New Rules Proposed For Fracking Access In UK

New rules intended to make it easier for companies to get access for fracking on land have been proposed by the Government.

The plan is to allow underground access beneath 300m (985ft), with people living above receiving a voluntary payment of £20,000 per well.

The decision comes amid a long-awaited survey by the British Geological Survey (BGS).

It said there is an estimate 4.4 billion barrels of shale oil in a vast basin in Conservative strongholds Kent, Sussex, Surrey and Hampshire.

Anti-fracking protests took place last year in Balcombe, West Sussex

It said the Weald Basin, between Wiltshire and Kent, could contain up to 8.5 billion barrels of resources, which is different from proven reserves.

In the United States, extraction has only been able to reach about 10% of the total oil.

To put the potential reserves in scale, North Sea oil fields have so far given up around 40 billion barrels of oil.

The BGS said the study found that shale gas is unlikely to be recoverable in the southern areas where oil is located.

Robert Gatliff, director of energy and marine geoscience at the BGS, said: "It's not a huge bonanza. But we have to see what happens and we won't really know the answers until we have got some more drilling and testing."

Asked about the findings, energy minister Michael Fallon said: "It's not a let-down or a let-up. It is what it is.

"It's a potentially home-grown source of energy that we simply cannot afford to ignore.

Fracking involves fracturing underground rocks to release oil and gas

"That is why we're encouraging this development through streamlining and simplifying the regulatory process while protecting the environment."

Prime Minister David Cameron has voiced his support for fracking and said it would be "good for our country".

Chancellor George Osborne announced incentives to expand the process during his Budget speech in March.

The BGS has already suggested there could be enough shale gas in the north of England to supply Britain for 40 years.

The South Downs National Park lies across much of the area likely to hold reserves.

Fracking sparked widespread protest against exploration last summer

And while supporters believe fracking will lead to lower energy bills and create thousands of jobs critics claim it harms the environment, including potentially causing earth tremors and polluting water supplies.

Fracking firm Cuadrilla faced fierce protests last year over its exploratory drilling plans at Balcombe, West Sussex, with some activists arrested.

Licences have already been approved for areas such as Lancashire, with further swathes of the country said to have fracking potential.

The technique, widely used in the US, involves high-pressure liquid being pumped deep underground to split shale rock and release gas and oil supplies.

Business Secretary Vince Cable told Sky News that drilling under houses had been going on for years in the coal industry.

"It's not been any issue," the Liberal Democrat MP said.

Business Secretary Vince Cable has downplayed the potential economic impact

"We're talking about activity well, well below ground level - not under people's gardens. Providing that's clearly understood, it creates less of a problem."

Meanwhile, Friends of the Earth's South East regional campaigner Brenda Pollack said: "These latest estimates will set alarm bells ringing across the South of England where fracking firms seem intent on punching holes in some of Britain's most beautiful countryside in the search for profits."

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InterContinental Rebuffs Secret £6bn US Bid

By Mark Kleinman, City Editor

The FTSE-100 hospitality provider InterContinental Hotels Group (IHG) has rejected a secret takeover bid from the US which valued the company at about £6bn.

Sky News has learnt that IHG's board met a few weeks ago to consider the offer, but dismissed it on the grounds that it was too low.

The identity of the bidder was unclear this weekend, although analysts said it may have been Starwood Hotels & Resorts, the owner of the Le Meridien, St Regis and Westin brands, or a specialist investment fund such as Starwood Capital.

Sources said that IHG was braced for the bidder or a rival to return, with US hotel operators understood to be enticed by the prospect of moving their tax domicile to the UK in a process known as a tax inversion.

That mechanism, which allows US companies to avoid paying tax on their overseas cash holdings, has been at the centre of Pfizer's £69bn offer for AstraZeneca, provoking a political outcry on both sides of the Atlantic.

Senior sources said on Saturday that Pfizer was likely to issue a statement on Monday under Rule 2.8 of the City's Takeover Code, which will confirm its intention not to make a formal bid at this stage for its British pharmaceuticals rival.

Pfizer would then be barred from making another approach for six months, although as Sky News revealed this week, AstraZeneca's biggest investor is pressing it to re-open talks with the US company in three months' time.

The recent approach for IHG, which owns brands such as Crowne Plaza, Holiday Inn and its eponymous chain, could fade away and not be revived, according to insiders.

