FCA probe Car and house insurance policies

(qlmbusinessnews.com via bbc.co.uk – – Wed, 31st Oct 2018) London, Uk – –

The City regulator is to investigate how home and car insurance policies are priced after finding “hidden” discrimination between customers.

The Financial Conduct Authority (FCA) will study the scale of the issue, whom it affects, and possible solutions.

Insurance customers may pay different prices depending on how loyal they are, their age, and whether they are online.

Marital status, home postcode and employment status may also have a hidden effect on price, the FCA said.

Citizens Advice has already warned loyal customers are being “ripped off”.

It launched a super-complaint claiming that customers who stick with the same supplier for a variety of household services are losing a total of £4.1bn a year. That amounts to an average of £877 per person.

Failing to shop around, or the inability to do so, costs people hundreds of pounds.

This is known in the industry as “price walking” – where the cost of insurance is increased each year the customer sticks with the same provider, eventually making their policy much more expensive (and profitable for the insurer) than for a new customer.

Part of the response to the Citizens Advice complaint is this review into the general insurance market by the FCA.

The FCA said UK insurers generated £78bn in premiums from customers and that 82% of adults had one or more general insurance products.

In an analysis of the home insurance market, the FCA said there was evidence of significant price competition for new customers with new policies offered at 30% below the cost of providing the policy and firms increased premiums in the second and third years of the policy.

The regulator has now written to the chief executives of insurance firms to set out that it expects them to treat customers fairly.

Andrew Bailey, chief executive of the FCA, said: “This market study will help us examine the outcomes from general insurance pricing practices and inform how, if necessary, we should intervene to improve the market.

“If change is needed to make the market work well for consumers, we will consider all possible remedies to achieve this.”

The FCA said it had already found some firms were not complying with its rules about information that customers should receive when they renew their policies and could use its regulatory powers against those with whom it had concerns.

These rules include making it clear in a renewal letter how much people paid the previous year.

In November last year, the BBC revealed how some insurers were burying these pricing details deep in renewal documents.

In the letter to the heads of insurance firms, Mr Bailey said: “There is a significant risk of consumer harm if your firm has not implemented an appropriate pricing strategy with effective governance and controls to determine and monitor your pricing activities and evaluate how your pricing decisions will affect consumer outcomes.”

Industry response
In May, insurers said they would crack down on “excessive” differences in premiums for new customers and existing policyholders.

The Association of British Insurers (ABI) and the British Insurance Brokers' Association (BIBA) said their Guiding Principles and Action Points should mean “an improvement in the outcomes for long-standing customers”.

However, the FCA investigation seems to challenge whether this response was sufficient.

Hugh Savill, the ABI's director of regulation, said: “While many customers benefit from competitive motor and home insurance markets with lower premiums, we agree that the market is not working as well as it should for some long-standing customers.

“This is an important issue and insurers will work with the FCA to address issues raised in the report to ensure that the market works as well as possible for all consumers.”



Evans Cycles Job Fears as Sports Direct buys brand out of administration

(qlmbusinessnews.com via theguardian.com – – Wed, 31st Oct 2018) London, Uk – –

Fears for hundreds of jobs as Sports Direct buys up Evans Cycles

Mike Ashley’s Sports Direct has bought Evans Cycles out of administration but has warned that it may have to close half the specialist retailer’s 62 stores, putting about 440 jobs at risk.

Evans, which traces its roots back nearly 100 years, had been seeking a buyer after its management team said they needed £20m for a turnaround plan that its former private equity owners were unwilling to fund.

Sports Direct bought House of Fraser in a similar prepack deal in August and is also thought to be interested in buying Debenhams, the department store group in which it owns a large stake.

Ashley, chief executive of Sports Direct, said: “We are pleased to have rescued the Evans Cycles brand. However, in order to save the business, we only believe we will be able to keep 50% of stores open in the future. Unfortunately, some stores will have to close.”

Evans, which employs 1,300 people in total, of whom about 880 work in store, had been struggling to survive amid tough high street conditions that have already seen Toys R Us, Maplin and House of Fraser collapse into administration, and a string of other well-known names close their stores

The cycle retailer also faced fierce price competition, particularly from the fast-growing online sports retailer rival Wiggle.

Evans found itself nearly £6m into the red in 2016 and has since faced rising business rates, an increase in the minimum wage and a fall in the pound’s value, which has made imported goods more expensive. In the year to October 2017, its sales rose nearly 2% to £138m, but the company recorded another loss, of £2.5m.

Amid the difficulties across the retail sector, the private equity firm ECI Partners, which bought Evans three years ago, and the retailers’ lenders, AIB and HSBC, were unable to agree on a deal to fund management’s rescue plan.

James Keany, at the advisory firm CBRE, which is retained to manage property for Sports Direct, said: “We are looking forward to working with landlords in order to help create a sustainable business. We will make contact with landlords over the next few days and discuss the future of individual stores.”

Sports Direct’s warning that it was likely to close half of Evans’ stores appears to have come as a surprise to PricewaterhouseCoopers (PwC), the advisory firm that sealed the sale of Evans and put it into administration immediately ahead of the sale on Tuesday.

Matt Callaghan, joint administrator and PwC partner, said: “Evans is a longstanding, well known and trusted brand with nearly 100 years of heritage in the cycling market. To have managed to preserve the business and transfer all staff to the purchaser is particularly pleasing; 2018 has been a very difficult trading year for the business, in part due to the impact of the extended winter weather in the early part of the year and a lack of cash to invest in stores and develop the online platform. A combination of losses, the capital expenditure requirements and tightening credit has led to a liquidity crunch.”

