Tesla Electric Car Fires Spark Safety Probe

The US government's auto safety watchdog has opened an investigation into battery fires in Tesla Model S electric cars.

The National Highway Traffic Administration (NHTA) said blazes broke out in two of the cars in the US after the undercarriage hit metal road debris, piercing the batteries and causing a thermal reaction and fires.

In each case, the car warned the driver of the damage and both escaped without getting hurt.

The first US fire occurred along a highway near Seattle when a Model S struck a curved metal object which pierced the shield and the battery.

In the second case, a Model S caught fire on November 6 near Smyrna, Tennessee, after the driver struck a trailer hitch in the road.

Tesla's CEO Elon Musk says the risk of injury to drivers is extremely small

Another fire was reported on October 17 in Mexico when a Model S burned after a high-speed crash.

The probe affects more than 13,000 cars from 2013 that were sold in the US. Tesla has sold about 19,000 of the cars, which can go up to 265 miles (425km) on a single charge, worldwide.

They start at $70,000 in the US - about $9,000 cheaper than the advertised on-the-road price of £49,900 in the UK, where the first vehicles are due for delivery in the Spring.

The low-slung Model S currently has a six-inch clearance between the ground and the undercarriage and the batteries are located beneath the passenger compartment and protected by a quarter-inch-thick metal shield.

The investigation could potentially lead to a recall, but a decision is likely to be months away.

Tesla CEO Elon Musk said in a blog that the company asked the government to investigate, even though its cars catch fire at a far lower rate than petrol-powered vehicles.

He said: "While we think it is highly unlikely, if something is discovered that would result in a material improvement in occupant fire safety, we will immediately apply that change to new cars and offer it as a free retrofit to all existing cars."

He also wrote that Tesla has done an over-the-air software update to give the car more ground clearance at highway/motorway speeds.

Mr Musk said: "The theoretical probability of a fire injury is already vanishingly small, and the actual number to date is zero."

Tesla said it planned another software update in January to give the driver more control of the air suspension ride height.

According to the US Fire Administration, there are around 194,000 vehicle fires on US roads each year - with 61% starting in the engine area.

Electric vehicles make up less than 1% of the cars sold in the US. 

Tesla's stock had risen by more than 400% earlier this year as the Model S won accolades from Consumer Reports and other magazines. Its share price has fallen 37% since news of the first fire was reported on October 2.

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Jobs At Risk As Tie Rack Exits High Streets

By Mark Kleinman, City Editor

The owners of Tie Rack will on Wednesday begin shutting down the chain's UK shops in a move likely to spell the death of the brand on British high streets.

Sky News has learnt that Tie Rack's investors have decided to bring the curtain down on the well-known retailer's remaining 44 UK stores, more than 30 years after the company was founded.

The move could threaten up to 200 jobs.

A closing-down sale is expected to begin on Wednesday, according to insiders, with the UK shops expected to have shut their doors for the last time by the end of the year.

Tie Rack is controlled by an Italian company called The Fingen Group, described on the retailer's website as "a conglomerate with business interests in retail and real estate".

Grant Thornton, the accountancy firm, is understood to have been asked by Tie Rack's owners to canvas prospective buyers of the overseas shops.

The current shareholders will retain ownership of the Tie Rack brand online, said one source.

Negotiations are also underway with British airport operators about Tie Rack retaining a presence at some of them, although the fate of those discussions is uncertain.

Tie Rack is one of dozens of high street retailers burdened by underinvestment, high overhead costs and changing consumer behaviour in recent years.

Tie Rack floated on the London Stock Exchange during the 1980s and saw more than £1bn of orders for just £12.5m-worth of shares, expanding to a peak of 450 stores in 1998. Since then, the chain has been in serial decline as it failed to keep pace with more fashionable competitors.

At its largest, Tie Rack had shops in 31 countries, including the US, Canada, France, Belgium, Spain and Ireland.

Ties now account for about only 20% of sales with the majority accounted for by other accessories.

Accounts for the business show that for the year to January 31, 2012, Tie Rack's turnover was £68.1m, with a £pre-tax loss of £6.8m.

Tie Rack, whose Rolling Luggage fascia will be unaffected by the store closures, could not be reached for comment.

