London's Gherkin 'Could Fetch £650m' In Sale

London's iconic Gherkin building has been put up for sale, potentially drawing buyers from around the world.

The 40-storey skyscraper - officially called 30 St Mary Axe - was designed by Lord Foster and opened in the City of London in 2004, and includes an atmospheric top-floor bar.

The landmark office building could fetch around £650m, according to experts.

The upcoming sale follows the appointment of Savills and Deloitte Real Estate as agents by the building's receivers, who took over control in April.

The building is jointly owned by investment bank Evans Randall and the German fund manager IVG, who paid around £630m for the tower in 2006 from reinsurance specialists Swiss Re.

At the time this was a record price for a building in the City, but within a few years the recession hit property prices and rental incomes and the partners faced mounting debts on the property.

Marketing of the 505,000 sq ft office building is about to start with interest expected to come from private firms and sovereign wealth funds.

Deloitte Real Estate head of City investment Jamie Olley said: "The property will appeal to a wide range of domestic and international investors and we are confident of maximising returns to the receivers and creditors." 

Savills' Stephen Down said several parties had already registered their interest. He said the building could be sold by early October.

Over the past 12 months, the take-up in office space has risen as the economy has returned to growth.

According to Savills' research, over the last five and a half years central London has seen £71.1bn invested into the office and retail markets, with overseas investors accounting for £47.7bn.

The skyscraper is currently let to around 20 tenants, including Swiss Re, Standard Life and the City studios for Sky News.

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UK Bankers Face Toughest Bonus Rules

By Mark Kleinman, City Editor

Staff at British banks could be made to hand back bonuses seven years after the money has been awarded to them under a regime that will introduce the world's toughest rules on clawing back remuneration.

Sky News has learnt that the Bank of England (BoE)'s Prudential Regulation Authority (PRA) has decided to enforce a draconian proposal outlined in March.

In a policy statement to be published on Wednesday, it will confirm that banks will have to amend the employment contracts of senior staff in order to implement the new rules, which will come into force on January 1 next year.

Coming in the wake of a series of market manipulation and mis-selling scandals which have triggered tens of billions of pounds in fines and compensation to consumers, the tougher framework is likely to be welcomed in Westminster but spark opposition from bank executives who argue that the City's international competitiveness will be undermined.

In its consultation paper published earlier this year, the regulator proposed that clawback should operate for a six-year period after bonuses have vested.

The PRA is to enforce the bonus policy on bankers

That period is still expected to apply to awards made prior to the beginning of next year, in line with the statute of limitations for employment contracts, Sky News understands.

However, insiders said the PRA had also been examining whether bonus awards made after January 1 next year could be reclaimed for up to seven years.

The Bank of England declined to comment on Tuesday on whether it would opt to pursue clawback for post-2014 bonuses over the longer, seven-year period.

Either way, the final details will represent tougher rules for bankers employed by UK lenders than those working for German, Swiss or American competitors.

The toughened regime follows last year's report by the Parliamentary Commission on Banking Standards, led by the Conservative MP Andrew Tyrie.

Under the BoE's plans, banks will be obliged to reclaim money already paid to employees even where they have not been directly culpable of misconduct.

Lenders will instead be required to demonstrate that they have done so where "there is reasonable evidence of employee misbehaviour or material error - the firm or the relevant business unit suffers a material downturn in its financial performance - or the firm or the relevant business unit suffers a material failure of risk management".

The rules will apply to the overseas employees of UK-based banks, which the likes of HSBC and Standard Chartered will argue will put them at a major disadvantage in their key Asian operations.

Major lenders already operate lengthy bonus deferrals meaning that share awards do not vest until the end of a three or five-year period, during which time part, or all, of the awards can be cancelled under a mechanism called malus.

Under its March proposals, the new clawback rules would have kicked in at the end of these deferral periods, making a total ranging from nine years to more than a decade before bankers would be able to spend bonus awards safe in the knowledge that they would not have to repay them.

However, some bankers believe the BoE will say that the deferral and clawback periods will be allowed to overlap, meaning that the overall period would be seven years.

The British Bankers' Association argued in its response to the consultation that the PRA's plans were fraught with legal difficulties and that the 'clawback clock' could start ticking at the time bonuses were awarded rather than the point of vesting.

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Aldi And Lidl 'Victors In Supermarket War'

Discounters Aldi and Lidl have seen their market share surge as Britain's four biggest outlets suffer in the ongoing bitter supermarket war.

Research firm Kantar Worldpanel said in the three months to June 20, both of the German-based retailers saw significant growth compared to the same period last year.

It said Aldi's share rose from 3.7% to 4.8%, while Lidl expanded from 3.1% to 3.6%.

