Singapore Fund Swoops For Royal Mail Stake

By Mark Kleinman, City Editor

A Singaporean state-backed fund is poised to become a significant shareholder in Royal Mail amid strong overseas demand for the postal operator's shares.

Sky News has learnt that the Government Investment Corporation (GIC) of Singapore has placed an order as part of the £3bn privatisation of Royal Mail, further details of which were announced last week.

GIC is one of several sovereign wealth funds which have expressed an interest in buying shares in the initial public offering, according to people close to the deal.

Their appetite for the stock effectively means Royal Mail will swap the ownership of some of its shares by one government for others.

Royal Mail is expected to be valued at between £2.6bn and £3.3bn as ministers race to privatise the company ahead of potential strike action by staff.

The company's flotation will include an eventual distribution of 10% of Royal Mail shares to 150,000 of its employees and an offer of shares to retail investors.

At an overall company valuation of £3bn, the employee shares would be worth in the region of £2,000 per person.

Royal Mail's profit more than doubled to just over £400m in the year to March as the modernisation plan of Moya Greene, chief executive, gathered pace.

GIC, like other sovereign funds, is a familiar investor in UK companies, with Royal Mail's promise of a robust dividend policy attracting strong interest.

Dealing in Royal Mail shares is likely to begin on October 16.

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Mobile Phone Blunders Putting Users At Risk

Almost 75% of people describe themselves as tech literate, despite making daily blunders that leave them open to security risks, according to a study of mobile device users.

The research found that fewer than 40% of people have a password lock on their phones.

Last year, there were 123,589 victims of identity fraud, with the average financial loss per victim being £1,100.

In 2012, it took people an average of 444 days to discover they had become a victim of ID fraud.

The findings show many tech users carry out frequent activities online that put them at risk.

Almost a fifth of people admitted staying logged in after checking their emails. A similar proportion of the population have clicked "remember me" when logging onto a site for the first time.

One in 10 people have logged onto their bank account on public wi-fi or 3G, and almost a fifth think it is safe to use free wi-fi if they are not accessing sensitive data.

Ten percent of people also admit that everyone can view their social media account, while one in six say they have accepted a friend request from someone they do not know, opening their personal information up for potential scammers.

Paul Wilson, who is an expert on cons and scams, said: "We are kind of a slave to convenience.

"These devices are allowing us to do things very quickly and easily, so people tend to want to get into their device without having to be interrupted. It seems like an annoyance every time it asks you for your passcode.

"The problem is that these things are so easy to steal and easy to lose that once someone has access to that, if you can get straight in it then gives them access to many other aspects of your life.

"Like your address, your personal information - things that can then be used to represent you and perhaps steal your ID online."

The research was conducted by Experian to reflect the growing rate of mobile device adoption across the population and demonstrate risks of online identity theft and fraud.

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Pensions Auto-Enrolment Hailed As 'Success'

Fewer people than expected have opted out of the auto-enrolment pension scheme since it was launched almost a year ago, according to a report which has identified a new mood of financial stoicism among the public.

The study - by pension provider Nest and researchers the Futures Company - concluded that the tough economy had triggered a fundamental shift in the way consumers handle their finances.

It said that more than 1.6 million people had been placed in workplace pensions since the roll out of auto-enrolment started last October with larger firms.

Three-fifths (61%) of people surveyed for the report, who are yet to be placed in a workplace pension, plan to stay in it, showing a sharp increase from less than half (47%), when similar research was carried out in 2011.

Just under one fifth (18%) of consumers disagree with the idea of auto-enrolment, marking a downward shift from 27% in 2011.

Auto-enrolment began over fears too few were saving for a longer retirement

So far, the rate of people staying in schemes once they have been opted in has been higher than many pundits had expected, the study said, with around nine in 10 people who are being auto-enrolled remaining in their pensions.

In trying to explain what was described as the "surprisingly low" opt-out rates, the report pointed to "growing evidence that the recession has changed consumer attitudes towards money".

The survey found that more than half (57%) of people would never spend money as freely as they did before the financial crisis, marking an increase from 48% a year ago and 43% in 2010.

