Water bill savings for England and Wales households

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(qlmbusinessnews.com via telegraph.co.uk – – Wed, 13 Dec 2017) London, Uk – –

Water regulator Ofwat has said customers in England and Wales will save between £15 and £25 a year from 2020 under its upcoming price review.

Under the plans, which set limits on the prices that customers will pay for water between 2020 and 2025, Ofwat said it was proposing to set the so-called “cost of capital” that has a direct bearing on bills at a record low of 2.4pc.

Ofwat said its review would ensure customers can “look forward to lower bills, improved services, reduced leakage and more help for the most vulnerable”.

The regulator added that it would challenge water firms “to go the extra mile in terms of the services they provide”. This would include more help for vulnerable customers and greater action to clamp down on leakages. Ofwat wants suppliers to save a further 170 billion litres of water a year, enough to meet the yearly needs of 3.1 million people.

Ofwat chief executive Cathryn Ross said: “The next decade will see profound changes in customers’ expectations and we are pushing the water sector to be at the very forefront of that.”

She added: “We’ve said many times already that this will be a tough price review for companies.

“We will cut the financing costs they can recover from customers and, with this lower guaranteed return, they will need to more efficient and innovative than ever before.

“I’ve no doubt that the sector can step up and meet the challenges we’ve laid before them today”.

The water industry is under pressure to improve its image and performance with Jeremy Corbyn’s Labour Party stating that it would nationalise companies if it came to power. Earlier this year John McDonnell, the Shadow Chancellor, cited figures that showed the price of water in England and Wales had risen 40pc since privatisation in 1989.

 

Westfield shopping centres acquired by France’s Unibail Rodamco in $25bn deal

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(qlmbusinessnews.com via bbc.co.uk – – Tue, 12 Dec 2017) London, Uk – –

The owner of Westfield shopping centres is being bought for $24.7bn (£18.5bn) in a deal which will see the malls launched in new markets.

French property group Unibail-Rodamco is offering $7.55 a share for the Australian business.

Westfield Corporation has 35 shopping centres in the UK and the US while Unibail-Rodamco has 71 sites in Europe.

Unibail-Rodamco said the takeover would result in a “progressive roll-out of the world famous Westfield brand”.

The takeover is the second major deal involving shopping centre owners to emerge in just over a week.

On 6 December, Hammerson, which owns the Bullring in Birmingham, announced a £3.4bn bid for Intu, whose properties include the Arndale shopping centre in Manchester.

In a joint statement, Unibail and Westfield said they would make €100m (£88.2m) in savings a year despite no overlap between where the companies’ shopping centres are based.

Christophe Cuvillier, chief executive of Unibail-Rodamco, said the acquisition of Westfield “adds a number of new attractive retail markets in London and the wealthiest catchment areas in the United States”.

Mr Cuvillier said it will cut the cost of advertising and marketing. At the moment, Unibail shopping centres advertise individually under different brands for big events, such Christmas.

He said that by using the recognisable Westfield brand, which it intends to roll-out across its flagship shopping centres in areas such as Paris, Barcelona, Vienna and Warsaw, it will reduce advertising spend.

It will also save costs at the corporate level because the board of Westfield is stepping down and leaving the combined group.

The group expected to sell €3bn (£2.65bn) worth of assets over the next few years, which will involving divesting of some smaller shopping centres.

Sir Frank Lowy, the billionaire property tycoon who co-founded Westfield in the 1950s, will retire as chairman of Westfield. His sons Peter and Steven will also step down as co-chief executives of the business.

However, following completion of the deal, Peter Lowy will be appointed to the combined group’s supervisory board and Sir Frank will chair a newly created advisory board.

They also said: “The Lowy family is committed to the success of the Group and intends to maintain a substantial investment in the group.”

Sir Frank is one of the richest people in Australia with a fortune of $5.9bn, according to Forbes magazine and was knighted by the Queen last week.

Sir Frank originates from Eastern Europe and survived the Holocaust in Hungary. He moved to Australia in 1952.

 

Mortgage support benefit for thousands of households to be axed

(qlmbusinessnews.com via theguardian.com – – Tue, 12 Dec 2017) London, Uk – –

Crucial welfare payment will be turned into a loan from 2018, affecting 124,000 individuals who rely on it

Thousands of hard-up older people are being given a stark choice: sign up to a “second mortgage” with the government, or lose some of the financial help you receive.

In a little-noticed move, the government is axing a benefit that has been around since 1948 and has thrown a lifeline to many people on low incomes. “Support for mortgage interest” (SMI) helps financially constrained homeowners with their mortgage payments – some of them might otherwise be at risk of being repossessed. But from April 2018, SMI will no longer be paid as a free benefit. Instead, the government is offering to loan people the money, which will have to be repaid later with interest.

Critics say this means tens of thousands of people, many of them pensioners, will be saddled with what amounts to a new mortgage on top of their existing home loan. A 68-year-old woman who is still paying off her mortgage and receives SMI contacted Guardian Money to say she isn’t comfortable taking out a government loan, so she is going to reject the offer. But that means she will have to find the money to replace the benefit. “This is going to cause a lot of hardship for people,” she says.