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Npower Tops List Of Energy Customer Complaints

Npower has topped a customer complaints list leading an energy watchdog to describe its performance as "unacceptable".

Latest research compiled by Consumer Futures, which represents consumers in regulated markets, said npower had 202.5 complaints per 100,000.

This was compared with 38.3 per 100,000 for SSE, the lowest of the main energy providers.

Audrey Gallacher, director of energy at Consumer Futures, said: "The company is implementing system changes that inevitably caused disruption to customers, however its complaints performance is unacceptable and the company must take further steps to tackle this.

"Energy companies have repeatedly said they want to rebuild consumer trust.

"Along with price, good service is important to customers. People want to know the relative performance on complaint handling to help them make informed choices when deciding whether to switch.

"Customer satisfaction with how complaints are handled is low across a whole range of industries and the same problems are seen over and over again."

The figures were taken from the period April to June 2013 and do not include any complaints made in the wake of recent price hike announcements.

Public confidence in energy suppliers has been dealt a major blow since five of the Big Six energy firms announced that charges would rise by an average of around 9%.

Citizens Advice chief executive Gillian Guy said: "Price hikes of 36% over the last three years, coupled with poor customer service, has compounded the lack of trust in energy firms as households struggle to afford to have a warm home."

A spokesman for Energy UK, the trade association for the energy industry, said: "The vast majority of energy customers are happy with the service they get with only around one in every 1,400 customers likely to need to contact their supplier about a problem.

"Most complaints only need a phone call to sort out - around four out of five queries are resolved by the end of the next working day - but, if the problem cannot be resolved, the energy ombudsman is there to ensure problems get fixed.

"Energy companies take their relationship with customers extremely seriously and work hard to improve customer service."

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G4S In £24m Apology For Overbilling Taxpayers

Security firm G4S has apologised and offered to repay more than £24m after it overcharged taxpayers for the electronic tagging of offenders.

The company admitted its part in the scandal - currently being investigated by the Serious Fraud Office - which included bills for monitoring criminals who had died.

But it insisted an independent review it commissioned had "not identified any evidence of dishonesty or criminal conduct by any employee".

G4S refused to co-operate with a forensic audit of its work - and that of fellow contractor Serco - which a public spending watchdog revealed had already cost the Ministry of Justice (MoJ) more than £2m.

The firm said it now accepted it had "wrongly considered itself to be contractually entitled to bill for monitoring services when equipment had not been fitted or after it had been removed".

The admission was branded "staggering" by Labour MP Keith Vaz, chairman of the home affairs select committee.

Mr Vaz has called for all G4S contracts with the Government to be reviewed "immediately", and for the firm to be "banned from bidding for any more".

"Contracts of this kind need to be conducted in good faith and represent value for money," he said.

G4S said: "This billing practice ... was not consistent with the contract or G4S's values and the company has apologised to the Ministry of Justice and issued credit notes totalling £23.3m for amounts incorrectly billed between 2005 and May 2013.

"A further credit note of £0.8 million will be issued for billings for the period from June 2013 to date."

The MoJ would not be drawn on whether it would accept the G4S offer. A spokesman said: "The Secretary of State has been clear: we are determined to secure a refund for the taxpayer."

The MoJ said it would not comment further until a criminal investigation was completed. 

G4S said it was ready for further negotiations with the MoJ if the audit concluded that it had overcharged by more than the sum offered.

The company said there was no evidence that its errors extended to any of its other Government contracts. It has faced repeated criticism of its performance, not least over security for the 2012 Olympics.

Labour MP Keith Vaz, chairman of the Home Affairs Select Committee, said: "The admission of G4S today is staggering.

"The company refused to co-operate with the Government, which led to the referral to the SFO, and that should have rung alarm bells. It represents serious corporate failure.

"Contracts of this kind need to be conducted in good faith and represent value for money. Every G4S contract with the Government needs to be reviewed immediately, and they should be banned from bidding for any more."

An audit by big four accountancy firm PricewaterhouseCoopers (PwC), launched in May, revealed that overcharging began at least as far back as the start of the current contracts in 2005 - but could have dated as far back as the previous contracts in 1999.

Auditors discovered the firms had charged the Government for tagging offenders who were back in prison, had had their tags removed, had left the country or had never been tagged in the first place but had been returned to court.

