Coal Pit Closures 'To Cost 2,000 Jobs'

Ministers have been accused of leaving Britain at the mercy of overseas energy suppliers by refusing to ensure UK Coal's long-term future.

A decision to support only the "managed closure" of the firm's remaining deep-pit mines at Kellingley in North Yorkshire and Thoresby in Nottinghamshire was slammed by the TUC.

The union organisation said while it recognised that £20m of support - shared between the Government and private sector - would save jobs in the short term, it claimed 2,000 roles would be lost by autumn 2015.

It was widely reported that the private sector investment will come from rival mining group Hargreaves Services and Harworth Estates, landlord of the two mines.

The Government insisted the money spared the company the prospect of immediate insolvency and 1,300 job losses.

Daw Mill was closed last year after a devastating underground fire

UK Coal was placed in administration last year after struggling with rising costs, hefty pension liabilities and strong competition from cheaper imports.

A fire at its most profitable mine - Daw Mill - forced its closure.

Energy minister Michael Fallon argued on Thursday that a failure to support UK Coal would have cost the Treasury "significant losses and liabilities" from the redundancies and unpaid taxes.

But in a written statement he said: "The taxpayer is better served by supporting a managed closure of the mines.

"There is no value-for-money case for a level of investment that would keep the deep mines open beyond this managed wind-down period to autumn 2015.

"Private sector investors who wish to put in the substantial investment that would be needed to maintain the mines beyond autumn 2015 without Government support remain free to do so."

The Government also confirmed its loan was conditional on the negotiation of final terms, including assurances that all parties, including the trade unions, backed the plan to close the mines.

The four unions involved - the NUM, BACM-TEAM, NACODS and GMB - expressed disappointment and accused ministers of refusing to apply to Europe for permission to use state aid to keep the mines open until at least 2018.

UK Coal started redundancy consultations with 600 staff at Thoresby and the 700 employees at Kellingley last week.

A total of 340 jobs will be lost immediately, according to the TUC.

The decision to effectively close the two collieries leaves Britain with just one deep pit mine - employee-owned Hatfield colliery in South Yorkshire.

UK Coal's six operational, but smaller, surface mines in the North East, Derbyshire, Leicestershire and Shropshire, will be sold.

The company currently supplies 4% of the UK's electricity needs and officials dismissed the TUC's claims on foreign energy dependence suggesting that UK Coal's surface mines should enable production to continue at 40% of its current rate.

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House Prices To Soar Amid Property Shortage

Housing sales have reached their highest level for six year, fuelling fears that many buyers will be priced out of the market.

Surveyors sold an average of 23 homes during the three months to March - the highest number since February 2008, according to the Royal Institution of Chartered Surveyors (Rics).

All areas except Wales, where the level was unchanged, saw a rise in interest from buyers.

But while buying activity is rising in more regions, the expected "spring bounce", which sees more people put homes up for sale, has not happened, Rics said.

The mismatch between the lack of supply and rising demand is a "major concern" and is continuing to put an upward pressure on prices, the surveyors' body said.

Simon Rubinsohn, Rics chief economist, said: "Now that the housing market recovery is well and truly under way and mortgage finance is more readily available, buyers seem to be looking to test the market right across the country, not just in the usual hotspots of the South East.

"That said, it is a major concern that we are not seeing enough houses coming on to the market.

More homes are needed in areas where people want to buy

"For the market to operate effectively, we desperately need more homes in areas where people want to buy and want to live.

"Until this happens we're likely to see prices continue to increase and it is going to be ever harder for many first-time buyers to conceive of ever owning their own home."

Prices are expected to rise by around 9.3% a year in London, which would push average property prices in the capital to over #567,000 by 2020.

While in the North prices are set to increase by 2% annually, which would see average house prices there increase to just under £132,000 by 2020.

In Wales, it is predicted house prices will rise by 4.9% annually and in Scotland a 4% rise is predicted.

Government support schemes such as Help to Buy have made mortgages more widely available, particularly for people with only smaller deposits saved who may have previously been struggling to get a deal.

But critics of the scheme argue the impact it is having in pushing up demand, without a corresponding increase in the supply of homes, is also pushing up house prices and encouraging people to stretch their borrowing.