However, others argue that it’s not the role of UK taxpayers, many of whom can’t afford to buy a home of their own, to subsidise people’s mortgage payments and enable them to acquire a potentially valuable asset they can pass on to their children after their death.

SMI helps homeowners on certain income-related benefits pay the interest on their mortgage and the Department for Work and Pensions normally sends the money straight to the mortgage lender. It was introduced after the second world war as a working-age benefit that would offer a short-term lifeline to people who had lost their job or become ill and were trying to get back on their feet.

However, almost 70 years later, many of those who receive it are of pension age and retired, and they are able to claim it indefinitely while their mortgage is outstanding. That is because pension credit is one of the qualifying benefits. The others include income support and income-based jobseeker’s allowance.

According to the government, there are about 124,000 people receiving SMI at a cost of £205m a year to the state. Almost half the recipients are of pension age and many have interest-only mortgages.

However, the government said the current setup was unsustainable, so in the summer 2015 budget it announced that from April 2018, SMI would no longer be paid as a benefit. Instead, it will be replaced by a state-backed loan, secured against the mortgaged property. The loans will offer the same support – the DWP will carry on making regular payments to the individual’s mortgage lender – but interest will be added every month to the total amount the person owes. The longer someone has the loan, the more interest they will need to pay back, so those who claim for several years could easily face bills running into thousands of pounds.

This isn’t the same as a normal loan: the mortgage holder does not have to pay it back until the house is eventually sold or transferred to someone else, though they might want to make voluntary repayments if they can afford to. In that sense, it’s like a government-sponsored version of equity release. If someone inherits the house, they will need to pay back the DWP from any available equity if the property is sold or someone else becomes the legal owner. If there isn’t enough equity, any amount that can’t be paid back will be written off.

So will the government make a profit from these loans? The DWP says no, as the interest rate people will pay will be “the rate the government borrows at” and based on official gilt rate forecasts. The latest prediction is for an interest rate of about 1.5% in 2018-19, rising to 2% in 2021-22. If you turn down the offer of the loan, SMI benefit payments will stop on 5 April 2018.

The 68-year-old who contacted us (and didn’t wish to be named) has a £67,000 mortgage. As she has decided she doesn’t want to the loan, she is going to have to find another £55 a month for her mortgage payments, “which is not a lot for some people, but is for others”, she says. “Where are people going to find that kind of money when they are only on a pension in the first place?”

Mutual insurer Royal London has criticised the way the change is being handled. “The government needs to make sure people have the help and advice they need to decide whether or not to take out a second mortgage to pay for this,” it says. “But instead, thousands of people are getting letters that miss crucial details such as the interest rate on the mortgage.”

However, the DWP says switching to loans will save it about £170m a year. It adds: “This change continues to provide a safety net to help people stay in their homes and avoid repossession. Over time, someone’s house is likely to increase in value, so it’s reasonable that anyone who has received financial help towards their mortgage should be asked to pay that back if there is available equity when the property is sold.”

By Rupert Jones

BAE signs biggest export deal of £5bn for Typhoon jets with Qatar

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(qlmbusinessnews.com via news.sky.com– Mon, 11 Dec, 2017) London, Uk – –

The contract is the biggest export deal for the Typhoon in a decade – but the company’s plans to axe 2,000 jobs remain unchanged.

BAE Systems, Britain’s biggest defence contractor, has agreed a £5bn contract to supply 24 Typhoon fighter jets to Qatar.

The deal, which includes a support and training package, comes two months after the FTSE 100 company said it would be axing 2,000 jobs to streamline the business with a renewed focus on technology.

It also includes an intention for Qatar to buy further military equipment from Britain, namely Hawk aircraft.

About 5,000 workers in the UK are employed on building the Typhoon, mainly at Warton in Lancashire.

The company said the deal would not mean a reversal of the planned job cuts across its operations in Lancashire, Yorkshire, Portsmouth, Guildford and overseas during the next three years.

“We have around 5,000 UK employees manufacturing and supporting these brilliant aircraft, as well as many hundreds of companies in the supply chain. Securing this contract enables us to safeguard Typhoon production well into the next decade,” BAE Systems said.

“The difficult decisions we have taken are necessary to better balance our workforce with our workload and ensure we have a sustainable and competitive business for the long term. We don’t take these decisions lightly – and as you’d expect we did take this potential order into account when reviewing our production needs for the future.”

The deal was signed by Defence Secretary Gavin Williamson and his Qatari counterpart Khalid bin Mohammed al Attiyah.

A statement from Qatar’s armed forces said the two ministers also signed an “agreement for building up a Joint Operational Squadron” between the two countries’ air forces to provide security during the 2022 football World Cup, which the Gulf state is hosting.

Mr Williamson said the contract was the biggest export agreement for the Typhoon in a decade and would “boost the Qatari military’s mission to tackle the challenges we both share in the Middle East”.

He added: “As we proudly fly the flag for our world-leading aerospace sector all over the globe this news is a massive vote of confidence, supporting thousands of British jobs and injecting billions into our economy.”

