Economy: Firms Demand Infrastructure Urgency

The CBI has launched a stinging attack on the Government, accusing the coalition of dragging its heels on delivering promised infrastructure spending to help lift the economy.

The business lobby group said it feared there was a "lack of political will" to get schemes off the ground with "too few signs of action" over the past two years on issues such as tackling potholes to the future of the country's airports.

It urged politicians to commit to immediate projects that were crucial to boosting exports and unlocking business investment.

A survey of 526 businesses by the CBI and accountancy firm KPMG found 65% of companies believed that Government policies would have no tangible impact, or could have even a negative effect.

Only a third of firms questioned - 35% - said they would make a difference on the ground, the study suggested.

John Cridland is the CBI's director-general

John Cridland, director-general of the CBI, said: "Government has talked the talk on infrastructure for the last two years with too few signs of action.

"The faltering speed of delivery on infrastructure creates a worrying sense that politicians lack the political will to tackle some of the major issues head-on."

He added the coalition must commit to detailed delivery on a number of projects in the next 18 months, while starting the debate on longer-term issues such as road reforms and Britain's airport capacity.

Businesses are increasingly worried about the UK's creaking road network, with nearly half of all firms polled unhappy with domestic transport, up from 28% in 2011.

Energy costs are another major headache, with 95% of firms concerned about gas and electricity prices and 90% worried about security of supply.

Firms are also keen for ongoing improvements in Britain's digital infrastructure, with the survey showing more than 80% of firms consider faster and more reliable fixed-line and mobile broadband as critical to their success.

A Government spokesman responded: "At the Spending Round we set out £100bn of what the report highlights as 'bold ambitions and flagship projects which if delivered will provide a significant boost to UK competitiveness'.

"The Government's focus is now on implementing these plans."

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Vince Cable Calls For Minimum Wage Increase

Business Secretary Vince Cable is pressing for an increase in the minimum wage amid concerns that many lower-paid workers are still not benefiting from the burgeoning economic recovery.

Speaking before the Liberal Democrat party conference in Glasgow today, Mr Cable said he would ask the Low Pay Commission to restore its value, which he estimates has fallen in real terms by 10% to 12% since the crash of 2008.

The minimum wage is currently set at £6.19 an hour but is due to rise to £6.31 on October 1.

"We cannot go on forever in a low pay and low productivity world in which all we can say to workers is, 'You have got to take a wage cut to keep your job'," he told told The Guardian.

Mr Cable said action to boost low pay should be combined with measures to tackle the abuses of zero-hours contracts.

"We have got to enter into a different kind of workplace. For a very long time, five or six years, wages have been suppressed in low wage sectors. I am sending a signal that we are entering a very different environment," he said.

In a further sign that cost of living issues are set to dominate the annual party conference season, his Lib Dem colleague - Treasury Chief Secretary Danny Alexander - urged employers to ensure that staff benefited in their pay packets as profits picked up again.

"It's not for me as a Treasury minister to start telling employers what their pay policies should be, that's a matter for firms," he told The Daily Telegraph.

"But of course, as growth returns to our economy and we see businesses being successful, the workforce will want to and should share in that success."

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Leigh-Pemberton To Lead Taxpayer Banks Body

By Mark Kleinman, City Editor

The son of a former governor of the Bank of England will on Monday be appointed as the new chief executive of the body which manages the taxpayer's stakes in Britain's bailed-out banks.

Sky News can exclusively reveal that James Leigh-Pemberton, a senior executive at Credit Suisse in the UK, will be appointed as the head of UK Financial Investments (UKFI).

The appointment will come at a crucial time as George Osborne, the Chancellor, prepares to offload the first chunk of the Government's 39% stake in Lloyds Banking Group in the coming days.

Mr Leigh-Pemberton, the son of Robin Leigh-Pemberton, who headed the Bank of England for a decade from 1983, will replace another career investment banker, Jim O'Neil, who is returning to the private sector.

