Sellafield Nuclear Workers Told To Stay Home

Non-essential staff at the Sellafield nuclear site in Cumbria have been asked to stay at home due to elevated radiation levels.

The plant was operating normally but with "reduced manning levels" while the cause of the higher reading at the north end of the site was investigated.

"Levels of radioactivity detected are above naturally occurring radiation but well below that which would call for any actions to be taken by the workforce on or off the site," it said in a statement.

All day personnel were asked to stay home unless specifically requested to report for duty but that laundry, canteen, utilities and transport staff were told to work as normal.

Those who could work from home were advised to do so if that was approved by their supervisors.

Sellafield later tweeted that it had found no evidence of a nuclear event.

"No risk to the workforce or the public, and no evidence of a nuclear event. All measures taken as a precaution," it said.

Nuclear expert Malcolm Grimston told Sky News that Sellafield was taking sensible steps.

"They have very carefully set out plans for anything of this nature and they'll simply be following those plans," said Mr Grimston.

A 2012 report by the National Audit Office said some facilities at the 68-year-old site had "deteriorated so much that their contents pose significant risks to people and the environment".

Sellafield, the UK's largest and most hazardous nuclear site, stores enough high and intermediate level radioactive waste to fill 27 Olympic-sized swimming pools.

It also has two nuclear plants which are currently being decommissioned.

The cost of cleaning up the waste at Sellafield has been put at £67.5bn.

In 1957, the UK's worst nuclear disaster also occurred at the site when one of the nuclear reactors caught fire, releasing radioactive material that spread across the UK and Europe.

The Government has announced that it wants to build a new nuclear reactor at Sellafield by 2025.

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Online Hotel Booking Prices Face 'Overhaul'

Travellers will be offered greater discounts for online hotel bookings after an investigation by the Office for Fair Trading (OFT).

The announcement comes after the regulator investigated competition concerns that two large online travel agents (OTAs) had separate agreements with the InterContinental Hotels group, which allegedly restricted discount offers.

The OFT said Expedia and Booking.com were limited in offering room-only hotel accommodation to consumers.

It is now expected that more online firms will be able to enter the market and offer discounts.

OFT Services, Infrastructure and Public Markets Group senior director Ann Pope said: "The travel industry, fuelled by the internet, has seen significant changes in recent years, and we want to ensure those changes continue to work in consumers' interests.

"That is why we are pleased to have secured this outcome which, by allowing OTAs and hotels to offer discounts, should increase competition and mean travellers across Europe can benefit from reductions on hotel accommodation throughout the UK.

"By shopping around, people can compare the different discounts offered by hotels and OTAs, and ensure they get the best deal."

The commitments mean that all online travel agents and hotels that deal with the three investigated businesses will be able to offer discounts off headline room-only rates.

But the cheaper price offers must follow certain conditions.

Consumers must sign up to a membership scheme of an online travel agent or hotel to be able to view specific discounts, and they must make at least one non-discounted booking to be eligible for future discounts.

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Oxo-Maker Demands Banks Stump Up £1bn Deal

By Mark Kleinman, City Editor

The owner of Mr Kipling cakes and Oxo stock cubes is demanding that banks participating in a forthcoming capital-raising agree to lend it millions of pounds to help overhaul its finances.

Sky News understands that Premier Foods, which this week agreed to relinquish control of Hovis, its bread division, has appointed Credit Suisse, HSBC and Jefferies to underwrite a rights issue that will raise roughly £350m after expenses.

The new equity will be used to reduce the indebted company's borrowings and will form part of a £1bn-plus overhaul of Premier's capital structure.

Insiders said on Friday that the three banks had been asked to "show their commitment" to the plan by agreeing to make their own balance sheets available to Premier Foods.

Jefferies, for example, is likely to provide a loan of roughly £25m as part of a new debt facility valued at roughly £250m, they said.

The request from Premier Foods comes as it applies the finishing touches to an ambitious blueprint aimed at putting its finances on a long-term footing following years of doubts about its future. The details are expected to be announced in March.

The company, which also makes Sharwoods sauces, Angel Delight desserts and Bisto gravies, ran into trouble following a merger with RHM and other debt-fuelled acquisitions.

Warburg Pincus, a buyout firm, has been a major shareholder in Premier Foods since 2009, and still owns about 17% of the company.

Premier Foods is to offload Hovis and the rest of its bread division

It is expected to participate in the new rights issue although a final decision has not yet been taken, a source said.

Under the plans being worked on by Gavin Darby, chief executive, Premier Foods will raise approximately £250m from a bond issue, on which Barclays, BNP Paribas and HSBC are working.

A further £250m will be available through new debt facilities, with the existing syndicate of nearly 30 lenders reduced to roughly eight, according to a person close to Premier.

Lloyds Banking Group, the taxpayer-backed bank, will reduce its participation in the debt by about a third, they added.

Another crucial component of the capital structure overhaul will be a revised agreement with Premier Foods' pension trustees.

Under the existing payment schedule, the company is obliged to pay as much as £75m into the scheme this year, according to analysts.

Mr Darby is now engaged in discussions about sharply reducing that sum as he seeks to tackle the nearly-£400m deficit in a manageable way.

The deal to offload Hovis and the rest of Premier Foods' bread division involves Gores Group, a private equity firm, paying £30m for a 51% controlling stake in the new joint venture.

The transaction values the bread business at £87.5m, including £28.7m of working capital that will be retained by Premier Foods.

Analysts said that the revamp of Premier Foods' balance sheet would reduce its net debt-to-earnings ratio to roughly three times, in line with other major food companies.

A Premier Foods spokesman declined to comment.

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Sainsbury's Shares Drop As Justin King Quits

What Has Justin King Done As CEO?

Updated: 11:17am UK, Wednesday 29 January 2014

The outgoing chief executive of Sainsbury's, Justin King, has been credited with turning the retailer around during the last 10 years, with an impressive list of achievements and awards racked up by company and staff.

• Around 24 million transactions a week in 2014 (vs 14 million in April 2005)

• Winner of 14 of 30 Mystery Shopper customer service awards for Service & Availability in 2013/14 (The Grocer)

• Supermarket of the Year 2013 (6th time in eight years – Retail Industry Awards)

• Brand of the Year 2013 (Marketing Society)

• FTSE100 Business of the Year 2013 (National Business Awards)

• Incremental sales up £9.5bn, up from £16.1bn in 2004/5 to £25.6bn for 2012-13

• Seventh biggest clothing retailer in the UK by volume and the 11th by value

• It is the seventh biggest general merchandise retailer in the UK by value

• Now has over 400 stores with full general merchandise range, with 33% of the population within a 15-minute drive

• Convenience stores numbers up 127% to 596 since 2004-5

• Awarded Convenience Chain of the Year (4th consecutive year – Retail Industry Awards)

• £1bn online grocery business with over 190,000 orders each week

• Online Retailer of the Year 2013 (2nd consecutive year – Grocer Gold Awards)

• Five consecutive years of profit growth for Sainsbury's bank

• Acquisition of remaining 50% stake from Lloyds Bank Group completes on 31 January 2014

• Leading positions on nutritional labelling, British sourcing, Fairtrade, RSPCA Freedom Foods and MSC

• £136m worth of Active Kids equipment donated since 2005

• First sole-sponsor of the Paralympic Games, in 2012

• Record levels of employee - known as colleagues - engagement (as measured by its annual Talkback survey)

• Only food retailer accredited to Gold Standard by Investors in People

• £520m given to employees in bonuses between 2005-6 to 2012-13)

• Employer of the Year 2013 (Retail Week Awards)

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Mulberry Value Plunges After Warning Issued

Luxury British fashion firm Mulberry has seen up to £140m wiped from its value, after issuing a dramatic profit warning.

It said annual profit would be "substantially" below forecasts due to heavy discounts in the Christmas period in Britain.

The company's share price dropped more than 15% before extending losses to more than 27% in mid-morning. It later eased to around 24% down.

As a result the firm saw its value drop to around £400m.

Chief executive Bruno Guillon said: "Due to tough trading conditions over the Christmas period which saw significant discounting across the market, Mulberry has experienced lower than expected UK retail sales."

It said total retail sales for the 17 weeks to January 25 were down 3% compared to a year ago.

Mulberry also said weak demand in South Korea was behind the profit drop.

Mr Guillon added: "Together with wholesale order cancellations from Korea, (this) will adversely impact our profit this year."

The Somerset-based firm has been reinvented from a trusted briefcase and wallet maker into an international fashion powerhouse with a clutch of celebrity fans.

But the company said that the all-important Christmas period, recorded as the eight weeks to January 25, were down 7%.

Many retailers depend on the festive season to support lighter sales periods elsewhere in the year.

UK sales represented 65% of the group's revenue in 2012-13 and the results suggest the home market is dragging the company down.

At the time Mulberry reported strong international sales growth of 34% in the same eight weeks.

