Energy Bills: Npower Deal Creates 'Big Seven'

A new player in the UK energy market is to be created after npower agreed a deal to offload 770,000 customer accounts.

They form part of npower's Electricity Plus and Gas Plus subsidiaries, which were sold today for £218m to Telecom Plus, a supplier of energy and telephony services trading as Utility Warehouse.

The deal, which will not result in any change to customer service and contracts, is expected to complete by early January.

It is the result of new rules from the industry regulator Ofgem which limit the number of tariffs on offer to domestic customers to a maximum of four.

As Utility Warehouse already manages the brands on behalf of npower, the sale will allow the two companies to continue to offer their customers up to four tariffs under their respective brands.

It will also meet demands for greater competition in the industry at a time of rising energy prices - a situation that has resulted in fierce debate in recent weeks over political intervention to ensure a fair marketplace for consumers.

Npower, which is part of Germany's RWE Group and recently topped a league table for customer complaints, currently has 5.4 million household accounts while price rises have prompted more people to look at switching from big six firms to a smaller competitor.

Npower's chief executive Paul Massara said: "In one move we have helped to create the biggest independent competitor in Britain's household energy supply market.

"This is good for competition and good for consumer choice. Today's announcement shows that Britain is well on the way to having a 'big seven' rather than a 'big six'."

Utility Warehouse will continue to receive its gas and electricity from npower under a new 20-year energy supply agreement which should enable it to provide more competitive tariffs to its customers.

The company said the deal boosted its medium-term target of supplying gas, electricity, fixed-line telephony, mobile telephony and broadband to more than one million customers.

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Barclays Boss To Head Major Business Charity

By Mark Kleinman, City Editor

The chief executive of Barclays is being lined up take the helm of the charity Business in the Community (BitC), less than 18 months after the bank became embroiled in a series of reputational crises.

Sky News understands that Antony Jenkins is to become the next chairman of BitC, which is a member of The Prince's Charities, the group of not-for-profit organisations of which Prince Charles is the president.

Mr Jenkins' appointment has yet to be finalised but is likely to be imminently, one insider said on Wednesday.

If he is confirmed to the post, it would see him replacing Mark Price, the boss of Waitrose and deputy chairman of the John Lewis Partnership, who is due to step down in January.

Insiders said on Wednesday that they expected Mr Jenkins to join the charity's board in the spring of next year, and take over the chairmanship in January 2015.

The arrival of Mr Jenkins at BitC would underpin his credentials as a corporate leader determined to hone his own ethical credentials as well as those of Barclays and the broader business community.

Since replacing Bob Diamond as the bank's chief executive last year, Mr Jenkins has sought to begin rebuilding its reputation, announcing a string of initiatives reflecting his attempt to establish it as "the go-to bank".

He has, however, been confronted with a number of ongoing regulatory probes into past misdeeds, including the circumstances of its bailout by Middle Eastern shareholders in 2008 and a widening investigation into potential manipulation of foreign exchange markets by traders working for Barclays and other banks.

The news of Mr Jenkins' prospective appointment at BitC also comes as the unfolding scandal at the Co-operative Bank threatens to inflict further damage on the industry's battered image.

Political rows over energy provision, payday lending and fraudulent claims by public sector outsourcers have deepened the sense of mistrust between the public and the business community.

BitC is the largest business-led charity of its kind in the UK, engaging in a broad range of education and training projects aimed at deepening companies' commitment to corporate social responsibility.

It has 850 members, who collectively employ more than 16m people, according to BitC's website.

Among its initiatives are Ban the Box, which encourages companies to give job applicants a second chance by not asking about previous criminal convictions; and Workwell, a programme focused on improving understanding of workplace health.

Mr Jenkins' appointment has been backed unanimously by the BitC board although some observers may question whether the charity will serve as a convenient platform for him to try to detoxify the Barclays brand.

Last week, the bank axed 1700 jobs across its UK branch networks as customers increasingly shift to using digital services, with thousands more likely to follow in the coming years.

Barclays already has an association with BitC as one of its corporate partners, while John Union, the head of the bank's Welsh operations, is a member of the charity's board.

