Oil Find Near Gatwick May Be 'World Class'

The estimated size of an oil find near Gatwick Airport has been upgraded to 100 billion barrels by a company backing exploration of the area.

UK Oil & Gas Investments (UKOG) said the Horse Hill-1 well in the Weald Basin was now thought to hold 158 million barrels per square mile.

In May 2014, the British Geological Survey estimated the Weald Basin to hold around 4.4 billion barrels of shale oil.

UKOG described the find as a possible "world class" resource with the potential for "significant daily oil production".

The site at Horse Hill in Sussex

The company's chairman David Lenigas claimed it would create "many thousands of jobs" but cautioned that it would take a long time to begin production. 

He said: "You've got to work through government process and to work with the local community. Everybody expects you to snap your fingers and all of a sudden the magic panacea is there. The key thing is there is a potential resource of significance here - but the fast track or slow track nature is really going to be determined by Westminster".

But Solo Oil PLC, another stakeholder in the exploration, was cautious about the potential. 

UK Oil and Gas insist there will be no fracking at Horse Hill

Solo Oil chief executive Neil Ritson told Sky News: "We're not actually putting out that number of a hundred billion barrels. I know that a leading academic - Professor Fraser at Imperial - is talking about 40 billion.

"Certainly those numbers are possible, but that's not where we are at the moment. It's early days."

The US-based firm which studied the reservoir estimated that recovery of the oil would be limited at between 3% and 15% of the total.

Local residents are concerned about damage to the countryside

It also insisted there was no need to use the controversial extraction process, known as fracking, to get access to the oil.

Mr Lenigas said:  "Horse Hill is a conventional well, with conventional testing and we've got permission from the government authorities for a conventional programme. There will be no fracking at Horse Hill."

But local campaigners believe fracking will be necessary at some point in the future.

Anti-fracking campaigner Charles Metcalfe said: "South East England is the most densely populated corner of England. To start drilling holes all over the place will completely change the nature of our countryside forever. And if the result is that you're not getting very much oil out of it, then that's awful".

Environmental group Greenpeace urged people to focus on clean technologies.

Greenpeace's chief scientist Dr Doug Parr said : "To gleefully rub your hands at a new fossil fuel discovery you need to turn the clock back to the 19th century and ignore everything we have learnt about climate change since. We already have more than enough coal, oil, and gas reserves to fry the planet".

The UK currently produces 770,000 barrels of oil per day, compared to 11.1 million in the United States and 11.7 million in Saudi Arabia.

The announcement helped shares in UKOG rise more than 300% during trading on Thursday. 

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Stallone Thanks UK Piracy Police After Arrest

Sylvester Stallone has thanked British police after a man was arrested on suspicion of leaking top films online, including Expendables 3.

The 26-year-old from Halifax was arrested at his workplace in Leeds on Thursday and is being questioned by detectives from the Police Intellectual Property Crime Unit (PIPCU).

The suspect is believed to be involved in obtaining high-quality films, only available at the cinema or unfinished-unreleased movies, and posting them on the internet.

His actions are estimated to be costing the film industry millions of pounds.

Expendables 3 was reportedly downloaded over 2 million times in the first week it was posted online.

Video: Stallone: Piracy Killing Hollywood

At the film's premiere in London last summer Stallone said that online piracy made him "sad". 

"I think it's unfortunate because, it isn't about me, I'm OK, but really there's thousands of people that won't make movies, that won't get a chance because they've lost a lot of money, that's the trouble."

Following news of the arrest, the star said: "I'd like to thank the Police Intellectual Property Crime Unit (PIPCU) at the City of London Police for working with US Homeland Security Investigations to apprehend the suspect in this case. It is important to protect the rights of creatives around the world from theft."

Matthew Etre, US Embassy London's Attaché for US Homeland Security Investigations (HSI) said: "Tackling virtual piracy remains a top priority for law enforcement. Too often these types of crimes are regarded as immaterial because they are seemingly without victims; however, when a business suffers a loss, it is felt at all levels, from the C-suite to the mailroom.

"In cases such as this, preventing piracy is akin to protecting people's livelihoods. This arrest is yet another success story highlighting what strong, collaborative relationships between law enforcement agencies can accomplish."

The arrest stems from a probe initiated in July 2014 by HSI special agents in Los Angeles after the agency received a tip regarding possible movie piracy from film industry representatives. 

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Gatwick Oil Find: Questions And Answers

An exploration firm has announced the discovery of billions of barrels of oil reserves at a site near Gatwick airport.

The announcement by London-listed UK Oil & Gas Investments (UKOG) has raised a number of questions including:

1. How big is the field?

UKOG says drilling at Horse Hill-1 on the Weald Basin points to 158m barrels of oil per square mile and that altogether there could be up to 100bn barrels beneath the South of England.

2. How much oil could be extracted?

UKOG admits only a fraction of the potential 100m barrels would be recovered - between 5% and 15%.

But it says this is still a significant amount and by 2030 the field could be meeting 10% to 30% of the UK's oil needs.

3. How does this compare with North Sea oil production?

Pretty well. The North Sea has produced around 45bn barrels in 40 years. By comparison the Weald Basin could produce up to a third of that - 15bn barrels.

4. And how does that compare with the likes of Saudi Arabia and the US?

It doesn't. Saudi Arabia produces 11.7m barrels of oil per day, and the US 11.1m. Both dwarf the current UK figure of 770,000 barrels per day.

