Energy Firm Pays Heavy Price For Overcharging

Energy firm E.ON is to hand £7.75m to Citizens Advice for customers who were overcharged after price rises.

The sum is on top of the £400,000 E.ON has already paid back money to others who may have been affected.

Regulator Ofgem said the penalty reflected the company's "repeated failing" on billing rules.

It wrongly imposed exit fees and overcharged customers following price rises in January 2013 and January 2014

Under Ofgem rules firms are not supposed to apply exit fees if a customer signals their intention to move supplier within the standard 30-day notice period of a price increase.

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This is the case even if the switch occurs after the rise.

Sarah Harrison, Ofgem's senior partner in charge of enforcement, said: "(Our) rules give customers a chance to avoid exit fees and higher costs when suppliers put up prices.

"These are important customer protections and it is vital that suppliers play by the rules so customers are encouraged to engage in the market."

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In November 2012, E.ON, one of the UK's six biggest energy suppliers, was required to pay £1.7m for similar failings.

Ms Harrison commented: "It's absolutely unacceptable that E.ON failed to provide these vital customer protections yet again and this persistent failure is the reason for the high penalty."

The errors in respect of price rises in January 2013 and 2014 affected direct debit and standard credit customers. The average amount paid back was around £8 and £12 respectively.

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The mistakes also resulted in around 11,500 prepayment customers - traditionally the poorest - missing out on an average refund of £3.42.

E.ON is aiming to reimburse them by the end of April.

Last May E.ON was ordered to pay back a record £12m for mis-selling.

Video: Energy Bills: What We're Paying

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Pru Boss 'Irritated' By Labour Letter Row

By Mark Kleinman, City Editor

A row over company bosses' political affiliations ahead of the General Election deepened on Thursday amid allegations that Labour was trying to undermine the leaders of some of the UK's biggest businesses.

Friends of the Prudential chief executive, Tidjane Thiam, told Sky News that he was "irritated" at suggestions from Labour sources that he was reconsidering his backing for a pro-Conservative letter which appeared in The Daily Telegraph this week.

The letter, which was originally signed by 103 business leaders, expressed support for Tory economic policies and warned that a "change of course" could jeopardise Britain's economic recovery.

Despite indicating that Labour was unconcerned by bosses' backing for the Tories, one Labour aide suggested on Thursday that Mr Thiam had "regretted" his decision to sign the Telegraph letter.

That provoked a robust response from people close to the Prudential chief, who is leaving his role this year to head the Zurich-based banking group Credit Suisse.

Video: Labour 'Wants Business To Succeed'

"He made his views clear and they speak for themselves, so he is unlikely to be happy at anyone else trying to misrepresent his position," a friend of Mr Thiam said.

Labour had earlier seized on a decision by Pascal Soriot, chief executive of the drug-maker AstraZeneca, to withdraw his association with the pro-Tory letter.

Mr Soriot did not say why he had signed the letter, but issued a statement saying: "Neither I nor AstraZeneca endorse any political party and while I support such policies my name should not be used in the context of the letter."

Labour aides also tried to claim that the chief executive of Ladbrokes had also changed his mind about being a signatory but omitted to mention that Richard Glynn, whose name appeared on the list of supporters, stepped down this week.

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His successor, Jim Mullen, said he would not sign any similar letters during an election campaign.

A Conservative Party source said that Labour was trying to "intimidate or undermine" business leaders from speaking out on the economy.

Sky News revealed earlier this week that Stefano Pessina, the boss of Walgreens Boots Alliance, had been approached but declined to sign the letter just weeks after being attacked by Ed Miliband for saying that a Labour government could be "disastrous".

In Thursday's seven-way party leaders' debate, David Cameron referred to the support from business leaders as evidence for the need to keep the Tories in government.

Video: David Gauke Discusses Open Letter

The festering row about business support for the main parties was also reignited this week when Chuka Umunna, the Shadow Business Secretary, said that Paul Walsh should not become the next president of the CBI after opting to show support for the Conservatives.

Sky News revealed in February that Mr Walsh, the former chief executive of Diageo, was being lined up to succeed Sir Mike Rake, and his appointment is expected to be confirmed later this month.

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Temasek Snaps Up Stake In UK's Funding Circle

By Mark Kleinman, City Editor

A fast-growing peer-to-peer lending platform is to sell a stake in itself to Temasek, the Singaporean sovereign wealth fund, as part of a fundraising that will catapult it into the ranks of Britain's most valuable technology start-ups.

