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Nissan e-NV200 electric people carriers added to Merseytravel fleet

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Nissan e-NV200 electric people carriers added to Merseytravel fleet

Merseytravel has added three Nissan e-NV200 Combi passenger vans to its maintenance fleet.

The local transport executive has added the vehicles to its fleet of 40 for use by maintenance teams.

The eNV200s – which cost an average of 2p a mile to run – are being used to transport workers and their tools around the Merseytravel estate including the various bus stations, three ferry terminals, seven tunnel ventilation stations and the two Mersey road tunnels: the Queensway and Kingsway.

With 90,000 vehicles crossing underneath the River Mersey every day, it’s Merseytravel’s job to ensure that the tunnels are effectively maintained in the most cost effective way.

By using the e-NV200, fuel costs are substantially reduced while it also helps to improve the local air quality as they do not emit any exhaust emissions.

Councillor Liam Robinson, chair of Merseytravel, said: “Our vision is for electric and other low emission vehicles to play a role in developing a vibrant low carbon economy across the region.

“The introduction of more electric vehicles to our own fleet is another major step forward.”

Last year Merseytravel took an all-electric Nissan Leaf as one of its pool cars.

It has also launched its ‘Recharge’ initiative, a government-funded project to provide a network of charging points at key locations to encourage and support electric vehicle ownership throughout the Liverpool City Region and West Cheshire. Additionally passenger van or minibus insurance premiums can differ and insurance providers should be made aware of the fuel type.

So far 30 chargers have been installed at locations including ​Seacombe  Ferry Terminal, Alder Hey Children’s Hospital, Broad Green Hospital, and Liverpool John Lennon Airport.

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Inchcape delivers ‘robust’ Q3 UK performance

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Inchcape delivers ‘robust’ Q3 UK performance

Inchcape delivered a “robust” performance in Q3 with turnover up 9.4% to £1.739bn at constant currency and by 2.5% at actual currency compared to the same period last year.

Like for like revenue was up 10.1% at constant currency and by 3.1% at actual currency.

Its aftersales activities, which account for 50% of the group’s gross profit, performed well and in line with expectations. Strong new car sales in recent years have grown the 1-5 year car parc in the majority of markets.

In the UK revenue growth was robust with the corporate sector particularly strong in new car sales. Used Vehicle margins declined year on year in the quarter but aftersales activities performed strongly.

Stefan Bomhard, group CEO of Inchcape, said: “Our growth continues to be supported by the group’s strong portfolio of distribution and retail businesses, in attractive markets, across five continents, where we typically have strong long-standing positions. In line with our earlier expectations, we are set to deliver a robust underlying constant currency performance in 2015.

“We delivered a strong performance in Australasia, reflecting our increased Subaru market share supported by an improved supply of vehicles. Our premium and luxury brand partners in our Retail operations continued to grow ahead of the market.

“In Europe our revenue performance was solid and in line with our expectations. The Belgium market was benign and we saw a sequentially stronger revenue trend. Although the Greek New Vehicle market was down in the quarter, we managed to gain market share.”

Inchcape said the outlook was positive and in line with earlier expectations.

“We are well positioned to take advantage of the attractive growth prospects in the premium and luxury segments across our diverse market portfolio and are set to deliver a robust underlying constant currency performance in 2015, in line with expectations,” said Bomhard.

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UK mortgage sector competition to be examined

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UK mortgage sector competition to be examined

The UK’s financial watchdog has launched a consultation process on competition in the mortgage sector to seek input from interested parties to identify both good points and potential areas for improvement.

‘For millions of consumers a mortgage is one of the biggest, if not the biggest, financial transaction they will enter into in their lifetime. The mortgage sector also plays a vital role in the financial services industry and many areas of the economy,’ said Christopher Woolard, director of strategy and competition at the Financial Conduct Authority (FCA).

He explained that competition can play a key role in ensuring that the sector works well, delivering consumer benefits through lower prices, better customer service, and more product choice.

‘We are seeking stakeholders’ views on competition in the mortgage sector. These views, together with evidence from the FCA’s wider programme of work on mortgages, will help inform any future FCA work on this key sector of the economy, including any future competition market study,’ he added.

The FCA is interested in the range of factors that might affect competition in the provision of loans secured against a property, whether regulated or unregulated, including as a result of changes introduced following the Mortgage Market Review and any other barriers to entry, expansion or innovation.

It also wants to examine consumers’ ability to effectively access, assess and act on information about mortgage products and services and firms’ conduct and relationships and the deadline for input is 18 December 2015 with feedback scheduled for the first quarter of 2016.

The Council of Mortgage Lenders welcomed the announcement and described it is an excellent opportunity for the regulator to review the effect of regulation, as well as market practice, on lenders as well as their customers.

‘The FCA’s role in promoting competitive markets is the part of regulation that best helps foster creativity, innovation and a sharp focus on what drives customers,’ said CML director general Paul Smee.

‘It’s also essential in delivering the kind of environment in which reputable lenders of all shapes and sizes can thrive. We will be working with all our members to ensure that their perspectives are fully reflected as we work with the FCA on this vital issue,’ he added.

He went on further to say ‘It is also essential that adequate unoccupied property insurance is arranged as standard property insurance isnt suitable and lenders will insist on this’.

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Michael Pooley to succeed James McCarthy as President of CHEP Europe

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Michael Pooley to succeed James McCarthy as President of CHEP Europe

CHEP today announced a transition of leadership for its European operations. James McCarthy, is leaving the company after seven-and-a-half years. CHEP has appointed Michael Pooley, who has previously led the company’s UK & Ireland business as well as its Sales & Customer Operations team in the USA, as James’ successor as President, CHEP Europe.

The Group President of CHEP’s worldwide Pallets operations, Peter Mackie, said: “James McCarthy has done a great job leading CHEP Europe, driving our business closer to its customers, overseeing the launch of a number of new pallet solutions and developing our focus on assisting customers with their sustainability efforts. The entire CHEP family will miss James and wishes him and his family very well for the future. In Mike Pooley, we are delighted to appoint a strong successor to James. During his time as head of our Sales & Customer Operations for CHEP USA, he was integral to strengthening key customer relationships and energizing our teams. His appointment will provide both continuity and fresh impetus for CHEP in Europe as we continue to work together with our customers to make their supply chains more efficient and sustainable.”

Mr McCarthy will remain with CHEP until December 2015 to work alongside Mr Pooley to enable a smooth leadership transition. Mr McCarthy has led CHEP Europe since March 2013 and also held the roles of President, CHEP Western Europe and Chief Financial Officer, CHEP Europe, Middle East & Africa since joining the company in 2008. Mr McCarthy said: “I have worked for CHEP for seven-and-a-half years and it has been a great experience but now is the right time for me to move on. I am delighted to welcome Mike back to the business and look forward to watching CHEP Europe and its customers thrive under his leadership.”

Mr Pooley rejoins CHEP on 1 November 2015 from materials testing company Exova Europe, where he was Managing Director since April 2013. Mr Pooley worked for CHEP from 2002 until 2013, in leadership positions including: Senior Vice President, Sales & Customer Operations for CHEP USA; Managing Director, CHEP UK & Ireland; and Vice President, European Key Accounts. Before joining CHEP in 2002, he spent 12 years with industrial gases business BOC in a number of business development, design, development and production engineering roles. Mike is a Chartered Mechanical Engineer and holds a master’s degree in Business Administration from Henley Management College.

Mr Pooley said: “I am delighted to be returning to the CHEP family at a time when there are  so many opportunities to work with customers throughout Europe on developing solutions that make the supply chain better. I am excited at the prospect of again working with our wonderful portfolio of customers and our passionate teams of supply chain experts.”

About CHEP

CHEP is the global leader in managed, returnable and reusable packaging solutions, serving many of the world’s largest companies in sectors such as consumer goods, fresh produce, beverage and automotive. CHEP’s service is environmentally sustainable and increases efficiency for customers while reducing operating risk and product damage. CHEP’s 7,500-plus employees and 300 million pallets and containers offer unbeatable coverage and exceptional value, supporting more than 500,000 customer touch-points in more than 50 countries. Our customer portfolio includes global companies and brands such as Procter & Gamble, Sysco, Kellogg’s, Kraft, Nestlé, Ford and GM. CHEP is part of Brambles Limited. For further information, visit

For further information, please contact:

Víctor Collado

Director, Corporate Communications

CHEP Europe, Middle East & Africa

Phone: +34915579401

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New record for September plate-change market

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New record for September plate-change market

As widely expected the September plate-change hit a new high with registrations up 8.6% to 462,517 units, according to the SMMT.

The rise marked the 43rd consecutive month of growth for the new car market and pushed the year to date total up 7.08% to 2,096,886 units. This was the first time the 2 million barrier has been exceeded in September since 2004.

“September is traditionally one of the year’s biggest months for new car registrations, and last month set an autumn record,” said Mike Hawes, SMMT chief executive, who reiterated his belief that the market will soon level off.

“With plenty of attractive, affordable deals available on the new 65-plate, Britain’s car buyers – whether private, fleet or business consumers – were busier than ever. The market reached pre-recession levels some time ago, and we anticipate some levelling off in the coming months. It is too early to draw conclusions, but customer demand for diesel remained strong, accounting for one in two cars registered.”

The retail sector led the market accounting for 49.3% of registrations, a year on year rise of 3%. Fleet demand grew 15.2% taking 44.9%, while the sub 25 fleet business sector grew 10.6% and accounted for 5.8% of the market.

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Ridgeway Group profits rocket 26% to £10.3m

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Ridgeway Group profits rocket 26% to £10.3m

Ridgeway Group turned in a strong performance in 2014 with pre-tax profits up 26% to £10.3m on turnover up 18% to £647.7m.

Results filed at Companies House showed that like-for-like new car retail sales rose 7% for the period and 15% overall.

The group, under chief executive John O Hanlon (pictured) saw average new car price increased by £574 per unit, gross profit per unit fell slightly but total gross profit increased by £1.75m.

Like-for-like used vehicle sales rose 11% in the year to 31 December and 21% overall.

The company said it had improved stock management and used car processes, which had lifted profitability.

Average used car prices increased by £735 on average with gross profit per unit up 16% and overall gross profit increased by £5.4m.

Ridgeways said that aftersales revenues and profitability grew in 2014 with increased customer engagement through service plans and the use of technology.

The group won the Motor Trader Digital Initiative of the Year award in 2014 for the development and implementation of Workshop Window.

During 2014 the group rolled out a programme of training modules in the Ridgeway Academy, covering sales, aftersales, communications and management for staff at all levels. To date almost 900 employees have attended one or more sessions.

Ridgeway continues to invest heavily in its facilities with a new Audi showroom opening in Oxford in July 2014 and refurbishment of VW dealerships.

It also relocated Skoda in Oxford to Kidington and refurbished a Maserati dealership and Select used car showrooms during the period.

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JJ Foodservice updates fleet with 7.5t Isuzu Forward rigids

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JJ Foodservice updates fleet with 7.5t Isuzu Forward rigids

JJ Food Service has taken delivery of new Isuzu Forward 7.5 tonne rigid trucks.

Mick Montague from JJ Food Service said: “All our Isuzus have served us really well in the past. They are an excellent workhorse with outstanding payload capability.

“In fact, we have still got some 06 plate Isuzus running around on a daily basis within our fleet today. For our new bespoke service for home deliveries, we felt that the Isuzu Euro VI 7.5tonner would be the ideal vehicle to handle the requirements of this specific operation.”

The latest replacement Isuzu Forward N75.190 4×2 rigids feature the popular Easyshift automated transmission and are specified with a Solomon’s dual compartment refrigerated body that has a movable bulkhead. The trucks each use Carrier Transicold Xarios refrigeration systems as standard and the bodies have all been fitted with the latest JJ Food Service wrap livery.

“For the last few years, we have concentrated on adding 18 tonne rigids to our fleet, however recently, our product range has changed considerably, in terms of product categories and higher price points. To accommodate these changes, we needed to go back to putting more 7.5 tonne vehicles into the fleet. This gives us a better, more efficient, utilisation of these types of products,” added Montague.

Based at the JJ Food Service depot in Enfield, the latest Isuzus are being used for a range of the company’s distribution services, mainly delivering to customers in West London and the City.

As the delivery routes are not particularly high mileage, JJ Food Service anticipates that the new Isuzu delivery vehicles will have a long working life in its fleet.

“Isuzu and JJ Food Service have enjoyed a really successful working relationship that goes back over many years. This is part and parcel of the ITUK approach to its customers. By working closely with our customers such as JJ Food Service, we are able to develop long-term partnerships. We strive to deliver great customer service and care and provide vehicles that are ideally suited to the specific distribution requirements,” added Keith Child, marketing director at Isuzu Truck.

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Continued low interest rates boosting UK property sales

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Continued low interest rates boosting UK property sales

Home sales in the UK have exceeded 100,000 per month for a fifth month in a row with buyers attracted by low interest rates and attractive mortgage products.

The latest official transaction data from HMRC shows that the provisional seasonally adjusted UK property transaction count for October 2015 was 105,490 residential and 10,160 non-residential transactions.

The seasonally adjusted estimate of the number of residential property transactions decreased by 0.2% between September 2015 and October 2015. This month’s seasonally adjusted figure is 6.3% higher compared with the same month last year.

The data also shows that the number of non-adjusted residential transactions was 2.6% higher than in October 2014.

Peter Rollings, chief executive officer of Marsh & Parsons, pointed out that October marks the fifth consecutive month that home sales have cleared 100,000, putting activity in a whole other league to the first half of 2015. 

‘There has been a slight correction on a monthly basis, but we’re still head and shoulders above a year ago, as buyers ride high on the wave of low interest rates and attractive mortgage products,’ he said.
He also pointed out that in London, supply and demand are moving in different directions. ‘We’ve seen the number of available properties for sale fall 5% during the third quarter of 2015 compared to a 4% boost in buyers over the same period,’ he explained.

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Everything you Need to Know About Used Plastic Pallets

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Everything you Need to Know About Used Plastic Pallets

Plastic pallets have been available for the past 28 years, but it is just recently that their use has been growing at an unprecedented rate. The combination of health and safety considerations, quarantine conditions and environmental regulations has contributed to a sharp increase in the demand for used, as well as new, plastic pallets over the last decade.
Industrial Uses

Industries such as electronics, household goods, food and beverages, pharmaceuticals, construction and logistics, among many others, have switched from using wooden to plastic pallets. This is because the plastic version has 50 times the operational lifetime of the wooden version, as long as it is employed correctly according to its temperature and load specifications. Plastic pallets are now a necessity in the grocery sector for handling fresh produce as well as frozen food items.

The pharmaceutical, electronic and food sectors often require ultra-clean storage and transportation facilities. A plastic pallet can be sterilised up to temperatures of 120 degrees C if necessary without losing any of its strength and durability.

Space and Safety

h1With space at such a premium in many major cities, the plastic pallet has found a special application in warehousing. Not only are they more compatible with current automated methods of materials handling, but they can stack up in a small space when not in use. They can even be stacked outdoors in all conditions during those periods when storage space is tight. This provides a significant cut in shipping and warehouse space costs. An equivalent wooden pallet can only survive a few re-uses in a warehouse before it splinters and breaks, possibly hurting an employee or customer.

