Dixons Carphone reveal unauthorised data breach of 5.9 million customers

(qlmbusinessnews.com via theguardian.com – – Wed, 13 June 2018) London, Uk – –

Dixons Carphone has revealed a major breach of data involving unauthorised access to 5.9 million customers cards and 1.2 million personal records.

The consumer electronics retailer said it was investigating an attempt to compromise the cards in a processing system at Currys PC World and Dixons Travel, but said there was no evidence of fraud as a result of the incident.

In a second breach, personal data such as name, address or email addresses, have been accessed. Again, Dixons said there was no evidence that it had resulted in fraud.

Alex Baldock, the company’s new chief executive, apologised for the data breach and admitted the firm had failed its customers.

“We are extremely disappointed and sorry for any upset this may cause. The protection of our data has to be at the heart of our business, and we’ve fallen short here.

“We’ve taken action to close off this unauthorised access and though we have currently no evidence of fraud as a result of these incidents, we are taking this extremely seriously.”

Baldock said the company had engaged cyber security experts to handle the matter and had added extra security measures to its systems.

The retailer will be writing over the coming days to those customers whose personal data was breached, “to inform them, to apologise, and to give them advice on any protective steps they should take”.

Of the 5.9 million cards that were accessed illegally, 5.8 million were chip and pin protected, and no pin codes, card verification values (CVV) or authentication data were accessed, meaning purchases could not be made.

However, about 105,000 payment cards from outside the EU and without chip and pin protection were accessed. The retailer said it had notified the banks concerned and they had not detected any fraudulent purchases on customer accounts.

Shares in Dixons Carphone fell 5.5% after the data breach was announced, as investors factored in a potential fine facing the firm.

The retailer said the data breach was discovered over the past week as part of a review of its systems and data. Although the breach occurred within the last year, it was before 25 May when the new European General Data Protection Regulation (GDPR) rules came into force.

As the data breach pre-dated GDPR, any financial penalty on Dixons Carphone would be imposed under the previous data protection act rules, where the maximum fine imposed would be £500,000.

Under the new rules, firms could faces fines of up to €20m (£17.6m) for a major data breach.

Dixons Carphone said the investigation into the cyber attack was ongoing and that the culprit or culprits had not been identified. The retailer has informed the relevant authorities, including the police, the Information Commissioner’s Office, and the Financial Conduct Authority.

A spokesman for the ICO said: “An incident involving Dixons Carphone has been reported to us and we are liaising with the National Cyber Security Centre, the Financial Conduct Authority and other relevant agencies to ascertain the details and impact on customers.

“Anyone concerned about lost data and how it may be used should follow the advice of Action Fraud.”

By Angela Monaghan

 

 

Plumber wins legal battle for ‘ workers rights’ against Pimlico Plumbers

(qlmbusinessnews.com via bbc.co.uk – – Wed, 13 June 2018) London, Uk – –

A plumber has won a legal battle for working rights in a Supreme Court ruling expected to have huge ramifications for freelance workers.

Gary Smith had worked solely for Pimlico Plumbers for six years.

Despite being VAT-registered and paying self-employed tax, he was entitled to workers' rights, the court ruled.

The ruling will be closely read by others with similar disputes, many of whom work for firms in the so-called gig economy.

An employment tribunal was “entitled to conclude” that Mr Smith was a worker, the court ruled.

As a worker Mr Smith would be entitled to employment rights, such as holiday and sick pay.

The Supreme Court ruling means that an employment tribunal can now proceed to examine his action against Pimlico Plumbers as a worker, including a claim that he was unfairly dismissed.

Pimlico Plumbers chief executive Charlie Mullins said he was “disgusted by the approach taken to this case by the highest court in the United Kingdom”.

“This was a poor decision that will potentially leave thousands of companies, employing millions of contractors, wondering if one day soon they will get nasty surprise from a former contractor demanding more money, despite having been paid in full years ago.

“It can only lead to a tsunami of claims,” he added.

‘Up in the air'
However, Tim Goodwin of law firm Winckworth Sherwood said the ruling may not apply to other complaints.

“Even with a high level decision like this, to a degree the issue of employment status in the gig economy is up in the air.

“The government is consulting on this issue, and may bring forward legislation. So it's quite possible that Parliament may overrule this decision within the next few months or years.”

TUC General Secretary Frances O'Grady said the case had exposed “how widely sham self-employment has spread”.

Ms O'Grady said the TUC wanted the government to act quickly to “crackdown on bogus self-employment” and ensure workers benefit from rights unless the employer can show they are genuinely self-employed.

“It's time to end the Wild West in the gig economy,” she said.

Cut working week
Mr Smith, from Kent, began his battle with Pimlico Plumbers when he wanted to reduce his hours following a heart attack in 2010.

He wanted to cut the five-day week, which he had been signed up to work with the firm, to three.

However, the firm refused and took away his branded van, which he had hired. He claims he was dismissed.

 

 

Fall in UK wage growth reduces pressure for interest rate rise on BoE

(qlmbusinessnews.com via theguardian.com – – Tue, 12 June 2018) London, Uk – –

Workers’ pay packets still increasing slowly despite fresh fall in unemployment

Pressures has eased on the Bank of England to raise interest rates after the latest official figures showed a fall in wage inflation despite a fresh drop in unemployment.

Both measures of earnings growth – including and excluding bonuses – edged lower in the three months to the end of April, according to the Office for National Statistics.

The Bank’s latest quarterly inflation report signalled that the fall in unemployment to its lowest level since the 1970s would lead to stronger earnings growth and necessitate a gradual increase in borrowing costs from 0.5%.