Despite some more optimistic news about the economy in recent months, the report found that people are still keeping a tight control on their purse strings as living costs remain high compared to wage growth, with just 29% saying they do not pay off their credit card balance each month, down from 52% in 2011.

Survey: Consumers have become more wary about spending large sums

Of the workers questioned who have now been placed in a workplace pension, around half (51%) of those who had remained in said they felt it was time to start saving for retirement while a similar proportion (48%) agreed it made financial sense because the employer also contributes.

However, around one in seven (13%) also said they had remained in their pension because they had been "too busy" to opt out.

The drive to get more people saving for their future aims to head off a looming retirement saving crisis, amid fears that people are living for longer but not putting enough aside for their later years.

Up to nine million workers are expecting to be newly saving into a pension or saving more as the reforms roll out.

Charles Counsell, executive director of automatic enrolment at the Pensions Regulator said auto-enrolment had got off to an "excellent start".

He said: "Automatic enrolment has been successfully rolled out to more than 2,000 of the UK's largest employers and well over 1.5 million people are now saving for their retirement as a direct result."

However, the popularity of auto-enrolment prompted a warning that firms might not be prepared as the scheme is expanded to include medium and small businesses.

Anthony Carty, Managing Director of Clifton Wealth, said: "These latest figures suggest that there could be a nasty surprise for those UK small business owners banking on a significant opt-out rate.

"While the actual time taken to set up auto-enrolment may be relatively short for a single firm, once all the key elements and systems are in place hundreds of thousands of companies will face the same challenges as the deadline looms but the pool of experts remains relatively small."

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Google Defends Tax Affairs From New Scrutiny

Google's tax arrangements are under further scrutiny after it revealed paying £11.6m in corporation tax last year on UK sales said to be as high as £3.5bn.

The US technology firm, which has faced Parliamentary criticism amid suggestions of tax avoidance in the past, has consistently argued it operates within the law.

The company, which recently celebrated its 15th birthday and employs around 2,000 people in the UK, said it paid the Treasury £156.1m in total during its last financial year.

The Daily Telegraph, citing filings at Companies House, reported its UK revenues for 2012 at £506m but Reuters said its total UK sales stood at £3.5bn.

Google's tax affairs rose to prominence again in June when a report by MPs found Google had made around £11.5bn in revenue from the UK between 2006 and 2011 but paid just £10m in corporation tax.

The Public Accounts Committee called for an HMRC investigation amid evidence from apparent whistleblowers while a Reuters investigation alleged that Google's UK staff were responsible for sales rather than marketing as the company has always insisted.

A Google spokesperson said: "Like most multinationals, we pay the bulk of our £1.2bn corporate tax bill where our business originated, in our case the US.

"That's a rate of more than 19%, roughly what a UK-based company would pay.

"We're also a significant contributor to the UK economy- having created over 2,000 jobs.

"This year alone we've invested more than £300m in property, and tax related to our UK operations totalled more than £150m."

Reuters journalist Tom Bergin, who conducted the news service's investigation into Google's tax arrangements, told Sky News he believed it was an "incredibly low" effective corporate tax rate.

He said: "Google reports half of its profits in Bermuda where it pays no tax so that's why Google has one of the lowest tax rates on its non-US income among any company.

"Google pays around three percentage points tax on its overseas profit so it is true when it comes to paying tax one of the few countries where Google does pays tax is the US.

"Of course, that's because the US tax rules are considerably stronger than they are here in Europe and particularly in the UK.

"So Google cannot possibly avoid paying tax in the US but when it comes to Europe and the UK it is a different matter," he concluded.

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US Shutdown Looms As Congress Squabbles

The US government is teetering on the brink of a partial shutdown that will curtail all but essential services, with no compromise in sight in a deeply polarised Congress.

If the Democrats and Republicans fail to find a solution before the deadline on a new spending bill, the shutdown goes into force at 12.01am on Tuesday.

The federal funding bill is usually considered routine business, but this time the measure is tied to the highly controversial health care law promoted by President Barack Obama.

It would be the first shutdown in 17 years.

While essential services such as mail delivery would remain in place, up to about 800,000 government employees could be forced off work, possibly without pay.

National parks, some museums and such tourist attractions as the Statue of Liberty would be closed. While Social Security and Medicare benefits would keep coming, there could be some delays in certain cases.

