Brits Can Switch Banks In A Week From Next Month

Virtually all banks and building societies have agreed to slash the time needed to transfer current accounts between providers from next month, it has been confirmed.

Customers will be able to move their accounts within seven days, drastically cutting the current 30-day period.

The Payments Council confirmed the launch date of September 16, in a scheme expected to increase competition for providers and better deals for customers.

Some 33 bank and building society brands accounting for almost all current accounts in the marketplace have signed up to the agreement.

The streamlined switching service also includes facilities for all outgoing and incoming payments to be moved over to a customer's new current account, with payments made accidentally to the old account automatically redirected for 13 months after the switch.

Consumers will be refunded interest and charges if anything goes wrong.

Adrian Kamellard, chief executive of the Payments Council, said: "As final preparations are made for launch we look forward to a new era of account switching which will lead to greater choice for customers and wider competition in the marketplace."

The Payments Council confirmed that the new switching guarantee does require that the old current account must be closed as part of the changeover.

Current account providers will display details of the new guarantee in branches and on their websites.

Rachel Springall, spokeswoman for financial information website Moneyfacts, said: "With only one month to go, we have already seen banks launch some incentives to entice new customers."

The extent to which the new rules will spur more people into action is not yet clear, but recent evidence has indicated that consumers have been getting more fed up with their current account providers.

The financial ombudsman recently reported that complaints about current accounts had rocketed by more than a third over the last year, following two years of falls.

Ms Springall said people considering making the jump to another provider should bear overall benefits in mind rather than initial perks.

She said: "Once an institution has you as a current account customer it is usually for the foreseeable future, so they are likely to offer you other products such as cards, loans and mortgages while you have a relationship with them.

"Assessing what you need from a current account on outset is vital."

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'Flash For Cash' Car Crash Scam Warning

Motorists have been warned about a new car accident insurance scam, which has been dubbed "flash for cash".

The latest tactic sees cars lying in wait for innocent victims at exits from shops, car parks or fuel stations.

Fraudsters flash their headlights, offering the victim a right of way to join the main road, but then speed up to ensure their car is hit side-on by the unwitting driver, according to automotive anti-fraud investigation specialist APU.

"It is yet another example of how criminal gangs are becoming more sophisticated and attempting to stay one step ahead of suspicion," APU's director of investigative services Neil Thomas said.

"By appearing to offer the right of way, the criminal simply continues his journey into a collision, holding the victim at fault for turning across him which, of course, cannot be denied under law."

The new tactic is a variation on the existing 'crash for cash' scam where organised crime gangs using several cars to stop suddenly, in the hope a following car will cause a rear-end collision.

According to the Insurance Fraud Bureau (IFB), crash scams cost £392m annually, with gangs netting an average of £1.7m.

The IFB believes 14% of personal injury claims are suspected to be linked to 'crash for cash' scams.

Metropolitan Police Traffic Command Detective Inspector David Hindmarsh said the motor industry insurance scams could add an estimated £50 to £100 to each policyholder's annual premium.

The 'flash for cash' scam (graphic APU)

The organised gangs now use claims management front companies to 'milk' the system.

"The issue with this new type of collision is that the police would not be called, and there would be no personal injury," Det Insp Hindmarsh told Sky News.

"Organised criminal groups can set up claim management companies with the sole purpose of defrauding the industry.

"Insurance costs would then be claimed for recovery of the damaged vehicle, storage while awaiting repairs and car rental during the period."

Association of British Insurers (ABI) director general Otto Thoresen said that across the whole insurance industry around 380 fraudulent claims are uncovered daily, worth nearly £1bn a year.

Another £2bn in fraudulent insurance claims are estimated to be made annually across the sector.

Det Insp Hindmarsh warned that utmost care should be taken when a driver offers you to join the traffic flow.

He said: "The advice would be if someone flashes you, make sure they are either stopped or don't risk pulling out.

"Always make sure it is safe to move before you do so."

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Zara Co-Founder Rosalia Mera Dies From Stroke

The co-founder of fashion chain Zara, Rosalia Mera, one of the richest women in the world, has died after suffering a stroke on holiday.

Ms Mera, 69, fell ill while on holiday in the Balearic island of Menorca.

She was transferred to the private San Rafael hospital in Coruna, northern Spain, where she died Thursday evening, a hospital source said.

She had been on holiday in Menorca with her daughter Sandra.

