is early days in their programme of renewal, this is a positive move by Serco and a step forward."

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Grangemouth's Future Saved In Last-Minute Deal

Grangemouth petrochemicals plant has been saved following a last-minute deal.

The 800 workers who were due to lose their jobs at the Falkirk plant - Scotland's largest industrial site and its only refinery - were told the news at 11am today.

It came after the Unite union confirmed it would now "embrace" a survival plan in an effort to reverse a decision by Swiss-based owner Ineos to close the business.

Calum MacLeod, chairman of Ineos' petrochemicals division, told a news conference a "great cheer" went up from workers as he told them their jobs were safe.

But he said "very limited redundancies" would have to be made.

Asked by one reporter if he had held a gun to Scotland's head, he replied: "I don't think that's the case."

He pointed out that Ineos had invested £1bn in the business and would invest another £300m to secure its future for at least the next 15 years.

Another £300m will be invested at the site, Ineos says

He said it was "only right" that by making such a "huge investment" the company had to make sure it had a "long-term sustainable base".

The agreement will see fuel production resume at the company's oil refinery today after a shutdown of more than a week.

The closure would have been a major setback for the Scottish National Party, which is leading the campaign for Scotland's independence from the UK.

Scotland's First Minister Alex Salmond said: "This news is a tremendous fillip for the workforce and the whole Grangemouth community, following what could have been a potential disaster."

Later, in an interview with Sky News, Mr MacLeod declined to say how many redundancies would be made. He said the £300m would be spent on building a new gas terminal at the site.

Asked what he thought of union tactics during the negotiations, he said it would have "saved a lot of traumatic effects" if union officials had begun the talks a week ago with the same attitude they had had over the past two days.

The closure would have been a huge blow for Alex Salmond

Jim Ratcliffe, chairman of Ineos Group, said: "This is a victory for common sense. Unite advised employees to reject change and vote for closure. Thank goodness people finally came to their senses. Grangemouth now has a great future."

Ineos said Unite had made a "dramatic U-turn" and had agreed to a three-year pay freeze, no strikes for three years, and moving to a "modern" pension scheme.

Earlier, Unite's general secretary Len McCluskey said shop stewards had decided to accept the company's survival plan "warts and all" in the wake of the closure decision.

Unite's Scottish secretary, Pat Rafferty, said: "Grangemouth is the powerhouse of the Scottish economy - it now has a fighting chance of upholding this crucial role into the future.

"Obviously today's news is tinged with sadness - decent men and women are being asked to make sacrifices to hold on to their jobs, but the clear wish of our members is that we work with the company to implement its proposals."

Ineos caused shockwaves on Wednesday when it announced it could not continue to operate its loss-making petrochemicals division, leaving 800 jobs at risk and many more contractors facing the axe too.

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Samsung Fined For 'Web Campaign Against HTC'

Samsung has been fined in Taiwan over an alleged internet campaign to undermine the reputation of rival mobile phone maker HTC.

Taiwan's Fair Trade Commission (FTC) confirmed a penalty of $340,000 (£210,000) - the second fine it has levelled against the South Korean giant this year.

FTC said it had fined the local unit of Samsung Electronics for organising an Internet campaign in violation of fair trade rules to praise Samsung smartphones while slamming those of HTC - a Taiwanese company.

The FTC also imposed smaller fines on two Taiwanese trading companies it said were responsible for mounting the Internet campaign.

Earlier this year the FTC fined Samsung for misleading advertising about the camera functions on a Galaxy model in Taiwan.

The FTC action comes with HTC badly on the defensive amid disappointing sales for its once popular smartphones.

The company, which posted its first quarterly loss in the July-September period, has suffered a drop in its global handset market share from a high of 10.3% in the third quarter of 2011 to only 2.6% in the third quarter of 2013.

Samsung was yet to release a statement in reaction to the FTC's decision.

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Grangemouth: Union Backs Down 'To Save Plant'

The Unite union has confirmed it will now "embrace" a survival plan at Grangemouth in an effort to reverse a decision by the owner to close its petrochemicals plant.

The move was announced following talks between union officials and management at Ineos which could potentially also lead to fuel production resuming at the company's oil refinery after a shutdown of more than a week.

Unite's general secretary Len McCluskey said shop stewards had decided to accept the company's survival plan "warts and all" in the wake of the closure decision.

