Jobless 'To Be Forced To Work' For Benefits

Work and Pensions Secretary Iain Duncan Smith will announce tough new conditions on the payment of unemployment benefits at the Conservative Party conference next week, according to reports.

The Daily Mail reported that the long-term unemployed will be told that they must do an unpaid full-time job or lose their benefits.

The paper said it was expected that claimants who go through the Work Programme - the Government's main back-to-work scheme - but fail to find a job will be required to take part in unpaid community work or work experience.

Mr Duncan Smith has said people should not live a life on benefits

Refusal to do so could mean the loss of welfare payments.

Mr Duncan Smith told the Mail: "It's not acceptable for people to expect to live a life on benefits if they're able to work."

He added: "Benefits should be a safety net - but not something that gives claimants an income out of reach of many hard-working families."

Mr Duncan Smith also announced the Government's benefits cap is now fully in place across Britain.

The controversial cap - which limits benefits to £500 a week for couples and lone parents and £350 a week for single adults - is a key plank of Mr Duncan Smith's welfare reforms. It is expected to affect about 40,000 households.

The cap covers the main out-of-work benefits - jobseeker's allowance, income support, and employment and support allowance - and other benefits such as housing benefit, child benefit and child tax credit and carer's allowance.

It was piloted in four London boroughs last April before being introduced across the country from July.

Mr Duncan Smith defended the cap, arguing that it restores fairness to the system, ensuring households where no one is working cannot claim more than the average family earns.

Critics say that it penalises out-of-work families in areas with high housing charges, forcing them to move out to cheaper areas.

But Mr Duncan Smith told the Daily Mail: "We have now successfully delivered a cap on benefits so that out-of-work households know they can no longer claim more than the average family earns and we have returned fairness to the benefits system."

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Royal Mail Sale To Be Completed Before Strike

The Government has confirmed a timetable for the Royal Mail privatisation to be completed ahead of any possible strike action by postal workers.

Shares are expected to be priced at between 260p and 330p, ministers said, giving a market valuation in the range of £2.6bn and £3.3bn.

The Government explained that it planned to sell between 40.1% and 52.2% of the company, which is expected to make its market debut on October 11, with 150,000 Royal Mail staff receiving free shares likely to be worth roughly £2,000 each at the valuation's mid-range.

It was confirmed that unconditional dealings in the stock will start on October 15, which is the day before voting closes in a ballot by the Communication Workers Union (CWU) over whether to back a campaign of industrial action on the sale.

Any strike action would start a week later.

Business Secretary Vince Cable said: "Today is an important day in the life of Royal Mail. People can now apply to buy shares in this iconic British brand.

"This will give Royal Mail access to the private capital it needs to modernise, as envisaged under successive governments, and enshrined in law by Parliament two years ago."

The Government envisages that 70% of the offering will be allocated to institutional investors.

Individuals could apply for shares from today, with the deadline for the receipt of applications being October 8, but sources have suggested the offer is already fully subscribed.

Further pricing details and share allocations will be confirmed when conditional dealings in Royal Mail start.

Retail investors based in the UK can buy shares at a minimum of £750 and can also apply through intermediaries.

Despite the prospect of the windfall for its members, the CWU says it fully expects the ballot to overwhelmingly back strike action unless the company provides guarantees on issues including pay, deliveries and future jobs.

A union communication sent to CWU members today said: "Those who want to sell off the Royal Mail Group are motivated purely by short-term gain and vested interests.

"We cannot give the company a free hand to determine your future and the future of UK postal services."

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Candy Crush: 'Shares Bid Values Firm At $5bn'

The British creator of the hit Candy Crush Saga game has reportedly used US rules to secretly file for a stock market flotation, valuing the firm at $5bn (£3.1bn).

King - which is based in London's Tottenham Court Road - is currently the largest developer of games on Facebook, having overtaken Zynga of Farmville fame.