By Sarah Butler



BP’s profits boosted by stronger oil prices


(qlmbusinessnews.com via uk.reuters.com — Tue, 30th Oct, 2018) London, UK —

LONDON (Reuters) – BP’s (BP.L) profits thundered to a five-year high, boosted by stronger oil prices with production set to rise further thanks to the $10.5 billion acquisition of BHP Billiton’s U.S. shale business this week.

The results further underscore a striking shift in BP over the past year as it shakes off the legacy of the deadly 2010 Deepwater Horizon disaster with new projects and the BHP deal, its largest acquisition in 20 years.

In a further sign of confidence, BP said it now expected to fully fund the acquisition from available cash without resorting to a rights issue as planned. It still plans to sell $5-$6 billion of assets to reduce debt.

“We’re a bit cautious to use the words ‘blow out’ when talking about BP, but today’s results are just that,” Bernstein analyst Oswald Clint said in a note.

BP shares were up 3.4 percent by 0914 GMT, compared with a 1 percent rise in the broader European oil and gas sector .SXEP.

The rise in oil prices over the past year to their highest since late 2014 has boosted revenue for oil companies such as BP. Coupled with deep cost cuts and stricter spending since the 2014 downturn, the sector has enjoyed rapid growth in profits.

BP’s third-quarter underlying replacement cost profit, the company’s definition of net income, rose to $3.8 billion, far exceeding forecasts of $2.85 billion based on a company-provided survey of analyst. That compared with a profit of $1.86 billion a year earlier and $2.8 billion in the second quarter of 2018.

The profit increase came as production in the first nine months of the year rose thanks to new fields and high oil and gas field reliability.

Underlying pretax profit for BP’s upstream business more than doubled to around $4 billion in the quarter compared with a year ago.

“We’re seeing a backdrop of a strong and well-performing business,” Chief Financial Officer Brian Gilvary told Reuters.

“We’re confident within the financial frame we can close this transaction with all cash,” Gilvary said.

For graphic on BP cashflow, click tmsnrt.rs/2CT4MdA

Oil and gas production for the first nine months of the year increased to 2.5 million barrels of oil equivalent per day (boed) and was set to rise further with the expected completion of the BHP deal (BHP.AX) (BLT.L) on Oct. 31.

BP launched nine major oil and gas fields over the past year, including in Azerbaijan, Oman, Egypt and Angola that will help boost production by 900,000 barrels of oil equivalent per day (boed) by 2021. Most of the production will be gas.

The BHP deal is set to initially add over 100,000 boed in production before disposals, which will mostly include predominantly onshore U.S. shale gas producing assets that BP already owns, Gilvary said.

Gearing, the ratio between debt and BP’s market value, declined to 27.5 percent at the end of the quarter from 27.8 percent at the end of June. Net debt was $39.2 billion at the end of September.

Gilvary said that gearing could temporarily rise next year above the 30 percent limit the company had set, depending on oil prices, as it pays for the BHP deal.

Dear Fed, thanks very much. Love, HSBC
In the fourth quarter, BP expects lower refining margins and more refinery turnarounds mainly at its Whiting site in the United States.

BP expects its capex in 2018 to be around $15 billion.

BP’s operating cash flow, excluding payments for the Deepwater Horizon spill, was $6.6 billion, the same as last year.

By Ron Bousso



Tech giants Google and Facebook hit with digital services tax worth up to £400m per year

Source: pixabay

(qlmbusinessnews.com via telegraph.co.uk – – Tue, 30th Oct 2018) London, Uk – –

Online tech giants including Google and Facebook are to be hit with a digital services tax worth up to £400m per year, as Chancellor Philip Hammond used the Budget to take the lead in a global push to tax Silicon Valley while limiting the pain felt on Britain's struggling high streets.

But the proposal for what he termed a “narrowly targeted” tax, to be paid only by large companies that are profitable and generate over £500m a year in global revenues, was sharply criticised by some as potentially damaging for the UK's technology industry at a sensitive time as negotiations continue over Brexit.

Some warned that the move, first reported earlier this month by the Sunday Telegraph, could damage the UK's reputation as a stable place to invest.

Russ Shaw, founder of Tech London Advocates, said a unilateral UK tax was the “wrong approach”. He said: “Digital tax is a universal problem, and must be taken on in that manner. Any other approach makes Britain economically vulnerable”.

Meanwhile, writing on Twitter, Peter Kyle MP pointed out that Sainsbury alone pays £580m in business rates. He branded the proposed tax, geared to level the playing field with the high street, as “pathetically tokenistic”.

But Chancellor Philip Hammond said the tax, which is expected to affect about 30 companies, was all about “fairness”.

He said: “It's clearly not sustainable, or fair, that digital platform businesses can generate substantial value in the UK without paying tax here in respect of that business.”

He said the tax would be aimed at UK-generated revenues of specific digital platform business models “designed to ensure it is the established tech giants rather than the technology startups which shoulder the burden”.

The announcement confirmed that the levy would not be an online-sales tax on goods ordered over the internet as “such a tax would fall on consumers of those goods – and that is not our intention”. It instead focuses largely on advertising revenues.

According to a consultation document released after Mr Hammond appeared in the House of Commons, the 2pc tax will be applied to the revenues a social media platform generates from revenue targeting adverts at UK users, the revenues a marketplace generates from facilitating a transition between UK users and the revenues a search engine generates from displaying advertising.

It will be rolled out in April 2020, although Mr Hammond said the UK would continue to work with international bodies, the OECD and G20, to attempt to strike an international deal on how to tax tech companies and would not go ahead with its own tax if such an agreement could be reached.

“I’m already looking forward to my call from the former leader of the Liberal Democrats,” joked Mr Hammond in reference to former deputy prime minister Nick Clegg, who is to join Facebook as its new global affairs and communications chief. Facebook is expected to be among the hardest hit by the planned tax.

