Hinkley Point Nuclear Plant Deal To Go Ahead

Critics warn that a landmark deal to build Britain's first new nuclear plant in a generation could push up household bills.

A consortium led by French firm EDF energy, which includes Chinese investors, will build the Hinkley Point C plant in Somerset.

It should begin operating in 2023 and ministers argue it will help secure future energy supplies, hasten the move to low-carbon power and lower generating costs.

The agreement was unveiled shortly before Npower became the latest of the "Big Six" energy firms to raise its prices.

David Cameron at Hinkley Point B on Monday

David Cameron hailed the nuclear project as "brilliant news" for Britain, calling it a "landmark in our economic growth plan".

But the Government has come under fire for guaranteeing to pay £92.50 per megawatt hour of electricity produced - a so-called "strike price" double the current market rate.

Campaigners have called for an independent review to ensure the deal is value for money, and also want a clawback for consumers in case the Government has overpaid.

Adam Scorer, director of Consumer Futures which represents consumers in regulated markets, warned that households could end up paying over the market price "for decades to come".

"A guaranteed price of £92.50 MWh moves the risks of future variations in wholesale prices from investors on to consumers, will likely see household bills increase and will distort future investment in electricity generation," he said.

Richard Lloyd from consumer group Which? said: "If it emerges that the Government has overpaid, we believe there should be a mechanism to refund consumers instead of a windfall to the suppliers."

Greenpeace was also highly critical, warning it would distort energy policy by distracting from cheaper, new clean technologies.

The current Hinkley site in Somerset

The Hinkley plant will be the first new nuclear power station to be built in Britain since Sizewell B in Suffolk, which started generating electricity in 1995.

Costing £14bn, the project will slash UK carbon emissions by nine million tonnes a year, create 25,000 construction jobs and 900 permanent positions once operations start.

The contract is due to run for 35 years, with the electricity price increasing annually in line with CPI inflation. At full capacity, the two reactors could provide up to 7% of the country's energy needs.

The agreed "strike price" could fall by £3 if another mooted development in Suffolk goes ahead, allowing for efficiencies in development and testing.

Energy Secretary Ed Davey insisted he had secured "good value" following more than a year of intense negotiations.

"What has driven a tougher deal is the fact that I made clear we could walk away from the table. We had other nuclear options," he said.

It is understood China General Nuclear Power Group and China National Nuclear Corporation will be among the group of investors.

Anti-nuclear campaigner Theo Simon

Chancellor George Osborne removed one of the last stumbling blocks last week by announcing Chinese firms could invest in civil nuclear projects in the UK.

The funding agreement will almost certainly mean that the new reactor will be a mirror image of the Taishan plant in China.

Anti-nuclear activists near the site claim they have been misled about the project.

Campaigner Theo Simon told Sky News: "We were told it would provide cheap energy; we were told it would help us to bridge the energy gap in the early 2000s.

"Now it seems it won't be built (until) 2025 and we will all be paying for the profits of EDF and Chinese nuclear corporations for the next 40 years."

Energy policy has shot up the agenda since Labour leader Ed Miliband pledged to freeze retail prices for 20 months. The Tories have branded this an unworkable "con".

But Shadow energy secretary Caroline Flint said on Monday: "David Cameron is now in the ridiculous position of saying that they can set prices 35 years ahead for the companies producing nuclear power, while insisting they can't freeze prices for 20 months for consumers while much-needed reforms are put in place," she said.

The Government claims building a new fleet of nuclear power stations could reduce bills by more than £75-a-year by 2030.

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Npower Energy Bills Up 11% Before Christmas

Energy giant npower has announced an increase in household tariffs of 9.3% for electricity and 11.1% for gas.

The price rise will be imposed from December 1.

Chief executive Paul Massara said: "This has been a really hard decision for us and I know this news will not be welcome.

"Nobody wants to see their bills go up particularly when household budgets are being squeezed.

"We've tried to protect customers for as long as possible but the truth is we simply cannot hold off any longer.

"There are many external costs which are increasing your bills, including Government schemes and the actual cost of buying energy."

The company is the third of the so-called big six energy firms to raise prices in recent days.

On Thursday, British Gas become the second major supplier of household energy to announce a rise in its prices - by an average 9.2%.

The company said its electricity and gas prices would rise by 10.4% and 8.4% respectively from November 23 - affecting 7.8 million households.

Rival SSE announced a price hike almost two weeks ago, raising its bills by 8.2% from November 15.

Prime Minister David Cameron has called the latest increase "disappointing" and urged households to try to save money by switching suppliers.

But critics say it is more important to lock into a fixed tariff to avoid future rises.