The plastic pallet is also significantly lighter than its wooden counterpart and has a smooth finish, with neither nails nor sharp corners. All this lowers any danger of injury at the workplace. Moist conditions adversely affect wooden pallets. They absorb water from the atmosphere and increase their weight while losing some of their strength. A plastic pallet remains the same in moist conditions. They are also impervious to fats, acids and solvents.

There are even greater advantages with used plastic pallets. They can be cleaned, disinfected and returned to distributors. A wooden pallet may collect fungus and bacteria during its use and can be of no further service.

Recyclable used plastic pallets provide a further benefit. Not only do they cut the disposal costs when their useful lifespan is over, but they can be converted into other plastic goods.


LP86-Light-Duty1Retailers and manufacturers have often doubted the cost-effectiveness of pallet pallets because their cost is higher than wooden ones. However, these costs amortise over the lifetime of the plastic pallet, making them an extremely cost-effective article. The average cost of a used wooden pallet is about half that of the used plastic version. But as the plastic pallet last up to 50 times as long as the wooden one, the advantage is obvious. So when retailers and manufacturers see any plastic pallets for sale, they should stock up as soon as possible.

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BHP rebuts UN ‘toxic waste’ claim

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BHP rebuts UN ‘toxic waste’ claim

BHP rebuts UN ‘toxic waste’ claim at Brazil dam

  • 27 November 2015
  • From the section Business

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The toxic mud reached the Atlantic Ocean, about 500km (310 miles) away from the area where the dam collapsed

Australian mining giant BHP says mud spilled by the devastating collapse of a dam at a Brazilian mine is not toxic.

On Thursday the UN said the dam burst at the Samarco mine unleashed a flood equivalent to “20,000 Olympic swimming pools of toxic mud”.

The incident earlier this month in Minas Gerais state left 13 people dead, devastating several villages. Eleven people are still missing.

The noxious river has trailed 500km from the mine into the Atlantic Ocean.

The mining giant said in a statement the waste water in the dam, a by-product of iron ore extraction known as tailings, did not pose any threat to humans.

BHP said: “The tailings that entered the Rio Doce were comprised of clay and silt material from the washing and processing of earth containing iron ore, which is naturally abundant in the region.”

He said the waste would “behave in the environment like normal soils in the catchment”.


The dam at the Samarco mine, which is jointly owned with Brazil’s own mining giant Vale, burst on 5 November.

The UN and Brazil’s environment agency have both tested the red-looking sludge, and say it it contains toxic chemicals.

The state water agency said it found arsenic levels at 10 times above the legal limit and other harmful metals.

The UN human rights agency also said that BHP and Vale had not taken steps to prevent the harm caused by the mine waste.

The country’s environmental agency Ibama has fined the iron-ore mine owners over Brazil’s “worst mining accident”.

Residents said there was no warning. They had to run for their lives as they realised the Fundao dam had collapsed.

Samarco has tried to protect plants and animals by building barriers along the banks of the river.

The company agreed last week to pay the Brazilian government 1bn reais (£170m; $260m) in compensation.

The money will be used to cover the initial clean-up and to offer some compensation to the victims and their families.

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Online chatting at work gets the thumbs up from bosses

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Online chatting at work gets the thumbs up from bosses

Online chatting at work gets the thumbs up from bosses

  • 27 November 2015
  • From the section Business

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Chatting at work is one thing, but could chatting about work online make us more productive?

Fancy being Facebook friends with your boss? Or being allowed to Snapchat your colleagues during office hours?

Well, this kind of office-based social networking is growing in popularity as a way of escaping the tyranny of corporate email.

Businesses wanting to streamline internal communications are turning to chat apps like Chatter, Slack and Yammer, as well as more established platforms like Facebook.

The market for enterprise social software, as it’s called, will be worth more than $8bn (£5.3bn) by 2019, up from about $5bn now, according to research firm Markets and Markets.

Of course, we’ve had company intranets for almost 20 years, but it’s the mobile friendly nature of many messaging apps that is shaking up this space.

In January 2015, Facebook unveiled its new business networking platform, Facebook at Work and has just launched an associated chat client, Work Chat.

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Most of us are used to social media in our private lives, but what about for work?

The social networking giant, with its 1.5 billion users, seems to want to dominate the corporate market, as well as the private sphere.

Facebook has signed up around 300 companies of varying sizes, including Heineken, Lagardere and Hootsuite.

‘Collaborative culture’

By far the largest deal it’s struck so far is with Royal Bank of Scotland, which announced in late October that following a successful pilot programme it will be rolling out Facebook at Work to all 100,000 employees in 2016.

But why?

Kevin Hanley, head of design at RBS says it’s all about facilitating collaboration between different arms of the business. Facebook at Work is “a key component in driving a more transparent, engaged, collaborative, culture,” he says.

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Sentiments echoed by Julien Codorniou, Facebook’s director of global platform partnerships, who says the platform is more than just a means of communicating, it’s a tool that drives productivity.

“We fundamentally believe that a connected workplace is a more productive workplace,” he says. “We want to connect three billion employees worldwide. All you need is a phone.

“We are giving everyone a voice.”

Facebook at Work functions in the same way as personal Facebook, and Mr Hanley says the familiarity explains its success at RBS.

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Facebook is aiming to consign work emails to the dustbin of history

“We’re finding there is no steep learning curve or training required. That means the adoption rate is much higher than previous attempts at doing something similar,” he tells the BBC.

Add in the benefits of its mobile app, which frees employees from desk-based applications, and RBS has found the tool to be “immediately useable”.

‘Finger on the pulse’

One of the most compelling reasons to try these new ways of working is to find an efficient alternative to the deluge of corporate emails, which, let’s face it, can sometimes be overwhelming.

Accounting software firm Sage implemented online communications portal Chatter into its business in April 2015.

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If everyone can join in the conversation will it make us more productive?

Sandra Campopiano, the firm’s chief people officer, says 9,000 topics have already been moved off email into “direct, snappy messages, or open, engaging groups and forums.”

“We want our people to use channels that feel natural to them and which help them to be collaborative,” she says.

“So social has to be one of the options, particularly in a tech company where so many of our colleagues are digital by nature.”

Andy Jankowski, founder of Enterprise Strategies, a corporate communications firm, explains that the value of these new enterprise social networks (ESNs) lies in this ability to make communications more natural and conversational.

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Salesforce Chatter

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Salesforce’s Chatter platform provides workers with secure social networking on any device

“They allow employees to comment, ask clarifying questions or share experiences in support of the messages being communicated,” he says.

“Communicating via an internal social network enables you to have a finger on the pulse of the organisation.”

The death of email?

But do these new ways of communicating really spell the end for the work email?

Critics of the venerable platform say it is essentially a one-way method of communication. Senders often have no effective way of knowing if the contents of their messages are relevant or understood. And recipients waste time sifting through emails they don’t need to see.

“Email overload is a common phenomenon in many corporations, resulting in employees simply not reading all that they receive,” says Mr Jankowski.

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Are we drowning in a flood of unnecessary corporate emails?

“This creates an environment where employees are often out of the loop because of the emails they have not read.”

Move conversations off email onto a social network where people can opt in or out and you have a fast-moving, visible means of sharing information and solving problems, they argue.

While Mr Jankowski thinks email is still the best way to communicate with one person or a small group, he agrees that the end of the companywide broadcast email may be nigh.

Ms Campopiano says “we may eventually see [email] die out, just like the fax.”

A waste of time?

But surely receiving endless message alerts and conversation updates can become highly distracting in the work environment and lead to lower, not higher, productivity?

Won’t we all be swapping cat videos?

Quite the reverse, argue Mr Hanley and Ms Campopiano: the ability to opt-out of irrelevant conversations actually frees up time.

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Could social media at work help us collaborate more effectively, the way ants do?

And Mr Codorniou says that while employees access Facebook at Work up to 50 times a day, the conversations are all about work.

In fact, Mr Jankowski believes that the data harvested by all this social network activity could prove very useful for businesses.

“We already use social network analysis with social media to make marketing decisions,” he says. “What if we could harness the collective brainpower of all employees to make better business decisions based on conversations and insights being shared across our internal social network?”

Security concerns

One issue that may make firms think twice about adopting social media-style apps for internal communications, however, is data security – where, and how securely, is your ESN provider storing all these potentially sensitive corporate conversations?

The EU’s rescinding of the Safe Harbour agreement means firms can’t assume US-based service providers are offering adequate privacy protections.

If it’s in the US, would you be happy for the US government to get its hands on them, invoking the Patriot Act?

That’s something to chat about – offline probably.

Follow Technology of Business editor @matthew_wall on Twitter

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Zambian businesses hit by power cuts

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Zambian businesses hit by power cuts

Zambian businesses pummelled by power cuts

  • 27 November 2015
  • From the section Business

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James Jeffrey

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Carpenter Stanford Mwanza says power cuts are seriously affecting his business

During an afternoon power cut in the Lusaka township of Bauleni, 52-year-old Stanford Mwanza does what work he can in his carpentry workshop by varnishing a wardrobe.

Among Bauleni’s 15,000 residents little stirs on streets full of normally active welders, mechanics and tyre menders during business hours, as workers wait for power to return.

Elsewhere across the Zambian capital of 1.4 million, and throughout this hydroelectric-dependent country, businesses are suffering after an erratic rainy season from last October to March this year left reservoir water levels too low, resulting in load shedding – or planned power-cuts – lasting eight to 14 hours a day.

Not everyone, however, accepts the government’s blaming of rains for the energy crisis that began shortly afterwards, but has worsened since August. Everyone agrees on the outcome, though.

“It is a hell of a problem,” Mr Mwanza says. “The power went at 10 this morning and now we just have to wait. Normally it takes me three weeks to finish a wardrobe but this one has taken two months.”

Poor rains

Zambia had one of Africa’s fastest growing economies – expanding on average 7% annually over the past five years – driven by mining of its huge copper and cobalt reserves.

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James Jeffrey

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During blackouts people resort to generators – if they can afford to

Then global prices for minerals dropped, coinciding with low rainfall and power cuts, and now Zambia’s local currency, the kwacha, is tumbling against the US dollar.

This triple whammy has hit everyone from multi-national mining firm Glencore, to mid-size local manufacturers, right down to Bauleni’s welders.

“If power comes on at night you do not feel like working, then when you wake up there is no power,” says Jabulani Keswa, pointing to an unfinished metal window frame. “The owner wanted this yesterday.”

“If food defrosts we have to throw it away, so we must use a generator, which is expensive,” says Bismark Musheke, 22, in a Bauleni butcher’s.

Many businesses cannot absorb such unplanned costs. A decent-sized generator for a modern office in Lusaka with 20 workers costs up to $14,000 (£9,000) – the cost has risen due to a weakened kwacha – while needing constant supplies of imported petrol or diesel, again subject to foreign exchange volatility.

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James Jeffrey

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In Bauleni’s Tiger Woods bar, bartender Patrick Mbewe has little to do during an afternoon power cut

Power cuts typically add 40% to businesses’ costs in emerging economies, the World Bank estimates.

As costs of doing business increase, output decreases and firms become less profitable – reducing the government’s tax take – says one foreign business advisor in Lusaka.

“There is less money to invest in infrastructure, development and debt repayment – it is a vicious cycle.”

For now, 59-year-old taxi driver Grivin Phiri has not let power cuts reduce output from his small side business run in his neighbourhood of Tenderer East, a larger Lusaka township.

“I do not care what time it is – if there is power I will make peanut butter,” Mr Phiri says beside the machine in his kitchen producing about 50 jars of peanut butter each week.

Mr Phiri says he remembers when rains used to arrive like clockwork each year on 24 October, but “now there is global warming.”

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James Jeffrey

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Taxi driver Grivin Phiri his 19-year-old son Rabson make peanut butter to earn extra income

Bad luck or management?

“The leadership should have prepared for this a long time ago,” says Evans Chisokwe, a Bauleni farmer. “Children cannot study at night.”

More than half Zambia’s hydroelectric power usually comes from the Kariba Dam – which has the world’s largest man-made reservoir – in the Zambezi river basin between Zambia and Zimbabwe.

“On the news we are told it is because water is low at Kariba Dam – that is the only thing we hear,” 33-year-old bar manager Elise Matafwali says of the power crisis.

Many say is not the first time Zambia has experienced the capriciousness of Mother Nature and the global commodity market.

“Zambia’s – and sub-Saharan Africa’s – energy crisis is caused by a lack of planning, a lack of investment as a result of low tariffs and prevarication by politicians, and poor management of the resource,” says Mark Pearson, a Lusaka-based independent regional integration consultant.

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James Jeffrey

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Critics say Zambia’s government-controlled electricity company needs overhauling

“We have known there would be an energy shortage for years and have allowed this situation to develop.”

This leads some to argue it is time the government-controlled Zambia Electricity Supply Corporation (ZESCO) was overhauled, with proper business leaders replacing government-chosen appointees whose mismanagement and lack of contingency planning has resulted in Zambia’s worst electricity crisis.

“Even if the rains come it will take time for water levels to rise enough,” says one ZESCO office manager.

“There is talk of full capacity returning by March; perhaps that is people being cautious and it may be earlier.”

African business rollercoaster

“Zambia sums up why business in Africa is a different ball game,” says Niels Bojsen, a Danish partner with Kukula Capital, a Lusaka-based investment company.

“Very few economies are in the world’s top 10 fasting-growing, and then suddenly are one of the countries with the largest currency devaluation.”

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James Jeffrey

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Once power returns welder Jabulani Keswa gets back to work making window frames

The main difference, Mr Bojsen says, is when problems hit Europe they appear more controllable. Whereas in Zambia, the fallout means severe power shortages and no one is sure when they will end.

The next two to four years will be rough for Zambia’s economy but it will recover due to richness in natural resources and great potential for agri-businesses and fish farming, he says, while noting Zambia could emerge stronger if the right lessons are learned and infrastructure established.

And Mr Bojsen is not alone in highlighting the advantages for business in Zambia compared with others in the region: peace and security, rule of law, political stability, lack of racial tension, a friendly population and a good climate.

Once power returns to Bauleni there is a rush to communal taps – with four local pumping stations starting again – workshops come alive, sparks fly from Mr Keswa’s blowtorch, and service picks up in Tiger Woods bar.

“Customers do not like warm beer,” says bartender Patrick Mbewe, reaching into a now humming, cooling fridge.

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Existing sales fall in October in the United States

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Existing sales fall in October in the United States

Existing home sales in the United States fell by 3.4% in October to a seasonally adjusted annual rate of 5.36 million from 5.55 million in September, the latest data shows.

All four major regions of the country saw no gains in sales. However, despite the decline sales are still 3.9% above a year ago at 5.16 million, the figures from the National Association of Realtors also show.

According to Lawrence Yun, NAR chief economist, the sales cooldown in October was likely given the pullback in contract signings in the previous couple of months. ‘New and existing home supply has struggled to improve so far this fall, leading to few choices for buyers and no easement of the ongoing affordability concerns still prevalent in some markets,’ he said.

‘Furthermore, the mixed signals of slowing economic growth and volatility in the financial markets slightly tempered demand and contributed to the decreasing pace of sales,’ he pointed out.

