Rail Fares Hike As More Trouble Hits Trains

Rail disruption hit the major train station where Transport Secretary Patrick McLoughlin sought to defend a hike in fares and hail record government investment in the network.

As commuter season tickets rose by 2.5%, the Secretary of State visited Birmingham New Street to highlight the amount of public money going in to improve the railways.

He was also arguing the case for passengers to contribute as well.

Passengers endure London travel chaos over festive period

But his comments are set to set to fuel train traveller anger, with the very same station subsequently plagued by a nearby signalling problem that caused delays of up to an hour to services passing through.

It was one of a series of hold-ups for passengers on the first day of the new fares.

Video: Passengers Want 'Value for Money'

There was early-morning trouble in East Anglia, then difficulties on Merseyrail services and on routes in the West Midlands.

While season tickets are rising by up to 2.5%, the overall average rise for all fares is 2.2%.

The latest annual increase means some fares have increased over 20% in the last five years.

The hikes follow major disruption during the Christmas period caused by over-running engineering work.

Video: Rail Boss On Christmas Rail Chaos

The delays led to chaotic scenes, with King's Cross and Paddington stations in London having to be closed and also resulted, eventually, in Network Rail chief executive Mark Carne announcing he would not be taking his annual performance-related bonus.

Speaking at Birmingham New Street, Mr McLoughlin said that between 2014 and 2019, the Government was investing £38.5bn through Network Rail to improve infrastructure.

He told Sky News: "That's a huge amount of public support that goes into the railway industry, and therefore it is right to say to the passenger they have got to contribute as well.

"No one likes to see fare increases. I don't like to see fare increases, but we are seeing a very vibrant rail industry in this country."

Video: No Bonus For Rail Boss

The fare rise - announced by rail industry body the Rail Delivery Group - will see more rail passengers than ever paying £5,000 for season tickets.

Rail Delivery Group director general Michael Roberts said: "At 2.2%, the average increase in fares in 2015 is the lowest for five years.

"For every £1 spent on fares, 97p goes on track, train, staff and other costs while 3p goes in profits earned by train companies for running services on Europe's fastest growing railway."

But campaign groups and trade unions say the latest annual rise in fares far outstrip the rises in wages and that Britons pay some of the highest rail fares in Europe.

Video: 'We Got It Badly Wrong Today'

Those commuting to London from Milton Keynes in Buckinghamshire, for example, are now having to pay 2.43% more, with their 2015 ticket going up to £4,888.

According to the Campaign for Better Transport (CBT), the cost of a Milton Keynes season ticket has risen 23.5%, or £930, since January 2010 and is one of a number of fares that have increased around four times more than average wages over this five-year period.

The CBT also highlighted the cost of a Newcastle to Middlesbrough season ticket, which will now be £2,324, and which has risen 26.3% since January 2010.

According to TUC figures, UK commuters spend more than twice as much of their salary on rail fares than some European passengers.

12.07 | 0 komentar | Read More

Payday Loan Costs Caps Comes Into Force

A cap on the cost of payday loans has come into force aimed at preventing debts spiralling out of control.

Fees and interest paid by customers using payday lenders will now be limited, lowering the cost of borrowing for most people.

The new rules also mean those who cannot afford to repay their debt on time will never pay back more in charges than the sum they initially wanted to borrow.

For all high-cost short-term credit loans, interest and fees must not exceed 0.8% per day of the amount borrowed.

Default fees for borrowers who fail to repay on time will be capped at £15.

Video: Nov 11: Payday Loan Charges Cap

The measures mean that if someone borrows £100 for 30 days and pays back on time, they will not be charged more than £24.

And someone who borrows £100, but struggles to repay their debt will never pay back more than £200, including fees and charges.

The Financial Conduct Authority (FCA), which oversees the industry, said the move would lower costs for most borrowers and ensure that charges are proportionate to the size and duration of the loan.

Short-term lenders said the caps would lead to fewer people getting loans from a smaller group of lenders.

They said that initially at least, the cost of a payday loan would generally be at or near the cap.

Wonga, Britain's biggest payday lender with more than one million active customers, started capping the cost of its loans in mid-December in order to comply with the rules.

Stricter rules for credit brokers are also being introduced amid concerns consumers have often mistaken credit brokers for lenders.

Video: Nov 11: Regulator On Payday Loans

Martin Wheatley, chief executive of the FCA, said the payday loan cap will "make the cost of a loan cheaper for most consumers".

"Anyone who gets into difficulty and is unable to pay back on time will not see the interest and fees on their loan spiral out of control - no consumer will ever owe more than double the original loan amount," he said.