5. How far down does the Weald oil lay?

UKOG says most lies within the Upper Jurassic Kimmeridge formation at a depth of between 2,500ft (762m) and 3,000ft (914m), so quite a long way down.

6. Will the day-to-day running of Gatwick be affected?

All being well, no - unless there is a major incident, of course. Gatwick Airport is around 2m (3km) away from Horse Hill.

7. Will oil production at Horse Hill involve fracking?

UKOG has consistently stated that it is not intending to frack, which involves pumping water, sand and chemicals into rocks at high pressure to free the oil and gas trapped within.

It says the oil at Horse Hill is held in rocks that are naturally fractured, which "gives strong encouragement that these reservoirs can be successfully produced using conventional horizontal drilling and completion techniques".

8. What obstacles is UKOG likely to face?

There will undoubtedly be some local opposition and concerns raised by environmentalists. Worries about fracking led to large-scale protests when Cuadrilla drilled at Balcombe in West Sussex, in 2013.

9. Who will benefit from oil production at Horse Hill?

If the figures are correct, the whole country. It's claimed 1000s of jobs will be created and UKOG's shares more than quadrupled on the announcement, so it has already done rather well.

10. What next?

"The operator... is now focussed on flow testing the Portland Sandstone and Kimmeridge Limestone sections of the well, to establish producibility and thereby seeking to quantify an overall net discovered resource," UKOG Chief Executive Stephen Sanderson said in a statement.

In other words, further drilling and testing are needed to confirm the initial results.

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Tories To Freeze Train Fares For Five Years

Rail fares will be frozen in real terms for five years if the Tories win the General Election, David Cameron has pledged.

The Prime Minister said extending the Retail Price Index inflation cap on regulated ticket prices until 2020 would save the average commuter £400.

The coalition has imposed the same restrictions for the past two years, and also removed the "'flex" train that allowed operators to increase some fares by more than inflation as long as others went up by less.

According to the Conservatives, the policy means commuters are already paying £75 less than they would have been.

The announcement is part of an effort to blunt the Labour attack over the cost of living, and accusations that most people are not benefiting from the economic recovery.

Video: Prime Minister Explains Fare Rises

Mr Cameron, who is campaigning in the south west today, said: "The cost of commuting is one of the biggest household bills that hardworking families face and it is something we are determined to bear down on.

"It shouldn't just be taken for granted that people across the country who get up early and come home late, spend a large amount of the money they earn travelling to and from work.

"Because of the difficult decisions that we have taken to repair the economy, we have been able to hold down commuter fares for the past two years.

Video: Passengers Want 'Value for Money'

"If elected in May, we would freeze them in real terms for the next five."

But Mick Cash, leader of the Rail, Maritime and Transport union, said: "This latest stunt would still mean annual fare increases that would institutionalise the harsh reality that the British passenger pays the highest fares in Europe to travel on rammed out and unreliable trains.

"The only solution is to end the rip off of rail privatisation which would allow us to free up the hundreds of millions of pounds drained off in profits to invest in services and cut fares."

:: Click here to make your own Government with our Shaker Maker: http://news.sky.com/election/shakermaker#/

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HSBC Tax Scandal: France Starts Criminal Probe

HSBC has expressed outrage at being placed on €1bn bail amid a criminal investigation in France into historical tax issues.

The UK-listed bank said it was informed on Wednesday that French magistrates were examining the "conduct of its Swiss private bank in 2006 and 2007 for alleged tax-related offences."

Its statement said the court's decision is "without legal basis and bail is unwarranted and excessive".

The bank added that it intended to appeal and "defend itself vigorously in any future proceedings".

Activities at the private bank are being examined in several other countries including Germany and Argentina in the wake of the publication of stolen files.

Video: HSBC Boss 'Sorry' For Tax Scandal

The papers claimed the Swiss operation had helped clients in more than 200 countries, including Britain, evade and avoid tax.

The accounts in question were said to contain £77bn ($119bn).

HSBC chief executive Stuart Gulliver apologised earlier this year for past practices at the Swiss arm.

He and chairman Douglas Flint told a committee of MPs in February they had completed a series of reforms to help restore trust and confidence.

Video: HSBC Whistleblower Speaks Out

Argentina last month stepped up its tax evasion row with HSBC by demanding it repatriates $3.5bn (£2.32bn) of cash allegedly moved from the country to its Swiss private bank.

The country's tax authorities issued the request weeks after the Central Bank of Argentina temporarily suspended HSBC Bank Argentina's operations of transferring money and assets abroad for a period of 30 days.

Argentina accuses HSBC of aiding more than 4,000 clients to evade taxes by shifting assets offshore.

HSBC Argentina denied the claim - insisting it respected Argentine law.

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China Forms TPG Duet In Cirque Du Soleil Bid

By Mark Kleinman, City Editor

One of China's biggest conglomerates is backing a bid by the American buyout giant TPG to win control of Cirque du Soleil, the live entertainment company which is one of Canada's most prominent global exports.

Sky News has learnt that Fosun International, which recently snapped up a 5% stake in the tour operator Thomas Cook, has joined forces with TPG to bid for the globally renowned performance troupe.

Final bids were lodged for Cirque du Soleil last week, according to people close to the process, with the Fosun-TPG bid up against a rival offer from CVC Capital Partners and Providence Equity Partners, two private equity firms.