‘As long as solid job creation continues, a gradual easing of credit standards even with moderately higher mortgage rates should support steady demand and sales continuing to rise above a year ago,’ he added.

The median existing home price for all housing types in October was $219,600, which is 5.8% above October 2014 when it was $207,500). October’s price increase marks the 44th consecutive month of year on year gains.

The data also shows that total housing inventory at the end of October decreased 2.3% to 2.14 million existing homes available for sale, and is now 4.5% lower than a year ago. Unsold inventory is at a 4.8 month supply at the current sales pace, up from 4.7 months in September.

The share of first time buyers increased to 31% in October, up from 29% both in September and a year ago. NAR’s annual Profile of Home Buyers and Sellers, released earlier this month, show that the annual share of first time buyers fell to its second lowest level since the survey began in 1981.

All-cash sales were 24% of transactions in October which was unchanged from September and down from 27% a year ago. Individual investors, who account for many cash sales, purchased 13% of homes in October, unchanged from September but down from 15% a year ago. Some 62% of investors paid cash in October.

Distressed sales, foreclosures and short sales, declined to 6% in October, which is the lowest since NAR began tracking them in October 2008 and own from 9% a year ago. Some 5% of October sales were foreclosures and 1% were short sales. Foreclosures sold for an average discount of 18% below market value in October, up from 17% in September, while short sales were discounted 8% compared to 19% in September.

‘All-cash and investor sales are still somewhat elevated historically despite the diminishing number of distressed properties. With supply already meagre at the lower end of the price range, competition from these buyers only adds to the list of obstacles in the path for first time buyers trying to reach the market,’ Yun concluded.

A breakdown of the figures show that single family home sales fell 3.7% in but are still 4.6% above a year ago. The median existing single family home price was $221,200 in October, up 6.3% year on year.

Existing condominium and co-op sales declined 1.6% and are now down 1.6% from October 2014. The median existing condo price was $207,100 in October, which is 1.6% above a year ago.

October existing home sales in the Northeast were unchanged from September and 8.6% above a year ago. The median price in the Northeast was $248,900, which is 1.3% above October 2014.

In the Midwest, existing home sales declined 0.8% but are 8.3% above October 2014. The median price in the Midwest was $172,300, up 5.7% from a year ago.

Existing home sales in the South decreased 3.2% but are still 0.5% above October 2014. The median price in the South was $188,800, up 6.2% from a year ago.

Existing home sales in the West fell 8.7% to an annual rate of 1.16 million in October, but are still 2.7% above a year ago. The median price in the West was $319,000, which is 8% above October 2014.

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Average rental prices in London reach over £1,400 a month

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Average rental prices in London reach over £1,400 a month

Rental values in London have risen by 4.67% since June 2015, with the average rental price for a property in the capital standing at £1,467 compared to £1,402 in the summer, the latest figures show.

Greenwich saw the largest increase taking the average rent to £1,397 per month, according to the Rentify Property Index. The firm said that this could be due to the time of year when students are starting back at university.

Other areas that experienced considerable rental uplifts include Brent, with average rents in the North West London borough growing by £201 to almost £1,500 per month.

Next was Newham with an increase of £197 taking the average rent to £1,378 per calendar month, then Lewisham with an increase of £194 taking the average rent to £1,305 and Lambeth with an increase of £182 to an average rent of £1,617.

Areas that saw a fall in rent included Wandsworth where the average rent fell by £33, and Kingston-upon-Thames, with the average rent in the area falling by almost £90 to £1,237. Homes in the City of London have also experienced what the firm described as an unprecedented dip in price, with the average monthly rent dropping £185 to £2,149.
Although this can’t be considered a long term decline, the figures do highlight seasonality in the market, according to the report, which adds that the dip in costs could be in part attributed to the school calendar, with families moving to ensure they secure the best postcode possible for their child’s education during the summer months.
The data also showed how strong rental demand is across the capital. Bexley proved to be the most popular area for property hunters with an average of 10 people viewing each home in the borough each day, whilst other outer London boroughs such as Enfield and Haringey, both seeing an average of 9.6 viewers per day, also generating huge interest.
‘High cost of rent in central London is continuing to drive people away to outer boroughs in search of affordable housing. This however means that these so called cheaper locations are seeing a remarkable rise in rent due to their popularity. They are hot on the heels with central London due to strong demand,’ said Rentify chief executive officer George Spencer.

‘Furthermore, the recent buy to let tax hike introduced by the Chancellor will further constrain supply as less people invest in property to rent, making life increasingly hard for Londoners,’ he added.

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Number of untaxed UK vehicles doubles

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Number of untaxed UK vehicles doubles

Untaxed UK vehicles double after paper tax disc abolished

  • 26 November 2015
  • From the section Business

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The number of vehicles without road tax – Vehicle Excise Duty (VED) – doubled to 560,000 this summer according to the Department for Transport’s survey, months after the paper tax disc was abolished in October 2014.

The Department for Transport admits these changes probably caused the increase in untaxed vehicles.

The figures with 210,000 in 2013, the last time the survey was conducted.

The RAC says the figures are “worrying and disappointing”.

It claims there may well be a correlation between evasion of tax and the number of people driving without insurance.

The 560,000 vehicles represent about 1.4% of UK vehicles, up from 0.6%.

Last year, the paper tax disc was abolished, and the authorities now use a network of cameras linked to a database to work out which vehicles are being driven illegally.

‘Significant’ revenue loss

“Almost 99% of all vehicles on the road are correctly taxed: that’s around £6bn in vehicle tax passed to the Treasury every year,” said Oliver Morley, chief executive of the Driver and Vehicle Licensing Agency.

“We write to every registered vehicle keeper in the UK to remind them when their tax is due and we have introduced a range of measures to make vehicle tax easy to pay. At the same time we are taking action against those who are determined to break the law.”

But RAC chief engineer David Bizley said: “These are very worrying and disappointing statistics indeed. Sadly, the concerns we raised about the number of car tax evaders going up at the time the tax disc was confined to history have become a reality.

The loss in revenue for the government is “significant”, he said, having risen from £35m in 2013 to an estimated £80m now “and, it has to be pointed out, far exceeds the forecast £10m efficiency saving”.

He called for the survey to be repeated in a year’s time to test whether the new system was largely to blame.

“We really cannot afford for this to increase again for the sake of both road safety and the country’s finances. Hopefully, much of the increase in evasion is due to the system being new and these figures will reduce as motorists become more familiar with how it works.”

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Retailers brace for Black Friday frenzy

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Retailers brace for Black Friday frenzy

Black Friday: Retailers braced for shopping frenzy

  • 26 November 2015
  • From the section Business

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UK retailers are gearing up for the Black Friday shopping phenomenon with analysts predicting record sales.

Consultants Experian and online retail group IMRG are predicting online purchases will hit £1.07bn, the first time they have passed £1bn in one day.

Visa Europe says £1.9bn could be spent online and in-store on its cards alone.

Last year’s Black Friday saw shoppers fighting over bargains, websites crashing and delivery companies struggling to cope.

The discount day originated in the US, where it takes place the day after Thanksgiving and kick-starts the Christmas shopping period.

Police warning

Many UK retailers have said online deals will go live from midnight onwards.

Last year, Amazon sold more than 5.5 million items on Black Friday at a rate of 64 items per second.

Ebay is expecting nine million British consumers to log on during the 24-hour period and for 25 items to be sold every second.

Some stores will be opening their doors from early in the morning. These include Argos shops and a selection of Tesco, Sainsbury’s and Currys PC World stores.

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Last year saw frenzied scenes in some stores

Earlier this year, retailer John Lewis warned that UK firms would have to rethink the heavy discounting of Black Friday, but it has decided that it has little option but to compete with other retailers and will be offering in-store and online promotions.

However, supermarket chain Asda, which started Black Friday promotions in the UK in 2013, has decided not to take part this year.

It said there was “customer fatigue” around such events and it was providing savings across the Christmas shopping season.

Last year, police were called to a number of stores to break up scuffles among shoppers vying for the best deals.

The police have warned shops to ensure they have carefully thought out security plans so they can avoid any trouble.

‘Spiky’ period

Some analysts feel the event has distorted Christmas spending pulling it forward at a time when retailers traditionally charged full prices.

James Miller, senior retail consultant at Experian Marketing Services, said: “There is little doubt Black Friday has dramatically changed the way people shop in the run-up to Christmas and has created an expectation of deep discounts that arguably did not exist before.

“Offline retailers in particular need to plan very carefully for this new ‘spiky’ festive period. While Black Friday offers the potential for a short blast of extra sales volume, this will be at the expense of margins during the most crucial period of the trading year.”

Consumers association Which? also warned shoppers to be careful.

Which? editor Richard Headland said: “There will be a whole host of deals available on Black Friday but not all of them will be genuine.”

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Amazon has been investing in infrastructure in readiness for the sales season

Paul Green, business development manager at retail systems integrator, Tryzens said Black Friday should be got rid of altogether.

“Black Friday makes little sense in the UK. Without Thanksgiving, the event’s focus point, the decision to concentrate so many resources and discounts on a Friday in November seems arbitrary at best and significantly disruptive at worst.

“Retailers are actually in danger of losing money this Black Friday through heavy discounting, while requiring high online maintenance and operational fulfilment costs to enable peak web and store sales in the process.”

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Property prices in Ireland now growing faster outside of Dublin, latest data shows

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Property prices in Ireland now growing faster outside of Dublin, latest data shows

Residential property prices are increasing more than twice as fast outside Dublin than in the capital as people continue to be squeezed out of Ireland’s largest housing market, the latest index suggests.

Indeed, prices in Dublin increased by 1% in October and are up 4.5% year on year but this is the lowest annual rate of inflation since the middle of 2013, according to the data from the Central Statistics Office.

Outside of Dublin property prices were up 2.1% month on month and 10.7% year on year as the market catches up with that of the main city. It was the highest rise outside of Dublin since October 2014.

A breakdown of the figures shows that Dublin house prices rose by 1% in October whilst Dublin apartment prices increased by 0.8%. However, it should be noted that the sub-indices for apartments are based on low volumes of observed transactions and consequently suffer from greater volatility than other series.

It means that at a national level residential property prices were 33.5% lower than their peak level in 2007. Dublin house prices were 33% lower than their peak, Dublin apartment prices were 40.2% lower than their peak and Dublin residential property prices overall were 34.9% lower than their highest level. Outside of Dublin residential property prices were 36.3% lower than their highest level in 2007.

Property consultants Savills said it is not surprised that house price growth in Dublin has slowed sharply. However John McCartney, director of Research at Savills, believes this is more due to a technical base effect than to any material slowdown in recent months.

‘In the month of October last year, Dublin prices rose by a staggering 3%. This feat would have to be repeated in October 2015 for the annual rate of price growth to hold at its current 6.5%. This is highly unlikely, and as a result, the annual growth rate will be dragged lower,’ he said.

He warned against reading too much into the figures. ‘The slowdown will undoubtedly attract headlines. But it will really say more about what was happening in the market last year than what is going on today,’ he explained.

‘The frenzied activity we saw 12 months ago as buyers rushed to avail of tax breaks and more lenient lending practices has gone. But agents are reporting steady transactions and robust prices, particularly in the €400,000 to €650,000 price range where competition is hottest,’ he concluded, adding that Savills expects annual price growth by the end of the year in Dublin to be around 5%.

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KPMG heads arrested in HMRC tax probe

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KPMG heads arrested in HMRC tax probe

Four KPMG partners in Belfast arrested in HMRC tax evasion investigation

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KPMG has said there is “no indication” the investigation relates to its business or “the business of our clients”

Four partners at the Belfast office of KPMG have been arrested in connection with suspected tax evasion.

HMRC officials visited the accountancy firm’s city centre office yesterday and detained the men.

They are Jon D’Arcy, Eamonn Donaghy, Arthur O’Brien and Paul Hollway.

KPMG said it is cooperating with the investigation and the four men have been placed on “administrative leave”.

The firm added that it does not have “any indication that this investigation relates to the business of KPMG or the business of our clients”.

Mr Donaghy is KPMG’s head of tax in Belfast and has been heavily involved in the campaign to have corporation tax powers devolved to the Northern Ireland Executive.

Mr Hollway is the firm’s head of corporate finance in Ireland.

Aside from their KPMG roles, the four men are directors in a property investment company called JEAP Ltd.

It is not clear if that forms part of the HMRC investigation.

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Hong Kong newspaper in takeover talks

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Hong Kong newspaper in takeover talks

Hong Kong’s South China Morning Post in takeover talks

  • 26 November 2015
  • From the section Business

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The SCMP has been in circulation for 112 years and rumours of its takeover have been swirling since earlier this month

The publisher of Hong Kong’s South China Morning Post (SCMP) has confirmed that it is in talks to sell the popular English-language newspaper.

In a filing to the Hong Kong Stock Exchange, the SCMP Group said it has received a “preliminary approach” from a third party to purchase its media assets, including the newspaper.

Reports suggest that Chinese e-ecommerce giant Alibaba is the bidder.

But Alibaba has not confirmed that it is interested in buying the newspaper.

However, sources told Reuters news agency that the Chinese tech giant, led by its famous chairman Jack Ma, was discussing buying the century-old newspaper to expand its business into the media sector.

In its statement, SCMP Group said talks of a possible purchase were at a very early stage.

“The terms of any potential transaction remain subject to discussion and to regulatory review” it said.

“There is no assurance that any such transaction will materialise or, if it materialises, will be consummated.”

The SCMP is a highly regarded newspaper for the English-speaking population in the former British colony.

The group also holds licences to several international publications such as Cosmopolitan and Harper’s Bazaar magazines.

Alibaba, meanwhile, is the world’s biggest e-commerce company and has interests in film companies and mainland Chinese media.

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FTSE 100 bolstered by mining firms

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FTSE 100 bolstered by mining firms

FTSE 100 bolstered by mining firms

  • 26 November 2015
  • From the section Business

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(Open): Shares in mining companies helped to lift the London market in early morning trade.

The benchmark FTSE 100 index was up 16.29 points at 6,353.93. Trading is expected to be quiet with US markets closed for Thanksgiving.

Among the mining companies, shares in Glencore rose 4.1% and Anglo American was up 3.5%.

However, shares in BHP Billiton fell 2% after JP Morgan cut its rating on the miner to “underweight” from “neutral”.

Tesco shares rose 1.9% after the supermarket said it had paid $12m (£8m) to settle a US lawsuit.

The lawsuit alleged that Tesco’s overstatement of its profits guidance, revealed last year, breached certain US securities laws.

Severn Trent shares rose 1% after the water company reported flat half-year revenues of £896m and a 2.6% rise in underlying profits to £218m.

On the currency markets, the pound fell 0.33% against the dollar to $1.5079, and dropped 0.2% against the euro to €1.4215.

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Barclays fined for poor client checks

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Barclays fined for poor client checks

Barclays fined £72m by FCA for poor checks on wealthy clients

  • 26 November 2015
  • From the section Business

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Banking giant Barclays has been fined £72m for failing to conduct proper checks on very rich clients because it did not want to inconvenience them.

The City regulator said Barclays arranged a deal worth £1.88bn for wealthy clients in 2011 and 2012 which it kept quiet.

It did not conduct the proper checks on clients who should have been considered politically high risk.

