Ireland Bailout Exit 'Not End Of The Road'

Ireland's finance minister has warned of continuing pain ahead as the country prepares to officially exit its bailout.

At a news conference in Dublin ahead of Sunday's milestone, Michael Noonan told reporters "this isn't the end of the road" but pledged there would never be a repeat of its financial collapse because of the measures taken to prevent such a crisis.

He acknowledged the sacrifices made and losses suffered by ordinary people since the nation went cap-in-hand to the EU and International Monetary Fund (IMF) for a €85bn rescue package in 2010.

He said: "The real heroes and heroines of the story are the Irish people.

"They have had their taxes increased, they have had their services cut drastically - some of them including public servants have had very serious pay cuts.

"Everybody has had cuts in their pensions as well. But they have continued to support the government."

Mr Noonan said those who had suffered the most were the hundreds of thousands who lost their jobs and homes.

Cutbacks and tax rises led to protests as the Celtic Tiger economy crashed

More than 200,000 people were forced to emigrate in the wake of the collapse of the Celtic Tiger economy - brought about by the bursting of Ireland's property bubble which crippled the banking sector.

The country will officially exit the bailout programme on December 15, allowing it to properly re-enter the money markets after raising just €5bn in the past year.

The money it was loaned by the so-called troika - made up of the IMF, European Central Bank and European Commission - will start to be paid off in 2014.

Mr Noonan was speaking on the day the European Commission released its final tranche of bailout funding to the country while the IMF was to follow suit.

Commission president Jose Manuel Barroso congratulated the Irish government and people for the achievement.

"Thanks to their efforts and sacrifices, Ireland will now be able to finance itself through its own efforts," Mr Barroso said.

"Today's result would not have been possible without the solidarity and significant financial support of the other EU member states." Those countries also include the UK, as it provided separate bilateral loans.

Public Expenditure Minister Brendan Howlin said the bailout exit would give "much greater control over our own destiny into the future" but he cautioned there would be no spending spree.

Both he and Mr Noonan warned there will be no cause for the country to "go mad" on Monday following the exit, insisting the government will have to remain committed to making "prudent" economic and social decisions.

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Cameron Holds Airport Summit As Row Looms

By Mark Kleinman, City Editor

David Cameron has held a secret summit with the head of a panel reviewing options for expanding Britain's airport capacity as he braces for a major row to erupt on the issue next week.

Sky News has learnt that the Prime Minister met Sir Howard Davies on Wednesday to discuss the Airports Commission's interim report, which will be published on December 17.

Political tensions are running high ahead of the report amid speculation that it will shortlist just three favoured options, each of which includes the construction of at least one new runway at Heathrow Airport.

Boris Johnson, the Mayor of London, has expressed fury over reports suggesting that his idea for a new four-runway hub airport in the Thames Estuary has been sidelined.

People close to the Commission's work said that Sir Howard had been irritated by the speculation, suggesting that much of it had been inaccurate.

The panel is understood to have outlined three Heathrow-centric proposals: a third runway at the UK's biggest airport; a bigger expansion comprising two new runways there; and an additional runway there alongside a second runway at Gatwick.

That could mean only two viable proposals would be taken forward, since the owners of Gatwick have insisted that they will not build a second runway if Heathrow is also allowed to expand.

Mr Cameron is understood to have urged Sir Howard to include in next week's report an alternative option that does not involve a new runway at Heathrow.

That could mean a revival of the London Mayor's proposal or an expansion focused on London's third airport, Stansted.

A Downing Street spokesman said: "The Airports Commission is independent of Government and its work is a matter for it. It will deliver its interim report next week. The final report to Government is due in 2015.

"Part of the Airport Commission's remit is to engage with representatives from across the political spectrum. As the Airports Commission have made clear, Sir Howard Davies has met with political representatives in all parties, which includes the Prime Minister, as part of this process, but they have not been given a copy of the draft report."