Meanwhile, supermarket giant Tesco saw its share of the sector fall from 30.3% last year to 28.9% in the period ending in July.

Asda, Britain's second biggest chain, remained flat at 17%, while Sainsbury's also remained static at 16.6%.

Struggling supermarket Morrisons was the second biggest faller out of the major retailers, seeing its share fall from 11.5% last year to 11% this year.

Both Tesco and Morrisons recorded sales losses of 3.8% compared to the same period last year, researchers said.

Kantar Worldpanel director Edward Garner said: "Aldi's 32% growth rate has lifted its market share to 4.8%, and this is a new record for the retailer and means it has nearly caught up with Waitrose on 4.9%.

"Similarly, Lidl sales have grown by nearly 20% and it has held onto its record share of 3.6%."

Britain's big outlets have become increasingly embroiled in a price war during 2014 that has harmed their margins.

They have also invested heavily in convenience store and online delivery services.

The hard discounters have avoided entering the online delivery sub-sector, which is seen by analysts as costing the majors more than £100m a year.

Grocery price inflation has also fallen for the 10th consecutive periods and now stands at 0.4%.

Price slashing and deflation in staple items like milk, vegetables and bread have driven food price inflation down to its lowest level since late 2006, when the research first started.
 

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NHS 'Is Being Sold Off Without Permission'

Labour will accuse David Cameron of selling off the NHS without permission and demand a halt to privatisation until after the general election.

In a speech later, shadow health secretary Andy Burnham insists that forced privatisation is being pushed through "at pace and scale".

He will warn that contracts are being signed now which will bind the next government.

Mr Burnham will also claim the Prime Minister was "not up front" about his intentions for reform during the 2010 campaign, leaving voters with no say.

Andy Burnham says contracts are being signed without a public mandate

In a speech in Manchester, the shadow health secretary will say: "Labour publishes new analysis today which shows that NHS forced privatisation is entering new territory and becoming harder to reverse.

"Contracts are being signed that will run for the five years of the next Parliament, and beyond. This is not acceptable.

"Contracts like this will tie the hands of the next Government in a crucial area of public policy.

"But, even worse, they are being signed without a mandate from the public. The Prime Minister was not up front about these plans at the last election.

"He needs to be reminded that he has never been given the permission of the public to put the NHS up for sale in this way."

David Cameron has been accused of forcing through privatisation

Since the Health and Social Care Act was introduced, the bidding for two contracts for cancer care in Staffordshire has been opened up to the private sector.

The contracts are worth a total of £1.2bn and last for 10 years.

Bids have also been invited for a  five-year contract worth £800m for the care of older people in Cambridge.

Mr Burnham will say that voters face the choice of a public, integrated NHS under Labour or fragmented and privatised service under the Conservatives.

He has written to NHS England boss Simon Stevens calling for a halt to any further contracts for NHS clinical services being signed until after the next election.

"When his reorganisation hit trouble and was paused, David Cameron explicitly promised that it would not lead to more forced privatisation of services.

"But, as always with the NHS and this Prime Minister, the rhetoric and the reality don't match. On his watch, NHS privatisation is being forced through at pace and scale."

A Conservative Party spokesman accused Labour of posturing.

"The NHS is an asset to be valued and protected - it deserves better than this speech," the spokesman said.

"The real choice at the next election will be between a Conservative Party which is delivering a more efficient and effective NHS - and a Labour Party which has learned nothing from its past mistakes."

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Centrica To Pay New Boss Less Than Predecessor

By Mark Kleinman, City Editor

Britain's biggest energy supplier has struck a deal to pay its new chief executive less than his predecessor as it seeks to avoid igniting a new political row about the sector.

Sky News has learnt that Centrica, the owner of British Gas, is poised to announce within days that Iain Conn, who will be installed as the company's new boss this week, will earn both a lower base salary and overall potential reward package than Sam Laidlaw.

Mr Conn's remuneration package will nevertheless be substantial.

City sources said on Tuesday that he would be paid an annual salary of just over £900,000, compared to Mr Laidlaw's base salary of £950,000.

The new chief executive will also be eligible for a share incentive award in his first year at Centrica worth the same amount as his basic pay, which would be deferred until 2016, they said.

Further long-term share awards could also be quantified, although one fund management source said Mr Conn's maximum potential reward would be "considerably lower" than Mr Laidlaw's prospective £6.969m.

Leading shareholders in Centrica are understood to have been briefed on the proposals in the last few days, with an announcement confirming Mr Conn's arrival expected at or before its half-year results on Thursday.

Future awards are likely to be finalised ahead of Centrica's annual meeting next year, as part of a scheduled review of the company's remuneration policies.

