'Brexit': Prize For Britain's EU Exit Strategy

A 100,000-euro (£86,000) cash-prize is being awarded for the best plan on how Britain could leave the European Union.

The 'Brexit Prize' has been created by the Institute of Economic Affairs (IEA), a free-market think tank, in the run up to a proposed referendum on the UK's membership of the EU.

Entrants are asked to explore the constitutional process of a withdrawal and how the UK can best position itself in the world outside the single market.

The prize will be judged by a panel including former chancellor Nigel Lawson and historian David Starkey.

Submissions can come from individuals and corporate bodies such as consultancy and law firms, with initial entries up to 2,500 words.

Competitors are asked to examine: "What measures does the UK need to take in the following two years, domestically, vis-a-vis the remaining EU, and internationally in order to promote a free and prosperous economy?"

The award follows on from the Wolfson Prize that offered £250,000 for the best explanation of how a country could leave the single currency.

The prize was won by a team headed by economist Roger Bootle, also a judge in the Brexit competition.

"Now that we have been promised an in-out referendum on Britain and the EU in 2017, it is essential that this momentous decision is preceded by a well-informed debate," Lord Lawson, chair of the judging panel, said.

The second-place entry will be awarded a prize of €10,000, and third-place granted €5,000.

The deadline for submission is September 16 with the winner expected to be announced in March 2014.

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Horsemeat: MPs Criticise 'Slow' Investigation

MPs have condemned the "slow pace" of an investigation into the horsemeat crisis in the UK as no one has been prosecuted six months after the scandal erupted.

Horsemeat contamination was first revealed in January by officials in the Irish Republic and the food crisis then spread across Europe.

Several supermarket products and school dinners across the UK were found to contain horse DNA.

But authorities in both the UK and Ireland are yet to acknowledge the scale of the illegal activity involved, the Environment, Food and Rural Affairs Committee said.

"The evidence suggests a complex network of companies trading in and mislabelling beef or beef products which is fraudulent and illegal," said committee chair Anne McIntosh.

"We are dismayed at the slow pace of investigations and seek assurances that prosecutions will be mounted where there is evidence of fraud or illegality."

Birds Eye products were found to contain horse DNA

The committee complained that there was still a "lack of clarity" over where responsibility lay in dealing with the contamination, and that role of the Food Standards Agency (FSA) was not clear.

"The FSA must become a more efficient and effective regulator and be seen to be independent of industry," Ms McIntosh said.

"It must have the power to be able to compel industry to carry out tests when needed.

"It must also be more innovative in its testing regime and vigilant in ensuring every local authority carries out regular food sampling."

Major supermarkets in the UK have been caught up in the scandal

The MPs were also "surprised" that in EU-mandated tests, 14 out of 836 samples of horsemeat from the UK tested positive for the painkiller bute.

But the committee acknowledged that horsemeat contamination was limited to a "relatively small" number of beef products sold in the UK, with 99% of products tested containing no horse DNA.

They said more regular testing of products is necessary to protect consumers.

"Regular and detailed DNA tests are needed on all meat or meat-based ingredients which form part of a processed or frozen meat product," the MPs said.

"Consumers need to know that what they buy is what the label says it is."

The committee also said there were clearly "many loopholes" in the current system of horse passports and called for assurances that horse movements were being properly monitored.

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Greece: Ex-Finance Minister Faces Prosecution

By Anthee Carassava, in Athens

Greek lawmakers have voted in favour of the criminal prosecution of former finance minister George Papaconstantinou for wiping the names of relatives from a list of 2,000 suspected tax cheats with Swiss bank accounts.

In a secret ballot, capping a marathon debate through the small hours of Tuesday, 166 deputies in the 300-seat Parliament voted for the former minister's prosecution on three charges of breach of faith, duty and tampering with a state document while at the helm of the finance ministry between 2009 and 2011.

Seventeen lawmakers were absent from the vote.