Rosalia Mera quit school at 11

Ms Mera was listed by Forbes this year as the world's 195th richest billionaire with a fortune of £3.9bn.

She was the highest-placed among Spanish women and was also described as the richest self-made woman in the world.

Ms Mera quit school at the age of 11 and started work as a seamstress at 13 before going on to found the Inditex textile giant alongside her husband Amancio Ortega.

The pair later divorced. Mr Ortega is listed by Forbes as the world's third-richest man with £36bn.

Inditex released a statement expressing the group's sadness over her death.

"The group wishes to send its sincere condolences to her loved ones and friends at this extremely difficult time, after the loss of a person who contributed so much to the origins and development of the company," it said.

Besides Zara, the Inditex group owns a number of successful international brands including Massimo Dutti and Pull and Bear.

Ms Mera had left the Inditex board in 2004 but kept a 5.05% stake in the firm, according to Spanish news reports.

She also held 30.6% of hotel chain Room Mate, it said.

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Online Gambling Firms To Pay 15% Tax In UK

Online betting companies based in offshore havens to sidestep Britain's gambling taxes will be hit with a new levy that may raise £300m for the taxpayer.

The Government is to impose a 15% tax rate on operators in the £2bn remote gambling market.

The rules state that from December 2014 gambling must be taxed according to where customers are based rather than where the online operator is registered.

UK-based firms are already taxed

"It is unacceptable that gambling companies can avoid UK taxes by moving offshore, and the Government is taking decisive action to ensure this can no longer happen," Economic Secretary to the Treasury Sajid Javid said.

"These reforms will ensure that remote gambling operators who have UK customers make a fair contribution to the public finances."

The shift will affect some of the industry's largest players.

Ladbrokes, Bwin.party, William Hill and Betfair all have online operations based in Gibraltar, where taxes are levied at 1% and capped at £425,000.

The proposed 15% rate, which the Government said will be confirmed in its Budget statement next March, would mean that offshore operators are taxed at the same level as domestic internet betting companies.

Officials estimates that the new rules will bring in £300m a year in additional tax revenue.

Plans to bring offshore gaming companies under the UK tax system were outlined in the 2012 Budget, but the industry had been waiting for the detail - most crucially the rate at which they will be taxed.

William Hill, which has the largest share of the UK's remote gambling market, has previously suggested that it could challenge the changes on the grounds that they breach European Union competition law.

The Gambling Commission said that the estimated worldwide remote gross gambling yield (GGY) - excluding telephone betting - was £21.08bn during 2012, up 5% on the previous year.

It said the UK consumer GGY generated with operators regulated overseas, which includes telephone betting, is estimated to have grown approximately 1% between 2011 and 2012.

The commission said remote GGY for operators licensed in Great Britain accounts for approximately 4% of the global total.

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The Sky News Business Round-Up And Look Ahead

Sky's Naomi Kerbel offers a look ahead to what's coming up in the week's business news.

:: Monday August 19

Leading UK housebuilder Bovis Homes reports interim results on Monday. The housing sector has been buoyed by the government's Help To Buy mortgage lending scheme.

The Chartered Business Institute releases its third quarter economic forecast on Monday. In May it forecast growth of 1.0% in 2013 and 2.0% in 2014.

: Tuesday August 20

The Council of Mortgage Lenders which represents banks, building societies and other mortgage lenders releases lending figures for July on Tuesday. Loans to first-time buyers hit their largest quarterly total since 2007 in the second quarter of 2013.

:: Wednesday August 21

Public sector finances including details on government borrowing and debt for July will be scrutinised on Wednesday. The public sector borrowed £12.4bn in June, £0.5bn more than a year earlier. Net debt reached £1,202bn at the end of June 2013, equivalent to 74.9% of GDP.

:: Thursday August 22

Finger-biting across the UK for GCSE results on Thursday. Recent research from the Prince's Trust has shown more than one in three young people leaving school substandard results believe they will end up on benefits.

:: Friday August 23

The British Bankers' Association releases July data on Friday. The number of mortgage approvals for house purchases rose to 37,278 in June, up from 36,290 a month earlier to a 17-month high.

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Fashion Designer Joins Anti-Fracking Protests

By Tom Parmenter, Sky News Correspondent, Balcombe

Fashion designer Vivienne Westwood has joined the growing anti-fracking protest camp in West Sussex.