The two bids are understood to be for a controlling stake in Montreal-based Cirque du Soleil despite initial indications that Guy Laliberte, its founder, was hoping to sell only between 20% and 30% of the company.

If TPG's bid is successful, the presence of a Chinese partner such as Fosun could help Cirque du Soleil to make a significant impression in China, one of a number of prospective growth markets that it has been looking to break into.

Fosun and TPG have worked together before, most notably last year on a takeover of Chindex International, a China-focused hospital operator which was listed in New York.

The Chinese conglomerate has made a significant impact in the global leisure and tourism sector, having recently led a takeover of Club Med, the international holiday resort group.

The auction of a stake in La Cirque du Soleil, which has earned a reputation for staging some of the world's most spectacular live shows, comes after it has recently fallen on tougher financial times.

Set up by street performers in Quebec in 1984, Cirque du Soleil describes itself as offering "a dramatic mix of circus art and street performance".

Millions of people have seen the company's range of hit shows in London, which have been staged at the Royal Albert Hall for more than a decade, and other cities including Las Vegas.

Notable for its daring acrobatics and flamboyant costumes, Cirque du Soleil was valued at $2.7bn when Mr Laliberte sold a 20% stake to Istithmar World, the investment arm of Dubai World, and Nakheel, a Dubai-based real estate developer, in 2008.

However, after Dubai was forced into a sovereign debt restructuring, Mr Laliberte bought back part of the stake he had sold in a transaction valuing Cirque du Soleil at just $2.2bn.

Analysts and company executives have reportedly said that the company expanded too quickly, spending over-zealously on new performers, executives and shows in a way which diluted the brand's international distinctiveness.

Reports had suggested that Live Nation Entertainment, IMG and AEG Live, were also likely to submit offers for Cirque du Soleil, although it was unclear whether any had done so.

Goldman Sachs is handling the auction for Cirque du Soleil.

The decision by CVC and Providence to bid jointly is intriguing because the two firms are pitched against each other in an unrelated auction of Stage Entertainment, a European theatre operator.

Providence is a big shareholder in Ambassador Theatre Group, which is seen as the leading contender to buy Stage.

TPG declined to comment on Thursday.

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Canada Pension Fund Omers Eyes Equiniti Deal

By Mark Kleinman, City Editor

One of Canada's biggest pension funds is plotting a takeover of Equiniti, the outsourcing group responsible for administering the pensions of millions of British civil servants.

Sky News understands that Omers Private Equity, which counts the Vue cinema chain among its investments, has sounded out Equiniti's current owner about a deal.

Sources said Omers was among a number of parties to have approached Advent International in recent weeks.

Employing more than 3000 people, Equiniti is a specialist in business process outsourcing, and has been owned by Advent since 2007.

Rothschild, the investment bank, is being lined up to evaluate a sale or public listing of Equiniti, which could value it in the region of £1.5bn.

Previously owned by Lloyds TSB, Equiniti counts more than half of the members of the FTSE-100, including HSBC, Marks & Spencer and Shell, among its clients.

Its examination of a flotation or sale has emerged just weeks before the General Election, when the role of rival outsourcers such as G4S and Serco is likely to be the subject of political debate.

Originally a registrar business focused on the administration and payment of shareholder dividends at companies such as Barclays and Tesco, it has diversified into services including pension and benefits administration, and technology to support loan servicing and complaints handling.

The company's chief executive, Guy Wakeley, joined just over a year ago, replacing Wayne Story, who quit shortly after Royal Mail's £3.3bn flotation.

The ensuing controversy around the postal operator's valuation ensnared Equiniti, which was dogged by complaints that the outsourcing group had failed to process 'Sell' orders sufficiently quickly.

Criticisms of Equiniti posted on Twitter and other internet forums during the privatisation had been investigated and been found to be invalid because investors had failed to understand correctly the procedures for selling Royal Mail shares, sources said at the time.

Equiniti describes itself as "the leading provider of shareholder services in the UK based on revenues and the number of underlying shareholder and employee records administered, providing services to more than 1,000 corporate clients and 17 million shareholders".

It boasts that its longest-standing client relationship has existed for 177 years, while earlier this week it was hired to manage a major contract for the UK Passport Office.

The company has been acquisitive under Advent's ownership, with its most significant deal taking place last October when it took control of MyCSP, which administers civil service pensions.

Advent and Omers declined to comment.

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Easyjet 'Rescue' Flights For Kids After Strike

Easyjet is laying on "rescue" flights to bring schoolchildren home after a French air traffic strike saw hundreds of flights axed.

The budget carrier is running five special flights: Luton to Paris, Paris to Barcelona, Barcelona to Luton, Gatwick to Madrid, and Marrakech to Gatwick.

Larger planes may be used to ease delays caused by the two-day controllers' strike, which started on Wednesday.

Easyjet, one of the worst-hit airlines, had to cancel 331 flights on Thursday and 248 on Wednesday.

Others, including Ryanair, Flybe and BA, were also affected by the industrial action.

Passengers queue at Nice airport during the strike

Ryanair axed more than 250 flights on Wednesday alone. The Irish carrier's services from the UK to Alicante and Malaga in Spain were among those hit.

French air traffic controllers are set to stage further stoppages in the next few weeks. The first will be from 16-18 April and the second from 29 April to 2 May.

An Easyjet spokesman said: "We recognise that there are a number of passengers across the network who have been affected by these cancellations and still require flights as soon as possible.

"We are operating five rescue flights, prioritising the repatriation of three groups of schoolchildren."