The announcement came despite lobbying efforts by companies including Facebook to stave off such measures, amid mounting criticism over the amount of tax tech giants are paying in the UK compared to the profit they are generating in the region.

eMarketer estimates that Facebook generated nearly £2.3bn in digital advertising revenue for 2017, and Google £4.7bn, but the two paid just £15.7m and £50m in UK tax respectively.

If the Treasury is to take £400m every year from the tax, Deloitte's Zubin Patel said it would need to apply “more widely than just the biggest and most famous companies”.

Another tech industry source said the latest measures were a “bit half hearted” and “not the bold decisive moves” which had been expected.

The enormous complexity of crafting an effective tax was also becoming clear.

Based on the Government's estimates, the maximum Google or Facebook would likely pay under the new tax would be £200m, and the amount is expected to be much less, with the OBR suggesting just £30m could be raised from each of the companies. The OBR admitted that its estimates were “subject to high uncertainty due to the data, modelling and behavioural complexities involved”.

The OBR suggested the £400m could be widely optimistic as well, suggesting that the government could lose around 30pc of that revenue by 2024 due to companies redistributing their revenue.

The announcement was met with a mixed response on Monday, as some hailed the move as a key to ensuring the giants pay their fair share, while others warned it would damage the tech sector in the long run.

TechUK chief executive Julian David said the approach risked “undermining the UK’s reputation as the best place to start a tech business or to invest at a time when the UK needed to enhance its attracrtiveness.

However, Adam Rose, a partner at Mischon de Reya, said the tax was “possibly the first step towards bringing the UK's tax system for technology dominated services into the modern era”.

Vince Cable, the Liberal Democrat leader, added that the tax could help level the playing field, saying “tech giants have got away without paying their fair share for too long”.

By Hannah Boland and Matthew Field



Chancellor Philip Hammond prepares last Budget before Brexit

(qlmbusinessnews.com via bbc.co.uk – – Mon, 29th Mon 2018) London, Uk – –

Philip Hammond is preparing to present the last Budget before Brexit.

The chancellor is expected to announce a rise in spending on mental health in England and has also hinted at cash for universal credit welfare reforms.

He has admitted a change of approach, including an entirely new economic plan, will be needed if the UK and the EU cannot agree a deal by 29 March.

Labour is calling for more investment in public services to put an end to years of “failed austerity”.

Earlier this month Prime Minister Theresa May promised an end to the cuts made to public spending since 2010 – and Mr Hammond will be under pressure to spell out how that will work.


Philip Hammond is preparing to present the last Budget before Brexit.

The chancellor is expected to announce a rise in spending on mental health in England and has also hinted at cash for universal credit welfare reforms.

He has admitted a change of approach, including an entirely new economic plan, will be needed if the UK and the EU cannot agree a deal by 29 March.

Labour is calling for more investment in public services to put an end to years of “failed austerity”.

Earlier this month Prime Minister Theresa May promised an end to the cuts made to public spending since 2010 – and Mr Hammond will be under pressure to spell out how that will work.

The chancellor's motivation for holding the Budget in October was to get it out of the way, before the last moments of the Brexit process create a Parliamentary rollercoaster.

It was – in a period of political peril for the government – meant to be non-controversial, “slimline”, almost a “holding Budget”, according to senior government figures.

So far, so non-controversial. Except at the Tory conference the prime minister decided to charge the politics around the Budget by suggesting that the era of the squeeze on public spending was at an end.

Economic editor Kamal Ahmed

The chancellor has a number of competing challenges.

Some of them are economic – can he really “end austerity” by spending more and at the same time keep his promise to control the government's £1.8tn debts?

Some of them are political – don't forget the government does not have a majority and pushing any big tax rises, for example, through Parliament would be very difficult. Mr Hammond is also being lent on to be “more positive” on the economy by his next door neighbour at Number 10, Theresa May.

If the UK gets a good deal from the EU, he said, “we will be able to show the British people that the fruits of their hard work are now at last in sight”.

The two sides have not yet reached agreement, and both the UK and the EU are making contingency plans for what happens if there is no deal.

Mr Hammond told Sky News that in this scenario: “We would need to look at a different strategy and frankly we'd need to have a new Budget that set out a different strategy for the future.”

He said the government had a “fiscal buffer” to provide protection for the economy if needed.

Monday's Budget will be based on the assumption of an “average-type free trade deal” being agreed between the two sides, he added.

Follow the Budget on the BBC

The chancellor has been under growing pressure – including from some Tory MPs – to provide more money to protect people losing out from the switch to universal credit, which merges six working-age benefits.

Asked about this, Mr Hammond told the BBC “judge me by my record” – saying he had committed extra money to the scheme in each of his previous two major financial statements.

“When we see things that need addressing, we address them,” he said.

Labour said the entire Budget should be voted down unless the government agrees to halt the roll-out of universal credit.

“The callous complacency of the chancellor who has refused to make good on the Tories' promise to end austerity is shocking,” added shadow chancellor John McDonnell.

“Nothing less than an end to failed austerity in tomorrow's budget will be acceptable.”

The £2bn mental health pledge is included in a £20bn boost to the NHS announced by the government in June. The current annual mental health spend is about £12bn.

The new funds will go towards ensuring round-the-clock mental health support in major A&E centres and providing more mental health ambulances.

People calling the non-urgent 111 number will be directed to the right support thanks to the investment, the government promised.

Health Secretary Matt Hancock acknowledged there would be no overnight transformation, telling BBC Radio 4's Today that putting mental health services on the same financial footing as physical services was the “work of a generation”.

But he promised the extra resources would come “irrespective” of what happened with Brexit.