That included a pay freeze, ending of a final salary pension scheme and other changes to terms and conditions which had initially been rejected by staff in a union vote.

Mr McCluskey said: "We are not going to let this plant close.

Unite is hoping all Grangemouth staff can soon return to work

"We have a situation whereby a company has put down an ultimatum and we have to respond. It is not how we engage in modern day industrial relations.

"My union is engaged with thousands of companies every day to negotiate plans to save jobs. There is nothing humiliating about negotiating plans to ensure jobs and communities are safe.

"This plant is on cold shut down and each day that goes by makes it harder to start back up again, which is why the stewards made the offer to the company - so that we can get people back to work."

Sources at Ineos told Sky News ahead of the meeting that any deal to re-open the chemical side of the operation would have to be rubber-stamped by a full meeting of Ineos shareholders.

Ineos owner Jim Ratcliffe holds the key to any closure u-turn

The company had announced on Wednesday that it could not continue to operate the loss-making petrochemicals division, leaving 800 jobs at risk at the plant with many more contractors facing the axe too.

Ineos also confirmed that while it was not planning to close down the oil refinery, which produces 80% of Scotland's fuel supplies, it would remain shut for now pending reassurances from Unite that there would be no strike action.

Mr McCluskey arrived at Grangemouth this morning to join local efforts to resolve the dispute, hours after officials accused Ineos owner Jim Ratcliffe of deliberately engineering the chemical plant's closure.

Ineos argued it was left with no alternative but to close the petrochemical business, which makes products used in the manufacture of household goods such as plastic packaging.

Politicians had urged the two sides to resume talks to prevent the closure, while efforts are expected to continue to find a potential buyer in case the peace efforts fail.

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Royal Mail May Have Been Undervalued

By Mark Kleinman, City Editor

JPMorgan told the Government earlier this year that it believed Royal Mail could be worth up to £10bn, including its debts, ahead of the postal operator's privatisation.

Sky News has learnt that corporate financiers from the Wall Street banking giant presented a spectrum for Royal Mail's value ranging from £7.75bn to £9.95bn - the top end of which was more than two-and-a-half times the price at which ministers ultimately sold shares in the company in the most important state asset sale for decades.

The Government sold shares in Royal Mail for 330p each earlier this month, valuing the company's equity at £3.3bn.

Including its roughly £800m of net debt, the privatisation effectively attributed an enterprise value to the company of £4.1bn, above the average valuation of £3.6bn ascribed to it by the nearly two dozen firms which pitched to advise on the sell-off.

The revelation of JPMorgan's valuation of Royal Mail will fuel the controversy over whether Royal Mail was undervalued by the Coalition.

The bank valued the Royal Mail from £7.75bn to £9.95bn, Sky News learns

However, it will also lend credence to those who have argued that many of the banks which participated in the process argued for unduly optimistic valuations for a company facing the twin pressures of industrial action by staff and a sharp long-term decline in its core letters delivery business.

Cabinet ministers including Vince Cable, the Business Secretary, and George Osborne, the Chancellor, have lined up to defend the price of the sell-off following an immediate surge in Royal Mail's share price in the hours after it floated.

Moya Greene, Royal Mail's chief executive, has also backed the Government's stance, endorsing Mr Cable's view that the share price would settle once the hype surrounding the sale had subsided.

Sky News also understands that Citi and Deutsche Bank also pitched valuations well above the £4.1bn point at which the shares were sold, according to sources at those banks and in Whitehall.

Insiders said that Citi had suggested an upper valuation of £7.3bn, while Deutsche Bank argued that Royal Mail could be worth between £6.4bn and £6.9bn.

Neither Citi, Deutsche Bank nor JPMorgan were appointed to work on the privatisation.

A number of other firms among the 21 which pitched are said to have suggested that Royal Mail was worth much less than the £4.1bn enterprise value at which it was sold, underlining the divergence of views about it.

A Department of Business spokesperson said: "A total of 21 banks pitched in May for the business of acting for the Government on the sale of Royal Mail as part of an extensive procurement process. Seven were successful.

"The proposals included indicative valuations of the company based, in many instances, solely on information already in the public domain.  Banks made their own assumptions of Royal Mail's future performance. The range was wide with the median around £3.6bn taking into account [an] IPO [initial public offering] discount.

