Home Sellers 'Getting 93% Of Asking Price'

Homeowners in all regions of Britain are now able to sell their properties at more than 93% of the asking price, according to a new survey.

Hometrack said the rate is even better in some areas, and has now reached a decade-long high in London.

It said sellers in London were obtaining 99.3% of the request price, while the average is typically 96.2%.

The property analysts said throughout England and Wales, houses remain on the market for less than two months before a sale is agreed - the lowest level since 2007.

In London the time on the open market is on average just 18 days.

The survey was released just hours before the Bank of England (BoE) said the level of mortgage lending in the UK has fallen for the first time in a year.

The BoE said 70,309 loans were taken out in February, down 9% on January's figure.

Hometrack said March house prices climbed 0.6%, down fractionally on February's level of 0.7%.

Prices were up 0.2% in Yorkshire, Humberside and the North West, and up 0.3% in the North East and West Midlands it said.

Prices climbed by 0.4% in the East Midlands, 0.6% in Wales, by 0.7% in the South East and London and by 0.8% in the South West and East Anglia.

Meanwhile, estate agents Knight Frank said London prices climbed 0.8% in March.

Hometrack research director Richard Donnell said: "The real driver of higher house prices is record low mortgage rates and strong demand from first-time buyers and investors who have no property to sell, which is compounding scarcity.

"With average mortgage rates currently at 3% or lower, compared to over 5% before the downturn, households have seen a significant boost to buying power."

New rules are due in April to ensure lenders are satisfied variable rate mortgagees are able to meet increased repayment rates when interest rates climb again.

It said cash buyers and investors make up 40% of the market and will not be affected.

Mr Donnell added: "The gap between supply and demand has been extended for the last five months and points to further price rises in the months ahead."

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Shares Up As FCA Clarifies Pension Probe

The City regulator has revealed that it will not individually review millions of pension and saving policies, prompting a share price rise for financial providers.

The Financial Conduct Authority (FCA) clarified the position in its 2014-15 business plan, released on Monday morning.

It comes after almost £2.5bn was wiped off the value of insurers on Friday.

The share price plunge followed comments by FCA director of supervision Clive Adamson to a newspaper about pensions started between the 1970s and the turn of the century.

The Daily Telegraph reported the FCA was planning an inquiry into 30 million policies sold during the period, valued at £150bn.

The chairman of the Commons Treasury Committee, Andrew Tyrie, described the fiasco as an "extraordinary blunder".

In its business plan the FCA said: "We will assess whether firms are operating historic - often termed 'legacy' or 'heritage' - products in a fair way and whether they have adopted strategies that exploit existing customers."

It added: "We have increased our focus on the market for retirement products, such as annuities, with the launch of a major competition study and work to tackle poor sales practices."

An FCA spokesperson told Sky News on Monday it would look into general business behaviour in the sector.

This would include how fairly legacy customers are treated compared with new policyholders, the quality of communications given and what exit fees are imposed.

As a result of the clarification, Britain's big insurance companies enjoyed a share price boost.

In midday trades Resolution was up 1.69%, Aviva by 1.75%, Legal & General by 1.02% and Prudential by 0.58%

Meanwhile, Sky News has learnt that the FCA will this week set out plans for an inflation-busting increase in its budget.

Sky's City Editor Mark Kleinman revealed that its annual funding requirement for 2014-15 would be just under £450m, approximately 3% above the £432.1m it said it required last year.

The increase, which is designed to cover the cost of delivering the regulator's new competition objectives, will hit the pockets of the biggest banks and insurance companies hardest.

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EasyJet Expands Luton Base In 10-Year Deal

EasyJet is to increase its capacity at Luton Airport by 20%, claiming it will create up to 2,500 new jobs in the region.

The 10-year deal with the airport comes as it prepares an ambitious expansion programme that includes flying 135 new Airbus aircraft.

The airline did not reveal the terms of the deal with the airport, which is 35 miles (56km) northwest of London.

Luton is the headquarters of easyJet's operations and already employs 1,600 staff locally.

Chief executive Carolyn McCall said: "Around 60% of what we will do is thickening our routes and frequencies and about 30-40% will be about new destinations."

Last Thursday the budget carrier agreed a separate seven-year deal with Gatwick Airport, its largest flight hub.

It intends to increase capacity at Gatwick, 28 miles south of the capital, by 10% within the next year.

Luton is London's fourth busiest airport and is waiting for Government approval for a £150m redevelopment project.

The airline said the number of Luton passengers could more than double to about 9 million annually if the airport is redesigned.

"London Luton can make a real and immediate contribution to the need for more airport capacity in the south east," Ms McCall added.

Luton is owned by the local council and has been operated by investment firm Ardian and airport operator Aena Group since November 2013.

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Ed Miliband Proposes New Energy Price Controls

Ed Miliband has proposed new controls on energy prices to give small businesses "equal protection" with households from "unacceptable" treatment by energy companies.

The Labour leader said annual energy bills for small businesses had risen by an average of £10,000 since 2010.

He called for a new regulator to be formed with powers to ban suppliers from changing people's tariffs without their consent, or hitting them with "crippling" back-dated bills.

Sticking to his cost of living agenda, he also reiterated plans for a 20-month price freeze for households and businesses when he addressed the Federation of Small Businesses (FSB) in Manchester later.

He said the move would save small fiirms, on average, £5,500.

"It is unacceptable that companies like yours do not have even basic protections that are available to households under the law from unfair energy contracts," Mr Miliband said.

"Since the turn of the century, the number of people working for themselves has increased by over one million.

"Small businesses are now the bedrock of our economy - and they will be even more so in the future.

"Some of the costs of running a small business have got larger and larger in recent years. The next labour government is determined to tackle this problem, and give every sort of business the chance to succeed."

Mr Miliband also pledged new legal rights for business organisations like the FSB to take cases such as late payment by firms to court on behalf of members.

Labour would also invite the FSB to help set the agenda for the new Competition and Markets Authority's investigations - like Which? and Citizens Advice already do - to ensure a fair deal for consumers and businesses.

It comes after energy watchdog Ofgem on Thursday referred the sector to the CMA amid concerns over profits, price co-ordination and barriers to new suppliers.

The competition inquiry could lead to the so-called 'big six' firms being broken up.

Mr Miliband said following the announcement there could be "no justification for further price rises".

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FCA Probes Millions Of 'Bad Deal' Investments

The City watchdog is to scrutinise millions of finance products sold to consumers over three decades, because of fears they are shackled by unfair terms and conditions.

It is estimated around 30 million policies, including pensions, endowments, life insurance and investment bonds were sold by companies between the 1970s and the end of the century.

The Financial Conduct Authority (FCA) is expected to announce the decision on Monday, as part of its annual business plan.

The investigation, due to begin in the summer, comes amid suspicion new customers receive better deals while long-term customers receive poor service and higher fees.

Many of the suspect policies penalise consumers if they try to swap to better deals offered by rivals.

The share price for many of the big insurance companies fell on Friday, with early trades in Resolution down 7%, Aviva down 6% and Legal & General trading more than 4% lower.

According to the FCA, some people risk losing half of their investments if they change provider from the so-called zombie funds.

The funds are closed to new customers and many of those who invested are suspected of subsidising other products because of the high charges.

FCA director of supervision Clive Adamson told The Daily Telegraph: "We want to find out how closed-book products are being serviced by insurance companies.

"As we are concerned insurers are allocating an unfair amount of overheads to historic funds.

"As firms cut prices and create new products, there is a danger that customers with older contracts are forgotten.

He added: "We want to ensure they get a fair deal. As part of the review we will collect information to establish whether we need to intervene on exit charges."

The FCA was born out of the now-defunct Financial Services Authority, which was abolished by the current Government in the wake of the financial crisis.

Next week it also takes responsibility for the consumer credit market.

Earlier this week, it imposed a £12.4m fine on Santander UK for failings in its investment advice to customers.

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Business Round-Up And Week Ahead

Sky's Naomi Kerbel offers a round-up of what's coming up in the week's business news.

: Monday March 31

From Monday, energy suppliers are required to publish the price at which they will buy and sell on wholesale markets up to two years in advance and the cost of a first class stamp goes up from  60p to 62p.

:: Tuesday April 1

The Competition and Markets Authority (CMA) takes on its full powers on Tuesday. Regulator, Ofgem has referred the energy market to the CMA for a full investigation into the competitiveness of the market and air passenger duty is due to rise in line with the Retail Price Index.

:: Wednesday April 2

On Wednesday, ASOS will report half year results. The online clothing retailer has faced stiff competition from other web-based companies like the recently-floated Boohoo which also targets people in their 20s.

:: Thursday April 3

It will be the Chancellor's chance to be grilled on Thursday. George Osborne will give evidence at Treasury Committee on this year's Budget. 

:: Friday April  4

On Friday, the U.S. will release its employment figures. It is expected that the unemployment situation will improve as the market shakes off the effects of severe winter weather. 

Missing something? Tweet your business stories to @SkyNKTweets

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FCA Probes Millions Of 'Bad Deal' Investments

The City watchdog is to scrutinise millions of finance products sold to consumers over three decades, because of fears they are shackled by unfair terms and conditions.