Charles Woodburn, BAE Systems chief executive, said: “We are delighted to begin a new chapter in the development of a long-term relationship with the State of Qatar and the Qatar armed forces, and we look forward to working alongside our customer as they continue to develop their military capability.

“This agreement is a strong endorsement of Typhoon’s leading capabilities and underlines BAE Systems’ long track record of working in successful partnership with our customers.”

Qatar is the ninth country to sign a deal for Typhoon jets, with delivery expected to commence in late 2022.

The announcement comes as the Government searches for major global trade deals amid Britain’s withdrawal from the European Union.

Last week Prime Minister Theresa May struck a deal with Brussels after the first phase of Brexit negotiations, in the hope of talks progressing on to trade.

By Sunita Patel-Carstairs

UK consumer spending falls in the festive season for the first time in five years

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(qlmbusinessnews.com via uk.reuters.com — Mon, 11 Dec 2017) London, UK —

LONDON (Reuters) – Squeezed British consumers reined in Christmas travel plans and bought fewer new cars last month, setting the stage for the first fall in festive spending in five years, credit card company Visa said on Monday.

The downbeat message came alongside a cut by the British Chambers of Commerce to its economic outlook for the next two years as the business organisation sees inflation rising faster than pay for the next two years.

Visa said inflation-adjusted consumer spending last month was 0.9 percent lower than in 2016. This was a smaller decline than October’s 2.1 percent drop but still enough to make annual falls in spending likely for the first time since 2012 for both the Christmas season and 2017 overall, the company said.

The biggest falls in spending came on expensive items such as cars and Christmas trips abroad, while cheaper luxuries such as beauty treatments and cosmetics saw gains.

“People opt for smaller treats, at the same time tightening their belts when it comes to larger purchases,” Visa executive Mark Antipof said.

Black Friday discounts in late November boosted online sales at the expense of physical stores, Visa added.

British inflation has held at a five-year high of 3.0 percent since September, pushed up by the fall in the pound since June 2016’s Brexit vote, while wages have failed to keep pace.

The British Chambers of Commerce, in a quarterly update to its economic outlook on Monday, said it expected this to persist throughout 2018.

“Continued uncertainty over Brexit and the burden of upfront cost pressures facing businesses is likely to stifle business investment, while falling real wage growth is expected to continue to weigh on consumer spending,” BCC economist Suren Thiru said.

The BCC cut its forecasts for 2017, 2018 and 2019, seeing growth of 1.5 percent this year, slowing to 1.1 percent in 2018 and only partially recovering to 1.3 percent in 2019.

This is slightly below the average for economists polled by Reuters, who expect growth of 1.3 percent next year and 1.5 percent in 2019, when Britain is due to leave the European Union.

On Friday, Britain and the EU agreed on a Brexit divorce deal, enabling them to begin talks about trade and a two-year transition period that will start when Britain leaves the bloc on March 29, 2019.

But businesses said they would need to see a clear transition agreement as soon as possible for them to be able to put contingency plans on hold.

Separately, jobs website Indeed said Britain remained by far the most popular EU location for cross-border job searches, although Germany, Ireland and Luxembourg had seen some gains over the past two years at the United Kingdom’s expense.

By David Milliken

Richard Reed Innocent Drinks Founder advice to Small business

(qlmbusinessnews.com via travelers.co.uk – – Sun, 10 Dec 2017) London, Uk – –

Innocent Drinks is known for its upbeat, playful brand. Founder Richard Reed offers his thoughts on why giving your brand a clear mission helps guide your business.

Focus on what you can control in business

“There are plenty of businesses that do well in the bad times, and there are plenty of businesses that do badly in the good times. The trick to staying positive is not to get too distracted by the external events you can’t control, and double down and focus on the things that you can.

“Ask yourself: have you got the right strategy? Are you effectively using that strategy? Are you attracting and retaining talent? Are you looking after your consumer better than the competition? And are you doing so in a meaningful way?”

Be prepared to adapt when you face challenges as a startup

“In 2008 when the credit crunch struck, we lost a third of our sales over a three-month period. We owed money to the banks, fruit prices went up due to a failure in world harvest, and the pound collapsed by 25%.

“Suddenly, consumers were saying our products were too expensive, but we were losing money on every single smoothie sold.

“We could have made our smoothies cheaper by reducing quality, but Innocent is about making the most natural, best quality drinks. Instead of changing our recipes, we resized our product to adapt to market pressures.”

Cut prices without compromise

“There are times when you’re going to need to make yourself cheaper because consumers have less money, but there will be a way of doing it which is in line with your brand.

“We knew there was absolutely no way we could compromise on quality, instead we sold smoothies in cartons of 750ml rather than 1litre. We made them smaller but we made the price smaller too – that actually turned the business around.”

Stay balanced through the highs and lows

“The bad times don’t last forever. They come in waves. Make sure you keep focused on the things that are important like looking after your consumer, making sure that the business is economically sound, and doing what you can to look after and attract talent.

“When you’re going through the good times, remember they’re going to end. Use the good times to build up a cushion of natural resource. It’s a classic thing, when the sun is shining, that’s when you start mending the roof – don’t wait until it’s raining.”