Toughened mortgage lending rules are coming into force later this month with the aim of preventing overlending to borrowers who may end up having trouble paying back, particularly when interest rates rise.

Housing Minister Kris Hopkins said: "Leading developers have pledged to build more as a direct result of this increased demand, and we've already delivered 420,000 new homes since 2010, including 170,000 new affordable homes."

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Current Account Switching Up In New Scheme

A growing number of consumers have taken advantage of a new regime making it easier to switch banks.

More than 600,000 current account customers moved to new providers in the last six months, since the week-long switch guarantee was launched.

The number of customers switching rose by 14% compared to the same period last year, according to the Payments Council.

Under the rules, a customer's new bank takes charge of the transfer.

The Payments Council said increased awareness of improved switching and growing consumer confidence was behind the spike.

It said 67% of people in the UK are now aware of being able to switch more easily, up from 59% at the end of 2013.

It added that customer confidence in the scheme had also risen, rising 9% to 65%.

The switching guarantee promises that a customer's new bank or building society is responsible for transferring all existing incoming and outgoing payments.

It also automatically closes old accounts as part of the process.

Prior to the new scheme it took up to 30 working days for a transfer to occur.

The Payments Council scheme also ensures that if the switch fails any charges are not levied against the customer.

It said that the data transfer system was operating efficiently and 99% of all transfers were conducted within the seven-day window.

Payments Council managing director Gary Hocking said: "By making the current account switch service quick, hassle-free and removing the fear factor we've taken away the barriers customers told us they had when it came to switching.

"Six months in and the latest figures suggest people clearly seem to be getting the message that things have changed for the better."

High street banks and building societies have launched a series of new accounts since the short-switch period was brought into force, as a way of enticing new customers.

Mr Hocking added: "There's also been a noticeable surge of advertising activity from current account providers big and small, suggesting that the new service is helping foster competition and choice for customers.

"As time goes on and the track record of the new service builds, we look forward to these encouraging results continuing."

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Gatwick Airport Disruption A 'Wake-Up Call'

Disruption at Gatwick Airport that left thousands of travellers stranded on Christmas Eve last year should be a wake-up call for all airports, according to a report by MPs.

A power failure at the airport triggered by flooding forced delays and cancellations affecting more than 11,000 people during the busy holiday periods.

The House of Commons Transport Committee said passengers had complained of a lack of basic facilities, including toilets and water, poor information and confusion over what expenses travellers could be reimbursed for.

The report said: "The problems at Gatwick at Christmas Eve should be a wake-up call for airports across the UK to get on top of operational resilience issues.

"Disruption, of whatever nature, should be met with well-drilled plans, familiar to airport operators, airlines, and other contractors, which put passenger interests first."

Customers complained about a lack of information. Pic: Andrew Jennings

The report called for the Civil Aviation Authority (CAA) to bring forward proposals for improving access to information for passengers on their rights during disruption.

Committee chair Louise Ellman said: "Passengers need accurate and consistent information, must be able to identify who is in charge during periods of disruption, and should have ready access to toilets and drinking water.

"If our largest airports cannot demonstrate they can look after passengers' interests in this way then the CAA must act."

"It was clear from evidence to this inquiry that there is considerable scope for airlines to ensure passengers are far better informed about their rights when flights are delayed or cancelled and how to enforce these rights."

Shadow aviation minister Gordon Marsden said: "It's clear from this report that we need a step change to ensure passengers are made the priority in air travel.

The disruption hit the airport's North Terminal

"Despite the efforts of individual staff, management failures left passengers in the dark over the fate of their flights and compensation.

"The Government must be far more proactive in improving passenger experience."

A spokeswoman for the Department for Transport said: "Passengers rightly expect to be kept informed during circumstances such as those at Gatwick this winter, and it is important that the airport carefully considers these recommendations and takes the necessary steps to increase the resilience of the airport to future flooding and heavy rainfall.

"Other airports should also learn lessons from this report."

Police officers were forced to step in to calm passengers at the West Sussex airport in December after flooding caused by winter storms caused a power outage at the North Terminal.