E.ON, Scottish Power and EDF Energy are the other big providers and are yet to make announcements on their winter pricing.

The price boost by npower came after the Government confirmed a deal for EDF to build Britain's first nuclear power station in a generation.

But the Chinese-backed plant at Hinkley Point in Somerset is not expected to be commissioned until 2023 at the earliest.

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HS2 Rail Link: 'Cities Could Lose Up To £220m'

Some cities in the UK could lose as much as £220m if a new high-speed rail link is built, previously unseen figures have shown.

If HS2 goes ahead, it will leave more than 50 areas worse off - details that were omitted from a Government-commissioned report in September, it is claimed.

The full findings of the KPMG study into the north-to-south rail route were released under a Freedom of Information request by the BBC's Newsnight programme.

Last month, the Department for Transport hailed the study, which found the UK economy would be boosted by £15bn a year, with Greater London benefitting by £2.8bn and the West Midlands by £1.5bn.

The project has caused outrage in some areas

But the study shows many areas not on the line - which would connect London to Birmingham and to Manchester and Leeds - will suffer a fall in economic output.

The worst-hit areas will be Aberdeenshire (-£220m), Norfolk East (-£164m), Dundee and Angus (-£96m), Cardiff (-£68m) and Norfolk West (-£56m).

Professor Henry Overman, who was an expert adviser to HS2 Ltd, told the BBC it was obvious that as some areas reap the benefits of being better connected, other places away from the line will pay a price.

The link will cut journey times between the north and south

"When a firm is thinking of where to locate, it thinks about the relative productivity of different places, and the relative wages etc," he said.

"HS2 shifts that around. So if you are on the line, that makes you a better place that hasn't had that productivity improvement."

Alison Munro, chief executive of HS2 Ltd, told Newsnight the figures were unsurprising.

"What this is showing is that the places that are on the high-speed network ... those are the places that will benefit most from high-speed two," she said.

The first phase of HS2 from London to Birmingham

"But high-speed two isn't the only investment that the Government is making. Over the next five years it is planning to spend £73bn on transport infrastructure."

Earlier this month, the Treasury Select Committee said HS2 had "serious shortcomings" and should be put on hold.

It said a "more convincing" economic case was needed for the scheme, which is now estimated to cost £42.6bn - 17% higher than first thought.

A Department for Transport spokeswoman said: "These figures show that the new north south railway is vital to rebalance our economy and it boosts the north overall more than the south. Of course the line does not serve every city and region and these figures reflect that.

"But it is wrong to take them in isolation. HS2 is part of a much bigger boost to our transport system - £73bn in the next parliament, of which HS2 is just £17bn. This will massively benefit places HS2 will not serve long before the line opens."

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JPMorgan Facing Record £8bn Fine: Reports

One of America's biggest banks is facing a record $13bn (£8bn) fine for mis-selling mortgage-backed securities in the run up to the 2008 financial crisis, say US reports.

A tentative deal has reportedly been reached between JPMorgan and the US Justice Department.

Last month, the bank was fined more than £600m over the "London Whale" trading scandal arising from disastrous trades by former bank employee Bruno Iksil.

If the deal is finalised, it would be the biggest settlement of its kind ever paid by a US company.

The agreement was reached by Attorney General Eric Holder, Associate Attorney General Tony West, JPMorgan CEO Jamie Dimon and the bank's general counsel Stephen Cutler in a phone call on Friday night, according to the Wall Street Journal.

It does not resolve a criminal investigation into the bank's conduct being handled by federal prosecutors in Sacramento, California, according to the reports.

On Friday night, Mr Holder told the bank that a non-prosecution agreement was a non-starter, meaning the Justice Department will continue its criminal investigation into JPMorgan.

JPMorgan executives give evidence over the 'Whale' losses to US Senate

As part of the deal, the Justice Department expects the bank to co-operate with its probe into the sale of overvalued mortgage-backed securities, which were blamed for the near-collapse of the banking system in 2007.

JPMorgan spokesman Brian Marchiony and Justice Department spokesman Brian Fallon declined to comment on the reports.

Of the $13bn, $9bn is fines and $4bn will go to consumer relief for struggling home-owners, it is claimed.

When the US housing bubble burst in 2007, bundles of mortgages sold as securities turned sour and the investors who bought them lost billions.

In the aftermath, public outrage boiled over that no high-level Wall Street executives had been sent to jail.

Some lawmakers and other critics demanded that the big bailed-out banks and senior executives be held accountable.

In response, the US government set up a task force of federal and state law enforcement officials to pursue wrongdoing with regard to mortgage securities.