Nathan Thorne, 23, from Goole on Humberside, has been trying to get home from Limoges to Leeds Bradford since his Ryanair flight was cancelled.

He and his younger sister have been unable to get another flight home until next Thursday, when the next strike begins.

Mr Thorne said: "All the flights before next Thursday are booked up and the Eurostar train is extremely expensive."

The controllers were striking over restructuring proposals and government plans to change the retirement age.

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M&S Sourcing Chiefs Set For Lavish Payday

By Mark Kleinman, City Editor

Two brothers hired to boost the efficiency of Marks & Spencer's (M&S) clothing business are in line for multimillion pound paydays which could make them the company's best-paid employees over a three-year period.

Sky News can reveal that Mark and Neal Lindsey, who were recruited just over a year ago, will receive a fixed proportion of the savings generated by the improvement in M&S's gross margin, in addition to basic salaries of £400,000 each.

The retailer said earlier this month that it remained on course to record a gross margin improvement of between 150 and 200 basis points, which analysts say would translate into an increase in profits worth tens of millions of pounds.

Sources said on Friday that the Lindseys had been hired on a three-year contract, with one adding that while their payout for 2014-15 would be substantial, it was likely to be far higher in the subsequent two years.

M&S refused to disclose the brothers' remuneration arrangements to Sky News because they are not on the company's main board.

However, company insiders said that their financial rewards would be aligned with the long-term interests of M&S shareholders, who have been boosted by third-quarter results showing the first improvement in general merchandise sales for more than three-and-a-half years.

One person close to the retailer insisted that the Lindseys would not be the highest-paid M&S employees for 2014-15, but conceded that their bonuses were directly tied to margin improvements in the general merchandise business.

A number of institutional shareholders have told Sky News that while they welcomed greater efficiency within the business, they were keen to understand the potential scale of the rewards that could accrue to them over the duration of their contract.

Unlike at banks and insurance companies, listed businesses in other sectors are not obliged to disclose - even anonymously - the remuneration of their most highly-paid employees.

The two sourcing chiefs were lured out of semi-retirement by M&S after an impressive track record as the architects of rival Next's widely-envied supply chain.

As the Hong Kong-based sourcing directors for general merchandise, the Lindseys have specific responsibility for clothing and footwear, overseeing M&S's network of regional sourcing offices around the world and its large London-based central sourcing team.

Although little-known in the UK, they played an important role in assisting Next's rise to prominence on the high street and its establishment as a darling of the City.

Speaking on 2 April, Marc Bolland, M&S's chief executive, said: "We have made strong progress over the quarter.

"We continued to deliver on General Merchandise gross margin, and are pleased that we have achieved this whilst also improving General Merchandise sales.

"M&S.com has returned to growth, as planned, with further improvement in customer metrics."

M&S shares were trading at just over 574p on Friday afternoon, giving the company a market value of £9.3bn.

The shares are up by 30% over the last 12 months.

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US Predator Eyes Bid For £6bn Smurfit Kappa

By Mark Kleinman, City Editor

A US paper-manufacturing giant is weighing a £6bn-plus takeover bid for Ireland's Smurfit Kappa as a wave of global deals fuelled by cheap debt continues to gather pace.

Sky News has learnt that International Paper Co is working with advisers at Deutsche Bank on a possible bid for Dublin-listed Smurfit, which specialises in the production of corrugated packaging.

Shares in Smurfit rose sharply early this week amid speculation of a bid approach from either International Paper or Amcor, an Australian rival.

Sources cautioned this weekend, however, that no formal approach had yet been made to Smurfit's board by International Paper, adding that the prospective bidder may yet decide not to pursue a deal.

One City source said that the American company, which has a market capitalisation of nearly $24bn (£16.4bn), had been looking at pitching an offer at about €36-a-share if it did press ahead with a proposal.

At that level, Smurfit's equity would be valued at more than £6bn, although with the company's debt and a conventional takeover premium included, a bid could be worth more than £8bn.

Smurfit's shares fell back after their initial surge last week to close at €28.91, although they are still up by more than 67% over the last 12 months.

If International Paper does lodge a bid for Smurfit Kappa, it would be the latest in a string of major takeover deals following the strongest start to a year for mergers and acquisitions for almost a decade.

In recent weeks, Heinz and Kraft Foods have agreed to merge in a $100bn (£68.3bn) deal, Royal Dutch Shell agreed to acquire BG Group in a takeover worth £47bn - the largest-ever transaction involving two London-listed companies - and the generic drug-maker Mylan offered to buy rival Perigo for $29bn (£19.8bn).

The timing of International Paper's interest is nevertheless likely to surprise analysts, some of whom played down the prospect of a bid for Smurfit earlier this week.

The Irish company's shares have soared in the last six months, while hopes of a broad economic recovery in the Eurozone, from where a significant proportion of its revenues derive, remain faint.

Smurfit operates in 32 countries, employing 42,000 people and boasting more than €8bn (£5.8bn) in revenue last year.

It makes packaging for clients in sectors as diverse as the retail flower market, tobacco manufacturers and high-value automotive goods.

There are already links between the Irish company and its purported predator: Paul Stecko, a non-executive director at Smurfit, spent 16 years with International Paper.

The packaging industry has already seen significant levels of corporate activity in recent months, with a £4.3bn agreed takeover of the UK's Rexam by Ball Corporation of the US.

The company declined to comment on Saturday, while International Paper did not respond to a request for comment.