A five-member judicial council will convene later in the week to yield what officials expect to be a final legal review before a special supreme court hearing is set up to try the 52-year-old former official and architect of Greece's austerity.

The alleged cover-up marks the biggest case of fraud since the late founder of Greece's socialist PASOK party was put in the dock with a rash of senior ministers in connection with a multi-million dollar bank embezzlement and corruption scandal.

The latest case, exposed late last year and investigated by a special congressional committee since January, underscores long-standing failures by the Greek state to crack down on tax evasion.

The 'Lagarde list' contains the names of about 2,000 Greek tax cheats

Even so, its landmark ruling by lawmakers drowned in fresh signs of swelling social unrest amid renewed fears of mass public sector layoffs and added austerity, three years after Greece's economy skid off the fiscal cliff, requiring 240bn euros in international bailouts.

Although Mr Papaconstantinou has denied any criminal wrongdoing, the probe showed that details from a number of bank accounts held by three of his relatives had been deleted from an initial list of some 2,000 tax cheats the minister received from Christine Lagarde, the head of the International Monetary Fund, when she was France's finance minister in 2010.

The list, however, went "missing" according to Mr Papacononstantinou, after a copy was passed on to the country's finance police more than a year later.

His successor, Evangelos Venizelos, now the head of the socialist PASOK party and part of an awkward coalition steering Greece to financial recovery, admitted to having a copy of the list in 2012, when the case came to light.

Opposition parties have openly accused Mr Venizelos and former socialist prime minister George Papandreou of complicity, demanding they too also face prosecution.

"I am the target for one and simple reason," Mr Papaconstantinou told lawmakers ahead of the vote. "Because I was the finance minister who put the country in the bailout process."

He lashed out at his successor and own political leader, saying he did nothing to investigate the list; rather, kept it in his desk drawer for months.

Mr Papaconstantinou, now retired from politics, faces up to 10 years in prison if convicted on all three charges.

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Energy Bills 'To Increase By £240 By 2020'

British consumers are forecast to pay £240 more for their annual energy bills within seven years, according to a utility firm report.

RWE npower predicted the average yearly bill - for all energy customers, not just its own - will rise from £1,247 to £1,487 by 2020.

The company believes official forecasts for future energy savings have been too optimistic when it comes to green technology.

It said support for low-carbon technologies would add £82 to the average energy bill by the end of the decade, up from £34 this year, and £12 in 2007.

Support for low-carbon power sources accounts for less than 3% of the average household bill, which will rise to 5.5% in 2020, the company predicted.

The firm's chief executive, Paul Massara, said: "Government policy is rightly delivering the transformation we need to address the UK's poor housing stock and encourage investment required in new infrastructure.

"But achieving these aspirations comes at a cost, and this is what needs to be clearly communicated to consumers."

Greg Barker, minister for energy and climate change, rejected parts of the npower report and said: "Global gas prices, not green policies, have been primarily pushing up energy bills.

Onshore and offshore wind farms have been a key low-carbon strategy

"That is why it is vital we crack on with securing investment in a diverse energy mix that includes renewables and new nuclear, as well as gas.

"We must also continue to drive up the energy efficiency of the nation's housing stock, particularly the homes of the most vulnerable households."

He said Government policies were keeping bills lower than doing nothing, with a typical household saving £65 today and £166 by 2020, compared with if the UK remained reliant on fossil fuels, failed to tackle climate change and did not make homes more efficient.

Meanwhile, energy company profits have risen from £18 on the average dual fuel bill in 2007 to £59 this year, the npower report said.

In 2020, npower predicted profits would rise to £71, staying constant at around 5% of the bill.

The cost of measures to help people save energy and money through greater efficiency, such as insulation, has increased from £17 in 2007 to £69 now and £88 at the end of the decade.

EU directives restrict the life span of conventional coal power stations

Npower said the total cost of Government policy and regulation, which includes general tax on energy and support for vulnerable households, will rise from £185 today to £329 by 2020 on the average bill.