"The banks' appointment process was overseen by Lazard as independent advisors to Government.

"The banks' proposals came months before any threat of strike action by the unions, financial market uncertainty in the United States and other factors which the Government has already said were taken into consideration in setting a price for the company in September."

George Osborne defended the price of the sell-off

The broad range of valuations presented by bankers is likely to be the focus of a forthcoming probe by the National Audit Office, which is a conventional step following major privatisations.

In a statement on Wednesday, the National Audit Office said: "Given the scale and significance of what has been the first public offering for many years of shares in a publicly owned company, the National Audit Office will be conducting a value for money examination of the privatisation of Royal Mail.

"The examination will cover the issues of how the price range for the initial public offering was set and the discussion of possible revisions to the range."

The Business, Innovation and Skills (BIS) Select Committee is also examining the privatisation, with Mr Cable and executives from Lazard expected to testify before the Committee on November 20.

Mr Cable last week wrote to the Committee to say that some leading institutional investors had threatened to withdraw their orders for shares if the Government sought to raise the sale price at a late stage of the process.

Bankers often pitch excessively high valuations for companies when they compete to advise on flotations and takeovers in order to ensure they win a slice of the business.

In Royal Mail's case, however, insiders pointed out that it was crucial for the Government to successfully float the company, or "price it to go" in City parlance.

Royal Mail shares were initially listed at 330p

They said it would have been disastrous if the IPO had had to be abandoned, partly because of the embarrassment for ministers and also because it would have ended the prospect of the privatisation taking place before Royal Mail's workforce could go on strike.

Another banker who worked on the deal said that a much higher sale price, followed by a poor after-market performance, would have been more damaging for ministers and incurred a much broader public backlash from those who bought shares.

The Government's remaining stake is now worth just under £2bn and is likely to be sold next year.

Investors who acquired stock in the privatisation have either booked healthy profits or are now sitting on handsome gains following the rise in the share price.

One Whitehall source added that documents published earlier this year showed that the valuation attached to Royal Mail was not one of the key determinants of the Government's decision-making process when appointing bankers to work on the privatisation.

Among the factors that were used to select the banks, they said, were understanding Royal Mail's "equity story" as well as key investor risks such as the feasibility of an IPO and the company's capital structure requirements.

The quality and breadth of their ability to target investor, and relevant prior transaction experience including with the Government were also taken into account, as were banks' proposed fees for working on the transaction.

The row was stoked further this week when the Government was criticised over the disclosure that The Children's Investment Fund, an investor with a track record of corporate agitation, had emerged as Royal Mail's largest private sector shareholder.

Royal Mail shares were trading in London on Thursday morning at around 530p, valuing the group at about £6.1bn including net debt.

A spokeswoman for JPMorgan declined to comment.

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Job Losses As Petrochemical Plant To Close

The owner of the Grangemouth petrochemical plant is to close the operation permanently and keep shut, for now, its major oil refinery amid a continuing pay dispute.

The move threatens up to 800 jobs at the petrochemicals business, which makes products used in everyday items such as packaging and plastic bags, unless it can be sold.

The Grangemouth site's owner Ineos said while it would retain the refinery, which produces 80% of Scotland's petrol and diesel, production would remain shut down until the threat of industrial action was removed.

The Government said there was no current threat of fuel shortages in Scotland because of contingency planning.

Workers were given news of the closure at a meeting with Ineos petrochemicals chairman Calum MacLean following the passing of a deadline on a survival plan which asked all Grangemouth staff to accept changes to pensions and other terms and conditions.

The Prime Minister described the closure as "disappointing"

The Unite union said around 680 of the site's total 1,370-strong workforce rejected the proposals, which included a pay freeze for 2014-16, removal of a bonus up to 2016, a reduced shift allowance and ending of the final salary pension scheme.

Following the meeting with staff, one worker who did not want to be named, said: "I feel sick. It's gone."

The worker, who appeared close to tears at points, told Sky News he could only listen to about 10 minutes of the meeting, before he felt he had to leave.

"There's no livelihoods left and we don't even know if we're going to get redundancy out of it. I hope they're happy with themselves," he said.

