Children Of The 1960s Worse Off Than Parents

The children of the 1960s and 1970s are likely to be worse off than their parents, with no higher income or savings, no home ownership and smaller private pensions than those born in the previous decade.

The only way they will be better off when they retire is thanks to inherited wealth, according to the leading economic think-tank the Institute for Fiscal Studies.

More people born in the 1970s are expecting to inherit (70%) than those born in the early 1940s (28%).

The findings appear to bring to an end to the steady rise in incomes and living standards that successive generations have enjoyed since the end of World War Two.

Incomes for working-age adults born in the 1960s and 1970s were no higher in real terms than those of their predecessors of the same age a decade ago, the study found.

People have spent more over their working career so have not saved much

And, while the Sixties and Seventies generation did have higher incomes when they were younger, they also spent more, leaving them with no more savings than those of the previous generations.

Those in their forties and fifties have also suffered from the move away from final salary pension schemes to less generous deals.

That same generation has also taken longer to get on the housing ladder, with the home ownership rate having fallen back to around two-thirds compared with a peak of four-fifths among those born in the 1940s and 1950s.

The only hope for increased cash is through inheritance

And, as far as inheritance goes, while they are more likely to inherit than their predecessors, the gap between the richest and the poorest will grow, with those already the wealthiest set to receive the most.

Andrew Hood, one of the report's authors, said: "Since the Second World War, successive cohorts have enjoyed higher incomes and living standards than their parents.

"Yet the incomes and wealth of those born in the 1960s and 1970s look no higher than the cohorts who came before them.

"As a result, younger cohorts are likely to have to rely on inheritances to be better off in retirement than their predecessors.

"But inheritances are unequally distributed, with households that are already relatively wealthy far more likely to benefit."

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New Runways For Gatwick And Heathrow Airports

Building a controversial third runway at Heathrow airport has been shortlisted as one of the options for expansion by the Airports Commission in its first report.

The interim findings of an independent inquiry led by the former head of the Financial Services Authority, Sir Howard Davies, has also recommended a second runway for Gatwick airport.

Sir Howard has also said he would consider the idea of building a new airport in the Thames Estuary, plans for which have been backed by the London Mayor, Boris Johnson, although he did not include it on the shortlist of options.

He warned if the UK did not expand its airports then it would cost the economy £45bn over 60 years and that to cope with increasing passenger numbers the first new runway should be operation by 2030, the second by 2050.

Sir Howard said: "The UK enjoys excellent connectivity today. The capacity challenge is not yet critical but it will become so if no action is taken soon and our analysis clearly supports the provision of one net additional runway by 2030.

Heathrow dealt with 70 million passengers last year

"In the meantime we encourage the government to act on our recommendations to make the best of our existing capacity."

He said that politicians would have to chose which runway to build first - one at Gatwick or one at Heathrow - as work on them would not be able to be carried out at the same time.

A third runway for Heathrow has met with bitter opposition and the publication of the report will likely trigger a substantial political row.

The Conservative party made its opposition to plans for the airport's expansion – supported by the Labour government - part of its 2010 election manifesto and ruled a third runway out when the coalition came to power.

Among the most vociferous opponents have been Mr Johnson and the Conservative MP, Zac Goldsmith, a keen environmentalist whose constituency is in the flight path.

Mr Johnson told Sky News that building another runway at Heathrow would be "bonkers".

He said that both the new runway options for Heathrow would involve "concreting over the M25 probably closing that major artery for five years at the least".

Plans for a third runway at Heathrow have been controversial

And he said that a second strip for Gatwick would make no difference to dealing with the air traffic.

He said: "A new airport in the inner estuary is the only credible hub option left, and the only one that would uphold this country's claim to be the natural financial, commercial and economic capital of Europe."

Last week he threatened to call for a judicial review if plans for the four-runway airport on the Isle of Grain, which at £112bn would cost five times as much as Heathrow expansion, were not included in the commission's report.

The commission said it had not shortlisted the Thames Estuary plan "because there are too many uncertainties and challenges surrounding them at this stage".

However, it will undertake further study of plans to see whether it was a "credible proposal" and may include it on the shortlist next summer.

Gatwick is running at 85% of its total capacity

The Airport Commission's final report will be submitted in the summer of 2015, after the next General Election, and the Transport Secretary, Patrick McLoughlin said the Government would not indicate a preference on options until after that.

Mr Goldsmith, who has suggested he would leave the Tory party over the issue, said last week that any decision by the Prime Minister to back Heathrow expansion would represent an "off-the-scale betrayal".