As the boss of UKFI, Mr Leigh-Pemberton will also oversee the fate of the taxpayer's much larger stake in Royal Bank of Scotland (RBS). Mr Osborne is undertaking a review of whether RBS should be broken up in an attempt to stimulate its lending to British companies.

Mr Leigh-Pemberton will become UKFI's fourth chief executive since it was established in 2009, following John Kingman, now a senior Treasury official; Robin Budenberg, UKFI's current chairman; and Mr O'Neil, who is leaving to rejoin Bank of America Merrill Lynch.

UKFI and Mr Leigh-Pemberton both refused to comment.

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Bank Seven-Day Switch Scheme May Fall Flat

By Poppy Trowbridge, Business and Economics Correspondent

The Government wants banks to work harder to win your business and is backing an initiative to allow customers to swap current accounts within seven working days.

But exclusive research conducted for Sky News reveals that the public is largely unaware of the plan and among those in the know the Government's initiative is unwanted.

The so-called 7-Day-Switch scheme comes into effect today.

Customers wanting to swap banks can provide their preferred lender with personal details, the bank then makes all the arrangements to bring across salary deposits and bill payments - with a hassle free guarantee.

In a move to revitalise competition in high-street banking, Chancellor George Osborne confirmed the plans back in February after the regulator highlighted how little choice existed in the current account market.

But in a poll of more than 2000 bank customers, 44% of those surveyed said they had never heard of the service.

Of those who had, 53% would not even consider switching when the guarantee is in place.

That is perhaps because 82% say they are happy enough with their current account, another indication that the initiative isn't needed by many.

The four biggest banks in Britain - Lloyds Banking Group, Barclays, Royal Bank of Scotland and HSBC - control three quarters of the current account market, according to figures from the Office of Fair Trading.

That means switching accounts may not result in drastically better deals at one bank or another.

Ali Steed, a personal finance expert at mymoneydiva.com, says many of the rates and products don't differ much from bank to bank.

"At the moment, because interest rates are actually very low, the amount of money you can actually get on your savings - from anywhere on the high street - is not really going to put you in a position where you can beat inflation."

If the Government initiative is to have any immediate effect it is likely to be in customer service.

Michael Ossei, from uSwitch, says: "Banks will have to work harder to both attract new customers and keep their existing ones, which means that accounts must offer better value for money and customer service."

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Benefit Cheats Face Up To 10 Years In Jail

Benefit cheats will face increased jail terms of up to 10 years in a crackdown on those who "flout the system", Britain's most senior prosecutor has said.

Keir Starmer QC warned it was time for a "tough stance" against the perpetrators of benefit and tax credit fraud as he set out new guidelines for the Crown Prosecution Service (CPS).

The Director of Public Prosecutions said the £1.9bn annual cost of the crime to the taxpayer should be at the "forefront of lawyers' minds" when considering whether a prosecution was in the public interest.

Suspects can now be charged under the Fraud Act, which carries a maximum sentence of 10 years in prison, the CPS said.

In the past, benefit cheats have often been pursued under specific social security legislation which carries a maximum term of seven years.

A financial threshold which prevented benefit fraud cases of less than £20,000 from being sent to crown court will also be abolished, the CPS said.

Keir Starmer says the CPS saw more than 8,600 prosecutions last year

"It is a myth that 'getting one over on the system' is a victimless crime: the truth is we all pay the price," Mr Starmer said.

"It is vital that we take a tough stance on this type of fraud and I am determined to see a clampdown on those who flout the system."

Under the new guidelines, prosecutors in England and Wales will be told to seek tough penalties in cases with aggravating features such as multiple offences, abuse of position or substantial loss to public funds.

Professionally planned frauds, the use of a false or stolen identity and cases involving attempts to dispose of the evidence will also be targeted.

Benefit fraud of less than £20,000 was previously automatically allocated to magistrates courts, which can hand out maximum sentences of only 12 months.

The financial threshold will now be abolished, bringing the prosecution of benefit fraud in line with the prosecution of other fraud cases, the CPS said.