It is estimated around 30 million policies, including pensions, endowments, life insurance and investment bonds were sold by companies between the 1970s and the end of the century.

The Financial Conduct Authority (FCA) is expected to announce the decision on Monday, as part of its annual business plan.

The investigation, due to begin in the summer, comes amid suspicion new customers receive better deals while long-term customers receive poor service and higher fees.

Many of the suspect policies penalise consumers if they try to swap to better deals offered by rivals.

The share price for many of the big insurance companies fell on Friday, with early trades in Resolution down 7%, Aviva down 6% and Legal & General trading more than 4% lower.

According to the FCA, some people risk losing half of their investments if they change provider from the so-called zombie funds.

The funds are closed to new customers and many of those who invested are suspected of subsidising other products because of the high charges.

FCA director of supervision Clive Adamson told The Daily Telegraph: "We want to find out how closed-book products are being serviced by insurance companies.

"As we are concerned insurers are allocating an unfair amount of overheads to historic funds.

"As firms cut prices and create new products, there is a danger that customers with older contracts are forgotten.

He added: "We want to ensure they get a fair deal. As part of the review we will collect information to establish whether we need to intervene on exit charges."

The FCA was born out of the now-defunct Financial Services Authority, which was abolished by the current Government in the wake of the financial crisis.

Next week it also takes responsibility for the consumer credit market.

Earlier this week, it imposed a £12.4m fine on Santander UK for failings in its investment advice to customers.

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Microsoft Office: Word Tops iPad App Chart

Microsoft Word has jumped to the top of the Apple Store free app chart, after releasing an iPad version of its Office software.

New chief executive Satya Nadella announced the move at his debut launch event.

Within hours Word, Excel, Powerpoint were the top-ranking free apps and allow users to read documents.

However for users who want to create and edit items an Office 365 subscription is required.

The UK Office 365 Home subscription costs 20% more in the UK than in the United States.

The British price is set at £79.99 but the app costs just $99.99 (£60) in the US.

Microsoft's OneNote was ranked number four in the chart, allowing auto-cropping of whiteboards and document photographs.

A significant number of iPad users have grumbled previously about not being able to use Microsoft's signature software on Apple's flagship tablets.

Mr Nadella said he hoped it helped people "to be productive across all devices".

"We are taking great focus and great care to make sure Office on any device shines through."

It is now expected Microsoft will speed up future releases of app versions for other mobile computing devices.

The company's former CEO Steve Ballmer released an iPhone version of the Office suite last year.

Industry analysts expect there to be near parity this year between tablets and the PC/laptop market, at around 275 million in both sectors.

More than half of Microsoft's operating profit, around £10bn, has come from the Office suite on the back of a resurgent business sector requiring its software.

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Bank IT Failures Probe Launched By Watchdog

By Mark Kleinman, City Editor

The City regulator will next week launch a probe into the resilience of high street banks' IT systems following a series of glitches which have threatened to further undermine the industry's image.

Sky News can reveal that the Financial Conduct Authority (FCA) will set out on Monday its intention to conduct a review of the systems of major lenders, just weeks after the partly state-owned Lloyds Banking Group saw an IT glitch shut down half of its cash machines for several hours.

The FCA will disclose its intention to carry out the work in its annual business plan, which details the key areas of focus for the regulator during the following 12 months.

The robustness of banks' IT systems has become an urgent priority for watchdogs amid concerns that repeated glitches are damaging already fragile consumer trust in the banking sector.

In December, Royal Bank of Scotland (RBS) suffered a systems outage on the busiest online shopping day of the year, the third time in about 18 months that such a problem had prevented customers from using cards, cash machines and online banking services.

Clive Adamson, director of supervision at the FCA, told Sky News that the IT resilience work would be a top priority for the regulator this year:

"To access and manage our money we depend on the banks' IT systems being reliable. But IT outages continue, interrupting key banking services. 

"We want to make sure that the banks have resilient IT systems in place that are able to cope with consumer demand, so customers aren't left financially stranded or disadvantaged."

The regulator has the power to impose swingeing financial penalties on banks whose systems are defective, with RBS the subject of an ongoing investigation by the FCA's enforcement division into an IT crisis during the summer of 2012.

The FCA's new work will be carried out in conjunction with the Prudential regulation Authority and the Bank of England, and will examine how banks and building societies manage their exposure to IT risks.

It will also look at the level of engagement by bank boards on the issue as well as whether directors are sufficiently knowledgeable to challenge executives.

Industry sources expect the FCA's work to hasten the collective spending of billions of pounds required to modernise banks' IT systems, which have suffered from years of under-investment.

RBS has already said that it will increase its £2bn annual IT budget by £450m, with other major lenders looking at similar hikes.

The regulator, which expects its work to conclude early next year, signalled in a report last year that the growth of mobile banking by customers has outpaced banks' investment in their IT systems..

The RBS problems in 2012 prompted the FCA's predecessor, the Financial Services Authority, to write to the chairmen of the nine biggest banks and building societies to request information about their critical infrastructure and banking processes.

Industry insiders expect the watchdog to take tough action if insufficient progress is deemed to have been made on the issue since then.

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Lloyds Bank Shares Worth £4.2bn Sold

Taxpayers have been left with a 25% stake in Lloyds Banking Group after the Government sold shares valued at £4.2bn.

The taxpayer owned 33% of Lloyds but the Treasury has continued with plans to fully return the lender to the private sector.

Some 5.6bn shares were sold to City investors on Tuesday night - raising £4.2bn based on the closing share price of 79.1p.

The shares were bought for 73.6p each, generating £106m profit for the taxpayer.

Lloyds was bailed out by the Government in 2008

In early morning Wednesday trades shares were down more than 4%, at 75.9p.

Chancellor George Osborne described the sale was "good value" and that the return would help cut the country's debt burden.

"It is another step in repairing the banks, in reducing our national debt and in getting the taxpayer's money back," Mr Osborne said.

A Treasury spokesman added: "Building a stronger banking system is a core part of the Government's long-term economic plan to deliver greater economic security."

The Government injected roughly £21bn into Lloyds in October 2008 during the financial crisis, giving it a 43% stake.

In April 2010, Lloyds returned to profit for the first time since its bailout.

Antonio Horta-Osorio, chief executive of Lloyds

The Government made a profit of £61m selling off the first tranche of its shares in September last year.

Ahead of the sale Lloyds boss Antonio Horta-Osorio said: "I am pleased that the Government intends to sell a further stake in Lloyds Banking Group and allow taxpayers to get more of their money back.

"I believe this reflects the hard work undertaken over the last three years to make Lloyds a safe and profitable bank that is focused on helping Britain prosper."

Lloyds posted statutory profits of £415m for 2013 against losses of £606m in 2012 - its first bottom-line profit since 2010.

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Energy Firm SSE To Freeze Household Bills

'Big Six' energy firm SSE is to freeeze household bills until January 2016, it has been confirmed.

The announcement comes amid the ongoing controversy over energy bill price hikes for consumers and businesses.

SSE chief executive Alistair Phillips-Davies said: "We're setting out a positive agenda for customers, including our price freeze to 2016.

"We're making sure our own house is in order for the future by streamlining and simplifying our business.

"And we're making clear we wish to work with people to find more ways of taking costs out of energy bills."

In conjunction with the tariff freezing, SSE announced a swathe of measures to keep its overheads down.

It said "further operational efficiencies" will see it reduce costs by £100m in the coming two years, including a staff reduction of 500.

SSE said it would also legally separate its retail and wholesale segments by March next year.

The big energy providers have come under sustained fire over profits, with critics saying although retail earnings may be modest the firms' wholesale and distributions margins are too high.

The company also said it would limit the size of its deepwater Project Beatrice wind farm, located 12 miles off Scotland's Moray Firth, north-east of Inverness.

It also plans to scale back and exit some other projects to concentrate on Beatrice.

Further cost savings are expected to come from reducing the amount of capital and investment expenditure in the coming years.

It said although investment outlay would be around £1.6bn in 2014/15, this figure would drop by nearly 20% for the following three years.

SSE said it expects to report a full-year annual pre-tax profit of around 9% when it releases its results on May 21.

It expects operating profit to be 10% higher from its network distribution sector and 20% higher from its wholesale division, primarily due to greater gas production.

However, as householders become more aware of reducing energy consumption, SSE expects to see a retail profit reduction of about 25%.

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Santander Fined £12m Over Poor Advice Service

Santander UK has been fined £12.4m by the City regulator over poor advice given to its customers.

Details of the penalty were first revealed by Sky News City Editor Mark Kleinman on the Jeff Randall Live programme on Tuesday night.

He revealed that the Financial Conduct Authority (FCA) penalty comes after a 13-month long investigation by its enforcement division.

The fine is the largest suffered to date by Santander UK, which has expanded through acquisition into Britain's fifth-biggest high street bank following takeover deals involving Abbey, Alliance & Leicester and Bradford & Bingley.

Tracey McDermott, FCA director of enforcement and financial crime, said: "Customers trusted Santander to help them manage their money wisely, but it failed to live up to that responsibility.