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Energy Bills: Welby Slams 'Severe' Price Rises

The Archbishop of Canterbury has launched a stinging attack on Britain's energy firms, warning the latest round of price hikes seem to be "inexplicable".

Justin Welby insisted the so-called Big Six energy companies had an obligation to behave morally rather than to simply maximise profit.

His intervention, published in an interview with the Mail on Sunday, came after British Gas followed in the footsteps of SSE by announcing a 9.2% increase in prices.

The head of the Church of England, himself a former oil executive, said he understood the anger the rises had generated.

"The impact on people, particularly on low incomes, is going to be really severe in this, and the companies have to justify fully what they are doing," Mr Welby said.

Last week British Gas announced a 9.2% increase in prices

"I do understand when people feel that this is inexplicable, and I can understand people being angry about it, because having spent years on a low income as a clergyman I know what it is like when your household budget is blown apart by a significant extra fuel bill and your anxiety levels become very high. That is the reality of it."

The Archbishop urged firms to be "conscious of their social obligations", saying they had to "behave with generosity and not merely to maximise opportunity".

"They have control because they sell something everyone has to buy. We have no choice about buying it. With that amount of power comes huge responsibility to serve society," he said.

"It is not like some other sectors of business where people can walk away from you if they don't want to buy your product and you are entitled to seek to maximise your profit.

"The social licence to operate of the energy companies is something they have to take very, very seriously indeed."

Electricity prices are rising faster than those for gas

But the Church Of England owns a significant number of shares in energy companies.

Sky's Chief Political Correspondent Jon Craig said: "Justin Welby has now joined in this increasingly politically charged debate about energy prices - the only embarrassment really for the Church of England really is that it owns more than £7m of shares in Centrica and about £6m of shares in SSE.

Craig added: "The remarks have been welcomed already by the Labour Party - but they will infuriate government ministers, the Prime Minister and the Energy Secretary."

An ongoing bitter political spat over energy has seen Labour leader Ed Miliband attempt to seize the initiative by pledging a 20-month-long price freeze.

Prime Minister David Cameron has dismissed the idea as a "con", and encouraged consumers to switch suppliers to keep bills down.

But polls have suggested that Labour's promise is popular with voters, putting pressure on the coalition to respond.

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London House Prices Leap 10% In Just A Month

London house prices are said to have soared to a new high this month, beating their previous record by nearly £30,000 and fuelling fears that the capital is overheating.

Property website Rightmove said asking prices in the capital saw an "unsustainable" 10% month-on-month increase in October, pushing typical asking prices to £544,232, leapfrogging a previous high set in July by more than £28,000.

It put much of the increase down to a "frenzy" of activity in parts of prime inner London as overseas investors look for a safe haven to place their cash amid the troubles of the eurozone, which is "leaving the shelves bare".

Westminster was named as London's strongest-performing house price area in October. Prices there have soared by 11.9% month-on-month to reach £1.6m typically.

Kensington, Chelsea, Hammersmith and Fulham also recorded increases of 11.8% in sellers' asking prices over the month.

In comparison, Rightmove said across England and Wales, asking prices rose by 2.8% month-on-month, following two months of falls, to reach £252,418 on average.

Prices across the country are 3.8% higher than they were a year ago, although in London they have shot up by 13.8% over this period, Rightmove said.

There are concerns that London's property market is overheating

Despite the overall upward march in prices, Rightmove said a bubble "seems a long way off in the majority of regions".

The patchy state of the housing market was still shown, as four areas recorded year-on-year falls in house values - Wales, the North, the North West and the West Midlands.

The North recorded the biggest year-on-year drop, with asking prices falling by 2.2% to reach £145,094 on average.

Sellers in Wales have dropped their asking prices by the second biggest amount over the last year, with prices falling by 1.4% annually to typically reach £165,708.

The findings come after the Council of Mortgage Lenders reported last week that lending activity is at its strongest in five years and the Office for National Statistics said UK house prices reached an all-time high of £247,000 in August, surpassing a previous 2008 peak.

Housing market activity among people with low deposits who have previously struggled to get on the property ladder is expected to increase further in the coming months, as a new phase of the Government's flagship Help-to-Buy scheme is fully fired into action.

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Tesco Vows To Cut Waste Food Mountain

Every family in the UK wastes an estimated £700 a year throwing away food, according to Tesco, which is launching a campaign to help curb the problem.

The supermarket's first ever food waste figures for its operations reveal that in the first six months of this year, 28,500 tons of food waste were generated in Tesco stores and distribution centres.

The research shows that 68% of salad to be sold in bags is thrown out, as are just under half of bakery items.