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Lloyds Eyes Takeover Deals In 'Symbolic' Move

By Mark Kleinman, City Editor

Lloyds Banking Group has begun scouting for takeover deals that would mark a symbolic step in its recovery from the financial crisis that left UK taxpayers as its largest shareholder.

Sky News has learnt that Lloyds is at the early stages of examining acquisitions that could bolster its presence in the consumer credit, home insurance and credit card markets.

Under the state aid deal with Brussels that cleared the way for the last Labour government to inject more than £20bn into Lloyds to keep it afloat, the bank is not allowed to pursue takeover deals above a modest size until after it has met conditions including the spin-off of more than 630 of its branches.

That network, which has been rebranded under the TSB name, is being floated on the stock market this year in a move that will see Lloyds ultimately relinquishing ownership of it.

The new acquisition drive is being spearheaded by Toby Rougier, a senior Lloyds executive, although insiders said that he had not yet put any proposed deals to the bank's board.

Any deal which entailed Lloyds growing its presence even in areas where it is comparatively small might attract political attention in the wake of the Labour leader Ed Miliband's call for major banks to face a cap on their share of the current accounts market.

Lloyds, which owns the Halifax network, is by far the biggest player in high street consumer banking, but has a smaller share of the market for lending to small and medium-sized companies.

It also has a 17% share of the consumer credit sector; 15% of home insurance; and 16% in credit cards, according to people close to the bank.

A source said that Lloyds, now 33%-owned by taxpayers, was concentrating on organic growth opportunities but conceded that acquisitions were now "back on the agenda" for the first time in five years.

LDC, the group's private equity arm, has been permitted to pursue takeovers during the last five years but these have been relatively small in scale.

Another symbolically important moment is expected to arrive with Lloyds' full-year results next month, when analysts expect Antonio Horta-Osorio, its chief executive, to announce that it has been given the green light to resume paying dividends.

Lloyds' focus since the bail-out has been on shedding assets, including its stake in Sainsbury's Bank, billions of pounds-worth of shipping and property loans, and the fund manager Scottish Widows Investment Partnership.

The bank has also been shedding tens of thousands of jobs, with the latest 1300 roles to be axed being announced earlier this week.

A Lloyds spokesman declined to comment on potential acquisitions.

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Cable Warns About Wrong Type Of Recovery

Business Secretary Vince Cable has warned that Britain's economic recovery could prove to be a "short-term bounce" if it is based on a housing boom.

He made the comments on the eve of the publication of the latest GDP figures, which have shown the country's strongest growth since the financial crisis began in 2007.

But the senior Liberal Democrat expressed concern that the recovery is too heavily based on housing prices and consumer spending.

"Despite a fall in real earnings, consumers have had the confidence to start spending again - dipping into their savings held for a rainy day and making use of rising house prices, at least in London and the South East, to borrow more easily," he said.

"Despite these encouraging signs, the shape of the recovery so far has not been all we might have hoped for."

In the speech at the Royal Economic Society at Bank of England, Mr Cable said that a "real recovery is taking place".

But he said sustained growth is dependent on rebalancing the economy and preventing a return to "boom-bust cycle".

"The big question now is whether and how recent growth and optimism can be translated into long-term sustainable, balanced, recovery without repeating the mistakes of the past," he said.

"We cannot risk another property-linked boom-bust cycle which has done so much damage before, notably in the financial crash in 2008.

"Indeed, unless our government put long term rebalancing at the heart of economic decision-making I believe the recovery could prove to be short-lived."

Mr Cable did stress he is "confident" the government is taking action to ensure the UK has a "sustainable, balanced, long term recovery" - rather than a "short-term bounce".

But he said he was concerned about the effects of loose monetary policy on asset prices but stopped short of calling for a tightening.

Sky's Political Correspondent Sophy Ridge says: "There will be a few eyes rolling in the Treasury because we do have these positive GDP figures Vince Cable is still sending out a warning that this is not the kind of growth we want.

"To be fair to the Business Secretary though, there are some economists that do agree with him.

"Vince Cable's concerns are that there is not enough growth in exports, business investment - it's all based on consumer-driven spending and crucially on a housing boom."

"He's concerned that the Government's Help to Buy policy could essentially cause a housing bubble, which could drive up growth in the short term, but not in the long term."

The Cabinet minister has previously expressed concerns about the Government's Help to Buy policy.

Under the scheme, which came into effect at the beginning of October, people can buy homes of up to £600,000 with a deposit of just 5% as the Government guarantees up to 20% of the mortgage.

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iPhone Sales Drive Record Apple Revenue

The release of Apple's iPhone 5s and iPhone 5c have helped drive record revenue figures for the tech giant, the company's quarterly results show.

Apple's revenues rose to $57.6bn (£34.7bn) for the last three months of 2013, which is a new quarterly record.

The figures reveal that Apple also made profits of $13.1bn (£7.9bn) over the same period on the back of strong iPhone sales - matching record profits set a year ago.

Tim Cook: 'We continue to invest heavily in our future'

Last year also saw the release of the iPad Air and iPad mini, products which have helped the tech giant reverse a recent profit slump.

The company sold some 51 million iPhones over the period, and a further 26 million iPads.

Apple also sold 4.8 million Macs, compared with 4.1 million over the same quarter in 2012.

Tim Cook, Apple chief executive, said: "We are really happy with our record iPhone and iPad sales, the strong performance of our Mac products and the continued growth of iTunes, software and services.

"We love having the most satisfied, loyal and engaged customers, and are continuing to invest heavily in our future to make their experiences with our products and services even better."

Despite the strong performance, Apple has forecast revenue below analysts' predictions for the current quarter, amid concerns that it will be squeezed by competition from devices running Google's Android software.

Apple's share price fell 8% to $505.05 in extended trading.

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Economy Grows At Fastest Rate Since Crash

The British gross domestic product (GDP) figure for the fourth quarter of 2013 stood at 0.7%, with growth for the full year reaching 1.9%.

Output for 2013 reached its fastest annual rate of growth for six years, according to the Office for National Statistics (ONS).

The figures were in keeping with forecasts made by economists and the FTSE 100 was trading up slightly after the data was released at 9.30am.

The preliminary result shows the important service sector - which accounts for around three-quarters of the economy - was up 0.8%.

The ONS said construction was 0.3% down on the previous three months, due to weak figures being recorded in November.

Agriculture was up 0.5% in the October to December period, while production was up 0.7% in the same three months.

Manufacturing was up 0.9% in the quarter, which was its biggest quarter-on-quarter rise since Q3 in 2010.

ONS chief economist Joe Grice said the service sector is now above the pre-recession levels, but both production and construction are still below that level overall.

Mr Grice said: "We have now seen four successive quarters of significant growth and the economy does seem to be improving more consistently.

"Today's estimate suggests over four-fifths of the fall in GDP during the recession has been recovered, although it still remains 1.3% below the pre-recession peak."

The latest figures have given a boost to the Chancellor and come just weeks after the International Monetary Fund (IMF) did a U-turn on its forecast for the UK economy.

George Osborne said: "These numbers are a boost for the economic security of hard-working people, growth is broadly based, with manufacturing growing fastest of all.

"It is more evidence that our long-term economic plan is working.

"But the job is not done, and it is clear that the biggest risk now to the recovery would be abandoning the plan that's delivering jobs and a brighter economic future."

The IMF now forecasts growth in 2014 of 2.4%, a figure which is in line with the Office for Budget Responsibility.

The Bank of England's current forecast is for growth of 2.8% in 2014.

Chief Secretary to the Treasury Danny Alexander added: "2013 was the first year since 2007 to see economic growth in all four quarters and to ensure the recovery is long term and sustainable, we need business to invest now."

"Britain is on the right track and we will not waver from the coalition economic plan that is delivering jobs, growth and the right climate for investment."

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Google Buys UK Intelligence Firm DeepMind

Google has bought a London-based tech company that specialises in artificial intelligence (AI), Sky News has confirmed.

It purchased DeepMind Technologies Ltd in a deal worth a reported £240m.

One of the DeepMind's current directors previously predicted AI machines will learn "basic vision, basic sound processing, basic movement control, and basic language abilities" by 2020.

Google has been improving the company's AI expertise and recently bought military robot maker Boston Dynamics, among other robotics companies.

It is believed to be working on a project to develop next-generation robots and is already trialling driverless vehicles.

DeepMind has become a major independent force in development of AI and currently develops algorithms for games, simulations and online commerce sites.

The Deepmind deal was first revealed by tech site re/code and it said Google CEO Larry Page led negotiations.

DeepMind is heavily involved in the enigmatic AI field of machine learning, where systems are improved as data is processed over time.

Last week Google CEO Eric Schmidt warned delegates at the World Economic Forum that technological innovation may wipe out whole swathes of jobs.

Google has already developed a self-driving car

He said that many roles are being automated by IT systems and it would become one of the biggest global issues in the next two to three decades.

DeepMind's website is just a single page stating it combines "the best techniques from machine learning and systems neuroscience to build powerful general-purpose learning algorithms".