More than 1,300 people are currently employed at Grangemouth by Ineos

Unite has accused the company of playing "Russian roulette" with the future of Grangemouth, the biggest industrial site in Scotland, and said it would back any efforts by the Scottish Government to find a new buyer for the petrochemical complex.

In a statement, Ineos blamed the union's opposition to its survival plan for the decision to close the petrochemical plant - saying shareholders could no longer fund it.

Mr MacLean said: "This is a hugely sad day for everyone at Grangemouth. We have tried our hardest to convince employees of the need for change but unsuccessfully.

"There was only ever going to be one outcome to this story if nothing changed and we continued to lose money.

"We still struggle to comprehend what has happened here. The employees were offered a chance to secure substantial new investment in the company, preserve their jobs and keep their salaries. Sadly this will no longer be the case."

The company added: "As a result of this decision, the directors of the petrochemicals business have had no option but to engage the services of a liquidator. It is anticipated that a liquidation process will commence in a week."

Energy Secretary Ed Davey said: "I am saddened to hear of Ineos' plans to place the petrochemicals business into administration, particularly because of the impact it will have on the workforce and local community.

"While respecting Ineos' right to make this decision, it is regrettable that both parties have not managed to negotiate a fair and equitable settlement that delivers a viable business model for the plant.

"Even at this late stage, I urge Ineos to continue dialogue with the workforce and Government will offer help and support with this.

"Ineos have informed us that the refinery will stay open and the management wish to restart full operations as soon as possible.

"We stand ready to help with discussions between the management and the union to ensure this can happen.

"Fuel supplies continue to be delivered as usual and there is no current risk of disruption to supplies."

More follows...

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EU Cap Pushes Barclays Into Third Way On Pay

By Mark Kleinman, City Editor

Barclays is drawing up secret plans to negate European Union restrictions on bankers' pay by introducing a separate chunk of remuneration that would be determined by an individual's seniority.

Sky News has learnt that Barclays directors have begun consulting with leading investors on the proposals in recent days as they seek to avoid a feared exodus of top staff to Asian and US-based rivals.

New rules from Brussels which are due to come into effect next year would limit the amount that banks operating in the EU can pay certain employees to the same level as their basic salary, or twice that sum if they have approval from shareholders.

Barclays' 'third way' on bank pay would involve splitting remuneration into three separate elements, rather than the current structure comprising basic pay and annual bonuses.

In addition to the existing components, a non-pensionable sum would be determined each year based on an individual's responsibilities. Paid each month in cash, this would supplement the employee's base salary but not be allowed to count towards the basic pay from which annual bonuses would be calculated.

Barclays' status as the leading proponent of the reforms may prove to be contentious among some investors who were taken by surprise when the bank was forced into a £5.8bn rights issue by banking regulators during the summer.

Its fundraising came after a torrid year for the British lender, beginning with its £290m fine for manipulating the interbank borrowing rate, Libor.

The new structure would not necessarily affect the pay of Antony Jenkins, Barclays' chief executive, or other board members, because much of their pay packages also include long-term incentive plan awards in shares.

Sources say the reforms would not have an inflationary effect on overall pay at Barclays because the new third chunk of remuneration would be factored in to deliberations over annual bonuses for senior staff.

Under one scenario outlined by a leading Barclays investor, a senior executive in its investment bank could be paid a basic salary of £750,000, a maximum bonus - with shareholder approval - of £1.5m, and a sum running to hundreds of thousands of pounds paid in monthly instalments.

Barclays and other UK banks such as HSBC have argued that the EU rules will inhibit their ability to compete with banks less affected, with some institutions complaining that staff are already being poached by non-EU rivals.

"One of the key questions to the banks is that as part of the uncertain bonus is shifted into a more certain payment then what discount should be applied to the more certain third element," said one investor who has been briefed on the plans.

"There are also a lot of questions on how the new third element is determined and how much transparency shareholders will get on this."

The issue of transparency will be particularly crucial since banks have been ordered to disclose more information about how much they pay their top staff.

Hundreds of thousands of City bankers are likely to be caught up in the EU remuneration rules, and other banks are also understood to be planning structures similar to that being discussed at Barclays.

Bankers' pay is already subject to rules relating to the proportions that can be paid in cash and shares, and much of it has had to be deferred for at least three years under reforms introduced in the aftermath of the financial crisis.