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Business Round-Up And Week Ahead

Push To Boost Number Of Women In Boardrooms

Updated: 12:43am UK, Friday 11 April 2014

By Anushka Asthana, Sky Political Correspondent

Ministers have started a process they hope will pave the way for all-women short lists in business for the first time.

Sky News has seen a letter sent to the Government's equality body asking it to rule on whether the practice could be legally applied when companies are recruiting to their boards.

It asks the Equality and Human Rights Commission to provide guidance on the matter.

"This should help make the recruitment process easier for companies and executive search firms," writes Jenny Willott, the equalities minister.

"In turn, it could also help enable businesses to increase gender diversity on their boards and could be vital in helping us achieve the 25% target for women on boards of FTSE 100 companies by 2015."

She told Sky News that business was missing out on female talent by failing to promote enough high-flying women to the top of their companies.

The latest move is part of an effort to drive up the number of women on boards.

Progress has been made with the FTSE 100 with the proportion of female board members rising from 12.5% to 20.7% - but that still leaves women outnumbered by four to one.

And just two of the 100 have female chairs. One company - Glencore Xstrata - has no women at all.

The situation is bad among chief executives with only five of the 100 top companies led by a woman, and one of them - Burberry's Angela Ahrendts - soon to step down.

Vince Cable, the business secretary, supports radical action in this area because it is thought that more diverse boards tend to result in better company performance.

But the Government has tended to support voluntary means over any type of quota. If all-women short lists were to happen they would be a tool that companies could choose to use.

Top female executives at an event to match them up with FTSE 100 chairs were wary about the idea.

Beatriz Butsana-Sita, managing director of global telecom markets for BT, said she would never want to feel that she was given a job because of a target or quota.

Ann Cormak, director international of Rolls Royce, said she found the idea of all-women short lists "constrictive" and would prefer decisions to be based purely on talent.

And Laura Frith, vice president of global talent at the Intercontinental Hotel Group, agreed that it ought to be only about merit.

All women did feel, however, that more could be done.

A survey of 46 leading business figures - including 16 FTSE chairs and 30 top female executives - found that all believed that balanced boards were best for a company. But they felt more action was needed.

Most of those questioned thought their companies were not doing enough – with the majority of chairmen saying the 2015 25% target was likely to be missed.

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Wet February Wipes £270m From Building Sector

Woolly weather in February caused a sharp decline in UK construction, wiping more than a quarter of a billion pounds from the sector.

The Office for National Statistics (ONS) said output fell to £5.8bn, down 2.8% from January.

Output is defined as the amount charged by construction companies to customers for value of work in the period, excluding VAT and payments to sub-contractors.

It said new work dropped to 2.6% - equivalent to £160m - while the repair and maintenance sub-sector fell by 3.1% to £110m.

The ONS said: "While most private indicators of construction activity picked up throughout 2013 and 2014, a number were seen to temporarily depart from this trend in February 2014.

"Many also cited adverse weather conditions as the primary reason for lower activity levels, especially in the house building sector."

The ONS said the February dip caused construction to stay virtually flat over the quarter.

It said between December and February, the total sector grew by only 0.3%, compared to the September to November period.

The small amount of growth over the three-month winter period was due to a 1% increase in new construction work.

During the same period repair and maintenance decreased by 0.8%, despite a slight rise of 0.3% in work for public housing.

It said the level of construction was an eighth below the best monthly peak, which was recorded in June 2011 at £6.6bn.

Construction in the housing industry was particularly affected in February because of the weather.

It fell 6.3% on January's figure and was the biggest monthly drop since March last year, when below average temperatures and snow hit the country.

But overall, while public housing was down, private new housing was up 15.3% compared to February last year.

The ONS said damage to property in February caused by storms, wind and flooding is yet to be recorded in monthly data and is expected to be reflected when March's figures are released.

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City Fights Back In Row Over £1bn Essar Deal

By Mark Kleinman, City Editor

A group of powerful City investors took steps on Friday to block a £1bn takeover of Essar Energy, an India-based oil refiner which is fast-becoming a test-case for the protection of minority shareholder.

