Vodafone Bids To Revive £5.7bn Spanish Deal

By Mark Kleinman, City Editor

Vodafone has resumed talks about buying Spain's biggest cable operator as it seeks to deploy some of the huge cash-pile generated by the $130bn sale of its stake in Verizon Wireless, its US partner.

Sky News understands that Vodafone has in recent days held fresh discussions with the private equity groups which control Ono about a takeover that could be worth approximately €7bn (£5.7bn).

The talks are at a tentative stage and Vodafone is understood to be pessimistic about its chances of persuading Ono's shareholders to ditch a planned flotation and agree a sale to the British-based mobile group instead.

Vodafone has a big presence in Spain, and has been bulking up its presence in some key markets by acquiring cable assets to broaden its product offering as mobile internet services become more pervasive.

Last year, it bought Kabel Deutschland while rival Liberty Global bought Virgin Media in the UK.

Vodafone's initial approach for Ono was rebuffed last month, but an insider said on Monday that it would remain disciplined about any revised offer.

"They won't overpay," he said.

One banker close to Ono said that any protracted market volatility caused by the crisis in Ukraine could play into Vodafone's hands by persuading Ono's shareholders of the merits of accepting the certainty of a firm takeover bid.

Ono is owned by a large group of investors, including the private equity firms Providence Equity Partners, Thomas H Lee Partners, CCMP Capital Advisors, and Quadrangle Capital.

Vodafone is itself a potential takeover target for the US telecoms giant AT&T, although it recently ruled out a bid until the summer.

The UK company has just handed over a £54.3bn ($84bn) windfall to its shareholders from the sale of its stake in Verizon Wireless to Verizon Communications.

The majority of that sum was in the form of Verizon stock and the remaining $24bn (£14.5bn) in cash.

Vodafone declined to comment on its interest in Ono.

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Childcare 'Costs Families More Than Mortgage'

The cost to families for part-time childcare is more than the monthly mortgage repayment, figures show.

According to the Family and Childcare Trust study, parents are spending more than £7,500 a year on part-time childcare for two children - around 4.7% more than the average mortgage bill.

Those with two children in full-time childcare are hit with an annual bill of £11,700 - 62% higher than the average yearly mortgage bill.

Its also says some families may be spending more on childcare than they do on their weekly shopping.

Information for the report came from family or children's information services at councils in England, Wales and Scotland.

Each local authority was asked to give the cost of 25 hours and 50 hours of childcare as provided by nurseries and childminders.

They were also asked to give figures on the average cost of 15 hours childcare in an after-school club, or for a childminder picking youngsters up from school.

It found a family with one two-year-old child attending nursery part-time and a five-year-old in an after-school club will be forced to spend £7,549 a year on average.

This is higher than the UK average annual UK mortgage, which the report puts at £7,207.

Education and childcare minister Elizabeth Truss insisted the cost of childcare in England had stabilised for the first time in 12 years.

"In fact, once inflation is taken into account costs for the majority have actually fallen," she said.

"This means more parents are able to access affordable childcare and support their families.

"These reductions contrast with rising costs in Scotland and Wales, highlighting the difference this Government's reforms are making."

The Department for Education said that the survey shows that the cost of nursery for a child over two was now £106.19, compared to £106.52 per week last year, which it said was a 2% reduction in real terms.

Dr Steven Toole, head of policy at 4Children, said: "The cost of childcare remains a major challenge for too many families, resulting in some parents getting into debt and others having to give up or being prevented from taking up work.

"Recent 4Children research shows the scale of the struggle parents face with childcare, with one in four saying that affordable, flexible and accessible childcare would make the most real, positive difference to their family life."

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Hotel Prices Soar At Top World Destinations

A survey has highlighted steep price increases in many of the world's top holiday destinations, though England football fans may have reason to cheer.

The study, by hotels.com, found that despite a general strengthening of the pound against many other currencies, room costs were on the rise in more than half the most popular world destinations.

Comparing prices in 2013 with 2012 in 116 cities, the average cost of accommodation rose in 69 and fell in only 40.

Britons paying for hotels abroad would have forked out the most last year in Monte Carlo, where the average price was £198.