During the summer, the Parliamentary Commission on Banking Standards proposed a ten-year deferral period for senior bankers' pay in order to encourage a greater focus on long-termism in the City.

Sky News understands that the Treasury, which this month mounted a legal challenge to Brussels' efforts to impose a maximum two-for-one bonus/pay ratio, is being kept informed about Barclays' plans

The UK banks are also expected to ask shareholders to vote at next year's annual general meetings on a resolution to allow them to pay up to twice the level of base salaries to staff as annual bonuses.

A consultation paper is expected to be published shortly by the Prudential Regulation Authority relating to the implementation of the EU's Capital Requirements Directive-4 (CRD-4) and its implications for bank pay.

Barclays declined to comment.

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PM Vows To Roll Back Green Taxes On Energy

David Cameron has promised to "roll back" the green taxes that have been blamed for pushing up energy bills after another bitter row with Ed Miliband.

The Prime Minister signalled he wanted to "get to grip" with green regulations, which energy firms have claimed played a large part in their decision to hike prices.

Mr Cameron also told MPs the Government was to launch an annual audit of competition in the energy industry to see if the market could be improved.

The announcements came as he was put under pressure on energy policy during angry clashes with the Labour leader at Prime Minister's Questions.

Mr Miliband mocked Mr Cameron after former Tory prime minister Sir John Major's comments calling for a windfall tax on energy firms on Tuesday.

But the Prime Minister hit back, calling Sir John a "good man" and Mr Miliband a "conman" as he branded Labour's price freeze promise a "cynical ploy".

After coming off worse in the bout with the Labour leader, Mr Cameron was also reprimanded by Commons Speaker John Bercow for repeating "conman" later in the session.

Mr Bercow said he had let it slide once but told the Prime Minister: "It's a bit below the level."

More to follow...

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Grangemouth: Owner 'In Dark' As Buyer Sought

The owner of the Grangemouth refinery, currently shut down during a bitter dispute with staff, has told Sky News it did not know the Scottish Government was seeking a new buyer.

Finance Secretary John Swinney confirmed talks with several parties after two-thirds of workers at the refinery refused to accept new terms and conditions as part of a survival plan for the site's future - a development which seems to have forced the Government's hand given the threat the shutdown poses to fuel supplies.

In an interview with BBC Radio Scotland he warned that the dispute between current owner Ineos and the Unite union was heading for a stalemate and said "alternative options" were being considered.

Unite has welcomed the prospect of a sale

"I don't think it will come as any surprise to anybody that the Scottish Government is looking at alternative options and there will be other players around the globe who will be interested in this particular plant.

"There are discussions...going on with other parties. The Scottish Government will continue to pursue those discussions because we think that is the right and the responsible thing to do."

Mr Swinney dismissed any idea of Government ownership of the site as "not appropriate".

"We are in a situation where the plant is operating successfully within the marketplace and it can work and operate more successfully in the market place," he said.

He urged Ineos to accept a trade union statement that there would be no strike action during negotiations at "face value".

"I can see no good reason for the plant lying idle today and I think it should be started as a matter of urgency," he said.

Ineos had set a deadline of 6pm on Monday for its employees to sign up to changes to pay, pensions and terms and conditions.

The company said hundreds of workers had accepted the proposals, but Unite maintained that, as the deadline passed, two out of three of its members had said no.

Last Thursday, Ineos sent a letter to all 1,350 workers at the site asking them to indicate their rejection or acceptance of the plan.

It said those who supported the survival plan would receive a transitional payment of up to £15,000.

The two sides have been embroiled in a bitter dispute for weeks, initially over the treatment of Unite convenor Stephen Deans, who was involved in the row over a selection of a Labour candidate in Falkirk, where he is chairman of the constituency party.

He was suspended, then reinstated, and is facing an internal investigation, which is due to report on Friday.

The dispute has since widened to the future of the entire site, with Ineos warning that it will close without fresh investment and changes to pensions and other terms and conditions.

The company said the plant, which has been shut down since last week because of the dispute, is losing £10m a month.

Ineos shareholders are expected to meet today to discuss the dispute.

Unite general secretary Len McCluskey welcomed news of the buyer talks with the Scottish Government - slamming the company's chairman in the process.