The healthcare law was passed by Congress and signed into law by President Barack Obama in 2010, despite opposition by the Republican Party, especially Tea Party conservatives.

Senator Ted Cruz has been among the most ardent critics of Obamacare

The Republican-dominated House has passed a funding bill that would delay the full effect of the healthcare law by one year.

But the Senate, controlled by the Democrats, has promised to reject the bill when it reconvenes later - resulting in a stalemate.

"To be absolutely clear, the Senate will reject both the one-year delay of the Affordable Care Act and the repeal of the medical device tax," Senate Majority Leader Harry Reid said.

"After weeks of futile political games from Republicans, we are still at square one."

With a solution looking increasingly elusive, the blame game has begun on Capitol Hill.

A Tea Party leader, Senator Ted Cruz, pointed the finger at Senate Democrats.

"The House has twice now voted to keep the government open. And if we have a shutdown, it will only be because when the Senate comes back, Harry Reid says, 'I refuse even to talk,'" said Mr Cruz, who led a 21-hour talkathon against Obamacare.

The last shutdown was under President Bill Clinton in 1995

White House spokesman Jay Carney said the "Republicans decided they would rather make an ideological point by demanding the sabotage of the healthcare law".

Uncertainty over the budget deadlock was the biggest factor behind falls in world markets on Monday.

In Japan the Nikkei closed 2% lower while the FTSE 100 was almost 1% lower on the day - a political crisis in Italy also feeding in to the minds of investors.

The New York Times said Mark Zandi, the chief economist for Moody's Analytics, estimated that a partial shutdown would trim annual economic growth by 0.2 percentage points in the fourth quarter, even if it ended within four days.

An impasse of a month could cut growth by 1.4 percentage points.

Mr Zanda estimated that an interruption longer than two months "would likely precipitate another recession".

The last time the federal government shutdown was under President Bill Clinton, when services ground to a halt for 28 days between December 1995 and January 1996.

It nearly happened again in April 2011.

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Osborne Plans Fuel Duty Freeze Until 2015

Fuel duty will be frozen until 2015 if the money is available, George Osborne has pledged as he addressed the Tory party conference.

The Chancellor's pledge came as he warned the battle to rebuild the UK economy is not over and that the Tories must be allowed to finish the task.

Mr Osborne accused Labour of making up policy "on the back of a fag packet" as he addressed the Conservative Party Conference.

He warned of disaster if Ed Miliband was to win power, suggesting his eye-catching energy price freeze plan would stunt growth and cost jobs.

Countering accusations of complacency about the recovery, Mr Osborne insisted there was "no feeling of a task completed or a victory won".

It was "not even close to being over and we are going to finish what he started," he declared, insisting his policies were a "serious plan for a grown-up country".

George Osborne at a vehicle manufacturers on Monday

In his speech, he also unveiled tough new rules to make the long-term unemployed earn their benefits by doing full-time unpaid community work from next year.

From April, people still without work after two years on the coalition's Work Programme will face three options if they want to remain on the dole.

They will have to do community work such as litter picking, visit a job centre every day or take part in compulsory training to tackle problems like illiteracy.

Those who break the rules of the new Help to Work scheme, for example by failing to turn up without a good reason, could lose their benefit for four weeks.

A second offence would see them lose it for three months.

Ahead of his address, Mr Osborne insisted on Sky News that the policy was not a return to the Conservative "nasty party" of old - describing the move as "compassionate".

"This is not about punishment, this is about help," he stressed, but also said: "What we are saying is there is no option of doing nothing any more.

"We are saying we are going to help you into work but we are going to ask for something in return. I think it is a very compassionate approach to people who previous governments just ignored."

Amid concern that job centres will be overstretched, he added that they would have extra money to police the scheme.

The Chancellor's speech came as TNT announced it was creating 1,000 new jobs by expanding its postal delivery service.

Potentially, around 200,000 long-term Jobseeker's Allowance claimants could be eligible for the new coalition initiative.

But ministers believe the numbers on it will be significantly lower, as many of those working covertly will decide it is no longer worth trying to claim benefits and drop out.

