British Gas Sees Profit Up 11% To £606m

British Gas has reported a profit increase for the full year of 11% to £606m.

The company said it performed well in the 12 months until December 31, despite a weak economy and energy cost increases.

It said: "This is having a real impact for both residential and business customers and, against this backdrop, it is important that we continue to focus on improving customer service and reducing costs."

British Gas is the UK residential arm of energy giant Centrica.

Overall, group adjusted operating profits rose 14% to £2.7bn, but Centrica, which employs around 40,000 people, said it paid more than £1bn in tax and invested £2.7bn in 2012.

Centrica said the sharp profit increase at British Gas residential came after last year's colder-than-normal weather saw gas use leap 12%, despite a fall in customer accounts.

The company said the number of residential customers dropped 1% in the year to 15.7 million, compared to 15.9 million in 2011.

It said customer "churn" was at its lowest rate ever.

British Gas raised its tariff costs late last year ahead of January's snow

The results are likely to raise questions over the fairness of energy bill increases after British Gas raised tariffs by 6% for around 8.4 million households at the end of last year.

To help thwart criticism the company provided a breakdown of the average customer bill, which it said totalled £1,188 a year.

It said the average wholesale energy cost for a customer was £568, delivery to the home was £283, environmental and social policies £112 and tax of £72.

The company said its own operating costs were £104, leaving a profit of £49.

Chief executive Sam Laidlaw also addressed the issue of corporate tax responsibility, amid the public furore over multinational tax avoidance.

He said: "It's important that Centrica makes a fair and reasonable return so that we can continue to make our contribution to society and invest."

Centrica is the parent energy company of British Gas

British Gas said the growth of online accounts was 20% last year, with 3.4 million customers using web access.

More than a third of all energy bills are now sent electronically. Some 70% of customers' meter readings are now sent online.

It also revealed that it has struggled to lure new customers to the maintenance arm, British Gas Services, and boiler installation services dropped by 10%.

It said: "The economic impact was seen more clearly in British Gas Business, leading to lower profitability and a reduction in the number of accounts served in a highly competitive market."

On Tuesday Sky's City Editor revealed that the company would announce its ambitions to become a big player in North America and the global energy sector.

He revealed that Mark Hanafin, the executive who runs Centrica Energy, the division focused on exploiting UK and Norwegian gas reserves, will head a new unit focused on broader international upstream effort.

Centrica also confirmed that British Gas' managing director Phil Bentley would leave the company this year.

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UK Economy Grew More Than Thought In 2012

The economy performed better than expected across 2012 despite shrinking in the final quarter, according to new official figures.

The Office for National Statistics (ONS), in its second estimate for the fourth quarter, maintained its finding that output fell by 0.3% between October and December.

Slow wage growth hitting consumers' pockets was a major factor.

However, compared with a year ago, the UK economy was 0.3% bigger - better than the first reading which suggested output was flat.

Sky's Economics Editor Ed Conway says this means Britain is only a small revision away from having never suffered a double-dip recession at all.

The better-than-expected scenario is a boost to Chancellor George Osborne ahead of his Budget next month.

However, the fourth quarter's output performance continues to highlight the risk of a triple-dip recession.

George Osborne is under intense pressure to stimulate growth

Last week, ratings agency Moody's downgraded Britain's triple-A credit rating, citing weak growth which it said was damaging the Government's fiscal targets.

The move dominated debate between Ed Miliband and David Cameron during Prime Minister's Questions.

According to the ONS output in the service sector, which makes up 75% of the UK economy, fell by 0.1% in the final quarter of 2012.

Industrial production was the big loser, contracting by 1.9% - its biggest decline since the first quarter of 2009 - while construction output grew by 0.9%.

Activity surveys for the first quarter of 2013 have given a mixed picture but have so far pointed to a picture of slight GDP growth for the period which, if realised, would mean the UK avoiding a new third period of recession.