One added that IHG's stock repurchases in the last fortnight meant that it was not involved in live takeover talks.

Starwood Hotels has a market value of just under $15bn (£8.9bn), while IHG is capitalised at £5.6bn.

The British group is chaired by Patrick Cescau, a former boss of Unilever, and run by Richard Solomons, who has pleased investors with a series of large capital returns.

These have been generated by the sale of many of its flagship hotel properties, including most recently sites in San Francisco and New York, as IHG shifts its business model to hotel management rather than ownership.

IHG still owns the LeGrand Paris and InterContinental Hong Kong, but is also expected to sell these properties and return hundreds of millions of pounds more to shareholders.

It has also been accelerating the expansion of its pipeline of new hotels, with 237 locations opened last year and 444 more added to its roster of future openings.

The company operates about 5% of the world's hotel rooms but has more than twice that volume of the industry's known slate of new rooms.

Last year, IHG reported pre-tax profits of £600m, a 10% rise on the previous year.

Its future growth will be driven by emerging markets, with Hualuxe, a premium brand aimed at Chinese customers, launched in 2012.

A spokeswoman for IHG, shares in which closed up 0.3% on Friday at 2226p, declined to comment.

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Hewlett-Packard To Cut Up To 16,000 More Jobs

Hewlett-Packard (HP) is to cut up to 16,000 jobs worldwide, after 11 quarters in a row of declining revenues.

The announcement was made after the IT giant's latest results were released unexpectedly before markets closed in the United States on Thursday.

Shares in HP fell 2.3% on the news of revenue falling.

Sales were down in the latest quarter by 1%, to $27.31bn (£13.7bn), which was below analysts' expectations.

Between 11,000 and 16,000 jobs are to be lost, on top of the 34,000 cuts that were announced in a May 2012 restructure plan.

Last December, HP announced it would slash 1,100 jobs at three of its UK sites in the first quarter.

Chief executive Meg Whitman, the former boss of eBay, has struggled to turn around the fortunes of the firm.

The firm is under pressure amid a global decline in PC sales and growing demand for laptops and greater tablet use.

The company said in a release that the increased cuts come "as HP continues to re-engineer the workforce to be more competitive and meet its objectives".

HP said net income in the second quarter, to April 30, was up 18% to $1.27bn (£750m).

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Hacked eBay Faces Multiple Investigations

Web retailer eBay is facing transatlantic scrutiny from the authorities over a massive cyber attack that compromised the personal data of its 145 million users.

Connecticut, Florida and Illinois have launched a joint inquiry over the hack, which came to light on Wednesday.

The investigation will focus on the scope of the data breach and eBay's response, said Connecticut officials.

Some customers have complained in web forums and on social media that they received no email warning from eBay to change their password, only learning about the cyber attack from the media.

eBay's database was compromised in late February or early March

New York state's top prosecutor, Attorney General Eric Schneiderman, has asked eBay to provide free credit monitoring for those affected.

"We are currently in conversation with eBay about that," a source in his office told Sky News.

The UK's data watchdog, the Information Commissioner, told Sky News that his team was "actively looking" at launching a formal investigation into eBay.

Christopher Graham said the privacy scare was a "wake-up call" to businesses, consumers and the Government.

He said it would be wrong to pre-empt any investigation into eBay, but pointed out that his team had previously fined Sony £250,000 ($420,000) for a data breach.

There had been no increase in fraudulent activity since the cyber attack, eBay said.

PayPal - which eBay owns - is unaffected, and it runs from a different system, according to the company.

The database was infiltrated between late February and early March by hackers who accessed the log-in details of eBay employees.

It included eBay customers' names, encrypted passwords, email addresses, physical addresses, phone numbers and dates of birth.

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Barclays Fined £26m Over Trader's Gold Fixing

Barclays Bank has been fined more than £26m by the City watchdog over failings related to gold price manipulation by one of its former traders.

The Financial Conduct Authority (FCA) said the bank failed to adequately manage conflicts of interest between itself and customers.

It said oversight failures occurred between 2004 and 2013 led to the £26,033,500 fine.

The trader manipulated the rate in the bank's interest just a day after UK and US regulators fined it $450m (£290m) over attempted rigging of the Libor - an interbank lending rate - that has global impact.

Barclays was fined for oversight failures and not for the price manipulation by the worker.

It agreed to settle the case at an early stage, saving itself a 30% additional penalty.