Sir Howard met George Osborne, the Chancellor, earlier this week while Sky News understands that Mr Johnson met the Transport Secretary, Patrick McLoughlin, on Thursday to discuss a range of issues including the Airports Commission's review.

A Whitehall official pointed out that Mr Johnson had consistently said that he would assist the Commission's work but would "not necessarily be bound by its conclusions".

A spokesman for the Mayor declined to comment on his meeting with Mr McLoughlin, although Mr Johnson said publicly on Wednesday that if only three options remained after next week's report, each of which included expanding Heathrow, "that would be scandalous".

The publication of an interim report, which will set out several options meriting further analysis ahead of a formal recommendation after the 2015 general election, was supposed to defuse political tensions over Britain's future aviation capacity.

However, Sky News understands that the Government will publish an official response in the new year, underlining the difficulty it faces in navigating an issue that will feature in the manifestos of all the main parties in 18 months' time.

Stewart Wingate, Gatwick's chief executive, said: "Gatwick's case for a second runway is compelling. Compared to Heathrow we are cheaper, quicker, have a significantly lower environmental impact and we are the most deliverable solution.

"Heathrow's answer for passengers is to re-establish their monopoly which will mean high fares forever, and huge environmental damage to their local communities."

The requirement for new runway capacity has become more pressing as the south-east's airports reach bursting point.

Rival European hubs in Frankfurt and Paris are growing rapidly, while Dubai is expected to overtake Heathrow as the biggest airport by international passengers within two years.

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HS2 Report: High-Speed Rail 'Essential To UK'

High-speed rail is "essential for the UK", according to a report by a committee of MPs.

The risk of not going ahead with the project "significantly outweigh the risks of doing so", the House of Commons Transport Committee has said.

The MPs suggested that the second phase, from Birmingham to the north-east and north-west, should be built at the same time as the first London to Birmingham phase to get trains running ahead of 2033.

However, they warned the £50bn project should not delay other vital transport projects.

Their report also criticised the Department for Transport for "unqualified" claims the project would bring £15bn benefit to the economy.

Bacombe Lane in the Chilterns where a viaduct will be build for HS2

The cost of the project in its entirety is estimated at £42.6bn with £7.5bn needed for the high-speed trains. Of this £42.6bn, a total of £14.56bn is contingency.

In its report, the committee said: "The Department for Transport's (DfT's) communications about HS2 should emphasise that the estimated cost is £28bn, not £50bn, and that cost increases to date have largely been due to the decision to undertake more tunnelling and other work to mitigate the impact of the project on people living near the route."

The report added: "The project is now commonly regarded as costing £50bn and rising. This has led to exaggerated references to HS2 requiring a 'blank cheque' from Government."

In their report, the MPs said the incoming HS2 Ltd chairman Sir David Higgins should report to ministers by the end of 2014 "on options for speeding up HS2".

The first phase of the scheme, from London to Birmingham, is due for completion in 2026. The second, Y-shaped section from Birmingham to northwest and northeast England is due to be finished in 2032/33.

A map of the woodlands affected by HS2

Campaigners have raised concerns the project will destroy vast swathes of England's countryside. The Woodland Trust has calculated that 21 ancient woodlands will be destroyed or significantly damaged by the first phase.

Joe Rukin, campaign manager for the Stop HS2 group, said that it was clear the latest inquiry "was going to be a cheerleading whitewash when the Transport Committee only called people who support HS2 to give evidence".

Transport Secretary Patrick McLoughlin welcomed the committee's finding that the North-South railway was what he called the "best long-term solution" for increasing capacity.

Shadow transport secretary Mary Creagh said that, although Labour supports HS2, "three years of Government delays and mismanagement has caused costs to balloon".

She added: "Incompetent ministers have only recently launched the consultation on phase 2 of the route, despite the fact that it was being worked on when Labour were in government."

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House Approves Budget Deal In Bipartisan Vote

The House has given sweeping bipartisan approval to a budget bill backed by both President Barack Obama, his Democratic allies and a big majority of the chamber's Republicans.