The bank said it co-operated fully with the inquiry.

Crime risk

The Financial Conduct Authority (FCA) said that the clients were “politically exposed persons” and so should have undergone greater scrutiny by Barclays.

The watchdog said that this should have been done to minimise the risk that no financial crime would result.

No such crime was committed, but Barclays was found to have applied a lower level of checks than was the case with lower-risk customers.

The FCA said the bank went to “unacceptable lengths” to accommodate these wealthy clients, because it did not want to inconvenience them.

Records of the deal, which made Barclays £52m, were kept strictly confidential, even within the bank. It promised to pay out to customers if this confidentiality was exposed.

Few people knew of the existence and location of Barclays’ checks, which were kept on a hard copy and not on the bank’s systems.

“Barclays ignored its own process designed to safeguard against the risk of financial crime and overlooked obvious red flags to win new business and generate significant revenue. This is wholly unacceptable,” said Mark Steward, director of enforcement and market oversight at the FCA.

The bank said: “Barclays has co-operated fully with the FCA throughout and continues to apply significant resources and training to ensure compliance with all legal and regulatory requirements.”

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New planning reforms in UK welcomed, but lack of resources not addressed

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New planning reforms in UK welcomed, but lack of resources not addressed

The British Property Federation has welcomed the majority of the changes announced in the autumn financial statement by the UK Chancellor but expressed disappointment that there was no mention of a review of planning fees.

‘While there are some really sensible suggestions in today’s announcement, the planning system still has one big problem, the lack of resources in local authority planning departments,’ said Melanie Leech, chief executive of the BPF.

‘Both the private and public sector have identified this as one of the biggest obstacles for development, and with the private sector willing to discuss how it might be able to plug the funding gap, it is frustrating that Government has not engaged on this matter,’ she added.

Included in the statement was amendments to planning policy to ensure the release of unused and previously undeveloped commercial, retail and industrial land for Starter Homes, and support for the regeneration of previously developed, brownfield sites in the greenbelt, by allowing them to be developed in the same way as brownfield sites elsewhere, providing it delivers Starter Homes.

It will be subject to local consultation, such as through neighbourhood plans and Leech described it as a ‘very sensible step’ and one that will put a stop to endless battles in the planning regime as well as bringing forward the Government’s intended 200,000 Starter Homes.

‘The sites that will be eligible for this will not be lush green fields, but rather disused scrap yards and car parks which happen to sit within the Green Belt, and which are calling out to be more productively used,’ she pointed out.

There will also be the establishment of a new delivery test on local authorities, to ensure delivery against the number of homes set out in Local Plans. The BPF believes that Local Plans are the key to sustainable development.

Leech said it will ensure that local authorities really do concentrate on growth for their area and that their local plans are focused on delivery and the practicalities of housing the population. ‘The lack of resources afflicting local authority planning departments is an issue, and if authorities can keep their local plans kept short and sharp, they will help themselves,’ she added.

The changes will also see the release of public sector land with capacity for 160,000 homes representing a more than 50% increase on the government’s record in the last parliament

‘The homes that are brought forward on these sites must be serviced with sufficient infrastructure and will ideally have homes for sale and for rent, to ensure that they contribute to mixed, vibrant communities,’ said Leech.

The government will bring forward proposals for a more standardised approach to viability assessments, and extend the ability to appeal against unviable section 106 agreements to 2018.

It is well known that a lot of disagreement between local authorities and developers arise due to viability assessments so the move towards a standardised viability model should go a long way to solving some of the disputes around development.

‘It is an enormously important step and we are delighted to see it taken forward. The model must be sure to take into account the needs of the Build to Rent sector as well as the more traditional development approaches,’ added Leech.

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New generation of skilled builders needed to fulfil UK’s new housing plans

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New generation of skilled builders needed to fulfil UK’s new housing plans

A new generation of skilled builders will be needed to fulfil the UK government’s latest pledge to build hundreds of thousands of new homes, according to industry experts.

The house building industry has welcomed the announcement of a £7 billion fund to prioritise home building with 200,000 starter home with 20% discount for those aged under 40, 135,000 shared ownership home, 10,000 rent to buy homes and 8,000 specialist properties for the elderly and disabled.

But the Federation of Master Builders (FMB) pointed out that already developments are being stalled or held up due to the cost of hiring skilled tradesmen and with a shortage of apprenticeships the skills problem is not about to go away.

‘Unless we see a massive uplift in apprenticeship training in our industry, there won’t be enough pairs of hands to deliver more housing on this scale. The Chancellor clearly recognises that the crisis of home ownership is inextricably linked to a crisis in house building. We therefore hope that in order to address both, the Government will do everything it can to increase house building capacity,’ said Brian Berry chief executive of the FMB.

‘SME developers will have an important role to play in delivering the smaller scale sites across the country. The last time we built in excess of 200,000 homes in one year was in the late 1980s when two thirds of all homes were built by small developers,’ he pointed out.

‘SME house builders now only build little over one quarter of all new homes which points to another serious capacity issue as we need more small house builders to enter the market and also for SME house builders to crank up their delivery of new homes in order to build the Chancellors 400,000 new affordable homes,’ he added.

There was much in the Autumn Statement for the construction industry to be excited about but some of the fundamental barriers to house building and, in fact, construction of any kind, remain in place, according to Simon Craven, director at Tower8.

‘If we are to see spades in the ground, then we need to see more of skilled workers to deliver these grand schemes. Further funding for a skilled workforce is required if the construction industry is to match the potential projects that the Chancellor is so keen to encourage,’ he explained.

‘Pressure on the construction industry comes from project costs such as staffing, materials inflation and other key factors that affect delivery. The Chancellor has left many of the problems of supply side and skills to the private sector to resolve which is a potentially exciting move. But the grey area occurs where the private sector works with local authorities, planners, education and divergent goals between these parties mean that the progress required is simply not made,’ he added.
‘Furthermore, we have been interested to speak with many of the firms that are looking to deliver PRS schemes in the coming years. And the reality is that the Chancellor’s announcement will make them extremely nervous despite his promise that the details have now been resolved on his increase in Stamp Duty on buy to let properties. It is naïve to assume that home ownership alone is the key to reducing housing costs for Britain. The rental sector must be seen as a viable alternative, as it is in so much of the rest of Europe, and placing barriers to a sector that has traditionally struggled to attract corporate investment would be a lasting mistake,’ he concluded.

Steve Perkins, director of urban development at global construction consultancy Turner & Townsend, believes that it will now be easier for developers to get both the money and the land they need to build.

‘But there is still the awkward question of what will happen when the surge of new building unlocked by these measures collides with the lack of capacity, both in the construction industry itself and in the planning process,’ he said.

‘As demand from developers increases, the shortage of skilled workers is likely to drive up construction costs, and stretch planning authorities, already pared back by local government austerity, to the limit,’ he pointed out.

‘Britain’s construction industry has already made great strides in increasing levels of housebuilding, and while these measures will give it a much-needed stimulus, they don’t remove all the structural barriers that have for too long prevented it from meeting demand,’ he added.

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Experts assess Osborne spending plans

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Experts assess Osborne spending plans

Spending Review: Experts assess windfall-funded U-turn

Media captionBBC editors on the Spending Review

Financial experts are poring over the details of George Osborne’s Spending Review, in which he funded a U-turn on tax credit cuts with a £27bn windfall.

He abandoned plans to cut credits for millions of low-paid workers, thanks to better-than-expected forecast tax receipts and low debt interest rates.

However, cuts totalling £20bn to Whitehall departments and £12bn to welfare were detailed.

The Institute of Fiscal Studies will deliver its full assessment later.

Paul Johnson, of the independent economic think tank, said the tax credit move would change nothing in the long run because the cuts would still feature in the new Universal Credit system, which is due to replace tax credits by 2018.

Mr Johnson also said the chancellor had been “quite lucky”.

’50-50 risk’

He said “the public finance forecasts were not desperately rosy relative to where they were in July” at the time of the Budget, and the revisions on tax receipts were “easily within the margins of error”.

He told the BBC: “The risk for him, and this must be at least a 50-50 risk, is that the next time round, or the time after, or the time after, these tax revenue forecasts will look less rosy.”

If that happened, the chancellor would need to either cut spending further or raise taxes in order to meet his target of bringing the public finances back into surplus.

Labour also argued that working families would still lose out with tax credits due to be phased out by 2018.

Shadow chancellor John McDonnell, who faced criticism from some Labour MPs for quoting former Chinese Communist leader Chairman Mao in his attack on the government, said the tax credits reversal was a victory for his party.

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There was a surprise announcement on protection of police budgets

BBC political editor Laura Kuenssberg said the £27bn windfall had allowed Mr Osborne to “cut with a blunt knife rather than a sharp axe” and press on with his bid to “anchor the Conservatives to the mainstream” of British politics.

Among the cuts in welfare spending will be a fresh squeeze on housing benefit.

The chancellor was forced to rethink plans to cut £4.4bn from tax credits from April after they were rejected by the House of Lords.

Rather than phasing the cuts in, as he had been expected to do, Mr Osborne said he had decided the “simplest thing” was “to avoid them altogether”, even though it would mean missing his own target for overall welfare spending in the early years of this Parliament.

SNP Treasury spokesman Stuart Hosie said Mr Osborne’s “complete and humiliating U-turn on tax credit cuts shows that we were right to keep the pressure up to the last minute” for the cuts to be scrapped.

A string of government departments will have to find double-digit savings in their running costs and local government is in line for further big cuts. although local authorities with responsibility for social care will be allowed to levy a new precept of up to 2% on council tax.

Other Spending Review announcements include:

  • Police budgets in England and Wales will be protected in real terms, Mr Osborne said in a surprise announcement
  • Plans to hand billions to private developers to build 400,000 new homes in England
  • A real terms increase for education funding – including early years and further and higher education, and big regional differences in per pupil funding removed
  • Buy-to-let landlords and people buying second homes will have to pay more in stamp duty
  • A levy on companies to fund apprenticeships is being set at 0.5% of an employer’s pay bill
  • Basic state pension to rise by £3.35 next year to £119.30 a week
  • Tax free childcare for families earning more than £100,000 to be scrapped
  • Money for new road and rail projects, including the electrification of TransPennine, Midland Mainline and Great Western
  • Holloway women’s prison in London, is to close as part of a plan to modernise Britain’s jails
  • Housing benefit for new social tenants to be capped at same level as private sector
  • NHS to deliver £22bn efficiency savings in England and Department of Health to cut 25% from its Whitehall budget
  • Proposals to raise £5bn in a fresh crackdown on tax avoidance
  • Using £15m a year from VAT on sanitary products to fund women’s health charities

Special report: Full in-depth coverage of the Spending Review and Autumn Statement

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Tax changes in the pipeline

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Tax changes in the pipeline

Autumn Statement 2015: Tax changes in the pipeline

  • 26 November 2015
  • From the section Business

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Our tax affairs will be organised digitally in the future, Chancellor George Osborne says, but it does not mean they are getting any simpler.

A series of tax changes were hidden behind the headlines of his Autumn Statement.

Some affect the self-employed and small companies, others impact low-income individuals, the retired and the wealthy. Many will now go out for discussion, but the outlines are clear.

Your own tax account

HM Revenue and Customs (HMRC) are to give most taxpayers a digital tax account. You will be able to see your tax position online and access the account using free apps and software.

But you will also have to keep the account up to date. The self-employed and landlords must input income and expenses every quarter, instead of waiting until after the end of the tax year to tell HMRC about profits. We do not yet know if this will also mean tax needs to be paid sooner.

Employees and pensioners will not be part of this new digital world, unless you have another source of income which pays you over £10,000 a year.

Automatic tax bills

HMRC will be able to send you a tax bill on the basis of the information they already hold, replacing self-assessment with HMRC assessment.

This new approach will be used where HMRC believe you have “simple” tax affairs.

If you receive an automatic tax bill, you should check it straight away. If you do not challenge the bill within a limited period, it may become final and HMRC will then collect the tax.

Sports testimonial matches

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Sports personalities sometimes have testimonial matches. Current rules sometimes allow them to keep the entire proceeds without paying tax.

These rules will change from April 2017, with any proceeds above £50,000 being taxed.

Salary sacrifice

If you swap your salary for something else, such as childcare or a higher pension, this is called salary sacrifice. Usually the swap means that tax and/or National Insurance contributions are reduced or removed altogether.

In the Autumn Statement, the government warned that it “remains concerned” about salary sacrifice and “is considering what action, if any, is necessary” – in effect, a warning that things might change.

Time limit to pay Capital Gains Tax

If your house or flat has always been your personal private residence (PPR), there is no tax to pay when you sell it. If you have a second property, you may have to pay capital gains tax (CGT).

At the moment, you work out the CGT after the end of the tax year, as part of your tax return. This means you have around 10 months to do the maths.

These time scales are to be tightened, so that the CGT will be due 30 days after the property is sold.

Working out CGT can be complicated, especially if you lived in the property for a while, carried out renovations, or let it to tenants. Under the new regime, you will need to get cracking on the calculations as soon as the ink is dry on the sale contract.

A new pensions tax system

The current pensions tax regime works like this: you get tax relief when you pay into a pension, but pay tax on most of the pension when you receive it.

The government is considering scrapping this system entirely, replacing it with a system similar to an Individual Savings Account (Isa).

The money you pay into your Pension-Isa will come out of your taxed income. The government may then add a bonus to your savings, and when you take your pension it will be tax free.

The government will announce its decision in next year’s Budget. If the change goes ahead it will be the biggest shake-up of pensions in our lifetimes.

Pension annuities

Those aged 55 and over are now allowed to take money out of their pension savings on a fully flexible basis.

However, many retired people have already used their pension savings to buy an annuity. An annuity gives you a regular monthly pension, usually for the rest of your life.

The chancellor has now announced that it will be possible to sell your annuity in the market place. So if you have an annuity of £500 a month, you will be able to sell this and get a lump sum instead.

In other words, you can swap your future income for an immediate cash sum.

You will of course need to know that you are being paid a fair price, and should check that you have enough other income to support you in old age.

Travel and subsistence

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The government has confirmed that it is going ahead with changes to prevent contractors from obtaining tax relief on the costs of their travel to work, including the cost of meals or accommodation related to that travel.

This change was announced earlier this year, but at the time the government was still considering whether to include everyone who worked via a personal service company (PSC).

We now know that the crackdown will not affect PSC contractors, unless the contract is caught by anti-avoidance rules known as IR35. This means that if the contractor would have been self-employed had he worked as an individual rather than using a PSC, he can continue to obtain tax relief for his travel and subsistence.

However, this is not the end of the story. Changes to IR35 are also likely, following a review earlier this year by the Office of Tax Simplification. Any reform is likely to tighten the current rules, and make them easier for HMRC to police and enforce.

Winding up for tax reasons

When companies are wound up, the money inside the company can sometimes be paid out as capital, so that the more generous capital gains tax regime applies.

This can be a way of avoiding income tax, but this planning is now likely to be blocked.

The opinions expressed are those of the author and are not held by the BBC unless specifically stated. The material is for general information only and does not constitute investment, tax, legal or other form of advice. You should not rely on this information to make (or refrain from making) any decisions. Links to external sites are for information only and do not constitute endorsement. Always obtain independent, professional advice for your own particular situation.