Among the other directors of BitC are John Cridland, director general of the CBI; Sir Richard Lambert, his predecessor; Chris Hyman, the departing chief executive of Serco, the troubled outsourcing group; and Steve Holliday, chief executive of National Grid.

Sir Richard has also taken on a role as the chair of a new panel aimed at devising a new professional standards body for the banking industry.

Among the other senior businesspeople who have occupied the BitC chairmanship are Sir Stuart Rose, former chairman of Marks & Spencer, and Sir Mike Rake, who chairs BT Group and is the CBI's current president.

Barclays and BitC both declined to comment on Wednesday.

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JPMorgan Agrees $13bn Mortgage Complaint Deal

JPMorgan Chase has agreed to pay $13bn (£8bn) to settle complaints over mortgages and mortgage securities, US officials have said.

The deal includes $9bn in payments to authorities and $4bn which will go to people affected by the bank's actions, New York State Attorney General Eric Schneiderman said.

The US government called the settlement the largest in the country's history.

It resolves a series of complaints against the bank for mis-stating the quality of mortgages and mortgage securities it sold before the financial crisis, and complaints it mishandled the mortgages of millions of homeowners.

Mr Schneiderman said: "This historic deal, which will bring long-overdue relief to homeowners around the country and across New York, is exactly what our working group was created to do.

"We refused to allow systemic frauds that harmed so many New York homeowners and investors to simply be forgotten.

"And as a result we've won a major victory today in the fight to hold those who caused the financial crisis accountable."

Chief executive of the bank Jamie Dimon

JPMorgan has said most of its mortgage-backed securities came from Bear Stearns Cos and Washington Mutual Inc, troubled companies that JPMorgan acquired in 2008.

As part of $6bn it will give to investors, $4bn will resolve government claims that JPMorgan misled mortgage finance giants Fannie Mae and Freddie Mac about risky mortgage securities the bank sold them before the housing market crashed.

That part of the deal was announced on October 25.

Fannie and Freddie were bailed out by the government during the crisis and are under federal control.

The $13bn settlement amount is only about half of JPMorgan's record 2012 net income of $21.3bn, or $5.20 a share, which made it one of the most profitable US banks last year.

Mounting legal costs from government proceedings pushed JPMorgan to a rare loss in this year's third quarter, the first under chief executive Jamie Dimon's leadership.

The bank reported on October 11 that it set aside $9.2bn in the July to September quarter to cover the string of legal cases against it. 

It faces at least nine other government probes, covering everything from its hiring practices in China to whether it manipulated the Libor benchmark interest rate.

JPMorgan said it has placed $23bn in reserve to cover potential legal costs.

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Poor Language Skills 'Hampering UK Economy'

By James Matthews, Sky News Correspondent

Britain's inability to speak "important" foreign languages could jeopardise future prosperity and global standing, according to a new report.

According to the British Council, the UK has an alarming shortage of people who are able to speak what it regards as the 10 most important languages.

They are Spanish, Arabic, French, Mandarin Chinese, German, Portuguese, Italian, Russian, Turkish and Japanese.

The Languages For The Future report identifies these languages as vital to the UK  over the next 20 years on economic, geopolitical, cultural and educational grounds.

John Worne, director of strategy at the British Council, told Sky News: "The problem isn't that we're teaching the wrong languages, because the most widely taught languages like French, Spanish and German all feature in our top 10.

"But the UK needs more people to take up the opportunity to learn, and crucially, get using these languages - along with new ones like Arabic, Chinese and Japanese.

"If we don't act to tackle this shortfall, we'll lose out both economically and culturally.

"Schools have their job to do, but it's also a problem of complacency, confidence and culture - which policymakers, businesses, parents and everyone else in the UK can help to fix.

"Languages aren't just an academic issue - they are a practical route to opportunity for the UK in business, culture and all our lives."

A YouGov poll commissioned by the British Council showed that three quarters of British people cannot speak the "important" languages well enough to hold a conversation.