Around 40% of apples are chucked away, a quarter of grapes are wasted between the vine and the fruit bowl, and a fifth of all bananas are unused - with customers throwing one in 10 in the bin.

As a result of the findings, the retailer is to end multibuys on large bags of salad and is developing mix-and-match promotions for smaller bags to try to help customers reduce the amount they are wasting.

It is also removing "display until" dates from fresh fruit and vegetables, using smaller cases in stores and rearranging 600 in-store bakeries to reduce the amount of bread on display, with the aim of better stock control and less waste.

The supermarket tracked 25 best-selling products and combined information with data from the Waste and Resources Action Programme (Wrap) to give an overall food waste "footprint" for each item.

Tesco says it is making changes to its processes as a result of the data

The last figures published by Wrap in 2011 estimate that 15 million tons of food waste is generated each year in the UK.

Tesco commercial director of group food Matt Simister said: "We've all got a responsibility to tackle food waste and there is no quick-fix single solution.

"Little changes can make a big difference, like storing fruit and vegetables in the right way.

"Families are wasting an estimated £700 a year and we want to help them keep that money in their pockets, rather than throwing it in the bin.

"We're playing our part too and making changes to our processes and in store. Ending multi-buy promotions on large packs of bagged salads is one way we can help, but this is just the start and we'll be reviewing what else we can do.

"We're working with our suppliers to try to cut waste at all stages of the journey from farm to fork."

Wrap director Richard Swannell said he welcomed Tesco's approach to tackling food waste across the whole supply chain.

"Food waste is a global issue, and collaborative action is essential if we are to successfully reduce food waste and reap the financial and environmental benefits of doing so," he added.

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Tourist Attraction Firm Merlin In Float Plan

The company behind some of Britain's biggest tourist has announced plans to float on the London stock market.

Private equity-owned Merlin Entertainments, which operates sites including the London Eye, Madame Tussauds and Alton Towers, announced the decision on Monday morning.

It operates 99 attractions in 22 countries and received more than 54 million visitors in 2012.

Analysts believe the firm to be worth as much as £3bn.

Madame Tussauds has been popular as a London attraction for decades

Merlin said the public offer of shares will enable it to pay down debt and plan for the next stage of its development.

The company generated revenues of more than £1bn last year and is Europe's leading visitor attraction operator and the second largest globally after Walt Disney.

Other sites operated by Merlin include Legoland Parks, Chessington World of Adventures and Warwick Castle.

News of an impending float was first revealed by Sky News City Editor Mark Kleinman, last May.

Merlin is owned by private equity firms Blackstone and CVC Capital Partners, two of the world's biggest buyout firms, and would be likely to head straight into the FTSE 100 given its potential £3bn-plus valuation.

Blackstone and CVC will sell a significant chunk of their shares, although Kirkbi, the Danish family-owned investment company which owns the Lego and Legoland trademarks and 75% of the Lego Group, said it intends to retain a significant shareholding following the flotation.

It is expected that Merlin will raise around £200m in proceeds from the flotation, which will be open to retail investors.

The minimum application size will be £1,000 and shareholders will be entitled to a 30% discount on either two adult Merlin Annual Passes or one family Merlin Annual Pass.

The group said it had continued to trade well in the year to date, with revenues up 11% to  £888.7m in the 35 weeks to the end of August, including growth of 7.1% when stripping out investment in new attractions.

Chief executive Nick Varney said: "Merlin Entertainments comes to the market with a consistent record of strong growth in both revenues and profits and bright prospects for the future."

Merlin said the issue of shares will help it in "retaining and incentivising" employees.

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Providence Secures £450m London Theatre Coup

By Mark Kleinman, City Editor

Providence Equity Partners, a US investment firm, is to become the most influential player on the London stage by securing a takeover of the West End's biggest theatre group.

Sky News has learnt that Providence is expected to tie up a deal to buy a controlling stake in Ambassador Theatre Group (ATG) as early as Monday.

Providence is understood to have outbid a host of rivals including Blackstone, Carlyle, Charterhouse and Lion Capital in recent days to complete a takeover of venues such as the Lyceum and Piccadilly theatres.

Ambassador's current majority shareholder, Exponent Private Equity, is expected to remain a minority investor once the deal completes.

A number of international theatre groups are also understood to have been interested in examining Ambassador's books.

The timing of the takeover is surprising because of the expectation that a buyer would want to assess the company's performance during the crucial Christmas trading period, which accounts for about half of its annual trading profits.

Exponent acquired a roughly 55% stake in the UK's largest theatre operator in 2009 in a deal valuing it at just over £130m. The remainder is owned by a number of wealthy individuals and Ambassador's founders, Howard Panter and his wife, Rosemary Squire.