Heathrow is currently operating at 98% of its capacity with 65m travellers using it in 2012 but the report pointed out that it was so busy passengers suffered "a high level of delay and unreliability".

If it is not allowed to expand, those in favour of a third runway claim that travellers to Europe will opt to fly into airports at Frankfurt, Paris and Amsterdam instead, at a cost to the UK economy.

Heathrow representatives told the commission that a third runway could be operating by 2029 allowing 260,000 more flights a year.

Boris Johnson says a third runway for Heathrow would be "crackers"

There are two options for the extra runway - to build a 3,500m (11,500ft) strip to the north west of the site or to extend the northern runway to 6,000m (20,000ft) and use one half for take-offs and the other for landings.

The north west option would see 1,500 homes demolished and the loss of 30 listed buildings, the extension would see 720 homes flattened and affect eight listed buildings.

Heathrow chief executive Colin Matthews welcomed the report saying: "I think the report we received today is good news for trade, for jobs and for the UK as a whole."

However, Keith Taylor, Green Party MEP for the South East, said: "The political opposition to airport expansion in south east England is sadly melting away.

"There's no doubt that the Government will be pleased with this report. It gives them the cover they need to go on avoiding answering difficult questions on airport expansion and to prepare themselves for a colossal U-turn on Heathrow expansion."

The idea of expansion at Gatwick, which is currently running at 85% of its capacity and full capacity at peak times, has also met with opposition. It would be built to the south of the existing runway.

Georgia Wrighton, director of the Campaign for the Protection of Rural England in Sussex, said: "A second runway at Gatwick, together with sprawling development and car parks anticipated on a massive scale, would concrete over cherished open countryside."

The report did not include options for a new runway for Stansted or Birmingham airports, as had been suggested.

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Ticket Rip-Off: Prices 'Marked Up' Online

Theatre-goers and music fans face mark-ups of as much as 38% on the value of some online tickets, according to a Which? study.

Compulsory charges are added to 72% of tickets sold online, said the consumer group, which is launching a campaign to bring down the cost.

Buying online is convenient, offers variety and quick transactions, but nearly half of those surveyed (49%) said the charges had put them off buying tickets for an event altogether.

In one study, only 3% of tickets were being sold at face value without any additional compulsory fees like booking or delivery charges.

Which? says in some cases the practice is illegal.

Which? says that many consumers feel ripped off by ticketing charges

Richard Lloyd, executive director of Which?, said: "Consumers tell us they are feeling ripped off by the level of ticketing charges and the lack of transparency means it is almost impossible for people to compare prices when booking online.

"We want to see the ticketing industry play fair on ticket fees, so that all charges are displayed up-front and with a clear explanation of what they're for."

A Ticketmaster spokesperson told Sky News: "To suggest that ticket fees are hidden is utterly misleading and factually incorrect. 

"Before a customer purchases a ticket, any additional fee is always displayed clearly.

"The fees cover a wide range of costs to provide the services which ensure the best and easiest possible experience for our customers from purchasing a ticket to accessing the event."

One explanation for the additional fees may be the acts themselves. They want their ticket prices to seem as low as possible, leaving the ticket agency to tack on the fee.

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Airport Expansion: The Case For And Against

The news that new runways at Heathrow and Gatwick are on a shortlist of airport expansion options has been welcomed by the airline industry as well as business leaders.

But green campaigners, local residents and some politicians are worried about the effects on the environment, as the options were outlined in an interim report by Sir Howard Davies's Airports Commission.

There are no firm long-term proposals in the report - they will come when the commission makes its final report in the summer of 2015, after the next general election.

PRO-NEW RUNWAYS:

Heathrow argues that a third runway would raise its capacity to 740,000 flights a year, from the current limit of 480,000.

The airport said it would be able to cater for 130 million passengers compared to 70 million today, "allowing the UK to compete with our international rivals and providing capacity for the foreseeable future".

Chief executive Colin Matthews said: "Britain needs a world-class hub airport with the capacity to compete against Paris, Frankfurt and Amsterdam. A third runway is the quickest, cheapest and surest way of connecting the UK to growth."

Some argue another runway at Heathrow will increase air pollution

The airport said a third runway would provide benefits to the UK worth £100bn and expansion would bring considerable benefits to the local community by protecting the 114,000 jobs already dependent on the airport and creating more than 70,000 new jobs.