The Government has handed over material from the PwC audit of Serco to the Serious Fraud Office while G4S was referred to it after declining to take part in the audit, which included looking at email trails between top executives.

The revelations sparked a Government-wide review of all contracts held by Serco and G4S. G4S UK and Ireland chief executive Richard Morris will face questions from MPs over the scandal tomorrow when he appears before the Commons public accounts committee.

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Oligarch's Fund Swoops For £500m Banknote Firm

By Mark Kleinman, City Editor

A fund backed by a billionaire Russian oligarch is closing in on a £500m takeover of one of the companies vying to produce the next generation of plastic currency for the Bank of England.

Sky News has learnt that Pamplona Capital Management has entered exclusive talks to acquire Innovia Films, a manufacturer of speciality products for the packaging, labelling and securities industries - including the creation of materials for use in polymer banknotes.

Pamplona is likely to pay in the region of £500m for Innovia, which already counts 20 central banks among its customers, including the Bank of Canada, from which Mark Carney departed to become Governor of the Bank of England earlier this year.

Pamplona is backed by Alfa Group, a company headed by Mikhail Fridman and one of the members of the AAR alliance which last year agreed to end its conflict-plagued joint venture with BP in Russia by selling out to Rosneft, the Kremlin-controlled energy giant.

The deal netted Mr Fridman and his partners at least $7bn each, cementing their status among the world's wealthiest individuals.

The negotiations between Pamplona and Arle Capital Partners about the purchase of Cumbria-based Innovia have not yet been completed and could take several weeks to reach an agreement, according to people close to the talks.

The deal is likely to be struck at around the same time that the Bank of England announces the outcome of a public consultation about a move to polymer banknotes, a decision that would end more than three centuries of paper banknote production.

Polymer notes are more difficult to counterfeit because they contain a plastic film which is produced by specialist machinery.

Innovia is viewed as a strong contender to win a role producing polymer bankotes for the UK central bank, although it faces stiff competition from De La Rue, the incumbent producer of the Bank of England currency.

If Innovia does secure the contract once its takeover goes through it would place the company under the ownership of a fund with close links to one of Russia's wealthiest oligarchs.

Pamplona is in talks to buy Innovia from Arle, which manages the residual investments of Candover, one of the original giants of the private equity industry but which ran into trouble during the financial crisis.

Innovia is the final investment in Candover's 2001 fund to be sold although there remain several investments made by Candover's 2005 fund under Arle's management.

A number of other private equity firms tabled offers for Innovia but have seen their bids rejected in favour of Pamplona's, insiders said.

Arle and Pamplona declined to comment.

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US Stock Markets Hit New Highs After Jet Deal

Stock market indexes have hit new milestones on Wall Street, fuelled by a wave of new Boeing plane orders and continued positive investor sentiment for stocks.

The Dow Jones industrial average crossed 16,000 points for the first time early Monday and the Standard & Poor's 500 index passed 1,800 points before both fell back in late trading.

Stocks have been rising sharply this year as the US economy improves, companies report bigger profits and the Federal Reserve keeps up its easy-money policies.

The S&P 500 index has risen for six weeks straight and is up 26% so far this year.

But a growing number of market watchers are calling for caution after the steep rise.

US politicians appeared to act against the national interest in the impasse

Boeing rose the most of the 30 stocks in the Dow after the plane-maker booked around $100bn (£62bn) in orders at the opening of the Dubai air show.

Meanwhile, foreign buyers of US Treasury securities increased their holdings in September, suggesting many shrugged off budget battles in Washington to keep investing in American debt.

Total foreign holdings rose 1% September to $5.65trn (£3.5trn), the Treasury Department said.

That followed a 0.03% gain in August.

Holdings had fallen from April through July, possibly reflecting concerns about rising interest rates.

In September, holdings were 1.2% below the record high of $5.72trn reached in March.

China, the largest foreign buyer of Treasury debt, boosted its holdings 2% in September to $1.29trn.

Japan, the second-largest buyer, increased its holdings 2.5% to $1.18trn.

An impasse over the budget led to a 16-day partial shutdown of the federal government in October.

Politicians did not reach an agreement to raise the nation's borrowing limit until October 16 - one day before a deadline that, if compromised, would have increased the risk of a default on US debt.