Labour responded: “If this announcement is simply money that's already been promised, it will do little to relieve the severe pressures on mental health services that have built up because of this Tory government's relentless underfunding of the NHS.”



Asda to consult staff on 2,500 job cuts

(qlmbusinessnews.com via news.sky.com– Mon, 29th Oct 2018) London, Uk – –

A union says it will fight for every job as the supermarket chain plans talks with staff next year about a series of changes.

Asda is to consult staff on changes to its business that could result in 2,500 job losses next year – when the UK leaves the EU.

The chain, which is currently planning on merging with Sainsbury's, is the latest major supermarket to announce a shake-up of the way it works aimed at saving costs.

Asda said: “In a competitive retail market, where customers rightly expect great value and ease of service, we must always look at how we can work more quickly and efficiently for them – and inevitably, that means we need to consider changing the roles we need our colleagues to do or the hours needed in particular parts of our stores.

“We believe the proposed changes we are consulting on would allow us to do a better job for our customers.

“We also recognise that discussions about potential change aren't easy.

“If the decision is taken to implement the proposed changes we would work with our colleagues to look at the potential impact of these proposals on them.”

Areas of work affected by any changes include petrol, bakery and back office functions while hours of work are also understood to be up for discussion.

While Asda did not confirm its plans would result in 2,500 job losses it did not deny the figure.

Other members of the so-called “big four”, including Tesco and Morrisons, have already carried out similar exercises.

Asda hopes its planned £12bn tie-up with Sainsbury's – currently the subject of a competition probe – will bring down the cost of their combined offering through lower wholesale costs.

The pair insist they have no plans to cut stores and jobs but MPs have questioned the merits of their merger.

The Competition and Markets Authority, which is investigating the tie-up, said last month there was a substantial risk that business overlap risked harming competition in 463 areas.

If the regulator allowed the deal without action, the combined Asda and Sainsbury's brands would have a slightly bigger market share than current leader Tesco.

GMB union national officer, Gary Carter, said of Asda's announcement: “These proposed redundancies are a hammer blow to Asda workers.

“The timing of this announcement, in the run-up to Christmas, is doubly appalling.

“Asda is performing well and is highly profitable because of the hard work of our members, who are the backbone of the company. GMB will fight tooth and nail for every single job.

“These cuts make no sense whatsoever. Slashing our members' jobs would hurt the service Asda customers receive.

“With all the speculation surrounding the proposed Sainsbury's merger and potential sell-off of stores, this news will not put anyone's mind at rest.”



Heinz first London baked beans cafe – this is what it’s like


Business Insider UK

You can now get hot pots of baked beans at Heinz's cafe in London's Selfridges.

The company launched it to mark the 50th anniversary of the “Beanz Meanz Heinz” slogan created in the 1960s.

Each pot costs £3 and you can get your beans with scrambled eggs, ham hock, or crispy bacon.


Amsterdam the Bicycle Paradise of the Netherlands – How Other Cities Can learn from it


Source: Bloomberg

The Dutch capital Amsterdam is widely known for being bike-friendly. But it wasn’t always a model cycling city. Public outrage at rising traffic casualties in the Seventies caused city planners to rethink their approach to urban design.


Snapchat loses 2 million more users as it struggles to match aggressive competition from rivals

(qlmbusinessnews.com via telegraph.co.uk – – Fri, 26th Oct 2018) London, Uk – –

Snapchat has shed five million users over the last six months as it battles aggressive competition from Facebook and Instagram.

The photo-sharing app suffered its second successive decline in popularity, falling from 188 million in the three months ending in June to 186 million by the end of September, according to its latest earnings report on Thursday night.

That was on top of a previous drop from 191 million earlier this year, following an unpopular redesign which Snap's own chief executive, Evan Spiegel, called “rushed” and “frustrating”.

But other figures showed mild improvement, with revenue 5-7pc higher than analysts had expected at $298 million (£232 million), and losses reduced by around 30 per cent.

Shares in Snap Inc briefly spiked 9 per cent in after hours trading, before dropping to below Wednesday's closing price of $6.60.

“We are focusing our time and resources to expand our community, increase engagement, and improve monetisation,” Mr Spiegel told investors. “We have a significant opportunity to grow and broaden our global community over the long term.”

Snap has struggled to become profitable since going public in March 2017, regularly missing revenue estimates and losing or replacing many senior members of staff.

Mr Spiegel pitched Snapchat, where photos and videos disappear after 24 hours, as an “escape from social media… without the pressure of likes, comments and permanence”, drawing an implicit contrast with rivals such as Facebook and Twitter.

But his app has been rapidly eclipsed by copycat offerings from Facebook itself, such as Facebook Stories, which claimed 300 million daily users in September, and Instagram Stories, which hit 400 million in June.

In a conference call with analysts, Mr Spiegel said he planned to restore Snapchat's user growth by targeting over-34-year-olds, who rarely use it at present, and people in the developing world, where most populations are younger on average than in the West.

He cited a forthcoming redesign of Snapchat's app for Android, which is the dominant smartphone operating system in most developing countries, and an effort to reduce its use of mobile data, which is far more expensive in developing countries relative to income.

Snap is at a disadvantage in many poorer markets because Facebook partners with local mobile phone companies to offer free data for its own apps.

Brian Wieser, an analyst at Pivotal Research Group, said Snap's performance had been “consistent with our prior expectations” and that he believed it would maintain enough users to sustain a “niche” position in the advertising market.

Snap's shares have dropped by over 60 per cent since its IPO, but Mr Spiegel is insulated from shareholder anger by an unusual stock structure which gives him and his co-founder Robert Murphy 96 per cent of the voting rights.

Its most recent annual shareholder meeting consisted of an online conference call with associate general counsel Atul Porwal, which lasted 2 minutes and 46 seconds.