Addressing environmental concerns, Heathrow said expansion could be met within EU climate change targets. Continued improvements to aircraft efficiency means air traffic could double by 2050 without a substantial increase in emissions, it argues.

Gatwick said expansion "can give the country the economic benefits it needs at an environmental cost it can afford with the lower fares and greater choice that passengers want. It can be delivered more quickly and at lower cost".

And the London Chamber of Commerce said: "Government should just get on and act on the short-term measures now. It will make no sense to delay any measures to enhance capacity until after the General Election.

"Businesses are crying out for aviation action now.  Political posturing would put the economic recovery at risk and threaten London's reputation as a world leading city."

ANTI-NEW RUNWAYS:

Local groups say the north-west runway plan at Heathrow will require significant demolition in the villages of Longford and Harmondsworth.

Anti-Heathrow expansion group Hacan have vowed to fight the Heathrow plans.

"We understand the strength of feeling of those living near Heathrow," Sir Howard said.

Countryside campaigners at the Campaign to Protect Rural England (CPRE) also voiced concern at the options set out.

Georgia Wrighton, director of the CPRE in Sussex, said: "A second runway at Gatwick, together with sprawling development and car parks anticipated on a massive scale, would concrete over cherished open countryside.

"A heady cocktail of increased flights, HGV traffic and cars would erode the tranquillity of rural communities, and the health and quality of life of people living under its shadow."

Keith Taylor, Green Party MEP for the South East, said: "The political opposition to airport expansion in South East England is sadly melting away.

"There's no doubt that the Government will be pleased with this report. It gives them the cover they need to go on avoiding answering difficult questions on airport expansion and to prepare themselves for a colossal U-turn on Heathrow expansion.

"This report will be of great concern to my constituents near Gatwick and Heathrow. We know that any new runways at either airport will increase air pollution, destroy homes and countryside and mean more people's lives are blighted by flight noise."

Tory MP for Richmond in west London, Zac Goldsmith, who has many constituents who live under the flight path, told Sky News: "The case for expansion is very weak.

"The case for improving our road transport, our rail links to existing airports is very strong. If we did that, we would have enough capacity for many, many years."

Last week, Mr Goldsmith said any decision by the Prime Minister to back Heathrow expansion would represent an "off-the-scale betrayal" and David Cameron would "never be forgiven in west London" .

London Mayor Boris Johnson, who wants a new airport in the Thames Estuary, said a third runway at Heathrow would be "completely crackers".

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Motor Insurance Premiums Could Be Cut

Car insurance premiums are too high, says the competition watchdog which is to look at ways of reducing them.

The Competition Commission said there could be caps on the cost of accident repairs and providing replacement vehicles for drivers.

The watchdog also said in its provisional report that too many accident repairs were not carried out to the required standard.

Deputy chairman Alasdair Smith told Sky News: "We were surprised when we did a survey of cars that had been repaired after an accident to find that of the 100 cars inspectors looked at, 45 hadn't been repaired properly."

The also commission found the way add-on insurance products were sold made it difficult for customers to find the best-value products.

It said overall the £11bn market was not working well for drivers and believed too many were footing the bill for unnecessary costs incurred during the claims process after an accident.

These costs are initially borne by the insurers of at-fault drivers, but they feed through into increased insurance premiums for all motorists.

The watchdog was also concerned about the relationship between price comparison websites and insurers.

Alasdair Smith, who is leading the investigation, said: "We are now considering a range of possible measures, some of them far-reaching reforms, to ensure that the market better serves the interests of customers."

Mr Smith said that in most cases the party managing the accident claim - typically the non-fault insurer or intermediary - was not the party liable to pay the costs of the claim.

He added: "There is insufficient incentive for insurers to keep costs down even though they are themselves on the receiving end of the problem."

The commission estimates the extra premium costs due to the separation of control and liability on replacement cars and repairs to be between £150m and £200m a year.

It is considering whether to make a driver's own insurer responsible for providing a replacement vehicle or to give at-fault insurers greater opportunity to take control over managing claims.

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New Pipeline To Loosen Russia's Grip On Energy

By Tim Marshall, Foreign Affairs Editor

The UK Foreign Secretary William Hague is in Azerbaijan today at a ceremony to sign a £27.6bn pipeline deal which will provide another alternative to energy supplies from Russia to Europe.

The deal will make Britain the biggest foreign investor in the country.

BP is the lead shareholder in an international consortium to bring gas from the Caspian Sea into Italy, Bulgaria, Turkey, and Greece.