It was founded by 37-year-old Demis Hassabis in late 2010. DeepMind says it is "supported by some of the most iconic technology entrepreneurs and investors of the past decade".

The founder was a child chess prodigy and video game designer by the age of 16, who later went on study computer science at Cambridge and gained a PhD in Cognitive Neuroscience at University College London.

As the start-up expanded Dr Hassabis' firm took on additional directors to boost both technical and financial clout.

Those were IT entrepreneur Luke Nosek, Mustafa Suleyman, investment banker David Gammon, Skype co-developer Jaan Tallinn and machine super intelligence expert Shane Legg, in that order.

Mr Legg predicted there will be humanlike artificial general intelligence (AGI) before 2030, with "impressive proto-AGI" functionality by 2020.

Mr Gammon left as director in early 2012 to become chairman of Cambridge-based software games firm Frontier, while remaining an adviser to DeepMind.

Last June, venture capitalist Bart Swanson became the firm's sixth director.

Mr Swanson was formerly chairman of Summly before it was sold to Yahoo! and held a senior role at a firm before it was sold to eBay.

He also helped lead the international expansion of Amazon at the turn of the century.

Facebook unveiled a partnership with New York University last year for a new centre for artificial intelligence, aimed at harnessing the social network's vast resource of data.

The deal comes as Google and Samsung agreed a global patent cross-license partnership covering technologies and business areas.

The agreement covers the two companies' existing patents as well as those filed over the next 10 years, and was developed to stop needless litigation.

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Business Bosses Slam Labour's 50p Tax Rate

A group of senior business leaders has written an open letter criticising Labour's plan to raise the top rate of tax.

Shadow chancellor Ed Balls confirmed at the weekend his party would restore the 50p tax rate if it gets into power at the next general election.

Business figures have been quick to criticise the plan, and today the heads of 24 companies warned in a letter to The Daily Telegraph that the 50p tax rate would halt the economic recovery and cost jobs.

The letter's signatories include Ocado chairman Sir Stuart Rose, West Ham United vice chairman Karren Brady, billionaire businessman Richard Caring and Kingfisher chief executive Sir Ian Cheshire.

"We think that these higher taxes will have the effect of discouraging business investment in the UK," the letter said.

"This is a backwards step which would put the economic recovery at risk and would very quickly lead to the loss of jobs in Britain."

Sir Stuart Rose led Marks & Spencer for six years

The 50p - or 50% - "additional rate" tax, which is payable on income above £150,000, was cut to 45% on April 6 last year.

Another signatory, Pimlico Plumbers founder Charlie Mullins, told the paper that raising the tax rate to 50p would be "suicidal".

He warned it could trigger an exodus of investors, pointing to the example of France under President Francois Hollande, who raised the top rate of tax to 75%.

"Business people aren't against paying tax, just not at such a punitive rate," he said.

It is not only business leaders slamming the plan. A former Labour trade and investment minister has also accused the party of choosing to "kick" Britain's wealth creators in the row over the 50p tax.

Lord Jones said he expected the shadow chancellor to increase the top rate of tax to 55p or even 60p in government - something Mr Balls has denied.

The ex-director general of the CBI, who is now a crossbench peer, told the BBC: "In the last few months we've got, oh, if it creates wealth let's kick it - really go for energy companies, really go for house-building, bankers, this time it's going to be the high-earners.

"Are we talking politics or are we talking what's right to create wealth and jobs as a nation?"

Karren Brady is also a signatory

Meanwhile, Prime Minister David Cameron described it as an "anti-business, anti-growth, anti-enterprise" measure.

He says lowering the tax rate was "the right thing to do".

Sky's Political Correspondent Anushka Asthana has said of the letter: "Labour will tell you that one in three of the figures are Tory donors, with one - Karren Brady - even introducing the Chancellor at the party's annual conference. Still, they know it's news.

"And though they may be a little taken aback by the strength of the attacks former Labour figures, they won't be that surprised that they oppose the policy.

"Mr Balls has made a simple political calculation: that ordinary voters will not share the views of wealthy business leaders. And he may be right."

And Conservative London Mayor Boris Johnson also added to the chorus of criticism, branding Mr Balls "stupid" for planning to increase the tax rate.

In his Telegraph column, Mr Johnson urged the Government to cut the rate to 40p to establish some "clear blue water".

But Mr Balls has the backing of Alistair Darling, who introduced the 50p rate when he was chancellor.

Boris Johnson called the shadow chancellor "stupid" over the plan

He told the Sky News Murnaghan programme: "It's part of the deficit reduction plan that he set out and I thought Ed Balls delivered a very good speech yesterday."

Mr Balls defended his proposal, insisting Labour was "a pro-business party".

"This is not an anti-business agenda but it's an anti-business as usual agenda," he told BBC 1's Andrew Marr Show.

"It's absolutely not back to the 1980s or the 1990s. I was part of a government which did very many things to open up markets, make the Bank of England independent, to work closely with business but the reality is we are in very difficult circumstances and because, if I'm honest with you, George Osborne's failure in the last few years, those difficult circumstances will now last well in to the next parliament."

Announcing the 50p plan on Saturday, Mr Balls described Labour as the "party of radical economic change" and said it was "speaking up ... for working people" facing a "cost of living crisis".

He said the country is "crying out for real and lasting change" and claimed the Prime Minister and the Chancellor are "out of touch" with voters.

And Mr Balls would appear to have public opinion on his side. A Mail on Sunday poll suggests some 60% supported the move, while just 17% were opposed.

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Cameron Pledges To Slash 'Crazy' Red Tape

Thousands of pages of "crazy" guidance for businesses will be cut by up to 90%, the Prime Minister has told business leaders.

Speaking at a Federation of Small Businesses (FSB) conference, David Cameron has said the coalition is planning to scrap or change more than 3,000 regulations from the "serious to the ridiculous".

Under the announcement, 80,000 documents of environmental guidance will be significantly slashed, including 286 pages of regulations on hedgerow maintenance and 380 pages on waste management.

Around 100 house-building standards will also be reduced to fewer than 10.

Mr Cameron says his government will be the first in modern history to have reduced the overall burden of red tape, saving more than £850m a year.

"We will scrap over-zealous rules which dictate how to use a ladder at work or what no-smoking signs must look like," he said.

"We've changed the law so that businesses are no longer automatically liable for an accident that isn't their fault.

"And the new Deregulation Bill will exempt one million self-employed people from health and safety law altogether.

"Let me just give you a few more crazy examples dreamt up in the past by Whitehall bureaucrats.

"Employees used to be able to sue their employer if they were insulted by a customer. We've changed the Equality Act to stop that.

"Shopkeepers used to need a poison licence to sell oven cleaner - we're scrapping that."

Mr Cameron says that supporting business is crucial to the coalition's long-term economic plan.

"That is why, among so many other things, I have insisted on slashing needless regulation," he said.

"This will make it easier for you to grow, to create jobs and to help give this country the long-term security we are working towards."

Mike Cherry, FSB national policy chairman, has said it is an historic moment for the FSB.

"We are delighted David Cameron will be joining us in celebrating the hardworking men and women whose businesses are the lifeblood of our economy and local communities," he said.

"Having support from the Prime Minister and policymakers from all parties is critical to ensuring small business issues are front and centre of the economic debate around rebuilding and rebalancing our economy."

At the FSB conference, Labour will announce plans to follow the US lead of creating a Small Business Administration (SBA) to work across government to encourage growth.

Shadow business secretary Chuka Umunna will tell the FSB: "We need government to be a better servant - and customer - of our small businesses and to make sure that entrepreneurs' voices are heard at the top table.

"A UK Small Business Administration is necessary to realising this ambition."

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Nestlé Chair Warns Over UK Exit From Europe

By Mark Kleinman, City Editor, in Davos

The consumer goods giant Nestle would be forced to re-evaluate the extent of its presence in the UK if Britain decided to leave the European Union, its chairman has told Sky News.

In an interview during the World Economic Forum in Davos, Peter Brabeck-Letmathe said the company was committed to its business in the UK but that he could not envisage a separation from its biggest trading partner being in the country's interest.

Nestle, which makes Nespresso coffee capsules and Kit-Kat chocolate bars, employs approximately 8,000 people in the UK and accounts for exports worth roughly £400m. Its other brands include Nescafe, Smarties and Yorkie.

"From a purely economic point of view, I can't see that the withdrawal of the UK [from the EU] would be favourable for any UK industries," Mr Brabeck-Letmathe, an Austrian, said.

"It would isolate the UK economically. Every company would be forced to re-evaluate the implications of investing in the UK. It would no doubt have an impact on its ability to supply European markets."

The warning, ahead of a likely referendum on Britain's EU membership in 2017, echoes the views of many of the multinational business leaders gathered in Davos.

Prime Minister David Cameron told Sky News on Thursday that he did not believe the Government's stance on EU membership was jeopardising inward investment, saying that companies had been "voting with their feet".

He said: "The argument I make with these business leaders is that the best thing for Britain would be to secure our place within a reformed European Union.