He said: "Jim Ratcliffe's behaviour has exposed a dreadful frailty at the heart of our energy supply, which is that one man's power and wealth can hold our governments and citizens to ransom.

"Our politicians need now to step up. Our public utilities cannot be run by those indifferent to considerations of social responsibility.

"Unite calls upon politicians in Edinburgh and Westminster to support a new beginning for Grangemouth, free of the tyranny of one man's whims.

"If this means securing financial assistance - or even nationalisation - then this must be done. We can have no objections from Westminster when they have handed our nuclear energy future over to the state-owned Chinese and French nuclear industries."

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Energy Regulator Moves To Protect Fixed Rates

Energy suppliers have been banned from increasing their prices on fixed-rate deals, the industry regulator confirmed while announcing an £8.5m penalty against ScottishPower over misleading sales techniques.

Ofgem said ScottishPower would pay £7.5m to benefit vulnerable customers and establish a £1m customer compensation fund  for breaching the terms of its market licence between October 2009 and January 2012.

It said ScottishPower provided customers with inaccurate estimations of annual charges and comparisons with their current supplier both on the doorstep and over the phone.

The settlement, the company said, meant that more than 140,000 people on the Warm Home Discount scheme would automatically receive payments of around £50 each.

ScottishPower said it would write to 336,000 households that may have been mis-sold, but was criticised by the consumer group Which? for asking people who thought they may have been mis-sold to call an 0845 chargeable phone number.

ScottishPower: 50,000 households may get up to £30 compensation

The company also came under fire for estimating mis-selling compensation payments at between £5-£30 per affected customer.

Shadow energy secretary Caroline Flint said: "This is yet more evidence that Britain's energy market is broken.

"Yet again Ofgem's response has been weak and David Cameron refuses to stand up to the energy giants. These companies need to know that if they mistreat their customers there will be a heavy price to pay."

The company said it accepted the selling failings, but insisted it had now rectified the problems. It stopped door-to-door selling in 2011.

Energy Secretary Ed Davey had demanded simpler tariffs

The penalty comes at a sensitive time for the Big Six energy firms which are under fire from customers over inflation-busting increases to bills ahead of winter while politicians scrap over intervention in the market.

To date, three of the firms have announced average rises of between 8% and 11%.

As part of moves to ensure the market acts fairly, Ofgem said new rules were now in force meaning energy suppliers were banned from increasing prices on fixed-term tariffs over the course of a contract and banned from automatically rolling householders onto another fixed-term offer when their current one ended.

The regulator said it wanted to end loopholes in fixed rates, including fixed deals linked to standard tariffs, meaning they would rise as standard prices increased.

From December 31, firms will have to cut the number of tariffs they offer customer to just four for gas or electricity, while from March companies will have to show the cheapest tariff they offer on every customer's bill.

Andrew Wright, Ofgem's chief executive, said: "Ofgem is resetting the energy market in consumers' favour to make it simpler, clear and fairer.

"Today's extra protection for consumers on fixed prices is just one of a range of reforms we are bringing in over the next six months to hold energy companies to higher standards.

"If suppliers fail to deliver, then Ofgem stands ready to take enforcement action to protect consumers.

"In an era of rising prices it is vital that competition works as effectively as possible. Our reforms seek to give consumers the tools they need to find the best energy deal for them and to ensure that suppliers have to treat them fairly.

"Ofgem is going to make it easier for consumers to 'vote with their feet' and for new suppliers to enter the market and take on the Big Six.

"Now we are looking for energy suppliers to pick up the baton and put their efforts into restoring consumer trust.

"Encouragingly suppliers have shown a willingness to start on this journey by signing up to our reforms and are now acting to implement them."

Ofgem's action followed criticism from MPs and Labour which have accused the regulator in the past of failing in its duty to protect consumers.

Energy and Climate Change Secretary Edward Davey added: "This is a clear, strong signal that energy companies shouldn't expect to get away with bad practice.

"We're giving Ofgem powers that force energy companies to make direct payments to consumers hurt by these kinds of activities, and backing up Ofgem's reforms so that consumers get a simpler, fairer deal."

:: We want to hear from you - if you've signed up for a fixed tariff, only to find your bill has gone up, or if you've been a victim of mis-selling please get in touch. You can email your comments - or a video of yourself making them - to news@sky.com.

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