It said total operating costs will rise from £208 now to £241 in the same period.

The wholesale cost of gas and electricity currently makes up 45% of the bill, or £565, but npower said Government data showed gas and electricity will become £50 cheaper by the end of the decade.

A separate report also found that while Britons are prepared to pay for a shift to renewables, they do not trust the Government or power companies to deliver a clean, secure and affordable energy system.

Researcher Dr Catherine Butler said: "If Government or energy companies are saying your bills are going up because of renewables, that isn't necessarily going to be taken on trust."

She added: "There's a real sense of anger about the profit-making nature of energy companies when it's seen as a basic need, not a consumer good."

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Nationwide Raids Watchdog For Compliance Boss

By Mark Kleinman, City Editor

Nationwide, Britain's biggest mutually-owned lender, has raided the City watchdog to appoint its first compliance chief, the latest example of gamekeeper-turned-poacher in the banking sector.

Sky News understands that Nationwide has hired Julia Dunn, a senior executive at the Financial Conduct Authority (FCA), as its chief compliance officer amid intense scrutiny by regulators on the behaviour of the country's biggest lenders.

Ms Dunn, who will take up her new role in September, is the latest FCA executive to quit for a role in the private sector, dealing a blow to the FCA's efforts to sustain its crackdown on egregious behaviour by the big banks.

Among her responsibilities at the watchdog was dealing with building societies' conduct-related issues.

Last week, Sky News revealed that Christina Sinclair, the FCA's acting retail director and a stalwart of its predecessor body, the Financial Services Authority (FSA), had resigned to join Barclays.

Her move will reunite her with Sir Hector Sants, the former FSA chief executive, who now heads compliance and regulatory relations at Barclays.

Other major UK banks, including Lloyds Banking Group, have poached senior executives from central banks and regulators as they attempt to overhaul their culture under strong pressure from politicians.

Ms Dunn's departure comes at a testing time for Nationwide's relationship with the new City regulators. Last week, the building society said it had reached agreement with the Prudential Regulation Authority (PRA - which supervises risks in the financial system - over the timetable for complying with a measure dictating the scale of borrowing on its balance sheet.

"Nationwide has previously indicated its intention to issue Core Capital Deferred Shares (CCDS)," it said in a statement last week.

"This new capital instrument is designed for mutual building societies and will enable Nationwide to raise common equity tier one capital to supplement retained earnings and to diversify its capital base.

"It remains the Society's intention to establish and access this form of capital during the current or next financial year. Any such capital issuance remains at the discretion of the Nationwide Board and will have the effect of enhancing the ratios and timetable set out above."

Nationwide stressed its commitment to remaining a mutually-owned building society and serving its 15 million members "including [through] ongoing support of the housing market through the provision of mortgages and at the same time diversifying and strengthening its capital base".

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McDonald's To Open In Communist Vietnam

McDonald's is to open its first restaurant in communist Vietnam next year - after granting a franchise to the relative of its prime minister.

The American fast food giant said it planned to open in the southern business hub Ho Chi Minh City in early 2014 after making businessman Henry Nguyen its "developmental licensee".

Mr Nguyen is the son-in-law of the country's prime minister, Nguyen Tan Dung.

"As we grow our presence in the Asia region, we are looking for partners with a blend of strong business acumen and a unique understanding of our brand," Dave Hoffmann, president of McDonald's Asia Pacific, Middle East and Africa region, said.

Communist forces stormed Saigon after US troops withdrew

The son-in-law, also known as Nguyen Bao Hoang, flipped burgers for McDonald's while growing up in America - where his family fled to in 1975 at the end of the US-led Vietnam war.

He returned to his native country more than 10 years ago and now works at IDG Ventures Vietnam, a venture capital group.

"I have dreamed of one day opening a McDonald's restaurant in my native country ever since my return to Vietnam more than a decade ago," Mr Nguyen said in a statement.