Sky News can exclusively reveal that Funding Circle is in advanced talks with Temasek Holdings about plans to raise well over £50m in new capital to accelerate its expansion.

Temasek, which has invested in some of the world's most valuable technology companies, including China's Alibaba, plans to invest roughly £30m as part of the deal, sources said on Thursday.

An arm of Blackrock, the world's biggest money manager, and Baillie Gifford, the Edinburgh-based asset management group, are also expected to participate in the deal, which will value Funding Circle at in excess of $1bn (£675m).

The funding round, which is likely to close within weeks, will cement Funding Circle's status as one of the UK financial technology, or fintech, sector's most exciting prospects.

Funding Circle's existing investors include funds such as Index Ventures, Accel, Union Square Ventures and Ribbit Capital.

They each stand to make substantial gains on the value of their holdings in the company, which was founded less than five years ago.

Funding Circle, which is also backed by the Carphone Warehouse co-founder Sir Charles Dunstone, describes its mission as being to "revolutionize the outdated banking system and secure a better deal for everyone".

Since opening for business, it has lent close to £600m and counts more than 30,000 individuals, the UK Government and local councils among those providing capital through the platform.

Pressure from the Government on banks to refer borrowers to peer-to-peer lenders when their loan applications are rejected by high street stalwarts is fuelling a rapidf growth in demand in the sector.

"Too much business lending is concentrated in the big banks," Vince Cable, the Business Secretary, said last year.

"If we're to have a properly functioning business lending market, they need to be challenged by new banks, peer-to-peer lenders and other alternative providers."

Last year, Funding Circle announced an agreement with Santander UK to refer small business borrowers to the tech company.

Samir Desai, the peer-to-peer lender's chief executive, said:

"This partnership recognises our role as the only marketplace that caters for, and is dedicated to, small businesses. In Santander we have found a fellow challenger brand that shares our commitment to putting small business customers' needs first. They have created a blueprint for other banks to follow."

Since then, other banks have struck similar deals with Funding Circle and its competitors, which offer higher interest rates than high street banks because of their lower fixed-cost bases.

Investors' enthusiasm for the peer-to-peer lending industry has also been fired by the successful initial public offering of Lending Club, the world's biggest peer-to-peer platform.

Funding Circle and Temasek declined to comment on Thursday.

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M&S Reveals Like-For-Like Sales Up 0.7%

Marks & Spencer has revealed like-for-like sales of food and clothing are up 0.7%, the first rise in sales for 14 quarters.

The retailer issued a trading statement for the 13 weeks to 28 March, which also revealed that total like-for-like UK were up 0.7%, group sales were up 1.9% and international sales were down 3.8%.

The lift in sales, the first rise in more than three years of trading, has been attributed to a customer response to changes in "product quality and styling" and an increase in the sale of more full-price items.

Food sales were also helped by record Valentine's Day trading.

The group said its spring and summer collections have been well received, including its much talked about suede skirt.

M&S is pleased with the response to its 70s-style suede skirt

M&S shares opened up 4% after the fourth quarter sales figures beat City expectations. Analysts had expected a 1.2% drop in like-for-like sales.

The company said that online sales returned to growth of 13.8%, with traffic numbers and customer satisfaction ratings continuing to improve since distribution problems hit Christmas trading.

Marc Bolland, chief executive, has faced increasing pressure to turn around the clothing business.

He said: "We have made strong progress over the quarter. In food we delivered another excellent performance, with sales growth ahead of the market.

"We continued to deliver on general merchandise gross margin, and are pleased that we have achieved this whilst also improving general merchandise sales."

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'Radical' Pension Changes Come Into Force

By Poppy Trowbridge, Consumer Affairs Correspondent

Major changes to pension rules come into effect today which will allow savers to have more control over their money when they retire.

People aged over 55 are now able to cash in their pensions and spend them as they wish.

The changes were announced by Chancellor George Osborne in his Autumn Statement and were expanded in last month's Budget.

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Retirees are no longer required to use their pension pot to buy an annuity when they retire.

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They can now take their pot in one go, or use it like a bank account to withdraw money in slices.

The changes will apply to the 320,000 people who retire each year with a defined contribution (DC) pension.

Around 540,000 people will be able to take control of their savings from today, according to estimates from the Government.

And from next year, as many as six million pensioners who already have an annuity will be allowed to sell them for cash.