French is spoken by 15% of people, German by 6%, Spanish by 4% and Italian is spoken by 2%.

Arabic, Mandarin, Russian or Japanese are each only spoken by 1%, while less than 1% of people in the UK speak Portuguese or Turkish.

The report calls for children to be taught a broader range of languages and for the subjects to be given the same priority as Maths and Sciences.

It also states that businesses should invest in language training for staff and that everyone should learn at least the basics of those languages deemed so important to the country's future.

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Supermarket Offers Cited By Consumer Group

By Poppy Trowbridge, Business And Economics Correspondent

Some of Britain's biggest supermarkets have been accused of running so-called special offers that often see customers "paying over the odds".

Consumer group Which? analysed more than 70,000 grocery prices and found examples of what they call misleading multibuys and dodgy discounts.

Richard Lloyd, executive director, told Sky News: "People are at best paying what they would have done, or often we have found paying over the odds, paying extra when they think they are getting a discount. That can't be fair.

"These special offers simply aren't special at all. That is why we need to see the rules change to force the supermarkets to play fair."

Rising food prices are one of the top worries for consumers as inflation has outpaced average wage growth for about five years.

Which? is wants the Government to make the rules for special offers simpler, clearer and stricter.

The consumer group says if these changes are not made swiftly, it will consider using its formal legal powers to ensure the practice is tackled.

In the meantime shoppers should look carefully at the special offers, Richard Lloyd added.

"Make sure that you are not getting misled into buying something that you think is a good deal when that is just not the case."

The British Retail Consortium, which represents the supermarket industry, said in a statement: "Across the tens of thousands of promotions available every day, regrettably, occasional errors do slip through.

"Retailers work very quickly to rectify these mistakes whenever they are found."

Both Asda and Sainsbury also issued statements apologising for what they called pricing errors.

Sainsbury's said: "We are absolutely committed to fair and transparent promotions and carry out regular audits and thorough training on this."

Asda's statement said: "We take pricing seriously, and we've recently employed a new team within the business that looks at all aspects of our pricing process and pricing practices in store and online.

"Sometimes mistakes can happen, but we would never deliberately mislead our customers ... "

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Npower Tops List Of Energy Customer Complaints

Npower has topped a customer complaints list leading an energy watchdog to describe its performance as "unacceptable".

Latest research compiled by Consumer Futures, which represents consumers in regulated markets, said npower had 202.5 complaints per 100,000.

This was compared with 38.3 per 100,000 for SSE, the lowest of the main energy providers.

Audrey Gallacher, director of energy at Consumer Focus, said: "The company is implementing system changes that inevitably caused disruption to customers, however its complaints performance is unacceptable and the company must take further steps to tackle this.

"Energy companies have repeatedly said they want to rebuild consumer trust.

"Along with price, good service is important to customers. People want to know the relative performance on complaint handling to help them make informed choices when deciding whether to switch.

"Customer satisfaction with how complaints are handled is low across a whole range of industries and the same problems are seen over and over again."

The figures were taken from the period April to June 2013 and do not include any complaints made in the wake of recent price hike announcements.

Public confidence in energy suppliers has been dealt a major blow since five of the Big Six energy firms announced that charges would rise by an average of around 9%.

Citizens Advice chief executive Gillian Guy said: "Price hikes of 36% over the last three years, coupled with poor customer service, has compounded the lack of trust in energy firms as households struggle to afford to have a warm home."

A spokesman for Energy UK, the trade association for the energy industry, said: "The vast majority of energy customers are happy with the service they get with only around one in every 1,400 customers likely to need to contact their supplier about a problem.

"Most complaints only need a phone call to sort out - around four out of five queries are resolved by the end of the next working day - but, if the problem cannot be resolved, the energy ombudsman is there to ensure problems get fixed.

"Energy companies take their relationship with customers extremely seriously and work hard to improve customer service."

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Banks Urged To End Expensive Phone Charges

High street banks, credit card companies and insurers are being urged to cut high-rate customer lines after a study found almost three quarters are costly 084 or 087 numbers.

