Wellcome Trust Warns On 'Populist' Mansion Tax

By Mark Kleinman, City Editor

One of Britain's most successful investors has issued a thinly veiled swipe at Labour's proposed mansion tax and warned that "populist politics" risk derailing Britain's economic revival.

Speaking to Sky News, Danny Truell, chief investment officer of the Wellcome Trust, the medical research charity, said a lack of clarity about politicians' intentions toward key industries was potentially damaging.

Mr Truell did not explicitly identify Labour's proposals for a tax on expensive homes, but people close to the Wellcome Trust confirmed its anxiety that the party had not said whether charities would be exempted from a new levy.

"In the UK, populist policies risk derailing progress in restoring balance in the economy," Mr Truell said.

"We own £1.2bn of residential property in the UK; there is no clarity on how charities will be treated in respect of property taxes, which can only damage confidence in the short term."

His warning will reinforce impressions of a gulf between Mr Miliband's party and the interests of business leaders and the City.

Labour has pledged to address that perception despite pledges of a crackdown on the banking, energy and property industries.

Mr Truell oversees a vast investment portfolio at the Wellcome Trust, which includes shareholdings in companies such as Apple, Marks & Spencer, Twitter and Vodafone.

The research foundation's residential property assets include more than 1700 units in South Kensington in Central London, which it said today may generate "more muted" returns in the near term because of "political concerns and overly strong recent price appreciation".

Mr Truell was speaking to coincide with the disclosure of another stellar annual performance by the Wellcome Trust's investment division, which generated a total return of 15.4% in the year to September 30.

That equated to a £2.5bn return, which will contribute to a £4bn investment in charitable activities during the next five years.

Mr Truell added that the current slump in oil prices would be conducive to growth in Europe and Asia, and said he was surprised by the market's reaction.

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Mobile Networks Agree Deal To Boost UK Coverage

A £5bn project to guarantee mobile phone voice and text coverage to 90% of the UK geographical area by 2017 will go ahead.

The deal means the four mobile networks - EE, O2, Three and Vodafone - have all agreed to tackle poor coverage in so-called partial "not spots".

These are areas that may have coverage from some but not all of the four networks.

This will halve the number of areas where there is patchy mobile coverage.

In addition, the operators will increase full coverage from 69% to 85% - allowing phone users to download data.

Culture Secretary Sajid Javid said: "Too many parts of the UK regularly suffer from poor mobile coverage leaving them unable to make calls or send texts.

"Government and businesses have been clear about the importance of mobile connectivity, and improved coverage, so this legally binding agreement will give the UK the world-class mobile phone coverage it needs and deserves."

A Vodafone UK spokesman said: "We support the Government's objective of delivering better coverage to rural areas including partial not-spots.

"It is a great result for UK consumers and businesses and it will make the UK a leader across Europe in terms of the reach of mobile coverage."

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Rouble 'Critical' After Hitting All-Time Low

The deputy chairman of Russia's central bank has conceded the rouble is in deep trouble but says it will take action to remedy the problem soon.

"The situation is critical. We could not imagine this in our worst nightmare a year ago," Sergei Shvetsov was quoted by the Russian news agency Interfax as saying.

He said the shock overnight hike in its key interest rate from 10.5% to 17% "will be followed by other measures to stabilise the situation".

Despite the increase the rouble continued to fall sharply throughout the day, hitting the 80 to the dollar mark and decreasing in value by 20% in a matter of hours.

"Trust me, the choice the central bank's board of directors made was one between bad and much, much worse," Mr Shvetsov added.

Video: Russian Economy In A Crisis

"In the coming days, the situation will be comparable with the toughest period of 2008. I think that the experience we accumulated over the past crises will help us find the right solution and survive this situation. I very much hope so."

The Bank of Russia's shock decision to up its core rate was a response to the rouble's value sinking by almost 50% over the course of the year - hit by Western sanctions imposed over the Ukraine conflict and plummeting oil prices.

