British Gas Customers Hit By Price Hike

Around 8.5 million households are being hit with a 6% rise in their energy bills as British Gas becomes the latest utility giant to hike its tariffs.

The move is estimated to add another £80 to the typical annual dual-fuel bill for a British Gas customer, or £1.50 a week.

The price increase is more than double the rate of inflation.

It was first announced last month but has sparked renewed anger after British Gas parent company Centrica revealed it was set to make profits of £1.4bn this year.

Experts also predict around £575m of pre-tax profit from its British Gas residential arm after gas consumption for the first 10 months of 2012 rose 9% because of colder than normal weather.

Mike Jeram, head of business and environment at trade union Unison, said: "The billion pound profits of energy companies, announced at the same time as massive price hikes for their customers, are an insult to the many families who are struggling to get by as winter takes hold."

Audrey Gallacher, director of energy at Consumer Focus, called for rules forcing energy firms to tell customers about the link between bill rises and profits.

She said: "Consumers will be sceptical over supplier profits, given questions over how justified recent price rises have been."

British Gas's bill increase comes amid a spate of tariff rises among the UK's "big six" power firms.

SSE was the first to increase prices, lifting bills by an average of 9% in mid-October, affecting about five million electricity customers and 3.4 million gas customers.

Npower follows with its increase on November 26, while EDF and Scottish Power will raise bills in December.

German-owned E.ON has denied reports it is planning to announce an 11% tariff rise next month.

A spokesperson told Sky News: "We have promised not to raise prices in 2012 and are continuing to offer customers long-term certainty by offering fixed-price products and helping the get on the best deal for them."

The firms have all blamed rising wholesale prices, which they say is out of their control, but the sector has been embroiled in controversy this week after accusations of alleged wholesale gas price-rigging.

One supplier, Co-operative Energy, has bucked the trend by announcing it will reduce its electricity charges by 2% from December 21.

Co-operative Energy, which supplies 60,000 households following its launch 18 months ago, said the move reflected lower wholesale electricity costs.

Regulators are investigating claims made by a whistleblower to the Financial Services Authority (FSA) and energy watchdog Ofgem of alleged gas price manipulation on September 28.

All six of the big energy companies have released statements denying any involvement in attempts to fix the £300bn market.

Centrica said an internal investigation "found nothing unusual" in its wholesale gas trading activities on the day when price manipulation was alleged to have taken place.

The group, which makes most of its profit from upstream gas and oil exploration, is expected to see a 6% profits improvement in its residential energy supply, driven by stronger trading over the first half of the year, with the figure forecast to be lower for the second half of the period.

Its trading update comes after rival SSE reported a 38% jump in half-year profits to nearly £400m.

Centrica said competition in its division which supplies small and medium-sized businesses had cost it 43,000 customers since June.

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Twinkies Maker Hostess To Close After Strike

The maker of iconic American treats such as Twinkies, Ding Dongs and Wonder Bread is closing its plants and liquidating its 82-year-old business.

Hostess Brands announced on Friday it would lay off all of its 18,500 workers after a national strike crippled its operations.

The company had warned employees it would file a motion for bankruptcy if plant operations did not return to normal levels by Thursday evening.

Not enough striking employees returned to work by the deadline.

"We deeply regret the necessity of today's decision, but we do not have the financial resources to weather an extended nationwide strike," said Gregory F. Rayburn, chief executive officer.

"Hostess Brands will move promptly to lay off most of its 18,500-member workforce and focus on selling its assets to the highest bidders."

Thousands of Hostess Brands employees will lose their jobs

It will mean the closure of 33 bakeries, 565 distribution centres, around 5,500 delivery routes and 570 bakery outlet stores throughout the United States.

The nationwide strike began on November 9 when Hostess introduced new terms and conditions that cut wages by 8%.

Unions said benefits would also be slashed by up to 32%.

The Texas-based company, which is privately owned by two hedge funds, filed for Chapter 11 protection in January, its second trip through bankruptcy court in less than a decade.

It is likely the future of the biggest brands will be decided by a court auction or by liquidators.