New York is among the most expensive destinations for hotels

Second was Muscat in Oman (£194) followed by New York (£185), Key West in Florida (£171) and Rio de Janeiro (£167).

Encouragingly for England football fans intending to travel to Brazil for this summer's World Cup, the price in Rio actually fell by 5% though separate studies have suggested fans face steeper bills in host cities during the tournament.

London prices rose from £110 in 2012 to £121 on average but the biggest percentage rise last year was 22% for New Orleans, where a hotel room price shot up from £120 in 2012 to £146 in 2013 as the city continued its recovery from the effects of Hurricane Katrina in 2005.

Price growth was steepest in New Orleans

The survey found that those looking for real bargains during trips abroad at the moment should head for Hanoi in Vietnam where average prices dipped 20% last year to £39.

Even cheaper accommodation can be found in Phnom Penh in Cambodia where prices last year fell to £33 on average.

The best-value European destination in 2013 was the Polish city of Krakow where the average hotel price was £62.

Kate Hopcraft, of Hotels.com, said: "There is no doubt that European hotel prices were some of those most badly affected by the economic fallout.

"Many of the destinations worst hit by the downturn have seen hotel prices stabilise, with some experiencing healthy rises."

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PM And Clegg In Tax Cuts Hypocrisy Row

Nick Clegg accused the Tories of having a "brass-neck" as the Prime Minister gave a speech hinting at tax cuts for hard-pressed families.

The Deputy Prime Minister said the Tories had been "spectacularly inconsistent" when it came to having a "commitment to fairer taxes" and had to be "dragged kicking and screaming" in Budget negotiations.

Mr Cameron used a speech in the Midlands on Tuesday to claim that as a result of the austerity measures the Government could now "give money back".

He said it would be "a bit of extra cash that can help a dad afford those trainers for his son or help a mum celebrate her daughter's birthday with a meal out", adding: "Having more money in our pockets is what gives everyone that sense of financial security and peace of mind. It's what enables us to provide for our families and feel more confident about the future."

Coming two weeks before the Budget it is expected this will mean the Chancellor will announce a rise in the personal allowance - the amount people can earn before tax kicks in - to above £10,000.

Nick Clegg is pushing for a rise in the main income tax allowance

Mr Clegg reacted furiously to news of the speech, claiming that the Tories were attempting to position themselves to take the credit for what was a Lib Dem policy and manifesto pledge that would be a £100 bonus for workers.

In a speech in Westminster, he said: "I'll try and be polite on this: my coalition partners, by contrast, have been spectacularly inconsistent. At the beginning of the Parliament they were first going on about inheritance tax cuts for millionaires.

"Then they wanted to fiddle around with the upper rate of income tax. Then they wanted to fiddle around with the taxes for married couples. Then they wanted to fiddle around with taxes to give incentives to people to give up employment rights to take up shares.

"So they have got a fair amount of brass neck to now claim that somehow all they ever wanted all along was to see the allowance go up, because that's not what they said in public and crucially it's not actually what they said in private either."

"I've had to drag the Conservative Party kicking and screaming, in every single Budget negotiation - by the way, not least recently. When I talked about wanting to see this extra workers' bonus, there was a very hostile reaction behind closed doors in Whitehall from my Conservative coalition partners.

"So I'm delighted that everybody is now scrambling to share authorship of a Liberal Democrat idea but I would just ask for my coalition partners, indeed anybody else, to be consistent in what you say in public and what you say in private and also consistent on what you say over a long period of time on tax."

Senior Conservatives have been encouraging the Chancellor to raise the 40p income tax rate threshold to £44,000, from £41,451, so it eases the burden on middle class voters.

The PM and Mr Clegg at the beginning of their coalition relationship

Responding to Mr Cameron's speech, shadow chief secretary to the Treasury Chris Leslie said: "David Cameron has revealed his true values by the choices he has made.

"He's chosen to give the top 1% of earners a £3bn tax cut while everyone else is worse off.

"Working people have seen their wages fall in real terms by over £1,600 a year on average under David Cameron's Government. Tax and benefit changes since 2010 have also left families £891 a year worse off."