It was also intended to settle nerves back home as fears grow that the extent of Russia's economic problems - largely unreported by state media - could spark panic among consumers as price rises become unmanageable.

By raising interest rates, the bank also hoped investors would find it more financially appealing to keep their money in Russia, whose economy relies heavily on oil revenues.

Central bank chairwoman Elvira Nabiullina said earlier the move should stem inflation, although she admitted it will take the rouble "some time" to find its correct value.

Russian stocks fell slightly on Tuesday morning with the MICEX benchmark 1.5% lower, reflecting the additional pressure on businesses.

Video: What's Causing Falling Oil Prices?

Falls of more than 50% in world oil prices are tipped to plunge Russia into recession next year.

On Tuesday the value of Brent crude slipped to new five-year low, falling below $60-per-barrel for the first time since July 2009.

The Bank Of Russia had raised the rate from 5.5% earlier this year to 10.5% just last Thursday.

It said then that it expected inflation to run at 10% this year and climb higher in the first quarter of 2015.

But the rouble has plunged further against the dollar this week, to 65 on Monday and then 80 on Tuesday, after dropping from 55 roubles last week.

Alexei Kudrin, Russia's finance minister from 2000-2011, said on Twitter: "The fall of the rouble is not just a reaction to low oil prices and the sanctions but also (a show of) distrust to economic policies of the government."

Video: Putin Points Finger At The West

He called on Russian president Vladimir Putin to take appropriate measures, although he did not specify what these should be.

Moscow's involvement in Ukraine has led to the US and the European Union imposing a range of sanctions which have added to Russia's economic woes.

These have included blocking Western financial markets to key Russian companies and limiting imports of some technologies.

Further sanctions are likely after the US Congress passed legislation on Monday that could see Washington providing weapons and other assistance to Ukraine. 

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Festive Cheer On Forecourt As Petrol Prices Fall

Petrol prices could soon fall below £1 per litre - the lowest level since the end of May 2009.

The RAC said the recent fall in the price of  oil - now below the $60-a-barrel - would keep dropping.

"What's currently happening at the pumps with falling fuel prices is something many motorists will not remember seeing before," said RAC fuel spokesman Simon Williams said.

"Talk of prices going up like a rocket and falling like a feather could not be further from the truth as retailers have been quick to pass on savings at the forecourt since we forecast on December 6 that prices were due to come down by 7p a litre for petrol and 6p for diesel."

The RAC added that it was hopeful drivers would benefit from the fall in prices in the first few months of the new year.

Video: What's Causing Falling Oil Prices?

The group's monitoring of fuel prices shows the average price of a litre of petrol is 116.9p - nearly 14p a litre cheaper than at the start of the year.

Diesel is nearly 16p cheaper - 122.33p a litre now compared to 138.24p in January.

The average supermarket price of fuel is 114.26p a litre for petrol and 120.18p for diesel.

Video: Petrol Prices

Mr Williams added: "Current forecasts are for average petrol prices to fall to below 110p a litre in the next fortnight and diesel to drop to under 116p.

"At these average prices across the country the cheapest retailers will almost certainly be selling petrol for around 105p a litre, or even lower."

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FCA Life Ban For Fare-Dodging Jonathan Burrows

The financial watchdog has banned a top fund manager from any role in the City after it was discovered he paid £43,000 to avoid prosecution for dodging train fares.

Jonathan Paul Burrows, who was a London-based managing director at US investment firm BlackRock, admitted his actions sullied the reputation of the City.

The Financial Conduct Authority (FCA) banned Mr Burrows for "not being a fit and proper" person.

It launched an investigation after a furore when it emerged an unnamed City worker paid the money to Southeastern Railway to avoid prosecution for repeated fare dodging.

In November 2013, a ticket inspector at Cannon Street station noticed an irregularity with the payment history of Mr Burrows' Oystercard.