Twinkies will be an attractive proposition but not all Hostess's 30 or so brands are likely to be snapped up by other manufacturers.

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Ikea 'Regrets' Using Forced Prison Labour

Ikea says it "deeply regrets" the use of forced prison labour by suppliers in communist East Germany more than two decades ago.

The Swedish furniture giant apologised after commissioning a report into claims political prisoners worked in factories making its products in the 1960s and 70s.

The company says it never condoned the use of forced labour but the report showed it failed to properly vet how its suppliers were operating.

The report concludes that Ikea managers "were aware of the possibility that political prisoners would be used in the production of Ikea products in the former GDR".

"We deeply regret that this could happen," said Jeanette Skjelmose, an Ikea manager.

"The use of political prisoners for manufacturing was at no point accepted by Ikea."

But she added: "At the time we didn't have the well-developed control system that we have today and we clearly did too little to prevent such production methods."

Ikea commissioned accountants Ernst & Young to look into claims aired by a Swedish TV documentary in June but first raised by a human rights group in 1982.

Rainer Wagner, chairman of the victims' group UOKG, said Ikea was just one of many companies that used forced prison labour in East Germany.

"Ikea is only the tip of the iceberg," he told The Associated Press in an interview earlier this week.

Wagner said he hoped that Ikea and others would consider compensating former prisoners, many of whom carry psychological and physical scars.

"Ikea has taken the lead on this, for which we are very grateful," he told a news conference in Berlin, where the report was presented.

Peter Betzel, the head of Ikea Germany, said the company would continue to support efforts to investigate the use of prisoners in East Germany in future.

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Bank Of Ireland And AIB Top Salaries Revealed

The Irish government has revealed that hundreds of executives at its taxpayer-backed banks are on six-figure salaries.

Irish finance minister Michael Noonan confirmed that 24 staff at the Bank of Ireland and four from Allied Irish Bank (AIB) have pay deals worth 400,000 euros (£320,000) a year.

He also confirmed that more than 169 people working for Bank of Ireland earned between 150,000 and 400,000 euros (£120,000 to £320,000).

The Bank of Ireland's chief executive, Richie Boucher, is paid an annual package of 831,000 euros (£666,000) at the 15% taxpayer-owned firm.

Meanwhile, figures for AIB, which is effectively nationalised, revealed that more than 1,200 employees were paid in excess of 100,000 euros (£80,000) with 186 of those earning between 150,000 and 400,000 euros.

Ireland's banking system has had a government-sponsored bailout of up to 70bn euros (£61bn) since a banking collapse in 2008, according to the Irish Independent.

Irish finance minister Michael Noonan speaks to journalists in Brussels

Top level salaries in AIB have now been capped at 500,000 euros (£400,000) - the figure reportedly paid to its chief executive David Duffy. He has also initiated a pay cut of 15% for top executives at the bank.

AIB was bailed out with almost 30bn euros of Irish government money, which now owns a 99.8% stake in the bank.

Ireland's opposition parties have opposed the remuneration rates, saying it is unacceptable to have huge pay packages at a state-owned institution.

The pay levels were revealed in written answers from Mr Noonan after questions were put to the government by Sinn Fein.

It accused the government of "fake outrage" with respect to the salaries amid massive austerity cuts.

Mr Noonan said the government shares the public anger over the salaries, however he claimed to have limited legal scope to reduce the pay of top-ranking executives.

AIB said in a statement that it "fully recognises the absolute requirement to reduce staff costs across all areas of our business in light of the levels of state support received and as we seek to return the bank to viability".

It added: "The bank has taken, and continues to implement, changes to its pay and benefits structure within the confines of contractual obligations and in seeking agreement with our staff and unions."

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BBC Hires Bankers For Teletubbies Sale

By Mark Kleinman, City Editor

The BBC's commercial arm is pursuing a sale of its interest in the company behind the global profile of The Teletubbies despite a potential delay to the arrival of its next chief executive.

I understand that DC Advisory Partners, a City firm, has been asked to canvas bidders for Ragdoll Worldwide, a joint venture between BBC Worldwide and Anne Wood, the founder of one of the most prolific producers of children's television in Britain.