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‘Give Africa $16bn for climate change’

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‘Give Africa $16bn for climate change’

COP21: World Bank chief wants $16bn to help Africa on climate change

  • 25 November 2015
  • From the section Business

The World Bank wants to raise $16bn to help Africa adapt to climate change.

By boosting the continent’s resilience to global warming and increasing renewable energy it hopes the scheme will prevent millions of people from sliding into extreme poverty.

The Africa Climate Business Plan will be presented at COP21, the global climate talks in Paris.

They are aimed at reaching agreement on how to limit global temperature increases to 2 degrees celsius.

“The thing that we wanted to make sure was that Africa wasn’t forgotten in the midst of these conversations,” Dr Jim Yong Kim, the president of the World Bank told the BBC.

When talks begin, he wants to make sure the conversation is not just about reducing emissions but also about taking steps to cope with the consequences of warming.


And here’s why.

The continent emits just 3% of the world’s greenhouse gas emissions. Yet even the smallest rise in global temperatures could have far-reaching consequences in sub-Saharan Africa.

Research by the Bank found that without measures to help countries prepare for climate change, 43 million people, mostly in Ethiopia, Nigeria, Tanzania, Angola, and Uganda could fall into extreme poverty by 2030. This will be due to droughts, increasing food prices, and stunting children’s growth.

The World Bank is committing a third of the money ($5.7bn) from the International Development Association (IDA), the arm of the World Bank Group that supports the poorest countries.

Road to Paris

Looking ahead to climate negotiations in Paris, the World Bank chief acknowledged that reaching a deal won’t be simple or easy.

And yet he remained optimistic.

Unlike in 2009, when climate talks in Copenhagen ended in anger and recriminations this time, Dr Kim insisted, would be different: “The resolve of leaders is at an entirely different level to what it was back then.

“There’s not a single country in the world that wants to be the stumbling block to getting to an agreement.”

And the tricky question of who will pay for any deal? “We think that there is a path to get there.”

But if previous climate summits are any guide, Dr Kim’s optimism may be sorely tested next week in Paris.

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HIV pill price cut by half in US

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HIV pill price cut by half in US

HIV pill in 5,000% price rise storm will be made cheaper in US

  • 25 November 2015
  • From the section Business

Image copyright
CBS News

Image caption

Turing Pharmaceuticals boss Martin Shkreli had previously defended the price raise

The company that sparked an outcry by raising the price of its HIV drug in the US by 5,000% says it will cut its price for some users.

Martin Shkreli’s drug company Turing Pharmaceuticals bought the rights to 62-year old drug Daraprim and increased the price per pill from $13.50 to $750.

Turing said it will cut the price by 50% for hospitals and offer financial assistance to individuals.

However, the company will keep its list price at the new higher level.

In September Turing promised to reduce the price.

The pill costs around $1 for patients in Europe.

In statement Turing’s chief commercial officer Nancy Retzlaff defended the company’s move. She said that reducing the listing price would not have translated into saving for patients.

“Drug pricing is one of the most complex parts of the healthcare industry. A drug’s list price is not the primary factor in determining patient affordability and access,” Ms Retzlaff said.

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Image caption

Daraprim now sells for $750 (£495) a dose despite costing $1 to produce

Doctors though worry keeping the price so high will make it impossible for hospitals to stock the drug for the few patients who need it.

“The decision not to lower the price leaves patients in the same boat,” said Dr Joel Gallant, medical director of special service at Southwest Care centre.

Though Turing is offering payment assistance for some patients, Dr Gallant said this could still leave patients waiting for treatment.

“Patients start the drug in the hospital, but then they need to be discharged with the drug. While they wait for patient assistance to be approved they could be re-hospitalised,” said Dr Gallant.

The original increase sparked outrage on social media and among politicians.

Democratic presidential candidate Hillary Clinton called the increase “price gouging”.

Turing’s chief executive Martin Shkreli- who had been labelled the most hated man in America-fought back saying politicians did not understand Pharmaceutical pricing.

He later backed down and promised to lower the price of the drug, though never said by how much.

Image copyright

Image caption

Martin Shkreli, seen here in an August Twitter post, has aggressively answered critics

Mr Shkreli told ABC news in September, “‘We’ve agreed to lower the price of Daraprim to a point that is more affordable and is able to allow the company to make a profit, but a very small profit.”

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Sau Paulo has the highest property taxes for real estate investors

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Sau Paulo has the highest property taxes for real estate investors

As the rate of price growth slows in many global city markets, transaction costs and taxation are becoming increasingly important considerations for investors, a new analysis suggests.

With slower price growth forecast in a number of prime city markets, investors are looking more closely at the cost side of the investment equation, according to the report from international real estate firm Knight Frank.

While there may be a number of factors behind the choice of location, the research shows that the tax burden across the cities in this report varies considerably both in amount and extent. The tax costs range from as low as 3.5% or 3.6% of the property price in year five in Monaco and Dubai respectively, to over 30% in Sao Paulo.

Despite encompassing a wide variety of cities and policies, a number of common themes and trends have arisen throughout the research. For example, in some cities, most notably in Geneva and in Mumbai, there are significant legal restrictions for non-residents who wish to purchase property so it is important to consider these before an investment decision is made.

In some jurisdictions, the tax costs are represented primarily by acquisition taxes, notably in Monaco and Dubai, while in most other jurisdictions, tax costs usually comprise acquisition duties payable when purchasing the property; wealth or yearly taxes when holding the property; taxes on rental income, and taxes on disposal of the property, including tax on gains and/or duties at the point of the sale of the property.

While in some countries the relative/percentage tax costs are almost equal for both US$1 million and US$10 million properties, in others the tax costs of holding the US$10 million property are almost double those for US$1 million property, the report points out.

‘Finally, it is important to note that some taxes, such as inheritance/gift taxes have not been taken into account in this analysis. Nor were home country taxes. Moreover, we have assumed that investors purchase in their personal name but that might not necessarily be the most efficient from a host or investment country’s tax perspective,’ the report says.

However, overall property costs remain largely the same for both a $1 million and $10 million property in many cities such as Sao Paulo, Mumbai and Geneva whilst others see a significant reduction in percentage terms at the $10 million level such as New York and Paris.

Reviewing the tax costs across the 15 main cities shows that taxation is highest in Sao Paulo, at both the US$1 million and US$10 million levels, where investors are taxed at 31.5% of the sale value at year five.

Hong Kong and Sydney also rank highly. An investor purchasing a US$1 million property in Hong Kong is taxed 22.4%, whilst at the US$10 million level investors in Sydney are taxed 26.0%, in both cases as a percentage of year five price.

Monaco offers non-resident investors the lowest rate of tax at 3.5% as a percentage of year five price, followed by Dubai at 3.6% and Paris at 7% at the US$1 million level. In Monaco and Dubai’s case the percentage change remains roughly the same between the two price bands, a US$10 million property in Paris however Paris sees its percentage figure jump to 12.8%.

London sits in the middle of the 15 cities when analysing both property and tax costs. Foreign investors are charged 7.8% and 5.4% respectively in property costs when buying at the US$1 million and US$10 million level. Looking at the tax costs, including stamp duty land tax, investors buying in their own name expect to pay 9.7% for US$1 million investment and 20.7% for US$10 million.

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Osborne’s £23bn magic trick

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Osborne’s £23bn magic trick

Osborne’s £23bn from the back of the sofa

  • 25 November 2015
  • From the section Business
  • comments

magicians hatImage copyright

So how has George Osborne pulled off the magical trick of maintaining spending on the police, imposing smaller than anticipated departmental spending cuts in general, and performing an expensive u-turn on tax-credit reductions, while remaining seemingly on course to turn this year’s £74bn deficit into a £10bn surplus in 2020.

Well, it is because the government’s forecaster, the Office for Budget Responsibility, has increased its prognosis of how much the Treasury will raise from existing taxes (not new ones) and reduced what it thinks the chancellor will shell out in interest on its massive debts.

In total the OBR thinks the national debt, the aggregate of the annual deficits, will be £23bn lower over the four years to 2020, and just because it is more optimistic about tax revenues and assorted costs.

Or to put it another way, George Osborne is today £23bn better off than he thought in July, and without doing anything at all.


So what is the chancellor doing with this very useful £23bn that the OBR has found at the back of the sofa?

Well he is using £19bn of it to cover the £4.4bn annual cost of not slashing tax credits, and making about £8bn a year less than expected in departmental savings.

So on paper it looks as though the chancellor is actually being a bit more prudent than he was in July, even though some would say he is expensively moving his party nearer to the centre-ground of British politics – which he thinks has been vacated by Jeremy Corbyn’s Labour.

To labour the point, George Osborne is not deploying quite all of his windfall to buy off his critics by taking the teeth out of austerity.

But that does not mean there is no risk for him.


The OBR’s fiscal optimism could well be misplaced – especially since only last week we saw government borrowing figures hideously worse than expected.

But presumably, if tax revenues turn out lower and interest payments higher than the chancellor is now banking on, he can attempt to blame and kick the forecasting agency, the OBR, which he created.

And he’ll hope, presumably, that voters won’t see double standards in his years of bashing his Labour predecessors for spending tax revenues that never looked sustainable.

George Osborne has not quite morphed into his former opposite number, Ed Balls. But he is, in a more Ballsian way, counting on economic recovery to mend his overstretched finances.

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Network Rail sell-off to fund upgrades

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Network Rail sell-off to fund upgrades

Network Rail sell-off to fund upgrades

  • 25 November 2015
  • From the section Business

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Image caption

Plans to electrify some parts of the Great Western route won’t be finished for years

Network Rail wants to sell £1.8bn of railway arch space, disused depots and shop space in bigger stations to help raise the cash to upgrade UK railways.

New chairman Sir Peter Hendy came up with the idea after he was drafted in this summer to rescue the company’s disastrous £12.5bn enhancement plan.

He says by selling off non-core bits of property, Network Rail can now deliver “the bulk” of the planned programme.

It is the biggest SME (small and medium-sized enterprise) UK landlord.

When Sir Peter came on board, costs had been spiralling and deadlines slipping because Network Rail promised major changes by 2019 that it simply could not deliver.

New trains

Sir Peter has warned that “some projects will cost more and take longer than originally expected”.

One critical scheme, the plan to electrify the line from Swansea to London, has been dogged with delays and extra costs.

The first budget estimate was £640m. It now stands at £2.8bn.

Work on the core part of the line, to Cardiff, should be finished by 2019, Network Rail says.

But new, multi-billion pound intercity trains are arriving more than a year before that.

It raises the embarrassing prospect of sparkly high-speed trains initially providing a slower service because they can’t run on electricity for the whole route.

Other all-electric versions could be idle for months.

Borrowing problems

Meanwhile, plans to electrify other parts of the Great Western route, to Oxford (from Didcot), Swansea and the loop to Bath and Bristol Temple Meads, will not be finished until some years later.

Network Rail has struggled since it became a public body last year.

That was a move that immediately turned the funding taps off, because it could no longer borrow cash on the private markets. Instead, its £38bn debt went onto the government’s books, and ministers refused to lend bosses any more money.

The Department for Transport will begin an eight-week consultation on the report next month.

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Buy to let industry hits out at extra property tax to be introduced next year

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Buy to let industry hits out at extra property tax to be introduced next year

There has been a furious reaction to the UK Government’s plans to introduce an increased rate of Stamp Duty for property investors purchasing buy to let properties and those buying a second home from April 2016.

Stamp Duty will be calculated at an extra 3% on top of the basic rate if a property is for buy to let purposes, bringing in some £880 million for the Treasury by 2020. But large corporate investors will be exempt from the charge, the Chancellor of the Exchequer has announced.

But the industry is furious, saying that it will result in house prices being pushed up between now and next April as would be landlords wanting to extend their portfolios do so before the new rate comes in, then it could result in a catastrophic drop in buy to let investment which would in turn force up rents due to a shortage of supply.
David Cox, managing director of Association of Residential Letting Agent (ARLA), described the move as a ‘catastrophe’. He pointed out that it is a bitter blow to landlords coming on top of recent changes to mortgage interest tax relief and the annual wear and tear allowance.

‘Increasing tax for landlords will increase rents and reduce property standards for tenants.
To make owning a BTL property financially viable, landlords will need to pass on the increased stamp duty costs to tenants, who will in turn see less spent on maintaining their property and of course see increased rents,’ said Cox.

‘The changes will also deter new landlords from entering the market, pushing the gap between dwindling supply of available property and growing demand even further apart, which will also in turn push up rental costs. In London, where demand is so strong and last year’s stamp duty changes hurt, rather than helped, will see tenants having the greatest burden to bear,’ he added.

Richard Lambert, chief executive director of the National Landlords Association, believes that it will cut off future investment in private properties to rent. ‘The exemption for corporate investment makes this effectively an attack on the small private landlords who responded to the housing crisis by putting their own money into providing homes by the party that they put their faith in at the election,’ he said.

‘If it’s the Chancellor’s intention to completely eradicate buy to let in the UK then it’s a mystery to us why he doesn’t just come out and say so,’ he added.

David Gibbs, partner at Alliotts Accountants, pointed out that not only will buy to let investors be hit with additional stamp duty on purchase but also a requirement to pay capital gains tax within 30 days of a sale.
‘Investors will face a hike of 3% on stamp duty for all buy to let purchases from 01 April 2016. That means stamp duty rates will run from 5% for property over £125,000 up to 15% on property over £1.5 million. In addition, when a property is sold from April 2019 the capital gains tax will be due just 30 days after completion,’ he explained.
‘Ultimately this set of proposals could drive buy to let investors out of the market leading to a serious shortage of rental property,’ he added.

Jo Bateson, tax partner at KPMG in the UK, explained that more detail is awaited to fully evaluate the tax implications and also how second home owners could be affected. ‘These measures might dampen demand for the kind of properties that are marketed as buy to let investments.  And investors may decide to re-evaluate the attractiveness of the residential market ahead of this announcement,’ she said.

‘There are a number of important issues still to be addressed such as precisely how the stamp duty changes will be applied, what is the definition of a second home, and what is the position of a purchaser who is at first unsure how it might be used,’ she pointed out.
‘We are waiting for some important outstanding details such as how reliefs and allowances can be applied to a tax payment which is outside of self-assessment which I am sure will be part of the consultation process,’ she added.

Mike Chapman, senior manager for corporate tax at Knill James Chartered Accountants, described it as a double whammy for buy to let landlords which could have a major impact on the residential property market.

‘The higher rates will be three percentage points above current SDLT rates and the exclusion of companies from the charge indicates that the Government sees the freeing up of residential property currently in private hands as key to its housing policy,’ he said.

‘So, there will pain on the way into the buy to let market through SDLT and the second announcement on Capital Gains Tax (CGT) on exit. From April 2019, a payment on account of any CGT on the disposal of residential property will be due just 30 days after completion. This compares to the current rules where the settlement of the tax due can be anything up to 21 months after disposal depending when in the fiscal year the sale occurs,’ he explained.

‘Clearly landlords who have maximised their borrowings with a view to enjoying capital growth may now seek to restrict their financial exposure by disposing of parts of their property portfolios. Where such properties are standing at a gain, disposal before the CGT acceleration is due will clearly be advisable,’ he added.