Under caution he admitted regularly not paying for tickets from his home in Stonegate, East Sussex, where there were no ticket barriers.

It was claimed he only paid £7.20 for a Oystercard single ticket in London instead of the standard single fare of £21.50 from Stonegate.

Mr Burrows worked as a top fund manager for US firm BlackRock

It emerged he had stopped buying annual season tickets in 2008, despite continuing to work in the City for another five years.

"Burrows held a senior position within the financial services industry. His conduct fell short of the standards we expect," FCA director of enforcement Tracey McDermott said.

"Approved persons must act with honesty and integrity at all times and, where they do not, we will take action."

According to the Daily Mail, father-of-one Mr Burrows owned two mortgage-free multi-million pound mansions in East Sussex and drove a Porsche sports car.

A heated public debate developed over how a wealthy worker was able to pay a five-digit sum to avoid prosecution.

Following his banning, his former employer said: "Jonathan Burrows left BlackRock earlier this year. What he admitted to the FCA is totally contrary to our values and principles."

After being banned on 15 December, Mr Burrows released his own statement through a PR firm and said: "I have always recognised that what I did was foolish.

"I have apologised to all concerned and reiterate that apology publicly today."

"The settlement I made with Southeastern in March 2014 was for an amount significantly in excess of the value of the fares not paid by me on the small number of occasions that I failed to pay.

"Indeed the size of the settlement could be said to have led to a distorted perception of the scale of my wrongdoing."

Approached by Sky News, Southeastern Railway defended its decision not to prosecute Mr Burrows at the time.

In a statement it said: "We reached a £43,000 settlement with Mr Burrows regarding allegations of fare-dodging earlier this year.

"We believe that the actions that we took were in the best interests of our passengers (and taxpayers) by giving us the best opportunity to recover a substantial sum in respect of the allegation."

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BT Set To Buy EE Mobile Phone Network

BT has announced that it wants to buy phone firm EE as it makes a play to re-enter the mobile market.

The company has been in negotiations with EE and rival O2, but BT announced a decision on Monday to go with EE.

The deal is worth £12.5bn. 

In a statement BT said it had "entered into an exclusivity agreement with Deutsche Telekom and Orange in relation to BT's possible acquisition of all of their UK mobile business, EE".

"The period of exclusivity will last several weeks allowing BT to complete its due diligence and for negotiations on a definitive agreement to be concluded."

EE is the UK's largest mobile group which has 27 million customers.

It was formed in 2010 in a joint venture between French operator Orange and Germany's Deutsche Telekom.

BT is Britain's biggest broadband and landline provider and has been looking to expand into so-called "quad play", offering landline, broadband, pay TV and mobile services.

"They might spend more money buying EE (than O2) but EE offers more opportunities," James Allison, a senior analyst in telecommunications at HIS, told Sky's Ian King.

"It is a a bigger operator, but more importantly it has better radio spectrum so they'll be able to offer more mobile service to more customers."

The planned purchase comes more than a decade after BT was forced to sell its mobile operations to reduce a multi-billion pound debt pile.

The deal is now likely to face scrutiny by the regulator Ofcom.

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Glitch Causes Items To Be Sold On Amazon For 1p

Businesses are furious after a piece of software used by retailers on Amazon went wrong, causing hundreds of items to be sold for 1p.

Some firms which use RepricerExpress say they risk going bankrupt because the problem has resulted in them losing so much money.

The software is designed to keep businesses competitive by automatically repricing items of stock so they are cheaper than others in the digital market.

The firm states on its website: "We are here to increase your sales on Amazon and Rakuten's Play.com and make your efforts as profitable as possible."

For an hour on Friday, between 7pm and 8pm, a problem with RepricerExpress led to hundreds of items being sold on Amazon at a fraction of their normal price. At the same time, some customers said, Amazon charged its usual fees for every item sold.