Fast food giants such as KFC, Burger King, Subway and Pizza Hut already have restaurants in Vietnam alongside dozens of local chains.

In February, Starbucks opened its first store in Ho Chi Minh City, which was previously called Saigon.

It has proved highly popular with young Vietnamese who form long queues to get Western-style lattes and frappes.

In 2004 KFC shut its Vietnam diners over avian flu fears

The entry of McDonald's into the Vietnamese market highlights the attractiveness of the roughly 90 million population and rapidly expanding middle class, despite the country's current economic slowdown and lingering banking crisis.

Although US food and drinks - including other iconic brands such as Coca-Cola - were available in South Vietnam until the end of the war, the companies pulled out after the communist victory which paved the way for the unification of the country in 1975.

Coca-Cola re-entered the Vietnamese market after "Doi Moi", economic liberalisation and normalisation of ties with the US in the 1990s, although the company is currently subject locally to a consumer boycott over alleged tax avoidance.

McDonald's is served in over 34,500 locations, across more than 100 countries. Vietnam will be the 38th Asia Pacific nation to have McDonald's outlets.

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BBC Savile Sex Scandal Reviews Cost £4.9m

Three reviews set up by the BBC in the wake of the Jimmy Savile sex scandal have so far cost licence fee payers almost £5m, the corporation's annual report has revealed.

The largest of the inquiries - the Pollard Review - which looked into whether the trust's management team failed in its handling of a dropped Newsnight investigation into the Savile allegations, cost £2.8m (inclusive of tax and VAT).

The cost of the review by the former head of Sky News included £101,000 to cover the "legal and related costs" of Helen Boaden, who was heavily criticised in the report.

Lord Patten said it had been a mixed year for the BBC

The then head of BBC News was among the senior executives who were criticised for failing to act while the corporation was plunged into chaos by the scandal.

Total legal costs for witnesses came to £391,120.92 while Mr Pollard was paid a fee of £81,600.

Costs for that review and subsequent investigations into respect at work and the BBC's culture and practices while Savile worked there, came to £4.9m to the end of March.

But the eventual public bill will be even higher because the review into culture and practices is still being conducted by former High Court judge Dame Janet Smith and will be published later this year.

An extra strand of her investigation is under way in light of the conduct of former BBC presenter Stuart Hall, who was recently jailed after admitting the indecent assault of girls as young as nine.

Writing in the report, BBC Trust chairman Lord Patten quoted Charles Dickens to compare the success of the Olympics coverage with the Savile scandal saying, "It was the best of times, it was the worst of times".

He said the revelations about the scrapped Newsnight investigation and subsequent departure of director-general George Entwistle were "low points".

He said: "The BBC seriously let down both itself and licence fee payers."

Nick Pollard's review into the Savile scandal has been the most costly

The BBC initially said the Pollard Review would cost £2m but Tim Davie, who stood in as director-general following Mr Entwistle's departure after just 54 days in the top job, said that had been an "estimate".

New director-general Tony Hall defended the cost to licence fee payers of the reviews, telling Sky News it was "absolutely proper" to "examine what lessons there are to be learned from the mistakes made nearly a year ago".

He said the results of the inquiries - into events that took place before he took up his role - had been "very helpful" to him so far.

Lord Hall said he wanted to change the culture at the BBC and called for "greater personal accountability" and a simpler corporation.

In a letter to Lord Patten he said he had been "struck by the complexity of the organisation and inhibiting effect that has on creativity".

New BBC boss Tony Hall has pledged to make the BBC a "simpler" organisation

He added that he was "personally leading a major piece of work to look at how we can simplify our organisation".

He also said he would be working closely with HR executive Lucy Adams, who was heavily criticised by a committee of MPs last week over hefty pay-offs to senior staff, and said he had full confidence in her.

Mr Entwistle was given a £450,000 pay-off despite his short tenure and widespread criticism of his handling of the Savile affair.

The annual report and accounts also reveal that the BBC made £580m of savings during 2012/13.