"Simply saying 'let's hope this issue goes away, let's hope that Europe sorts itself out', without doing anything, won't work.

"We need to get in there, change Europe, make it work better, make it more competitive, make it more flexible - help make Britain more comfortable with its membership, have that referendum and then settle this issue."

Mr Brabeck-Letmathe, who also chairs the parent company of Formula One motor racing, said the EU and its single currency had been "an incredible success".

"The EU is full of failures and weaknesses like any large institution, but its achievements are greater. We have to work to strengthen the internal market."

He suggested that the trading bloc's governing mechanisms required reforms such as shrinking the number of EU Commissioners.

"The current system is not an efficient way to run it," he said.

In addition to his corporate roles, Mr Brabeck-Letmathe has also been a leading advocate of water stewardship in large companies, and unveiled new measures this week aimed at improving global water sustainability.

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Non-EU Banks Slip Through Bonus Cap Loophole

By Mark Kleinman, City Editor in Davos

Major global banks such as Morgan Stanley and Nomura are benefiting from a loophole in new European pay rules that could leave British rivals at a big disadvantage.

Sky News understands that banks based outside the European Union (EU) are able to approve bigger bonuses for employees of their subsidiaries in the trading bloc without recourse to external shareholders.

That means Wall Street and Asian banks can instantly consent to variable pay for senior staff worth double the level of their salaries, the maximum permissible under the new EU cap.

However, Barclays, HSBC and other British banks will have to put the same measure to their annual investor meetings. Without approval, they will not be able to award bonuses worth more than 100% of salaries in any one year.

UK banks such as Barclays may be left at a disadvantage over bonuses

Sources said that banks including Bank of America Merrill Lynch and Goldman Sachs had formally discussed the issue at their group remuneration committees "to ensure appropriate corporate governance". Both had already given approval for the 200% cap, they added.

In practice, the UK banks will not be disadvantaged if shareholders back motions at this year's AGMs allowing them to pay bonuses at the higher level.

However, the fact that international rivals have already been able to give staff certainty about their pay from this year onwards was proving to be a valuable recruitment tool, bankers say.

Sky News has revealed in recent weeks the details of plans by Barclays, Goldman, HSBC and Morgan Stanley to raise base salaries through monthly or quarterly allowances for senior staff.

George Osborne, the Chancellor, is aware of the loophole benefiting non-EU banks, aides said on Friday.

Mr Osborne is fighting the ratio cap in the courts, and one senior Treasury official said that while the Government is confident that it has "a decent legal case", recent defeats to Brussels had left it only mildly optimistic about emerging victorious.

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AT&T Courts Europe Over £60bn Vodafone Bid

By Mark Kleinman, City Editor, in Davos

US telecoms giant AT&T is courting European regulators as it accelerates work on a possible £60bn takeover bid for Vodafone.

Sky News has learnt that Randall Stephenson, AT&T's chairman and chief executive, met the EU Telecoms Commissioner Neelie Kroes at the World Economic Forum in Davos to discuss his ambition to become a major player in the European market.

Insiders said that Mr Stephenson and Ms Kroes discussed a number of issues including the Commission's receptiveness to a potential takeover bid for a major European operator such as Vodafone.

The AT&T boss is also said to have held talks with Joaquin Almunia, the EU Competition Commissioner, in recent days, although an insider at the US company denied that they had "met formally" in Davos.

A combination of AT&T and Vodafone, which has been speculated about for months, would create a global behemoth in the telecoms sector with a market value of well over £150bn.

The talks between Mr Stephenson and EU politicians come as Vodafone prepares to hand over a £54.3bn ($84bn) windfall to its shareholders from the sale of its stake in Verizon Wireless to Verizon Communications.

The majority of that sum will be in the form of Verizon stock and the remaining $24bn in cash.

Vodafone and Verizon will both hold shareholder meetings next Tuesday to approve the $130bn deal, which was the largest announced corporate transaction in the world last year.

AT&T has yet to make an approach to Vodafone but has begun discussing options for financing what would be one of the world's biggest takeover deals in recent times.

City sources said that AT&T had been urged by some of its leading shareholders to delay an approach to Vodafone until after its US deal had closed.

Vodafone's sale of its Verizon Wireless stake is scheduled to complete on February 21. The UK company's shares will begin trading without the US mobile group's asset priced into them three days later, with investors receiving cash and shares on March 4.

Vodafone is to offer a free dealing facility for holders of up to 50,000 of its shares to trade their new Verizon shares.

Coincidentally, Mr Stephenson and Vittorio Colao, Vodafone's Italian chief executive, are both due to speak at the Mobile World Congress, a key industry conference, in Barcelona on February 24.

AT&T's board has not formally approved an offer for Vodafone but the regulatory, financing and legal work being undertaken by the US company suggests that an approach is likely this year.

Mr Stephenson has spoken publicly of the 'huge opportunity' in Europe to exploit the growth of mobile broadband across the Continent.

A takeover of Vodafone would give AT&T instant scale in major European markets such as the UK, Germany, Italy, Spain and Turkey.

Even after the Verizon Wireless deal closes, analysts expect Vodafone to be valued by the stock market at more than £50bn and possibly as high as £70bn, preserving its status in the ranks of the UK's ten biggest public companies.

Mr Colao has been examining strategic options for Vodafone's post-Verizon future, and he has already spent more than £6bn on the German cable company Kabel Deutschland.

He has also outlined plans for a £6bn network investment programme to take place over the next three years.

Reports have suggested that AT&T could pursue EE, the UK mobile group, as an alternative option to expand in Europe if a pursuit of Vodafone does not pay off.

AT&T declined to comment on Mr Stephenson's discussions with Commissioner Kroes, while Vodafone declined to comment.

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Royal Mail Rides The Online Parcel Wave

The newly-privatised Royal Mail has revealed a rise in parcel delivery revenue of 8% in the nine months to December 29.

The spike in like-for-like earnings comes as the shift to online purchases continues.

The company said the figures were boosted by strong demand over Christmas.

Despite parcel volumes remaining flat, price delivery changes pushed revenue upwards.

Meanwhile, revenue for its letter delivery service was down 3% in the same period - blamed on the rise of email and social media.

Royal Mail said the trading performance was in line with expectations and it has confidence it will deliver results consistent with key value targets for the full year.

The postal firm's part-flotation last October by the Government was fiercely opposed by unions and Labour.

The Government still has a 30% stake but was widely criticised for potentially short-changing the taxpayer on the flotation price.

Shares in the firm closed at 588p on Thursday, up 78% from the 330p per share price.

In early Friday trading shares remained flat. The company is currently valued at around £5.9bn.

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Hornby Hits The Rails Over Supply Chain Woes

Profit for model train maker Hornby has been derailed, after the company admitted problems with its supply chain.

The Kent-based company released an interim management statement and also warned it has lost almost £1m in sterling reserves used to purchase products.

"As a result of the supply chain issues … the group sales for the financial year are now expected to be below current market expectations and below the total for last year," it said in the statement.

It's full-year figures to March 31 are due to be released in early June.

Hornby over estimated Olympic-theme toys in 2012

In the previous year it made an underlying pretax profit of just £0.15m on turnover of £57.4m.

That was a 96% drop on the 2011-12 pre-tax profit, on 10% lower turnover.

In Friday's statement, it said net debt last December stood at £6.5m - down 18% on three months earlier.

Executive chairman Roger Canham added: "Whilst the outlook for the year is disappointing, we have used this year of management change to make some important decisions that we are optimistic will enable us to return to growth.

"I am confident that this draws a line under this painful period of the group's recent trading."

Shares plunged more than 30% in 2012 after it issued a profit warning over poor sales of its London Olympics merchandise.

Hornby expects good sales of its military models in 2014

Hornby was forced to offer up to 85% off its Olympic and Paralympic ranges, which include model London 2012 taxis, Olympic-themed train sets and die-cast athlete figurines.

It now hopes to find success in 2014 with wireless Scalextric cars and Airfix military models trading on the centenary of the First World War and 70th D-Day invasion.

Last June, Hornby told Sky News last June it was 'reshoring' some production facilities from China to the UK.

The company said rising labour costs and overheads in China were hampering returns for the firm.

The latest statement does not reveal if any production facilities will be repatriated in the current financial year.

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Nestlé Chair Warns Over UK Exit From Europe

By Mark Kleinman, City Editor, in Davos

The consumer goods giant Nestle would be forced to re-evaluate the extent of its presence in the UK if Britain decided to leave the European Union, its chairman has told Sky News.

In an interview during the World Economic Forum in Davos, Peter Brabeck-Letmathe said the company was committed to its business in the UK but that he could not envisage a separation from its biggest trading partner being in the country's interest.

Nestle, which makes Nespresso coffee capsules and Kit-Kat chocolate bars, employs approximately 8,000 people in the UK and accounts for exports worth roughly £400m. Its other brands include Nescafe, Smarties and Yorkie.

"From a purely economic point of view, I can't see that the withdrawal of the UK [from the EU] would be favourable for any UK industries," Mr Brabeck-Letmathe, an Austrian, said.