Ambassador's minority investors are said not to be keen to sell their shares as part of the current sale process, but one insider said the existing shareholder agreement contained a clause known as drag rights, which may mean that any buyer of Exponent's stake has the power to compel other investors to sell at the same time.

Exponent is expected to make a handsome return on its investment, which will also reap a windfall for Greg Dyke, the former BBC director-general who now chairs Ambassador as well as the Football Association. Other minority investors are said to include Rupert Gavin, the boss of Odeon and UCI Cinemas.

ATG owns about a dozen venues in London's theatreland, which are staging productions such as Jersey Boys, which is transferring to Ambassador's Piccadilly Theatre in March next year.

The Lion King, which is staged at the Lyceum, is one of the West End's most successful and long-running musicals.

In total, Ambassador owns 39 venues in Britain. It was established by Mr Panter and Ms Squire in 1992, and sold to Exponent four years ago in a deal that combined the existing ATG and the theatre portfolio of Live Nation, the American entertainment giant.

Since then, the company has expanded through bolt-on acquisitions including its debut appearance on New York's Broadway this year, when it paid around £40m to buy the Foxwoods Theatre, home to Spider-Man: The Musical.

A sale process will take place at a buoyant time for London's theatre industry. Ambassador saw a 17% surge in sales to £111m in the 12 months to March 2012, while operating profits during the same period rose nearly 70% to £15.5m. Both measures are understood to have grown again during the subsequent 12 months.

Overall West End ticket sales were up in 2012 for the ninth consecutive year despite an anticipated decline during the London Olympics.

Fears about the economic environment and the Games proved relatively unfounded with attendance increasing to almost 14m, up 0.56%, and box office sales setting a new record of £530m, up 0.27%.

Providence could not be reached for comment, while UBS, which is handling the auction, and Ingenious Corporate Finance, which is advising Providence, declined to comment.

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Rescue Plan Leaves Co-op With 30% Bank Stake

The Co-operative Group is to lose overall control of its banking arm amid a funding struggle, Sky sources have confirmed.

The Co-op will be left with only a 30% stake in the bank, according to Sky News City Editor Mark Kleinman.

An announcement is expected to confirm the deal next Monday, with City investors and bondholders filling the funding shortfall.

The growing likelihood of the self-styled ethical lender being controlled by predatory US hedge funds and blue-chip investors such as pension funds and insurers has triggered warnings over the bank's future ethos.

Meanwhile, the bank has confirmed a suspension of listing and trading on the London Stock Exchange of its subordinated debt securities.

"The group has stated that constructive engagement with bondholders is continuing and that Group remains confident that a proposal to recapitalise the bank can be agreed and put to bondholders," it said in a statement.

"The bank expects to request the suspension of the relevant securities to be lifted at the time that full details of a recapitalisation plan are announced."

The Co-op banking division operates as a mutual concept and currently has 4.7m customers. It includes an insurance arm for home, motor and pet cover.

On June 17 the bank, which was founded in 1872, announced it needed to raise £1.5bn to plug the capital black hole.

The bank now admits it needs an additional £105m to deal with increased provision for payment protection insurance (PPI) and other product mis-selling claims, and "expects that many elements of any recapitalisation plan will be materially different".

The recapitalisation from outside the mutual comes after the Co-op previously set aside £269m to compensate customers mis-sold PPI.

The recalculated funding shortfall is due to more customers coming forward as well as the Financial Conduct Authority providing fresh guidance on appropriate levels of compensation for customers.

The sum also includes a compensation for mortgage customers affected by a newly-discovered flaw in which they were charged only interest on their first mortgage instalment - meaning further payments were higher than they should have been.

Customers who took out Platform and Optimum mortgage products would have been affected although the bank has not yet notified any of them and further details of the scale of the issue remain unclear.

The bank said the overall new provision of up to £105m also took into account "the identification of a technical breach of the Consumer Credit Act".

This was thought to relate to failing to inform some loan customers that they could reduce their outstanding balance.

The overall provision from the bank also includes money put aside because of overdue payments and unpaid cheques.

Co-op disclosed the figures as it prepares for its recapitalisation plan - which will mean it has to publish financial details to the stock market.

The attempt to plug the £1.5bn black hole in its balance sheet through a painful fundraising will force losses on to owners of its bonds and leave it with a stock market listing - ending its prized mutual status.

Hedge funds represented by investment banks had earlier demanded the bank tear up its rescue plan, instead proposing an alternative plan of converting all its bonds into shares, giving it a bigger stake in the lender.

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