"If trust in financial services is going to be restored, which it must be, then customers need to be confident that those advising them understand, and are driven by, what they need.

"Santander let its customers down badly."

The penalty is significantly below the FCA's biggest-ever fine of £28m, which was imposed on Lloyds Banking Group in December for incentivising staff to sell billions of pounds of unnecessary products.

City watchdog the FCA imposed its biggest ever Santander UK fine

Kleinman revealed that the City regulator's probe into Santander UK followed a mystery shopping exercise across the banking sector, which exposed failings in the investment advice given to consumers.

As a consequence of the FCA enforcement action, Santander UK announced barely a month later that it was closing its investment advice arm to new customers.

Steve Pateman, head of banking at Santander UK, said: "We regret that elements of Santander UK's historic branch-based investment sales processes did not meet the required regulatory standards and apologise to any customers who have concerns.

"To ensure that any concerns our customers may have are addressed we will be writing to them this summer, to offer them an opportunity to withdraw from their investment or have their sale reviewed.

"Customers need take no action now and should wait to receive letters from us."

Other high street lenders, such as Barclays, had already withdrawn from the market altogether, while Lloyds has closed its mass market advisory service and now provides financial guidance to customers with at least £100,000 to invest.

The exodus of major banks from the investment advice market has provoked fears that millions of British consumers are being left financially disenfranchised.

People close to Santander UK said the bank disputed many of the regulator's judgements about the quality of its investment advice during the 13-month investigation.

It is also understood to have argued that consumers suffered no detriment as a consequence of the failings identified by the FCA, an assertion that the regulator is not understood to have contested.

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Auction House Bonhams Eyes Sale Of Its Own

By Mark Kleinman, City Editor, in Dubai

It has secured a record bid for a painting in Russia and struck the most valuable purchase of an Old Master at auction.

Now Bonhams, the British auctioneer, is considering a deal of a different kind.

Sky News has learnt that the company's shareholders are bringing in City advisers to assess whether Bonhams itself should be put up for sale on the back of record profits.

Sources said on Saturday that Greenhill, an investment bank, had recently been appointed to conduct a strategic review, which will involve examining a range of options for bringing new capital into the business.

Bonhams, which has become a well-known name in the global auctioneering sector, specialises in selling fine art, classic cars and antiques.

It is jointly-owned by two businessmen: Robert Brooks, a former motor racing driver who has chaired the British Racing Drivers' Club, and Evert Louwman, a Dutchman.

Mr Brooks has said in the past that he wants to take advantage of Bonhams' strong balance sheet by building the company into a credible rival to Christie's and Sotheby's, the most famous name in the auction world.

It is unclear whether either of the existing shareholders would countenance an outright sale of their stakes.

Greenhill is expected to recommend the recruitment of a new investor, which is likely to attract interest from major private equity firms and sovereign wealth funds.

A stock market flotation is also expected to be considered although Mr Brooks has previously said that such a move was unlikely.

It is unclear exactly how much Bonhams would be valued at although City sources indicated that it would be several hundred million pounds.

Headquartered on New Bond Street in London, the current Bonhams was formed from a merger with Brooks in 2000, and has established a presence in Dubai, Hong Kong and the US.

The company was founded in 1793, and now claims market leadership in a number of areas, including the sale of Alfa Romeo, Aston Martin and Maserati cars for world record prices.

Last year, Bonhams saw profits more than double to £25m as wealthy buyers looked for alternative investment opportunities in a continuing environment of low interest rates.

Key sales in 2013 included a 1954 Mercedes Formula One car driven by the legendary Argentine racer Juan Manuel Fangio, which fetched £19.6m, and the Madonna Laboris, which became the most expensive Russian painting sold at auction when it attracted a £7.9m bid.

"2013 was a year where we saw the Bonhams brand establish itself further on the global stage," Mr Brooks told a newspaper last week.

'We have put significant investment behind growing a brand that can compete effectively in the key auction markets of the world."

A Bonhams spokesman refused to comment.

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Leahy Firm Leads Race For £1bn Dubai Group

By Mark Kleinman, City Editor, in Dubai

The private equity firm which employs Sir Terry Leahy, the former boss of Tesco, is leading the race to buy a German industrial group which has key operations in northern England.

Sky News understands that Clayton Dubilier & Rice (CD&R) is heading a field of four remaining bidders for Mauser, a German-based industrial packaging group owned by the ruler of Dubai.

Mauser, which makes drums for transporting medical waste and other hazardous materials, operates two UK facilities, at Batley in West Yorkshire and Littleborough in Lancashire.

The auction of Mauser, which is owned by Dubai International Capital (DIC), was narrowed in the last few days to CD&R, Ardian Partners, Pamplona Capital and Platinum Equity, according to insiders.

Blackstone did not table a formal offer for Mauser, while it is unclear whether Apollo Management, another party which had expressed interest in the group, did so.

The sale of Mauser, which is expected to fetch approximately £1bn, would leave DIC owning only two companies less than a decade after it pursued ambitious plans to become one of the world's leading private equity investors.

DIC is part of Dubai Holding, one of the groups owned by Sheikh Mohammed bin Rashid al Maktoum.

The Dubai-based group acquired Mauser in mid-2007, just as the first signs of stress in global financial markets were becoming apparent.

Dubai was forced to default on sovereign debt repayments in 2009 amid a slump in asset prices but has since successfully restructured its borrowings.

The emirate is now recovering from the financial crisis, with significant construction work resuming and international banks increasing staffing levels from the post-crisis trough of recent years.

Mauser has itself undergone a financial restructuring, announcing in May last year that it had won support from its lenders, which include HSBC and Royal Bank of Scotland, to amend the terms of its debt facilities.

DIC had contemplated a combined auction of Mauser, its UK-based aerospace group Doncasters and Almatis, a German aluminium manufacturer, but has decided to delay selling the latter two businesses.

Among DIC's other troubled investments was Travelodge, the British hotel operator, which it lost control of after its balance sheet became overstretched.

The auction of Mauser is being handled by Bank of America Merrill Lynch.

Mauser and CD&R, which owns companies such as the discount retailer B&M, declined to comment.

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Cable Turns Screw Over Royal Mail Chief's Pay

By Mark Kleinman, City Editor

Vince Cable is demanding that the board of Royal Mail limits a pay rise for its chief executive to the same level awarded to the rest of the newly privatised company's workforce.

Sky News can reveal that the Business Secretary has informed directors of the postal operator that a salary increase of more than 3% for Moya Greene could prompt the Government to vote against Royal Mail's remuneration policies.

The warning has set the scene for an explosive row between Mr Cable and the Royal Mail board, some members of which believe Ms Greene is significantly underpaid as the boss of a FTSE-100 company.

Royal Mail reports its annual results towards the end of May, and will hold its annual general meeting during the summer.

Vince Cable wants to limit a pay rise for Moya Greene

As a 30% shareholder in the company, the Government would deliver a serious blow to the credibility of Royal Mail directors if it voted against their pay report.

Mr Cable and officials at the Department of Business, Innovation and Skills have not yet made a decision about how the Government will exercise its vote.

However, with new executive pay rules drawn up by Mr Cable now in place, it would also undermine his status as an advocate of boardroom reforms if he was seen to endorse even tacitly an inflation-busting pay increase for Ms Greene.

Under a deal struck between Royal Mail managers and the Communication Workers' Union earlier this year, workers will receive a 9.1% pay rise over three years, a deal which included 3% increases in 2013 and 2014.

Royal Mail insiders pointed out on Sunday that Ms Greene did not receive a pay rise last year and has not had one since 2010.

"Since that time, frontline staff have had a three-year pay award of 6.9%, plus a £1000 lump sum, and now the further 9.1% rise and a £200 lump sum," said one ally of Ms Greene.

The company's chairman, Donald Brydon, has argued publicly that she deserves a substantial salary hike, saying in January:

"I think it's only fair to pay Moya the right market rate for her job."

"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 her peers at the helm of companies in the FTSE-100. She is also paid substantially less than her predecessor, Adam Crozier.

Ms Greene was paid a base salary of £498,000, 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 ends.

Some of the company's directors are keen to avoid a public row with Mr Cable, believing that the Government is likely to sell its remaining 30% stake within months anyway.

That would make it much easier to hand Ms Greene a big pay rise, with Royal Mail no longer even partly-owned by the state.

However, some board members believe there is a risk that Ms Greene could leave or be poached if her pay is not increased in the short term.

"The directors have a fiduciary duty to do what is right to keep the best possible leadership in place," a source close to the board said.

For Mr Cable, taking a public stand over pay at Royal Mail is also important because of the criticism he has faced since authorising its £3.3bn privatisation last autumn.

He denied that the company had been undervalued by the Government and its advisers, despite an initial surge in Royal Mail's share price.

While the shares have fallen moderately since their post-flotation high, they closed on Friday at 581.5p, valuing Royal Mail at just over £5.8bn.

The National Audit Office is expected to publish its report on the privatisation process in the next fortnight, with insiders saying on Sunday that it was likely to be critical of the valuation settled upon by the Government.

The BIS Select Committee will then publish its own report on the sell-off, although its cross-party membership may mean that severe criticisms are muted.