Sky News has learnt that the Association of British Insurers (ABI) has formed a special committee and brought in legal advisers to consider ways of preventing the billionaire founders of Essar Energy from forcibly removing the company from the London Stock Exchange.

The row centres on the 70p-a-share offer for the 22% of the shares not owned by Essar Global, the vehicle of the Ruia brothers, who listed Essar Energy by selling shares less than four years ago priced at six times the price they now want to pay.

The cut-price offer has sparked fury from big City institutions, including Standard Life Investments, which in February described it as "cynical opportunism" and "a calculated attempt to deprive minority shareholders of the substantial future upside in Essar Energy's valuation".

Sources close to the talks said the members of the special committee spoke for 9% of Essar Energy's share capital, or 35% of the freely-floated shares, and that discussions with other independent investors were also ongoing.

Under stock exchange rules, because the Ruias already control a majority of the shares, they can declare their offer unconditional even if no other shareholders accept their bid.

Doing so would enable them to delist the company without a vote, which would either force investors to accept 70p-a-share or to remain shareholders in a more highly-indebted and unlisted company where they possess no influence.

Sky News understands that one option being considered by the minority investors is to force the independent directors of the company, who comprise a majority of the board, to issue new equity that would dilute the majority owners.

That would be fraught with difficulty because issuing new equity would require the authorisation of the board as well as the consent of the Takeover Panel, which can prevent such a moves in 'poison-pill' takeover situations.

The committee has now written to Essar Global to ask it not to declare its offer unconditional unless at least half of the independent shareholders accept the offer

The ABI committee has also written to the Financial Conduct Authority (FCA), to urge it to monitor the situation, as well as to VTB Capital, the bank financing the Ruias' bid, to discourage it from declaring the offer unconditional.

Insiders said that the Ruias' offer was particularly outrageous because it was made just months before new rules are introduced to protect the rights of minority shareholders.

They added that while the right to make an offer for the company was detailed in a relationship agreement drawn up when Essar Energy floated, its terms were not made clear in the shareholder prospectus, which could provide the ABI with another legal avenue to explore.

Skadden Arps Slate Meagher & Flom, a major law firm, is advising the special committee.

Sky News revealed on Thursday that the investment affairs division of the ABI was planning to merge with the Investment Management Association to give fund managers a more powerful voice in situations such as the one surrounding Essar.

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Co-op Bank In Record £1.3bn Annual Loss

The struggling Co-operative Bank has reported a pre-tax annual loss of £1.3bn and said it would not return to profit for at least two years.

The bank also confirmed it would not make £4.97m deferred annual bonuses to its former bosses.

Chief executive Niall Booker said an overhaul plan known as the liability management exercise (LME) had "kept the bank alive".

Taking into account a profit made by the LME, it said the loss was reduced to £586m for the year ending December 31.

Mr Booker said: "The results today reflect the magnitude of the issues that have come to light since I jointed the Co-operative Bank ten months ago.

"It is early days but initial progress on our business plan is encouraging and we remain enthusiastic about the long-term potential for the bank."

The embattled parent mutual, the Co-operative Group, lost overall control of its banking arm to US hedge funds in December as part of its rescue plan. It now holds a 30% stake.

The Co-operative Group consists of a number of divisions

The £1.5bn funding 'black hole' was added to in March when it revealed a further £400m gap, forcing it to seek further investor funds.

The institution, which continues to market itself as having "ethical principles", said it cut assets last year by £2.1bn and reduced staff levels by 14% - around 1,000 employees.

It said it would try to restore its capital position, and refocus attention on being a bank for householders and small to medium-sized businesses.

Part of the plan includes reducing its product range, along with improving digital and branch-based banking services.

Although former executives would miss out on deferred bonuses, Mr Booker is to receive a £1.2m salary and benefits package and £1.7m bonus - dependant on the bank's future performance.

A further £1.2m is part of a long-term incentive plan that is payable over three years.

The bank's annual results were published on Friday after two earlier delays to the release.

The parent Co-op Group, which is expected to report an even larger loss later this month, also continues to struggle to find its way in an increasingly competitive environment.

 Earlier this week the former City minister, Lord Myners, quit the board amid opposition to his planned reforms of the business.