As a result, financial markets have been gearing up for an August increase in interest rates to coincide with the publication of the next inflation report.

The ONS’s report on the state of the labour market said unemployment had dropped by 38,000 in the three months to April, leaving the jobless total at 1.42 million.

The unchanged unemployment rate of 4.2% was the lowest since 1975, while the proportion of the population of 16- to 64-year-olds in work – 75.6% – was the highest since modern records began in 1971.

Even though the economy barely grew in early 2018, the ONS said there were 146,000 more people in work between February and April than in the previous three months.

Despite the healthier jobs outlook, however, earnings growth including bonuses dipped by 0.1 points to 2.5%, while earnings growth excluding bonuses dipped by a similar amount to 2.8%.

Although earnings are rising slightly faster than prices, the TUC general secretary, Frances O’Grady, said: “Wage growth is stuck in the slow lane. At this rate pay packets won’t recover to their pre-recession levels for years.

“We need to speed things up. Extending collective bargaining would boost living standards and help workers get a fairer share of the wealth they create. Ministers must allow unions the right to go into every workplace.”

Jeremy Thomson-Cook, the chief economist at WorldFirst, said: “The juxtaposition of today’s increase in the employment rate to a record 75.6% and yesterday’s news of lay-offs at both Poundworld and Jaguar Land Rover will be lost on nobody and we think that today’s jobs report could soon be revealed as a high water mark for job creation.”

By Larry Elliott

 

 

Fashion chain New Look report heavy operating loss in ‘very difficult year’

(qlmbusinessnews.com via telegraph.co.uk – – Tue, 12 June 2018) London, Uk – –

Fashion chain New Look has swung to a full-year loss amid plunging sales on the high street and online.

The retailer reported an operating loss of £74.3m for the year to March 24, having made £97.6m profit in the previous year.

New Look's sales in the UK fell by 11.7pc on a like-for-like basis, accelerating from a decline of 6.8pc the year before. Website sales slumped by 19.2pc.

Total revenue was £1.34bn, down from £1.45bn year on year.

The business was hit with a £34.2m one-off cost, which included an exceptional charge from stock clearances.

Alistair McGeorge, New Look's executive chairman, said: “Last year was undoubtedly very difficult for New Look, with a well-documented combination of external and self-inflicted issues impacting our performance.

“Trading conditions will remain tough in the year ahead, but further operational efficiencies and a resolute focus on our core strengths and heartland customer will help to ensure we remain on the right track.”

New Look launched a restructuring plan in March, announcing that it would shut 60 stores as part of a company voluntary agreement (CVA), affecting 980 jobs.

The company said on Tuesday that the CVA would allow the business to save £40m.

The poor trading news from New Look comes after House of Fraser proposed a CVA, saying it intended to shut 31 stores, putting 6,000 jobs at risk.

Mothercare and Carpetright have also undertaken CVAs so far this year in a bid to save on costs.

Torrid trading on the high street has triggered a swathe of retail failures, with Toys R Us, Maplin and Poundworld all entering administration.

By Press Association

 

 

Poundworld expected to appoint administrators after rescue talks fail


Wikimedia

(qlmbusinessnews.com via bbc.co.uk – – Mon, 11 June 2018) London, Uk – –

Discount retailer Poundworld is expected to appoint administrators, putting 5,100 jobs at risk.

Talks with a potential buyer R Capital have collapsed meaning that the chain felt it had no other option but to put the company into administration.

Poundworld, which has 355 stores, and serves two million customers a week, also trades under the Bargain Buys brand name.

Deloitte is expected to be appointed to oversee the administration.

It will be hoping to sell the business as a going concern.

Poundworld has been losing money for the past two years. Losses for the financial year 2016-17 were £17.1m, up from £5.4m the year before.

Tough
It's the latest High Street retailer to run into trouble.

Just last week, department store chain House of Fraser said it would close 31 of its 59 shops, citing the need to adapt to “fundamental change” in the retail industry.

A combination of falling consumer confidence, rising overheads, the weaker pound and the growth of online shopping have made it tough for traditional retailers.

Electronics chain Maplin and toy chain Toys ‘R' Us both collapsed into administration earlier this year.

Other High Street chains such as Mothercare and Carpetright have been forced to close stores in order to survive.

Restaurant chains such as Italian chain Carluccio's, pizza restaurant Prezzo and burger chain Byron have also had to close stores as they battle a triple-whammy of falling trade, higher costs and increased competition.

‘Too many mouths'
Independent retail analyst Richard Hyman said Poundworld was simply not managing its business well enough. “The clue's in the name: These days having a fixed price in the title is a disadvantage but it is not a killing disadvantage.

“Importing products is not peculiar to Poundworld but others have been getting round this by getting manufacturers to put in a few less biscuits in the pack, for example.

“The bigger picture is there are too many retailers with too many stores for the market to feed.”

Poundworld, which has its headquarters in West Yorkshire, was formed in 2004, but it says it can trace its origins “back to 1974 and a market stall in Wakefield, West Yorkshire”.

In 2014 Poundland's founder Chris Edwards took a central part in a BBC documentary about the intense competition between the company and its rivals Poundstretcher and Poundland.

Investment company TPG, which bought a majority stake in Poundworld in 2015, also controls the restaurant chain Prezzo whose landlords and creditors agreed a restructuring last month.

A formal administration announcement will be made at 10am when the court opens.