Under the reforms instigated by Mr Cable, shareholders in public companies will have a binding vote on future pay policies and an advisory vote on the previous year's remuneration report.

With the AGM season about to get underway, companies such as Barclays are anxiously trying to deflect the prospect of a major investor rebellion.

The Business Secretary has in the past praised Ms Greene as "an exceptionally good CEO" although the pair have clashed before over a £250,000 housing allowance paid to the Royal Mail boss, which she later returned.

If the Government did oppose Royal Mail's pay report, it would be vulnerable to accusations of hypocrisy given that the chief executives of the state-backed Lloyds Banking Group and Royal Bank of Scotland are each eligible for far higher pay deals than Ms Greene.

Such a move could also 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.

Royal Mail and a spokeswoman for Mr Cable both declined to comment.

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Fortnum Boss Warns of Scots Vote 'Disaster'

By Mark Kleinman, City Editor, in Dubai

The chief executive of Fortnum & Mason, the upmarket London-based grocer has warned that a 'yes' vote in the Scottish independence referendum would be a "disaster" for the country.

Speaking exclusively to Sky News, Ewan Venters, a Scot by birth, said that a break-up of the United Kingdom would create a damaging period of uncertainty for businesses.

"I think it would be a disaster. The UK is better as one. We are a small enough island as it is, we don't need to become smaller," he said.

"The consequences of an independent Scotland and an independent England could be very unfavourable economically. That uncertainty is not what the country needs."

Mr Venters, who has run the Queen's grocer since 2012, is one of the most senior English-based Scottish businessmen to articulate his views about the implications of the referendum vote which takes place in September.

A former executive at companies including J Sainsbury and Selfridges, which is owned by the same family as Fortnum & Mason, Mr Venters also criticised the fact that he would not be allowed to take part in the vote.

"It is very disappointing that Scots like myself are not allowed a vote, when someone could be from any nation, move to Scot and be allowed a vote.

Fortnum & Mason is a favourite of the Royal Family

"It is an ill-conceived set-up of the referendum by those in the establishment who know that many of those who have moved away from Scotland to build careers elsewhere are in favour of the union remaining intact."

He is the latest in a growing number of executives and companies to speak out on independence.

In recent weeks, Alliance Trust, Standard Life and Royal Bank of Scotland have highlighted contingency planning being undertaken to prepare for a 'yes' vote.

In its annual report published this week, the defence contractor BAE Systems also said a vote in favour of independence could be disruptive.

Mr Venters, 41, was speaking in Dubai during a trip to mark the opening of Fortnum & Mason's first overseas store, opposite the Burj Khalifa, the world's tallest skyscraper.

Fortnum & Mason, which operated solely from its shop on London's Piccadilly for more than 300 years, was founded in 1707, the year that the Act of Union binding England and Scotland came into being.

Mr Venters wants the Dubai store, which has been developed in conjunction with AKI, a local partner, to be the first step in a carefully and gradually orchestrated expansion of the business.

"It is a very important milestone because customers from this region are hugely important at our Piccadilly store," he said.

"Fortnum has a long history of taking products to customers around the world," he said, which included exporting Christmas hampers to 112 countries towards the end of last year.

Dubai was chosen as Fortnum's first international outpost because of the Emirates' status as the most important luxury retail centre in the world, behind London, he added.

"Tea is the most popular drink after water here. As tea merchants for more than three centuries, we felt it was important to be here," he said.

Mr Venters cautioned against expectations that the Dubai opening would lead to a chain of Fortnum & Mason stores opening around the world, although he has now overseen the launch of two outlets in little more than six months.

Last autumn, the company opened a shop next to the Eurostar terminal at London's St Pancras station, with sales understood to be performing strongly.

"We will carefully consider other opportunities in what I call surging economies rather than emerging markets.

"This is a good moment to look at taking firmer positions in the world on a gradual basis."

"Over half of our business is made up of consumers living in the UK. That trend has increased in recent times as we have tried to make it more relevant to domestic consumers," Mr Venters said.

He described Britain's economy as "two-tier", with London the dominant force, adding that this week's Budget statement by George Osborne was "business-friendly and broadly friendly to working people of Britain by ensuring there's more money in people's pockets".

Mr Venters also waded into the debate about the future of Britain's troubled high streets, calling for a significant increase in residential development in order to stimulate wider usage.

"The opportunity for the high street has never been so good. The drive to buy more online means people are shopping on a more frequent basis.

"With some proactive housing policies on high streets and sensible movement on business rates, there is no reason why you couldn't start to see a revival."

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Business Round-Up And Week Ahead

Sky's Naomi Kerbel offers a round-up of what's coming up in the week's business news.

:: Monday March 24

On Monday, the Chancellor's budget "perk" to reduce beer duty by a penny comes into effect. 

:: Tuesday March 25

Energy provider, SSE will cut its dual fuel prices by 3.5% on Tuesday. The company's prices rose by 8.2% on average on November 15, 2013.

:: Wednesday March 26

On Wednesday, teachers who are members of the National Union of Teachers are due to strike against changes to their pay and pensions. 

:: Thursday March 27

It is a big day for Sky News Business on Thursday. At 7pm, Jeff Randall will host his final Jeff Randall Live business programme.

:: Friday March 28

On Friday, the ONS will deliver final growth figures for the fourth quarter in the UK. The last estimate showed growth of 0.7%.

Tweet your business stories to @SkyNKTweets

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Leahy Firm Leads Race For £1bn Dubai Group

By Mark Kleinman, City Editor, in Dubai

The private equity firm which employs Sir Terry Leahy, the former boss of Tesco, is leading the race to buy a German industrial group which has key operations in northern England.

Sky News understands that Clayton Dubilier & Rice (CD&R) is heading a field of four remaining bidders for Mauser, a German-based industrial packaging group owned by the ruler of Dubai.

Mauser, which makes drums for transporting medical waste and other hazardous materials, operates two UK facilities, at Batley in West Yorkshire and Littleborough in Lancashire.

The auction of Mauser, which is owned by Dubai International Capital (DIC), was narrowed in the last few days to CD&R, Ardian Partners, Pamplona Capital and Platinum Equity, according to insiders.

Blackstone did not table a formal offer for Mauser, while it is unclear whether Apollo Management, another party which had expressed interest in the group, did so.

The sale of Mauser, which is expected to fetch approximately £1bn, would leave DIC owning only two companies less than a decade after it pursued ambitious plans to become one of the world's leading private equity investors.

DIC is part of Dubai Holding, one of the groups owned by Sheikh Mohammed bin Rashid al Maktoum.

The Dubai-based group acquired Mauser in mid-2007, just as the first signs of stress in global financial markets were becoming apparent.

Dubai was forced to default on sovereign debt repayments in 2009 amid a slump in asset prices but has since successfully restructured its borrowings.

The emirate is now recovering from the financial crisis, with significant construction work resuming and international banks increasing staffing levels from the post-crisis trough of recent years.

Mauser has itself undergone a financial restructuring, announcing in May last year that it had won support from its lenders, which include HSBC and Royal Bank of Scotland, to amend the terms of its debt facilities.

DIC had contemplated a combined auction of Mauser, its UK-based aerospace group Doncasters and Almatis, a German aluminium manufacturer, but has decided to delay selling the latter two businesses.

Among DIC's other troubled investments was Travelodge, the British hotel operator, which it lost control of after its balance sheet became overstretched.

The auction of Mauser is being handled by Bank of America Merrill Lynch.

Mauser and CD&R, which owns companies such as the discount retailer B&M, declined to comment.

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Petrol Prices Drop To A Three-Year Low

Petrol: The Pump Price Conundrum

Updated: 10:35pm UK, Wednesday 30 January 2013

By Ursula Errington, Business Correspondent

So, the OFT says motorists aren't being ripped off, that the price of petrol on our forecourts is fair and isn't the result of collusion or price-fixing.

Outraged motoring groups still aren't convinced.

The reality is, I don't think anyone knows how to work out the relationship between crude oil and pump price.

From the moment crude oil is pumped out of the ground to when we hand over our money at the till to pay for a topped-up tank, the price of the commodity has been influenced by multiple markets all subject to their own supply and demand idiosyncrasies.

I last worked in oil trading about a decade ago and back then the relationship between the price of Brent crude oil and pump prices was deemed to be pretty sketchy.

Assiduous analysts, whose job it was to structure financial instruments to hedge the bank's customers with exposure to fluctuations in the oil market, pored over oil prices and pump price data looking for a concrete correlation on which to base a safe hedging instrument.

Judging by the collective sighing, teeth-gnashing and head-in-hand gestures, it proved both time consuming and difficult.

Broadly a six-week time lag was identified between a movement in the crude oil price to a correlating adjustment in the pump prices back then but it was considered too statistically patchy to appeal to clients.

So why is it so difficult to find a relationship between the price of oil and the pump price drivers pay?

Firstly, pricing crude oil itself is pretty complicated. Before the black stuff is even out of the ground its anticipated value has been traded on the futures market for weeks, months or years before.

On any one day the oil price is set by taking a combination of a weighted average and straight average up to two months in the future, of all the trades over 600,000 barrels executed on the electronic trading platform the Intercontinental Exchange (ICE).