British officials do not openly admit that part of the strategy behind the Shah Deniz 2 deal is to loosen Russia's grip on energy supplies to Europe, but Mr Hague did hint at that in a speech in the capital Baku, telling Sky News: "Energy security is a major concern to much of Europe and this new gas corridor will bring a new supply of energy and will increase competition.

"With major involvement of BP and other British companies, it will also be a major boost to British companies and jobs."

Behind the statement lies the idea that countries west of Russia could become less beholden to Moscow for energy, and that Russian gas prices may have to come down due to this new route.

One source told Sky News: "Europe is too reliant on too few sources of gas and oil, this makes it vulnerable."

Human Rights campaigners have criticised the deal claiming it will boost Azerbaijan's President lham Aliyev who is accused of human rights abuses and of rigging elections.

In October a government phone app appeared to release the results of this year's Presidential election a day before the polls opened. It gave the President a landslide victory over his rival Jamil Hasanli.

According to the country's electoral commission it was a "technical glitch" and a "misunderstanding".

The manager of the company making the app told local media that the test result was data from the previous presidential election. Not everyone believed this and pointed out that Mr Hasanli had not then been standing for President.

Mr Aliyev duly won the election by a landslide.

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Inflation Falls To Four-Year Low Of 2.1%

The annual rate of inflation hit a four-year low last month of 2.1% as recent energy price increases are yet to feed in to the figures.

The Consumer Prices Index (CPI) measure eased from 2.2% in October - partly due to falling fruit and vegetable prices.

The rises to energy bills are expected to make a large upward contribution to December's inflation figures.

The easing of inflation in November takes pressure off the Bank of England as it attempts to help bring the CPI measure back towards its target of 2% - giving it plenty of breathing space to keep interest rates low even as the economy picks up.

And the slowdown could be seen as providing at least a crumb of comfort to squeezed households where wage growth continues to lag behind the rise in the cost of living.

The CPI rate of 2.2% in October was sharply lower than September's 2.7%.

The Bank's interest rate setters have had to loosen their focus on inflation, maintaining ultra-low borrowing rates to help nurse the economy back to health.

But pressure to tighten monetary policy would increase if inflation started rising.

Cost-of-living increases are still outstripping pay rises, with the last published figures showing wage growth at 0.8%.

Meanwhile, the cost of filling a Christmas stocking has gone up, with games, toys and hobbies up 2.8% on October, taking the annual increase in prices in the sector up to 1.8%.

Restaurants and hotels increasing their rates by a smaller amount made a downward contribution to inflation.

Petrol prices also fell in November, but less steeply than last year, meaning they made an upward contribution to the overall rate.

The CPI rate has not been lower since November 2009, when it stood at 1.9%.

A separate measure of inflation, the retail prices index (RPI), which includes housing costs, remained the same at 2.6%.

Catherine McKinnell MP, Labour's Shadow Economic Secretary to the Treasury, said of CPI: "This small fall in the inflation rate is welcome, but with prices still rising much faster than wages the cost-of-living crisis continues.

"Families and pensioners are still set to face inflation-busting hikes in energy prices this winter, which the ONS says are not in today's figures.

"After three damaging years of flatlining, working people are on average £1600 a year worse off. But the Autumn Statement failed to set out a plan to tackle the cost-of-living crisis and earn our way to higher living standards for the many and not just a few."

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Superdrug Parent Picks Banks For £15bn Float

By Mark Kleinman, City Editor

The owner of Superdrug, Britain's second-largest specialist health and beauty retailer, has picked a trio of banks to oversee a stock market flotation that could involve a secondary listing in London.

Sky News has learnt that Hutchison Whampoa, the Hong Kong-based conglomerate, has appointed Bank of America Merrill Lynch, Goldman Sachs and HSBC to manage a share sale of its AS Watson division during 2014.

The listing is likely to be jointly in Hong Kong and London, although no firm decision has been made about the UK component, with Singapore also competing to secure a slice of one of the world's largest retail sector offerings for years, insiders said on Tuesday.

AS Watson is the world's biggest health and beauty retailer, with interests in 33 countries through a network of more than 11,000 shops. As well as Superdrug, it owns The Perfume Shop, the UK's biggest fragrances retailer

Hutchison, which is run by the octogenarian Li Ka-shing, Asia's wealthiest man, had previously been considering a sale of Park'n'Shop, the Hong Kong grocery chain that is one of AS Watson's largest individual businesses.