 

 

Proposed new laws for companies to justify pay gap between bosses and staff

(qlmbusinessnews.com via news.sky.com– Mon, 11 June 2018) London, Uk – –

The move follows concerns that some chief executives have been receiving salaries that are out of step with company performance.

Large firms will have to publish and justify their chief executives' salaries and reveal the gap to their average workers under proposed new laws.

UK listed companies with over 250 staff will have to annually disclose and explain the so-called “pay ratios” in their organisation.

The move comes after years of shareholder and public outrage over bumper chief executive pay at firms such as Persimmon, WPP, BP, Shell, Lloyds, Astrazeneca, Playtech and William Hill.

Last week housebuilder Persimmon admitted a raft of failures that led to an embarrassing shareholder rebellion over pay as MPs slammed an “egregious” pay deal for top bosses worth over £100m.

The company's chairman and the head of the remuneration committee resigned after anger over their bonuses

Business Secretary Greg Clark said: “Most of the UK's largest companies get their business practices right but we understand the anger of workers and shareholders when bosses' pay is out of step with company performance.

“Requiring large companies to publish their pay gaps will build on that reputation by improving transparency and boosting accountability at the highest levels, while helping build a fairer economy that works for everyone.”

The new regulations, which will come into effect from January 2019 subject to parliamentary approval, also require listed companies to show what effect an increase in share prices will have on executive pay.

Government minister Lord Duncan said: “It only takes poor behaviour from a small number of companies to damage the public's trust in big business.

“Improving transparency and accountability in this way, plus other initiatives such as giving employees a voice in the boardroom, will help create a more equal and fair society while ensuring that the UK remains a world-leading place to invest and do business.”

TUC general secretary Frances O'Grady said the move was “a first step, but more is needed”.

“Fat-cat bosses are masters of self-justification and shrugging off public outcry. New rules are needed to make sure they change,” he said.

“We need guaranteed places for worker representatives on boardroom pay committees. That would bring a bit of common sense and fairness to decision-making when boardroom pay packets are approved.

“The Government should put an end to phoney incentive schemes that reward executives above and beyond the actual results they get.”

Rebecca Long Bailey, shadow business and industrial secretary, said: “The Tories have missed the mark again, reannouncing half-baked, rehashed policies that do nothing to tackle the entrenched inequality that's crippling our society.”

 

 

 

Oprah Winfrey’s Legacy Celebrated at Smithsonian’s Museum Exhibit

 

The Smithsonian's National Museum of African American History and Culture is opening a new exhibit this week called “Watching Oprah.” It's a celebration of Oprah Winfrey's legacy. Gayle King previewed the exhibit with Oprah on Wednesday where the media mogul saw it for the first time.

 

The Wave-free Electric Surfboard

 

 

The Carver by Oneon is an electric jet board that lets you surf without waves. Riders can use a wireless remote to control the speed, which maxes out at 21mph. At full speed, the battery can last for 20 minutes and then takes two hours to recharge. The starting price for the board is $5,595.

 

What Makes Stradivarius violins worth millions and are they actually worth it?

Many musicians prefer these 300-year-old instruments, but are they actually worth it?

Antonio Stradivari is generally considered the greatest violin maker of all time. His violins are played by some of the top musicians in the world and sell for as much as $16 million. For centuries people have puzzled over what makes his violins so great and they are the most scientifically studied instruments in history. Two world class violinists who play Stradivarius violins as well as a violin-discuss  what makes Stradivari so great.

Special thanks to Stefan Avalos for the Stradivari research footage.

 

 

Tesco boss Dave Lewis blames business rates for retail carnage on the high street

(qlmbusinessnews.com via cityam.com – – Fri, 8 June 2018) London, Uk – –

Tesco boss Dave Lewis has joined the outcry against business rates, blaming the system for the carnage on the high street.

He said that the tax was partly responsible for the collapse of some retailers, and that it had created an “uneven playing field”.

“Are we allowing it to stay competitive, or are we by stealth lowering corporation tax and increasing business rates to a place which is creating an uneven playing field and forcing people to think about how it is they avoid that cost and find other routes to the market?” he said to the BBC.

His comments come after another day of retail woes, with a total of 11,500 jobs at risk due to House of Fraser's plans to close more than half of its stores and the news that Poundworld is to appoint administrators.

House of Fraser's large stores have been subject to some staggering business rates rises.

Robert Hayton, Head of U.K. Business Rates at Real Estate Advisor, Altus Group, said: “The proposed CVA, if approved, would see the overall Rateable Value used for property taxes on stores in England and Wales fall from £59.50m to £32.23m until the next revaluation in 2021 reducing tax liabilities this year for business rates from £30.24m to £16.02m on a full year basis.”

By Alys Key

 

BT chief executive Gavin Patterson to step down later this year

(qlmbusinessnews.com via theguardian.com – – Fri, 8 June 2018) London, Uk – –

Move comes amid growing shareholder dissatisfaction with his performance

The BT chief executive, Gavin Patterson, is to leave the telecoms giant later this year after investors made it clear they had lost confidence in his ability to lead the company through an ambitious turnaround plan.

In a surprise move, the company said it had already started the process of looking for his successor and expects to appoint a new chief executive in the second half of the year.

Jan du Plessis, the chairman of BT, thanked Patterson for his contribution over the last 14 years but said the company needed a change in leadership.

He said: “The board is fully supportive of the strategy recently set out by Gavin and his team. The broader reaction to our recent results announcement has, though, demonstrated to Gavin and me that there is a need for a change of leadership to deliver this strategy.”