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Kurt Geiger To Try On Another New Owner

By Mark Kleinman, City Editor

The upmarket shoe retailer Kurt Geiger is preparing to try on another new owner less than a year after its last buyout.

Sky News understands that the company's management and their backers at Sycamore Partners, an American private equity firm, have hired bankers at Goldman Sachs to explore a sale of part or all of the business.

An outright sale would be the latest in a string of deals involving Kurt Geiger, which prides itself on its celebrity customer base and which operates footwear concessions in department stores including Harrods and Selfridges.

Jon Hamm, the Mad Men actor, and ‎the model Rosie Huntington-Whiteley are among prominent fans of the brand.

The price tag attached to the fashion label, which is moving into the children's footwear market, is unclear‎ although analysts said it could be in the region of £300m, roughly equivalent to last year's estimated sales figure.

The brand was bought by Jones Group, a US fashion company, in 2011 in a deal worth £215m.

Jones' subsequent troubles led it in April last year into the arms of Sycamore, which days later sold a stake to Kurt Geiger chief executive Neil Clifford and other senior managers.

At the time, Mr Clifford said:

"We believe our company has tremendous potential for growth in the UK and internationally, and we will continue to invest in new opportunities alongside our department store and brand partners."

In a recent interview with The Times‎, Mr Clifford raised the prospect that Kurt Geiger could abandon its US operations, citing the need for substantial infrastructure investment to make a success of the move.

Preparations for another sale could take several months, with Kurt Geiger expected to appeal to private equity firms for investing in the luxury goods and retail industries, as well as international fashion houses.

A stock market listing is another possible alternative.

In addition to its hundreds of concession operations, Kurt Geiger sells its own brands‎ such as Carvela in more than 70 stores around the world.

Kurt Geiger's first shop opened on London's Bond Street in 1963, but it took until 2007 before its first significant overseas expansion into Europe and the Middle East.

Four years after that, the business was sold to Jones Group by Graphite Capital, a private equity firm which had bought it from Barclays' buyout arm in 2008.

Prior to Barclays, Kurt Geiger had been owned by Mohamedd Fayed, the then owner of Harrods.

Sycamore Partners and Goldman Sachs both declined to comment.

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'Google Tax' In Force To Tackle Avoidance

Multinational companies that shift their profits offshore to avoid tax now face being slapped with a levy.

The diverted profits tax (DPT), which has now come into force, aims to crack down on the controversial practice which has sparked criticism of companies like Google, Starbucks, Amazon and Apple.

Only last month, a financial watchdog highlighted its continuing concerns that multinational companies trading in the UK were not paying the right amount of tax.

Members of the Commons Public Accounts Committee said evidence given by Google, Starbucks, Amazon and large accountancy firms showed the use of tax avoidance measures was "widespread".

In 2013, Facebook paid just £3,169 in tax, while Amazon paid £10m, Apple £11m and Google £11.6m.

Video: 18 March: Multinationals Targeted

At the same time, the total revenues of the four companies in the UK was more than £17bn.

Meanwhile, it was revealed Starbucks paid no corporation tax between 2009 and 2012.

Despite sales of £400m in 2011, the coffee giant claimed it had made a loss in those years and so paid no tax.

There has been mounting pressure to tackle tax avoidance in the face of the austerity-driven spending squeeze.

The so-called "Google Tax" will see firms charged 25% on profits artificially siphoned offshore.

It is expected to make £25m for the Treasury this financial year, rising to £360m by 2020.

Other changes being introduced from April 1 include reducing the rate of Corporation Tax paid by companies from 21% to 20%.

These were highlighted by Chancellor George Osborne as 100 leading business figures gave their backing to the Conservatives and said Labour would damage Britain's economic recovery.

He said: "Their message is positive: under David Cameron's leadership, we have an economic plan that is working and creating jobs.

"Today that plan sees corporation tax cut again to 20%, and a new diverted profits tax so those low taxes are paid."

Labour's shadow business secretary Chuka Umunna has hit back at the open letter, saying: "No one will be surprised that some business people are calling for low taxes for big businesses."

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Tories Woo New Backers As Boots Boss Says No

By Mark Kleinman, City Editor

The Conservatives have embarked on a fresh attempt to court backing from the business community hours after the publication of a letter warning against "a change in (economic) course" pursued by a Labour administration.

Sky News can reveal that Lord Feldman, who chairs the party's board and was responsible for organising a pro-Tory letter in Wednesday's Daily Telegraph, has urged other business leaders to add their support for a Conservative government.

"I hope you have seen the Daily Telegraph today that has published a letter with over 100 business leaders supporting the Conservative's policy to lower corporation tax to 20% effective today," Lord Feldman wrote in an email to company executives obtained by Sky News.

"I am writing to ask if you would consider adding your name as a signatory to this letter.

"It is clearly important to send a signal that the business community is behind the Conservatives' long-term economic plan, and does not want to see a change of course."

Sky News also understands that the boss of Boots, the high street health and beauty retailer, was asked to sign the original letter but declined, just weeks after being attacked by Ed Miliband for predicting that a Labour election victory could be "disastrous" for the UK economy.

Stefano Pessina, who runs the US-headquartered Walgreens Boots Alliance, opted not to put his name to the letter because as a Monaco resident he is not entitled to vote in UK elections.

In a statement, a spokeswoman for the company, which employs tens of thousands of people in the UK, said: "As Stefano Pessina is not a UK citizen and does not vote in the UK, he would not sign any letter to support a political party in the UK General Election.