Hundreds of extra demonstrators from all over the UK have arrived to camp outside the controversial test drilling site at the village of Balcombe.

She told Sky News that Prime Minister David Cameron's stance supporting fracking was outrageous: "It's just storing up for the future, near future even, with financial problems and ultimately, you know, we'll all fry.

"You know the ice caps are melting, the Earth is going to change dramatically and I don't know where he's (David Cameron) coming from - what is this race?"

Protesters have set up two camps around the village of Balcombe

Protesters have now set up two camps a mile apart and some have said they intend to take "direct action" against the drilling site. 

Campaigner James Wilde told Sky News that the phrase meant: "Anything which is resistance, anything which is proactive and, you know, generally uses strategy."

He added: "We love our air, we love our water and we like things unadulterated by poisonous chemicals."

Energy company Cuadrilla has already suspended operations at the site over the weekend.

Vivienne Westwood said the PM's support for fracking was "outrageous"

Chief executive Francis Egan explained that his firm is simply testing the ground: "Any hydraulic fracturing proposal would require a detailed Environmental Impact Assessment, public consultations and multi-agency regulatory reviews, all of which would be available for scrutiny."

The firm added: "We will continue working closely with the police and local authorities throughout the planned protest and we continue to support the right to protest peacefully."

Villagers are split over the idea of fracking but the majority are concerned about how the protest has evolved.

Linda and George Short live very close to the site and had initially helped the protesters by taking water for them.

Now, with so many new arrivals, they are cautious about what "direct action" may take place on their doorstep.

Linda said: "I think a lot of people are anti-fracking but they are also anti the protesters - they don't like the fact that there are so many outsiders.

"But these people are - yes you might call them professional protesters - but I wouldn't have the courage to lie down in front of a lorry, so in effect they are actually doing our dirty work for us."

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City Investors Bank On £55m RBS Branch Payout

By Mark Kleinman, City Editor

A consortium of City investors vying to buy 315 branches from Royal Bank of Scotland is in line to receive £55m in annual interest payments from the state-backed lender - even before they complete a deal.

Under the proposal W&G Investments, a vehicle set up by the former Tesco finance director Andy Higginson, would be paid a 5% "coupon" on a £1.1bn down-payment to acquire the branch network.

The payments would be made by RBS during the period between it agreeing to sell the branches to W&G and the completion of a deal, which analysts expect could take as long as two years.

If it takes longer, RBS could have to pay an even bigger sum to the consortium.

The details are disclosed in a document published on Friday by W&G, which will formally list on London's junior AIM stock market next week.

It marks the latest stage of RBS's protracted efforts to offload the business, codenamed Project Rainbow, under the orders of the European Commission in return for the banks's £45bn taxpayer bailout in 2008.

Santander pulled out of a deal to buy the RBS branches

RBS wants to revive the venerable banking brand-name Williams & Glyn to entice bidders and has granted W&G Investments a licence to use the name during the auction.

The admission documents include, however, dozens of risk factors that could inhibit a takeover of the branches by W&G, which is backed by leading investors such as Lansdowne Partners, Schroders, Talisman and Toscafund.

The potential barriers to a successful acquisition of Rainbow include the greater scrutiny of bank bosses by financial regulators and the drawn-out nature of a deal.

W&G said: "During the period between the Signing Date and the Completion Date, which is anticipated by RBSG to be approximately two years, it is expected that the Company [W&G] will have rights to monitor the performance of the Rainbow Assets.

"However... the Company may not have the ability or right to intervene and the value of the Rainbow Assets may be materially adversely impacted."

It also pointed to the ongoing review of Britain's small business banking market by the Office of Fair Trading, which it said could jeopardise investors' willingness to back a deal.

And it said adverse customer reaction to a takeover could put at risk the bank's desired funding model.

It said: "The currently anticipated funding model for Rainbow is dependent on deposits, rather than wholesale funding.

"There is a risk that there may be adverse public reaction to the Company post acquisition of Rainbow which could lead to depositors withdrawing their money.

"Certain customers and depositors may seek to change banks if they perceive the Separation or the acquisition of Rainbow by the Company might put their money at risk.

"This could result in a funding gap that would need to be addressed by accessing funding in the wholesale markets (provided that such funding were to be available) which is likely to be a more expensive form of funding for the Company than deposit-based funding."