Investors welcomed the news, with shares initially rising 2.5% to 208p. When Patterson was appointed chief executive in September 2013, shares were trading at about 340p, before hitting a high of almost 500p in early 2016.

Neil Wilson, the chief analyst at markets.com, said investors had “finally lost patience and driven him out”.

Wilson added: “There’s been more wrong than right for BT since he took over five year ago. It’s been a disappointing time for BT and for its shareholders.”

The departure comes after a backlash from shareholders over BT’s recent results and concerns that Patterson was not the right person to lead the company through an ambitious restructuring plan.

The strategy includes 13,000 job cuts and a move out of BT’s central London headquarters after almost 150 years as it attempts to slash costs amid growing competition and falling revenues. BT missed profit and revenue targets in the year to the end of March, sending shares in the company to a six-year low.

Days after the news of the job cuts, BT revealed Patterson was paid about £2.3m last year, including a £1.3m bonus on top of his basic salary of £997,000.

At time of the strategy update last month, Du Plessis publicly endorsed Patterson as the person to steer the company through the changes but the position changed after the BT chairman held a series of conversations with shareholders.

Patterson, who has been at BT for more than 14 years and was appointed chief executive in September 2013, will stay on in the top role until a replacement is found.

He will continue to be paid his usual monthly salary until his successor is appointed, after which point he will be entitled to up to 12 monthly payments covering his basic salary, benefits and bonus. Based on current projections that means he could walk away with about £2.3m, in line with his salary and bonus last year.

Patterson has led the company through a troubled 18 months that included an accounting scandal in Italy and a record £42m fine from Ofcom.

Patterson said: “It’s been an honour to lead BT since 2013 and serve as a member of the board for the last 10 years. Throughout that time I’ve been immensely proud of what we’ve achieved; in particular the transformation of the business in recent years, with the launch of BT Sport, the purchase and integration of EE and the agreement to create greater independence for Openreach.

“BT is a great business and with the new management team I’ve recently put in place, is, I believe, very well-positioned to thrive in the future.”

George Salmon, an equity analyst at Hargreaves Lansdown, said the first half of Patterson’s tenure as chief executive had been positive, with the rise of BT Sport bringing some good times for investors.

“However, it’s been a different story over the last two years. Since 2016, BT’s share price graph resembles something of a black run; pretty much always on a downward trend and with a few nasty cliffs here and there.

“Ultimately, this is what’s behind the change. Shareholder confidence has followed the share price down and with BT embarking on a crucial restructure, the board has decided it’s time for a change.”

By Angela Monaghan

 

 

Department chain House of Fraser to close 31 stores

Alex Liivet/Flickr

(qlmbusinessnews.com via bbc.co.uk – – Thur, 7 June 2018) London, Uk – –

Department store chain House of Fraser is to close 31 of its 59 shops, affecting 6,000 jobs, as part of a rescue deal.

If the plan is approved, 2,000 House of Fraser jobs will go, along with 4,000 brand and concession roles.

The stores scheduled for closure, which include its flagship London Oxford Street store, will stay open until early 2019, House of Fraser said.

The retailer needs the approval of 75% of its creditors to go ahead.

Creditors will vote on the insolvency plan, which involves company voluntary arrangements (CVAs), on 22 June.

In May, House of Fraser's Chinese owners Nanjing Cenbest reached a conditional agreement to sell a 51% stake to the Chinese owner of Hamley's, C.banner. The sale is conditional on the restructuring plan being approved.

The House of Fraser stores identified for closure:

Altrincham • Aylesbury • Birkenhead • Birmingham • Bournemouth • Camberley • Cardiff • Carlisle • Chichester • Cirencester • Cwmbran • Darlington • Doncaster • Edinburgh Frasers • Epsom • Grimsby • High Wycombe • Hull • Leamington Spa • Lincoln • London Oxford Street • London King William Street • Middlesbrough • Milton Keynes • Plymouth • Shrewsbury • Skipton • Swindon • Telford • Wolverhampton • Worcester

‘Existential threat'
House of Fraser chairman Frank Slevin said the retail industry was undergoing “fundamental change”, and the company “urgently needs to adapt”.

“Our legacy store estate has created an unsustainable cost base which, without restructuring, presents an existential threat to the business.”

Closing stores was “a very difficult decision”, he said, but “it is absolutely necessary if we are to continue to trade and be competitive”.

Accountancy firm KPMG, which is overseeing the insolvency process, said the firm had been hit by “mounting pressures facing the UK High Street”.

In addition to the store closures, the department store chain is seeking to cut rents by 25% on 10 of the stores it is keeping open.

Of the 31 stores it wants to shut, it is seeking a 70% rent reduction for seven months, after which the stores will close.

Analysis

By Emma Simpson

House of Fraser has been living hand to mouth for months. Axing half its stores is a drastic attempt to save the business from collapse.

This is a chain that's had more than its fair share of financial ups and downs over the decades, with a colourful array of owners. But the chain has gradually lost its relevance and suffered from a lack of investment.

It's been struggling for a long time. And in the last year, the increasingly tough conditions on the High Street has exposed its weaknesses, with the result that its problems have finally come to a head.

Even with these store closures, House of Fraser still need to have the right products and experience to pull shoppers into the stores that will be left.

‘Massive task'
A CVA is an insolvency process designed to let a firm with debt problems reach an agreement with creditors to help pay off part or all of its debts and avoid administration or liquidation.

Richard Lim, chief executive of analyst firm Retail Economics, said the plan to shut House of Fraser's Oxford Street store and 30 others was “a huge statement of intent”.