"Furthermore, he has not previously signed any letters to back political parties on such occasions.

"As a businessman, international entrepreneur and investor, Stefano naturally takes a keen interest in the overall business environment in the countries in which he leads businesses.

"With this in mind, he has previously expressed views regarding certain business policies and recommendations, especially regarding the UK economy to which he has been very committed and highly supportive for 20 years."

Mr Pessina was stung by the Labour leader's accusation in February that he was "avoiding his taxes", an allegation he strongly denied.

Although Mr Pessina and others approached about the letter declined to sign it, its publication will reinforce the widely held perception that the Conservatives enjoy far stronger support from the business community than Labour.

Under the Tory-led coalition, corporation tax has been reduced to 20% following a string of annual cuts which Labour has pledged to reverse in order to favour tax cuts for smaller companies.

It is unclear whether the Conservatives plan to publish an updated version of the letter once new signatories are added.

George Osborne, the Chancellor, said the letter represented an "unprecedented intervention" in a General Election campaign.

"A hundred business people, employing over half a million people and leading some of Britain's best-known companies, from Primark to the Prudential and from BP to Britvic and Mothercare have spoken out," he told Sky News.

Some observers suggested, however, that after weeks of corralling support, the Tories would have been disappointed to enlist support from the chief executives of only three FTSE-100 companies: Associated British Foods, BP and Prudential.

The festering row about business support for the main parties further deepened on Wednesday when Chuka Umunna, the Shadow Business Secretary, said that Paul Walsh should not become the next president of the CBI after opting to show support for the Conservatives.

Sky News revealed in February that Mr Walsh, the former chief executive of Diageo, was being lined up to succeed Sir Mike Rake, and his appointment is expected to be confirmed later this month.

A CBI spokesman said: "The CBI is a politically neutral organisation and its senior post holders will always act impartially.

"The CBI has made no announcement about its next president."

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Miliband: Epidemic Of Zero-Hours Contracts

By Jason Farrell, Senior Political Correspondent

Workers on zero-hours contracts will be able to demand a regular contract after 12 weeks under proposals announced by Ed Miliband.

The Labour leader promised to outlaw the "exploitative" contracts in a commitment to be included in Labour's election manifesto saying: "We have got to end the epidemic of zero-hours contracts.

Speaking at an event in Huddersfield, Mr Miliband said: "You shouldn't be left at the beck and call of an employer who can ask the world of you but give you no security in return. It's not fair, it's not good for businesses and we will put a stop to it."

The proposal strengthens Labour's previous policy on the contracts, which sought to give workers the right to a regular contract after 12 months.

:: For full coverage of General Election 2015 click here

Video: Zero-Hours Contracts

The announcement comes after Prime Minister David Cameron admitted that he could not live on a zero-hours contract during questioning from Jeremy Paxman on Sky News' Battle For Number 10 programme.

Mr Miliband said zero-hours contracts have become a symbol of a low-wage, low-skill economy.

In reference to Mr Paxman's interview with the Prime Minister, the Labour leader said: "If Cameron can't live on it, nor should you - Labour will give workers a legal right to a regular contract, not a zero-hours contract.

"Today I can announce that in our first year of government after the election, Labour will legislate for a new principle: If you are working regularly, you have a legal right to a regular contract."

Mr Miliband first set out the 12-week proposal in 2013 at the Trades Union Congress (TUC) conference, but later backtracked.

Video: Zero Hours 'Gone Too Far'

A spokesman for the party leader said the change back to 12 weeks would incorporate 92% of people on the controversial employment terms.

The proposal is expected to include exemptions for employees such as so-called bank nurses, who request a zero-hours contract so they can work at another hospital as well as their usual job.

Mr Miliband was asked by a worker at the Huddersfield factory what was to stop employers only providing work for 11 weeks to dodge the provision. He replied a "legal mechanism" would be put in place to prevent it.

The Coalition Government sought to prohibit exclusivity clauses in zero-hours contracts, but the Labour Party argues this does not go far enough.

A Conservative spokesperson accused Labour of "presiding over zero-hours contracts" for 13 years.

Video: Osborne Under Fire Over Zero Hours

"Zero-hours contracts account for just one in 50 jobs in our economy," the spokesperson said.

"This Government has already banned the abusive ones - and all the while Labour presided over zero-hours contracts with no safeguards for three terms and 13 years while they were in power."

Speaking on the campaign trail Boris Johnson, who is running for MP in Uxbridge, said he would rather people were in work than left feeling "ill-used by society, left out, unable to express themselves with their self-esteem sinking and sinking."

:: Watch the seven-way leaders' debate live and in full from 8pm on Thursday on Sky News, on Sky channel 501, Virgin Media channel 602, Freeview channel 132, Freesat channel 202, and on the Sky News website.

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Insurer Hastings Motors Towards £1bn Listing

By Mark Kleinman, City Editor

The owners of Hastings, one of the UK's fastest-growing insurers, have appointed investment bankers to steer the company towards a £1bn post-lection flotation.

Sky News understands that Hastings has appointed Goldman Sachs and Credit Suisse to oversee a review of the company's options to take place during the coming months.

Although any deal is unlikely to take place until later this year at the earliest, it will still mark a rapid exit for Goldman's merchant banking arm, which acquired just under 50% of Hastings in October 2013.