Staffing levels across the corporation were reduced from 21,940 to 21,282 over the year, while senior management teams have been cut by 31% since 2009.

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Swinton Insurance Fined £7m Over Mis-Selling

High street insurance group Swinton has been fined more than £7m over mis-selling products to consumers.

The Financial Conduct Authority (FCA) said Swinton's aggressive sales strategy meant that it failed to treat customers fairly in its telephone sales of monthly add-on insurance policies.

It said that between April 2010 and April 2012, Swinton sold personal accident, home emergency and motor breakdown policies, which during the relevant period generated an income for accounting purposes of £92.9m.

The FCA found that Swinton did not provide enough information to customers about the key terms of the policies and also failed to properly monitor its sales calls.

Swinton set aside £11.2 million to repay those customers who were mis-sold, of which £1.9 million has already been paid out.

According to the FCA, the insurance firm has contacted over 650,000 customers it thinks may have been affected.

Swinton has over 500 branches across the UK, employs more than 3,000 people and has been operating for six decades.

Incorporated in 1963, it processes more than 2.5 million policies each year.

The City watchdog said any policyholders who believe they bought monthly cover as a result of mis-selling should contact Swinton directly.

Tracey McDermott, the FCA's director of enforcement and financial crime, said: "Swinton failed its customers. When selling monthly add-on policies, Swinton did not place the consumer at the heart of its business. Instead it prioritised profit.

"At the FCA we have been clear in our expectation that firms must behave in the interests of consumers.

"Today's outcome shows our approach in action and will act as a deterrent for other firms tempted to put profit figures above the fair treatment of customers."

The FCA found Swinton did not explain the cover clearly enough or tell customers the monthly policies were optional and separate from other core insurance products.

It also failed to give enough information about the terms of the policy, including the conditions and limitations, and cancellation process.

The nature of the failings, particularly poor sales scripts, meant that every sale could have been a mis-sale, the FCA said.

In response to the ruling Swinton chief executive Christophe Bardet apologised for the company's procedural policies.

Mr Bardet said: "We apologise for these shortcomings. They were not compatible with the proud history of Swinton, which since 1957 has been providing peace of mind to people through insurance cover.

"Our focus is now to deliver on our promise of insurance with a personal touch. Swinton is embarking on a £60m investment in growth which puts the customer at the heart of everything we do."

On its website Swinton said its customer service team aims to resolve general complaints within 20 days.

The £7.38m fine reflects the number and seriousness of the issues raised during the investigation, according to the FCA.

The sum was reduced from £10.54m, with a 30% discount applied as Swinton settled at an early stage in the FCA's investigation.

In 2009, Swinton was ordered to offer refunds to 350,000 customers over mis-selling of payment protection insurance.

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Inflation: Fuel Prices Blamed For June Rise

Inflation surged to a 14-month high in June as rising prices at the fuel pumps and less discounting by fashion retailers intensified pressure on households.

The Consumer Prices Index (CPI) inflation rose to 2.9% last month, from 2.7% in May, the Office for National Statistics (ONS) said.

It is the highest level since April 2012, although inflation was prevented from climbing higher by falls in the prices of fruit, vegetables, bread, air fares and package holidays.

The ONS said: "The largest upward contributions to the change in the rate came from motor fuels and clothing and footwear.

"The largest downward contribution came from air transport."

The figure was weaker than economists' forecasts of a 3% level, and is expected to fall later in the year as commodity prices ease.

Meanwhile, the headline rate of Retail Price Index (RPI) inflation rose to 3.3% in June, up 0.2% from the May figure.

Motorists have complained of rising fuel prices this year

Unlike the US Federal Reserve, which aims to control inflation and also increase employment, the Bank of England's (BoE's) exclusive mission has been to keep inflation close to Government-set target of 2%.

However, the annual CPI rate has held stubbornly above the target since November 2009.