"It would isolate the UK economically. Every company would be forced to re-evaluate the implications of investing in the UK. It would no doubt have an impact on its ability to supply European markets."

The warning, ahead of a likely referendum on Britain's EU membership in 2017, echoes the views of many of the multinational business leaders gathered in Davos.

Prime Minister David Cameron told Sky News on Thursday that he did not believe the Government's stance on EU membership was jeopardising inward investment, saying that companies had been "voting with their feet".

He said: "The argument I make with these business leaders is that the best thing for Britain would be to secure our place within a reformed European Union.

"Simply saying 'let's hope this issue goes away, let's hope that Europe sorts itself out', without doing anything, won't work.

"We need to get in there, change Europe, make it work better, make it more competitive, make it more flexible - help make Britain more comfortable with its membership, have that referendum and then settle this issue."

Mr Brabeck-Letmathe, who also chairs the parent company of Formula One motor racing, said the EU and its single currency had been "an incredible success".

"The EU is full of failures and weaknesses like any large institution, but its achievements are greater. We have to work to strengthen the internal market."

He suggested that the trading bloc's governing mechanisms required reforms such as shrinking the number of EU Commissioners.

"The current system is not an efficient way to run it," he said.

In addition to his corporate roles, Mr Brabeck-Letmathe has also been a leading advocate of water stewardship in large companies, and unveiled new measures this week aimed at improving global water sustainability.

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Help To Buy Scheme: Under 40s Rush To Apply

Nearly half of would-be homeowners under the age of 40 are planning to apply for Help To Buy assistance this year, a new study suggests.

According to research by Experian, 39% of those aged between 20 and 40 hope to apply for the Government initiative in 2014.

The report said the average deposit saved by them is £9,590.

There has been a flurry of applications in recent months.

In November, figures showed in the first month of the scheme's launch more than 2,000 people had put in offers on homes and applied for a Help to Buy mortgage - and by early January that had topped 6,000.

Under the scheme, which came into effect at the beginning of October, people can buy homes of up to £600,000 with a deposit of just 5% as the Government guarantees up to 20% of the mortgage.

The report warned that 26% have saved less than £5,000 - the minimum deposit required to take part in the scheme.

The research also indicated that many have burdensome credit outstanding that may hamper applications.

The study said the average credit owed is around £4,600, which increases with age, so that the average 40-year-old owes £5,240.

Regionally, the East Midlands has the highest credit owed (£5,800), with the South East the lowest (£3,940). Some 5% owed more than £15,000 to creditors.

But with lenders increasingly reliant on database checks for loan risk assessment, many of those wishing to become homeowners are unaware of the process.

The report said 40% are not listed as living at their current address, which will adversely affect credit ratings.

It said: "Those living in the East Midlands, Yorkshire and London proved the least likely to have their names on the electoral roll."

"Ensure everything is accurate and up-to-date. Simple issues like incorrect address details, linked accounts they may have forgotten about and not being on the electoral roll can hamper attempts to access a mortgage.

"Buyers should also play close attention to things like outstanding accounts that should be marked as settled."

Prime Minister David Cameron said he hoped 2014 would see "thousands more realise their dream of home ownership".

However, the significant take-up of the loans will further fuel fears of a housing bubble.

The scheme's expansion this year means two-thirds of the entire UK mortgage market will offer products under Help to Buy, bringing home ownership to a growing number of people.

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Penalty-Free Phone Switching Imposed By Ofcom

Householders and small businesses can now change telecoms providers if prices are raised without warning.

Consumers now have the right to exit landline, broadband or mobile contracts without incurring a penalty on monthly contract price terms.

The decision by telecoms regulator Ofcom now means phone and broadband firms are now required to give customers 30 days' notice of an impending price rise.

Ofcom first announced the plan last October and it now has agreement from all the operators.

In a statement, the regulator said: "It also states that any changes to contract terms, pricing or otherwise, must be communicated clearly and transparently.

"Ofcom will monitor providers' application of the guidance and complaints closely to assess the effectiveness of this new protection."

The regulator also intends to go undercover to ensure phone firms keep their word.

It said: "Ofcom will also conduct research, such as mystery shopping, to assess the transparency of contractual information given to customers by providers at the point of sale."

The new agreement also means phone operators must warn customers if they intend to reduce data, text or minutes.

Ofcom has now released a checklist for consumers before they commit to signing up to phone or broadband contracts.

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Man Utd Relegated From Football's Richest Three

Manchester United has been relegated from the top three in a global rich list of football teams.

The English club has been squeezed out by greater success at Real Madrid, Barcelona and Bayern Munich.

The list, compiled by 'Big Four' accountancy firm Deloitte, is based revenues accrued during the 2012-13 season.

For the ninth year Real Madrid headed the list, with revenues of €518.9m (£425.8m). The Spanish team has now broken a record previously held by Man Utd.

Placed in fourth with revenues of €423.8m (£347.7m), Man Utd is ranked one spot above French champions Paris Saint Germain, who are now backed by the financial might of the Qatar Investment Authority.

Details of Man Utd's fall in the rankings came the club's calamitous season on the field took another turn for the worse as they dropped out of the Capital One Cup with defeat to Sunderland in the semi-finals on Wednesday night.

Man Utd have struggled on the pitch under new manager David Moyes

Despite winning the Premier League last season under Alex Ferguson, new manager David Moyes has struggled to make an impact with the club currently sitting 7th in the table, 14 points behind leaders Arsenal.

The financial fortunes could be further damaged in the next list if the club fails to finish in the top four and qualify for the financially lucrative Champions League.  

According to Deloitte, the world's 20 richest clubs saw a combined revenue rise of 8% last season to €5.4bn (£4.4bn), despite the economically tough conditions.

Bayern Munich saw the largest revenue rise, of 17% to €431.2m (£353.8m), compared to the previous year.

Bayern Munich entered the top three after winning the Champions League

Six English clubs were listed in the top 30 clubs globally, but only Man Utd, Manchester City and Liverpool saw revenue increases.

Liverpool, despite increasing its revenue by 9% in 2012-13, still fell out of the top 10 to 12th spot. The club had been in the top 10 rankings throughout the 21st century.

A total of seven of the top 20 clubs are sponsored by airlines based in the Middle East.

The list has been compiled annually by the sport business group of the accountancy firm since 1999-97.

It said all clubs in the top 30 of the list now have annual revenues above €100m. In the first year of rankings only Man Utd had that honour.

Market watchers are now waiting to see what, if any, impact the list and Wednesday night's loss to Sunderland may have.

Earlier this month, it was reported that the value of the club had seen a drop of around £250m on the New York Stock Exchange since Moyes took over as manager.

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Unemployment Rate Falls To 7.1% In Job Surge

The UK unemployment rate fell to 7.1% during the three months to the end of November, prompting concerns of a rise in mortgage rates.

It was the biggest ever quarterly increase in employment. A total of 280,000 jobs were created in the period.

The Office for National Statistics (ONS) said the number of those jobless fell by 167,000 between September and November, to 2.32 million.

The ONS said a total of 30.15 million people are now in work. The number of people claiming jobseeker's allowance last month fell by 24,000 to 1.25 million, the ONS said.

It said average earnings increased by 0.9% in the year to November - excluding bonuses. The pay figure was unchanged on the previous month.

Base rate and unemployment rate since June 1992

The drop in the unemployment rate has potential implications for both savers and borrowers.

The Bank of England's monetary policy committee said it would consider a base rate rise, from the current record low of 0.5%, when the unemployment rate reached 7%.

The 0.5% is the lowest sustained base rate since 1964.

Forecasters had not expected the threshold to be reached until later in the year.

The 7% jobless rate will not trigger an automatic rate rise, according to the bank.

The latest unemployment rate of 7.1% is down by 0.5% from June-August, and by 0.6% from a year earlier.

But youth unemployment reached its highest rate since 1993.

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Npower Slammed By Ofgem Over Billing Claims

The energy watchdog and the Government have accused gas and electricity supplier npower of "misleading" consumers over the cost structure of household bills.

Npower released a 14-page document which sought to "create a better understanding of the facts behind the energy industry".

The 'Big Six' company's report, Energy Explained: Inside The Cost Of Energy, showed how customers could minimise their bills by improving home insulation efficiency.

It argued that bills in the UK are high because the country's "old and draughty" houses waste so much gas and electricity.

The company illustrated what impact insulation would have on bill reduction, although it said network costs - those beyond its control - would rise until 2020 by a projected 74%.

But in a strongly worded response, regulator Ofgem said: "We welcome npower's effort to inform the energy debate, however their data on network costs is incorrect and misleading.

"We offered to help npower improve the accuracy of their numbers for network charges and it is disappointing that they did not engage fully with us until after the document had been circulated."

Npower also stated that green taxes on energy bills would more than double by the end of the decade.

However, the Department of Energy and Climate Change (DECC) rejected the claim.