So it is fair to say that part of the oil price is set by traders who are speculating, who have no intention of allowing their futures contracts to mature and "go physical" (i.e. become related to an actual cargo of oil) but who are buying and selling futures contracts depending on their day-to-day view of the multiplicity of variables effecting the market.

This need not be considered a bad thing. Speculative traders aren't just plucking figures out of the air, they are working on the basis of fine-tuned mathematical models used to assist them in weighting all the factors in play - an outlandish speculative trade based on few decent indicators wouldn't be in their interest at all.

Crucially, these traders add a huge volume of trades to the market, which actually means that big distortions in one trader's view are evened out across the average when the price is set. 

Then there is the shipping market to get the stuff to shore. Highly volatile and as prone to geo-political influences as the commodity itself, shipping deals are opaque because they are over-the-counter and are often based on long-term trading relationships.

The economics of refining are also unhelpfully complex, predominantly because optimising refinery operations is tricky.

Refinery margins (the difference in price between the wholesale value of the products coming out of the refinery and the crude oil from which they were derived) have been surging for many companies of late because of a relative drop in the cost of crude oil and solid demand for products but unscheduled refinery outages, workers on strike, storage costs, changes in the quality of the crude itself - all these things will impact the margin within hours.

And then there's the cost of haulage and the variables at petrol station level, such as a franchise owner's credit rating, local forecourt wars and location.

All of that and we still have some of the cheapest fuel in Europe, according to the OFT.

But it's not over yet - the taxman must also have his share. In the 10 years from 2003 to 2012, prices at the pump increased from 76p per litre (ppl) to 136ppl for petrol and from 78ppl to 142ppl for diesel. Nearly 24ppl of that increase was because of tax and duty.

Is it any wonder then that trying to compare the price of crude oil and the pump price proves a largely fruitless task?

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HS2 Tsar Needed For Project, Says Taskforce

A special HS2 minister should be appointed by the Government to oversee the £50bn high-speed rail project, a report from the scheme's growth taskforce has said.

The group said the appointment would ensure emphasis remained on growth and regeneration around HS2.

Led by Lord Deighton, the task force said the scale of HS2 was "without precedent" and "could catalyse far-reaching economic and social benefits, particularly to the cities of the Midlands and the North".

It continued: "So it is clear to us that we cannot expect to get the most out of HS2 simply by following 'business as usual'.

"We must set our sights high, challenge the status quo and be clear about our goal of building a truly transformational piece of national infrastructure."

It is hoped the scheme will boost regeneration

Lord Deighton made a reference in the report's foreword to a line from the film Field of Dreams, in which Kevin Costner's character hears a voice telling him to turn his farm fields into a baseball park and spectators would arrive.

Lord Deighton said: "This report makes clear that we must not take a 'build it and they will come' attitude to HS2.

"It is up to all of us to make the most of this unique opportunity.

"Our conclusion is that HS2 could be much more than a railway. It could be an exciting and transformational opportunity, particularly for our cities in the Midlands and the North, to invest in our future economic growth."

The scheme has attracted major opposition

A series of other recommendations to the Government are made in the report, which says a growth strategy should be established for each HS2 station by the end of 2014.

These strategies should explain how high-speed rail will generate local jobs, growth and regeneration, the report said.

It also said the Government and Network Rail should set out their plan for defining how HS2 will affect rail services for cities off the HS2 route and for rail freight, and also their plans for a wider review of rail services.

Stop HS2 campaign manager Joe Rukin said: "Lord Deighton has said there shouldn't be an 'if you build it, they will come' attitude to HS2, but that is how they have been operating for the last four years.

"While the case for HS2 only exists in a vested interest Field of Dreams, the reality of the project is a waking nightmare for the taxpayer."

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Putin Mocks Sanctions For Russians Over Crimea

Faces Caught In The Middle Of US-Russia Spat

Updated: 8:45pm UK, Thursday 20 March 2014

The fresh wave of US sanctions against Russia include banning some of the country's richest and most influential businessmen - and President Vladimir Putin's closest friends - from entering America.

Among the individuals targeted with and travel bans and freezing of US assets are billionaire brothers Arkady and Boris Rotenberg.

The co-owners of SMP Bank and SGM Group, a major supplier of construction services to Russian gas giant Gazprom, were judo sparring partners with Mr Putin.

The pair - friends of Mr Putin since childhood - also made billions in Sochi Olympics-related contracts.

Financier Yuri Kovalchuk, the largest shareholder of Bank Rossiya, is a personal banker for senior Russian officials - including, reportedly, Mr Putin. He is another close friend - and a neighbour - of the president.

They have known each other since the early 1990s when Mr Kovalchuk was deputy mayor of St Petersburg.

The bank - also on the hit list - serves some of the country's wealthiest officials and controls two big insurance firms - Sogas and SK Transneft.

High-level Kremlin officials including Mr Putin's chief of staff Sergei Ivanov and deputy chief of staff Alexei Gromov are also targeted, as well as Vladimir Yakunin, chairman of the board of the Russian state-owned company Russian Railways and a close confidant of the president.

Gennady Timchenko, a prominent businessman and owner of the private investment group, Volga Group, which specialises in investments in energy, transport and infrastructure assets is also named by the US.

President Putin's spokesman said some of the names on the list caused "nothing but extreme bewilderment" - and Russia immediately responded with its own list of sanctions on American officials.

These included Obama aides Caroline Atkinson (deputy assistant and deputy national security adviser for international economics), Daniel Pfeiffer (senior adviser and assistant ), and Benjamin Rhodes (assistant and deputy national security adviser for strategic communications and speechwriting), as well as senators Mary Landrieu, John McCain and Daniel Coats.

Mr McCain, the former Republican presidential candidate, and Mr Putin have long been engaged in a bitter personal feud.

During their last war of words in September 2013, the US senator accused Mr Putin of corruption, repression and self-serving rule in an opinion piece for a Russian website in response to a letter Mr Putin wrote in The New York Times, urging America not to use military force in Syria.

In an opinion piece headlined "Russians Deserve Better Than Putin", Mr McCain also accused the president of being "a friend to tyrants and an enemy to the oppressed" for siding with Syria's President Bashar al Assad.

Back in December 2011, Mr Putin let his views be known on Mr McCain after the US politician tweeted "Dear Vlad, The #ArabSpring is coming to a neighbourhood near you" at a time of huge protests across Moscow.

When pressed about the tweet during a televised phone-in, the Russian president hit back, calling the senator "nuts".

"Mr McCain fought in Vietnam. I think he has enough blood of peaceful citizens on his hands. It must be impossible for him to live without these disgusting scenes anymore," he said.

Mr Putin added: "Mr McCain was captured and they kept him not just in prison, but in a pit for several years. Anyone [in his place] would go nuts."

Earlier this month, Speaker of the House John Boehner, also on the Russian list, called Mr Putin a "thug" over its actions in Crimea, according to The Enquirer.

The Republican told the Cincinnati newspaper it was "time to stand up to Putin", adding: "At what point do you say enough is enough? We are at that point."

He, and Senators Landrieu, McCain and Coats hailed their inclusion on the Russian list as a "badge of honour", while the White House refused to comment.

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Budget 2014: The Key Points You Need To Know

The Chancellor George Osborne has delivered his fifth budget. Here are the key points.

Savings

:: Tax-free ISAs to be boosted to £15,000 per year from July. Junior ISAs up to £4,000 a year.

:: Stocks and shares ISAs can be tranferred to new single ISA scheme.

:: Premium Bonds cap lifted from £30,000 to £40,000 in June, and to £50,000 next year.

:: 10p rate of tax for savers to be abolished.

:: Zero tax band to cover £5,000 of savings.

Reliefs

:: Alcohol escalator to be scrapped for all alcohol duties, instead a rise with inflation.

:: Scottish whisky duty to be frozen as it is "a huge British success story".

:: Cut of 1p in duty per pint of beer.

:: Export finance lending interest rate to be cut by a third and lending doubled to £3bn.

:: From 2015, all long haul air passenger flights carry same, lower, band B tax rate.

:: Right to Build scheme for builders of their own homes including £150m of finance to support it.

:: New £200m fund for councils "to bid for" to fix potholes across Britain.

:: Additional £140m help for flood damage.

:: September's fuel duty rise will not be brought in.

Taxes

:: Duty on fixed-odds betting terminals to rise to 25%.

:: Horse race betting levy to be extended to bookmakers based offshore.

:: Bingo duty will be halved to 10% "to protect jobs and protect communities".

:: Tobacco duty to remain at 2% above inflation and escalator will not be stopped.

:: Increased disclosed tax avoidance schemes scrutiny for the wealthy.

:: City fines over Libor rate-rigging to continue going to military charities and emergency service charities.

:: From midnight anyone buying home over £500,000 through corporate entity to pay 15% stamp duty to "avoid abuse".

:: "We will expand the tax on residential properties worth over £2m to those worth more than £500,000."

:: Private jets, previously not taxed, will see tax levied on flights.

Income Tax

:: Personal tax allowance rises to £10,500 next year, giving average saving of £800.