Like Twitter a few weeks ago, it is said by The Daily Telegraph to have used the US Jobs Act to file its intentions confidentially because it has annual sales of less than $1bn (£622m).

The firm, which produces gaming products for the mobile market, makes its income through player purchases of in-game products such as extra lives and is said to make $600,000 daily from Candy Crush Saga.

Players of the game must swap different coloured sweets around to match three of the same to pass through levels, collecting rewards along the way.

The decision to file the Initial Public Offering (IPO) on the Nasdaq stock exchange is of little surprise given the market's tech focus, but King will be mindful of Zynga's performance since its stock market debut.

Its value has sunk amid the insurgency from King and praise heaped upon the London firm by Facebook.

King has confirmed hiring Hope Cochrane - credited with the IPO of tech company Clearwire - as its chief financial officer but is yet to respond to queries from Sky News about its flotation plans.

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Tesco Sorry Over 'Gay Best Friend' Doll

Tesco has withdrawn an inflatable figure labelled "gay best friend" and apologised for selling it.

It comes a day after the retailer was forced to remove a Halloween costume called "Psycho Ward" from its shelves after it sparked widespread criticism.

On its website Tesco said "The Inflatable g*y Best Friend" was suitable for children aged three to four and was an "amusing gift".

Tesco is no longer selling the doll. Pic: Tesco.com

"If SEX in the City and Will & Grace taught us anything, it's that g*y best friends are in this season," the description of the product said.

"We've had the manbag, we've had leg warmers and iPhone fever, now it's time for the new craze.

"Although not much can be said for his own attire, your Inflatable g*y Best Friend is ready to give you fashion advice, tell you if your bum looks big and b**ch about everyone who doesn't wear Jimmy Choo's."

A Tesco spokesperson said: "This product was uploaded to the website by a third party seller but was removed from sale immediately because we found it offensive.

"The webpage should have been removed at that time and we are looking into why it is still visible two months later.

"We have very clear guidelines for third party sellers who list items on our website, and are very sorry that on this occasion they weren't followed."

The product remains on sale on the Amazon website.

Gay rights charity Stonewall chief Ben Summerskill said selling the item was "like trying to sell ice to Eskimos".

He said: "We can't imagine why any woman would choose to buy an inflatable gay best friend when there are two million of the real thing already available in modern Britain and most of them are much better looking than Tesco's pale imitation."

Asda and Tesco apologised for the Halloween costumes

Tesco and rival supermarket chain Asda both faced a backlash on Thursday over the sale of Halloween costumes which appeared to make light of mental health issues.

Tesco said it was "really sorry for any offence caused" by its "Psycho Ward" offering, which included a bright orange boiler suit.

Asda also apologised after it advertised a fancy dress outfit featuring someone covered in blood and brandishing a machete as a "mental patient fancy dress costume".

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House Prices: Bank Given New Help To Buy Role

By Ed Conway, Economics Editor

The Bank of England is to be given effective control over the loan-to-value ratios of mortgages eligible for the Government's new Help to Buy scheme, it has emerged.

As of next September, the Bank's Financial Policy Committee will be able to impose swingeing fees on high-debt loans in the Treasury's mortgage guarantee scheme, potentially ruling out 95% loan-to-value products.

The news came after the Chancellor announced that he will give the Bank the right to review the scheme on an annual basis, instead of only after three years, as had been originally intended.

Under the original conception of the scheme, in which the Treasury will part-finance deposits to help prospective homeowners onto the housing ladder, buyers would only have to provide a 5% deposit, with the Government helping provide a further chunk.

However, Sky News understands that in an annual review, starting next September, the Bank will also be able to call for a specific increase in the fees banks will have to pay if they want to lend out a 90-95% loan-to-value mortgage.

Although the Bank only has the power to recommend the fee changes, Treasury insiders say they would be highly likely to implement them.

The other lever the Bank can pull is to recommend lowering the price of properties eligible for the scheme from £600,000.