One of the sellers, Judith Blackford of Kiddymania, told Sky News she could be forced out of business as result of the error.

She said: "I started using Repricer Express - a repricing tool as did a lot of other businesses a few months ago.

"Last night through an error in their programme they listed my stock on Amazon at 1p per item including delivery.

"I have lost about £20,000 overnight. Having asked Amazon to cancel the orders they are still sending them out and charging me horrendous fees.

"Surely someone has to be accountable for this. I will be bankrupt at this rate by the end of January."

Another online trader Belle thinks her company, which sells toys and games, will lose around £30,000 and she will probably be put out of business.

Belle thinks her firm, which sells toys and games, will lose around £30,000

She told Sky News: "It's disgusting really because this third party software, that is their business, this should not have happened, this is 2014.

"We have to pay for this software every month, we've been using it for 18 months no problem.

"At the busiest time - this was predicted to be our busiest weekend of Christmas - turnover is zero."

As a result of the error, several buyers commented on Twitter at how pleased they were to have bought the items for so little.

One person wrote: "Amazon are having a glitch on their site and loads of stuff is selling for 1p. I just bought an incense holder, don't even need it."

An email to some customers from the CEO of RepricerExpress, Brendan Doherty, said the problems with the software caused incorrect pricing to be sent to Amazon.

A statement on the company's website from Mr Doherty said: "I am truly sorry for the distress this has caused our customers.

"We have received communication that Amazon will not penalise sellers for this error. We are continuing to work to identify how this problem occurred and to put measures in place to ensure that it does not happen again.

"Everyone here is devastated and disappointed that you have experienced this problem.

"We understand that you are angry and upset and we will endeavour to work to make good on this issue."

A spokesman for Amazon said: "We are aware that a number of Marketplace sellers listed incorrect prices for a short period of time as a result of the third party software they use to price their items on Amazon.co.uk.

"We responded quickly and were able to cancel the vast majority of orders placed on these affected items immediately and no costs or fees will be incurred by sellers for these cancelled orders.

"We are now reviewing the small number of orders that were processed and will be reaching out to any affected sellers directly."

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David Cameron To Launch Home Discount Scheme

A scheme offering 100,000 first-time buyers new homes with a discount of 20% as part of a drive to help people onto the property ladder will be launched by David Cameron later.

Those under 40 who have never owned their own home can register their interest in buying via the Starter Home Initiative from the start of 2015 - six months earlier than planned.

Because of a change to the planning system set to come into force, under-used or unviable brownfield land will be freed from certain costs in return for a below market value sale price on properties constructed on the site.

Developers and councils are being urged to ensure the changes unlock a variety of sites across the country.

Mr Cameron said: "Hard-working young people want to plan for the future and enjoy the security of being able to own their own home. I want to help them do just that.

Video: Stamp Duty: Good News For Buyers

"Under this scheme, first-time buyers will be offered the chance of a 20% discount, unlocking home ownership for a generation.

"This is all part of our long-term economic plan to secure a better future for Britain, making sure we are backing those who work hard and get on in life."

Communities Secretary Eric Pickles said: "The 2008 housing crash blocked millions of hard-working, creditworthy people from becoming home-owners, at a time in their lives when they should have been able to expect to get on the property ladder.

"We're turning that around with Help to Buy, but today's new Starter Homes scheme will offer a further boost, giving young people (under 40) the opportunity to buy low-cost, high-quality new homes for significantly less than they would normally expect."

Stewart Baseley, executive chairman of the Home Builders Federation, said the initiative is "another positive step" in tackling the shortage of housing.

At the moment, developers can face an average bill of £15,000 per home in Section 106 affordable housing contributions and tariffs.

But under the scheme, developers offering Starter Homes would not have to pay certain charges.

To ensure the savings are passed onto buyers, the homes will not be able to be re-sold at market value for a fixed period.