W&G also warns in the documents that the recommendations of the Vickers Commission on banking reform could scupper a deal because of moves to force banks to make themselves safer by ring-fencing retail activities from investment banking operations.

Although the RBS network falls within the permissible limit of £25bn of deposits to avoid having to be treated as a ring-fenced bank, the W&G directors point to uncertainty over the legislation as another risk.

It said: "The draft secondary legislation to the Financial Services (Banking Reform) Bill provides that the requirement to ring-fence will not apply to UK banks holding less than £25,000,000,000 in 'core deposits'. At this stage it is unclear what the finalised threshold will be and therefore whether Rainbow would be a ring-fenced bank."

An earlier deal to sell the network, which comprises all RBS-branded branches in England and NatWest branches in Scotland, fell through last year when Santander UK pulled out citing concerns about IT systems.

Santander had initially agreed to pay £1.65bn for the branches, which include £19bn of assets, 250,000 small business customers and approximately 5,000 staff.

The rival bidders remaining in the RBS auction include a private equity bid from Corsair Capital and Centerbridge that is backed by the Church of England's pension fund, and one led by Blackstone, the US private equity group.

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Mortgages 'Most Affordable For 14 Years'

By Nick Martin, News Correspondent

Mortgages are more affordable now than at any time in the past 14 years, according to the latest figures.

Monthly payments now account for 27% of a new borrower's income in the second quarter of 2013, well below the average for the past 30 years.

Lower house prices and reduced mortgage interest rates have been the main drivers behind the significant improvement in affordability, according to the Halifax.

Halifax mortgage director Craig McKinlay said: "Substantial mortgage rate reductions and lower house prices have led to a significant improvement in mortgage affordability since the peak of the housing market six years' ago.

"The Funding for Lending Scheme has helped lenders to cut mortgage rates causing a further modest improvement in affordability over the past year despite the modest rise in house prices nationally."

It is good news for first-time buyers.

James Almond from Bramhall near Stockport has just got on to the properly ladder.

The 38-year-old bar manager said he felt the right deals were available to take the plunge.

He said: "I used a mortgage broker to look at the best deals and in the end it was quite affordable.

"Many of my friends aren't so lucky and are still living with their parents because the deposits required are so large."

But there remains a clear north-south divide when it comes to mortgage affordability, according to the Halifax.

Mortgage payments are at their lowest in Northern Ireland where they are just 17% of incomes compared to 36% in Greater London.

Independent mortgage consultant Richard Ignatowicz said the market can change quickly.

 "We can't just say mortgages are now more affordable than ever. It doesn't mean much in isolation.

"Borrowers need to be cautious about changes on the horizon. Will they still be able to afford a mortgage when the rate reverts to 5%? Tthat's the real question."

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A £350m Donation To Nation That Can't Be Used

An unspent donation made to the Government 85 years ago, which is now worth £350m, cannot be touched because it won't fulfil conditions of its use - paying off the national debt.

The anonymous donation of £500,000 was made in 1928 and established a fund which was designed to help the Government pay off the UK's debt.

It was made with a strict request that it should not be touched until it was able to reduce the national debt to zero.

Although it has grown 700-fold since the 1920s, it is unlikely to achieve its target - the national debt currently stands at £1.3trillion.

While the fund is growing at a rate of £5m to £10m a year, Britain's national debt rocketed by an estimated £121bn in 2011/12.

In the meantime, the fund, called The National Fund, is now managed by Barclays and is likely to keep on growing.

The anonymous donor who set it up at its outset is believed to have done so in response by a call from Conservative Prime Minister Stanley Baldwin, who wrote to the Financial Times in 1919.

He suggested it would be patriotic for British citizens to contribute towards paying off the national debt, which at that point had reached 140% of the total amount of money earned in one year by the UK (GDP).

Barclays Wealth and Investment Management is the fund's trustee

By 1927, the national debt had reached 160% of GDP and it is thought that the donor was prompted to set up the fund with the belief that it would grow sufficiently to pay it off.

The National Fund has now grown to become one of the largest charities in the UK by net assets.

But unlike most charities, it takes in no donations and provides no handouts to needy causes.

Papers lodged with the Charities Commission in 2012 said: "The aim of the charity is to create a fund, that either on its own or combined with other funds, is sufficient to discharge the National Debt.

"The ultimate beneficiary of the National Fund is the National Debt Commissioners."