Last year, the CPS saw more than 8,600 prosecutions in benefit and tax credit cases, along with 4,000 in the first five months of this year, Mr Starmer said.

The current conviction rate is 89.7%, he added.

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Clegg Wins Economy Vote After Cable Falls In

Nick Clegg has been given his party's backing over the coalition's economic strategy, avoiding any challenge to his authority.

The Lib Dem leader took the unusual step of asking conference delegates to vote in favour of a motion endorsing the Government's approach and fiscal mandate.

Rebel amendments put forward would have committed the party to watering down the deficit-reduction plan and changing the Bank of England's mandate.

But they were overwhelmingly defeated after Mr Clegg himself warned the result would only be welcomed by George Osborne and his Labour shadow Ed Balls.

Business Secretary Vince Cable also made an 11th hour change of heart and turned up to cast his vote in support of Mr Clegg, after aides said he would stay away.

Vince Cable arriving in the conference hall on Monday

The motion, Strengthening the UK Economy, asked activists to "reaffirm support" for the coalition's fiscal mandate, which says the Government's books should balance by 2017-18.

Pensions minister Steve Webb proposed it and Mr Clegg summed up, becoming the first Lib Dem leader to choose to speak in such a debate for more than six years.

Warning delegates to "be careful what you wish for", he said: "If we start messing about with the big goal posts we have stuck in the ground which frame the stability which is required for further economic growth, we will destroy jobs and decrease prosperity."

He added that "chopping and changing" the Bank's mandate for setting interest rates would "increase the uncertainty that all speakers have said is very destructive of further economic confidence and recovery".

He also criticised proposals to remove councils' borrowing limits to allow them to invest more in housing, describing this as a "complete revolution" that would not lead to a "single extra affordable home".

Mr Clegg was earlier forced to deny rumours of a damaging split with Mr Cable over the economy, insisting at the conference in Glasgow that it was all a "total storm in a teacup".

The Business Secretary's aides had initially refused to confirm whether he would vote in favour of the motion, indicating that he believed it could be "improved".

But after an apparent climbdown, it emerged he would back it and appeared in the conference hall as sources said the issue had been "completely blown out of proportion".

Mr Clegg told Sky: "There isn't some great gunfight at the OK Corral going on here in Glasgow. We are having a sensible debate about the economy.

"Vince and I work very closely together. I don't run a boot camp or determine exactly who is in which room at what time.

"What Vince and I have done is to work on the ideas that are in that motion - which he has made quite clear he supports - together."

Apparent tensions with Mr Cable came after Mr Clegg and Chief Secretary to the Treasury Danny Alexander both rejected his call for a limit on the Government's Help-to-Buy scheme.

The Business Secretary raised eyebrows last week by telling Sky News the extension to the policy, due in January, should be reconsidered amid fears of a housing bubble.

But Mr Clegg and Mr Alexander warned on Sunday that national policy should not be set based on what was happening in London, where prices have recently risen sharply.

Mr Alexander told Sky News' Murnaghan programme: "We are a million miles away from a housing bubble in this country. I don't think we should allow the tail of central London to wag the dog of this policy."

As the conference focuses on the economy, two new opinion polls showed the scale of the party's slump in support since it entered the coalition with the Tories in 2010.

A YouGov survey for the Independent found that 36% of those who say they would vote for the party believe it has changed for the worse since the last election and just 20% believe it is better.

In a separate survey by OnePoll for ITV's Daybreak, 72% of people identifying themselves as Lib Dem voters said Mr Clegg was not a good leader and 57% said he should stand down before the 2015 election.

Mr Clegg said: "I think we were right to step up to the plate and roll up our sleeves, however much it's clearly hit our short-term popularity, because without us the economy would not now be recovering."

He also said he believed TV debates between major party leaders were an "important addition" to the election race and should be repeated during the next campaign.

"I'm ready to have TV debates whenever they are organised," he told Sky News. "I think they were a good innovation last time."

In a question and answer session later, Mr Clegg said protection for the NHS and schools budgets should be kept after the next election.