The department said "Npower's analysis is incorrect on so many levels" and insists that lower social and environmental programmes will in fact lower energy bills by as much as £166 in 2020.

The DECC added: "A number of the policies listed by npower don't have any impact on household energy bills, including the Renewable Heat Incentive, Climate Change Levy and the Carbon Reduction Commitment."

Last week, npower apologised to customers over a rising tide of complaints to regulators and charities.

Information compiled by the watchdog Consumer Futures found that the company continued to receive the highest number of complaints between July and September - around eight times more than the best-performing firm.

Its data suggested npower collected nearly half of all gripes against energy firms to third parties in the period, numbering 253 per 100,000 customers - a rise of 25% on the previous three months.

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Cable Vows Fight Over Royal Mail Chief's Pay

By Mark Kleinman, City Editor

An explosive executive pay row is brewing between Vince Cable and Royal Mail over the £1.5m package earned by the newly privatised company's chief executive.

Sky News can reveal that the Business Secretary is preparing to face down moves by Royal Mail's board to hike Moya Greene's annual remuneration just months after the Government sold a 70% stake in the company.

Mr Cable is understood to be willing to consider going as far as using his vote as the postal operator's biggest remaining shareholder to try to block any such increase.

If that were to happen, it would represent a remarkable new chapter in the privatisation of Royal Mail, which was bitterly opposed by Labour and the Communication Workers' Union.

The Government has been heavily criticised since last October's £3.3bn stock market listing, with the company's soaring share price leaving ministers vulnerable to accusations that it had been seriously undervalued.

The conflict over executive pay has been simmering since last weekend, when Donald Brydon, the boardroom veteran who chairs Royal Mail, said in a newspaper interview that increasing Ms Greene's pay was necessary if the company wanted to retain her services.

"I think it's only fair to pay Moya the right market rate for her job," he told The Sunday Telegraph.

"I'm not in the school that says top executive pay is without fault, there are parts of it that are egregious and wrong. But happily we are so far away from that end of it that to try and right-size her a bit I think is a necessary part of making sure we keep her."

Mr Brydon did not quantify the perceived shortfall in the Royal Mail chief's pay, although Ms Greene is paid less in aggregate than any of her peers at the helm of companies in the FTSE 100. She is also paid substantially less than her predecessor, Adam Crozier.

Last year, she received just under £498,000 in basic salary with further sums totalling nearly £1m based on her performance and directors' judgements about her success at modernising the company.

Royal Mail has pledged not to give Ms Greene a significant pay rise until after the current financial year.

Mr Cable is said to be irritated at Mr Brydon's intervention in the context of a row last year which led to Ms Greene returning a £250,000 housing allowance after he objected to the "material" payment.

The sum was disclosed in Royal Mail's annual report last summer. A review of Ms Greene's employment contract by Sky News after the company's flotation found no further discretionary payments of that kind.

At the time, Mr Cable said: "I am pleased that this unapproved payment is being returned. The company acted quickly to rectify the situation.

"A mistake was made in not seeking my approval: I would not have approved it. The chairman is sorry; the payment is being returned. I now regard the matter closed.

"Moya Greene is an exceptionally good CEO and she and the board have my full support to take the company forward."

Under laws passed at Mr Cable's instigation, most listed companies will face for the first time in 2014 a binding shareholder vote on their future pay policies for senior executives.

The prospect of one of the first big protest votes under the new regime being orchestrated by Mr Cable himself would stun the City.

It is not clear whether Mr Cable is opposed to any increase at all in Ms Greene's salary while the Government remains a shareholder in the company, but he is understood to be determined to hold Royal Mail's board to account over the issue.

However, the Business Secretary's stance may leave the Government vulnerable to accusations of hypocrisy given that both Antonio Horta-Osorio and Ross McEwan, the chief executives of state-backed Lloyds Banking Group and Royal Bank of Scotland, are paid far higher sums than Ms Greene.

There is a widespread expectation that ministers will sanction the sale of the remaining stake before next year's general election, which would leave Royal Mail's board answerable only to external investors.

The Business Secretary is said to be keen to avoid the "nuclear option" of using the Government's vote to oppose Royal Mail's remuneration report.

Unions are likely to apply intense pressure on him to do so, however, with Unite national officer Ian Tonks saying this week: "Calls to boost Moya Greene's huge salary even further is proof the rushed privatisation of Royal Mail is descending into a farce. The Government should step in and make clear it opposes this sort of corporate greed."

If Mr Cable did vote against it, it could leave some Royal Mail directors feeling that their positions were untenable because they were not able to act in the interests of all shareholders by securing the services of the company's chief executive.

It would also revive memories of the vote by UK Financial Investments against Royal Bank of Scotland's pay report in 2009 following its taxpayer bail-out, although that vote was only on an advisory basis.

Mr Cable will give evidence later on Wednesday to the Business, Innovation and Skills select committee about the department's annual report, when he may face further questioning about the Royal Mail sell-off.

A spokeswoman for Mr Cable declined to comment.

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Power Bosses Questioned Over Storm Response

By Ashish Joshi, Sky News Correspondent

The bosses of some of the country's leading power distribution companies are being questioned about their response to the Christmas storms by a panel of MPs.

The House of Commons Energy and Climate Change Committee is holding a one-off evidence session on the companies' response to the severe weather.

Hurricane-force winds and torrential rain led to hundreds of thousands of power cuts during the Christmas period.

Retired insurance executive Neil Bailey was one of those left without electricity for five days.

His home in Horsham ,Surrey, was without power from December 23 until December 28.

A large ash tree in an adjoining field was toppled by the gale force winds that tore through southern England bringing down an electricity pole.

The supply to the severed cable was cut off by engineers sent to inspect the damage due to safety fears.

Heavy flooding struck many parts of Britain over the Christmas period

Friends helped the Baileys cook a Christmas turkey, but the family were forced to take a room in a local hotel for warm showers.

"Fortunately we've got some very good friends who helped us through from the time when the power was taken out on Christmas Eve through to Christmas Day," Mr Bailey said.

"I had my turkey cooked in a local village and another friend lent me their house to cook the vegetables and the potatoes.

"We were driving up down the dual carriage way to make Christmas dinner.

"The house was very cold and dark. There was no light from 4pm to 8am. It's not very pleasant."

The extreme weather stretched resources and resolve to the limit.

The response to the emergency by the power companies has been criticised heavily.

Mr Bailey has already been asking questions.

Power companies faced strong criticism over their response to outages

A letter from Basil Scarsella, CEO at UK Power Networks, one of the executives called to appear today, apologised for the outages and explained why power had not been restored to his home earlier.

"The recent storms have been the worst weather we have experienced for several years," the letter read.

"The high wind speeds and torrential rain caused widespread damage to our network and caused a large number of power cuts through the South East of England.

"Due to the unprecedented amount of damage caused, all of our engineers were working throughout the Christmas period to try to restore the supplies as quickly as possible with a priority given to dangerous situations."

Mr Bailey wants to see the panel of MPs demand greater accountability from the power supply companies.

"When you have a company in a virtual monopoly position there has to be some regulation to ensure that the service they are providing is being delivered," he said.

"Some kind of audit needs to take place to check that the plans they have for an emergency or contingency times are checked."

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Small Business Lending Has Gone Down Say MPs

Many smaller firms are still struggling to get finance and Whitehall is not doing enough to raise awareness of the help available it has been warned.

But the critical report by the Commons Public Accounts Committee has been rejected by the Government, which argues credit conditions for small and medium-sized enterprises (SMEs) are improving, and new lending is being provided.

MPs on the influential financial watchdog said that up to 2015 the Government was spending nearly £3bn on schemes to help firms, but departments could not show these were being successful in tackling the market failures they were designed to tackle.

The committee's report said: "Indeed far from encouraging more lending to SMEs, investment has declined."

Margaret Hodge, who chairs the committee, said: "Small and medium-sized enterprises have a vital role to play in driving the UK's economic recovery, but despite Government attempts to encourage lending to SMEs many still struggle to access the finance they need.

Margaret Hodge said schemes were run as a series of ad hoc initiatives

"At the time of our hearing overall lending to SMEs was down. Net lending by banks participating in the Funding for Lending scheme has declined by £2.3bn since the scheme was launched, and the number and value of loans backed by the Enterprise Finance Guarantee fell each year between 2010 and 2013.

"Departments manage their various schemes not as a coherent programme but simply as a series of ad hoc initiatives.

"There is no common understanding about which parts of the SME sector are generating the most growth and where government support would do most good.

"Departments were therefore unable to demonstrate that they are achieving best value for taxpayers' money."

The MPs recommended the establishment of the British Business Bank should be used to oversee and coordinate schemes.

John Allan, chairman of the Federation of Small Businesses, said: "Recent FSB research shows hundreds of schemes available to support small and medium-sized businesses, but no clear mechanism for evaluation, co-ordination or communication either at the national or local level."

A Government spokesman said: "The PAC's assessment does not reflect the reality, which is that credit conditions for SMEs are improving, new lending is being provided and small businesses are being offered cheaper loans rates.