Economists believe the continued and deepening squeeze on consumer spending as a result of low wage growth and rising prices is one of the greatest risks.

Chris Williamson, of Markit, said: "With political tensions rising in the eurozone due to the inconclusive Italian elections, low consumer confidence at home, signs of still weak bank lending and businesses remaining reluctant to invest due to economic uncertainty, none of the main causes of weak growth have been resolved.

"The outlook for the rest of the year is therefore one of very modest economic growth at best with ongoing, heightened risks of another slide back into contraction."

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Minister Hails 'Historic' EU Fish Agreement

The Government has said an EU agreement to introduce a blanket ban on dumping dead fish back into the sea is an "historic moment".

EU ministers have backed an overhaul to the Common Fisheries Policy (CFP) which will see an end to a process called "discards" – where fish are thrown back in the sea because they are not the ones the crew intended to catch.

The agreement will see the dumping of edible fish banned for stocks like herring and whiting from January 2014. A ban for white fish stocks was also agreed, to begin in January 2016.

Speaking from Brussels on Wednesday morning after marathon talks, fisheries minister Richard Benyon said: "This is a historic moment in reforming the broken Common Fisheries Policy.

Richard Benyon said he was delighted with the agreement

"The scandal of discards has gone on for too long and I'm delighted that the UK has taken such a central role in securing this agreement.

"I am disappointed that some of the measures required to put this ban into place are no longer as ambitious as I had hoped but it's a price I am willing to accept if it means we can get the other details right.

"The final package will still need to be agreed with the EU Parliament but the result we have achieved today is another step in the right direction and will prove to be good for both fishermen and the marine environment."

The issue galvanised wide UK support when chef Hugh Fearnley-Whittingstall launched a "Discards Campaign" which has so far attracted more than 850,000 signatures on a petition condemning the throwing away of perfectly edible fish.

EU Fisheries Commissioner Maria Damanaki - who once admitted the CFP was "broken" - said the discards system means almost one quarter of all fish caught in European waters is being dumped at sea.

Biggest resistance to fisheries reforms on the scale demanded by MEPs came from France, Portugal and Spain.

Mr Fearnley-Whittingstall said he was pleased with the commitment to ban discards, but added that the "devil is in the detail".

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Apple 'To Pay £66m' Over Kids' App Downloads

Apple is set to pay out around £66m ($100m) to settle a US lawsuit which claims children were improperly charged while playing iPad and iPhone games.

It is alleged that poor safeguards meant kids were easily able to buy extra features for the free games without their parents' knowledge or permission.

Court papers claim: "Apple failed to adequately disclose that third-party Game Apps, largely available for free and rated as containing content suitable for children, contained the ability to make In-App Purchases."

The case dates back to 2010 and 2011, with Apple updating its software to put in more secure controls on in-game purchases from March 2011.

It has now agreed to give a £3.30 ($5) credit to an estimated 23 million people who were affected. However, if parents can show they were charged more than £20 ($30) then cash refunds will be offered.

The games that were downloaded were designed for children as young as four, claims the lawsuit - which was started by five parents.

One of the parents, Garen Meguerian, says his young daughter spent several hundred dollars on "game currency" while playing "highly addictive" apps like Zombie Cafe and Treasure Story.

Apple previously required a password to be entered for any download or purchase which was valid for 15 minutes without needing to be re-entered.

The system changed in 2011 to make the password mandatory for every transaction, and to warn users that free games might contain the option to buy extra features.

Some technology writers have said that parents should be more aware of the consequences of giving children access to their gadgets and passwords.

Lawyers bringing the case also want Apple to pay their legal fees of £860,000 ($1.3m). The proposed settlement needs court approval and will go before judges on March 1.

Apple has not yet commented on the case.

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Horsemeat: Tesco To Source More Meat From UK

By Poppy Trowbridge, Business and Economics Correspondent

Tesco has announced a commitment to source more of its meat from the UK at a farming conference in Birmingham today.