People close to the situation said the decision to pay Mr Conn less than Mr Laidlaw reflected the fact that it would be the incoming boss's first job as a FTSE-100 chief executive, as well as the determination of Centrica's board to avoid a further political row.

BP confirmed last week that Mr Conn was leaving after almost 30 years, including a decade on the board.

The oil giant said it had decided to treat him as a "good leaver", meaning he would continue to be eligible for share awards accrued during his career there.

While these theoretically could have been worth more than £15m, as revealed by Sky News in May, their eventual value is likely to be closer to £5m.

Mr Conn will join Centrica at a challenging time, with the Competition and Markets Authority about to launch a full probe of the industry and Ed Miliband, the Labour leader, pledging a price freeze if his party wins next May's general election.

Mr Laidlaw could have earned almost £7m last year, but received less than a third of that sum after donating his £851,000 bonus to charity because of the ongoing row over energy prices.

The new chief executive's other priority will be to identify a new finance director and leadership team for British Gas.

Analysts at Royal Bank of Canada said they expected that the combination of warm weather in the UK, negative publicity and greater competition would result in a 25% fall in profits at British Gas's residential arm.

"On a (year-on-year) basis North American activities are forecast to fare even worse, with polar vortex costs and a margin squeeze in residential energy likely to lead to a fall in [pre-tax profit] of over 50%.

"Overall, we expect a decline in all seven operating divisions of (Centrica) in the H1 results."

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Domino's Pizza Takes Slice Of World Cup Success

Domino's Pizza has seen its profit rise by 10% in the first-half of the year, boosted by the World Cup.

Britain's pizza delivery chain benefited from football fans staying in for the games, whilst it extended its trading hours.

It also said improved marketing and promotions drove sales up.

In the 26 weeks to June 29, pre-tax profit rose to £24.5m.

At UK stores that have been open for more than a year, sales increased by 11.3% with strong growth in online.

It said 61.5% of all UK sales were done online in the six months.

Of that figure, 30.9% of online orders were taken via mobile devices.

The group said it was also seeing improved consumer confidence in its sector, with discretionary spending on the rise.

Chief executive David Wild said: "It's been another strong year for Domino's and I am particularly delighted by the sales performance in our core UK business, which has continued into 2014, confirming the strength of our offer for both new and existing customers.

"We sold 65.5 million pizzas across the group during the year and created over 1,500 jobs, which is no mean feat."

But the company said it continued to struggle with the expansion of its business in Germany.

As it grappled with restructuring costs and weak trading, Domino's said it was seeking to recruit franchisees to take over its poorly performing outlets in the country.

Mr Wild said the company was committed to its plans for the German division, which closed four outlets and posted an operating loss of £4.7m in the first-half.

Most of Domino's Pizza's 868 stores are based in the UK, but as well as Germany, it also operates in Ireland and Switzerland.

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House Prices Force Adults To Live With Parents

By Gerard Tubb, North Of England Correspondent

Millions of young workers have been dubbed the "clipped wing generation" because they are forced to live with their parents by rising house prices.

Housing charity Shelter has published census data showing almost two million workers aged 20-34 in England alone - a quarter of the total - are living with parents or grandparents.

A YouGov poll found 48% of them say housing costs are to blame.

At the Coast and Country Housing Association headquarters in Redcar, out of 11 people working in one office, nine were aged 20-34 and four of them were still living at home.

Laura Wood is living at the family home while she saves up for a deposit

Laura Wood, 26, moved back into the family home after graduating and has lived there ever since while she saves up for a deposit on a house.

"It's obviously difficult when you mum's still asking what time are you going to be in, where are you going what are you doing, so I don't feel like I'm 26 half of the time," she said.

Her co-worker Liz Wilson, 65, still has her 30-year-old son living at home and says the problem of unaffordable housing is forcing her to stay at work.

"I can't retire because we have to provide a larger property for him to have his own room, his own space, and as such we can't downsize," she said.

Unaffordable housing is forcing Liz Wilson, 65, to stay at work

Campbell Robb, Shelter's chief executive, accused the Government of not doing enough to help.

He said: "The 'clipped wing generation' are finding themselves with no choice but to remain living with mum and dad well into adulthood, as they struggle to find a home of their own.

"Rather than pumping more money into schemes like Help to Buy, we need bolder action that will meet the demand for affordable homes and not inflate prices further."

In a statement, Housing Minister Brandon Lewis said measures including the Help to Buy scheme were addressing the issue.

"We're determined to ensure anyone who works hard and wants to get on the property ladder has the help they need to do so," he said.

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BP Warns Of Impact Of Sanctions On Russia

Oil giant BP has warned that increased international sanctions imposed on Russia could have an "adverse impact" on the company.