The appointment of Goldman bankers to work on a prospective flotation means that the Wall Street firm will earn money from its advisory work as well as the return on its investment in Hastings.

Insiders said that the insurer, which was valued at approximately £700m by its most recent deal, is expected to seek a valuation "significantly closer" to £1bn in a future transaction.

Just under half of Hastings is owned by the company's founders, with the balance held by management, including Gary Hoffman, the chief executive, and employees.

Under Mr Hoffman's leadership, Hastings has demonstrated rapid growth, reporting that customer numbers had reached 1.65m by the end of September last year, up from 1.35m 12 months earlier.

The company, which is due to announce another round of financial results next week, also reported significant increases in net revenue and market share, with adjusted pre-tax profit in the year to date up by 18%.

A stock market listing is expected to be the default choice for Hastings' management and shareholders, although recent takeover activity in other areas of the insurance sector will mean that they also remain open to an outright sale.

During the last deal, Goldman invested £150m in return for just under 50% of Hastings' equity, with Neil Utley, its chairman, crystallising a fortune worth tens of millions of pounds from the sale of part of his stake.

Hastings also raised approximately £420m from a bond sale at the same time.

Based in Bexhill, East Sussex, Hastings employs more than 1500 people, over 80% of whom are understood to be shareholders in the company.

Mr Hoffman led the turnaround of Northern Rock during its period in Government ownership following the run on the mortgage lender in the autumn of 2007, which heralded Britain's banking crisis.

He then spent two years as chief executive of NBNK Investments, a vehicle set up to acquire retail banking assets, but which was rebuffed in favour of the Co-operative Group in the contest to buy 632 branches from Lloyds Banking Group.

That deal collapsed amid a financial crisis at the Co-operative Bank, leading to the branches being rebranded as TSB and listed on the stock market.

A Hastings spokesman declined to comment on Wednesday.

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M&S Reveals Like-For-Like Sales Up 0.7%

Marks & Spencer has revealed like-for-like sales of food and clothing are up 0.7%, the first rise in sales for 14 quarters.

The retailer issued a trading statement for the 13 weeks to 28 March, which also revealed that total like-for-like UK were up 0.7%, group sales were up 1.9% and international sales were down 3.8%.

The lift in sales, the first rise in more than three years of trading, has been attributed to a customer response to changes in "product quality and styling" and an increase in the sale of more full-price items.

Food sales were also helped by record Valentine's Day trading.

The group said its spring and summer collections have been well received, including its much talked about suede skirt.

M&S is pleased with the response to its 70s-style suede skirt

M&S shares opened up 4% after the fourth quarter sales figures beat City expectations. Analysts had expected a 1.2% drop in like-for-like sales.

The company said that online sales returned to growth of 13.8%, with traffic numbers and customer satisfaction ratings continuing to improve since distribution problems hit Christmas trading.

Marc Bolland, chief executive, has faced increasing pressure to turn around the clothing business.

He said: "We have made strong progress over the quarter. In food we delivered another excellent performance, with sales growth ahead of the market.

"We continued to deliver on general merchandise gross margin, and are pleased that we have achieved this whilst also improving general merchandise sales."

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Energy Firm Pays Heavy Price For Overcharging

Energy firm E.ON is to hand £7.75m to Citizens Advice for customers who were overcharged after price rises.

The sum is on top of the £400,000 E.ON has already paid back money to others who may have been affected.

Regulator Ofgem said the penalty reflected the company's "repeated failing" on billing rules.

It wrongly imposed exit fees and overcharged customers following price rises in January 2013 and January 2014

Under Ofgem rules firms are not supposed to apply exit fees if a customer signals their intention to move supplier within the standard 30-day notice period of a price increase.

Video: Energy Firms Fail On Cuts Promises

This is the case even if the switch occurs after the rise.

Sarah Harrison, Ofgem's senior partner in charge of enforcement, said: "(Our) rules give customers a chance to avoid exit fees and higher costs when suppliers put up prices.

"These are important customer protections and it is vital that suppliers play by the rules so customers are encouraged to engage in the market."

Video: Consumers 'Duped' Over Energy Deals

In November 2012, E.ON, one of the UK's six biggest energy suppliers, was required to pay £1.7m for similar failings.

Ms Harrison commented: "It's absolutely unacceptable that E.ON failed to provide these vital customer protections yet again and this persistent failure is the reason for the high penalty."

The errors in respect of price rises in January 2013 and 2014 affected direct debit and standard credit customers. The average amount paid back was around £8 and £12 respectively.

Video: Your Energy Cost Explained

The mistakes also resulted in around 11,500 prepayment customers - traditionally the poorest - missing out on an average refund of £3.42.

E.ON is aiming to reimburse them by the end of April.

Last May E.ON was ordered to pay back a record £12m for mis-selling.

Video: Energy Bills: What We're Paying

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Temasek Snaps Up Stake In UK's Funding Circle

By Mark Kleinman, City Editor

A fast-growing peer-to-peer lending platform is to sell a stake in itself to Temasek, the Singaporean sovereign wealth fund, as part of a fundraising that will catapult it into the ranks of Britain's most valuable technology start-ups.

Sky News can exclusively reveal that Funding Circle is in advanced talks with Temasek Holdings about plans to raise well over £50m in new capital to accelerate its expansion.

Temasek, which has invested in some of the world's most valuable technology companies, including China's Alibaba, plans to invest roughly £30m as part of the deal, sources said on Thursday.