Video: July: Young Unable To Buy Homes

More than 30 house builders have already backed the plans, and say they would consider bringing forward land to be developed from next year.

A design panel will be set up to ensure the homes are not only cheap, but also high-quality.

Renowned architect Sir Terry Farrell, who is on the panel, said it could make a real difference.

He added it would build on the recommendations of the Farrell Review, which raised the need for more proactive planning.

Sir Terry said: "Only by planning and designing our villages, towns and cities together with local communities can we create the kind of built environment we all aspire to and should be demanding."

Shadow housing minister Emma Reynolds said no-one would believe the PM's promises on the issue, and added: "The only way to restore the dream of home ownership is to build more homes and Labour has a plan to get at least 200,000 homes built a year by 2020.

"We are in favour of building starter homes but it is not clear how the Government is going to deliver these homes 20% cheaper than market price."

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FTSE 100 Suffers Worst Week In Three Years

More than £110bn has been wiped off the value of Britain's leading companies as the FTSE 100 suffered its worst week in three years.

The index closed down 161.07 points on Friday, a loss of 2.49%, making an overall drop of 6.6% since Monday - the largest weekly fall since August 2011.

The slide reflected a new five-year low for the price of Brent crude and worries about the global outlook, particularly after more disappointing economic figures from China.

The FTSE 100 is dominated by business with an interest in the energy and commodity sectors, meaning it has taken a bigger hit from weak oil prices.

Oil stocks have taken a hit as weakening demand and the prospect of oversupply sparked a fall in the price of oil by 10% this week to around $62 (£39.50) a barrel.

Video: What's Causing Falling Oil Prices?

The International Energy Agency on Friday cut its forecast for global demand for the fourth time in five months.

BP shares have fallen by 9% since the start of the week and are a fifth cheaper in the year to date.

In New York, the Dow Jones Industrial Average ended the week down 677.96 points or 3.8%, while markets in France and Germany were down by nearly 3%.

Video: 13 Nov: Why Is The Oil Price Down?

Traders were reacting negatively to the plunge in the oil price despite the likelihood that it could represent a $4bn (£2.5bn) stimulus to the world economy.

Laith Khalaf, senior analyst at Hargreaves Lansdown stockbrokers, said markets are mulling the question of whether a lower oil price is a "symptom or a cure" for weak global demand.

He said: "The answer is it is probably both, but the restorative qualities of a lower oil price are going to take some time to feed through, and in the meantime markets are focusing on the negatives."

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Growing Business: Demand Soars For UK Xmas Trees

By Nick Ravenscroft, Sky News Reporter

Families in Britain are increasingly buying Christmas trees that were grown in the UK rather than ones that have been imported, according to UK suppliers.

The British Christmas Tree Growers' Association (BCTGA) estimates that in the last six years the total number being grown here in the UK has risen by as much as 20%.

This is reflected in the proportion of British and imported trees being bought at shops and markets across the country.

Six years ago it was evenly split with approximately half being shipped in from Europe, according to the BCTGA.

The association's members now say British-grown plants account for some 70% of the total number of trees sold in the UK.

Harry Brightwell, secretary of the BCTGA, told Sky News: "People are much more conscious of environmental issues and the fact of buying a British grown tree usually means the transport is less."

At Yattendon Estates, a Christmas tree farm in West Berkshire, a cold and frosty morning was no deterrent to customers looking to buy a tree as the calendar counts down the days to Christmas.

Manager Alastair Jeffrey said: "Ten years ago our European competitors stole a march on us… now UK industry has really concentrated on making sure we're right up to spec… quality is the name of the game."

The majority of trees sold in Britain are Nordmann Firs which, for a six foot tree, will cost upwards of £45.

Among the Nordmann Firs grown in Britain are those supplied to Downing Street, which this year took trees from Herefordshire and the Gower, according to BCTGA.

With up to eight million trees already being sold by British producers, the move away from European imports spells continued growth for this part of the rural economy.

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