Critics of the new system say savers will be tempted to go on a spending spree, leaving the state to pick up the tab later on.

But Pensions Minister Steve Webb told Sky News: "We're not going to have two million people making decisions this week or this month.

Video: How Will People Use Their Money?

"We certainly think there will be many thousands of people who have planned very carefully and put the capacity in place.

"But I think lots of people, although they in theory could use these new freedoms, in fact if you're in your late 50s and still working, you may go on saving into a pension for many years to come."

Government advisor and pension expert Ros Altmann said: "This is a radical departure from the past. I would trust people with their own money.

"Now it's up to the industry to offer better products and more choice."

The freedoms come at a price: those who choose to tap their defined contribution pension pots for cash should be aware of income tax thresholds.

Some 25% of a person's savings can be taken tax free. Any extra that is withdrawn is liable for income tax at 40% if the total exceeds £42,386 when added to annual income.

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The revenues from this could raise an extra £1bn for the Treasury, according to the Institute for Fiscal Studies.

The Government's free, impartial, Pension Wise service has been established to offer guidance to everyone eligible for the freedoms.

Pensions minister Steve Webb said: "It is right that people should have the power to make their own decisions about how they spend their own money after decades of careful saving - ending the effective obligation to buy an annuity will give people back control of their financial affairs."

It came as SNP leader Nicola Sturgeon launched her party's plan for pensioners, listing "the kind of policies" they will pursue if they secure a significant number of seats in the General Election.

"We will maintain the 'triple lock' on pensions, we'll set the single-tier pension at £160 a week, we'll resist any further increases in the state retirement age in Scotland until we have tackled and closed the life-expectancy gap (and) we will absolutely oppose any attempt to take away the winter fuel allowance."

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Tories Woo New Backers As Boots Boss Says No

By Mark Kleinman, City Editor

The Conservatives have embarked on a fresh attempt to court backing from the business community hours after the publication of a letter warning against "a change in (economic) course" pursued by a Labour administration.

Sky News can reveal that Lord Feldman, who chairs the party's board and was responsible for organising a pro-Tory letter in Wednesday's Daily Telegraph, has urged other business leaders to add their support for a Conservative government.

"I hope you have seen the Daily Telegraph today that has published a letter with over 100 business leaders supporting the Conservative's policy to lower corporation tax to 20% effective today," Lord Feldman wrote in an email to company executives obtained by Sky News.

"I am writing to ask if you would consider adding your name as a signatory to this letter.

"It is clearly important to send a signal that the business community is behind the Conservatives' long-term economic plan, and does not want to see a change of course."

Sky News also understands that the boss of Boots, the high street health and beauty retailer, was asked to sign the original letter but declined, just weeks after being attacked by Ed Miliband for predicting that a Labour election victory could be "disastrous" for the UK economy.

Stefano Pessina, who runs the US-headquartered Walgreens Boots Alliance, opted not to put his name to the letter because as a Monaco resident he is not entitled to vote in UK elections.

In a statement, a spokeswoman for the company, which employs tens of thousands of people in the UK, said: "As Stefano Pessina is not a UK citizen and does not vote in the UK, he would not sign any letter to support a political party in the UK General Election.

"Furthermore, he has not previously signed any letters to back political parties on such occasions.

"As a businessman, international entrepreneur and investor, Stefano naturally takes a keen interest in the overall business environment in the countries in which he leads businesses.

"With this in mind, he has previously expressed views regarding certain business policies and recommendations, especially regarding the UK economy to which he has been very committed and highly supportive for 20 years."

Mr Pessina was stung by the Labour leader's accusation in February that he was "avoiding his taxes", an allegation he strongly denied.

Although Mr Pessina and others approached about the letter declined to sign it, its publication will reinforce the widely held perception that the Conservatives enjoy far stronger support from the business community than Labour.

Under the Tory-led coalition, corporation tax has been reduced to 20% following a string of annual cuts which Labour has pledged to reverse in order to favour tax cuts for smaller companies.

It is unclear whether the Conservatives plan to publish an updated version of the letter once new signatories are added.

George Osborne, the Chancellor, said the letter represented an "unprecedented intervention" in a General Election campaign.

"A hundred business people, employing over half a million people and leading some of Britain's best-known companies, from Primark to the Prudential and from BP to Britvic and Mothercare have spoken out," he told Sky News.