:: 40p tax rate threshold to rise from £41,450 to £41,865 from next month and then up by further 1% to £42,285 next year.

:: Transferable tax allowance for married couples rising to £1,050.

Pensions

:: All retirees on defined contribution pensions to be offered free, impartial, face-to-face advice.

:: No need for pensioners to buy annuities if they do not wish to.

:: Removal of all remaining tax restrictions on how pensioners have access to their pension pots.

:: Income requirement for flexible draw-down from £20,000 to £12,000, raised cap draw-down limit from 120% to 150%.

:: Lump sum small pot level lifted five-fold to £10,000.

:: Almost doubling total pension savings as a lump sum to £30,000.

:: £20m  to be spent in next two years working with consumer groups over pension advice.

:: New Pensioner Bond paying market leading rates, issued by National Savings and Investments, open to everyone aged 65 or over. Available from January next year.

 

Spending and Welfare

:: Foreign aid to be 0.7% of national income.

:: Public sector spending reduction to reach £1bn by 2015-16.

:: A permanent cap on welfare, excluding state pension, set at £119bn in 2015-16, rising in line with forecast inflation to £127bn in 2018-19.

Growth

:: Independent OBR growth forecast revised upwards to 2.7%, up from 2.4% in Autumn Statement.

:: Growth next year is also revised up to 2.3%, then 2.6% in 2016 and 2017, with growth expected to return to long-term trend of 2.5% in 2018.

:: 1.5 million new jobs forecast in next five years.

Borrowing

:: Deficit this year of 6.6% reduced to 5.5%  next year, then expected to be 4.2%, 2.4% and finally 0.8% in 2017-18. Following year forecast surplus of 0.2%.

:: Expect to borrow £108bn this year, £12bn less than forecast last year. No borrowing from 2018-19.

:: OBR forecasts public debt to be 74.5% of GDP this year; 77.3% next year; peaking at 78.7% in 2015-16 - lower than the 80% previously forecast - before falling to 78.3% in 2016-17, then falling to 76.5% and then 74.2% in 2018-19.

:: The new £1 coin to thwart forgery and "In honour of our Queen".

Jobs

:: Support for more than 100,000 new apprenticeships.

:: New Alan Turing Institute for computing "big data" to boost Britain's IT prowess.

Business

:: New allowance for ultra high pressure, high temperature oil field for North Sea oil and gas.

:: Tax relief of up to 25% for touring theatrical productions.

:: VAT relief on fuel for air ambulances and inshore rescue boat services across Britain, and a new air ambulance for London.

:: Accept recommendation to move collection of Class 2 NICs into self-assessment, abolishing for 5 million people "this wholly unnecessary bureaucracy".

:: Corporation tax - high street stores will get £1,000 off their rates, and businesses the £2,000 Employment Allowance.

:: From next year, corporation tax to drop from 21% to 20% and under-21s taken out of the jobs tax.

:: Business rates discounts and enhanced capital allowances will be extended for another three years.

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Next Looks Good As Annual Profit Rises 11%

High street fashion retailer Next has seen its annual underlying pre-tax profit rise by 11.8%, to almost £700m.

The clothing retailer, which is Britain's second biggest in the sector, said growth in its online and catalogue business was behind the strong figures.

The firm has more than 500 stores in the UK and Ireland, along with around 200 outlets in some 30 other countries.

Next said total pre-tax profit to the end of January was £695.2m.

The figure was in keeping with analysts' expectations and compared to £621.6m in the previous financial year.

Its strongest growth was in the combined catalogue and online 'Directory' division, which grew revenue by 12.4% to £1.341bn.

The Directory business generated 50% of operating profit, meaning the division had an operating margin of 26.7%.

This compares very favourably to the core retail segment that generated 48% of operating profit at a margin of only 15.6%.

Total revenue and sales were up 5.4% to £3.74bn and the company increased its dividend by 23% to 129p.

It forecast sales growth this financial year of between 4% to 8%, with a pre-tax profit estimate of around £750m.

"In the year ahead we expect the fourth quarter to provide tough comparatives and it will be hard to beat," the company said.

"Accordingly, we are budgeting very cautiously for the final quarter."

Shares in Next have risen around 61% over the last 12 months.

The firm added: "However, conditions are likely to remain far from buoyant and there are real risks to the sustainability of the current recovery."

Sky News City Editor Mark Kleinman recently revealed that high street fashion rival Marks and Spencer had appointed two brothers responsible for streamlining Next's sourcing supply chain.

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Dubai-Based Oil Firm Banks On London Float

By Mark Kleinman, City Editor, in Dubai

A company spun out of one of the groups found guilty of contributing to the 2010 Gulf of Mexico oil spill has lined up bankers to pursue a listing on the London Stock Exchange.

Sky News understands that Shelf Drilling, whose assets were previously owned by the oil services giant Transocean, has picked Morgan Stanley and at least one of Goldman Sachs, HSBC and Royal Bank of Canada to oversee the listing.

Shelf was formed in 2012 with the purchase of more than three dozen rigs from Transocean for roughly $1bn.

The company is run by David Mullen, the former boss of Wellstream Holdings, which was also listed in London, and is owned by three private equity firms - Castle Harlan, Champ and Lime Rock.

Shelf's decision to pursue the listing in the UK underlines the prominence of London as a venue for raising capital in the oilfield services sector.

In January, the company issued a statement confirming that it was examining an initial public offering of shares but did not name its banking advisers or the likely listing destination.

Employing approximately 3,500 people, Shelf operates shallow-water rigs in southeast Asia, India, West Africa, Egypt, Saudi Arabia and Italy.

It counts Chevron, ExxonMobil, Petrofac and Saudi Aramco among its major customers, and is already understood to have seen a significant financial return since carving out its assets from Transocean two years ago.

Transocean pleaded guilty last year to a range of offences relating to the Gulf of Mexico oil spill, for which it agreed a $400m (£240m) settlement with the US Department of Justice.

BP, which has been forced to pay tens of billions of pounds for restitution and the clean-up following the spill, this week announced that it had won permission to bid again for exploration contracts in the Gulf of Mexico.

Shelf could not be reached for comment.

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Unemployment Drops By 63,000 In Last Quarter

The unemployment figure for the three months to January has dropped by 63,000 to 2.33 million.

The Office for National Statistics (ONS) added that the number of people claiming Jobseeker's Allowance last month fell by 34,600 to 1.17 million.

Meanwhile, the ONS said average earnings increased by 1.4% in the year to January, up 0.2% on the previous month.

The latest official data gives the Government a Budget boost, with a record number of people in work.

More than 459,000 are employed compared to a year ago, taking the total to just over 30 million in jobs.

It is the highest figure since records were started in 1971.

The ONS said the jobless rate dropped to 7.2%, with most of the fall being from men.

It added that there was a fall in the number of part-time workers, because they were unable to find full-time jobs.

It said the part-time total was down 32,000 to 1.4 million.

The number of people claiming Jobseeker's Allowance fell by 34,600

Although a reduction was reported, the total is still 41,000 than at the same time in 2013.

Both long-term unemployed and jobless youth figures were down.

The ONS said long-term jobless was down by 38,000 to 828,000, while 912,000 aged 16 to 24 were without work.

The youth figure was down by 29,000.

It said Britons classed as economically inactive fell by 19,000 to 8.9 million.

That figure includes those who have given up looking for work and carers.

The latest data also shows public sector employment on the decline, with a drop of 159,000 to 5.5 million - recorded as the lowest level since 1999.

The big drop was said to include the large numbers of Royal Mail workers now classed as being in the private sector, after the company's flotation last autumn.

Meanwhile, the civil service reduced numbers by 6,000 to 441,000 and local government fell by 25,000 to 2.3 million.

Private sector employment is now 662,000 more than at the same time last year.

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Budget 2014: New £1 Coin Is Blast From The Past

By Jon Craig, Chief Political Correspondent

George Osborne will use his Budget to announce a major change for the nation's pockets, with a new pound coin to be introduced in 2017.

The new coin, aimed at stamping out forgeries and counterfeits, will replace the £1 coin that was introduced more than 30 years ago and resemble the pre-decimalisation 12-sided "threepenny bit".

According to the Treasury, the new coin will be the most secure in the world.

The new coin will be revealed in a Budget the Chancellor hopes will provide the springboard for a Tory victory at next year's General Election.

The new £1 coin will have 12 sides and is due to enter circulation in 2017

Mr Osborne will raise the rate at which people start paying income tax to £10,500, which he claims will benefit all but those on incomes of over £100,000.

But he will reject calls from senior Tories to raise the threshold at which people start paying tax at 40p in the pound, already due to increase to £42,286 next year.

Labour has already started its response putting up posters this morning claiming: "hard-working people are £1,600 worse off with the Tories."

Speaking on Wednesday morning, Ed Miliband said: "I hope we don't see complacency from the Chancellor today because I think so many families across the country are incredibly hard pressed. They are seeing their wages falling, they faced 24 Tory tax rises since 2010.

"What I hope we see from the Chancellor is an understanding of the difficulties families are facing an a response to make life easier and better for them."

Labour's poster response

The Chancellor will have to respond to Labour's charges that the Tories are out of touch, ordinary families are facing a cost of living crisis and only the rich are benefiting from the economic recovery.