The 332-94 vote sends the measure to the Senate, where Republicans are more skeptical.

The Democratic-led chamber appears sure to adopt the measure next week and send it to Mr Obama for his signature - avoiding the prospect of another damaging partial government shutdown and allowing the White House to concentrate on boosting the economy.

Mr Obama's press secretary, Jay Carney, hailed the vote, saying it "shows Washington can and should stop governing by crisis and both sides can work together to get things done".

The package was drafted by a congressional odd couple of House Budget Committee Chairman Paul Ryan and Senate Budget Committee Chairman Patty Murray.

The agreement would set overall spending levels for the current budget year and the one that begins on October 1, 2014.

That straightforward action would probably eliminate not only a new shutdown but also reduce the opportunity for the periodic brinkmanship of the kind that has flourished in the current three-year era of divided government.

The measure would erase $63 billion in across-the-board cuts set for January and early 2015 on domestic and defence programmes, leaving about $140 billion in reductions in place.

On the other side of the budget ledger, it projects savings totaling $85 billion over the coming decade, enough to show a deficit reduction of about $23 billion over the 10-year period.

Supporters of the measure easily beat back attacks on it from conservative activists.

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RSA Boss Quits Over Insurer's Irish Woes

Shares in More Than insurer RSA tumbled 19% on opening on Friday after its chief executive resigned amid the crisis in its Irish division.

Simon Lee, whose job was on the line after two recent profits warnings, stood down with immediate effect.

He held the job for two years and will receive his contractual entitlement of £824,000 in lieu of 12 months' notice, paid on a monthly basis.

RSA said a review of its Irish business found it will need to strengthen reserves by £130m, on top of the £70m hit identified last month after a routine internal audit uncovered a financial black hole in the division.

RSA has lost a third of its value over the past year (correct at 08:52 GMT)

With this month's storms in the UK and Scandinavia costing it another £25m in claims, RSA warned of a further reduction in earnings for this year and an impact on next year's dividend payout for shareholders.

RSA chairman Martin Scicluna will take on Mr Lee's duties while a successor is found.

He said: "Simon felt it was in the best interests of the group that he step down to enable a change in leadership."

Mr Scicluna also announced a review of the group's businesses, which will be completed by the time of full-year results in the spring.

Philip Smith, the head of RSA's Irish division, resigned at the end of last month after he was suspended alongside two other executives pending the review's outcome.

It relates to a surge in bodily injury claims in the motor insurance market, which requires its reserves to be strengthened by £130m.

RSA will also inject £135m of capital into RSA Insurance Ireland to ensure that its solvency ratio is maintained above 200%.

Auditor PwC is currently carrying out the review of the Irish business and is expected to file its report next month.

The plunge in RSA's share price on the FTSE 100 was said by Barrie Cornes, an insurance sector analyst at Panmure Gordon stockbrokers, to have placed RSA on the radar screens of rivals looking to acquire some of its better performing businesses.

He added: "We would highlight the emerging markets business as being one which RSA might be 'forced' to sell but we suspect that the Canadian and Scandinavian businesses are the parts that competitors would be particularly interested in."

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Apple Probe: China Factory Overtime 'Excessive'

An inquiry into alleged sweatshop conditions in Chinese factories that make Apple gadgets has found improvement, but there are still concerns about excessive working hours.

The Fair Labor Association (FLA) released its findings after being tasked by the California-based tech giant with looking into allegations about the plants run by its largest supplier, Foxconn.

Problems that were previously identified included students on internship programmes being forced to work long hours on overnight production shifts, high numbers of suicides and industrial unrest among employees.

The report concluded Foxconn factories in Longhua, Chengdu and Guanlan had reached virtually all the goals they were set.

Apple said in a statement: "We are proud of the progress we have made together with the FLA and Foxconn,

Foxconn employees staged violent protests last year

"Our suppliers must live up to the toughest standards in the industry if they want to keep doing business with Apple."