 

 

UK manufacturing expands for sixth consecutive month in October

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(qlmbusinessnews.com via bbc.co.uk – – Fri, 8 Dec 2017) London, Uk – –

UK manufacturing output expanded for the sixth consecutive month in October, helped by record car production.

Official figures showed Britain’s factories notched up the longest run of expansion for at least two decades.

Manufacturing output increased by 0.1% in October compared with the previous month, in line with expectations.

Despite a relatively subdued October, Kate Davies of the Office for National Statistics said “the longer-term picture is one of strong growth”.

Annual growth in factory output hit 3.9% in October – the biggest increase since December 2016.

Separate ONS figures released on Friday showed the construction sector unexpectedly contracted by 1.7% in October compared with the previous month.

 

Asda risk losing 800 shopfloor staff to paycuts or redundancy

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(qlmbusinessnews.com via theguardian.com – – Fri, 8 Dec 2017) London, Uk – –

In document seen by the Guardian, retailer tells staff it needs to cut operating costs to ‘close price gap’ with rivals Aldi and Lidl

More than 800 senior Asda shopfloor workers are facing a pay cut or redundancy in the new year after the supermarket chain embarked on another cost-cutting exercise.

Store staff have been briefed this week on a proposal that could mean 842 section leaders being removed from its store management teams. Thousands of other workers will also be affected by a wider move to cut the number of hours spent on stacking and tidying shelves at 600 supermarkets.

In a document given to staff, and seen by the Guardian, the retailer said it needed to cut costs so it could “close the price gap” with rivals Aldi and Lidl.

It said: “We need to continuously review our operating model. … being the cheapest of the big four is no longer a viable business model. We need to be able to look at ways to reduce our operating costs in order to close the price gap.”

The document reveals that about half of Asda’s 153 smallest supermarkets are loss-making. It says the US-owned grocer needs to find ways of working which are “fit for the future and ensure the longevity of the format”.

A consultation process has now begun. If the plan is pushed through in 2018 the section leaders, who work in both the fresh and packaged food aisles, will lose the higher hourly pay rate associated with the job and “management contribution” hours.

The document then explains: “We would explore redeployment opportunities, and only as a last resort, we would look at the possibility of redundancy with affected colleagues.”

The rise of Aldi and Lidl has forced the mainstream chains to restructure their large store networks. Tesco and Sainsbury’s have also embarked on significant cost-cutting programmes this year. The German chains Aldi and Lidl are continuing to grow rapidly, with Aldi overtaking both the Co-op and Waitrose to become the UK’s fifth largest supermarket chain. Lidl passed Waitrose in August to become the seventh largest.

Lloyds Sell London headquarters to Chinese property investment company

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(qlmbusinessnews.com via uk.reuters.com — Thur, 7 Dec 2017) London, UK —

LONDON (Reuters) – Lloyds Banking Group said it has sold its London headquarters to a Chinese property investment company for an undisclosed price.

Under the terms of the sale to Hengli Investments Holding, Lloyds will lease back the 25 Gresham Street building, which it has occupied since its construction, for the next 20 years. The building sits in the heart of the City of London’s financial district.

The sharp drop in the value of sterling following Britain’s vote last year to leave the European Union has lured foreign investors into the British real estate market.

That coincided with plans outlined by Lloyds in 2016 to cut its non-branch property portfolio by 30 percent as part of a cost-cutting drive. It said at the time that the initiative would result in one-off savings of 100 million pounds and an additional 100 million pounds in run-rate savings by the end of 2018.

There will be no disruption to Lloyds’ operations or staff in the building as a result of the sale, a spokeswoman said.

“The transaction enables the group to capitalise on the market conditions and realise value in its property portfolio for shareholders,” she continued.

According to Savills, a real estate agency that advised Hengli Investments Holding on the deal, the purchase of the 119,742 sq foot (11,124 sq m) building is the firm’s first purchase in the UK.

Chen Chang Wei, chairman of Hengli Investments Holding, said the firm was pleased to have reached a deal on the property in less than a month, and that it would continue to consider other investment opportunities locally.

By Emma Rumney

“Dieselgate” Volkswagen executive given seven years jail sentence

 

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VW has so far refused to pay out to drivers in the UK and in wider Europe, claiming it only broke the law in the US

(qlmbusinessnews.com via telegraph.co.uk – – Thu, 7 Dec 2017) London, Uk – –

A former Volkswagen executive has been sentenced to seven years in jail and given a $400,000 (£300,000) fine after pleading guilty to helping the German carmaker cheat on diesel emissions tests.

The “dieselgate” scandal has cost Volkswagen as much as $30bn in fines, buybacks and settlements since 2015 when it admitted fitting 11m diesel vehicles worldwide with so-called defeat devices to suppress emissions of nitrogen oxide during tests. These allowed vehicles to cheat pollution tests.

However, Oliver Schmidt, a German national who headed up VW’s environmental and engineering office in Michigan, is only the second person to receive jail time in the US for his role in the scheme.

The first was a company engineer, James Liang, who was handed only a 40-month jail term in August for conspiracy to defraud the US government and violating the clean air act. He is appealing this.