Mr Osborne posted on Twitter on Wednesday morning: "Today I will deliver a Budget for a resilient economy - starting with a resilient pound coin."

Mr Osborne will go on the attack against Labour, claiming the opposition was to blame for the economic crisis when in government and has been proved wrong in opposing the Coalition's austerity measures.

"This will be a Budget for a resilient economy," a Treasury source told Sky News.

"The Government's long-term economic plan is providing economic security by dealing with our record deficit and helping businesses create new jobs at record rates.

"As a country, we have held our nerve, the plan is working, but the job is very far from done. Britain is still borrowing too much.

"We have to invest more and export more, and support growth in every region of our country and all parts of our economy."

The new £1 coin is backed by organisations including the Automatic Vending Association, which said the cost for adapting existing machines would be "minimal".

Kelvin Reynolds, of the British Parking Association, added: "Parking operators have long expressed concerns about a rise in counterfeit £1 coins and the inconvenience this causes to motorists when coins are rejected by parking payment machines and the losses incurred as a result."

The current £1 coin has been in circulation for much longer than the normal lifecycle of a modern British coin.

Its technology is no longer suitable for a coin of its value, leaving it vulnerable to ever more sophisticated counterfeiters.

The Queen's head will continue to feature on one side of the coin

The Royal Mint estimates about 3% of all £1 coins - around 45 million in total - are now forgeries, although in some parts of the UK, the number is as high as 6%.

Around two million counterfeit £1 coins are removed from circulation annually - a direct cost to the banks and cash handling centres, as well as the economy.

As with all British coins, the new-look £1 piece will feature the Queen's head on one side.

A public competition will be held to decide the design for the reverse, or "tails", side.

Introduced in 1937, the threepenny bit was in the first group of coins ever to feature the portrait of HRH Queen Elizabeth II.

It was the first British coin to use a 12-sided shape, which enhanced its popularity during the Second World War as its distinctive size and shape made it the easiest coin to recognise during the blackout.

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China Smog 'Thwarts Lure For Foreign Execs'

China's chronic air pollution is now a major reason why foreign executives do not want to work in the country, a new survey suggests.

A boom in cars is partially behind the smog problem

According to the American Chamber of Commerce in Beijing (ACC), thick smog that affects many areas is making it difficult for companies to recruit top executives willing to move to Asia.

It said 48% of 365 foreign firms in its annual survey, covering businesses in China's northern cities, said air quality concerns were thwarting the lure of overseas postings senior executives.

The ACC said pollution is "a difficulty in recruiting and retaining senior executive talent".

Chinese parents also fear for the health of their children

It added that the 2014 figure is a leap from the 19% of firms citing smog as a problem in 2010.

But it added China's slowing economy remained the top risk for companies.

Foreign executives and diplomats have voiced increasing concerns about China's pollution.

Off-the-scale smog is forcing residents to stay indoors

They fear its effects both for themselves and their dependent families.

Almost all Chinese cities monitored for pollution in 2013 failed to meet health standards.

The US embassy in Beijing even has its own monitoring app, which invariably shows higher pollution rates than those issued by the government.

Pilots are to learn how to land through thick smog

Northern China suffers significantly, as it is the industrial base for much of the country's cement and steel production.

Its colder climate also exacerbates the problem, as coal is used for heating.

Beijing is also regularly hit by smog from cars and industry from surrounding areas.

Meanwhile, its commercial capital Shanghai, in the south, suffers less as a result of air pollution.

The capital Beijing is surrounded by industrial provinces

The ACC's Shanghai branch did not see pollution as a major problem.

Premier Li Keqiang "declared war" on pollution at the opening of the annual session of parliament earlier this month.

China has also pledged to make 60% of its cities meet national pollution standards by 2020.

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Sainsbury's Sales Slide Is 'End Of An Era'

Supermarket chain Sainsbury's has reported like-for-like sales down 3.1%, ending 36 successive quarters of growth.

The result for sales, excluding fuel, were for the 10 weeks to March 15 - its fiscal fourth quarter.

That compared to a rise of 3.6% in the same period last year.

The result was worse than analysts had forecast.

Including recently opened stores, the firm's total fourth quarter sales fell 1% excluding fuel.

CEO Justin King told Sky News: "We've had 36 quarters, that's nine years, of consistent growth so obviously it is disappointing to be reporting sales down for this quarter."

The company said sales at its convenience stores were up 15% but online sales growth slowed to 6%.

It said this was because of a reduction in marketing while a new web portal was launched.

The firm said it expects a challenging 12 months ahead but expects to outperform its rivals in the ultra-competitive sector.

Sainsbury's is battling with Asda to be the second biggest firm in the sector, behind market leader Tesco.

Number four group Morrisons reported a loss last week and saw its share price drop 10%.

It said it would invest £1bn in slashing prices over the next three years to lure back customers, prompting further fears of an expanded price war.

Smaller discount chains such as Aldi and Lidl have attracted shoppers while upmarket Waitrose and Marks and Spencer have also taken a bite from the main retailers.

The sales slide for Sainsbury's comes as Mr King prepares to leave the firm in July.

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Asos Shares Plunge 19% On Growth Fears

The share price of online fashion group Asos has plunged by nearly a fifth over fears about its future growth.

When markets opened at 8am the share price dropped 15%, before falling even further.

In mid-morning trades the drop eased to 13% down.

The downbeat investor reaction comes after the group increased capital expenditure and lowered its full-year margin.

The retailer said it would increase a capital spending programme to achiever longer-term growth rather than short-term profit.

Asos said that in the six months to February 28 total group revenue was up 34% to £482m.

Although UK sales were up 32% to £182m and EU sales up 65% to £77m, sales in the rest of the world (RoW) were only up 14% to £116m.

This compared to RoW sales up 37% in the same period during 2012/13.

Furthermore RoW sales - responsible for 29% of non-UK sales - struggled in the last two months, rising only 3% compared to the same period last year.

Although its retail gross margin was up by 0.6% on the previous year, it fell by 0.3% in the two months to February 28.

The number of customers joining the Asos database eased slightly.

Although they were up 36% on the prior year to 8.2 million, the figure was down from 40% growth seen a year beforehand.

Asos now expects to see it hit annual global sales of £1bn.

CEO Nick Robertson said: "The group delivered strong sales and margin growth over the first six months of the year and we are now confident of achieving £1bn of sales in FY 2013/14."

Key capital expenditure costs include investments in China, IT expansion and boosting warehouse capacity in the UK and Germany.

Barnsley is the main UK warehouse centre for the group.

Asos was launched in 2000 and listed on London's AIM exchange in 2001. In 2010 it launched American, German and French sites.

The company, which targets people in their 20s, has also had to contend with the rise of Boohoo recently.

Its rival aims to provide fashion for teenagers and people in their early 20s, and its share price jumped 50% on flotation last week.

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Bank Of England In Deputy Governor Shake-Up

The Bank of England has named two new deputy governors as part of a major shake-up under boss Mark Carney.

They have been revealed as the bank's Monetary Policy Committee (MPC) member Ben Broadbent and International Monetary Fund (IMF) deputy managing director Nemat Shafik.

Dr Shafik will be the first female MPC member since 2010.

Mr Broadbent is to replace Charlie Bean as deputy governor responsible for monetary policy, from July 1 onwards.

From August 1, Ms Shafik will be in the role of deputy governor for markets and banking.

They have the roles under five-year terms and will also sit on the BoE's Financial Policy Committee (FPC).

The FPC regulates banks and the rate-setting MPC.

She will replace current MPC member Paul Fisher, who is the bank's executive director for markets.

Prior to taking the IMF role in 2011, Ms Shafik was the Government's permanent secretary at the Department for International Development (Dfid), from March 2008 to March 2011.

Dr Shafik - who has Egyptian, US and British nationality - was previously the youngest ever vice president at the World Bank.

She will be responsible for the BoE's exit from the £375bn quantitative easing policy.

In addition, Dr Shafik will review intelligence-gathering on markets.

The BoE has come under increasing scrutiny over allegations that some traders in the City have manipulated key foreign exchange rates.

Mr Broadbent previously worked as an economist at Goldman Sachs and becomes the first external MPC member given a deputy governor role at the bank.

He will be responsible for analysis of the UK economy and bank notes.

The BoE also confirmed Sky News City Editor Mark Kleinman's report that Anthony Habgood would become chairman of its court of directors, from July 1.

Mr  Habgood is chairman of brewer Whitbread and publishing company Reed Elsevier.

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China Growth Plan To Target Internal Migrants

China is to encourage 90 million more rural residents to move to cities before the decade's end, in a bid to boost domestic consumption growth.

China now plans to boost urban populations in a five-year plan

It said the plan is to boost urbanisation of its 1.4 billion population, from the current 53.7% to 60%, by 2020.

The nearly six-year long migration wave - more than 43,000 a day - is expected to help expand cities, improve public transport and bolster sustainable growth amid a shift from foreign trade and investment.

Rural dwellers moving to higher-paid jobs in cities are seen as a key driver of consumption, as they need to buy goods to furnish new homes.