According to documentation sent out to mortgage lenders, banks will be charged three different fees depending on the scale of loans they plan to extend under the scheme: one for an 80-85% loan, one for a 85-90% loan and another for a 90-95% loan.

Should the Bank's FPC become concerned about households overextending themselves, they could recommend an inordinate increase in the fees for the highest debt mortgages, effectively ruling them out in the market.

The development underlines the scale of concern in the Treasury and Bank that the Help to Buy scheme could have the potential to overheat parts of the housing market which already look unaffordable.

Research by Sky News has found that the average property in Kensington & Chelsea is now worth almost 30 times the average salary of those living in the area; this compares to an average ratio of 6.1 times across England and Wales.

According to Nationwide house prices rose by 4.3% in Britain over the past year – though the increase in London was 10%.

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Church Consortium Wins RBS Branch Sale Race

Royal Bank of Scotland is to sell 314 branches to a consortium backed by the Church of England in a deal forced on the bank because of its taxpayer bailout.

It will see Williams & Glyn's, a bank brand that has been dormant for nearly 30 years, soon return to the UK high street to become a new competitor in the market.

The consortium includes Corsair Capital, Centrebridge Partners and the Church Commissioners for England - the church's pension fund.

The deal will give the church a role in high street banking after the Archbishop of Canterbury Justin Welby slammed controversial payday lenders for their rates before learning that the church had actually invested in Wonga, the country's best-known payday firm.

The Archbishop of Canterbury wants banking to have a moral compass

The new player, whose executives include former trade minister Lord Davies, has pledged to put lending to small business at its heart, give more funds to the community and cap its bonuses at 100% of annual salary.

RBS confirmed the investors would pay £600m for part of the business with the remainder being raised in a stock market listing at a future date.

RBS chairman Sir Philip Hampton said: "We are delighted to be working in partnership with these investors to establish a new challenger bank for UK customers.

RBS chairman Sir Philip Hampton

"Williams & Glyn's will play an important role in the UK banking landscape and will be an excellent new addition to the market, with a particular strength in small business banking - a sector that is so crucial to the UK's economic recovery.

"Much has been done already in building the standalone business, and today's announcement provides more certainty for our customers and employees ahead of a flotation."

Sky News revealed in July that the Corsair bid was being backed by the Church Commissioners for England in an attempt to establish an ethical dimension in the group's vision for the small business-focused bank.

An earlier deal to sell the network, codenamed Project Rainbow, 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.

Lord Davies, who is vice chairman of Corsair Capital, said today: "We are delighted to have been selected by RBS.

"The Consortium views this as an opportunity to create a genuine challenger bank, which will be a vibrant, healthy competitive force in UK banking and a new financial services provider to the UK public and small and medium sized businesses.

"There is a great history in the Williams & Glyn's brand and the business has an opportunity to be at the forefront of the UK banking industry whilst making an active contribution to the community from its strong regional network."

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BlackBerry's Near $1bn Loss As Phones Flop

Struggling smartphone maker BlackBerry has confirmed a loss of $965m (£599m) for the second quarter - much of it down to the the failure of its latest handsets.

The figure includes a writedown of $934m for unsold phones such as the Z10, one of two devices released earlier this year in a high-profile attempt to turn the company around.

Customers have not been impressed with the latest offerings and the Canadian firm continues to lose market share to rivals such as Apple and Samsung.

BlackBerry shipped 5.9 million phones in the second quarter, far less than the nine million new iPhone models Apple recently sold in just a few days.

BlackBerry's results - which it warned the market about last week - also revealed a big drop in quarterly revenues - from $2.9bn a year ago to $1.6bn today.

The all-touchscreen Z10 was meant to save the firm - but has flopped

The company is taking drastic steps to ensure its future and recently announced it was laying 4,500 staff.

It also unveiled a 'rescue plan' earlier this week in the form of a buyout by its largest shareholder, Fairfax Financial Holdings.

However, the deal is still to be finalised and the company is open to other offers.