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Supermarkets Taken To Task Over Offers

By Poppy Trowbridge, Business And Economics Correspondent

Some of Britain's biggest supermarkets have been accused of running so-called special offers that often see customers "paying over the odds".

Consumer group Which? analysed more than 70,000 grocery prices and found examples of what they call misleading multibuys and dodgy discounts.

Richard Lloyd, executive director, told Sky News: "People are at best paying what they would have done, or often we have found paying over the odds, paying extra when they think they are getting a discount. That can't be fair.

"These special offers simply aren't special at all. That is why we need to see the rules change to force the supermarkets to play fair."

One example found by Which? was a Sainsbury's special offer for Carex Aloe Vera & Eucalyptus Moisturising Antibacterial Handwash, where the item was priced at £1.80 for seven days, then was on offer at "was £1.80, now 90p" for 84 days.

Ocado sold a 12-pack of Beck's beer as "was £12.19, now £9" for almost a month but had only sold the item at the higher price for three days.

Asda increased the regular price of Muller Light Greek Style Yoghurt from £1.50 to £2.18 before it went on a "two for £4" offer, costing shoppers £1 more.

Shoppers are being urged to look carefully at special offers

It also increased the price of Uncle Ben's Express Basmati Rice from £1 to £1.58 before offering for "two for £3" and then returning the rice to £1 when the offer ended.

With inflation having outpaced average wage growth for about five years, rising food prices are one of the top worries for consumers.

Which? wants the Government to make the rules for special offers simpler, clearer and stricter.

The consumer group says if these changes are not made swiftly, it will consider using its formal legal powers to ensure the practice is tackled.

In the meantime shoppers should look carefully at the special offers, Mr Lloyd added.

"Make sure that you are not getting misled into buying something that you think is a good deal when that is just not the case," he said.

The British Retail Consortium, which represents the supermarket industry, said in a statement: "Across the tens of thousands of promotions available every day, regrettably, occasional errors do slip through.

"Retailers work very quickly to rectify these mistakes whenever they are found."

Both Asda and Sainsbury's also issued statements apologising for what they called pricing errors.

Sainsbury's said: "We are absolutely committed to fair and transparent promotions and carry out regular audits and thorough training on this."

Asda's statement said: "We take pricing seriously, and we've recently employed a new team within the business that looks at all aspects of our pricing process and pricing practices in store and online.

"Sometimes mistakes can happen, but we would never deliberately mislead our customers ... "

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OECD Growth Upgrade Is Boost For Chancellor

By Ed Conway, Economics Editor

George Osborne has been handed a further fillip as the Organisation for Economic Co-operation and Development upgraded its forecast for UK economic growth by more than any other major economy.

The OECD said it expected Britain's economy to grow by 1.4% this year and 2.4% next year – higher than the 0.8% and 1.5% respective rates it was forecasting in its last Economic Outlook in June.

It is the biggest upgrade for any of the world's major economies.

The OECD upgrade follows on the heels of the International Monetary Fund, which also upgraded Britain's economic growth projections by more than any other leading country in October.

It is the latest boost for the Chancellor, who is expected to present an improved picture of the UK economy in his Autumn Statement next month.

George Osborne will be making his Autumn Statement on December 5

A Treasury spokesman said: "The OECD have revised their forecast for UK GDP up by more than any other G7 country over the next two years. This provides more evidence that the UK's hard work is paying off and the country is on the path to prosperity.

"Today's report also highlights the risks that remain to the recovery and urges the UK to stick to the government's plan that is growing the economy, lowering the deficit and inflation, and creating jobs. This is the only sustainable way to raise living standards for hardworking families."

However, the OECD's Economic Outlook did warn that the UK faced a number of risks in the coming years – one of which was the possibility of an overheating housing market.

It said: "The recently established government 'Help to Buy' property programme needs to be carefully monitored, as planned, and swiftly adjusted if it risks triggering sharp increases in house prices as a result of supply rigidities."

The Paris-based organisation said the Bank of England should consider raising interest rates towards the end of 2015. However, some economists think the moment of tightening will come even sooner than that.

:: Spreadsheet comparison of OECD forecasts

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EasyJet Special Dividend As Profits Rise 51%

EasyJet is planning to return £175m to shareholders in a special dividend after full year profits rose 51% to £478m - a record for the company.