Gold fixing is a financial term used to describe the somewhat arcane price-setting mechanism that allows investors to buy and sell gold at a single quoted price.

Barclays is one of four banks that sets the price of the precious metal twice a day, in US dollars, on the London Gold Exchange and in Paris and Zurich.

It joined the group in 2004, and the other members are Scotiabank, Societe Generale and HSBC.

The FCA said: "On 28 June 2012, former Barclays trader Daniel James Plunkett exploited the weaknesses in Barclays' systems and controls to seek to influence that day's 3pm setting of the gold price and thereby profited at a customer's expense.

Barclays boss Antony Jenkins has apologised for the latest scandal

"As a result of Plunkett's actions, Barclays was not obligated to make a $3.9m (£2.3m) payment to its customer, although it later compensated the customer in full.

"Plunkett's actions boosted his own trading book by $1.75m - £1m - (excluding hedging)."

The watchdog also fined Mr Plunkett £95,600 and has banned him from performing any function in relation to any regulated activity.

He can, however, work in financial markets in other countries.

The FCA said the trader used the phrase "mini puke" in an email to describe the drop in gold price ahead of the June 28 pricing figure.

Responding to the latest fine imposed by regulators, Barclays CEO Antony Jenkins said: "We very much regret the situation that led to this settlement.

"Barclays has undertaken a significant amount of work to enhance our systems and controls and is committed to the highest standards across all of our operations."

Meanwhile, the chairman of the Treasury Select Committee welcomed the ongoing attempts to improve integrity of the much-maligned banking sector.

Andrew Tyrie MP, the former chairman of the Parliamentary Commission on Banking Standards, said: "It is essential that the regulators do what is necessary to give us confidence that the integrity of these markets is being maintained.

"It is equally essential that the drive to improve standards with the fundamental reforms outlined by the Parliamentary Commission among others is maintained."

The gold price manipulation scandal is the latest issue to tarnish the reputation of Barclays.

It recently suffered a shareholder backlash - announcing a 32% fall in annual profits to £5.2bn but raising its staff bonus pool by 10% to £2.38bn.

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City Watchdog Faces Backlash Over Inquiry PR

By Mark Kleinman, City Editor

The City watchdog is facing a backlash for spending thousands of pounds of fees paid by the financial industry on public relations advice amid an inquiry into its conduct.

Sky News understands that the board of Financial Conduct Authority (FCA) has appointed FTI Consulting, one of the City's leading PR firms, to provide "communications support" while an external law firm probes the events which led to a day-long panic among insurance company investors.

The inquiry, which is being conducted by Clifford Chance for a fixed fee that will also be paid out of industry subscriptions, was triggered by the briefing of a national newspaper in March about a probe it was launching into certain aspects of the closed-life insurance industry.

The FCA failed to issue a public statement to clarify the newspaper story until almost six hours after share trading had commenced, by which time the share prices of companies such as Aviva, Legal & General and Resolution had been hit hard by investors' interpretation of the potential impact on them.

The decision to spend substantial sums on external PR advice - the precise amount would not be disclosed by either the FCA or FTI Consulting - drew criticism from insurers and politicians.

John Mann, a member of the Treasury Select Committee, told Sky News: "They're trying to gloss over the mistakes they made and that's neither fair nor reasonable."

One insurance industry executive said it "beggared belief" that fees contributed by regulated firms were being used to provide advice to the board of the watchdog.

"This is money that we and other firms have paid into the FCA's coffers, and now it is being used for a completely unjustifiable reason," the executive added.

FTI's appointment is understood to have been approved by John Griffith-Jones, the former KPMG partner who chairs the watchdog, and the FCA's other non-executive directors.

A source close to the regulator insisted that the use of an external adviser was necessary because some members of the FCA's press office were involved in the probe and therefore prevented from discussing its progress with the media.

"The board needs independent advice on this and it won't even start using FTI until the final report is in," the source said.

Clifford Chance, which is expected to complete its work during the summer, will report back to Mr Griffith-Jones, with George Osborne, the Chancellor, taking a close interest in the outcome.

Andrew Tyrie, chairman of the Treasury Select Committee has called for a wide-ranging inquiry into how the FCA discloses market-sensitive information.

"It is crucial – now that the FCA's non-executive directors have commissioned this inquiry – that neither they nor the board play any further role until Mr Davis has completed his report," he said last month.