It said tighter economic restrictions enforced by the West over the ongoing Ukraine crisis may harm its relationship and investments in Russia's state-owned oil firm Rosneft.

The comments from BP come as it released its second quarter results, showing a profit of $3.635bn (£2.14bn).

Hours after the announcement, the firm's fears appeared to have been realised as European governments agreed further sanctions against Russia, with the country's oil industry among the targets.

BP owns 19.75% of Rosneft, which is Russia's largest oil company, and the source for almost 9% of its annual profits.

BP is a top-tier FTSE 100 firm and a key company for UK pension funds to invest in.

In 2011 BP signed an Arctic exploration deal with Rosneft

On Monday, Russian foreign minister Sergei Lavrov said his country had no intention of imposing tit-for-tat sanctions.

Mr Lavrov said: "I assure you, we will overcome any difficulties that may arise in certain areas of the economy, and maybe we will become more independent and more confident in our own strength."

His comments came as a panel of judges in The Hague ordered the company to pay $50bn (£29.4bn) in damages to shareholders of the now defunct oil firm Yukos.

They said that officials under President Vladimir Putin manipulated the legal system to bankrupt Yukos, which was formerly owned by Mikhail Khodorkovsky.

Yukos, once Russia's largest oil company, was broken up after Mr Khodorkovsky was arrested in 2003.

It was declared bankrupt and auctioned off - with Rosneft buying most of its assets.

Rosneft said that it expected no claims to be made against the company in connection with the Hague court ruling, which Russia contests.

It said it was not a defendant in the case and that the ruling would not have a negative impact on its "commercial activity and assets".

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Next Annual Profits Set To Outdo M&S Again

Next has raised its forecast for annual sales and profits as Britain's second largest clothing retailer reported a 10.7% increase in half-year sales.

The Group upped its profit guidance by £25m and now expects to make between £750m and £790m for the full year to January.

Last year the retailer saw pre-tax profits of £695m, overtaking fashion rival M&S.

Representing growth of 11% to 17%, Next's new forecast is set to extend its lead on M&S further in the sector.

It is the second time in three months that the chain has raised its performance expectations, after enjoying two consecutive quarters of strong sales.

Store sales rose by 7.5%, while Next Directory sales were up 16.2%.

Favourable weather and new store openings also helped growth and it now predicts full year sales to rise between 7% to 10%.

The retailer has 500 stores in Britain and Ireland and about 200 stores in more than 40 countries overseas.

Shares in Next rose by around 2% in early Tuesday trading, following the announcement of its better-than-expected results.

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'Dirty Diesel' Drivers Face New Tax In Cities

Drivers of diesel vehicles face having to pay more in taxes and levies as cities around the UK strive to cut air pollution.

In London, plans to introduce a £10 charge for the most polluting diesel cars are being considered by Mayor Boris Johnson.

These could come into force by 2020.

The Mayor's plans for the Ultra Low Emission Zone (ULEZ) are still subject to full consultation, but it is expected it will require diesel cars to be Euro 6 standard - no more than five years old.

Older petrol-driven vehicles beyond Euro 4 - more than 14 years old - will also be hit by the ULEZ charge.

The final figure for the ULEZ levy is expected to be a similar amount to the congestion charge.

The hike in motoring costs would be on top of the congestion charge, pushing up the cost to at least £20 to drive into the capital's ultra-low emission zone.

The Department for Environment, Food and Rural Affairs said that unless action is taken, London, Birmingham and Leeds would face dangerous levels of pollution from vehicle exhausts by 2030.

London's congestion charge was credited with reducing traffic volumes

Diesel exhaust emissions are responsible for about a quarter of the 29,000 premature deaths caused by air pollution, according to experts from King's College London.

The number of diesel cars in Britain has grown to 11 million, nearly a four-fold increase since 2000, according to the Society of Motor Manufacturers and Traders.

This was largely due to motorists switching to diesel because of greater fuel economy and lower road taxes.

But diesel engines also produce toxins including nitrogen dioxide and particulates, which irritates the lung lining and can cause respiratory disease.

The Labour Party has reportedly planned a countrywide network of low emission zones that would push older diesel cars out of city centres.

Oxford has already introduced a low emission zone for buses and could expand this for other vehicles.

London Mayor environment adviser Mathew Pencharz told The Times: "We want to see an unwinding of incentives that have driven people to diesel.

"Euro engine standards on emissions have not delivered the savings expected, meaning we now have a legacy of a generation of dirty diesels."

All of these initiatives are being driven by the need to meet tighter European regulations on clean air and avoid the threat of heavy fines for breaching them.

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