In a statement, BlackBerry boss Thorsten Heins said the company was "very disappointed" with its latest results and that "major changes" were under way.

He added: "We understand how some of the activities we are going through create uncertainty, but we remain a financially strong company with $2.6bn in cash and no debt.

Boss Thorsten Heins says "major changes" are under way to save BlackBerry

"We are focused on our targeted markets, and are committed to completing our transition quickly in order to establish a more focused and efficient company."

BlackBerry still has some 70 million subscribers worldwide, but most of these are using older handsets.

According to research firm IDC, BlackBerry had just 2.9% global market share in the second quarter, with Android devices at nearly 80% and Apple phones at 13%.

In Autumn 2009, the company had 20% of the smartphone market and it was also once Canada's most valuable company, with a market value of $83bn (£52bn) in June 2008.

Fairfax's recent offer for the firm valued it at just $4.7bn (£2.93bn).

The company has said its new strategy will see it re-focus on its core business market, and in future it will only offer two high-end devices and two entry-level handsets.

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Google Overhauls Search Engine Formula

Google Inc has overhauled its search formula that runs the internet's dominant search engine, to better cope with longer, more complex queries from web users.

The company secretly launched its latest "Hummingbird" algorithm about a month ago in a bid to keep pace with the evolution of internet usage, Amit Singhal, senior vice president, said.

Google is describing it as the most dramatic alteration to its search engine since it revised the way it indexes websites three years ago.

As search queries get more complicated, traditional keyword-based systems begin deteriorating because of the need to match concepts and meanings in addition to words.

Mr Singhal, writing in a separate blog post, said: "Remember what it was like to search in 1998? You'd sit down and boot up your bulky computer dial up on your squawky modem, type in some keywords, and get 10 blue links to websites that had those words.

"The world has changed so much since then: billions of people have come online, the web has grown exponentially, and now you can ask any question on the powerful little device in your pocket."

"Hummingbird" is the company's effort to match the meaning of queries with that of documents on the internet, said Mr Singhal from the Menlo Park garage where Google founders Larry Page and Sergey Brin conceived their now-ubiquitous search engine.

It is a change that could have a major impact on traffic to other websites.

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Marriage Tax Breaks For Four Million Couples

David Cameron says four million couples will benefit from the Government's new £1,000 marriage tax allowance.

Ahead of the start of the Conservative Party conference, the Prime Minister said the scheme - starting in April 2015 - will be worth up to £200 a year for married couples, including 15,000 in civil partnerships.

They will receive the benefit at the end of the tax year in 2016.

It will work by letting people transfer £1,000 of their personal tax allowance to their spouse or civil partner - an increase on the £750 allowance promised in the Tory manifesto, which would have seen couples gain £150.

The new allowance, which is not available to couples which include a higher rate taxpayer, is aimed at couples where one partner has not used all of their personal allowance or does not work at all.

Bride-to-be Jo Herbert, told Sky News at a west London wedding show that she did not think the proposals were fair and that she felt they would do little to encourage marriage.

She said: "Personally I don't think that it's very fair that they (married couples) are receiving financial rewards and couples that just that just choose not to get married for any reason cannot benefit as well. 

The PM says 'nothing would be possible' without his wife Samantha

"I don't think that it would actually incentivise anyone to get married because £200 - I mean yes thank you very much I will take that -but it is not going to go too far especially in the grand scheme of things, in how much weddings cost."

The announcement comes after a trade-off that allowed the Liberal Democrats to announce free school meals for all children under eight earlier this month.

The proposal, which Downing Street said shows the Government values commitment by recognising marriage and civil partnerships in the tax system, makes good on promises Mr Cameron made when he was running for leadership of the party in 2005.

In an article in today's edition of The Daily Mail, he said: "I believe in marriage. Alongside the birth of my children, my wedding was the happiest day of my life.

"Since then, Samantha and I have been a team. Nothing I've done since - becoming a Member of Parliament, leader of my party or Prime Minister - would have been possible without her."