“The closure of such an iconic flagship store signals the massive restructuring task at hand,” he said.

“Department stores are incredibly expensive to operate and the last few years have seen costs spiralling upwards from business rates, rents and National Living Wage.”

House of Fraser started with a shop in the centre of Glasgow almost 170 years ago.

It became a retail empire with more than 100 department stores, including iconic luxury store Harrods in 1959.

Owner Hugh Fraser also acquired Kendals in Manchester and Rackhams in Birmingham.

Hugh's son, also called Hugh, expanded the portfolio with a further 50 stores. The Fraser dynasty came to an end in 1985, when Mohamed al-Fayed took it over.

The House of Fraser Group has annual sales of £1.2bn. It employs about 5,000 people directly and also has 12,500 concession staff.

 

 

Volvo set new targets aimed at doubling sales by 2025

(qlmbusinessnews.com via telegraph.co.uk – – Thu, 7 June 2018) London, Uk – –

Volvo Cars has set itself new targets aimed at doubling sales and boosting profits by 2025 as the premium car maker grows its stake in new segments and technologies.

By 2025 the Swedish company, which is owned by Chinese automotive business Geely, wants half of all the cars it sells to be fully electric and a third of the total to have self-driving capabilities.

Volvo also aims to grow the amount of cars in its range that it offers on a subscription basis to 50pc under its “Care” programme.

Under this system customers pay a set monthly fee over for a two-year contract, and get a car, insurance and breakdown assistance while Volvo also covers all maintenance.

“Our customers’ expectations are changing rapidly,” said Hakan Samuelsson, president and chief executive, and who has previously compared Care to how people buy mobile phones.

“This means that Volvo Cars is also changing rapidly. These initiatives will help transform Volvo from being purely a car company to being a direct consumer services provider.”

Under the plans, Volvo hopes to create 5m “direct consumer relationships” by 2025, implying that sales will almost double. Last year Volvo sold 571,000 cars globally.

The company is also aiming to increase its profitability, “bringing it in line with other premium car makers”, such as BMW and Mercedes, at approaching 10pc, up from the current profit margin of 6.4pc reported in the last quarterly figures.

To do this, Mr Samuelsson said that Volvo would continue to tap into the new segment of providing cars for ride-hailing services, which are trialling self-driving systems. In the autumn, Volvo said it had agreed a deal to sell up to 24,000 of its large XE90 SUVs to Uber.

Profitability will also be driven by Volvo working with other car businesses in the Geely group, such as Lynk & Co and Polestar, the recently reborn premium electric brand. A combination of shared R&D, procurement and economies of scale is hoped to boost profits.

Volvo has boomed since being bought by billionaire Li Shufu’s Geely group in 2010, last year delivering annual revenues of 210bn Swedish kroner (£18bn) and a profit of £942m.

Speculation is growing that the company could be floated but the strong financial performance has more than repaid the $1.8bn price Mr Li paid when he bought Volvo from Ford in 2010. The billionaire is understood to be happy to retain Volvo unless it gets a $30bn market valuation.

By Alan Tovey

 

TSB chief receives sharp criticism on bank’s IT failure from City watchdog

(qlmbusinessnews.com via theguardian.com – – Wed, 6 June 2018) London, Uk – –

Bank failed to be ‘open and transparent’ over IT meltdown affecting 1.9m customers, says FCA

The City regulator has launched a stinging attack on the chief executive of TSB over the bank’s failure to be open and transparent with customers when an IT upgrade went badly wrong, locking as many as 1.9 million customers out of their accounts.

The Financial Conduct Authority accused Paul Pester of “portraying an optimistic view” of services after the botched operation in April that is still causing disruption for customers more than a month on.

“The FCA has been dissatisfied with TSB’s communications with its customers and we have had concerns that TSB was not being open and transparent about the issues experienced,” Andrew Bailey, the FCA’s chief executive, said in a letter to the Commons Treasury committee.

“The current communications were perceived as poor, and could reduce trust in TSB and in the banking sector as a whole.”

The City regulator’s damning assessment increased the pressure on Pester as he prepared to make a second appearance in front of the Treasury committee on Wednesday.

In a critical assessment of Pester’s personal handling of the IT meltdown, Bailey also suggested that the TSB boss might have been more forthcoming with MPs on the Treasury Committee when he gave evidence on 2 May. Bailey said at the time of the hearing Pester may have had information from tech experts at IBM who had been drafted in to help cope with the meltdown.

“We are … concerned that at the time of the committee hearing, the CEO may have been in possession of an initial set of slides by IBM which provided initial views on the incident, and could therefore have shared more detail on this with the committee.”

Bailey highlighted TSB’s claim that “the vast majority” of customers were able to access their online accounts at a time when there was a successful first-time login rate of only 50%.

The FCA has the power to fine TSB over the incident and said it was investigating the crisis jointly with the Prudential Regulation Authority. The system failure happened when TSB transferred customer records to a new IT platform.

Noting the extraordinary nature of the situation, Bailey said: “We do not normally make this information public, but given the level of public interest, I want to be clear that we will be conducting this work.” He said Pester and the TSB board were accountable for the decision to press ahead with the systems upgrade.

Responding to Bailey’s comments, Nicky Morgan, chair of the Treasury committee, said she was deeply concerned by TSB’s failings.

“The regulator does not make such criticisms lightly. I am deeply concerned by TSB’s poor communications about the scale and nature of the problems it has faced; by its response to customer fraud; and by the quality and accuracy of the oral and written evidence provided by Dr Pester to the committee.