Some observers suggested, however, that after weeks of corralling support, the Tories would have been disappointed to enlist support from the chief executives of only three FTSE-100 companies: Associated British Foods, BP and Prudential.

The festering row about business support for the main parties further deepened on Wednesday when Chuka Umunna, the Shadow Business Secretary, said that Paul Walsh should not become the next president of the CBI after opting to show support for the Conservatives.

Sky News revealed in February that Mr Walsh, the former chief executive of Diageo, was being lined up to succeed Sir Mike Rake, and his appointment is expected to be confirmed later this month.

A CBI spokesman said: "The CBI is a politically neutral organisation and its senior post holders will always act impartially.

"The CBI has made no announcement about its next president."

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Kurt Geiger To Try On Another New Owner

By Mark Kleinman, City Editor

The upmarket shoe retailer Kurt Geiger is preparing to try on another new owner less than a year after its last buyout.

Sky News understands that the company's management and their backers at Sycamore Partners, an American private equity firm, have hired bankers at Goldman Sachs to explore a sale of part or all of the business.

An outright sale would be the latest in a string of deals involving Kurt Geiger, which prides itself on its celebrity customer base and which operates footwear concessions in department stores including Harrods and Selfridges.

Jon Hamm, the Mad Men actor, and ‎the model Rosie Huntington-Whiteley are among prominent fans of the brand.

The price tag attached to the fashion label, which is moving into the children's footwear market, is unclear‎ although analysts said it could be in the region of £300m, roughly equivalent to last year's estimated sales figure.

The brand was bought by Jones Group, a US fashion company, in 2011 in a deal worth £215m.

Jones' subsequent troubles led it in April last year into the arms of Sycamore, which days later sold a stake to Kurt Geiger chief executive Neil Clifford and other senior managers.

At the time, Mr Clifford said:

"We believe our company has tremendous potential for growth in the UK and internationally, and we will continue to invest in new opportunities alongside our department store and brand partners."

In a recent interview with The Times‎, Mr Clifford raised the prospect that Kurt Geiger could abandon its US operations, citing the need for substantial infrastructure investment to make a success of the move.

Preparations for another sale could take several months, with Kurt Geiger expected to appeal to private equity firms for investing in the luxury goods and retail industries, as well as international fashion houses.

A stock market listing is another possible alternative.

In addition to its hundreds of concession operations, Kurt Geiger sells its own brands‎ such as Carvela in more than 70 stores around the world.

Kurt Geiger's first shop opened on London's Bond Street in 1963, but it took until 2007 before its first significant overseas expansion into Europe and the Middle East.

Four years after that, the business was sold to Jones Group by Graphite Capital, a private equity firm which had bought it from Barclays' buyout arm in 2008.

Prior to Barclays, Kurt Geiger had been owned by Mohamedd Fayed, the then owner of Harrods.

Sycamore Partners and Goldman Sachs both declined to comment.

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Sluggish US Economy Adds Only 126,000 Jobs

By Sky News US Team

A slow US economy added a lower-than-expected 126,000 jobs in March, though the unemployment rate held steady, as predicted, at 5.5%.

Friday's jobs reports broke a run of 12 consecutive months in which the economy added more than 200,000 jobs.

It was the smallest jobs gain since December 2013, said the Labor Department.

Job gains in February and January this year were also revised down by 69,000.

US manufacturing and construction activity is anaemic, while hiring at restaurants is down as the country emerges from a harsh winter.

Average hourly wages rose a modest 7 cents to $24.86 (£16.68) an hour.

The disappointing report could hold back the Federal Reserve from raising interest rates in the middle of this year.

Cheaper oil has hurt manufacturers as energy firms rein in orders for equipment, and has yet to show an impact on consumer spending. 

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Tories Accused Of 'Secret Tax Plan' By Labour

The Conservatives have been accused by Labour of favouring the rich after the Chancellor refused to rule out cutting the top rate of income tax in a Sky News interview.

George Osborne told the Murnaghan programme his party had "no plans" to further reduce the top rate of tax and insisted it was not a priority.

Prime Minister David Cameron also said: "It's not our policy, it's not our plan."

But Labour claim the Chancellor has been "flushed out", pointing out Mr Osborne used the same words about VAT before the last election, which he then raised from 17.5% to 20%.

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The opposition has promised to bring back the 50p rate for those earning upwards of £150,000, claiming the cut to 45p had benefited the wealthiest by at least £85,000.