The supermarket kingpin has told the National Farmers Union meeting that by July all its chicken will come from British farms, and pork products will follow.

Tesco will also offer suppliers two-year contracts to help companies plan their business for the longer term.

The company's chief executive, Phillip Clarke, addressed the conference today, told Sky News: "We feel the need to bring the food closer to home.

"We think it's right to bring more of it back to the UK, so long as we can get the demand from the UK."

Tesco has blamed its suppliers for the meat contamination

Earlier this month, Mr Clarke said in a video on Tesco's website that the company would take a more open approach to food processing after it was found to be selling products contaminated with horsemeat.

Tesco was one of the first retailers to pull products from its shelves after the horsemeat contamination was revealed on January 16 after analysis was undertaken by Irish food officials.

Tests on Findus beef lasagne revealed that some of the ready meals were made entirely from horsemeat.

And Tesco found levels of horse DNA exceeded 60% in tests on its Everyday Value Spaghetti Bolognese.

Since the horsemeat scandal broke, supermarkets have been criticised for not communicating with customers quickly enough.

They have also seen frozen burger sales and ready meal sales plunge dramatically, data by Kantar Worldpanel showed.

In an attempt to be more transparent, Tesco said it would put cameras on the supply chain so shoppers could see where the food they are eating has come from and how it was produced.

Harvester has withdrawn 6oz burgers as a precautionary measure

"There's nothing for anybody to hide. There never should be," said Mr Clarke.

While it already sources all its beef products from the UK and Ireland, the food retailer admits suppliers had cut corners.

"The impact so far on sales is minimal," Mr Clarke added, though he acknowledged that some customers are buying fewer frozen ready meals.

George MacDonald, Retail Week executive editor, told Sky News, "The shopper can feel fairly confident that anybody involved is going to be looking very closely indeed at how they can sort out these problems."

As the nation's biggest supermarket, Tesco should be at the forefront of campaign to restore trust in food, Mr MacDonald believes.

"It is essential for them to fully reconnect with the customer," he said.

Sky News has confirmed that Harvester has become the latest outlet to withdraw burger products for precautionary reasons over horsemeat fears.

Paragon's website promoted product quality but equine DNA was found in food

The firm withdrew its 6oz burgers from sale after equine DNA was found in burgers destined for Whitbread their Doncaster-based supplier, Paragon Quality Foods Ltd.

Paragon has confirmed no contamination of Harvester burgers occurred, and its website insisted: "Only high quality meat, fully traceable to the farm is used in our superior burger."

A Harvester spokesperson told Sky News: "The Harvester burger had a negative test result but as Paragon had received a positive test result for a batch of 6oz burgers in the factory we removed our product as a precautionary measure in case of any possible contamination.

"We are in the process of replacing all existing stock with a fresh batch."

:: Pembrokeshire Council has withdrawn mince products from all schools, care homes and day care centres after horsemeat was found in one supplier's products.

:: Ikea has withdrawn its beef and pork wiener sausages from sale in France, Spain, UK, Ireland and Portugal over contamination fears, which were made by the same Swedish supplier as its horsemeat-tainted meatballs.

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Ryanair To Fight For Aer Lingus Takeover

Ryanair is to appeal a decision by the European Commission to block its proposed takeover of Aer Lingus over fears of higher fares.

The no frills carrier, which already owns almost 30% of the rival Irish airline, claimed it was a purely political move to protect the Irish Government's 25% stake.

The bid - Ryanair's third attempt to take control of Aer Lingus - was accompanied by a comprehensive remedies package to satisfy previous competition concerns, the budget airline said.

It included two upfront buyers - British Airways' owner International Airlines Group and Flybe - to take over around half of Aer Lingus's short-haul business.

Ryanair spokesman Robin Kiely said: "We regret that this prohibition is manifestly motivated by narrow political interests rather than competition concerns and we believe that we have strong grounds for appealing and overturning this politically-inspired prohibition.