The payday loans industry, which has been the focus of criticism in recent years, has undergone a string of shake-ups after coming under the regulation of the FCA last April.

Payday lenders are banned from rolling over a loan more than twice and they can only now make two unsuccessful attempts to claw money back out of a borrower's account.

The firms have only ''interim permission'' to operate under the FCA's stricter regime and they will need to pass assessments in order to get full permission to carry on.

Russell Hamblin-Boone, chief executive of the Consumer Finance Association, which represents short-term lenders including the Money Shop, Quick Quid, Peachy and Sunny, said: "We expect to see fewer people getting loans from fewer lenders and the loans on offer will evolve but will fully comply with the cap."

12.07 | 0 komentar | Read More

Next Shares Surge After Xmas Sales Growth

Next has reported it enjoyed strong sales growth in the run-up to Christmas and has now raised its annual profits guidance.

The retailer confirmed it was to pay a fourth special dividend of the year while announcing a 2.9% increase in full price sales between 28 October and Christmas Eve - with total sales for the year to 24 December rising 7.7%.

Next Directory, which incorporates its online and catalogue offerings, drove the performance with sales in the division rising 7.5% in the pre-Christmas period alone.

The company said it now expected its full-year profit guidance "to be within £10m either side of £775m" - a £5m increase on the midpoint range it had expected in October.

Surplus cash would again be returned to investors, Next said, with its fourth special dividend of the year worth 50p per share.

That development and the wider Christmas cheer boosted its shares by as much as 4% in early trading on the FTSE 100 and gave a lift to rival Marks & Spencer too.

Retailers are on track for a record December following the success of Black Friday sales the previous month, but there are signs that cold weather and some stock shortages may have hit high street sales since Boxing Day.

Next warned that it remained "very cautious" about the year ahead.

The firm said the outlook for UK consumers appeared "relatively benign" with low inflation, wages starting to recover, available credit and strong employment painting a "somewhat more positive picture than recent years".

But the group said it faced comparisons with a strong spring and summer in 2014 while uncertainty in the UK and global economy - with a general election looming - presented risks.

It is expecting sales growth for 2015/16 of between 2.5% and 7.5%, compared with the latest expectations for 2014/15 of 6-8%.

12.06 | 0 komentar | Read More

House Prices Rise At Slowest Pace For A Year

UK house price growth eased to its weakest annual pace for 13 months in December, according to Nationwide.

The building society's monthly index showed that property prices lifted by 7.2% annually this month to reach £188,559 on average, slowing from an 8.5% annual rate of growth in November.

The average cost of a home edged slightly lower from the record high of £189,388 measured the previous month.

Nationwide's report named London as the UK's "top performer" for price growth in 2014, with prices there up by 17.8% year on year, reaching £406,730 typically.

Wales was the weakest-performing region, with values having increased by 1.4% annually to reach £141,631 on average.

Activity in the housing market slowed following the introduction of tougher mortgage affordability checks but Nationwide forecast a return to stronger growth in 2015 because of stamp duty reforms and improved levels of construction.

Its chief economist Robert Gardner said: "The slowdown in housing market activity is surprising given further steady gains in employment, a pickup in wage growth (albeit from low levels) and the continued low level of mortgage rates.

"Moreover, surveys suggest consumers remain in high spirits – a view reinforced by robust retail spending growth in November, which was at its highest for over a decade.

"If the economic backdrop continues to improve as we and most forecasters expect, activity in the housing market is likely to regain momentum in the months ahead.

"Supply side developments will be crucial in determining the trajectory for prices."

12.06 | 0 komentar | Read More

Greece Back In Crisis As Snap Election Forced

Greece has been plunged back into crisis mode by a snap parliamentary election that could yield a government opposed to the country's financial reforms.

The Athens Stock Exchange was 10% down when it was confirmed that the government of prime minister Antonis Samaras had failed to secure the election of a new president, triggering the national poll.

The radical leftist Syriza party, which wants to renegotiate Greece's bailout agreements that have prevented Greece defaulting on its debts and roll back on austerity, is favourite to win the general election.

The prospect of a new government reneging on the terms of the rescue deals  - agreed with the EU and International Monetary Fund - prompted the stock market sell-off.

Investors are worried the country's very future in the euro is a core risk as polls suggest most voters favour a return to the drachma following five years of crippling cuts and job losses.

Video: Snap Elections For Greece

Syriza leader Alexis Tsipras said the snap election would herald an end to austerity.