He also admitted being in coalition was a constant battle as he sought to ensure his party stood up for itself as delegates criticised welfare reforms.

"I'm not going to pretend to you that I don't find some of the individual decisions, particularly on welfare reform, really difficult. You would have to be made of granite not to wrestle with some of these things," he said.

But there was embarrassment for the party as a crib-sheet of lines for Lib Dem MPs to take in media interviews was inadvertently emailed to journalists.

They were reminded that they should say the party met for conference "in a confident mood" and had "a strong record of achievement in Government".

They were also told to say that Labour "cannot be trusted to build a stronger economy", while the Tories "on their own can't build a fairer society".

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Naomi Campbell Criticises Fashion 'Racism'

By Richard Suchet, Arts and Entertainment Correspondent

Naomi Campbell has told Sky News the fashion industry is still plagued by racism, despite attempts to eradicate it over a number of years.

The supermodel criticised casting agents and accused them of being reluctant to book non-white models.

"It's disappointing that they still think before booking models of colour," she told Sky News.

"It's appalling. It shouldn't be that way in this day and age."

It is not the first time the 43-year-old model has used the platform of London Fashion Week to raise the issue of racial discrimination.

At the beginning of the month, she teamed up with businesswoman and supermodel Iman to launch the Diversity Coalition.

Their objective is to highlight the "racist act" of having one, or no, models from different ethnic backgrounds in a catwalk show.

Last season, 82.7% of models were white at New York Fashion Week, with only 9.1% Asian, 6% black and 2% Latina.

Thirteen shows had no model of non-white ethnic background at all.

London Fashion Week, which features 58 catwalk shows over five days, is expected to attract more than £100m in orders, according to the British Fashion Council.

The fashion industry contributes £21bn annually to the British economy.

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Barclays Battles Watchdog Over £50m Deal Fine

By Mark Kleinman, City Editor

Barclays has confirmed that it is facing a £50m fine from the City watchdog over the £11.8bn capital-raisings that allowed it to remain out of Government ownership five years ago.

The bank confirmed a Sky News report that it had been told by the Financial Conduct Authority (FCA) that it was seeking the penalty over the disclosures it made to the stock market in 2008.

In the prospectus accompanying its £5.8bn rights issue, which was published on Monday afternoon, Barclays said it was continuing to contest the FCA verdict, which threatens to heap fresh shame on the embattled bank.

The regulator filed warning notices against Barclays late last week in which it accused the lender of failing to disclose £322m in advisory fees payable to Qatari interests which had agreed to take a multibillion pound stake in Barclays, according to the prospectus.

"While the Warning Notices consider that Barclays and Barclays Bank believed at the time that there should be at least some unspecified and undetermined value to be derived from the agreements, they state that the primary purpose of the agreements was not to obtain advisory services but to make additional payments, which would not be disclosed, for the Qatari participation in the capital raisings," Barclays said.

"The Warning Notices conclude that Barclays and Barclays Bank were in breach of certain disclosure-related Listing Rules and Barclays was also in breach of Listing Principle 3 (the requirement to act with integrity towards holders and potential holders of the Company's shares). In this regard, the FCA considers that Barclays and Barclays Bank acted recklessly. The financial penalty in the Warning Notices against the Group is £50m. However, Barclays and Barclays Bank continue to contest the findings."

Antony Jenkins is trying to repair the bank's image

Although the alleged breaches of market rules took place well before he took over the helm of Barclays, the findings put renewed pressure on Antony Jenkins, the bank's chief executive, who has embarked on a public crusade to overhaul its culture and standards.

Assuming the discussions with the FCA do result in Barclays paying a financial penalty, it would add to the mounting cost of the bank's recent transgressions, which have included a £291m fine for its role in the manipulation of the interbank borrowing rate Libor.

The bank has also set aside billions of pounds to compensate customers who were mis-sold payment protection insurance and interest rate swaps, and been hit with a contested fine for rigging US energy markets.