"But we want to do more which is why the British Business Bank will be fully operational later this year.

"We expect the Bank to unlock up to £10bn of funding for firms over the next five years."

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OneSavings Heeds Miliband Call In Float Push

By Mark Kleinman, City Editor

A lender backed by a prominent Wall Street financier is stepping up plans for a stock market flotation that it hopes will help it to become a serious challenger to the main high street banks.

Sky News has learnt that OneSavings Bank, whose Kent Reliance and other trading brands have hundreds of thousands of customers, has hired Barclays, Royal Bank of Canada and Canaccord Genuity to work on the listing.

The flotation is expected to take place this year, and would offer at least a partial exit route for Christopher Flowers, the American tycoon whose investment vehicle helped to devise a rescue plan for the struggling Kent Reliance Building Society in 2010.

The appointment of the investment banks follows calls by the Labour leader, Ed Miliband, for greater competition in Britain's banking sector.

In a speech last week, Mr Miliband said that a Labour government would create two new challenger banks to the 'big five' by forcing established players to shrink their market share.

JC Flowers injected £50m of new capital into KRBS four years ago in exchange for roughly 40% of OneSavings, which describes itself as part of a "unique mutual hybrid arrangement", under which the bank is a subsidiary of an industrial and provident society called the Kent Reliance Provident Society (KRPS).

The restructuring was designed to allay members' fears about the loss of its mutual ethos when it agreed the deal with JC Flowers, one of Wall Street's most prolific investors in financial institutions.

Insiders insisted that a flotation would not diminish that mutual ethos, echoing a vow made by the Co-operative Group as part of its ongoing £1.5bn restructuring.

In a statement issued to Sky News last month, a spokeswoman for OneSavings Bank said:

"I can confirm that OneSavings Bank is reviewing various options to continue to build the business for the long term benefit of all its stakeholders whilst maintaining the bank's mutual ethos - to make any further comment would be premature."

the bank declined to comment on the appointment of advisers.

If it does float, it would herald a return to the stock market in the banking sector for Sir Callum McCarthy, the former boss of the Financial Services Authority, who is among OneSavings' non-executive directors. Stephan Wilcke, the bank's chairman, was one of the architects of the improved deal won by the Co-op Bank's private investors last month.

Since injecting funds into Kent Reliance in 2010, JC Flowers has sought to acquire other lenders in order to create a much larger organisation. However, it has been thwarted in its efforts to buy the Principality Building Society and more than 300 branches being offloaded by Royal Bank of Scotland (RBS).

It did succeed earlier this year in snapping up a package of performing loans from Northern Rock Asset Management, the taxpayer-owned "bad bank", which added 70,000 customers to its ranks.

OneSavings discloses some information about its financial performance because it has subordinated debt instruments which trade on the London Stock Exchange.

In August, it announced that it made a post-tax profit of £12.4m during the first half of the year, against a post-tax loss of £1.8m during the same period a year earlier.

There is an unprecedented pipeline of British banks waiting to list their shares publicly, including branch networks being sold under European state aid rules by both RBS and Lloyds Banking Group.

Metro Bank, which is raising £385m to fund its expansion, plans to float in 2016. Aldermore, a specialist lender to small and medium-sized companies, and Santander UK are also likely to pursue listings in the next two years.

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Fashion Chain Fat Face Dressed Up For Float

By Mark Kleinman, City Editor

The fashion retailer Fat Face is stepping up plans to make its stock market debut following a Christmas trading period in which it emerged as one of the high street's leading performers.

Sky News has learnt that Fat Face and its owner, the private equity group Bridgepoint, have appointed Citi and Jefferies to work on a flotation that would take place within months. Canaccord Genuity is also expected to be hired, according to insiders.

The listing would see the arrival of Sir Stuart Rose, the former Marks & Spencer boss and one of Britain's best-known retail executives, at the helm of another public company.

Sir Stuart, who is chairman of Fat Face, also chairs Ocado, the online grocer which has seen its share price soar in recent months.

Like New Look, another clothing retailer, Fat Face defied a broader high street trend by refusing to offer heavy discounts on its stock in the run-up to Christmas.

The result was a 5% increase in sales over the five weeks to January 4, while total sales grew by 15% in the first half of its financial year to £98.9m.

Earnings before interest, tax, depreciation and amortisation rose 57% to £19.6m in the six months ending in November.

"Investment in our product, service and store environment continues to build trust in the Fat Face brand and our reputation for offering quality, style and value for money.

Combined with the further expansion of our UK store portfolio and the rapid development of our multi-channel offer, this has led to another half-year of double digit sales and profit growth," Fat Face's chief executive, Anthony Thompson, said earlier this month.

The chain was established in 1988 selling T-shirts in the Alps, but now has more than 200 shops in the UK. Bridgepoint has been an investor since 2007, and has not had an entirely trouble-free period of ownership, having to inject additional capital during difficult trading conditions.

Fat Face is one of many retailers examining listings as the UK economy continues its recovery, although the mixed fortunes of high street chains at Christmas suggest that investors may be wary of backing some of those which want to sell shares on the public markets.

Appliances Online, DFS, House of Fraser, Pets At Home and Poundland are among those exploring flotations, with strongly-performing stock markets offering encouragement to retail executives.

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

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KPMG Investigated Over Co-op Bank Audits

'Big Four' accounting firm KPMG is being investigated by the accounting watchdog over auditing of the beleaguered Co-op Bank, it has been confirmed.

The Co-op Bank had bid for 632 Lloyds Banking Group branches in 2013 but a £1.5bn capital shortfall was discovered.

"The Financial Reporting Council (FRC) has launched an investigation … into the preparation, approval and audit of the financial statements of the Co-operative Bank plc, up to and including the year ended 31 December 2012," the watchdog said in a statement.

This is the latest in a number of inquiries into conduct and procedures at the bank.

In early January, the Financial Conduct Authority and the Prudential Regulation Authority said they would commence investigations into the Co-op Bank.

The bank is also being scrutinised through an internal review, a Treasury-commissioned inquiry and a Treasury Select Committee (TSC) probe.

Police are also investigating disgraced ex-chairman Paul Flowers over drug allegations.

Last month, the TSC grilled KPMG partners over its role in the Co-op takeover of the Britannia Building Society.

In response to news from the FRC, KPMG issued a statement.

It said: "As auditor to the bank we believe that we have provided, and continue to provide, robust audits which provide rigorous challenge to the judgements and disclosures proposed by the bank's management.

"We look forward to co-operating fully with the FRC (and other regulatory authorities) in their investigations."

Meanwhile, the parent Co-operative Group has announced a decision to scrap the sale of its general insurance business.

This follows a restructuring deal reducing the capital contribution requited to help the struggling bank arm.

The insurance business was due to be sold in 2014 and would have netted several hundred million pounds.

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

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IMF Upgrades UK Growth Forecast Above Rivals

By Ed Conway, Economics Editor

The International Monetary Fund is on the brink of upgrading its growth forecast for the UK more than any other major economy, Sky News has learnt.

The Fund is poised to increase its projection for UK growth in 2014 from 1.9% to 2.4%. Although the Fund will also lift its forecasts for world economic growth, the UK upgrade is significantly stronger.

It is the latest boost to the fortunes of the Chancellor, coming barely 24 hours after the Ernst & Young ITEM Club also increased its projection for UK economic growth this year.

Although the Fund's forecast for growth this year will be shy of the 2.7% predicted by the ITEM Club, the scale of the upgrade underlines how quickly sentiment about Britain's economy has turned in recent months.

The updated forecasts may also be construed as a reputational blow for the Fund itself, whose chief economist warned less than a year ago that the economic policies being carried out by George Osborne amounted to "playing with fire".

Since then, the Fund has already increased its growth projections for Britain once, last October, before this week's anticipated upgrade.

The news comes amid growing optimism about the speed of the UK recovery. In spite of concerns about retailers' fortunes over Christmas, retail sales grew in December at the fastest annual rate in almost a decade.

The Office for National Statistics is expected to announce next week that growth in the final quarter of 2013 remained relatively strong at around 0.7%.

However, some have voiced concern that Britain has been reliant for much of the growth on household spending rather than the exports and manufacturing sector.

The IMF itself has voiced concern that, having failed to rebalance the economy, the government is now reliant, through policies such as Help to Buy, on boosting the housing market and encouraging consumers to take out more debt.

Nonetheless, the IMF upgrade represents the latest evidence that Britain's recovery is starting to take real hold, pushing the country towards robust growth this year.

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

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Miliband Promises 'Reckoning' With Big Banks

Is The Banking System Broken?

Updated: 12:36pm UK, Friday 17 January 2014

By Joel Hills, Business Presenter

Folklore at Tesco has it that any internal business pitch to the former boss Sir Terry Leahy which didn't include the word "customer" in the first sentence was bound to end in failure and, on occasion, humiliation.

Sir Terry's time at Tesco is in the process of being reassessed, but there's surely no doubting that the supermarket's spectacular growth in the late 90s was down, in great part, to Tesco's obsession with delivering what customers wanted (no quips about horse burgers, please).