He said: "With the will of our people, in a few days the bailout agreements of austerity will be history."

In a televised address Mr Samaras said: "Tomorrow I will visit the president and request that elections be held as soon as possible, on 25 January." 

He had previously warned that an election could be "disastrous" while the country is negotiating with its creditors.

Greek banks bore the brunt of the hit to the Athens market, with Bank of Piraeus dropping 16.7% to record lows while National Bank of Greece fell 14.2%.

The Greek result hit stock markets in Spain and Italy particularly badly too as they were also badly damaged by the Eurozone economic slump and sovereign debt crisis which led to Greece's 2010 bailout.

The country had been progressing well in its recovery though cuts to core services remain deeply unpopular and unemployment is stubbornly above 25%.

12.06 | 0 komentar | Read More

Will Greece's Crisis Mean Tragedy For The Euro?

If, as now looks quite possible, far-left party Syriza wins next month's snap elections, plunging Greece back into chaos, there will be more than a smidgeon of irony about the whole affair.

For one thing, the elections mark almost exactly five years since the Greek economic crisis first exploded onto the world stage.

In late January 2010 the then-prime minister George Papandreou stood up on the main plenary stage at the World Economic Forum in Davos and declared that his country was under attack by speculators. The country sought a bailout three months later.

But, more significantly, 2015 was supposed to be the year of the Greek recovery.

Yes, the country is still regrouping following the deepest post-war recession of any developed country. More than a quarter of the eligible working age population are still out of work - and around half of all those under the age of 25.

The number of years a Greek citizen can hope to live in a healthy state has fallen from 67.4 in 2007 to 64.9 in 2012.

And yet Greece seemed to have turned the corner. Unemployment was starting, very gradually, to fall. The Government's austerity plans were coming to an end. The country had attained a primary surplus, meaning that when debt interest was ignored it was finally earning enough tax revenues to finance its spending.

And, to cap it off, the International Monetary Fund expected it to be the fastest-growing economy in the eurozone next year (after Ireland).

So the return of the jitters around Greece could hardly have come at a less opportune moment. But does this episode mean a full-blown euro crisis is in prospect? Well, yes and no.

On the one hand, remember that the euro crisis was as much a political one as an economic one. All it takes is for a country to elect a government which is steadfastly against either the euro or the terms of its bailout and it could cause major disruption in the single currency area.

That's what could happen if Syriza wins the election. It could well happen in Spain if Podemos, the fast-growing new anti-bailout party wins the country's elections at the end of the year.

Moreover, the real problem in the single currency - that there is a massive gulf in performance between its member states and few, if any, mechanisms to adjust for that - still hasn't been addressed.

Although there is now the skeleton of a banking union taking shape, there are no plans for a proper fiscal union (so that taxes from, for instance, Germany, could help support the Greek economy). Until one is created, the likelihood is that Europe will continue to limp from crisis to crisis.

However, even if Greece were to start threatening to renege on its bailout commitments or leave the currency, a widespread crisis beyond Greece's borders may not be a foregone conclusion.

Stock markets across Europe have been relatively sanguine about what's happening in Athens. Bond yields on other leading European economies remain low.

In other words, markets are betting that a Greek crisis could be contained. That won't prevent some nervous moments in the coming months as the country prepares for the polls again.

12.06 | 0 komentar | Read More

Royal Mail, DX Snubbed City Link Rescue Deal

By Mark Kleinman, City Editor

Rival delivery companies including Royal Mail were approached about a pre-Christmas rescue of City Link, the parcel services provider which collapsed into administration this week.

Sky News has learnt that Royal Mail and DX Group held preliminary talks in recent weeks with KPMG, which was working for City Link's owner to identify possible buyers of the struggling company.

Royal Mail, which is 30%-owned by the taxpayer, is understood to have been interested in taking on some of City Link's large customer contracts, which include deliveries for high street retailers such as John Lewis and Mothercare.

DX is said by insiders to have held talks about a more comprehensive deal involving City Link's assets, and analysts said they now expected it to attempt to acquire parts of the company out of administration.

Other specialist restructuring firms were also approached about a takeover of City Link, but none of these resulted in concrete discussions about a deal prior to directors appointing EY as administrator after the close of trading on Christmas Eve.

Video: 'I Received The Email On Christmas'

The collapse has sparked controversy, with more than 2,700 jobs directly under threat and a further 1,000 said to be at risk owing to the number of self-employed contractors used by City Link.

The RMT trade union criticised Better Capital, the investment firm which owns City Link, for the timing of the administration, which Sky News revealed on Christmas Day.