An arm of Blackrock, the world's biggest money manager, and Baillie Gifford, the Edinburgh-based asset management group, are also expected to participate in the deal, which will value Funding Circle at in excess of $1bn (£675m).

The funding round, which is likely to close within weeks, will cement Funding Circle's status as one of the UK financial technology, or fintech, sector's most exciting prospects.

Funding Circle's existing investors include funds such as Index Ventures, Accel, Union Square Ventures and Ribbit Capital.

They each stand to make substantial gains on the value of their holdings in the company, which was founded less than five years ago.

Funding Circle, which is also backed by the Carphone Warehouse co-founder Sir Charles Dunstone, describes its mission as being to "revolutionize the outdated banking system and secure a better deal for everyone".

Since opening for business, it has lent close to £600m and counts more than 30,000 individuals, the UK Government and local councils among those providing capital through the platform.

Pressure from the Government on banks to refer borrowers to peer-to-peer lenders when their loan applications are rejected by high street stalwarts is fuelling a rapidf growth in demand in the sector.

"Too much business lending is concentrated in the big banks," Vince Cable, the Business Secretary, said last year.

"If we're to have a properly functioning business lending market, they need to be challenged by new banks, peer-to-peer lenders and other alternative providers."

Last year, Funding Circle announced an agreement with Santander UK to refer small business borrowers to the tech company.

Samir Desai, the peer-to-peer lender's chief executive, said:

"This partnership recognises our role as the only marketplace that caters for, and is dedicated to, small businesses. In Santander we have found a fellow challenger brand that shares our commitment to putting small business customers' needs first. They have created a blueprint for other banks to follow."

Since then, other banks have struck similar deals with Funding Circle and its competitors, which offer higher interest rates than high street banks because of their lower fixed-cost bases.

Investors' enthusiasm for the peer-to-peer lending industry has also been fired by the successful initial public offering of Lending Club, the world's biggest peer-to-peer platform.

Funding Circle and Temasek declined to comment on Thursday.

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Pru Boss 'Irritated' By Labour Letter Row

By Mark Kleinman, City Editor

A row over company bosses' political affiliations ahead of the General Election deepened on Thursday amid allegations that Labour was trying to undermine the leaders of some of the UK's biggest businesses.

Friends of the Prudential chief executive, Tidjane Thiam, told Sky News that he was "irritated" at suggestions from Labour sources that he was reconsidering his backing for a pro-Conservative letter which appeared in The Daily Telegraph this week.

The letter, which was originally signed by 103 business leaders, expressed support for Tory economic policies and warned that a "change of course" could jeopardise Britain's economic recovery.

Despite indicating that Labour was unconcerned by bosses' backing for the Tories, one Labour aide suggested on Thursday that Mr Thiam had "regretted" his decision to sign the Telegraph letter.

That provoked a robust response from people close to the Prudential chief, who is leaving his role this year to head the Zurich-based banking group Credit Suisse.

Video: Labour 'Wants Business To Succeed'

"He made his views clear and they speak for themselves, so he is unlikely to be happy at anyone else trying to misrepresent his position," a friend of Mr Thiam said.

Labour had earlier seized on a decision by Pascal Soriot, chief executive of the drug-maker AstraZeneca, to withdraw his association with the pro-Tory letter.

Mr Soriot did not say why he had signed the letter, but issued a statement saying: "Neither I nor AstraZeneca endorse any political party and while I support such policies my name should not be used in the context of the letter."

Labour aides also tried to claim that the chief executive of Ladbrokes had also changed his mind about being a signatory but omitted to mention that Richard Glynn, whose name appeared on the list of supporters, stepped down this week.

Video: Business Leaders Back Tories

His successor, Jim Mullen, said he would not sign any similar letters during an election campaign.

A Conservative Party source said that Labour was trying to "intimidate or undermine" business leaders from speaking out on the economy.

Sky News revealed earlier this week that Stefano Pessina, the boss of Walgreens Boots Alliance, had been approached but declined to sign the letter just weeks after being attacked by Ed Miliband for saying that a Labour government could be "disastrous".

In Thursday's seven-way party leaders' debate, David Cameron referred to the support from business leaders as evidence for the need to keep the Tories in government.

Video: David Gauke Discusses Open Letter

The festering row about business support for the main parties was also reignited this week when Chuka Umunna, the Shadow Business Secretary, said that Paul Walsh should not become the next president of the CBI after opting to show support for the Conservatives.

Sky News revealed in February that Mr Walsh, the former chief executive of Diageo, was being lined up to succeed Sir Mike Rake, and his appointment is expected to be confirmed later this month.

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Sluggish US Economy Adds Only 126,000 Jobs

By Sky News US Team

A slow US economy added a lower-than-expected 126,000 jobs in March, though the unemployment rate held steady, as predicted, at 5.5%.

Friday's jobs reports broke a run of 12 consecutive months in which the economy added more than 200,000 jobs.

It was the smallest jobs gain since December 2013, said the Labor Department.

Job gains in February and January this year were also revised down by 69,000.

US manufacturing and construction activity is anaemic, while hiring at restaurants is down as the country emerges from a harsh winter.

Average hourly wages rose a modest 7 cents to $24.86 (£16.68) an hour.

The disappointing report could hold back the Federal Reserve from raising interest rates in the middle of this year.

Cheaper oil has hurt manufacturers as energy firms rein in orders for equipment, and has yet to show an impact on consumer spending. 

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