“The committee will discuss Mr Bailey’s letter, and the ongoing problems faced by TSB customers, when it sees Dr Pester and other TSB board members, as well as the FCA, on Wednesday.”

A spokeswoman for TSB said the bank continued to keep customers updated on its latest service status. She added: “We will be updating the Treasury select committee [on Wednesday] and will continue to fully support its inquiry.

“In the meantime, we continue to focus on doing whatever it takes to put things right for our customers, and ensuring that no customer will be left out of pocket as a result of the recent IT issues.”

During his first encounter with MPs, Pester was accused by Morgan of being “extraordinarily complacent” after he said the bank’s move to the new IT system had mostly run smoothly.

Up to 1.9 million online and mobile banking customers at TSB began experiencing problems with their accounts on Monday 23 April after the bank – now owned by Spanish lender Sabadell – migrated from an IT system inherited from the previous owner, Lloyds Banking Group.

However, some TSB customers are still facing disruption to services more than a month after the IT chaos began. The FCA said as recently as 30 May, when Bailey wrote to Morgan, phone customers were still being forced to wait more than 30 minutes to be connected to an agent, while customers were hanging up or being disconnected on more than 40% of calls.

Bailey also said that the risk and scale of customer fraud had increased since the migration, and that TSB had failed to meet regulatory requirements of refunding all affected customers “as soon as practicable and in any event by the end of the business day after the day which it became aware of the fraud”.

The FCA said “operational challenges” still persisted in some TSB bank branches.

By Angela Monaghan

 

 

Government criticised by farmers worried over post-Brexit plans ‘lack of detail’

(qlmbusinessnews.com via news.sky.com– Wed, 6 June 2018) London, Uk – –

Farmers are nervous following a government consultation that they believe lacks ‘clarity on funding, delivery and timing'.

The government has been criticised for providing “a notable lack of detail” when it comes to its plans to support farmers post-Brexit.

MPs on the environment, food and rural affairs committee have called for “more clarity on funding, delivery and timing” in its report entitled The Future Of Food, Farming And The Environment.

It follows a government consultation published on February, which should have provided reassurance about what will replace the current direct payment system for farmers after the country leaves the European Union.

Instead it left farmers like Tim Pratt, from Wantisden Hall Farms in Suffolk, feeling nervous.

“We are a big business. We need to plan machinery, we need to plan labour and we need to know what's going on and the uncertainty is the issue at the moment,” he said.

The committee has called for ring-fenced funding, new support mechanisms for farmers and a commitment to ensuring welfare standards are maintained on products entering Britain.

Farmers currently receive payments based on the amount of land they farm as part of the EU's common agricultural policy.

Instead they will be rewarded for increasing biodiversity, creating new wildlife habitats, reducing flood risk and improving air quality.

But the chair of the select committee, Neil Parish MP, wants more detail on how food production will be protected.

“We have got to make sure we have got a proper agriculture and environment policy as we move forward because it's strong on the environment but not so strong on food and farming,” he said.

The National Farmers' Union are also worried.

President Minette Batters said: “We absolutely embrace the government ambition that every farming business should be able to have access to world-class environmental delivery.

“I think it's a very important area, but ultimately we need profitable, thriving, food-producing businesses.”

A Defra spokesperson said the UK leaving the EU provides “a historic opportunity to design a fresh approach to farming that works in the national interest”.

They added: “We have committed to match the £3bn in farm support until the end of this Parliament in 2022, followed by a longer agricultural transition period to give farmers time to adapt.

“We had more than 44,000 responses to our consultation which we are analysing before bringing forward an agriculture bill later this year.”

 

 

UK Government takes £2 billion loss on RBS share sale

(qlmbusinessnews.com via uk.reuters.com — Tue, 5 June 2018) London, UK —

LONDON (Reuters) – Britain has sold some of its holding in Royal Bank of Scotland (RBS.L), the bank which it rescued in the 2008 financial crisis, but has taken a loss of more than 2 billion pounds on the deal.

UK Government Investments sold a 7.7 percent stake in a placement overnight to institutional investors at 271 pence a share, almost half of what the government paid during its initial and largest capital injection into RBS, which it bailed out for a total of 45.5 billion pounds.

“This sale represents a significant step in returning RBS to full private ownership and putting the financial crisis behind us,” Britain’s Chancellor of the Exchequer Philip Hammond said.

Once one of the largest banks in the world by assets, RBS’s near collapse required Britain’s biggest bailout, leaving the government still holding a large stake nearly a decade later. After the latest sale its holding is 62.4 percent.

Britain’s opposition Labour party criticised the share sale when it was announced late on Monday, saying that taxpayers would lose out and the government should have held out for more.

The bank’s shares were down 3.4 percent at 0719 GMT.

Jefferies analyst Joseph Dickerson said the sale marked a step towards longer-term investment value in RBS, which has not paid a dividend for a decade.

‘AN IMPORTANT MOMENT’
RBS Chief Executive Ross McEwan said the government’s decision reflected the progress RBS had made in becoming simpler and safer.

“This is an important moment for RBS,” McEwan, who has presided over the bank’s turnaround since 2013 and a series of key milestones in recent months, said in a statement.

Under former Chief Executive Fred Goodwin, RBS expanded rapidly from a small Scottish bank to become a global financial services group.

But a disastrous 2007 bid for Dutch bank ABN Amro was sealed just as the financial crisis hit, bringing the bank to the brink of collapse and forcing the government to step in.