Peter Williams, executive director of the Intermediary Mortgage Lenders Association (IMLA), believes that the Government must be very careful not to go too far and overly constrain the private rental sector, which performs an essential role in the housing market.

‘For all their new initiatives, successive Governments have a poor track record of delivering the required number of new homes, and a healthy private rental sector is vital for those either needing to rent or choosing to do so,’ he said.
‘The Stamp Duty changes will impose higher initial costs for investors but most mortgage deals should be able to absorb a slightly higher loan size, if the borrower requires, within lenders’ existing guidelines. Data suggests that landlords invest for the long term, so this change is unlikely to materially reduce activity on its own,’ he explained.

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‘Tampon tax’ to go to women’s charities

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‘Tampon tax’ to go to women’s charities

‘Tampon tax’ proceeds to go to women’s charities

  • 25 November 2015
  • From the section Business
Media captionTampon tax ‘to fund women’s charities’

The £15m raised each year from charging VAT on tampons will be used to fund women’s health and support charities, the chancellor has announced.

George Osborne said European law meant the tax could not be axed, but insisted the government was committed to getting the EU rules changed.

Currently VAT is charged at 5% on sanitary items, the lowest rate allowable under EU law.

The move comes after 300,000 people signed a petition against the tax.

“We already charge the lowest 5% rate allowable under European law and we’re committed to getting the EU rules changed,” said Mr Osborne.

He said the way the government would use the money from VAT would be “similar to the way” that it gives the proceeds of bank fines connected to the manipulation of the global benchmark London inter-bank lending rate to charity.

However, the comparison came in for criticism.

“Comparing #tampontax to #libor implies we have control over our biology,” tweeted the North London branch of the Fawcett Society, a charity for women’s equality and rights.

‘Tax on women’

Mr Osborne’s move comes just a month after MPs narrowly rejected a Finance Bill amendment which would have forced an EU negotiation on the VAT rate charged on sanitary items.

At the time, David Gauke, the financial secretary to the Treasury, said due to the “considerable cross-party support”, he planned to raise the issue with the European Commission, but warned that axing the rate would require a European Commission proposal and the unanimous agreement of all 28 member states.

At the time, Paula Sherriff, the Labour MP behind the Finance Bill amendment, said the charge was “unfair”.

She said VAT was “a tax on women, pure and simple. Periods are a fact of life and it’s not like women have a choice”.

Labour cut the rate when it was in government from the then standard rate of 17.5% – imposed in the 1970s – to the lower rate of 5%, but was prevented from going any lower by the European rules.

Autumn Statement and Spending Review 2015

Presented by Chancellor George Osborne, the Spending Review sets out what government spending will be over the next four years, while the Autumn Statement is an annual update of government plans for the economy.

Explained: Which government departments will be affected?

Analysis: From BBC political editor Laura Kuenssberg

Special report: Full in-depth coverage of the Spending Review and Autumn Statement

Watch: The BBC’s TV coverage begins on BBC Two and the BBC News Channel at 11:30 GMT, with BBC Radio 5 Live coverage from 11:55 GMT

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Osborne backs major transport schemes

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Osborne backs major transport schemes

Spending Review: Transport capital spending ‘up 50%’

  • 25 November 2015
  • From the section Business

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Investment in major transport projects is to increase over the current Parliament, by 50% to £61bn, Chancellor George Osborne has announced as part of the Spending Review.

He called it “the biggest increase in a generation” on road and rail projects.

As part of it, he said work on the HS2 high-speed railway linking the north of England to the south could begin.

However, while capital spending will rise, the Department for Transport’s operational budget will fall by 37%.

Road building

Mr Osborne also announced that the electrification of three major rail arteries will go ahead.

These are the Trans-Pennine in northern England, Midland Mainline in central England and Great Western Railway route from London across south-west England to Wales.

There will also be “the biggest road building programme since the 1970s”, he said.

Other projects which Mr Osborne has announced as part of spending on the sector are £11bn for transport in London, and some £300m for cycling in the UK.

Autumn Statement and Spending Review 2015

Presented by Chancellor George Osborne, the Spending Review sets out what government spending will be over the next four years, while the Autumn Statement is an annual update of government plans for the economy.

Special report: Full in-depth coverage of the Spending Review and Autumn Statement

Documents: Link to full Autumn Statement and Spending Review documents via HM Treasury

What it means for you: How the Autumn Statement and Spending Review will affect your finances

Watch: The BBC’s TV coverage begins on BBC Two and the BBC News Channel at 11:30 GMT, with BBC Radio 5 Live coverage from 11:55 GMT

Rail fares

There will also be a quarter of a billion pound investment in facilities in Kent to assist the handling of freight lorry movements, as part of Operation Stack.

In addition, Mr Osborne said some £5bn would be spend on roads maintenance.

Transport for the North, a body which brings together transport and local authorities across the north of England, will be established.

The government also said it would “deliver on commitments to freeze regulated rail fares at no more than inflation (RPI) for the entire Parliament”.

It said it would look to devolve “significant transport powers to mayor-led city regions, including Greater Manchester, Sheffield city region, Liverpool city region, the North East, Tees Valley and the West Midlands”.

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What the chancellor’s words mean for you

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What the chancellor’s words mean for you

Autumn Statement 2015: What it means for you

  • 25 November 2015
  • From the section Business

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In a speech that lasted for more than an hour, Chancellor George Osborne revealed his financial game plan and how this will affect the wallets and purses of the watching public.

The speech, made up of an Autumn Statement and a Spending Review, included a significant change of tactics – by scrapping his recent plan to cut tax credits.

He threw himself into some big challenges – not least with buy-to-let landlords who could face a tax rise.

But what does it mean for the finances of spectators on the sidelines – the UK public?

Was that a tax credits U-turn?

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Tax credits are benefit payments for those on low incomes, aimed at topping up pay. They are the biggest welfare cost to the government apart from the state pension.

In his summer Budget, Mr Osborne announced a plan for a £4.4bn cut to tax credits from April 2016. This meant cutting tax credits sooner and faster as a claimant’s income rises.

Having lost a key vote on the House of Lords, he promised to reconsider.

He did so by scrapping the planned cuts.

That means some low-income families who were expecting cuts in tax credit payments of up to £1,200 a year will no longer face that loss.

He says he can do this because the state of the economy and the continued record low interest rates means that he expects to have more money available than previously thought.

The rate of housing benefit in the social sector will also be capped at the same rate as is paid to those in the private rented sector, in order to make some savings.

What is his hope for housing?

Money will be spent to encourage house builders to construct starter homes. These will be offered at a 20% discount on prices up to £450,000 in London and £250,000 elsewhere. The policy was first announced in October 2014.

There will also be investment in a shared ownership scheme, reduced rent for those saving for deposit, and specialist homes for the elderly and those with a disability.

The aim is to shift to aspirational home ownership, and helping to reduce the housing benefit bill.

There will also be a London Help to Buy scheme those within the capital who can save a deposit of 5% of the value of the property they want to buy. They will be able to get an interest-free loan, for up to five years, worth up to 40% of the value.

Mr Osborne said that there was a crisis of home ownership among young people.

And how will this be paid for?

A total of £1bn will be raised by 2021 owing to a change to stamp duty.

A 3% surcharge on stamp duty when some buy-to-let properties and second homes are bought will be levied from April.

This means it will add £5,520 of tax to be paid when buying the average £184,000 property. The new charge would have hit 160,000 buyers if it had applied last year, around 13% of the total buy-to-let market.

Commentators have already suggested this could hit the sector hard.

This is the second big change to stamp duty, after reforms announced a year ago which affected the higher end of the property market.

Were there any other tax rises?

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Councils which have responsibility for social care will be able to add 2% to council tax bills in a bid to provide up to £2bn for that care.

Taxpayers will have to wait to see exactly how that affects them in pounds and pence when they receive their council tax bill.

Are pensions going up at all?

The state pension for existing pensioners will rise by 2.9%, or £3.35, to £119.30 a week from April, to match the rise in average earnings.

This is the result of triple-lock pledge on pensions – a government promise for the next five years – which means the state pension rises each April to match the highest of inflation, earnings, or 2.5%.

Next year is a significant one for new retirees as it is the start, from April, of the new “flat-rate” state pension, set at £155 a week.

However, not everyone will get the full amount, such as some of those with a private or workplace pension provision. Some who have built up an additional state pension may get more.

Any bad news for pensioners?

They have been protected from a lot of cuts by this government.

However, the chancellor said that pension credit payments will be stopped for people who leave the country for more than one month.

At present, pension credit is paid for up to 13 weeks while claimants are temporarily abroad. If they go overseas for medical treatment under the NHS, then it is paid for longer.

The same new restriction for those going overseas will also apply to housing benefit.

What about my wages?

We already know that a 1% cap on rises in public sector pay will be in place for the next four years. We also know a compulsory Living Wage – basically, a new minimum wage – will be paid to people aged 25 and over, starting in April 2016 at £7.20 an hour and reaching £9 an hour by 2020.

Childcare is a big hit on income, what has happened to that?

The government had previously said it would give further support for childcare costs.

The chancellor announced 30 hours of free childcare for three and four-year-olds will be available from 2017, but only to parents working more than 16 hours and who each earn £100,000 or less.

Many parents already get a free 15 hours of childcare for three and four-year-olds.

Statement and Spending Review 2015

Presented by Chancellor George Osborne, the Spending Review sets out what government spending will be over the next four years, while the Autumn Statement is an annual update of government plans for the economy.

Special report: Full in-depth coverage of the Spending Review and Autumn Statement

Documents: Link to full Autumn Statement and Spending Review documents via HM Treasury

Watch: The BBC’s TV coverage begins on BBC Two and the BBC News Channel at 11:30 GMT, with BBC Radio 5 Live coverage from 11:55 GMT

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Buy-to-let homes face higher stamp duty

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Buy-to-let homes face higher stamp duty

Autumn Statement: Buy-to-let homes face higher stamp duty

  • 25 November 2015
  • From the section Business

Buy-to-let landlords and people buying second homes will soon have to pay a higher rate of stamp duty, the chancellor has announced.

From April 2016, they will have to pay a 3% surcharge on the purchase value of the property.

George Osborne said the new surcharge would raise £1bn extra for the Treasury by 2021.

Buy-to-let landlords are already due to get a lower rate of tax relief on mortgage payments.

The changes were amongst a range of announcements on housing.

Restrictions on shared home ownership are to be removed, and the planning system reformed further, to allow more homes to be built.

A new Help to Buy scheme in London will see buyers given an interest-free loan worth up to 40% of the property.

In total, the government will put an extra £6.9bn into housing.

Autumn Statement and Spending Review 2015

Presented by Chancellor George Osborne, the Spending Review sets out what government spending will be over the next four years, while the Autumn Statement is an annual update of government plans for the economy.

Special report: Full in-depth coverage of the Spending Review and Autumn Statement

Watch: The BBC’s TV coverage begins on BBC Two and the BBC News Channel at 11:30 GMT, with BBC Radio 5 Live coverage from 11:55 GMT

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Government to borrow less this year

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Government to borrow less this year

Autumn Statement: Government to borrow less this year

  • 25 November 2015
  • From the section Business

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The government will borrow less money this year than was expected to at the time of the Budget in July.

The slight fall in the Office for Budget Responsibility (OBR) forecast from £74.1bn to £73.5bn was announced in the Autumn Statement.

The comparable figure has increased since July because of statistical changes to the treatment of housing associations.

The OBR predicts a £10.1bn surplus in 2019-20.

Chancellor George Osborne said the reduced borrowing was a result of an increase in the amount the OBR expects in tax receipts and falls in the interest rate the government pays on its debt.

He said that these would combine to mean that the government finances were expected to be £27bn better off over the course of this parliament than had been predicted in July.

Autumn Statement and Spending Review 2015

Presented by Chancellor George Osborne, the Spending Review sets out what government spending will be over the next four years, while the Autumn Statement is an annual update of government plans for the economy.

Explained: Which government departments will be affected?

Special report: Full in-depth coverage of the Spending Review and Autumn Statement

Watch: The BBC’s TV coverage begins on BBC Two and the BBC News Channel at 11:30 GMT, with BBC Radio 5 Live coverage from 11:55 GMT

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UK govt announces details of £7 billion house building priority programme

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UK govt announces details of £7 billion house building priority programme

The UK government has announced a £7 billion programme to make house building a priority which includes more than 400,000 affordable homes.

Chancellor George Osborne called it the biggest affordable housing programme since the 1970s when he made the announcement as part of his Autumn financial statement.

It will include £2.3 billion paid directly to developers to build 200,000 starter homes aimed at first time buyers. They will be offered at a 20% discount on prices up to £450,000 in London and £250,000 across the rest of the country.

He also announced £200 million for 10,000 new homes that tenants can live in for five years at reduced rents while they save for a deposit. They will then have the first right to buy the home.

Then there will be £400 million to help build 8,000 specialist homes for older people or those with disabilities, the Chancellor also confirmed.

But not all of this is new. The starter homes package has already been flagged up and it is well known that the government wants to build millions of home in the next five years.

Nevertheless the programme has been widely welcomed, although concerns have been expressed about the focus on home for sale, although the new homes that tenants can buy after five years will also be welcomed.

Among those concerned about the lack of help for the rented sector is Adam Challis, head of residential Research at JLL. ‘The Chancellor’s support for 400,000 new affordable homes is welcomed at a time when there is a dire need to expand housing construction right across the country,’ he said.

‘This Government’s narrow focus on home ownership is a serious concern however. Support for the private rented sector and social housing is vital to protect the financial stability of millions of households, for whom ownership is beyond reach,’ he pointed out.
‘The private rented sector is the fastest growing tenure in the UK and deserves direct support through the planning system and through the release of public land. Social housing investment provides vital security to more vulnerable households, while also reducing the heavy current reliance on temporary accommodation,’ he explained.
‘Housing delivery desperately needs long term planning rather than short term interventions. They are disruptive to construction programmes and ultimately weaken the system of delivery. Housing should be viewed as infrastructure that protects household stability and supports economic growth,’ he added.

Developers will welcome the announcement by the Government of funding for new housing including starter and shared ownership homes, according to Claire Fallows, partner at Charles Russell Speechlys.

‘Questions remain, however, as to whether local authorities will continue to insist on the provision of social and affordable rented units on larger housing sites and, if so, whether Housing Associations will have the funding available to acquire those units. Flexibility by authorities will be required to ensure that housing delivery is not stalled,’ she said.

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Centiro warns that increasing delivery capacity will only paper over Black Friday cracks

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Centiro warns that increasing delivery capacity will only paper over Black Friday cracks

Centiro is warning retailers risk further Black Friday headaches unless they manage delivery networks effectively. Last year’s problems were too big to ignore, with many retailers and 3PLs already taking preventative measures to prepare themselves. The likes of Marks & Spencer and John Lewis have built standalone websites for the day, while Yodel has spent £20 million on a new website and back-end equipment, and onboarded 7,000 temporary staff for the Black Friday and Christmas periods. However, Centiro believes retailers and carriers will only be able to successfully meet the challenge presented by Black Friday if they have full visibility into their delivery networks and are able to effectively manage customer returns.