Insiders said that DC was expected to begin approaching potential bidders for at least the BBC Worldwide stake, likely to include The Walt Disney Company, in the coming weeks.

In addition to The Teletubbies, Ragdoll Worldwide owns the rights to programming produced by Ragdoll Productions including In The Night Garden and The Adventures of Abney & Teal.

The joint venture was established in 2006.

BBC Worldwide announced in October that John Smith, its long-serving chief executive, would step down in December and be replaced by Tim Davie, the corporation's director of audio and music.

Since that succession plan was unveiled, the BBC has been stunned by Newsnight's erroneous implication that Lord McAlpine, the Conservative Peer, had been a paedophile, and the string of lurid allegations about sexual abuse committed by Jimmy Savile.

The BBC's handling of events led to the departure last weekend of George Entwistle, its director-general, with Mr Davie asked to step in as his temporary replacement.

Mr Davie is still expected to take over at BBC Worldwide once Mr Entwistle's successor is appointed.

It is unclear whether Ms Wood or Ragdoll's management have any interest in selling their interest in the joint venture.

City sources said that DC had been appointed to handle the sale because of its successful auctioning of the assets of Chorion, the intellectual property company which held the rights to the Mr Men and parts of Enid Blyton's literary estate.

In a statement, a BBC Worldwide spokeswoman confirmed DC's hiring, saying that it would advise both partners "on the best future strategy to maximise the value of their joint venture Ragdoll Worldwide Limited. Whilst a sale of the rights held within the joint venture is a potential route, this is just one of the many options that we are exploring".

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CBI Boss Calls For Reform Of Offshore Tax

The head of Britain's biggest business body has told Sky News the "time has come" for foreign firms to pay their fair share of UK tax.

Confederation of Business Industry (CBI) director general John Cridland was speaking as the issue of corporate offshore tax arrangements moved into the political domain.

Mr Cridland told Sky News: "It's an issue whose time has come. The challenge is to be more transparent. I'd be surprised if the landscape isn't different in five years' time."

He also rejected the idea that HM Revenue and Customs is a "soft touch" and called for international tax rules and co-operation to tackle loopholes that allow large firms to minimise liabilities in certain jurisdictions.

The comments from the head of the CBI, which represents many of Britain's biggest firms, follow those of the boss of Dixons Retail.

Sebastian James backed John Lewis chief Andy Street, who earlier told Sky News multinationals such as Amazon, Google and Starbucks would be able to use their tax advantages to invest more than their UK rivals.

In a statement on Twitter Mr James said: "I agree with Andy Street - retailers making profits in the UK should pay tax in the UK."

Mr Street told Jeff Randall Live the Treasury needed to do more to prevent the likes of online retailer Amazon "destroying the UK tax base" and potentially putting British companies out of business.

On Thursday Business Secretary Vince Cable told Sky there was "systematic abuse" of the tax system by some multinational corporations (MNCs).

He said MNCs were "playing governments off against each other" when it comes to tax structures with offshore accounting.

Mr Cable said he expected Chancellor George Osborne to address the issue of MNCs allegedly underpaying their tax in his Autumn Statement next month.

Dixons Retail has 1,200 stores, including PC World and Currys, and Amazon is a major rival.

Amazon, Google and Starbucks chiefs are grilled by MPs

These latest comments from British retail bosses come after UK heads of Amazon, Google and Starbucks appeared in front of MPs in the Public Accounts Committee (PAC) earlier this week to defend their tax positions.

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

"I assure you we are not making money," he told the committee.

"It's very unfortunate. We're not at all pleased about our financial performance here. It's fundamentally true everything we are saying and everything we have said historically."

Labour's Ms Hodge replied: "You have run the business for 15 years and are losing money and you are carrying on investing here. It just doesn't ring true."

Starbucks has reportedly paid just £8.6m in corporation tax in 14 years of trading in Britain. It was also revealed it has paid no corporation tax for the past three years, despite sales of £1.2bn in the UK.