The papers say the fund increased in value by £12m in 2012 which all came from dividends on investments. Last year it spent £570,000 on managing the fund and £430,000 on other activities.

Barclays has been trying for four years to get permission to use the money to make charitable grants or to turn it over to the Treasury, but any change would have to be approved by a court.

A spokesman for Barclays said: "We've been working ever since we became the trustee to change the original objects, which say the funds can be used only to pay off the entire national debt.

"We are working with the Charity Commission and the attorney general's office to look at how best to take the fund forward."

This week it emerged Joan Edwards left £520K to the Government

A spokesman for the attorney general's office said: "There has been correspondence between the Charity Commission, the trustees and ourselves over the National Fund.

"We are looking at a number of options for the future of the Fund, consistent with its object of extinguishing or reducing the national debt.

"It would not be right to comment further whilst this process continues."

A spokeswoman for the Charity Commission said is it continuing dialogue with the trustee and the attorney general's office regarding the charity.

This week, the Tories and Liberal Democrats gave up a £520,000 bequest from former nurse Joan Edwards amid confusion over whether she actually meant the money to go to the state or to the political parties in power.

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Swedes Plot £1bn Swoop For UK Manufacturer

By Mark Kleinman, City Editor

Another slice of Britain's industrial base is poised to fall into European hands with a near-£1bn takeover of Edwards Group, a Sussex-headquartered high-tech manufacturer.

Sky News can reveal that Edwards, which is listed on New York's Nasdaq stock exchange, is in advanced talks about a takeover by Atlas Copco, a major Swedish industrial combine.

A deal for Atlas Copco to buy Edwards could be announced as soon as next week, according to banking sources in the US.

Although it is not quoted in London and specialises in making products such as high-pressure vacuum pumps which are unfamiliar to the general public, the deal will nevertheless be closely-watched in Britain.

Edwards' takeover by Atlas Copco will follow a recently-agreed £3.4bn deal for Schneider Electric of France to buy Invensys, another British manufacturing stalwart.

Edwards employs hundreds of people at its Crawley head office and manufacturing facilities and is widely-held to be among the world's most advanced companies in its field. Its products are an important component in the supply chains of flat-screen television and solar cell manufacturers.

Vince Cable, the Business Secretary, would be alarmed if the deal was predicated upon the closure of any UK facilities but such a move from Atlas Copco was unlikely, said one banker.

Wall Street insiders said the Swedish group, which has a market capitalisation of more than £20bn, planned to offer around $9.20-a-share for Edwards, a healthy premium to the $8 at which it listed on Nasdaq last year.

It is unclear whether Edwards' board has formally voted to approve the bid, but insiders said that investment bankers at Barclays and Lazard, who are advising the British-based company, had recommended that it should do so.

Edwards opted for a listing on Nasdaq over London last year after concluding that it would achieve a higher rating for its shares if it went to the US, and next week's deal will signal the end of its brief tenure on the technology-focused exchange.

A supplier of vacuum pumps to the world's largest semiconductor manufacturers, Edwards was spun out of the BOC gases group after it was acquired by Linde, a German rival, in 2006.

Large chunks of Edwards' shares are still held by CCMP Capital and Unitas, the two private equity firms which acquired it from BOC.

Edwards had a market value of just over $950m (£608m) at Friday's closing share price of $8.45.

The offer from Atlas Copco, which is larger than Electrolux and Volvo, two other big Swedish manufacturers, is expected to crystallise another big financial gain for CCMP and Unitas.

It will also add another dimension to the Stockholm-based company's operations, which include making machines for the mining industry, air compressors and power tools.

Edwards employs more than 3000 people around the world, although it has shifted some jobs from the UK to lower-cost manufacturing sites overseas, including in Asia, recently unveiling plans for a vast factory in China's Shandong Province.

The company is now chaired by Nick Rose, a former finance director of Diageo, the drinks company, who is on the boards of BAE Systems, BT Group and Williams Grand Prix Holdings, the owner of the Formula One team.

Atlas Copco's bid comes six months after Edwards named Jim Gentilcore, who already sat on the company's board, as its chief executive, replacing former Jaguar Land Rover and JCB executive Matthew Taylor.

It was unclear on Saturday whether Mr Gentilcore would remain in place if the takeover of Edwards is completed.

Neither Atlas Copco nor Edwards could be reached for comment.

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