The FCA was in the headlines again on Friday after fining Barclays £26m for breaching its rules in relation to the fixing of the gold price.

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RBS And NatWest Hit By Mobile Banking Glitch

Mobile banking services for RBS and NatWest have been hit by an IT glitch, along with an unconnected problem that affected some Lloyds, Halifax and Bank of Scotland online users.

In a statement given to Sky News, a spokesperson for RBS Group said: "Some customers may have had trouble getting into mobile banking today between 8.40am and 2.30pm.

"All services are back up and running as normal.  We apologise for any inconvenience this caused."

A spokesman for Lloyds Banking Group said there was a temporary issue on Friday morning that affected mobile and online services for a small number of customers who were trying to set up payments at Lloyds, Halifax and Bank of Scotland.

The apology seen by NatWest smartphones users

A Lloyds spokesman said: "We are aware that a small number of customers experienced issues accessing payments this morning.

"The issue has now been rectified and we are working with those customers who were affected."

The RBS Group has been hit be a sequence of system-wide IT failures in the past, which affected RBS, NatWest and Ulster Bank.

More recently, it has suffered 'pay day problems'  in the past, when workers expect to see funds enter their accounts.

Branch and cash machines are believed to be unaffected by the latest woes.

In its last annual results, the group said it was investing heavily in computer infrastructure to modernise its systems.

A number of banks were affected in February when workers expected funds to be deposited.

According to the British Bankers' Association, the use of mobile devices for banking services has doubled in the past 12 months.

RBS saw more than 17 million log ins in one week, through its mobile app, earlier this month.

In late December the group was hit by its fourth IT failure, after a cyber attack left online users unable to access accounts.

That followed an outage in early December, on one of the year's busiest shopping days.

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New Trains In Seven-Year Rail Franchise Win

Three new state-of-the-art electric train fleets are to be rolled out on the busiest rail routes in London and the South East.

The new Thameslink, Southern and Great Northern (TSGN) franchise will be run by Govia, with rival FirstGroup missing out.

Govia has been awarded a seven-year contract, which includes construction of nearly 1,400 new carriages.

Govia is 65% owned by the Go-Ahead Group and 35% by France's Keolis.

The franchise will carry more than 280 million passengers annually.

Go-Ahead Group CEO David Brown said: "I'm delighted the (Depatment for Transport) has chosen us to operate this important and complex franchise and to play an instrumental role in delivering the benefits of the Government's £6bn Thameslink programme.

"This will be the UK's busiest franchise and we will be introducing 50% more capacity into central London during peak times, with 26% more morning peak carriages providing 10,000 additional seats."

Services and capacity are expected to be improved to scores of destinations, including Brighton, King's Lynn, Cambridge, Peterborough, Bedford, Luton and Gatwick.

The improved service is due to be fully operational by the end of 2018 and will also include improved staffing and stations, along with a simplified ticket structure.

Rail minister Stephen Hammond said: "A world-class railway is a vital part of our long-term economic plan.

The improved service and trains will be spread across the South East

"That's great news for businesses and the hundreds of thousands of passengers who use these vital services every day."

The new franchise, the largest ever in terms of passenger numbers, is a blow to the current Thameslink operator FirstGroup.

Govia presently operates the other rail contract incorporated into the new franchise.

Twenty-four trains will be able to travel between Blackfriars and St Pancras each hour.

New tunnels will also link Peterborough and Cambridge to the existing Thameslink network, boosting access from the North to Gatwick and Brighton.

Govia beat competition from four short-listed bidders - Abellio, FirstGroup, MTR and Stagecoach - to run the key commuter contract from September.

The Go-Ahead Group's partner Keolis is 70% owned by French rail operator SNCF.

After the announcement, FirstGroup CEO Tim O'Toole said: "I am disappointed that we will not be operating the new franchise and taking the Thameslink programme on to its next stage.

"We submitted a strong bid which would have delivered high quality services for passengers, value for taxpayers and an economic return for shareholders."

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The Week's Big Business Stories

Train Order Derailed Over 'Too-Wide Carriages'

Updated: 4:52pm UK, Wednesday 21 May 2014

New trains ordered in a £2.43bn deal to expand the network in regional France have been found to be too wide for many of the platforms.

A total of 1,300 platforms out of a total of 8,700 will need to be modified to accommodate the new trains, it has been confirmed.