Excessively long working hours remain a problem, however.

The FLA said more than half of the 170,000 employees at the Foxconn factories exceeded China's legal limit of 36 monthly overtime hours from March through October.

Foxconn plants in Longhua and Chengdu consistently limited workers' time on the clock below 60 hours per week during the review period, according to the FLA.

That met the labour group's standards but surpassed China's legal limit of 49 hours per week.

Apple said it had reduced excessive overtime at Foxconn and other suppliers, cutting the average working week to 53 hours, which the company said was well below industry norms.

Conditions at Pegatron remain a concern

"We will continue to provide transparency by reporting working-hours compliance each month on our website and we are committed to reducing overtime even further," Apple said.

Foxconn's progress was "a significant step in the right direction," said FLA president Auret van Heerden.

Even as conditions at the Foxconn factories plants improve, there are recurring complaints about abuses at other Chinese facilities that make Apple products.

The charity China Labor Watch said in a recent report that it uncovered a wide range of violations during an examination of factories in Shanghai and Suzhou run by Apple contractor Pegatron Corp.

The alleged problems included sexual discrimination, excessive working hours, poor living conditions and pollution.

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Food Poverty: 1.5m UK Pensioners Struggling

By Ashish Joshi, Sky News Correspondent

More than 1.5 million British pensioners are now living in food poverty - and the situation is set to worsen this winter, according to new research.

The Centre for Economics and Business says a quarter of over-65s have had to make cutbacks on food over the past three years, and over one million are malnourished or at risk of malnutrition because they are struggling to afford basic nutritious food.

The reason is that while the cost of living has continued to rise, incomes have not kept pace.

Increasing food prices in particular have hit the elderly the most.

The study shows over-65s will spend an average of £699 on food between October and December this year - that's an increase of £138 compared to the same quarter five years ago.

And by 2018 there will be an additional increase of £297 on top of that bill. It all adds up to the over-65s being harder hit than any other demographic.

Members describe the lunch clubs as a lifeline

Raina Barnes, 82, from Perivale, Middlesex, has been attending the Age Concern lunch club in Greenford for the past few months. Hot meals and warm company are provided by the charity.

Mrs Barnes, who was widowed last year, remembers when a £30 shop would easily last a few weeks. These days, she says, you get "hardly anything" for that amount.

"I think the supermarkets are taking us for a ride. One minute they're putting their prices down. The next they're going higher. You've only got a certain amount of money to spend," she says.

"All the basics like bread, milk and eggs are the things you need all the time. I mean eggs have just gone up terrible. You just have to see how it goes."

Sharing the dinner table with Mrs Barnes is 88-year-old Harry Thomas, a World War Two veteran. Mr Thomas says he shops around to compare the best prices in local supermarkets.

"It's a very hard thing these days for people, the price of things. You go to one shop and the price might have been dropped and you go to another and the price goes up a little bit.

"You never know what to buy. All I do is look at the price and say 'too high' and I don't bother."

Danny Woolcott, 87, has been a regular at the lunch club for more than six years. The retired mechanic, from Southall, visits three times a week.

He blames the Government for "letting pensioners down".

"I would like to see any government looking after the elderly people of this country.

"The people who brought this country along are being neglected badly and I think it's disgusting the way things have been left, honestly and truthfully."

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Ireland's Bord Gais Energy Sold To Centrica

British Gas owner Centrica is in line to take over the energy supply arm of Ireland's state-owned Bord Gais as part of a £1bn deal.

The group is part of a consortium that would pick up a business with more than 700,000 Irish household and business customers in the sale, as well as a gas-fired power station in Cork.

The consortium has been named preferred buyer in a sale of Bord Gais assets, in a deal struck as Ireland prepares to end its international bailout.

The announcement came hours after Centrica said it was quitting its planned £2bn Race Bank wind farm scheme off the Norfolk coast, selling the project to Denmark's DONG Energy for £50m.