Schmidt had been looking to limit his own sentence to 40 months in jail, with court papers filed last week showing Schmidt had said he only learnt about the scheme in the summer of 2015, at the end of the scandal.

FAQ | Volkswagen emissions scandal

What did VW do?

The company falsified emissions data on its diesel vehicles, pretending they were cleaner than they are

How exactly..?

By installing a piece of software into computers on its cars that recognise when the car is being tested – a so-called “defeat device”. This fine-tunes the engine’s performance to limit nitrogen oxide emissions. When used on the road, the emissions levels shoot back up

How widespread is the problem?

11m cars worldwide had the software installed; 1.2m of them were in the UK

Which models are involved?

The allegations, which have been admitted by VW, cover the Jetta, Beetle, Audi A3 and Golf models from 2009 to 2015 and the Passat in 2014 and 2015. Audi, Seat and Skoda cars are also affected, as well as VW vans. Some diesel and petrol vehicles also have “irregularities” around carbon dioxide emissions.

What happens next?

VW offered to fix affected models and started the recall in January 2016. It is facing investigations in over a dozen countries as well as lawsuits from motorists.

As of March 2017, the company had not reached a compensation agreement with British motorists and the transport minister was considering legal action against VW.

The EU Commission has named the UK among seven countries against which it will take legal action for their inadequate consumer protection regarding this scandal.

However, US federal officials sought the maximum sentence of seven years, saying Schmidt had played a key part in concealing the scheme from regulators given that he held a “leadership role within VW”.

“As a consequence of that role, he was literally in the room for important decisions during the height of the criminal scheme.”

They had also argued that he encouraged “key engineers” at VW to destroy documents relating to the scandal.

While VW has agreed to pay compensation to drivers in the US caught up in the scandal, it has so far refused to pay out to drivers in the UK and in wider Europe, claiming it only broke the law in the US.

However, it was ordered to recall cars in the UK fitted with defeat devices, and in September said it had fixed 775,000 of the 1.15m cars affected.

By  

Shopping Centre Giants Merge in £3.4bn Deal

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(qlmbusinessnews.com via bbc.co.uk – – Wed, 6 Dec 2017) London, Uk – –

Shopping centre owner Hammerson, which owns Birmingham’s famous Bullring, has agreed a £3.4bn takeover of rival Intu.

The deal will create the UK’s biggest property company, worth £21bn.

Intu owns the Lakeside shopping centre, in Essex. and the Trafford Centre, in Manchester, while Hammerson owns Bicester Village designer outlet and London’s Brent Cross shopping centre.

Shares in Intu jumped by nearly 19% on the news, while Hammerson’s fell by 3%.

The combined group plans to target fast growing markets in Spain and Ireland.

John Strachan, chairman of Intu, said: “Intu offers high-quality retail and leisure destinations in the UK and Spain, which, when merged with Hammerson’s own top-quality assets in the UK, in France and in Ireland, present a highly attractive proposition for retailers and shoppers in Europe’s leading cities.”

Hammerson chairman David Tyler said: “This transaction will deliver real value for shareholders. The financial strength of the enlarged group and its strong leadership team will make it well-placed to take advantage of higher growth opportunities on a pan-European scale.”

Hammerson shareholders will own 55% of the combined firm and Intu investors the rest. Shareholders will vote on the deal next year.

The combined group would be led by Hammerson chief executive David Atkins and chaired by Mr Tyler.

Russ Mould, AJ Bell investment director, described Hammerson’s takeover of Intu as “dramatic, given how terribly Intu’s shares have down this year, amid fears over not just what Brexit may do to consumer confidence but also the fate of bricks-and-mortar retailers at the hands of Amazon and other online rivals”.

Analysis: Dominic O’Connell, Today business presenter

The union of Hammerson and Intu – the company formerly known as Capital Shopping Centres – has been the Holy Grail of property investment for more than a decade.

The relative underperformance on Intu shares, which have at times traded at a discount to book value as high as 50%, has brought an opportunity for David Atkins, Hammerson’s ambitious chief executive.

The other key factor was the willingness of John Whittaker, the secretive billionaire who was the big shareholder in Intu, to come to the table.

The end result is a shopping centre monster – £21bn worth of assets across Europe – that will quickly weed out underperforming properties once the deal is done.

GlobalData retail analyst Sofie Willmott said the deal would give the combined group a stake in 12 of the 20 UK supermalls – large shopping centres of more than 20 million sq ft that attract more than 20 million customers a year.

This “dominance” would “bolster the group’s negotiating power with both retailers and leisure operators”, she added, and help Hammerson to compete better with rival Westfield.

According to GlobalData forecasts, spending growth in supermalls is due to outstrip overall spending growth in bricks-and-mortar stores over the next five years.

Ms Willmott said she expected the enlarged group to “prioritise” supermall development.

“As clothing and footwear retailers focus on supermalls to create large-scale, experience-led stores, physical retail spend will move away from town centres towards destination shopping centres, ensuring supermalls space is hot property,” she said.

“The proposed deal will net the group a stake in almost 60% of all UK supermalls space, making it a force in the retail landscape, well placed to benefit from retail spend shifting across locations.”