Other authorities in the UK and the US are also examining the Qatari capital-raising issue, and Barclays said on Monday that their investigations continued.

"The Serious Fraud Office is investigating the same agreements. Its investigation is at an earlier stage and the Group has received and continues to respond to requests for further information," the bank said.

"The DOJ and the SEC are undertaking an investigation into whether the Group's relationships with third parties who assist Barclays to win or retain business are compliant with the United States Foreign Corrupt Practices Act. They are also investigating the agreements referred to above including the two advisory services agreements.

"The US Federal Reserve has requested to be kept informed of these matters. It is not possible to estimate the full impact on the Group if the final conclusion of these matters is adverse," the bank added, implying that it could face far heftier financial penalties than the £50m proposed by the FCA.

The rights issue documentation was published as part of Barclays' efforts to raise almost £8bn from investors through a combination of new shares and bonds, following pressure from the Bank of England's regulatory arm to strengthen its balance sheet.

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Ryanair: Stansted Deal 'To Create 7,000 Jobs'

Ryanair says a ten-year deal with the owners of Stansted Airport may result in up to 7,000 new jobs being created.

The no-frills carrier said the agreement, which will see Ryanair grow its traffic at Stansted by over 50% from 13.2 million passengers in 2012 to over 20 million each year, was in return for a package of lower costs and more efficient facilities at the Essex airport.

Ryanair's job creation figures were based, it said, on research which found that up to 1,000 "on-site" jobs are sustained at international airports for every one million passengers.

The airline announced the move seven months after Manchester Airports Group (MAG) bought Stansted from Heathrow's owner - then-known as BAA.

Ryanair's chief executive, Michael O'Leary, said the deal "proves how UK airports can flourish when released from the dead hand of the BAA monopoly and is the first dramatic initiative by MAG to reverse 7 years of decline, during which Stansted's traffic fell from 23.8 million to 17.5 million".

He added: "As Stansted's biggest airline, Ryanair looks forward to a decade of growing traffic, routes and jobs at Stansted.

"We are also pleased to release our Stansted summer 2014 schedule with 120 routes, including four new routes to Bordeaux, Dortmund, Lisbon and Rabat."

MAG's chief commercial officer Ken O'Toole added: "The new long-term agreement between Ryanair and MAG at Stansted shows that competition really does work, and it represents great news for both passengers and UK businesses.

"The deal secures a new and exciting era for both Ryanair and Stansted, and we're delighted to be supporting the airline's growth over the next ten years.

"Today's announcement, coupled with our £80m investment in the terminal, confirms that Ryanair shares our confidence, and shows how we are succeeding in transforming Stansted under new ownership.

"Stansted has a really bright future in providing international connectivity for the UK."

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Larry Summers Quits Race To Become Fed Chair

European stock markets hit a five-year high after Larry Summers, the frontrunner to become the next chairman of the U.S. Federal Reserve pulled out of the running for top post.

Mr Summers who is a former policy advisor to President Barack Obama was considered the favourite to succeed the current chairman Ben Bernanke as the head of the U.S. central bank but he informed the President of his decision on Sunday to no longer run for the post. 

Mr Summers has been unenthusiastic about the U.S. Federal Reserve's stimulus programme, known as quantitative easing, and therefore was expected to scrap the policy if appointed.

His decision leaves Janet Yellen as many people's favourite to become Ben Bernanke's replacement when his term ends in January 2014. Dr Yellen is currently vice-chair of the Fed's board and her monetary policy stance has been far more dovish than Mr Summers'.

If Dr Yellen were successful, she would be the first female to lead the U.S. central bank in its 100-year history.

Another high-profile candidate is Donald Kohn who has 40 years of experience of the Federal system and was vice-chair of the Board for four years.

Also tipped for the top job is the former U.S. Treasury Secretary, Tim Geithner . However, Mr Geithner has shown reluctance in the past saying the position will be "someone else's privilege".

European stocks hit five-year highs after the news. In London, the FTSE 100 closed up 39.06 points, or 0.59% at 6622.

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