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Osborne Jail Threat For Offshore Tax Evaders

Wealthy people who stash money in offshore accounts to evade paying tax could be sent to jail, the government has said.

Chancellor George Osborne said new proposals could mean that people who hide their cash overseas could face criminal charges even if they did not intend to evade tax.

Mr Osborne, who is consulting on the new powers, said there would be "no safe haven" for anyone who cheats the Exchequer.

It comes after concerns that some wealthy people are costing the government millions of pounds a year by keeping money away from the glare of UK authorities.

HM Revenue & Customs will have the power to prosecute people who do not declare their foreign income, regardless of whether they intend to avoid payment.

Previously, in order to earn a conviction with a jail sentence, prosecutors had to show that individuals intended to avoid paying tax on foreign income.

Mr Osborne, who has been at the International Monetary Fund meeting in Washington, told the Financial Times: "We are changing the balance of the law so the burden of proof falls on those who are hiding their money offshore and we don't have to prove that they intended to do so."

He added: "It is totally unacceptable for people not to pay the tax that is due and the message will be clear now with this new criminal offence that if you're evading tax offshore, there is no safe haven."

HM Revenue and Customs (HMRC) has been criticised for not prosecuting enough tax evaders.

Sky News' Ecomonics Editor Ed Conway said there has been much international discussion about what can be done to clamp down on people who hide money overseas.

David Cameron has previously announced a crackdown on so-called shell companies to help combat tax evasion and corruption.

The new criminal offence and sanctions are expected to come into effect next year, but many are expected to contribute to the consultation before that can happen.

The announcement was greeted by dismay from some, with critics suggesting the law could result in people being jailed when they were genuinely ignorant of the law.

Bill Dowdell, head of tax at Deloitte, told The Times: "It's horrifying. People should not be put in prison unless you can prove intent.

"I'm shocked to find that an offence which could lead to a prison sentence could be decided on a strict-liability basis."

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Push To Boost Number Of Women In Boardrooms

By Anushka Asthana, Sky Political Correspondent

Ministers have started a process they hope will pave the way for all-women short lists in business for the first time.

Sky News has seen a letter sent to the Government's equality body asking it to rule on whether the practice could be legally applied when companies are recruiting to their boards.

It asks the Equality and Human Rights Commission to provide guidance on the matter.

"This should help make the recruitment process easier for companies and executive search firms," writes Jenny Willott, the equalities minister.

"In turn, it could also help enable businesses to increase gender diversity on their boards and could be vital in helping us achieve the 25% target for women on boards of FTSE 100 companies by 2015."

She told Sky News that business was missing out on female talent by failing to promote enough high-flying women to the top of their companies.

The latest move is part of an effort to drive up the number of women on boards.

Progress has been made with the FTSE 100 with the proportion of female board members rising from 12.5% to 20.7% - but that still leaves women outnumbered by four to one.

And just two of the 100 have female chairs. One company - Glencore Xstrata - has no women at all.

The situation is bad among chief executives with only five of the 100 top companies led by a woman, and one of them - Burberry's Angela Ahrendts - soon to step down.

Vince Cable, the business secretary, supports radical action in this area because it is thought that more diverse boards tend to result in better company performance.

But the Government has tended to support voluntary means over any type of quota. If all-women short lists were to happen they would be a tool that companies could choose to use.

Top female executives at an event to match them up with FTSE 100 chairs were wary about the idea.

Beatriz Butsana-Sita, managing director of global telecom markets for BT, said she would never want to feel that she was given a job because of a target or quota.

Ann Cormak, director international of Rolls Royce, said she found the idea of all-women short lists "constrictive" and would prefer decisions to be based purely on talent.

And Laura Frith, vice president of global talent at the Intercontinental Hotel Group, agreed that it ought to be only about merit.

All women did feel, however, that more could be done.

A survey of 46 leading business figures - including 16 FTSE chairs and 30 top female executives - found that all believed that balanced boards were best for a company. But they felt more action was needed.

Most of those questioned thought their companies were not doing enough – with the majority of chairmen saying the 2015 25% target was likely to be missed.

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