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Markets Tumble As Ukraine Tensions Escalate

Putin Is Cracking The Whip On The West

Updated: 10:29am UK, Monday 03 March 2014

By Sam Kiley, Foreign Affairs Editor

He's done it again.

With the swashbuckling approach to international affairs that fits his popular bare-chested public persona, Vladimir Putin has outmanoeuvred his Western rivals and local challengers.

Barack Obama, the leader of the world's greatest superpower, has been left looking like a salmon gasping on a river bank.

John Kerry, the US Secretary of State, unwittingly put his finger on why.

"You just don't in the 21st century behave in 19th century fashion by invading another country on completely trumped up pretext," he harrumphed.

Well, if you're Mr Putin, you do.

You destabilise regions where you have cultural linguistic ties, like Abkhazia and South Ossetia in Georgia, and then if you feel the time is right you invade them like a 19th-century Tsar and take charge in the name of protecting your natural subjects.

There is nothing surprising about what happened in the Crimea. Only that the Western powers, nests of super-expensive spy agencies and cyber surveillance, were left entirely gormless and thunderstruck when Russian commandos, posing as "gunmen", quietly took over airport and government buildings.

But one did not need MI6, the CIA, European spooks and cyber nerds to guess that Mr Putin meant business when he identified the new government in Kiev as being the products of a fascist revolution and mobilised 150,000 troops on Ukraine's borders. You just had to keep your head out of the sand.

But that is where Western powers have been shoving it throughout the recent Putin years.

They did this because they are powerless to stop him. They don't have his dash or his amoral lack of concern for anything other than what he perceives to be Russia's interests.

He has not been wringing his hands over Syria - a country he has repeatedly said should be left to make its own sovereign way (unlike Ukraine).

He has behaved with the total hypocrisy and certainty of purpose that made nations great in the 19th century.

Empires were built, the biggest by the Brits, on perfidy, dash, ruthlessness and clarity.

He has backed Bashar al Assad. He has backed Iran.

As a result he has the most influence in the Syria nightmare.

He also has the most influence in determining or at least shaping Iran's nuclear future - and if Tehran gets the bomb, then making sure that he's on the right side of its leadership.

As in Ukraine, the West is enjoying baying at the Russian bear from the moral high ground.

But it has no levers that it is serious about pulling, either in the Middle East or in Crimea.

Threats of snubbing the G8 pow-wow in Sochi in June, even of economic sanctions, hardly matter to the Kremlin.

Moscow can cause economic mayhem in Europe just by turning off the gas taps.

Mr Kerry told the CBS programme Face The Nation that there would be "very serious repercussions" for Moscow and said G8 nations and some other countries are "prepared to go to the hilt to isolate Russia" with an array of options.

"They're prepared to put sanctions in place, they're prepared to isolate Russia economically, the rouble is already going down. Russia has major economic challenges," he said.

That may be true.

But Mr Putin has the whip in his hand, and he's already doing the cracking.

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Holidaymakers Warned Over Online Scams

By Tadhg Enright, Sky News Correspondent

Police have warned holidaymakers to be wary of online booking scams after £7m was stolen by fraudsters last year.

A total of 4,500 cases of booking fraud were reported to police in 2013, with almost a third of cases involving consumers paying for holiday villas and apartments that did not exist.

A report by fraud investigators from The City of London Police said the other most common scams included fake airline tickets and some package holidays to sporting events and religious pilgrimages.

Detective Superintendent Pete O'Doherty said: "The internet has changed the way we look for and book our holidays.

"Unfortunately it is also enabling fraudsters, using online offers of villas, hotels and flights that simply don't exist or promising bookings that are never made, to prey upon those looking for that perfect break."

Laura and Seán Parks told Sky News about their ordeal after they were scammed while trying to book a Valentine's Day break while Seán, a soldier, was home on leave from Afghanistan.

Having seen an online advertisement for log cabins near Loch Ness in the Scottish Highlands she was duped into paying £400 into the fraudster's bank account - only to find upon arrival that the cabins did not exist.

Seán said that booking service appeared to be legitimate: "The website looked 100%. Everything else, the invoices, they all looked genuine."