By Laurence Dodds


Google dismiss dozens of employees over sexual harassment

(qlmbusinessnews.com via bbc.co.uk – – Fri, 26 Oct 2018) London, Uk – –

Google has sacked 48 people including 13 senior managers over sexual harassment claims since 2016.

In a letter to employees, chief executive Sundar Pichai said the tech giant was taking a “hard line” on inappropriate conduct.

The letter was in response to a New York Times report that Android creator Andy Rubin received a $90m exit package despite facing misconduct allegations.

A spokesman for Mr Rubin denied the allegations, the newspaper said.

Sam Singer said Mr Rubin decided to leave Google in 2014 to launch a venture capital firm and technology incubator called Playground.

He was given what the paper described as a “hero's farewell” when he departed.

Mr Pichai's letter said the New York Times story was “difficult to read” and that Google was “dead serious” about providing a “safe and inclusive workplace”.

“We want to assure you that we review every single complaint about sexual harassment or inappropriate conduct, we investigate and we take action,” he continued.

None of the employees dismissed in the past two years had received an exit package, Mr Pichai added.

According to the New York Times report, two unnamed Google executives said then-chief executive Larry Page asked Mr Rubin to resign after the company confirmed a complaint by a female employee about a sexual encounter in a hotel room in 2013.

A Google investigation found the woman's complaint to be credible, the paper reported, but the company has not confirmed this.

Mr Rubin has said he did not engage in misconduct and left Google of his own accord.

The claims will add to the growing chorus denouncing sexist culture in male-dominated Silicon Valley.

Carolina Milanesi, an analyst at Creative Strategies in San Francisco, tweeted: “In a normal world this would mean Rubin is done, but tech has not just been forgiving, some tech sees little wrong with this.

“I'd like to think Google will clean up its act if anything to avoid having a retention problem with their female employees.”

Shares in Alphabet, which owns Google, fell more than 3% in New York after it reported revenues of $33.7bn (£26.3bn) for the three months to September – slightly less than analysts had expected.

However, net profit soared $2.5bn to $9.2bn – far higher than expected.



Lloyds Banking Group shrugs off Brexit fears as profits rise


(qlmbusinessnews.com via uk.reuters.com — Thur, 25th Oct, 2018) London, UK —

LONDON (Reuters) – Britain’s Lloyds Banking Group (LLOY.L) shrugged off fears of a chaotic, no-deal Brexit and pledged to keep pumping credit into the economy regardless of the outcome of negotiations between Brussels and London.

The bank’s finance chief George Culmer told reporters on Thursday that Lloyds remains hopeful that the two sides can secure a deal before Brexit day in March 2019, when the UK will undergo its biggest policy shift in four decades.

“There is great uncertainty out there, but our continued expectation is for some sort of withdrawal agreement going forward,” Culmer said, adding that 97 percent of the bank’s business is UK-focused.

“What is fundamental is that we continue to support our customers whatever the outcome.”

Reuters this month reported that the Bank of England had laid out a contingency plan to ensure that banks such as Lloyds, Britain’s biggest mortgage lender, do not suddenly slam the brakes on lending in the event of a no-deal Brexit.

Lloyds, which is a bellwether for the economy given its broad exposure to UK consumers, said it had seen no change in customers’ ability to repay debt.

Despite lengthy talks between Britain and the European Union, the terms of divorce remain uncertain five months before the country leaves the bloc with or without a deal.

That has clouded confidence in British lenders and helped to drag down Lloyds’ share price by 17 percent this year despite its strong performance.

Lloyds shares remained flat at the market open after it reported a third-quarter pretax profit of 1.8 billion pounds, outperforming the 1.7 billion pound average from company-compiled analyst estimates.

It was helped by a growing net interest margin – a key measure of bank profitability – and falling costs. The net interest margin rose 8 basis points to 2.93 percent.

Lloyds also said it had grown its lending to small businesses and in higher-margin areas such as car finance – two strategic aims laid out in the three-year plan laid out in February.

The bank aims to digitise operations and grow outside of core markets such as mortgages, where it has effectively exhausted opportunities for significant growth.

Another key ambition is an increased presence in insurance and wealth, where the bank has secured two partnerships in recent weeks.

The bank reported a core capital ratio of 15.5 percent, up from 14.9 percent a year ago, reflecting continued efforts to make its balance sheet recession-proof.

CFO Culmer said the bank is likely to return some of that excess capital to shareholders, with the board set to make a decision after December.

In a separate statement, the bank said Culmer, who played a key role in turning Lloyds around after its 20.3 billion pound bailout in 2008, would retire after interim results in 2019.

By Emma Rumney, Lawrence White



Debenhams confirm plans to shut up to 50 stores, putting 5,000 jobs at risk

Wikimedia/Geoff Pick

(qlmbusinessnews.com via theguardian.com – – Thur, 25th Oct 2018) London, Uk – –

Debenhams to close up to 50 stores, putting 5,000 jobs at risk
Struggling department store chain also unveils near £500m annual loss

Debenhams has confirmed plans to shut up to 50 stores, nearly a third of the UK-wide chain, putting up to 5,000 jobs at risk.

The struggling department store also unveiled a near £500m annual loss as it writes off the value of its brand and the cost of unwanted shop leases and IT systems.

Debenhams, which currently has 165 stores and employs 27,000 people, is struggling to adapt as shoppers switch away from the traditional high street towards spending more on leisure activities and to buying online. Nearly a quarter of all spending on fashion purchases is now made on the internet.

The company said the closures would take place over three to five years, as it confirmed that a far greater number of its outlets than previously admitted are likely to become unprofitable and need to shut down amid rising costs and heavy competition. The retailer said last year that it would close up to 10 stores and has already shut two.