Economists said the figure would come as a relief to new Bank governor Mark Carney, avoiding the need for him to write a letter to Chancellor George Osborne explaining high inflation.

The ONS said clothing and footwear prices fell 1.9% month on month, much less than the 4.2% fall a year ago, as retailers started their summer sales with less generous discounts.

Pressure on motorists increased, with petrol and diesel prices both rising by 1.1p per litre, compared with price falls a year earlier.

If CPI hit 3%, BoE governor Mark Carney would have been asked to explain

The figures showed inflation continues to erode consumers' spending power and significantly outstrip wage rises, which increased by just 1.3% in the three months to April compared with a year earlier.

Price rises for personal care items such as moisturiser and deodorant, and increases in the cost of domestic heating fuel, helped drive inflation higher.

But there were falls in the cost of potatoes, fruit, bread, cereals and dairy products, defying economists' expectations of price rises.

Air fares and package holidays also fell in June, compared with sharp increases in flight costs in May.

Price falls for sofa beds, carpets and settees also helped hold back inflation.

A Treasury spokesman said inflation is down significantly from its peak of 5.2% in 2011.

He said: "At the same time, to help families with the cost of living, the Government has increased the tax-free personal allowance to £10,000.

"(It) will take 2.4 million people out of income tax altogether and save a typical basic rate taxpayer almost £600, and frozen fuel duty, which has kept petrol prices 13p per litre lower than they would otherwise have been."

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Co-Op Bank Toughs Out Customer Withdrawals

By Mark Kleinman, City Editor

Depositors with the Co-Operative's struggling banking arm have withdrawn hundreds of millions of pounds since the scale of its problems began to emerge in the spring, Sky News understands.

Corporate and retail customers of the Co-Op Bank have contributed to net withdrawals totalling more than £500m - out of an overall deposit base of almost £37bn at the end of 2012 - in recent months.

In a statement issued on Tuesday, a spokesman for the Co-Op's banking arm said: "Customer deposit retention levels remain within expected parameters and we continue to recruit new retail depositors, reflecting the underlying loyalty to our brand.

"The bank remains focused on delivering its capital plan."

News of the withdrawals - which amount to roughly 2% of the lender's deposit base, a smaller number than had been anticipated by banking experts - come as the Co-Op Group prepares a restructuring that will result in bondholders being forced to swallow significant losses on their investments.

Sources close to the Co-Op Bank and the Prudential Regulation Authority (PRA), the arm of the Bank of England which monitors risks in the financial system, said they were "comfortable" with the deposits profile of the business.

Co-Op depositors' savings are protected - as they are at all UK-regulated banks - up to an £85,000 limit by a Government guarantee.

A substantial proportion of the withdrawals at the Co-Op Bank are understood to have been made by so-called matrix funds, which are obliged under their terms of operation to pull their deposits from lenders which have their credit ratings downgraded to junk status.

Some local authorities are also understood to be among the depositors which have diverted their money elsewhere.

The Co-Op Bank's rating was downgraded five notches in May following its withdrawal from a deal to acquire 632 branches from Lloyds Banking Group.

A heavyweight new management team, led by former HSBC executive Niall Booker, was parachuted into the Co-Op's banking arm, and was tasked with devising a restructuring plan aimed at filling a £1.5bn capital hole identified by the PRA.

That plan involves the Co-Op Group injecting £1bn of new capital, while bondholders will swap their existing debt for new debt and a chunk of shares in a new company that will be listed on the London Stock Exchange.

Bondholders angered by the proposed terms have vowed to fight for a better deal, but would be likely to see their investments wiped out if they voted to block it in the autumn. Under that scenario, the PRA would probably take control of the Co-Op Bank under a new resolution programme.

The Times reported on Tuesday that hundreds of jobs were likely to be axed at the Co-Op Bank as part of the restructuring, with Mr Booker expected to focus on retail lending under a revised strategy.

The plans will be outlined in the prospectus for the bank's stock market listing later this year.

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