Few argue that Britain’s Labour government of the time erred in rescuing the lender, but the years since have been marked by relentless restructuring and billions of dollars in fines to settle misconduct disputes which have hit the bank’s recovery efforts and the chances of returning taxpayers’ money.

A 2015 Rothschild report commissioned by former Chancellor George Osborne found that 107.6 billion pounds in crisis-era bailouts, including funds injected into Lloyds Banking Group (LLOY.L) and failed lender Northern Rock, would bring a 14.3 billion pound return for the taxpayer.

But the report estimated a 7.2 billion pound overall loss on the government’s investment into RBS.

Successive governments have also faced criticism for a hands-off approach to RBS which has been embroiled in a series of scandals, including over its treatment of small businesses in the aftermath of the crisis.

The government is set to sell the rest of its 62 percent stake in RBS over the next few years, most likely in a similar fashion to Monday’s sale although it could offer some of the shares to the public.

Monday’s sale resumes a process the government began in 2015 when it sold a first tranche of RBS shares – 5.4 percent of its stake – for 330 pence per share, at a 1.1 billion pound loss.

Subsequent sales were put on hold pending the agreement of the multi-billion dollar settlement with the U.S. Department of Justice.

By Emma Rumney, Lawrence White
Additional reporting by Dasha Afanasieva

 

 

Qatar Airways CEO Akbar Al Baker says only a man could rise to the challenges of his job

(qlmbusinessnews.com via telegraph.co.uk – – Tue, 5 June 2018) London, Uk – –

Qatar Airways chief executive officer Akbar Al Baker says only a man could rise to the challenges of his job.

Moments after becoming chairman of the International Air Transport Association’s board of governors, one of the world’s biggest boys’ clubs, Mr Al Baker did little to suggest things will change.

At a press conference in Sydney, where IATA held its annual meeting, he was asked what could be done about the woeful representation of women in Middle East aviation. That’s not the case at Qatar Airways, Mr Al Baker told the reporter.

“Of course it has to be led by a man, because it is a very challenging position.” There were loud groans of disapproval from many reporters in the room.

The comments contrast with efforts by some rivals to push up female representation at the upper echelons. Qantas Airways’s senior management is 40pc female, including the heads of the international and frequent-flier loyalty businesses, CEO Alan Joyce said.

SkyTeam appointed Delta executive Kristin Colvile as chief executive of the airline alliance earlier this month.

Not only is diversity a competitive advantage, Mr Joyce said, “It’s the right business thing to do and it’s the right moral thing to do.”

A day earlier, IATA members from airlines across the world had listened to a panel discussing ways to address gender imbalances in the industry. When the IATA board posed for a group photo last week, there was just one woman among 26 airline chiefs – Christine Ourmières-Widener, CEO of Flybe.

Mr Al Baker clarified his position in an interview with Bloomberg TV after his press conference. “I was only referring to one individual,” he said. “I was not referring to the staff in general.”

Qatar Airways staff are more than 33pc female, he said. Adding: “The carrier has female pilots and female senior vice presidents. There’s no gender inequality in Qatar Airways.”

Asked whether he’d welcome a female executive as CEO, Mr Al Baker said: “It will be my pleasure to have a female CEO candidate I could then develop to become CEO after me.”

 

 

House of Fraser’s future hangs in the balance amid 11th-hour restructuring battle

Alex Liivet/Flickr

(qlmbusinessnews.com via theguardian.com – – Mon, 4 June 2018) London, Uk – –

Retailer has reached deadlock with Chinese owner as it seeks to avoid administration

The future of the embattled House of Fraser department store chain was hanging in the balance this weekend, as deadlock between its Chinese owner and lenders threatened to scupper its planned rescue package.

The GMB and shopworkers’ union Usdaw are watching from the sidelines, anxious about the risks of financial collapse for the store’s 17,000 employees, who work in its 59 stores across the UK.

The ailing retailer is seeking a company voluntary arrangement (CVA) – a complex insolvency procedure, which is increasingly being used by restaurateurs and retailers to shed loss-making sites – to allow it to restructure its store portfolio.

In an 11th-hour battle, it has been seeking to win over its landlords to avoid collapsing into administration. The restructuring plan is a condition for a multimillion-pound cash injection from C.banner, the Chinese owner of Hamleys.

The company is understood to have been reviewing its options after it upset its landlords by announcing a CVA, which would lead to the closure of a least 20 stores – a third of the total – without consulting them.

The company insisted on Sunday that, while it had hoped to launch the CVA at the beginning of June, the board expected it to be agreed within the next 10 days.

It said C.banner confirmed on 1 June that it would raise £124m through a share sale in Hong Kong, with the backing of its majority shareholder, to support the deal.

Chairman Frank Slevin said: “We are on track with our plans to enter the proposed CVA agreement. The funding from C.banner is another important milestone in this complex process.”

He added: “We continue to have very constructive talks with our banks and other stakeholders who are positive about the plans.”

The overall restructuring deal will give control of the 169-year-old retail chain to C.banner, which is buying a 51% stake in its parent group.

The buyout will involve the acquisition of shares from Nanjing Cenbest, part of China’s Sanpower conglomerate, which will retain a minority stake. C.banner has agreed to pay a further £70m for new shares leading to a “significant capital injection” in House of Fraser. That is in addition to £25m of cash that has been injected into the company by shareholders since March this year.

Property companies Legal & General and Westfield are among about a dozen landlords that have been plotting opposition to the CVA.

Property companies can block the CVA and demand improved terms if creditors holding more than a quarter of the debts rebel against the company’s proposed terms. If the CVA fails then it is likely that House of Fraser will collapse into administration – the latest retail casualty on the high street.