The scheme, devised by Work and Pensions Secretary Iain Duncan Smith, will cost around £300m - with the money likely to be found from departmental underspends.

Sky's chief political correspondent Jon Craig described the new conditions as "a tough crackdown".

Labour's shadow chief secretary to the Treasury, Rachel Reeves, said: "It's taken three wasted years of rising long-term unemployment and a failed Work Programme to come up with this new scheme.

"But this policy is not as ambitious as Labour's compulsory jobs guarantee, which would ensure there is a paid job for every young person out of work for over 12 months and every adult unemployed for more than two years."

During his speech later, Mr Osborne is not expected to unveil specific action on living standards, despite pressure to respond to Labour leader Ed Miliband's energy price freeze pledge last week.

Instead, the Chancellor will stress the need to stick with the coalition's economic plans, warning that the UK still has not fully recovered from the credit crunch.

He told Sky: "Our economic plan is helping Britain turn a corner. We have dealt with the problems we inherited, we have still got a long way to go ...

"By contrast the Labour party got us into this mess and all I hear from them is that they want more borrowing and more spending. A set of gimmicky announcements isn't going to cover up the fact that they don't have a credible economic policy."

Critics claimed the Government scheme would treat the unemployed more harshly than criminals and was just a "rehash" of plans that had already failed.

Joanna Long, from the Boycott Workfare campaign, said: "It's bad news for people who will be forced to work at far below the minimum wage - and it's terrible news for the people whose jobs they will be replacing.

"This is about cutting the safety net for unemployed people, and handing something for nothing to charities, companies and councils which should be paying wages and taxes."

Graeme Cooke, from the Institute for Public Policy Research, added that the measures would probably only affect one in 20 people on the dole and warned it needed careful planning.

"The key issue is how such schemes are designed. If they give people real experience of work and the practical employability habits that go with it, they can help people be more attractive to prospective employers," he said.

"But if it is pitched as a punishment where people do menial tasks, it risks acting as a signal to employers that these are people not to employ."

But Matthew Sinclair, chief executive of the TaxPayers' Alliance, welcomed the move, insisting it was unfair to have people on benefits "for years on end". 

"There is plenty of international evidence from countries such as Australia, Canada and the US that this type of scheme is not only fairer on those footing the welfare bill, but also gets people back into work," he said.

:: The Chancellor's speech to the Conservative Party Conference in Manchester is being broadcast live on Sky News.

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Aldi Grows UK Supermarket Jobs And Profits

Aldi has looked to build on its growth in the UK by confirming it is planning to create 6,000 jobs this year.

The discounter said it was opening 50 new stores as it announced that UK pre-tax profits rose 124% in 2012 to £157.9m.

The company said its customer base had grown by one million over the year on the back of 34 store openings during the period.

Its expansion plans contrast with some of its so-called "Big Four" rivals, with market leader Tesco and number four player Morrisons calling time on the supermarket space race in favour of building their online offerings.

Aldi, which started out in Germany, said "polarisation" in the grocery market was driving its growth alongside upmarket Waitrose.

Cash-strapped households are flocking to the chain as budgets shrink amid the squeeze on consumer spending as stubbornly high inflation outpaces wage rises.

Joint managing director Matthew Barnes said Aldi was attracting a "broader demographic."

He said: "We have opened in affluent locations like Knutsford and Winchester and have quickly won over local customers with our award-winning quality and value.

"If we can open more stores, we will make Aldi a more convenient place for people to do their weekly shop."

Its market share now stands at 3.7%, up by almost a third from a year earlier.

Fruit and vegetable sales soared by almost 50% in 2012, Aldi said, while meat sales have risen 60% year on year for the past three years.

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M&S Removes Asia Boss In New Bolland Shake-Up

By Mark Kleinman, City Editor

Marks & Spencer (M&S) has unveiled fresh changes to its senior management ranks as Britain's biggest clothing retailer fights to accelerate a turnaround in its fortunes.

Sky News understands that Pascal Martin, the executive responsible for M&S's 120 stores in Asia, is to leave next month following discussions with Jan Heere, the head of its international operations.

Mr Martin, who has worked at M&S only since 2011, will be replaced by Bruce Findlay, a former retail director for Calvin Klein in Europe and previously of Tommy Hilfiger in Asia-Pacific.