But sources close to the situation pointed to an email sent by one RMT official to members on Christmas Eve which said - inaccurately - that the company had already called in administrators that morning.

"This led to increasing pressure on the business and given the level of rumour [there was a] risk of creditor action and thus the company [had to be placed] into administration to give it protection," said an insider.

RMT officials held talks with the administrators on Saturday about a possible rescue, while Vince Cable, the Business Secretary, has agreed to meet the union to discuss the situation in the new year.

A spokesperson for the RMT union said: "A meeting between City Link union RMT and administrators Ernst and Young today has exposed a truly horrific catalogue of mismanagement at the top of the company dating back to November which leaves more than 2,000 staff facing redundancy on new years eve with a skeleton staff kept on for a couple of weeks to wind down the operation."

City Link was acquired by Better Capital, an investment firm headed by Jon Moulton, a leading financier, last year.

Its previous owner, the pest control firm Rentokil, offloaded it for just £1, reflecting the parcel group's long history of losses.

People close to the situation said Better Capital's £40m investment in City Link had been followed by a series of efforts to make it commercially viable, and pointed out that the current shareholder would lose a "significant" sum of money as a result of its collapse.

Video: Xmas Misery For Delivery Workers

The scale of possible job losses among City Link's 2,727 employees has not yet been identified, although EY said they were likely to be substantial, with the first round of redundancies expected within days.

A number of staff are being retained to help return parcels to customers and assist with winding down City Link's operations, the administrator said.

Despite the recent explosion in the growth of online shopping, the delivery sector is beset by excess capacity, with companies such as Amazon developing their own delivery services.

Last month, Better Capital wrote down the value of its £40m investment in City Link by 50% and said it was exploring "various options to maximise the value of the (holding)".

In the wake of a £14m loss for the 2013-14 financial year, City Link's owner added that the business had "progressively deviated from its monthly profit budget during its current year to 31 December driving the conclusion that its current structure is unsustainable in the long term".

Better Capital blamed the worsening outlook on "excess (and increasing) capacity in the sector, made worse by customers developing their own delivery capabilities".

The administrators said customers who had handed over parcels to City Link on Christmas Eve should go to a depot to retrieve them on or after December 29.

The company's online parcel tracking system and helpline telephone numbers are again open to enable fulfilment of existing orders.

Royal Mail declined to comment while DX was unavailable.

12.07 | 0 komentar | Read More

Profits Dripping Away For Dairy Farmers

By Becky Johnson, Sky News Reporter

Andrew Wright gets up at 5.30am every day to milk his herd of 170 cows.

He took over the farm in Cheshire from his parents twenty five years ago and had hoped to one day pass it on to his son.

But times are tough for dairy farmers. Milk prices are falling and for every pint produced there is no guarantee of a profit. Indeed, many farmers are already making a loss.

Unable to balance the books, 16 dairy farmers are giving up on milk production every week in England and Wales, according to the Tenant Farmers Association.

It's a prospect Mr Wright is now having to face. 

"If prices keep dropping as they are, in another 12 to 18 months' time we will have to consider how the business carries on, or in what form the business carries on," he says.

"I have a son who's 12. He's shown an interest in the farm. I don't want to discourage that in any way but he'll have to make his own mind up and if he sees that there isn't the return there for his dad, he is probably going to look elsewhere for employment in the future."

In April, farmers could get up to 35p per litre, but that's dropped to around 28p. That's less than the cost of producing milk, which is around 30p per litre.

Farmers say supermarket price wars are partly to blame for devaluing milk.

Some retailers sell milk at a loss and most have cut the cost of a four pint bottle over the last year. In some supermarkets it's now sold for as little as 89p.

But supermarkets argue it's their profits that take a hit when they cut the price to customers.

Andrew Opie from the British Retail Consortium said: "The fact a supermarket might sell four pints for a pound doesn't impact on the farmer. They'll be getting a guaranteed price through the dairy that they've agreed with the supermarket.

"So if a supermarket wants to invest in its own milk to sell it more affordable for consumers, that's great for consumers."

But a number of processors who buy from farms to sell to retailers have been cutting the price they pay to farmers, and further cuts will come in 2015.

Mr Wright says farmers wonder who is making a profit.

"It's always the farmer at the bottom of the chain that gets told how much he's getting for his milk," he says.

"Maybe the processors should be opening their books if they've got nothing to hide."

He fears that eventually savings may need to be made on feed and vaccinations but that is not a path he wants to go down unless he has to.

For now he's just watching profits dripping away.

12.07 | 0 komentar | Read More