Centrica has shifted from renewable energy investment to gas

The Irish deal saw the Dublin government pushing for a £1.2bn sale but eventually accepting the lower price.

Ministers said the international investment was a strong vote of confidence in the market and the Irish economy and would provide additional funding for investment in infrastructure and jobs.

As part of the deal, Brookfield Renewable Power is understood to be in line to pick up existing onshore wind farms and others being developed, while iCON Infrastructure will take on a gas pipeline network in Northern Ireland.

The sum being paid by each member of the consortium has not been disclosed.

Talks will now begin on finalising the sale, which is expected to complete early next year.

Bord Gais's assets were offered to international investors as part of the disposal of state assets under Ireland's EU-IMF bailout programme, which it is expected to exit within days.

Centrica sees the Irish deal as a growth opportunity in an adjacent market to the one currently served by British Gas, which has 12 million residential customers in the UK.

Its exit from Race Bank, announced on Thursday, was part of a broader strategy shift which includes focusing more on gas investments.

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Versace: Italian Fund Steps Off £900m Catwalk

By Mark Kleinman, City Editor

Italy's sovereign wealth fund is close to bowing out of the race to buy a stake in Versace as a trio of international private equity firms battle to invest in one of the world's best-known fashion houses.

Sky News understands that Fondo Strategico Italiano (FSI) is expected to miss out on the shortlist to acquire 20% of family-owned Versace in a deal likely to value the company at about £900m.

Blackstone and CCMP Capital, two New York-based firms, and Investcorp of Bahrain were informed on Friday that they were being considered as Versace's new investment partner.

A final round of bidding is expected before the end of the month.

The elimination of FSI, which is run by a former Merrill Lynch banker, is surprising after it was reported to have tabled the highest bid for the shareholding.

The Italian fund also has a joint venture with the Gulf state of Qatar, which last year bought the rival Italian fashion brand Valentino as well as luxury properties in Milan and Sardinia.

A person close to the Versace stake sale said it was now likely that FSI would miss out although it remained possible that it could re-enter the process.

It is unusual for some of the private equity firms left in the bidding to pursue a minority stake in a company so vigorously.

The global prestige of Versace, however, has proved to be a significant attraction. The opportunity to expand the business aggressively is said to have encouraged a belief among the bidders that its profitability can be grown rapidly.

The family, led by the largest shareholder Allegra, is understood to be open to the idea of a stock market listing in Milan in 2016 or later.

Donatella Versace, the designer behind the brand since the murder of her brother Gianni in 1997, and who owns 20% of the company, is playing a leading role in the negotiations over the stake sale.

Closely-held Italian companies such as Versace have been forced to open themselves up to external investment by the long stagnation in Italy's economy.

Versace was itself close to going under when Gian Giacomo Ferraris joined as chief executive from Jill Sander in 2009.

The private equity bidders all have experience of investing in luxury goods. One of CCMP's senior advisers, Robert Singer, is already a board member at Versace, which recorded sales of nearly £400m last year.

None of the firms shortlisted for the Versace stake would comment on the process.

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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 December 16

On Monday, the Federation of Small Business will release its quarterly review looking at how regions and sectors have performed in the fourth quarter.

:: Tuesday December 17

The Airports Commission is expected to release a shortlist of locations in the South East of England for a new runway on Tuesday. 

:: Wednesday December 18

Wednesday sees the UK release its unemployment figures for the three months to November. Last month's figures showed that unemployment fell by 48,000 in the three months to September with the rate at 7.6%.

:: Thursday December 19

Business high fliers join Jeff Randall for his annual Christmas special on Thursday. See it first on Thursday 19th December at 7.30pm.

:: Friday December 20

On Friday both the US and the UK will give final GDP readings for the third quarter. Last month's readings showed the US at an annual rate of 3.6% and the UK 0.8% up on previous quarter.

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