Laura added: "He was using a booking company, wasn't he? And I contacted the booking company to ask if they were aware of any of this and they weren't.

"But you have no reason to doubt anything when you have invoices coming through, and you're paying into a bank account."

The National Fraud Intelligence Bureau, travel industry body the Association of British Travel Agents and the Get Safe Online campaign have urged consumers to be wary and prepared the following advice:

:: Do your research. Do not just rely on one review, do a thorough online search to ensure the company's credentials. If a company is defrauding people there is a good chance consumers will post details of their experiences, and warnings about the company, online.

:: Use your instincts. If something sounds too good to be true, it probably is.

:: Pay safe. Never pay directly into an owner's bank account. Paying by direct bank transfer is like paying by cash and the money cannot be traced and is not refundable. Where possible, pay by credit card or a debit card that offers protection.

ABTA chief executive Mark Tanzer said: "Fraudsters are conning unsuspecting holidaymakers and travellers out of thousands of pounds each year - leaving them out of pocket or stranded with nowhere to stay through fake websites, false advertising, bogus phone calls and email scams."

Get Safe Online chief executive Tony Neate said it was vital for holidaymakers to do their research before booking.

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Serco Braces For Tough 2014 As Profits Fall

Serco has reported a 6% fall in annual profits following a year which saw it embroiled in a government contracts scandal.

The firm, which agreed last December to repay the Government £68.5m for overcharging for the tagging of convicted criminals, warned that 2014 was also likely to be tough.

Serco last Friday named Aggreko chief executive Rupert Soames as its new boss in the wake of a series of profit warnings and high-profile resignations.

It said that 2013 adjusted pre-tax profit fell to £254.4m - a figure slightly below analyst forecasts of £257m.

Its share price fell 3% in early trading on the FTSE 100 on Wednesday.            

Serco had already warned that restructuring costs - taken to help try and win back Government trust - would drive profits lower in 2014.

The company said its order book was worth £17.1bn - down £2bn on a year ago - though it has been granted permission to bid again for new Government business so long as its reforms remain on track.

Adjusted net debt for 2013 grew 21% to £701m due to heavy exceptional charges, although the group said it still had sufficient financing headroom.

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MPs Demand Wholesale Review Of Business Rates

A committee of MPs has demanded a "wholesale review" of business rates to support local economies, particularly high street retailers.

The Business Committee's report suggested that a Government consultation - which admits the need for reform - would not deliver enough.

Its chairman, Labour MP Adrian Bailey, said: "This is a time for wholesale review and fundamental reform, not for tinkering around the edges.

"Business rates are not fit for purpose and minor administrative changes will not alter that.

"We are not advocating a return to a bygone age, but if high streets are to become thriving community hubs and start ups are to invigorate our town centres the significant barrier to innovation currently posed by business rates must be addressed."

Mary 'Queen of shops' Portas reviewed Britain's high streets

The Committee urges ministers to give a six-month business rates amnesty for firms occupying empty properties and there should be an examination of whether retail taxes should be based on sales rather than the rateable value of a property.

The MPs also suggested that retail needed its own system of business taxation, adding that a six-month amnesty would encourage new businesses to the high street.

But it raised concerns that money allocated to a number of towns following a review headed by retail expert Mary Portas was not being spent.

Around £2.3m was earmarked for so-called Portas Pilots, but Mr Bailey said the Government could not provide evidence of how, or even whether, the money had been spent.

The Portas report, completed more than two years ago, had stressed the need for a review of business rates, the MPs noted.

Mr Bailey added: "British retail is a global success story. Employing around three million people, it is the largest private sector employer in the UK.

"But its traditional home - the high street - is struggling under a system of business rates that comprises one of the highest forms of local property tax in the European Union.

"Amongst the many challenges they face, business rates are the single biggest threat to the survival of retail businesses on the high street.

"A system of business taxation based on physical property is simply no longer appropriate in an increasingly online retail world."

The British Chambers of Commerce and British Retail Consortium were among lobby groups welcoming the MPs' intervention in the debate and demanding radical reform.

A Government spokesman said: "We have taken a series of steps to help local firms and shops with their business rates including announcing over £1bn of business rates support at Autumn Statement 2013.