Which? found that 177 out of 242 customer or complaints lines for financial services such as current accounts, loans and credit cards - or 73% - were premium-rate numbers.

The companies included leading high street banks and building societies such as HSBC, Lloyds Bank, Nationwide and TSB Bank, credit card providers American Express, Capital One and Tesco Bank and insurers Aviva, Churchill and Direct Line.

The watchdog found that four in 10 people (39%) prefer to call financial firms with an inquiry and nearly a third (31%) would rather complain by phone.

However, nearly all of the credit card providers studied (95%) use 084 or 087 numbers for complaints or customer service help lines, and 89% of current account providers use them for complaints or customer service help lines.

Existing customers are also being charged more than new ones, with free 0800 numbers used for 52% of sales or new customer lines compared with just 26% for existing customers and 21% for complaints.

Populus surveyed 2,070 adults online between August 30 and September 1.

Barclays and Barclaycard have announced they will offer a freephone or basic rate number for all customer help lines, while NatWest and RBS are also dropping costly calls.

Which? has called on other providers to follow their example.

The EU Consumer Rights Directive ban on the use of expensive numbers for customer help lines comes into force next year, but financial firms are excluded.

Which? is calling on the Financial Conduct Authority (FCA) to clarify existing rules to stop financial services companies from using high rate numbers on complaints lines, and change the rules so they also cover customer help lines.

The watchdog's executive director Richard Lloyd said: "Millions of us prefer to deal with our bank on the phone, yet we are expected to cough up for a costly call when we do.

"It's not right that financial companies are being let off the hook."

Ashok Vaswani, chief executive of Barclays Retail and Business Banking, said: "For many customers the telephone is the most convenient way in which to contact us, so it's right that we have taken this step to ensure that no customer need dial a premium or high rate number simply to speak to us."

A British Bankers' Association spokesman said: "We expect to see many banks changing to use local numbers for complaints in the near future and it is good to see that some banks have already committed to doing so."

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Thomas Cook Offloads Foreign Exchange Unit

By Mark Kleinman, City Editor

The chief executive of Thomas Cook will on Monday continue her reshaping of the revitalised tour operator by unveiling the sale of its foreign currency division.

Sky News has learnt that Harriet Green struck a deal on Friday to sell Thomas Cook Corporate Foreign Exchange (CFX) to Moneycorp, a rival operator owned by funds affiliated to the state-backed Royal Bank of Scotland (RBS).

A statement is expected to be made to the London Stock Exchange on Monday to confirm the transaction.

The deal is understood to value the unit at only about £5m but is expected to be viewed by the City as a further step towards re-modeling Thomas Cook under the stewardship of Ms Green, who took over as chief executive last year.

Ms Green has presided over a sharp rise in the company's share price after tapping investors for more than £400m in new equity earlier this year and announcing a plan to refocus Thomas Cook on fewer core brands and higher-margin activities.

The fate of one of the best-known names in the UK holiday sector had been hanging in the balance when Ms Green contacted Thomas Cook's chairman, Frank Meysmann, to urge him to consider for the vacant chief executive's post.

Since taking over, she has sold a string of non-core assets, including its business in Egypt and Lebanon last month for just under £10m.

At a trading update in September, the company said it was hopeful of a positive end to its financial year, with full-year results to be published later this month.

"While we expect geopolitical events may impact destination choice, we are, following the improved integration of our business lines, offering customers a wider range of new routes and attractive vacations which we believe will provide a sound basis for continued performance into the new financial year," Thomas Cook said.

"This combined with the continued delivery of our new product range and our cost-out and profit improvement plan, give us confidence of achieving our targets and successfully implementing our strategy for profitable growth."

Thomas Cook declined to comment while Moneycorp could not be reached on Sunday.

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Crunch Time As Biscuit-Maker Seals £350m Sale

By Mark Kleinman, City Editor

The maker of Jammie Dodgers and Wagon Wheels is finalising an agreement to sell itself this weekend to a Canadian pension fund for around £350m.

Sky News understands that Burton's Biscuits is expected to announce on Saturday that it is being taken over by a major financial investor, with an arm of the Ontario Teachers' Pension Plan in pole position to land the deal.