The no-frills airline said that in addition to the one-off payment of 44.1p per share - subject to shareholder approval - it would also pay a regular ordinary dividend of 33.5p per share worth £133m.

EasyJet said it ended its financial year to September 30 with £1.24bn in cash - an increase of £354m on the previous 12 months - and as a result the board was recommending the extra payout.

Total revenue rose 10.5% over the period to £4.25bn as it flew 68 million people while revenue per seat increased by 7% to an average of more than £62.

The Luton-based carrier hailed the success of recent initiatives, such as allocated seating and fast-track security, for boosting its popularity with more affluent, older fliers and business passengers.

Fuel costs climbed to £1.2bn.

EasyJet chief executive Carolyn McCall said: "As evidence of our continued confidence in the future prospects of the business, the board has recommended to return £308m to shareholders through the combination of an ordinary and special dividend.

"We will continue to deliver our strategy of offering our customers low fares to great destinations with friendly service so that we can continue to win in a more competitive market.

"This means we are well placed to continue to deliver sustainable returns and growth for our shareholders," she added.

EasyJet had said in October that annual profits would be at the upper end of expectations, and cited keen demand for flights during July and August.

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Flowers Quit Council Over 'Adult' Content

The former chairman of the Co-operative Bank resigned as a councillor in Bradford two years ago after "inappropriate" content was found on his computer, the council has revealed.

Reverend Paul Flowers, a Methodist minister who chaired the Co-operative Bank for three years from 2010, is alleged to have bought illegal drugs as part of a Mail on Sunday sting.

He left the city council in September 2011, having served on it for almost a decade, citing personal reasons and increased responsibilities at the Co-operative Banking Group.

But a spokesman for Bradford Council said: "Inappropriate but not illegal adult content was found on a council computer handed in by Councillor Flowers for servicing. This was put to him and he resigned immediately."

Reverend Flowers, who has already apologised for doing things that were "stupid and wrong" in relation to the drugs claims - but without elaborating - has been suspended from the Methodist Church and by the Labour Party.

Len Wardle joined the Co-op's board in 2002. Pic: Co-op

The substances said to be at the centre of the claims include cocaine and ketamine - a horse tranquilliser - used as a party drug.

The allegations against Reverend Flowers, which are the subject of a police inquiry, exacerbated pressure on Britain's biggest mutual which is having to explain the background to the bank's financial difficulties - largely a result of its merger with Britannia in 2009.

The Co-operative Group's long-standing chairman Len Wardle announced on Tuesday he was resigning with immediate effect after he admitted "serious questions" were raised by the drugs scandal.

Mr Wardle, who has held the position since 2007, announced last month that he was due to leave next May but he said it was now right for him to go straight away, having led the board that appointed Reverend Flowers.

Paul Flowers is being investigated following the Mail On Sunday's claims

Mr Wardle said in a statement: "The recent revelations about the behaviour of Paul Flowers, the former Chair of The Co-operative Bank, have raised a number of serious questions for both the Bank and the Group.

"I led the Board that appointed Paul Flowers to lead the Bank Board and under those circumstances I feel that it is right that I step down now, ahead of my planned retirement in May next year.

"I have already made it clear that I believe the time is right for real change in our operations and our governance and the Board recently started a detailed review of our democracy.

"I hope that the Group now takes the chance to put in place a new democratic structure so we can modernise in the interests of all our members."

The Co-op confirmed Mr Wardle would be replaced by Ursula Lidbetter, currently Group deputy chair and chief executive of the Lincolnshire Co-operative Society.

Mr Wardle's decision was announced hours after The Co-op Group launched a fact-finding probe and a root-and-branch review of its structure after "serious and wide-ranging" allegations about Reverend Flowers, who resigned in June after a £1.5bn black hole was discovered in its finances.

The Co-op Bank discovered a massive gap in its finances following the purchase of Britannia Building Society in 2009 and abortive attempts to take on hundreds of Lloyds branches.

It faces a rescue which will see 50 branches close and investors including US hedge funds take control of 70% of the business, leaving the wider Co-operative Group with just 30% - described as a "tragedy" by former group chief executive Peter Marks.

The former Co-op bank chief executive who steered through its ill-fated merger with Britannia told MPs today it was years before anyone believed it was a "daft" idea.

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