One off charges of £524.7m relating to the value of the brand, unwanted store leases and IT systems took the company to a pretax loss in the year to 1 September of £491.5mfrom a £59m profit a year before. Sales slid 1.8% to £2.9bn.



ergio Bucher, the chief executive, said: “It has been a tough year for retail in 2018 and our performance reflects that. We are taking decisive steps to strengthen Debenhams in a market that remains volatile and challenging.”

He said the company was “taking tough decisions on stores where financial performance is likely to deteriorate over time” and working with its new finance director to get “rigorous cost discipline.”

The company is to halve capital expenditure from this year’s level to £70m over the next year and focus investment on up to 100 top outlets and create a new “low cost approach” for about 20 others.

Debenhams also axed a final dividend payout to shareholders, saying it would prioritise cash generation and debt reduction in an move first reported by Sky News.

The 240-year-old retailer has already issued three profit warnings this year the company is also trying to sell assets in a bid to shore up its finances, including its Danish chain Magasin du Nord.

The company’s share price has dived by 75% in the past year, and the entire business is now valued at just £105m as investors fears have mounted that it could follow rival House of Fraser into administration.

House of Fraser is set to close at least 12 of its 59 stores after being bought out of administration by Sports Direct. John Lewis has admitted that it will make almost no profit in the first half of this year.

Sports Direct, which is a major shareholder in Debenhams, is tipped to launch a takeover of Debenhams too if the department store’s financial situation worsens.

In September, the Takeover Panel was forced to intervene after a Sports Direct director caused confusion by saying the retailer had considered buying Debenhams – before insisting that he had not intended to make the comment. Sports Direct had to then issue a formal statement confirming that it did not plan to make a bid for the struggling department store chain for six months.

But the company reserved the right under Takeover Panel rules to make a bid if there was a “material change of circumstances” at Debenhams, if the company’s board agreed, or if there was a bid from a third party.

Bucher said that Debenhams had a “sustainable and profitable future.”

He added: “Debenhams remains a strong and trusted brand with 19m customers shopping with us over the past year. Our transformation strategy is gaining traction, with positive results from new product and new formats, general acclaim for our store of the future in Watford and digital growth that is outpacing the market,” he said.

By Sarah Butler



UK ‘will pay the price’ of no-deal Brexit due to complicated new border controls – Watchdog

(qlmbusinessnews.com via bbc.co.uk – – Wed, 24th Oct 2018) London, Uk – –

Britain will “pay the price” of a no-deal Brexit because complicated new border controls may not be ready in time, a government watchdog has warned.

Thousands of UK exporters did not have enough time to prepare for new border rules, the National Audit Office said.

Criminal gangs could exploit any border weaknesses and queues and delays were likely at border crossings, it added.

The government said it was confident of striking a “good” deal with the EU for as “frictionless” trade as possible.

It said that plans were already 95% complete.

The National Audit Office acknowledged that government had made some progress on preparing for the possibility of a “hard” Brexit.

It is the official body charged with scrutinising the operation of government departments and reporting to MPs so that they can hold the government to account.

Its head, Sir Amyas Morse, said: “The government has openly accepted the border will be sub-optimal if there is no deal with the EU on 29 March 2019.

“It is not clear what sub-optimal means in practice, or how long this will last.

“But what is clear is that businesses and individuals who are reliant on the border running smoothly will pay the price.”

The NAO said that there was £423bn of trade which crosses UK borders every year, much of that with the EU or onto other destinations via the rest of Europe.

Over 200 million people also cross the border.

At present, Britain's membership of the EU single market and the customs union allows for the free movement of goods, people and services around Europe.

There's more on those freedoms here.

Outside the EU there will need to be new border controls and if there is no deal those controls will have to be stricter than if Britain agreed a “soft” Brexit which included a 19 month implementation period.

The NAO said that under a “no deal” up to 250,000 firms may need to fill out customs declarations forms for the first time as Britain moved onto World Trade Organisation (WTO) rules.

The WTO governs global trading relationships between countries.

Her Majesty's Revenue and Customs (HMRC) – which collects taxes at the border – could also have to deal with as many as 260 million customs declarations a year, up from 55 million.

The NAO said that new border checks could lead to delays at crossing points, increased risk of customs non-compliance and queues of lorries, for example, trying to cross onto the European continent at Dover and Folkestone in Kent.

The report also said that there was no agreement yet in place to deal with the issue of the border between Northern Ireland and the Republic – the only land border Britain will have with the EU after Brexit.

Of 12 “critical” projects preparing Britain's borders for a no deal, 11 were “at risk of not being delivered on time and to acceptable quality”, the NAO said.

“Although the government has achieved much and its planning efforts have increased in momentum, given the scale of the task, there are inevitably gaps and risks to its progress that I am obliged to point out,” Sir Amyas said.

“But I do so while recognising that these are not normal times for individual departments or the government as a whole.”

‘Extensive work'
The NAO said that properly policed borders were “fundamentally important to national security, effective trade, tourism, well-managed migration, healthy communities and the environment” and that there was a high level of risk that new border controls would not be ready on time.

“Organised criminals and others are likely to be quick to exploit any perceived weaknesses or gaps in the enforcement regime,” the NAO said.

“This, combined with the UK's potential loss of access to EU security, law enforcement and criminal justice tools, could create security weaknesses which the government would need to address urgently.”

The NAO said there was a risk that organised crime could exploit any weaknesses in the border to smuggle goods into the country or traffic people in. However, the NAO's report said it recognised that the government was aware of the changing risks at the border.

The government said it had made significant progress planning for a “no deal”.

“Extensive work to prepare for a no deal has been well underway for almost two years and we have robust plans in place to ensure the border continues to operate from the day we leave,” a spokesman said.