The shake-up is the latest to be sanctioned by Marc Bolland, M&S's chief executive, as he attempts to reverse a run of eight consecutive quarters of declining like-for-like general merchandise sales.

Asia is one of the company's most important growth regions, comprising wholly-owned shops in China and Hong Kong, a joint venture with Reliance Retail in India and franchised operations in countries such as Indonesia, Malaysia, South Korea and Thailand.

In a statement issued to Sky News, an M&S spokeswoman confirmed the changes, saying:

"We can confirm that Pascal Martin is leaving M&S at the end of October to pursue new opportunities outside of the business. We'd like to thank Pascal for his contribution over the last couple of years and wish him well for the future.

"We are pleased to announce the appointment of Bruce Findlay as Regional Director, Asia. Bruce has extensive international retail experience."

M&S does not typically provide sales figures for each market covered by its international division, although it said in May that annual full-year sales had grown by 11.3%, with China and India showing double-digit like-for-like sales growth.

The performance of its stores in China has, however, been disappointing in the context of management's internal targets, Sky News reported last January.

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Flat-Pack Energy: Ikea Selling Solar Panels

Ikea has begun selling solar panels to customers in the UK - in its trademark flat-pack style.

The Swedish firm said it was using Britain to test the ground for its plan to offer renewable energy to the mainstream market worldwide because of the country's current electricity prices and financial incentives from the Government.

Ikea says the panels will pay for themselves in seven years

The company said it was not the first general retailer to sell solar panels but claimed its partnership with Chinese firm Hanergy was the only one to provide a built-in care package.

Ikea said a standard, all-black 3.36-kilowatt system for a semi-detached home will cost £5,700 and include an in-store consultation and design service as well as installation, maintenance and energy monitoring service.

Ikea's chief sustainability officer Steve Howard said: "In the past few years the prices on solar panels have dropped, so it's a really good price now.

"It's the right time to go for the consumers, " he said.

The company claimed the solar panel investment would pay for itself in about seven years for the average home.

The Government offers private solar panel owners the opportunity to sell back electricity to the grid on days when they have surplus production and has a financing plan for solar power investments, which means residents can buy a system for no up-front cost and pay it off gradually.

"That is a great deal. If you are going to be in your house that long, your energy will be free after seven years," Mr Howard said.

The panels are currently only sold in Southampton but Ikea said its stores across Britain would follow in the coming months.

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Steve Ballmer Cries At Microsoft Goodbye

Video of Microsoft boss Steve Ballmer's tearful farewell speech has emerged, showing the 57-year-old striding off to a song from Dirty Dancing.

Mr Ballmer, who recently announced he was stepping down within 12 months, paced around the stage, his voice quivering as he told an arena of employees: "You work for the greatest company in the world - soak it in!"

"Microsoft's like a fourth child to me," said Mr Ballmer - after a pause to compose himself.

"Children do leave the house. In this case, I guess I'm leaving the house."

Mr Ballmer has been chief executive since co-founder Bill Gates gave up the position in 2000, and the company is now busy looking for someone to replace him.

Known for his flamboyant speeches and sporting a bright yellow shirt, the Microsoft boss thanked thousands of employees who had packed into Seattle's Key Arena - normally a venue for sports events and rock concerts.

"My last song is one I've always wanted to use, but it was always deemed inappropriate - it's a great song!" said a teary-eyed Mr Ballmer.

Thousands of employees packed a Seattle arena for the send-off

"It's from one of my favourite movies, one of my favourite songs ... a song that talks about what you have meant to me and what you have done for me.

"You have made this the time of my life."

With the famous Dirty Dancing tune booming out, Mr Ballmer hugged and high-fived employees and raised his arms aloft, shouting "thank you!" before bouncing out of the arena at the song's climax.

The executive - who has an estimated $18bn (£11bn) fortune according to Forbes - oversaw massively successful products such as Windows XP during his time in charge.

However, in recent years Microsoft has been left behind by the likes of Apple in terms of innovation.

It is now playing catch-up in the tablet and mobile markets, with its Surface device struggling to gain popularity and its Windows 8 operating system also being criticised.

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