 

Millions in UK trapped in a cycle of persistent overdraft debt

(qlmbusinessnews.com via news.sky.com– Wed, 6 Dec, 2017) London, Uk – –

Regulators are urged to stop banks from trapping people in a cycle of persistent overdraft debt.

A charity which helps people manage their debts has accused banks of trapping millions of people in a cycle of overdraft debt.

StepChange said 2.1 million people had no choice but to dip into their overdraft at least once a month in 2016 – and that high charges and poor help were making it difficult for them to break the cycle.

A survey of its clients showed three quarters of them were “constantly” in their overdraft before seeking debt support.

It said the problem amounted to unaffordable lending – demanding the Financial Conduct Authority (FCA) investigate.

The charity’s ‘Stuck in the Red’ report suggested the vast majority of those it was helping were using their overdraft facility to pay for essentials and household bills.

It said that while some lenders had made progress by abolishing unarranged overdraft fees and boosting transparency, many of those in trouble had continued to have interest and charges added despite a bank being made aware of their difficulties.

StepChange said overdrafts were designed to be short term but that was not the reality.

It spoke up as the FCA and the Bank of England also keep a close eye on unsecured borrowing – on things such as credit cards – hovering at levels not seen since the financial crisis.

Fears of a growing credit bubble were raised in a separate study by National Debtline – run by the Money Advice Trust.

It found 37% of adults were putting Christmas on credit – up from 33% in 2016.

Times are tougher for households this festive season because inflation is outstripping average wage rises.

That pressure on budgets has been largely caused by the Brexit-fuelled collapse in the value of the pound which has seen higher import costs passed on to consumers.

Wages have failed to keep pace with inflation – currently running at 3% – because of the shaky economy which is stuttering amid uncertainty over the terms of the divorce from the EU.

Experts advise people struggling with debt to seek help immediately – and stick to a strict budget over Christmas.

StepChange said it was important the banking sector played its part in helping borrowers escape financial trouble through “fundamental reform” of overdrafts.

Its head of policy, Peter Tutton, said: “Overdrafts are one of the most common credit products used in the UK.

“They are meant to be short-term, but our evidence shows that they can all too easily trap people in expensive and long-term cycles of persistent debt.”

He added: “Lenders and regulators must take action to need to ensure that overdraft lending is affordable, that borrowers in financial difficulty get the right support and that we break the cycle of persistent overdraft debt.”

By James Sillars

Uk’s biggest train fares increase comes into effect January 2018

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(qlmbusinessnews.com via bbc.co.uk – – Tue, 5 Dec 2017) London, Uk – –

Train fares in Britain will go up by an average of 3.4% from 2 January.

The increase, the biggest since 2013, covers regulated fares, which includes season tickets, and unregulated fares, such as off-peak leisure tickets.

The Rail Delivery Group admitted it was a “significant” rise, but said that more than 97% of fare income went back into improving and running the railway.

A passenger group said the rise was “a chill wind” and the RMT union called it a “kick in the teeth” for travellers.

The rise in regulated fares had already been capped at July’s Retail Prices Index inflation rate of 3.6%.

The fare increase is above the latest Consumer Prices Index inflation figure of 3%, which was a five-and-a-half year high.

  • Are you joining the ‘£5k commuter club’?

The chief executive of passenger watchdog Transport Focus, Anthony Smith, said: “While substantial, welcome investment in new trains and improved track and signals is continuing, passengers are still seeing the basic promises made by the rail industry broken on too many days.”

One in nine trains (12%) has arrived late at its destination in the past 12 months.

The Rail, Maritime and Transport (RMT) union general secretary Mick Cash said: “For public sector workers and many others in our communities who have had their pay and benefits capped or frozen by this government, these fare increases are another twist of the economic knife.

“The private train companies are laughing all the way to the bank.”

Paul Plummer, Rail Delivery Group chief executive, told the BBC’s Today programme: “We are very aware of the pressures on people and the state of the economy and are making sure everything we do is looking to improve and change and make the best use of that money.”

Mr Plummer admitted it was “a significant increase” – the highest since fares rose by 3.9% in January 2013.

Analysis: Richard Westcott, BBC transport correspondent

You might think that popularity is a good thing, but it’s causing the railways some problems.

Here’s some examples. Passenger numbers on routes into King’s Cross have rocketed by 70% in the past 14 years. On Southern trains, passenger numbers coming into London have doubled in 12 years.

That’s got to be good for easing congestion and reducing vehicle pollution… but much of our rail network is still Victorian and it’s buckling under the strain of all those extra people.

There is a push to bring in new trains, stations and better lines, but it’s difficult to upgrade things while keeping them open and it’s seriously expensive.

The money’s got to come from somewhere and in recent years it’s the fare payer that’s been asked to pick up a bigger proportion of the tab.

It means that, year in and year out, many people have seen their season ticket go up much more than their salary, if they’ve had a salary rise at all.

Investment

Figures published by the Office of Rail and Road in October showed that £4.2bn was given to the rail industry in 2016-17 – a drop of nearly 13% on the previous year, taking inflation into account.