High-pay urban jobs are now seen as a foundation stone of future growth

China has announced the plans to expand its cities and improve public services to support economic growth.

The International Labour Organisation (ILO) said that by the end of 2009 China had a total of 229.8 million rural migrant workers.

Many work away from home for more than six months at a stretch.

Internal migration in China has been a key element of its construction boom

Although coastal cities such as Shanghai have expanded rapidly, migrants are hampered by a household registration system that tethers them to home town locations.

Since 1979, China has seen an estimated 340 million citizens reclassified as urban dwellers.

According to University of Washington Professor Kam Wing Chan, if only half of those reclassified are migrants, this "epic scale" migration wave would the the quickest and largest in human history.

Many migrant workers live away from home for more than six months

The current system, known as hukou, only allows citizens to officially move within their existing rural or urban boundary.

The non-residents are thereby given limited access to schools, health care and pensions - even if they have lived in cities for years.

Prof Chan said: "However, formal or permanent moves - meaning those involving a hukou change - crossing city, town and township boundaries are strictly regulated and require approval by the public security authorities."

Millions of migrants return to their home town for the lunar new year

The ILO has pushed for improvements to migrants' rights, protection and employability, and legal assistance as part of the system's overhaul.

An estimated 660 million Chinese people now low in urban locations but a study by Beijing's Tsinghua University found only 27.6% with official urban status.

The Cabinet's announcement of the "National New Type Urbanisation Plan" for 2014-2020 did not reveal any financial or other details of how it would be enacted.

Foreign trade was long seen as the key driver of Chinese growth

But it comes after earlier calls for improved housing for 100 million people living in dilapidated shantytowns.

"Domestic demand is the fundamental impetus for China's development, and the greatest potential for expanding domestic demand lies in urbanisation," the official Xinhua News Agency said of the report.

The migration plan follows a vision to make the economy more productive through entrepreneurial freedom and market-led changes to banking and other sector.

Consumer consumption of high-end goods has boosted western luxury firms

Xinhau said the urbanisation plan will mean building railways to reach cities with more than 200,000 residents by 2020 and high-speed rail to cities above 500,000 people.

It promised to pursue a "human-centred and environmentally friendly path".

"A scientific and reasonable urban development model should be adopted, with green production and consumption becoming the mainstream in urban economic activities," it said.

Human rights groups have highlighted poor living conditions for migrants

"China should strive to push for harmonious and pleasant living conditions."

Authorities now expect 300 million rural residents to become city dwellers by 2030 - the equivalent of almost the entire US population moving.

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Media Boss Desmond Eyes £700m Channel 5 Float

By Mark Kleinman, City Editor

The media tycoon Richard Desmond is considering a stock market flotation of Channel 5 even as bidders firm up offers of up to £700m for the terrestrial broadcaster.

Sky News has learnt that Mr Desmond is working with investment bankers from Goldman Sachs on the possible listing.

The exploration of a flotation raises the prospect of Mr Desmond, one of Britain's most colourful media owners, heading a public company for the first time in his long career.

City sources said Goldman had taken the idea of a listing of Channel 5 to Mr Desmond in recent weeks and that he had agreed to allow the Wall Street bank undertake work on it.

Goldman is understood to have begun sounding out institutional investors and received a broadly favourable response, although their ultimate appetite to buy shares in the TV business would depend on the valuation attached to Channel 5.

The analysis of a listing is at an earlier stage than a concurrent sale process being run by  Barclays' investment banks, which has drawn interest from more than 20 potential buyers.

Among those initially competing in the sale process were BSkyB, the owner of Sky News, and US media groups including Discovery Networks, Scripps, the owner of UKTV, and Viacom.

It is unclear whether any of the bidders are prepared to meet Mr Desmond's reputed £700m asking price, or whether a flotation of Channel 5 is being used as a 'stalking horse' option to maintain tension in the bidding process.

Banking sources said that seven parties remained in the auction last week, with that number expected to be narrowed further in the next few weeks.

Among the media and communications groups which are not currently in the process are BT and ITV, with the latter having publicly ruled out any interest in a takeover.

Mr Desmond has turned around the financial performance of Channel 5 since he paid just over £100m for the broadcaster of Big Brother and its celebrity offshoot in 2011.

The tycoon, who also owns the Daily Star and Daily Express and their Sunday sister newspapers, has cut costs and improved the performance of Channel 5's advertising sales operation.

He has also been assessing the sale of the Health Lottery, which he owns, believing that any buyer would have a ready-made platform for submitting a competitive bid for the National Lottery licence when it enters its next tendering process.

A spokeswoman for Mr Desmond's Northern & Shell holding company declined to comment while none of those understood to be interested in bidding for Channel 5 would comment.

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MPs Attack Sale Of Royal Mail Postcode Database

The Government has been slammed for selling a valuable database of every British postcode and address in last year's flotation of the Royal Mail.

Ministers were strongly criticised for including the register, which contains 1.8 million postcodes and all 28 million addresses, to help boost the share price in the initial public offering (IPO).

The cross-party Commons Public Administration Committee said the Postcode Address File (PAF) was a "national asset" which should have been retained and made publicly available to benefit businesses and the economy.

It said the PAF's sale achieved only "short-term gain" in last autumn's IPO and was an "unacceptable and unnecessary consequence of privatisation".

The committee said losing the database to the private sector has the potential to thwart economic innovation and growth.

Unions were highly critical of the Royal Mail privatisation

Committee chairman Bernard Jenkin said: "The sale of the PAF with the Royal Mail was a mistake. Public access to public sector data must never be sold or given away again."

The PAF holds all known Royal Mail delivery points in the UK and the committee said an immense amount of work went into collecting the database and said it was of "huge direct value" to the economy.

In a statement to Sky News, the Royal Mail defended its position and said it takes its "responsibilities and obligations" for the PAF "very seriously".

It said: "Last year, Ofcom held a review of the PAF's pricing and licensing framework and recognised the integral relationship between PAF and delivery of the Universal Service Obligation (USO).

"Without positive and progressive management of PAF, our operational ability to deliver the USO would be severely undermined.

"Following its consultation, Ofcom concluded in July 2013 that Royal Mail should continue to be able to recover both the internal and external costs of PAF from licensees.

"In addition, in 2011 Parliament decided that the PAF should be available to all on reasonable terms."

Business Secretary Vince Cable opposed a planned pay rise the firm's boss

The Royal Mail flotation was widely criticised for having an undervalued opening price.

The Government sold shares last October for 330p each, valuing the company's equity at £3.3bn.

Shares rose to more than 500p within a week of the sale, drawing more criticism of the float price.

Sky News City Editor Mark Kleinman later revealed investment bank JP Morgan had previously told the Government that the Royal Mail could be worth near to £10bn - 200% up on the float price.

The PAC added: "The Postcode Address File was included in the sale to boost the Royal Mail share price at flotation.

"This takes an immediate but narrow view of the value of such data sets."

"The PAF should have been retained as a public data set, as a national asset, available free to all, for the benefit of the public and for the widest benefit of the UK economy.

"Its disposal for a short-term gain will impede economic innovation and growth. This was an unacceptable and unnecessary consequence of privatisation."

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Morrisons Suffers Staff Payroll Data Theft

Data from supermarket chain Morrisons' staff payroll system, including bank account details, has been stolen and published on the internet, the company has confirmed.

In an email sent to staff and seen by Sky News, the company called it an "illegal theft" of data.

The information has since been taken off the website that published the details.

A data disk was also sent to a regional newspaper with the stolen data.

The theft included names, addresses and bank account details of an unspecified number of staff. It employs around 100,000 people.

The email warned that "this affects colleagues from all levels of the organisation".

Morrisons, which became aware of the theft on Thursday, said: "Initial investigations suggest that this theft was not the result of an external penetration of our systems.

"We can confirm there has been no loss of customer data and no colleague will be left financially disadvantaged."

The email warning was sent to senior staff who were asked to inform workers

So-called insider threats have become a serious concern for companies in recent years, due to the volume of data stored and its accessibility.

Sky News has confirmed that the data watchdog, the Information Commissioner's Office (ICO), has been alerted to the theft and may launch a probe.

An ICO spokesman said: 'We have been made aware of reports that Morrisons have suffered a potential data breach, and we will be making enquiries."

Morrisons, which is Britain's fourth biggest supermarket group, said it had called in police and cyber crime experts.

The criminal inquiry into the data theft from Bradford-based Morrisons is being led by West Yorkshire Police.

Detective Chief Inspector Nick Wallen said: "We are aware of the situation and are supporting Morrisons and their investigation into these matters."

It has also started communications with banks handling staff accounts and a credit rating agency, and has set up a helpline for employees.

The group has come under pressure recently over its performance in the ultra-competitive sector.

On Thursday, it launched a counter-attack in the supermarket price war after losing more than just ground to its rivals in its last financial year.

The chain, which has struggled amid strong challenges from discounters and because of its slow response to the online grocery and convenience markets, confirmed a pre-tax loss of £176m for 2013/14 after a profit of £879m in the previous 12 months.

Like-for-like sales fell 2.8% in the period, and its share price suffered a 10% drop on Thursday.

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