“Future IT systems and infrastructure are already being built and, as they do today, HMRC will continue to apply an automated, risk-based approach to customs checks.

“This means any increase in the number of checks will be kept to a minimum.

“We will always ensure we have the necessary resources to keep the border secure, and that's why we're recruiting approximately 600 Border Force officers to prepare for the day we leave the EU, in addition to the 300 officers which will be deployed by the end of the year.”



Barclays profits slip as fines mount

(qlmbusinessnews.com via telegraph.co.uk – – Wed 24th, Oct, 2018) London, Uk – –

Barclays has insisted it is on track to generate bigger profits, despite Brexit concerns weighing “heavily” on the market and hefty misconduct charges taken early in the year denting earnings.

Over the nine months to September the banking giant's pre-tax profits fell 9.5pc to £3.1bn, down from £3.5bn the previous year.

Barclays blamed a £1.4bn settlement with the US Department of Justice in March over past mis-selling of toxic mortgage products and a £400m additional charge for payment protection insurance claims in the first quarter.

Without these one-off costs pre-tax profits for the period were up 23pc to £5.3bn, with underlying profits increasing at both its UK division and international arm, which includes its highly scrutinised investment bank.

Barclays pointed out it had generated its second quarter in a row of “clean” profits without major misconduct charges. For the third quarter of the year, pre-tax profits were £1.6bn, compared with £1.2bn the previous year.

Barclays is under intense pressure to increase returns to shareholders with activist investor Ed Bramson pressing for a shake-up behind the scenes, having taken a more than 5pc stake in the bank.

Barclays chief executive Jes Staley said the firm was on target to reach its underlying profitability targets, which include pushing return on tangible equity to greater than 9pc next year and 10pc in 2020. It was above this for the year to date at 11.1pc.

He said 2018 was “proving to be a year of delivery on strategy at Barclays”, but warned concerns over Brexit “weigh heavily on market sentiment”.

By Iain Withers


UK technology company Dyson to build electric car in Singapore

(qlmbusinessnews.com via uk.reuters.com — Tue , 23rd  Oct 2018) London, UK —

LONDON (Reuters) – British technology company Dyson said on Tuesday it would build its electric car in Singapore, with a new site set for completion in 2020 ahead of the first vehicle launch a year later.

Dyson, founded by the billionaire British inventor of the bagless vacuum cleaner James Dyson, announced its plans to build an electric car a little over a year ago.

It is designing the technology and building a test track in Wiltshire, western England, but said the decision to make the car in Singapore reflected the international nature of its operations.

Dyson already employs around 1,100 people in Singapore, where it makes electric motors. It said Singapore offered access to high-growth markets, an extensive supply chain and a highly skilled workforce.

“We will begin construction in December and it will be completed in 2020, meeting our project timeline,” Dyson Chief Executive Jim Rowan said.

Reporting by Paul Sandle



O2 to postpone £10bn flotation due ‘Brexit fears’

QLM Image

(qlmbusinessnews.com via news.sky.com– Tue, 23 Oct 2018) London, Uk – –

Parent Telefonica explored a London listing for the mobile operator in 2016, after a merger with rival operator Three collapsed.

Telecom giant O2 is holding off its £10bn stock market flotation until after Brexit amid market uncertainty, according to reports.

The mobile operator had been expected to list on the London Stock Exchange this year following 4G and 5G spectrum auctions in April, but sources told the Press Association that those plans are now on hold.

Analysts have valued the operator, owned by Spanish parent Telefonica, at between £9bn and £10bn.

The decision to put off its initial public offering (IPO) comes at a time of market uncertainty, general fears around Brexit, and after a number of underwhelming UK launches on to the stock market.

Telefonica declined to comment.

Accountancy giant EY has previously said that Brexit uncertainty is casting a “shadow” over the London IPO market.

Telefonica first said it would explore a London listing for its mobile operator in 2016, after a merger with rival operator Three collapsed amid competition concerns.

Reports said it had been awaiting the outcome of April's radio spectrum sale, in which the biggest chunk went to O2, raising over £1bn for the government.

While the operator made no firm commitment to float this year, Telefonica had been looking to raise cash on O2 as a means of driving down debts of around €40bn (£35bn).

However, the need to float the British mobile network to generate funds is now less pressing, with the Spanish group seeing its cash flow strengthen, reports said.

In August, Telefonica chief executive Jose Maria Álvarez-Pallete told reporters that he was “under no pressure” to sell a part of O2 through an initial public offering, but would continue to monitor the stock market.

“It would be a sizeable IPO, [which] would need attractive conditions, but it doesn't look like the financial markets are ready,” he said at the time.

Since August, a number of high-profile and widely anticipated stock market debuts have been performed below expectation.

Luxury car manufacturer Aston Martin, which launched on the London market this month, saw its initial offer price fail to hit the top end of the £17.50 to £22.50 valuation range it put forward in September.

An offer at the top end would have seen the manufacturer – famous for making James Bond's cars – valued at more than £5bn.

On the same day, UK fintech company Funding Circle floated and saw the initial share price promptly plummet by almost a quarter, before regaining some ground to 17% below its 440p opening price.



Addison Lee aims for self-driving cars in London within three years

(qlmbusinessnews.com via theguardian.com – – Mon, 22 Oct 2018) London, Uk – –

Tech pioneer Oxbotica to start mapping public roads as it calls deal with hire firm ‘huge leap’

Self-driving car services could be on the streets of London within three years under a partnership between the private hire firm Addison Lee and the British driverless car pioneers Oxbotica.

The companies have signed a deal to develop and deploy autonomous vehicles in the city by 2021.