House of Fraser said in a detailed statement in early May that it would reduce the size of the store portfolio, although insiders said no official hitlist of those earmarked for closure would be drawn up until the CVA is launched. Sources dismissed talk of specific stores closing – including the company’s flagship on London’s Oxford Street – as “unfounded speculation”.

But industry experts have already suggested House of Fraser would have to consider closing at least 20 sites. The group has already been negotiating with landlords as part of plans to reduce its floorspace by 30% by slimming down a number of outlets. It is understood that deals have been struck to downsize stores in cities including Plymouth and Wolverhampton.

House of Frasier’s CEO, Alex Williamson, has fuelled fears that many stores are likely to close in regions where sales growth has slowed.

Williamson said: “If we are to deliver a sustainable, long-term business supported by new liquidity, then we need to make difficult decisions about our underperforming legacy stores.

“I am conscious that inaccurate speculation only feeds the ongoing uncertainty for my colleagues in the business and I reassure them we will share further news when we have it.”

High street landlords are increasingly unhappy about struggling retailers using CVAs to effectively railroad them into agreeing to slash rents. The latest was Mothercare – which on Friday announced it is to close about 50 of its 137 stores by June next year with the potential loss of about 800 jobs after landlords approved a financial rescue package. New Look, Carptrightand the restaurant chains Carluccio's,Byrons,Prezzo and Jamie’s Italian have used the process to jettison unwanted outlets.

Martin Greenslade, the chief financial officer of Land Securities, the UK’s largest commercial property owner, said CVAs should only be used an emergency option to prevent collapse.

“Where a business has genuine trading difficulties, a CVA can help provide the necessary breathing space to restructure and raise new funds to avoid administration,” he said.

“In general, we are happy to support these agreements. Where the operating performance of a business is fine but its ownership structure has excessive debt or management simply wants to improve its operating profits by reducing rents, we do not believe that the CVA process is fair or appropriate.”

By Rebecca Smithers

 

 

Under-30s trade union membership falls despite wage stagnation

(qlmbusinessnews.com via bbc.co.uk – – Mon, 4 June 2018) London, Uk – –

The number of people under the age of 30 who are members of a trade union has fallen significantly since 2001.

Figures from the Trades Union Congress provided to the BBC reveal membership levels among the under-30s have fallen from 20.1% in 2001 to 15.7% in 2017.

In the private sector, which employs more than 80% of 21 to 30-year-olds, the figure fell from 12.6% to to 9%.

It comes despite the pay gap between younger and older workers rising by more than half in the past 20 years.

Younger people are also much more concerned about “insecure work” and their financial position.

Pay gap

Frances O'Grady, the general secretary of the TUC, admitted the union movement had “a problem” in reaching young people.

And it needed to show the under-30s that unions are still relevant in an era when higher-educated young people have actually seen average earnings drop over the last 20 years.

On average, being a member of a union means your pay is higher – although that is often to do with the sector worked in and the size of the employer.

A new report from the TUC to mark the 150th anniversary of its foundation in Manchester in 1868 revealed that over-30s are now paid 21.9% more than under-30s, compared with 14.5% in 1998.

That means that on average, young people are earning £2.81 an hour less than older people, up from £1.51 an hour less in 1998.

Although it would be expected that older people earn more than younger people, the slower pace of wage growth among the young has increased the gap.

Older people are on average earning £5,884 a year more than younger workers, compared with £3,140 a year in 1998.

‘Sympathetic'
Ms O'Grady said many young people felt they were in insecure employment in sectors such as health care or retail sales, but were not turning to the unions for support.

Many employers also made it difficult for people to become a member of a union, she said.

She also admitted that unions had to “earn the right” to represent people at work.

We know we've got a problem,” Ms O'Grady told me.

“We know that young people overwhelmingly are sympathetic to our vision and our values. The problem is that many of their employers, especially in the private sector, make it hard for us to organise them.”

Of employees of all ages, 23.2% are a member of a union, itself the lowest figures since records of the percentage figure began in 1995.

Zero-hour contracts
The overall membership of trade unions – at 6.9 million – is well below its peak above 13 million in the late 1970s.

“If you think about where young people are working in hospitality or retail care industry, often on temporary or zero-hour contracts, often in franchise organisations that are hard to organise, the model that we have isn't working for them,” Ms O'Grady said.

“We've got to fix it, and we've got a chance, we're in the 21st Century, we can use 21st Century tools like digital to organise young people in new ways that suit them and give them what they need.”

The TUC report revealed that younger people were now more concentrated in lower-paid sectors such as private social care or hotels and restaurants.

A survey of 1,500 young people suggested that a quarter had struggled with living costs and that 41% had put off buying or moving home because of concern about finances.

Just a third believed that their job made the best use of their skills.

“What young people are telling us is that they feel stuck, they're stuck in low-paid insecure employment, they don't know how to get out or get on,” Ms O'Grady said.

“What they really want is an online shop steward, an online coach, who will support them in getting the skills and the opportunities they want to make a life for themselves.”

‘Male, pale and stale'
She admitted the trades union movement needed to do more on diversity.

“I want us to look like modern Britain, a little less of the male, pale and stale and a bit more of the diversity of Britain,” Ms O'Grady said.

“Our leadership looks a lot better than most of the leaderships you would find in the boardroom, or indeed in politics, but that's not good enough for me.

“We've got to look like the people that we aim to represent – including young people.”

By Kamal Ahmed