A spokesman for national operator RFF told French radio: "We discovered the problem a bit late, we recognise that and we accept responsibility on that score."

Work has already started to modify hundreds of stations and move trackside equipment to accommodate the new trains.

The mistake was first reported by a French satirical magazine.

It said SNCF was given dimensions for platforms built since the 1980s. However, platforms in more than 1,000 locations built decades beforehand were said to be a different size.

An SNCF spokesman confirmed the technical issue to Sky News and said: "The problem is not with the rolling stock but with the platforms."

It said 182 new TER train carriages ordered from train maker Alstom were too wide for stations in 12 French regions, along with 159 carriages from Bombardier for nine regions.

Remedial work totalling €50m (£40m) has already been spent to get the procurement back on track, SNCF said.

It added the trains "were wider to meet public expectations" and that the alterations would cost just 1.25% of its annual maintenance and infrastructure budget.

More than 300 platforms have been altered to date, with another 600 expected to be completed by the end of the year.

French transport minister Frederic Cuvillier said an "absurd rail system" caused the error.

"When you separate the rail operator from the train company ... this is what happens."

Work will be finished by 2016 to coincide with full delivery of the multi-billion contract.

The decade-long expansion plan comes as the rail system has seen a 50% rise in passenger numbers around the French capital, and a 40% rise in regional travel.

France's biggest rail worker union denounced the mistaken order as proof of the dangers of deregulation, seizing on the costly error on the eve of an anti-liberalisation protest in Paris.

The CGT said the order would never have happened if the state railway company had not been split in two in a preliminary step towards privatisation.

"This saga would be just a vaudeville farce if it were not for the fact that it results from the split," the union said in a statement.

It referred to a decision back in 1997 to break the railways into two entities - the SNCF train service operator and RFF, which is in charge of rail infrastructure.

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Blackstone In Joint Bid For Friends' Tax Arm

By Mark Kleinman, City Editor

The private equity giant Blackstone has joined forces with a US-based specialist insurer to table a bid for the tax planning arm of Friends Life, the FTSE-100 financial services group.

Sky News understands that Blackstone and Philadelphia Financial will make a joint offer for Lombard, which specialises in wealth planning solutions for some of the world's wealthiest people.

Philadelphia Financial targets high net-worth families through a network of intermediaries, and is understood to view Lombard as an attractive opportunity to expand that area of its business.

Friends Life has been in talks to sell the division for more than six months and is understood to have set a deadline in June for offers from interested parties.

Permira, another private equity group, is also expected to lodge a bid, while interest from Warburg Pincus, another private equity firm, is said to have waned.

Responding to Sky News' disclosure of the sale plan last November, Friends Life, which was then called Resolution, said: "Resolution notes the recent speculation in the press regarding the potential disposal of its Lombard division, which comprises Lombard International Assurance S.A. and Insurance Development Holdings AG, and confirms that it is currently in discussions regarding the possible disposal.

"There is no certainty these discussions will result in a transaction being agreed. A further announcement will be made as and when appropriate."

Analysts say the Lombard unit, which is being auctioned by investment bankers at Barclays, could be sold for £400m.

Based in Luxembourg, Lombard offers "wealth planning solutions to high and ultra-high net worth individuals".

The business is viewed as non-core by Friends Life's board and a sale would see the company re-orient itself towards its home market in the UK, analysts said.

Lombard uses Luxembourg's light-touch tax regime to help shield clients' assets from the taxman and is understood to include dozens of billionaires among its key customers.

Insiders said that Friends Life was also likely to consider the sale of Friends Provident International (FPI), which provides life assurance and investment products in Asia, the Middle East and some other markets, in due course, although no sale process for that business had yet been formally planned.

FPI has offices in the United Arab Emirates, Hong Kong, Singapore and the Isle of Man, and primarily distributes through independent financial advisers and strategic partnerships.

Andy Briggs, Friends Life's chief executive, said late last year that it was planning to compete more aggressively with specialist annuity providers such as Just Retirement, which recently floated on the London Stock Exchange.

In March, it issued updated guidance on its plans in the wake of George Osborne's shake-up of the annuities market.

He said: "There is a negative implication for new business flows in the individual annuity market, as some people utilise the increased flexibility provided by the Chancellor's proposals.

"However, we believe that annuities will continue to be an important product for those who value the guaranteed income throughout increasingly long retirement periods."

Blackstone, Permira and Friends Life all declined to comment on Friday.

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