The Rail Delivery Group said that private investment in rail reached a record £925m in 2016-17.Figures published by the Office of Rail and Road in October showed that £4.2bn was given to the rail industry in 2016-17 – a drop of nearly 13% on the previous year, taking inflation into account.

The Rail Delivery Group said that private investment in rail reached a record £925m in 2016-17.

It added that in the next 18 months, services around the country would be improved with more trains and better services and stations.

Routes to benefit include Crossrail, Thameslink, Edinburgh to Glasgow, Great Western and Waterloo and the South West while there will also be upgrades in the Midlands and the North.

Selection of new annual season ticket costs from January 2018

Brighton to London – £4,332 – £148 increase

Gloucester to Birmingham – £4,108 – £140 increase

Woking to London – £3,248 – £112 increase

Liverpool to Manchester – £3,152 – £108 increase

Maidenhead to London – £3,092 – £104 increase

 

Cineworld to buy Regal in £2.7bn deal making them second largest cinema operator

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(qlmbusinessnews.com via independent.co.uk – – Tue, 5 Dec 2017) London, Uk – –

Cineworld has announced that it is snapping up its US peer Regal for $3.6bn (£2.7bn), turning the British company into the second largest cinema operator in the world, with over 9,500 screens.

In a statement on Tuesday, Cineworld said that the deal would create a globally diversified cinema operator, spanning ten countries and would allow Cineworld to access the North American cinema market – which is the largest box office market in the world.

The US cinema market has had an industry box office worth in excess of $10bn in each year since 2008 and stable admissions in excess of 1.25 billion in each year over the same period, Cineworld said.

“We have long had high respect for Regal and for its strong position in the largest box office market in the world and we are delighted that the Regal directors have unanimously agreed to recommend our offer to their shareholders,” said Mooky Greindinger, chief executive of Cineworld.

“Consolidation is an important move forward and the best practice we have successfully rolled out across Europe will be the key driver to continued success,” he added.

Amy Miles, CEO of Regal, said that she believes the transaction “provides compelling value for our stockholders”.

“We believe this partnership with Cineworld will enhance Regal’s ability to deliver a premium movie-going experience for customers and further build upon our strategy of introducing innovative concepts and premium amenities designed to enhance the value of our theatre assets,” she said.

Cineworld was founded in 1995. It was originally a private company but re-registered as a public company in May 2006 and listed on the London Stock Exchange in May 2007.

On Tuesday it said that it expects the deal to be “strongly accretive to earnings” in the first full year following completion of the transaction, which will be 2019.

The deal will be funded by a rights issue, which will raise approximately £1.7bn, and a debt issue.

Because of the size of the acquisition, Cineworld said that it will be classed as a reverse takeover under the listing rules of the Financial Conduct Authority. As such it will be conditional on the approval of Cineworld’s shareholders at a general meeting which is expected to take place in February next year.

Cineworld added, however, that board intends to unanimously recommend the deal.  The directors of Cineworld also intend to vote in favour of it, the group added.

Separately, Cineworld said that the Anschutz Corporation, which controls about 67 per cent of the voting rights in Regal, has agreed to provide its written consent to approve the takeover.

By Josie Cox

Facebook pledged to hire 800 new staff in the UK over the next year

(qlmbusinessnews.com via telegraph.co.uk – – Mon, 4 Dec 2017) London, Uk – –

Facebook has opened a new office in London and pledged to hire 800 new staff in the UK over the next year.

The social media giant said the seven-storey building in central London, one of a number of offices it has opened in recent years, would make the capital its largest computer engineering base outside of the US.

In a first for the company, it is also promising to house technology start-ups in the new building, running an “incubator” designed to foster young companies.

Facebook, which has been criticised over its UK tax arrangements, has often highlighted its investment in staff. It opened its first office in London 10 years ago and will employ 2,300 in the UK by this time next year.

The 247,000 sq ft building in Rathbone Place, off Oxford Street, designed by Frank Gehry, the architect, will house developers and sales staff. Services developed in the UK include Workplace, its office communication tool, and part of Facebook’s Oculus virtual reality team.

The start-up incubator, called “LDN LAB”, will mark the first time that Facebook has housed start-ups in its offices. It will not take equity in the companies but a spokesman said it would share “expertise and mentorship” and that it would be looking for companies dedicated to Facebook’s mission of “building communities”, suggesting the lab could be a pre-cursor to acquisitions.

“Today’s announcements show that Facebook is more committed than ever to the UK and in supporting the growth of the country’s innovative start-ups,” said Nicola Mendelsohn, Facebook’s vice-president for Europe, the Middle East and Africa. “This country has been a huge part of Facebook’s story over the past decade.”

The move is the latest commitment to the UK from a large Silicon Valley company. Google, Apple and Snap have all expanded in London since last year’s Brexit vote.

Philip Hammond, the Chancellor, said: “The UK is not only the best place to start a new business, it’s also the best place to grow one. It’s a sign of confidence in our country that innovative companies like Facebook invest here, and it’s terrific news that they will be hiring 800 more highly skilled workers next year.”

By 

Co-op to sell food past its “best before” date to cut down on food waste

 

(qlmbusinessnews.com via news.sky.com– Mon, 4 Dec, 2017) London, Uk – –

Shoppers can buy tinned and dried foods under the scheme which runs with the slogan “Don’t be a binner. Have it for dinner!”