The reason banks are so unpopular, of course, is that they have demonstrably failed to put their customers at the heart of what they do.

In fact they have, on the whole, treated us appallingly.

As Bill Michael of KPMG put it to a group of bank bosses at their annual conference in 2012, far from treating their customers like kings, banks had behaved as if we were "captive geese that can be force-fed, or sold more product to - whether appropriate or not".

Here's the remarkable thing though: the litany of recent scandals and abuses (Payment Protection Insurance, interest rate swaps, Libor-fixing, money laundering, tax avoidance) doesn't seem to have cost the big banks any customers.

Take Barclays. Broadly speaking, the bank has the same number of personal accounts and business accounts today that it did before the financial crisis.

Now the likes of Barclays, Lloyds, RBS and HSBC will tell you that's because ultimately we are all satisfied with the service we are getting from them. Ed Miliband believes it indicates there is something seriously wrong.

The Labour leader's view - that the market isn't functioning properly - is one some of the bosses of smaller banks share.

Last October, a month after the new seven-day switch guarantee was introduced, I chaired a session at the British Bankers' Association's 2013 conference.

Jayne-Anne Gadhia, the chief executive of Virgin Money, complained that the playing field was still horribly skewed in favour of her rivals. 

Paul Lynam, the chief executive of Secure Trust bank, also thinks he's kicking a ball uphill and struggles to steal business from his much bigger rivals as a result.

Interestingly, while both of them share Ed Miliband's diagnosis of the problem, they both also think his prescription of forced branch sales and market share caps are wrong-headed.

Mr Lynam's grumble is that bigger banks can lend more freely than he can because they can borrow more cheaply (they're still too big to fail and therefore continue to enjoy an implicit taxpayer guarantee) and they are not obliged to retain as much capital to protect themselves against losses as he is (Basel rules – don't worry, I'm not going there).

He also believes that the Payments System is deeply flawed.

Now stay with me, please, because his last point is important. Think of the Payments System like the National Grid, but instead of moving gas and electricity around the country the Payments System moves money.

If Mr Lynam wants to send a payment on behalf of one of his customers to a customer at another bank he has to use the Payments System. Here's the rub: the Payments System is effectively owned by the big banks and they charge Mr Lynam up to 40 pence to "clear" each transaction. He says the real cost is closer to 1p.

The whole issue of competition in banking is nuanced and fiercely contested, but it is also desperately important that it's resolved.

It is imperative that we all have faith that the banking system is working well and in our interests.

Perhaps Mr Miliband's suggestion of a full, independent competition inquiry, however long, isn't such a bad idea.

After all, the Competition Commission investigation into the supermarket sector in 2008 went some way to sorting fact from myth and, I would argue, helped to restore some public trust in the likes of Tesco. And public trust in our banks has surely never been so low.

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

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Fastest Growth In Retail Sales Since 2004

Brisk business for smaller retailers ahead of Christmas helped sales volumes grow at their fastest annual pace since 2004 in December.

Figures from the Office for National Statistics (ONS) measured 2.6% growth during December to show an annual increase of 5.3% - easily topping the forecasts of economists.

The performance suggests a bigger contribution to GDP growth from consumer spending in the fourth quarter of 2013, after the sector was credited with driving recovery during the previous three months.

However, it will also raise more concerns about consumer debt levels and the extent to which people are digging into savings.

The surge in business for small stores may have been a result of the storms ahead of Christmas - prompting consumers to shop locally.

Debenhams had a poor Xmas despite department stores seeing strong trade

Small stores were found by the ONS to have outperformed their bigger rivals, with the amount spent in them increasing by 8.1% against growth of 2.6% for larger stores, compared with December 2012.

The figures follow news of upbeat trading from the likes of Argos, Halfords, Primark and Next over the festive season, though Marks & Spencer and Debenhams struggled.

The extent of their woes was laid bare by the ONS, which measured department store sales volume growth of 11.7% in December - the highest year-on-year growth since January 2000.

The slew of results from major chains suggested retailers who embraced online and high demand for gadgets and cheap fashion enjoyed robust trading.

The ONS said internet sales increased 11.8% by value compared with the same month last year, with average weekly spending online standing at £675.4m.

The statistical body also reported that the 2.6% growth in sales volumes month-on-month equalled the previous high set in February 2010.

The overall amount spent in shops was up 3.6% compared with the same month last year, with food stores improving by 2.2% and non-food stores by 4.4%.

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

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Bingo Hall Burden: MPs Call For Tax Cuts

By Adele Robinson, Sky News Correspondent

The UK's bingo hall business will "stagnate" if the Government does not cut tax on it, campaigners say.

More than 50 MPs are backing calls to reduce duty and bring levies on the game in line with other forms of gambling.

Bingo hall profits are currently taxed at 20% compared with a 15% rate for most other gambling activities.

Campaigners estimate that reducing bingo duty is expected to raise around £40m for the Exchequer over four years.

Miles Baron, from the Bingo Association, says investment is vital for growth.

"By building new clubs and investing in new clubs, attendances would improve that would generate more income, that would generate new taxes, that would employ more people ... this is at the heart of the community, this is a vital and important part of some people's social repertoire."

Campaigners claim gambling taxes are forcing more and more clubs to close

The Government says it would have to carefully consider before reducing the rate because its priority is to cut the budget deficit.

Jim Cunningham, Labour MP for Coventry South, says if more support is not given then the "social service" side of bingo will be lost.

"The implications can be that some of these places may have to close because they're not profitable and if that happens then there is a problem for some of these elderly people, during the day in particular, to find somewhere else to go."

Nearly 400 bingo clubs across England, Scotland and Wales are hosting free bingo games this weekend to support the campaign to cut tax.

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

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Exchanges Group ICE To Unveil Libor Reforms

By Mark Kleinman, City Editor

Administration of the tainted interbank borrowing rate Libor will be handed over next month following approval from the City regulator.

Sky News understands that the US-based IntercontinentalExchange Group (ICE) will announce on Friday that it has received the go-ahead to begin overseeing the daily setting of some of the world's most important financial indices.

The handover will take place in early February in the wake of an escalating scandal which has seen some of the biggest global banks fined hundreds of millions of pounds for failing to prevent traders attempting to manipulate Libor and related benchmarks.

As part of the changes, which will see the British Bankers' Association relinquish oversight of Libor, ICE will announce that Andre Villeneuve, a City grandee, will become chairman of ICE Benchmark Administration Limited.

Mr Villeneuve is a former chairman of LIFFE, the futures market owned by NYSE Euronext, which was itself subsumed by ICE in an industry-reshaping merger last year.

So far, four banks - Barclays, Royal Bank of Scotland, Rabobank and UBS - have been fined close to £2bn by regulators for their role in the global rate-rigging scandal, with a queue of others waiting to settle.

The European Commission has also fined a string of large banks in recent months, adding to the costs for the industry of resolving the rate-rigging scandal.

A review of the rates by Martin Wheatley, chief executive of the Financial Conduct Authority (FCA), found that the rate was open to manipulation and made a series of recommendations including sharply reducing the number of rates set as part of the process.

As the new Libor administrator, ICE will still be subject to FCA regulation and supervision.

The FCA is expected to say on Friday that it has approved the handover of Libor, according to insiders.

ICE could not be reached for comment, while the FCA declined to comment.

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

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Fastest Growth In Retail Sales Since 2004

Brisk business for smaller retailers ahead of Christmas helped sales volumes grow at their fastest annual pace since 2004 in December.

Figures from the Office for National Statistics (ONS) measured 2.6% growth during December to show an annual increase of 5.3% - easily topping the forecasts of economists.

The performance suggests a bigger contribution to GDP growth from consumer spending in the fourth quarter of 2013, after the sector was credited with driving recovery during the previous three months.

However, it will also raise more concerns about consumer debt levels and the extent to which people are digging into savings.

The surge in business for small stores may have been a result of the storms ahead of Christmas - prompting consumers to shop locally.

Debenhams had a poor Xmas despite department stores seeing strong trade

Small stores were found by the ONS to have outperformed their bigger rivals, with the amount spent in them increasing by 8.1% against growth of 2.6% for larger stores, compared with December 2012.

The figures follow news of upbeat trading from the likes of Argos, Halfords, Primark and Next over the festive season, though Marks & Spencer and Debenhams struggled.

The extent of their woes was laid bare by the ONS, which measured department store sales volume growth of 11.7% in December - the highest year-on-year growth since January 2000.

The slew of results from major chains suggested retailers who embraced online and high demand for gadgets and cheap fashion enjoyed robust trading.

The ONS said internet sales increased 11.8% by value compared with the same month last year, with average weekly spending online standing at £675.4m.

The statistical body also reported that the 2.6% growth in sales volumes month-on-month equalled the previous high set in February 2010.

The overall amount spent in shops was up 3.6% compared with the same month last year, with food stores improving by 2.2% and non-food stores by 4.4%.

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

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