“It’s not just how much delivery capacity retailers have that will determine Black Friday success, it’s how they are able use it,” said Niklas Hedin, CEO of Centiro. “Retailers need greater insight into their carrier networks to understand exactly what delivery options they can offer, and set customer expectations accordingly. This might involve limiting available services to avoid overpromising something you can’t deliver. Customers are now demanding shorter order-to-delivery windows and greater choice over where goods are delivered to, so every missed delivery is damaging to retail brands.”

The ability to perform on Black Friday is make or break for retailers, according to figures from the JDA/Centiro Customer Pulse Report 2015. The survey of more than 2,000 UK adults revealed that more than half (56%) of online shoppers who experienced problems at peak times in the last 12 months, such as Black Friday and Christmas, would be unlikely to shop with the same retailer this year.

The research also revealed how the returns process is becoming ever critical: 63% said the ease of which they can return items factors into which retailers they choose to shop online with. Indeed, last year’s Black Friday saw a second wave of strain on carrier networks once everything had been delivered, when impulse shoppers returned unwanted items.

“With greater demands for choice coupled with increasing numbers of returns, a one-size-fits-all approach will not remedy Black Friday problems,” added Hedin. “Retailers need the insight into their carrier networks to offer a range of delivery options and handle returns effectively. To put it simply, retailers without good delivery network visibility at Black Friday are putting themselves at risk of serious long-term brand damage.”

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Malaysia’s 1MDB seals China deal

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Malaysia’s 1MDB seals China deal

Malaysia’s 1MDB in China power deal that’s moving markets

  • 25 November 2015
  • From the section Business

1MDBImage copyright

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Malaysian state fund 1MDB has $11bn in debt

It’s rare to see the Malaysian ringgit rise against the US dollar – especially given its performance this year – down some 18%.

Even more curious that it happened while regional currencies like the Indonesian rupiah and Thai baht continued to fall.

Research houses are also upgrading their forecasts for Malaysia’s stock markets and the economy.

So what’s driving all this positivity?

Well, in part it is thanks to the sale of the energy assets at one of Malaysia’s most notorious institutions: IMDB.

1Malaysia Development Bhd (1MDB) is a state investment fund set up in 2009 and was supposed to turn Kuala Lumpur into a financial hub. But it is currently on a fragile financial footing.

Now, 1MDB has sold one of it, and Malaysia’s, most coveted power assets, Edra Global Energy, to China General Nuclear for $2.3bn (£1.5bn).

“The markets are showing they’re pleased with the deal,” says Taufik Basir, analyst with Hong Leong securities.

“It’s a good thing for Malaysia, it addresses a big chunk of 1MDB’s debt issues. It was a good financial decision – making the most of a bad deal. But frankly, what else could they have done?”

Allegations against 1MDB

Recently Malaysia’s 1MDB has been in the press for all the wrong reasons.

Most of the headlines about the beleaguered firm this year have been about how much money it owes – some $11bn that it has amassed over the last five years.

Earlier this year, it was entangled in an even bigger mess: hit by allegations that $700m had been transferred to Malaysian Prime Minister Najib Razak’s personal bank account from companies linked to 1MDB.

The man tasked with cleaning up all of this – 1MDB chief executive Arul Kanda – must be feeling mighty happy with himself this week. He called the sale of Edra Global Energy a “vote of confidence in the Malaysian economy.”

When I spoke to him in October, he told me that that the fund was in the process of selling off stakes in some of its prized energy assets in an attempt to raise cash and pay down some of its multi-billion dollar debt.

“The value of assets outweigh value of debt,” he told me at their office in Kuala Lumpur. “The value of assets can be proven, given bids we’ve received”.

Mr Kanda said the company would start to see a profit sometime next year, after they’ve sold off some of their key assets.

Chinese stake in Malaysia

1MDB expects the Edra sale to be completed in February 2016 – but the devil is in the detail.

Foreign investors are typically only allowed to own as much as 49% of Malaysian power producers, unless they obtain a waiver from the government.

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Prime Minister Najib Razak chairs 1MDB’s advisory board and his leadership has been questioned because of his alleged dealings with the firm

It’s not clear yet whether the Chinese firm has been given this exemption – but it is buying all of Edra – which makes up 14% of Malaysia’s total power assets.

The sale has been criticised by members of the opposition who say it means China will control a big chunk of Malaysia’s energy assets and that the price paid for these assets is far less than what 1MDB paid in the first place.

There have always been questions asked about the purpose and performance of 1MDB – which has changed auditors twice since 2009.

Malaysia already has a sovereign wealth fund, Khazanah, which makes investments for the country’s national development.

1MDB was set up with similar ambitions by Mr Najib in 2009, who chairs its advisory board and also serves as Malaysia’s finance minister as well as prime minister.

Since the scandal broke, calls for the prime minister to step down have been growing from protestors, and even from the high profile former prime minister Mahathir Mohamad, who still holds a lot of influence in the country.

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Beyonce and Arcadia confirm 2016 launch

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Beyonce and Arcadia confirm 2016 launch

Beyonce and Sir Philip Green’s Arcadia confirm 2016 launch

  • 25 November 2015
  • From the section Business

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A launch of retail billionaire Sir Philip Green’s new clothing venture with singer Beyonce is planned for spring next year.

The owner of the Arcadia group, which includes Top Shop, Dorothy Perkins, and Burton, has been working with the star on a new athletic street-wear brand.

It had been reported that the global venture would launch this year.

Details came as Sir Philip’s group reported operating profits up 5.5% to £251.6m despite “challenging times”.

Sales for the year to 29 August were almost flat at £2.06bn, according to results published by Taveta Investments, Arcadia’s family-controlled parent company.

The fashion industry was abuzz with speculation earlier this year when the retail entrepreneur and singer announced they were creating an all-new global company, Parkwood Topshop. Deals between retailers and celebrities have traditionally been branding links.

In an update on Wednesday, Taveta said: “We are developing our distribution globally for the launch of this exciting new brand in spring 2016.”

The new company will produce clothing, footwear and accessories. So-called street-wear is a “rapidly growing area of the market”, the company said in a statement.

Taveta’s profit figures, for the year ending 29 August, do not include High Street chain BHS, which was sold in March to Retail Acquisitions for just £1.

Sir Philip said Arcadia delivered “a robust performance in challenging times”. In the first 10 weeks of the current financial year, like-for-like sales were down 2.3% on the same period last year, he said.

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Osborne’s big idea

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Osborne’s big idea

Osborne’s big idea

  • 25 November 2015
  • From the section Business
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George OsborneImage copyright

If George Osborne has a big idea, it is to transfer the costs of and responsibility for building a better, fairer Britain from the public sector to the private sector.

We’ve seen that with the imposition of a higher minimum wage, rebranded as his National Living Wage, and his stumbling attempt to cut state top-ups to the low paid through the tax-credit system.

We are seeing it today with what one of his colleagues describes as the government “raising the affordable housing budget but also redirecting it to homes for sale rather than rent”.

So one of the centrepieces of today’s Autumn Statement and Spending Review is what the Treasury describes as the “biggest affordable housebuilding programme since the 1970s”.

There will be a substantial £2.3bn of government funding for the construction of so-called starter homes – or homes up to a value of £250,000, or £450,000 in London, which will be sold at a 20% discount to those under 40 buying their first home.

And there will be a big push on semi-privatisation of social housing, with £4bn of finance for shared ownership of residential properties – which will also include a big push on encouraging private developers to promote his Help-to-Buy scheme.

It’s bonanza time for mass housebuilders, especially if the chancellor succeeds in loosening planning constraints, as he wants to do.

And it’s thin gruel – again – for housing associations, which are being obliged to shrink by selling properties at big discounts to tenants and which are having difficulty building even what they had planned to do following the Treasury’s decision to force them to cut rents.

That imposed rental cut was an attempt to shrink the housing benefit bill.

And here perhaps is the best way of seeing Osborne’s British vision: slash tax credits by forcing the cost of providing decent wages on businesses; reduce housing benefit, by spurring a boom in cheap housing, cutting rents and stimulating private ownership,

It is a shrinking of the state, that – in theory, and over the medium term – should not impoverish the working poor.

But there may well be pain for what MPs perhaps patronisingly call “strivers” in the period of transition,

And whether in practice too many vulnerable people will fall through shrunken and lowered state safety nets will be one of the big political questions in this parliament – and which may decide whether George Osborne achieves his ambition of relocating to Number 10.

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Prime central London property market unlikely to see growth until Q3 next year

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Prime central London property market unlikely to see growth until Q3 next year

Potential sellers in central London’s prime property market are staying put and using the money they would have paid in stamp duty on refurbishing their present home, it is suggested.

Official statistics show that price growth in this sector of the UK’s property market has slowed with changes to stamp duty announced a year ago blamed.

The latest analysis report from Sandfords, a central and North West London agent, confirms that this has been the case.

‘The stamp duty changes that took place towards the end of 2014 have depressed the market across the board in prime central London and forecasts for next year have altered in light of this,’ said Andrew Ellina, the firm’s director.

‘I predict that price increases in the prime central London market in 2016 will be modest with some areas experiencing growth and others seeing prices remaining fairly static,’ he added.

He explained that families in particular are choosing to carry out alterations rather than put their home on the market and the firm expects this to continue into the New Year.

The biggest price band that has been affected is from £1.5 million to £5 million. For properties below the £1.5 million the stamp duty changes have not been too onerous. For anything above £5 million, purchasers have sufficient funds and are therefore not too bothered about a heavy stamp duty bill.

Ellina believes that unless something significant happens that we cannot foresee at the moment, there will not be a crash, but the global economic outlook combined with tax changes in the UK and the perceived high current values will subdue demand and this will take some time to work through. ‘I do not anticipate sustainable growth returning until the third quarter of 2016,’ he said.

Regent’s Park and Marylebone are still undervalued in comparison to Knightsbridge and Kensington, but are becoming increasingly more fashionable and desirable, the report suggests. Other areas of growth will be in Fitzrovia and Kings Cross which are rapidly changing out of all recognition.

‘The capital is undoubtedly still one of the safest places in the world to live and invest, and will continue to be a top investment location. This year, buyers from all over the world including, the Far East, China, India, Greece and Europe have been heavily spending their money and buying properties in London, and it looks like they will still be big players in 2016,’ Ellina concluded.

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Scottish residential rent rises have halved in four months

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Scottish residential rent rises have halved in four months

The Scottish residential rental market as seen rents rising at half the speed they were during the summer months, slowing from a 3.1% annual rise in June to 1.6% October.

After peaking at record prices in the summer, Scottish rents have been falling in recent months but there are signs that growth is starting to rally again, according to the latest buy to let index from lettings agent network Your Move.

They increased by a modest 0.2% between September and October, the first month on month rise since July, and takes the average monthly rent in Scotland to £546, just £1 higher than the previous month in cash terms.
Despite widespread recognition that tenant demand is currently outpacing supply of available homes to let, landlords believe that rent rises are likely to continue on a slower trajectory than witnessed earlier this year.

Indeed, according to the latest Landlord Survey from Your Move, landlords expect rents to increase by just 1.4% over the next 12 months. Only 32% of landlords are intending to raise their rents next year, with the main motivation being to cover the cost of inflation.
‘There are indications from landlords that this trend will continue until 2016. Ultimately, rents in the private rented sector reflect what people are willing and able to pay, and are delimited by household incomes and monthly earnings,’ said Brian Moran, lettings director at Your Move Scotland.

A breakdown of the figures shows that rents are higher year on year in every region of Scotland except Glasgow and Clyde in October. Scotland’s second city has seen a 0.9% drop in rents since October 2014. This means the typical rent in the area now stands at £560, down from a record of £575 in the summer of 2014.
Compared to a year ago, the Highlands and Islands has experienced the biggest increase in rents, up 5.7% in 12 months. However this rate of growth is starting to slow after a monthly price drop in October, and rents have come down from their historic peak in September. After this, average rents in the South of Scotland are up 2.6% year on year.
Annual rent growth in Edinburgh and the Lothians has increased from 2% in September to 2.5% in October, meaning that rents are now £15 more expensive than a year ago in Scotland’s capital city. Standing at £630 per month, this is a new record for rent prices in the region, and 15% higher than the average rent in Scotland overall.
The East of Scotland has experienced a more modest 1% uptick in rent prices in the past 12 months, with monthly rents rising by £5 to £522.
Three of the five regions of Scotland have seen rents increase in the past month. The urban centres of Edinburgh and the Lothians and Glasgow and Clyde have seen the strongest month on month rises, with rents up 1.1% since September. The East of Scotland has seen a 0.2% monthly increase in rent prices, in the first month on month rise since July.
The South of Scotland have experienced the biggest drop in rents on a monthly basis. Here, rents are 1% lower than in September. Average monthly rents have also fallen in the Highlands and Islands, down 0.5% month on month, the first monthly drop since April, following a sustained summer of growth.
The index also shows that Scottish tenant arrears have climbed to a fresh record in October, with the proportion of rent in arrears rising to 13.8% of all rent due in the month. This is the fifth consecutive month that tenant arrears have worsened, rising from 8.8% in May of this year, and up from 13.2% the previous month. On an annual basis, rental arrears have more than doubled, increasing from 6.5% of all rent in October 2014.
‘Since May, rental arrears have been moving in only one direction and it’s not where we want them to be heading. More needs to be done to turn tenant fortunes around and divert them back onto the right road, but in the meantime, it’s vital that the channels of communication are kept open between landlords and their tenants,’ said Moran.
‘Scottish rent growth is coasting along at a sustainable speed, and can hardly be accused of going off the rails. It is unemployment in Scotland that has been accelerating over the summer, and is now higher than the UK average,’ he explained.

As of October 2015, the average gross yield on a Scottish rental property stands at 4%, consistent with the previous month. Compared to a year ago, gross yields are also holding steady with October 2014, but there has been significant volatility within these 12 months, as a result of house price distortions surrounding the implementation of the new Land and Buildings Transactions Tax.
Taking into account property price growth and void periods between tenants, but before any costs such as mortgage repayments or maintenance, the average total annual return on a buy to let property in Scotland stands at 5% in the year to October 2015. This represents a modest dip from 5.6% in September, but a more significant fall from 9.3% in the year to October 2014.
In cash terms this means the typical landlord in Scotland has seen a return, before any mortgage payments or maintenance costs, of £8,000 in the last year.  Rental income makes up £5,900 of this sum, while capital appreciation on buy to let property amounts to £2,100 in the 12 months to October 2015.

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Big China brokerage in $166bn error

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Big China brokerage in $166bn error

China’s biggest brokerage Citic in $166bn error

  • 25 November 2015
  • From the section Business

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The period in which Citic Securities inflated its derivative business was during the dramatic sell-off in mainland Chinese shares

China’s biggest brokerage, Citic Securities, had overstated its derivative business by $166bn (£110bn) from April to September, according to the country’s securities association.

The Securities Association of China said the firm inaccurately inflated the amount of its equity swap transactions in a report submitted in October.

Citic said the error occurred due to a system upgrade and has been corrected.

Probes have resulted in executives confessing to insider trading at Citic.

In September, shares of China’s largest state-owned brokerage slumped after it reported that three executives, including its president, were under police investigation.

The firm has been part of a crackdown by China’s regulators on irregular stock trading since mainland markets plunged dramatically in mid-June.