Ms Hodge questioned how that could happen when a former chief financial operator said in 2007 that the division had an operating profit rate of 15%.

Mr Alstead denied knowledge of the statement and insisted the first profit Starbucks made was £6m in 2006.

Matt Brittin, the chief executive of Google UK, and Andrew Cecil, Amazon's director of public policy, also gave evidence to the committee.

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

"We have our European headquarters in Luxembourg... the books could be in the UK, they could be in France. If you are purchasing English books it is very likely they will be in our fulfilment centres (warehouses)."

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

Google's UK unit paid just £6m to the Treasury in 2011 on revenue of £395m, according to The Daily Telegraph.

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RBS And Lloyds TSB 'May Cost Taxpayer £66bn'

More than £66bn of taxpayers' money invested in RBS and Lloyds TSB may never be recovered, MPs have warned.

The Commons Public Accounts Committee (PAC), said that lessons needed to be learned from the sale of Northern Rock - and applied to decisions concerning any future sale of the banks "with value to the taxpayer taking precedence over speed of exit".

The MPs, who are charged with monitoring Government financial affairs, said that the Treasury made a series of costly mistakes in its handling of Northern Rock, which had to be taken into public ownership in 2008.

Just two bidders were interested in taking it over, sparking fears that the two remaining state-backed banks, RBS and Lloyds, will fail to be sold for a profit.

Auditors earlier this year estimated that losses on the Northern Rock rescue would amount to £2bn. That figure includes the loss of about £480m on the sale of Northern Rock Plc to Virgin Money, owned by Sir Richard Branson, last year.

The estimated losses were highlighted in a report in May by the National Audit Office (NAO) into the nationalisation of the bank in 2009 and its subsequent part sale.

The report criticised the then Chancellor Alistair Darling for failing to look at the full consequences to the taxpayer.

Northern Rock Plc was sold to Virgin Money, owned by Sir Richard Branson

Labour MP Margaret Hodge, who chairs the PAC, said: "The lack of competition does not fill us with confidence that the taxpayer will make a profit on the sale of the two banks which remain in public ownership, RBS and Lloyds.

"There is a risk that the £66bn invested in RBS and Lloyds may never be recovered.

"It is vital that the final decisions on the wholly owned banks are made with value to the taxpayer taking precedence over speed of exit.

"This will not be the last banking crisis, and the next one is likely to be different. The Treasury must ensure it retains the right staff with the right skills to understand the risks and respond effectively.

"It needs to learn the lessons from the creation and sale of Northern Rock and make sure that these are applied in future, including to any sale of RBS and Lloyds."

The run on deposits at Northern Rock in September 2007 was an early and pivotal moment in the financial crash and subsequent meltdown.

MP Margaret Hodge says the £66bn invested in RBS and Lloyds may be lost

After nationalisation, the bank was split into a mortgage lending and savings arm, Northern Rock plc, and Northern Rock (Asset Management), which held its bad debt.

The move was supposed to generate lending but it fell well short of its £15bn target, reaching just £9.1bn.

The Treasury has accepted its part in a "monumental collective failure", according to the report.

It has now set up a dedicated team, UK Financial Investments (UKFI), to manage taxpayer shares in banks.

Earlier this year the Treasury's most senior official, Sir Nicholas Macpherson, admitted the taxpayer lost out because of five months of "drift" as the crisis unfolded.

A spokesman for the Treasury said the decision to nationalise Northern Rock in 2008 was taken in the interest of financial stability, and that the sale of Northern Rock plc to Virgin Money last year represented "good value for money for the taxpayer, and has helped increase high-street competition".

A Treasury aide added: "RBS and Lloyds have made good progress over the last two years and our goal remains the same: To get the best possible value for taxpayers."

Matthew Sinclair, chief executive of the TaxPayers' Alliance, said: "This report on the expected cost of the Northern Rock fiasco will come as a devastating blow for taxpayers who are already carrying a huge loss from the Government's stake in RBS."