Pressed on whether top earners could be in line for another tax cut, Mr Osborne said: "You can judge us by what we say we want to do.

"And what we want to do is increase the tax-free personal allowance to £12,500 so people full-time on the minimum wage don't have to pay income tax and millions are better off.

"And when it comes to higher rate taxpayers our priority is increasing the threshold at which you pay that higher rate, the 40p rate, to £50,000.

"Those are our big tax commitments for the coming parliament."

Tackled repeatedly over whether the top rate could be cut further, Mr Osborne said: "If that was our priority or our plan we would have made it part of our plan and made it one of our priorities."

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But Labour's Chris Leslie told Murnaghan this was the same argument previously used by Mr Osborne on VAT, which he had then increased.

The party's priority, he claimed, "is always about helping the very richest in society".

Mr Leslie said later: "The Conservative Party's secret plan has now been exposed.

"Asked four times, George Osborne repeatedly refused to rule out another top-rate tax cut for millionaires.

"The Tories have raised taxes for millions but cut them for millionaires.

"And it's now clear that if they win the election they'll do the same again."

Video: Osborne Won't Rule Out Top Tax Cut

But Treasury minister David Gauke hit back, claiming Labour have a "secret plan" of their own for £3,028 of tax rises for every working family.

He said: The British people have a right to know what these tax hikes are.

"Already Ed Balls has been forced to admit that Labour will drag a million more hardworking taxpayers into the 40p income tax rate.

"The reality is Labour also need a National Insurance rise to make their sums add up.

"Conservatives will freeze VAT, Income Tax and National Insurance.

"So the choice at this election is clear. Lower taxes under David Cameron. Or higher taxes under Ed Miliband and the SNP."

Video: Cameron: No Change To Top Tax Rate

The clash over tax is just the latest between the two main parties as the election campaign gets into full swing.

In recent weeks, Mr Cameron ruled out an increase in VAT while Labour committed not to increase National Insurance.

Mr Osborne also warned "an unholy alliance" between Labour and the SNP after the election would threaten the future of the UK and its economy.

SNP leader Nicola Sturgeon has offered to help Ed Miliband "lock David Cameron out of Downing Street" amid claims she had told the French ambassador she would prefer a Tory win.

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Challenger Poaches Exec From Bank of England

By Mark Kleinman, City Editor

One of a new wave of banks set up to challenge the hegemony of the UK's established high street lenders will announce this week that it has poached a senior executive from the Bank of England.

Sky News has learnt that Bank and Clients (B and C) has lured Nicole Coll, the chief financial accountant at the Bank of England since June 2013, to become its first chief of finance and operations.

The appointment, which will be announced on Tuesday, underlines the extent to which start-up banks are turning to regulators and central banks to fill their executive ranks as they seek senior staff with significant experience.

Prior to joining the Bank of England, Ms Coll held senior roles at Societe Generale, the French banking group, and Marex Spectron, a broker-dealer.

B and C was set up recently by Ocean Capital, an investment firm, which paid £13m to acquire a banking licence held by Somerset-based Church House Trust.

Offering a range of mortgage and savings products, it had been relegated to a peripheral role at Virgin Money, which took ownership of it in 2009.

Ocean Capital provided loans to private and public companies across Europe and North America, and is led by two brothers, Edouard and Julien Bridel.

Under the B and C name, the bank now intends to strengthen its focus on business lending.

B and C's launch coincides with the stock market listings of two rival challenger banks, with shares in Aldermore and Shawbrook both performing strongly since making their stock market debuts in recent weeks.

A string of other start-up banks have begun to emerge in the years since the financial crash, including Metro Bank and OakNorth, which this week announced that Lord Turner, the former chairman of the Financial Services Authority, would join its board.

Meanwhile, Lord McFall, the previous chairman of the Treasury Select Committee, has joined Atom Bank, a digital-only venture, as a director.

Further measures to promote competition in banking were announced last month in George Osborne's final Budget before the General Election‎, with a particular focus on a new Midata tool to enable consumers to compare current accounts.

The Competition and Markets Authority is due to conclude an inquiry into the personal current accounts and SME banking markets later this year.

The perception that challenger banks will be assisted by Government policy ‎whatever the outcome of May's election was one factor in the timing of the decisions by Aldermore and Shawbrook to proceed with their listings in the early part of this year.

A spokesman for B and C declined to comment on Ms Coll's appointment.

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