The association, which is partly overseen by the China Securities Regulatory Commission, said it was investigating the matter and would take further action if necessary.

It did add that the error did not impact the month-end net size of Citic’s business.

The brokerage told the Reuters news agency that it had amended the figures at the start of November and the size of its swaps business was $6.2bn.

An equity swap is a type of derivative that refers to a cash exchange between realized gains on specific stocks and fixed interest rates over a certain period of time in the future.

Shares of Citic Securities were down almost 1% in Shanghai in afternoon trade.

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Osborne to unveil homes cash amid cuts

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Osborne to unveil homes cash amid cuts

Spending Review: George Osborne to pledge housing cash amid cuts

Media captionWhat to expect in the Spending Review

George Osborne is to set out government spending plans up to 2020 later, which will include billions of pound in cuts but also new money for housebuilding.

The Autumn Statement and Spending Review will detail £20bn of cuts to Whitehall budgets and £12bn to welfare.

But the chancellor will pledge almost £7bn to make housebuilding a priority, with more than 400,000 “affordable homes” to be built in England.

Plans to mitigate the effect of tax credit cuts have also been promised.

BBC political editor Laura Kuenssberg said Conservative MPs were expecting a “serious pulling back” from the government on planned £4.4bn cuts to working tax credits, which were rejected by the House of Lords last month.

The combined Autumn Statement and Spending Review will set departmental spending limits for the next five years and give details of the government’s taxation and deficit reduction plans.

Ministers have pledged to cut annual welfare spending by £12bn, and government departments have been asked to find a total of £20bn in savings under plans to achieve a budget surplus by 2020.

The chancellor also hopes to raise £5bn with a crackdown on tax avoidance.

Media captionWhat are the chancellor’s options to balance Britain’s books?

Mr Osborne will promise to address a “crisis of home ownership in our country”, pledging a “bold plan to back families who aspire to buy their own home”.

The Treasury said the chancellor would unveil “the biggest affordable housebuilding programme since the 1970s”.

It will include:

  • £2.3bn paid directly to developers to build so-called “starter homes“, aimed at first-time buyers, who will get a 20% discount on prices up to £450,000 in London and £250,000 elsewhere
  • £4bn to help build 135,000 “Help to Buy: Shared Ownership” homes for households earning less than £80,000 (or £90,000 in London)
  • £200m for 10,000 new homes that tenants can live in for five years at reduced rents while they save for a deposit. They will then have “first right” to buy the home
  • £400m to help build 8,000 specialist homes for older people or those with disabilities

Spending Review 2015 – 25 November

The Spending Review is a five-year projection of government spending. In effect, it decides how £4 trillion of taxpayers’ money will be spent by setting caps on government departments.

Explained: Which government departments will be affected?

Analysis: Latest from BBC political editor Laura Kuenssberg

Watch: The BBC’s TV coverage begins on BBC Two and the BBC News Channel at 11:30 GMT, with BBC Radio 5 Live coverage from 11:55 GMT

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There have been warnings over the effects of further cuts to police budgets

The Treasury has already announced that front-line NHS services in England will get a £3.8bn, above-inflation cash injection next year.

Defence spending is to be increased, as set out in Monday’s Strategic Defence and Security Review.

Schools and international aid will escape cuts but the other, unprotected departments are braced for reductions to their budgets.

These include local government, the Ministry of Justice and the Home Office, with police forces expected to face more cost-cutting.


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By BBC political editor Laura Kuenssberg

This won’t be a Spending Review, ministers say, that displays an attitude of cutting a little bit here and there, moving money around the balance sheet to try to smooth out the pain.

Instead they see it as a programme of strategic cuts that, while difficult, add up to something: a country where work is rewarded, where anyone who wants to get on is helped to do so, and where the state has a careful approach to spending taxpayers’ money, using it judiciously where it helps and not being afraid to scrape it back where it does not.

But choosing priorities – not just protecting but substantially increasing spending on areas like health, significant new spending on housebuilding, including billions going directly to house builders to encourage them to get spades into the ground, and retaining what many see as generous welfare payments to the older generations – inevitably means others will lose out.

Read more from Laura

There have been warnings over the effect of further reductions in police spending, with one of the UK’s most senior police officers saying cuts could jeopardise the UK’s response to a Paris-style attack.

Prime Minister David Cameron has said the counter-terrorism budget will be protected.

Carl Emmerson, deputy director of the Institute for Fiscal Studies, told BBC News because of the amount of protected spending, the unprotected areas could be cut by as much as 50% from 2010 up to 2020.

Are you hoping to buy your first home? What problems have you faced getting on the property ladder?Let us know about your experiences. Email with your stories.

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Big is beautiful for merging universities

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Big is beautiful for merging universities

Big is beautiful for merging universities

  • 25 November 2015
  • From the section Business

Image copyright
Olivier Jacquet

Image caption

Sorbonne lecture: Paris could have a mega-university, if those broken up after 1968 are re-united

Universities across Europe are talking about merging or forming alliances like never before.

Almost 100 mergers have taken place since the beginning of the century. The European University Association (EUA), representing universities in 47 countries, is mapping this changing landscape with an interactive merger map.

And the pace is accelerating, with eight super-universities or clusters identified in 2012; 12 in 2013 and 14 in 2014.

So what’s driving the merger mania?

Is it a way of climbing world university rankings by concentrating the best brains and resources to attract more students and bigger research grants?

Or is it a way of responding to funding cuts?

Thomas Estermann, director for governance, funding and public policy development at the EUA, says bigger numbers of staff and students give these super-universities more clout.

Global reach

Bigger universities can gain higher profiles and boost global reputations, he says.

Mergers are also a way of “streamlining” and reducing duplication.

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Estonia has reduced the number of institutions by more than a quarter

In some cases it will be a way of coping with a demographic decline of young people.

The EUA says mergers gathered pace from 2005 onwards, with Denmark and Estonia being the early trendsetters.

Estonia cut its number of higher education institutions from 41 to 29 between 2000-2012. The University of Tallin in the country’s capital capital absorbed eight smaller institutes and colleges.

In Denmark, the number of universities was reduced from 12 to eight and government research centres integrated into the university sector.

French fashion

France now leads the way with mergers with a government-inspired initiative to gather universities and research centres into umbrella-like communities – “communes” – and then to consider full mergers.

One of the biggest amalgamations, the Paris-Saclay “federal university”, includes the highly-ranked Ecole Polytechnique, the HEC business school and Universite Paris-Sud.

Image copyright
Olivier Jacquet

Image caption

The Sorbonne could become part of a much bigger Paris university in the next few years

This has the explicit aim of creating a institution which will be in the top 10 of global rankings.

Now it looks like Paris will go one step further, following successful university mergers in Strasbourg, Bordeaux and Marseille.

In the heart of the Latin Quarter, two of the French capital’s most prestigious institutions – Paris-Sorbonne and Pierre and Marie Curie (UPMC) Universities – are planning to recreate the spirit of the old unified University of Paris which was torn apart after the student riots of 1968.

Back then, the French government allowed the University of Paris – one of the oldest in the world, founded around 1150 – to split into 13 autonomous universities along faculty lines, often referred to as Paris 1, 2, 3 and so on up to 13.

The ‘old Sorbonne’

Professor Jean Chambaz, president of UMPC – Paris 6 – said: “One of the limitations of French universities came about 40 years ago when they separated along disciplinary lines.

“One had all sciences, another only the humanities, another just law and economics.

Image copyright
Andrea Fabry/KIT

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Karlsruhe Institute of Technology (KIT) is a German merger that has boosted research income

“We were the science and medical faculties of the Sorbonne, of the University of Paris, before the split in 1970.”

“Today UPMC’s focus is science, engineering and medicine; at Paris-Sorbonne it is arts and humanities. But to address the challenges of the world, we need to build a comprehensive university containing all these disciplines.

“At the moment in Paris, we don’t have mergers, but autonomous institutions working in partnership, like our own Sorbonne University group, which includes research centres, the private INSEAD business school, as well as Paris-Sorbonne, UPMC and some other institutions.

“In February, we will have elections for presidents and boards of both Paris-Sorbonne and UPMC. Providing the new members agree, we will press ahead with a full merger and create the new university by 1 January 2018.

“In some ways we are recreating the old Sorbonne, but in the 21st Century.”

Professor Barthelemy Jobert, president of Paris-Sorbonne University – Paris 4 – is enthusiastic about creating a powerful global research university covering all disciplines and capable of rivalling the best in the world.

“Success will be creating a new model of a global university in France, with independent autonomous faculties as well as a presidency who will speak for the whole university.”

The French government favours such mergers, but is leaving it to the universities to decide.

Professors Jobert and Chambaz see eye-to-eye on the merger, but say it is vital to win support from academics, technical and administrative staff and students.

KIT a German MIT?

Prof Chambaz says they are learning from other European examples of successful government-backed mergers, such as Germany’s Karlsruhe University and Karlsruhe Research Centre merging into Karlsruhe Institute of Technology (KIT).

Image copyright
Pierre Kitmacher

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The University Pierre et Marie Curie could be part of the new Paris super-university

With the goal of repeating the success of the Massachusetts Institute of Technology (MIT) in the US, KIT has increased student numbers by 20% since 2009 and concentrated research on fields such as energy and mobility.

It enjoyed a 50% boost to research income between 2009 and 2013.

The new Aalto University in the Finnish capital, Helsinki, had government backing to combine institutions.

Helsinki School of Economics, Helsinki University of Technology and the University of Arts and Design, Helsinki were merged, with the aim of turbo-charging Finland’s higher education system.

It wanted to tackle the relative poor performance of Finland’s universities, compared with the country’s top ratings at school level in the Pisa test rankings.

Image copyright
Olivier Jacquet

Image caption

Prof Jobert (left) from Paris-Sorbonne and Prof Chambaz from UMPC are discussing a merger

“The new university was designed to put innovation and impact on the knowledge economy at the heart of things,” said Aalto’s vice president, Hannu Seristo.

And the new bigger university climbed almost 50 places in this year’s QS rankings.

But not all mergers are so enthusiastically supported by government.

The University of Lisbon and Technical University of Lisbon, Portugal, had to “actively convince” public authorities to secure approval to merge into Universidade de Lisboa and justify the costs involved.

And that’s just the point, says Mr Estermann. “Mergers need a lot of time and energy to be successful. Saving money should not be the main reason to merge as return on investment can take a long time.

“They shouldn’t be forced. We’re talking about autonomous institutions and not a company takeover.”

The original article can be found at

How Ireland built a cheese movement

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How Ireland built a cheese movement

How Ireland built a cheese movement

  • 25 November 2015
  • From the section Business

Image copyright
Cashel Blue

Image caption

Cashel Blue is one of numerous Irish cheeses now available in the US

When Irish farmer Eugene Burns started making a posh French-style, smelly cheese in 1983, he decided to do something either very brave or very foolhardy.

So convinced was he of the quality of his cheese that he made the decision to try to sell it in Paris.

Mr Burns wanted to go straight into the lion’s den of the cheese world.

And instead of putting a few rounds in the post, he vowed to drive to the French capital.

Despite having never left Ireland before, the County Cork farmer filled his van with cheeses, and drove to Paris’ Rungis food market via the UK and two ferries.

“I don’t think he had a word of French even,” says Irish food writer and TV personality Darina Allen. “How he got there is hard to say.”

But Mr Burns did manage to find the Rungis market, and the cheese of the determined Irishman was a hit with French wholesalers.

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Liz Burns says her dad was determined to sell his cheese to the French

“He absolutely knocked it out,” says Ms Allen.

So much so that Mr Burns returned to the Republic of Ireland with an order for a ton a week.

Which didn’t initially go down well with his wife, as he daughter Liz Burns, 42, explains: “My mother said ‘a ton, are you mad!’.”

However, they were able to fulfil the orders, and the cheese, called Ardrahan, has never looked back. Still available in France, it is today also sold across Ireland, in the UK, and even in the US.

Like many Irish diary farmers, Mr Burns decided to start making cheese almost out of necessity, due to the introduction of European Union milk quotas in 1984.

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Wicklow Farmhouse Cheese

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Ireland how has a burgeoning artisan cheese movement

Brought in to bolster milk prices, these put strict limits on how much milk could be produced, meaning that farmers had to reduce the size of their herds, or even throw milk away.

Ms Burns, who took over the running of the family farm and production of Ardrahan follower her father’s passing in 2000, says her dad was simply not prepared to see good milk go to waste.

“We had our milk, our milk was really, really good,” she says. “We weren’t going to throw it down the drain.”

And there was good reason why the late Mr Burns decided to go to Paris – back in the early 1980s demand for French-style cheese was rather limited in an Ireland attached to its Cheddar-type cheeses, so he knew he had to find export markets.

‘Intense competition’

Cashel Farmhouse Cheesemakers is another family-run Irish cheese business that was set up on a farm as a response to the introduction of EU milk quotas (which were finally revoked earlier this year).

Established in 1984 in County Tipperary, is is now run by couple Sarah and Sergio Furno, both 41, and produces 300 tons of cheese per year. Mrs Furno is the daugher of founders Louis and Jane Grubb.

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Sarah Furno says Cashel Blue has had to work hard to crack the US market

In recent years, Cashel has increasingly focused on the vast US market, despite the challenges it presents.

“The US is a market complete with layers that don’t exist elsewhere,” says Mrs Furno. “Such as brokers who act between distributors and retailers.”

This means a much longer supply chain, and so cheeses need to have a good shelf life.

Mrs Furno adds: “In the US I would not call us successful as distinct from being persistent.

“We simply have worked to keep our cheese available, despite intense competition from other European blue cheeses, and very good American farmstead blues.”

Led by the likes of Cashel, a whole host of Irish cheeses are now available in the US.

While data specifically for cheese is unavailable, Irish government figures show that dairy exports overall to the US rose by 35% to €10m ($10.7m; £7.1m) in the first half of 2014, compared with a year earlier.

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John Hempenstall has been able to reduce the prices of his Wicklow Farmhouse Cheese

Karen Coyle, North America director of Bord Bia, Ireland’s food board, says that Irish food exports benefit from the US’s very positive view of the country.

She says that in the US, Ireland is seen as a “luscious, green-grassed island” of passionate farmhouse producers.

At Ardrahan, in 2006 it created a new creamy and milder cheese especially for the US market, called Duhallow.

The cheese have proved a hit in the US, and even featured on the Oprah Winfrey Show.

Lower prices

Ireland’s artisan cheese-makers have also worked hard over the years to boost domestic sales, helped by the country getting increasingly more cosmopolitan in its tastes.

Image caption

Ireland is not short of rain, which means lots of green grass for dairy cows

Mrs Furno says she works hard to increase knowledge and awareness of Cashel’s products, “spending a lot of time in dialogue with people” who want more information about the cheeses.

Producers have also worked hard, and in collaboration, to shorten their supply chains, which has helped them to reduce their prices.

John Hempenstall, owner of Wicklow Farmhouse Cheese, which produces 120 tons a year, says this has helped him cut its prices by as much as 30%.

“As a result our cheese has started to sell in areas that aren’t particularly affluent,” he says, pointing to less well of neighbourhoods of the capital Dublin.

“We are a bit of a treat people say they’ll give themselves.”

The original article can be found at

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