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Exclusive: Santander UK Plots Jersey Sale

The British arm of the giant banking group Santander is reviewing the future of its Jersey-based private banking arm days after rival HSBC was accused of using its business there to provide accounts to convicted criminals.

I have learned that Santander UK has begun sounding out prospective buyers of Santander Private Banking Jersey, a business it inherited from its takeover of Abbey in 2004.

The unit manages approximately £4bn of deposits and tens of thousands of customers, according to insiders. The Spanish-owned lender has hired Gleacher Shacklock, an advisory firm, to gauge the appetite of potential bidders for its Jersey division.

People close to the situation said that Santander UK had not committed to a sale, but was exploring a series of options that included changing the structure of the business or retaining it in its current form.

It had previously conducted a similar exercise for its Isle of Man private banking division and elected to retain the unit, people close to the bank said.

Potential buyers of the division could include the owners of other large private banking businesses such as Investec or Kleinwort Benson.

Earlier this month, HSBC found itself at the centre of a new controversy over compliance standards when it emerged that a number of individuals with criminal links were customers of its Jersey-based operation.

A list containing thousands of names had been provided to HM Revenue & Customs by a whistle-blower, dealing a further blow to HSBC just days after it was forced to hike the potential bill for breaching US anti-money laundering rules by £500m.

Santander UK declined to comment.

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Comet Closing Down Sales As 41 Stores To Shut

The stricken retail chain Comet will close 41 stores by the end of the month unless a buyer can be found, administrators have confirmed.

Redundancies were "inevitable" although administrators Deloitte said they would look to place staff from closing stores into other nearby outlets.

Up to 500 jobs could be under threat at 27 of the stores where closing down sales began today. A further 14 closing down sales will begin early next week.

Chris Farrington, joint administrator, said: "We are very grateful to the company's employees for their professionalism, loyalty and support at this difficult time and all employees will of course continue to be paid for all the work they do while the company is in administration."

Deloitte had already announced 330 redundancies at the company but there have been no job losses among shop staff as yet and all the chain's 236 stores remain open at present.

The bulk of the staff cuts have been made in Comet's head office in Rickmansworth, Hertfordshire, as well as its site in Hull and call centre in Clevedon, Somerset.

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

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

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

The high street electricals market in the UK has come under huge pressure as cash-strapped shoppers put off purchases of big-ticket items such as TVs and large appliances and online rivals take a bigger slice of the sector.

Comet's administration comes just months after it was taken over by investment firm OpCapita, which bought the chain for a nominal £2 in February.

Angry staff at the chain have called for ministers to investigate the retailer's collapse and the way its former private equity owners ran the company.

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Firms Could Be Forced To Reveal Consumer Data

Businesses are under pressure to join a scheme to give consumers data they gather about them on their shopping habits.

Ministers are preparing laws which will force companies to disclose personal information to consumers if they request it.

The move, which would involve the details being handed over in a "machine-readable" format could help families improve and change their purchasing choices.

Mobile phone and energy companies would provide information on a customer's usage, so they could shop around for the best deal without repeated form-filling.

Receipts and warranties would be stored electronically, avoiding the need to locate paper copies when an item needs to be returned or repaired.

And details of bank and credit card accounts would all be in one place, meaning people could keep an eye on their income and outgoings more easily.

So far, 20 companies in the energy, finance and telecoms sectors have signed up to the Government's voluntary "midata" scheme, including Lloyds TSB bank, British Gas and Google.

But no major supermarkets have joined although they are thought to be the biggest users of customer data for marketing strategies.

They hold information on eating habits, personal finances and weekly schedules through loyalty cards and sophisticated data tracking systems.

Releasing data about food shopping could allow families to get better deals. They would be able to compare the prices of different items charged in different branches of their supermarket as well as monitor the nutritional value of their shopping.

The Government's Behavioural Insights Team, whose research led to the "midata" access plan, found that the best way of convincing people to make changes was to give them more data about their own choices.

Jo Swinson, the consumer affairs minister, said: "Many businesses reap huge commercial benefits from the information they gather from consumers' daily spending patterns.

"Why shouldn't consumers also benefit from this by having access to their own data?"

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