Oxbotica will start mapping more than 250,000 miles of public roads in and around London from next month, using its technology to create a comprehensive map of every traffic feature.

While the link-up could eventually allow Addison Lee’s fleet of black Mercedes and Prius cabs to be driven autonomously, the 5,000 drivers in London will remain employed, the firm says. However, it could also offer a cheaper, autonomous ride-sharing version of its hire service. The first stage is likely to be in corporate shuttles, around airports or campuses.

Despite the ambitious time frame, London looks set to be at least a year behind other global cities. Tokyo launched an experimental driverless taxi in August, with a view to having a full service in place in time for the 2020 Olympics.

Toyota, meanwhile, is investing $500m (£388m) to develop an autonomous fleet for Uber, although Uber’s programme was set back when one of its self-driving cars was involved in a fatal collision with a pedestrian in the US in March.

Andy Boland, chief executive of Addison Lee, said that although technology could make an autonomous version of their current service feasible in London, “our 5,000 drivers in the UK are going to carry on doing what they are doing. For the foreseeable future I would draw that distinction between premium services, and technology opening those other sorts of services at a relevant price point.”

However, he said a driverless vehicle should eventually prove cheaper to run for the firm: “There are cost savings in the medium term, from maximising asset utilisation.”

The traditional London taxi and private hire trade has been disrupted by Uber offering lower fares, but industry observers have questioned whether Uber could continue to keep prices down in the long term by continuing to use drivers.

Boland said that while plenty of tech firms had eyed the market in a sector that could be worth £28bn a year by 2035, practically implementing autonomous or car-sharing services would still require the kind of fleet, maintenance and customer base his firm already had.

Graeme Smith, chief executive of Oxbotica, said: “This represents a huge leap towards bringing autonomous vehicles into mainstream use on the streets of London, and eventually in cities across the United Kingdom and beyond.”

New York is the next city it will target.

Transport for London said it was committed to engaging with firms using autonomous vehicle technology at the earliest opportunity. Michael Hurwitz, director of transport innovation, said it had the potential to change travel significantly: “All cities across the UK, including London, need to understand the opportunities, risks and challenges they face when considering how transport will operate in the future.”

Addison Lee and Oxbotica were part of the consortium carrying out government-funded studies in Greenwich, south-east London, to investigate whether the public transport network could be complemented with people ride-sharing in driverless pods.

Gwyn Topham Transport correspondent



Tobacco giant Philip Morris accused of hypocrisy over anti-smoking ad

Pexels/Sera Cocora

(qlmbusinessnews.com via bbc.co.uk – – Mon, 22 Oct 2018) London, Uk – –

One of the world's biggest tobacco firms, Philip Morris, has been accused of “staggering hypocrisy” over its new ad campaign that urges smokers to quit.

The Marlboro maker said the move was “an important next step” in its aim to “ultimately stop selling cigarettes”.

But Cancer Research said the firm was simply trying to promote its smoking alternatives, such as heated tobacco.

“This is a staggering hypocrisy,” it said, pointing out the firm still promotes smoking outside the UK.

“The best way Philip Morris could help people to stop smoking is to stop making cigarettes,” George Butterworth, Cancer Research UK's tobacco policy manager said.

The charity said smoking was the leading preventable cause of cancer and it encouraged people to switch away completely from smoking, including through the use of e-cigarettes.

Health charity Action on Smoking and Health (Ash) also criticised the campaign – which is called Hold My Light and has been launched in a four-page wraparound on Monday's Daily Mirror – saying it was a way for Philip Morris to get around the UK's anti-tobacco advertising rules.

There is also a campaign video, which shows a young woman negotiating a Mission Impossible-style room in order to hand her cigarette lighter over to a group of friends, who are supporting her in a bid to give up smoking.

Most forms of tobacco advertising and promotion in the UK are banned, and rules introduced last year mean cigarettes and tobacco must be sold in plain green packets.

Deborah Arnott, chief executive of Ash, said Philip Morris was still advertising its Marlboro brand wherever globally it was legal to do so.

“The fact of the matter is that it can no longer do that in the UK, we're a dark market where all advertising, promotion and sponsorship is banned, and cigarettes are in plain packs.

“So instead Philip Morris is promoting the company name which is inextricably linked with Marlboro,” she said.



Philip Morris has said previously that it wants to achieve a “smoke-free” future.

Like many tobacco firms, Philip Morris is moving towards a focus on new products to replace cigarettes as the number of smokers in the UK continues to decline.

In the UK, it markets several alternatives to cigarettes, including a heated tobacco product, Iqos.

It also owns the Nicocig, Vivid and Mesh e-cigarette brands.

‘It takes time'
The firm's managing director Peter Nixon said its new advertising campaign was “about supporting smokers in finding alternatives”.

Asked why, if Philip Morris was so keen for smokers to quit, it did not simply stop making cigarettes and focus entirely on alternative products, he said it was because smokers would just switch to a rival product.

“Cigarettes still generate 87% of our business. We want to get to [smoke-free] as soon as possible, and we want to be selling alternatives, but it does take time,” he said.

Mr Nixon said the firm had invested over £4bn in developing alternative products to cigarettes.

The campaign suggests four ways to give up cigarettes, including going cold turkey, using nicotine patches, vaping and using heated tobacco products.

In an unusual move, the Daily Mirror made a reference in its editorial column to the advertising feature which envelops the paper. It said it was “pleased to back the campaign”.

It added: “Yes, we were surprised too that this is a campaign created by Philip Morris Ltd. But it can only be a good thing that they are now trying to encourage people to quit cigarettes.”

In July last year, the government set out a plan to make England, in effect, smoke-free in the next few decades.

The new Tobacco Control Plan aimed to cut smoking rates from 15.5% to 12% of the population by 2022.