A supermarket chain has become the first big retailer to sell food that is past its “best before” date to cut down on food waste.

From now on, shoppers at the Co-op’s 125 East of England stores will be able to buy a range of tinned goods such as beans and fruit as well as dried food such as pasta and rice for 10p.

The move forms part of the chain’s The Co-op Guide to Dating, and runs with the slogan: “Don’t be a binner. Have it for dinner!”

Best before dates are about quality – not safety – and food is safe to eat after this date but may be past its prime, according to the Food Standards Agency.

It estimates the UK throws away seven million tons of food each year, the majority of which could have been eaten.

Roger Grosvenor, joint chief executive of East of England Co-op, said customers appreciated the opportunity to save money.

He told The Grocer magazine that items were flying off the shelves within an hour of them being reduced during the scheme’s trial period.

“This is not a money-making exercise, but a sensible move to reduce food waste and keep edible food in the food chain,” Mr Grosvenor added.

“By selling perfectly edible food we can save 50,000 plus items every year that would otherwise have gone to waste.

“The vast majority of customers understand they are fine to eat.”

In addition, budget supermarket Aldi has urged charities and other local organisations to get in touch because it wants to give away its leftover food – an estimated 20 to 30 crates – from each of its stores from 4pm on Christmas Eve.

Tilman Fertitta the billionaire on how to be successful

 

Business Rockstars/Youtube

Tilman Fertitta, CEO of Landry’s Inc. – one of the nation’s largest restaurant corporations, sits down with Mark Lack. Tilman talks about owning Golden Nugget Casinos and Landry’s (worth over $3 billion) – the Houston-based restaurant and entertainment company that owns more than 500 properties and 40 brands of restaurants, including Bubba Gump Shrimp Co. and Morton’s The Steakhouse. Fertitta is the chairman and CEO. His CNBC show called “Billion Dollar Buyer” premiered in March 2016 and was renewed for a second season. He talks about going public, and then taking it back to private. He talks about growing his company to a billion dollar company. He gives great business advice and more!! He has 3 tips for anyone starting a business. Tilman is the man.

RBS axes 680 jobs as a quarter of branches set to close

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(qlmbusinessnews.com via bbc.co.uk – – Fri, 1 Dec 2017) London, Uk – –

RBS is closing 259 branches – one in four of its outlets – and cutting 680 jobs as more customers bank online.

The closures involve 62 Royal Bank of Scotland and 197 NatWest branches.

RBS, which is 72%-owned by the taxpayer, said it would try to ensure compulsory redundancies were “kept to an absolute minimum”.

The bank said use of its branches by customers had fallen 40% since 2014, but the Unite union, which represents bank staff, called the cuts “savage”.

Following the closures, the RBS group will be left with 744 branches.

‘Difficult news’

An RBS spokesperson said: “More and more of our customers are choosing to do their everyday banking online or on mobile.

“Since 2014 the number of customers using our branches across the UK has fallen by 40% and mobile transactions have increased by 73% over the same period. Over 5 million customers now use our mobile banking app and one in five only bank with us digitally.

“We realise this is difficult news for our colleagues and we are doing everything we can to support those affected.

Unite said serious questions needed to be asked about whether the closures marked the end of branch network banking.

Rob MacGregor, Unite national officer, said: “This announcement will forever change the face of banking in this country resulting in over a thousand staff losing their jobs and hundreds of High Streets without any banking facilities.

“The closure of another 259 branches is savage. Why is the government signing off this alarming branch closure programme

Analysis: Kevin Peachey, personal finance reporter

RBS, like many of its competitors, says that branch use has dropped dramatically as people bank on the go.

Industry analysts CACI forecasts that typical consumers will only visit a bank branch four times a year by 2022.

Yet visiting a branch remains a way of life for many people – older people and small businesses particularly. A report into branch closures by Professor Russel Griggs likened losing a local branch to a “bereavement” for some people.

So what is being done for them?

The major banks have signed up to a protocol that ensures specially trained staff are in place to help customers find alternatives when a local branch is closing, such as using the Post Office.

They must work more proactively to support elderly and vulnerable customers, and tell communities as quickly as possible after the decision has been made.

Presentational grey line

Paul Wheelhouse, Scottish Government Minister for Business, Innovation and Energy, said: “The news of further branch closures from RBS will be hugely concerning to many people in Scotland as it now not only affects, potentially, staff at RBS but also leaves large areas of Scotland, particularly rural areas, with limited branch coverage.

“While recognising that footfall in branches is falling, due to online banking, RBS, and other banks, must take into account the needs of all customers – not just those who can access and use digital services.”

Bad bank

The news comes as RBS continues its rehabilitation from its state-backed bailout in 2008, prompted by the financial crisis.

On Thursday, it said it had closed its so-called “bad bank”, which was set up to handle toxic assets stemming from the crisis.

Earlier this week, RBS passed the Bank of England stress tests, having failed in 2016.

In last week’s Budget, the government revived plans to sell down its stake in the bank, aiming to sell £15bn of its shares by 2023.