However, Mr Li abandoned the auction after prospective buyers failed to meet his apparent $4bn (£2.5bn) asking price.

Hutchison is by some measures the largest single inward investor in the UK, with interests in ports, mobile communications and - through its sister company Cheung Kong Infrastructure Holdings - water supply and other utilities.

A London listing of AS Watson, which reportedly could value the company at as much as $25bn (£15bn), would be a major boost to UK capital markets following an intense debate about the quality of foreign companies which have listed their shares on the London Stock Exchange.

One person close to the situation said that recently-announced rule changes could make a London flotation more complicated for Hutchison Whampoa.

AS Watson was established in 1828 as a platform for providing free medicines to the poor of Guangdong, a province in southern China.

Superdrug, which operates nearly 900 shops in the UK and Ireland, trails only Boots in the market for health and beauty products, and is expected to have a successful Christmas trading period, according to industry observers.

A Hutchison spokesman could not be reached for comment on Tuesday.

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GCHQ To Monitor Huawei Amid Cyber Spying Fears

GCHQ intelligence officials will strengthen their oversight of a controversial Chinese telecoms giant engaged in supplying Britain's network amid fears that its equipment could be used for cyber espionage.

The Prime Minister's national security adviser has said that senior members of Britain's listening post should have a greater role at work being done at the Huawei Cyber Security Evaluation Centre, known as the Cell, which is based in Banbury, Oxfordshire..

Earlier this year the parliamentary Intelligence and Security Committee warned that the involvement of Huawei in the UK's critical national infrastructure risked compromising national security.

Both US and Australian politicians have been critical of the firm citing its links to China's government and military.

The firm was founded by Ren Zhengfei, was a former officer in the People's Liberation Army, and has been banned from bidding for some US infrastructure contracts.

A review carried out by by national security adviser Sir Kim Darroch, concluded that GCHQ should in future "lead and direct" all senior appointments to the Cell.

Huawei founder Mr Zen with George Osborne in China

A senior member of GCHQ will also chair a new oversight board monitoring the Cell's work and ensuring its continued independence from the firm.

However, the Cell's staff will continue to be employed by Huawei, despite the the apparent conflict of interest.

Huawei is now a major player in the UK telecoms sector following a multi-million pound deal to provide networking equipment to BT in 2005.

The Government has been apprehensive about imposing monitoring on the firm, despite concerns over national security, because of the risk of antagonising Beijing at a time when ministers are trying to boost trade links.

During his visit to China earlier this month, Mr Cameron broached the idea of establishing formal process of dialogue on cyber-security with Chinese counterpart Li Keqiang.

Huawei, which said it supported the recommendations made in the review.

In a statement it said: "Huawei shares the same goal as the UK Government and our customers in raising the standards of cyber security in the UK and ensuring that network technology benefits consumers."

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Aldi And Lidl: Half Of Brits Shop At Discounters

The squeeze on family budgets has seen more than half of British shoppers going to discount stores Aldi or Lidl in the last three months.

It comes as the big four supermarkets all lose market share, new figures have shown.

Aldi and Lidl have successfully broadened their customer base, with the former having a record 4% of the market and the latter retaining the 3.1% it reached during the summer.

Chris Longbottom, director at Kantar Worldpanel, said: "Value continues to be a powerful incentive for the British shopper, a fact that is further highlighted by Farmfoods which, while still a relatively small player in the market, has grown its sales by 36.6% compared with last year."

Some 50.1% of all British households stepped into a discount retailer in the 12 weeks to December 8, compared with 46.1% a year ago, researchers found, as wages grow at a slower pace than the annual rate of inflation.

Aldi and Lidl have broadened their customer base

Mr Longbottom added: "At the other end of the market Waitrose has performed strongly with 6.7% growth.

"Based on past patterns, it is likely to further boost its market share over the busy Christmas period, as is Iceland which traditionally performs well with its party food offering."

Among Tesco, Asda, Sainsbury's, Morrisons and the Co-operative, the best performer continued to be Sainsbury's although the year-on-year growth of 1.8% was insufficient to match the market growth of 2.8%, said Kantar Worldpanel.

Tesco accounted for 29.9% of sales in the latest period, Asda 16.9%, Sainsbury's 16.8% and Morrisons 11.6%.

The Tesco figure will add to concerns over the effectiveness of a turnaround plan that has seen over £1bn invested in its home market.

Earlier this month, the retailer reported a 1.3% fall in third quarter underlying UK sales.

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