The sale has not yet been completed, and sources close to the talks said it remained possible that a rival bidder could yet make an improved last-minute offer.

Three other firms - Clayton Dubilier & Rice, Apax Partners and Warburg Pincus, which is an investor in Premier Foods, the UK's biggest branded foods producer - also tabled final offers for Burton's on Thursday.

Ontario Teachers has become a voracious acquirer of British companies in recent years, taking over Camelot, the National Lottery operator, and Busy Bees, the nursery chain.

If it completes the Burton's deal, it will look to expand the business overseas and consider further acquisitions.

A sale of Burton's will entail a change of ownership for another portfolio of prominent UK food brands following the sale several months ago of the snacks division of United Biscuits (UB), which included Hula Hoops and KP Skips among its products.

Burton's is Britain's second-largest biscuits manufacturer by sales, behind UB, which is also owned by two private equity groups, Blackstone and PAI Partners.

As well as Wagon Wheels, Burton's produces Cadbury Biscuits, Lyon's and Maryland cookies.

Based in St Albans, Hertfordshire, Burton's traces its roots back to the mid-1800s when it was founded by George Burton.

It employs more than 2,200 people around the UK in three manufacturing facilities in Llantarnam, Edinburgh and Blackpool, a chocolate refinery in Moreton and a central distribution hub in Liverpool.

Burton's is one of a sizeable number of mid-sized British companies which has been through several phases of private equity ownership.

In 2009, Apollo and CIBC, the Canadian bank, seized control of the company after Duke Street Capital, its previous owner, was forced to surrender control to the biscuit-maker's lenders.

Another private equity group, HM Capital, had bought the company in 2000 from Associated British Foods, owner of the Primark retail chain.

The auction of Burton's will pre-empt that of UB, which is expected to be put up for sale in the next couple of years.

Ontario Teachers is now likely to draw up plans to bid for part or all of UB.

UB, which now consists solely of a biscuits business, owns the McVitie's brand, which includes products such as Jaffa Cakes and Penguin.

Spokesmen for Burton's and Ontario Teachers declined to comment.

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Clegg Calls For Fifth Income Tax Threshold Rise

Deputy Prime Minister Nick Clegg is calling on his coalition partners to raise the income tax threshold for a fifth time so the Government can "reward" voters for years of austerity.

The Liberal Democrat leader wants Chancellor George Osborne to take advantage of the improving economy and raise the threshold at which people start paying income tax to at least £10,500 by the time of the general election in May 2015, aides have said.

The cut would be worth £100 a year to 24 million ordinary rate taxpayers while taking around half a million people out of income tax altogether.

The Lib Dems have already seen the coalition achieve their manifesto commitment to raise the personal allowance to £10,000 - which was finally reached in the last Budget in March.

Mr Clegg is now keen to be able to claim the political credit for a further advance in what he regards as his "signature tune" policy.

He will write to party activists next week declaring his intention to fight for a "workers' bonus" to reward voters for the sacrifices they have made during the years of austerity.

The move, expected to cost the Treasury £1bn, is likely to infuriate the Tories, who believe they should take just as much credit.

Lib Dems however pointed out that in the televised debates before the last general election, Mr Cameron argued that raising the personal allowance to £10,000 would not be possible.

A source close to Mr Clegg said: "Our polling shows that raising the tax allowance is both strongly associated with the Lib Dems and popular. We know that we are on to a vote winner here.

"The Tories once said this policy wasn't affordable but now they like to claim credit for it. Will they now join the Lib Dems in going further and faster?"

For Labour, shadow treasury chief secretary Chris Leslie dismissed the call, saying the coalition's changes had left working families worse off overall.

"Working people facing a cost-of-living crisis need help right now, but Nick Clegg's Government has instead prioritised a huge tax cut for those earning over £150,000," he said.

"When it comes to people on middle and low incomes, the Government is giving with one hand but taking away much more with the other.

"The Lib Dems need to explain how their proposal would be paid for and why they refuse to back Labour's plan to freeze energy bills and reform the market."

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