He said that the new measures would apply "if you're gay or straight - and in a civil partnership or a marriage. This summer I was proud to make Equal Marriage the law. Love is love, commitment is commitment".

Labour's shadow chief secretary to the treasury, Rachel Reeves, said that the marriage tax break would not even help two-thirds of married couples and said he was out of touch if he "thinks people will get married for £3.85 a week".

She said: "And even for the minority who might benefit, it will be far outweighed by what David Cameron's Government has already taken away in higher VAT and cuts to child benefit and tax credits. In most cases, the extra payment will be paid to men, even though it is women who have disproportionately lost out so far."

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Ex-Barclays Chief In Frame For Lloyds Role

By Mark Kleinman, City Editor

One of the architects of the legislation that will force Britain's banks to ring-fence their high street lending operations is being considered as a surprise candidate to chair Lloyds Banking Group.

Sky News can reveal that Martin Taylor, a member of the Independent Commission on Banking (ICB) in 2010-11, is on a list of names approached about taking over from Sir Win Bischoff next year.

Mr Taylor's presence on the shortlist to chair Lloyds has emerged less than a fortnight after George Osborne, the Chancellor, began reducing the taxpayer's stake in the bank, raising £3.2bn from the sale of a 6% stake.

His name is an unexpected one to feature in the reckoning to succeed Sir Win is a surprise given that his last term in a UK bank's boardroom ended in ignominy at Barclays in 1998.

Lloyds has been searching for a new chairman for just over four months but is in no hurry to identify a replacement for Sir Win, who will not step down until its annual meeting next year.

The task of finding a new figurehead for the bank's board is likely to have been made significantly easier by the fact that the Treasury has begun selling its shareholding. A surge in Lloyds' share price during the last year would, if maintained, pave the way for further disposals ahead of the next general election.

The chairmanship of Lloyds is one of the most high-profile in British boardrooms. Sir Win, a former boss of Citi, the Wall Street bank, was appointed four years ago to replace Sir Victor Blank, who was forced to step down in the wake of Lloyds TSB's rescue of HBOS.

That deal resulted in taxpayers pouring more than £20bn into Lloyds to save the combined group, leaving UK Financial Investments, which manages the Government's stake, to threaten to vote against Sir Victor at its annual meeting in 2009.

Mr Taylor was a trenchant critic of banks' behaviour during the year-long probe into the structure of the industry that was chaired by Sir John Vickers.

He argued forcefully for the system of ring-fencing that will be adopted before 2019 by the major lenders, although Lloyds will be relatively unaffected by the policy because of its limited investment banking operations.

Last year, Mr Taylor recounted how he had been "among the first to succumb to the myth of (former Barclays boss Bob) Diamond's indispensability" as he outlined the need for a cultural overhaul of British banking.

If Mr Taylor was chosen as Lloyds' next chairman, he would have to step down as an external member of the Bank of England's Financial Policy Committee (FPC), which he joined only a few months ago. One banker said this weekend there was unlikely to be any question over conflicts of interest with either the ICB or FPC if Mr Taylor did take the Lloyds role.

Since being forced out of Barclays in 1998, Mr Taylor has served as an adviser to the international arm of Goldman Sachs, chairman of WH Smith and then of Syngenta, a Swiss-based agricultural chemicals producer.

The search for Sir Win's successor is being led by Tony Watson, the former fund manager who is Lloyds' senior independent director.

David Roberts, the bank's deputy chairman and another former Barclays executive, is seen as a strong candidate to land the role although it is unclear whether he wants it.

Lord Davies, the former trade minister, has also been linked with it although he has made it clear he is not interested and was this week part of the consortium which agreed to buy a stake in 314 Royal Bank of Scotland branches.

Odgers Berndtson, the headhunting firm, is leading the search, while Lloyds is also about to announce the appointment of a chairman of TSB, the 631-branch network it is spinning off as an independent bank.

Lloyds declined to comment on Saturday.

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