"Half of this will go to supporting the retail sector through a £1,000 business rates discount for shops, pubs and restaurants and a temporary reoccupation relief to help bring empty shops back into use.

"We are also undertaking a review of business rates administration which will look at longer-term reforms to make the system more transparent, efficient and responsive to economic circumstances."

Toby Perkins, Labour's shadow minister for small business, accused the Government of hitting firms with rising costs.

He said: "Under David Cameron, small firms have seen hikes in business rates of £1,500 on average and many will see further rises next month.

"In contrast, the next Labour government will cut and then freeze business rates to give firms a much-needed boost."

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Flood Aid Drives Civil Engineering Record

The legacy of the worst winter storms for 250 years damaged the recovery in house-building but helped the civil engineering industry record its strongest month since April 1997.

The construction of homes grew at its slowest pace for four months in February, according to the Markit/CIPS Purchasing Managers' Index (PMI) for the sector, where at figure above 50 denotes growth.

The PMI slipped to 62.6 from 64.6 in January - hurt by heavy rain, strong winds and floods which affected house-building particularly.

The railways line at Dawlish was washed away

The survey's findings correspond with an earlier warning from Bank of England Governor Mark Carney, who said the economy might suffer a temporary hit because of the adverse conditions.

By contrast, civil engineering activity saw its strongest month since April 1997, the study found, helped by higher spending by local authorities which, in some cases, was in response to the rain as diggers were called in to protect homes and businesses from rising waters.

Attempts to keep water levels back aided civil engineers

Job creation was at its highest in three months as 59% of construction companies expected a rise in output over the year, compared with only 10% predicting a fall.

Britain's construction industry has been recovering since last year thanks to a combination of record low interest rates, government programmes to encourage people to buy new homes and falling unemployment.

The sector, which accounts for about 7% of gross domestic product (GDP), has been facing strong demand to build more properties to boost housing supply.

A shortage of new homes amid high demand for properties has been cited as the core reason for property prices rising to, what some critics claim are, unsustainable levels.

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Standard Chartered To Slash Chief's Bonus

By Mark Kleinman, City Editor

Standard Chartered, the emerging markets bank, will reveal on Wednesday that it is slashing its bonus pool and its boss's payout as it bids to stave off the kind of row with investors that has hit rivals such as Barclays.

Sky News has learnt that Standard Chartered will announce alongside its annual results that it is paying roughly $1.2bn (£720m) in bonuses for 2013, down from $1.4bn (£840m) the year before.

The percentage fall in bonuses is substantially higher than the decline in the bank's profits for the year, reflecting its desire to demonstrate pay restraint, a source close to Standard Chartered's board said on Tuesday.

Peter Sands, the bank's chief executive, will see his bonus cut by a bigger margin than the reduction in the overall pool, according to a source.

StanChart is Liverpool's shirt sponsor

His £2m payout for 2012 had been reduced to not much more than £1m to reflect "a challenging year" for the bank, which sponsors Premier League side Liverpool, they added.

While a comparison with Barclays is unlikely to be explicitly drawn by Standard Chartered, the source said Mr Sands and Sir John Peace, its chairman, were keen to avoid the publicity over pay which had damaged its UK-based rival.

Last month, Barclays increased its bonus pool for 2013 to £2.4bn despite a slump in profits, a move which has sparked fury from a number of leading City investors.

Standard Chartered has been a darling of the stock market for many years, with its presence in Africa, Asia and Latin America underpinning a decade-long unbroken run of record profits.

That performance will come to an end on Wednesday when it is expected by City analysts to report a fall in earnings of about 6% to just over $7bn (£4.2bn).

The bank's shares have suffered recently as a consequence of City speculation about a dividend cut and rights issue, as well as broader concerns about the volatility of emerging market economies.

Standard Chartered plans to use Wednesday's results announcement to address speculation about its capital position, an insider said.

The bank is understood to be frustrated about what it perceives to be a lack of explicit guidance from the Prudential Regulation Authority, the UK banking regulator, about its future capital requirements.

Standard Chartered, which is in the process of selling a number of assets in markets such as Lebanon and South Korea, declined to comment.

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