"This decision leaves Aer Lingus as a small, isolated airline and leaves the two Irish airlines at the mercy of the Government-owned Dublin Airport monopoly, which continues to increase passenger charges, deliver third-rate services and oversee traffic declines."

Following the decision, Aer Lingus said consumers were being better served by vigorous competition set by the two airlines and the takeover should never have been made.

Chief executive Christoph Mueller said: "The series of inadequate remedy offers presented by Ryanair only underlines the view that Ryanair made its offer without any reasonable belief that it could obtain clearance."

Joaquin Almunia, European Commissioner for competition, said the ruling protected more than 11 million Irish and European passengers flying in and out of Dublin, Cork, Knock and Shannon.

"For them, the acquisition of Aer Lingus by Ryanair would have most likely led to higher fares," he said.

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Martha Lane Fox To Join The House Of Lords

The web tycoon Martha Lane Fox is joining the House of Lords, where she will be the youngest woman peer.

The co-founder of travel website lastminute.com, who is also David Cameron's "digital champion", will sit on the crossbenches as a non-political member.

The 40-year-old revealed on Twitter that she has taken the formal title of Baroness Lane-Fox of Soho in the City of Westminster.

Adding the hyphen is required under peerage rules.

However, she later tried to backtrack because the Soho element is not supposed to be announced until she is admitted on March 26.

"Ssshh ... Soho bit still a secret apparently," she wrote, adding: "Whoops, first mistake of newly appt peer - shouldnt have announced title til formally in house [sic]."

She also posted a picture of the formal letter from the Lords authorities confirming the ennoblement, before deleting it when it was picked up by the press.

The online entrepreneur told friends via the micro-blog site that the appointment was a "real privilege" and she "can't wait to make an impact".

"Will get robe on and get them moving," she told one.

The businesswoman co-founded website lastminute.com in 1998, before stepping down as managing director in 2003 - two years before the company was sold.

She went on to start the karaoke chain Lucky Voice and charity Go On UK, which aims to spread digital skills.

She also has her own grant giving foundation, Antigone, funding charities that target neglected causes.

Joining her in the Lords will be composer and broadcaster Michael Berkeley, who will also sit as a crossbencher.

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Barclays Imposes £450m Libor Bonus Hit

By Mark Kleinman, City Editor

Barclays is imposing more than £450m of financial penalties on its employees in relation to the Libor-rigging scandal which last year triggered the departure of its chief executive.

I understand that the bank will disclose details in its forthcoming annual report of moves to reduce variable pay for staff by far more than the £291m in fines levied by UK and US regulators.

The disparity between the two figures underlines the determination of Antony Jenkins, Barclays' chief executive, to demonstrate accountability across the bank for the reputational crisis that engulfed it last summer, according to insiders.

Investors said the move was a step in the right direction but questioned why Barclays had still decided to award £1.8bn in bonuses to its staff given the scale of the misconduct-related fines and charges taken by the bank during 2012.

The £450m cut to bonuses comprises about £290m derived from reductions to the 2012 bonus pool and at least £160m which has been clawed back from employees' deferred share awards from earlier years, according to people close to Barclays.

In total, somewhere in the region of £300m was clawed back by Barclays' remuneration committee in 2012, with Libor accounting for roughly half the total. The rest was accounted for by Barclays' ongoing exposure to the payment protection insurance (PPI) mis-selling scandal and other misconduct-related charges.

The details will be highlighted in Barclays' annual report, which could be published as soon as next week. The Guardian reported this morning that the report would disclose that more than 600 Barclays employees were paid more than £1m last year.

The additional disclosure follows the appointment of Sir David Walker as Barclays' chairman last autumn. Sir David was the author of a key report on corporate governance in the banking sector in which he advocated the publication of the number of employees earning specific salary brackets.

Last year, the bank faced a huge revolt from leading investors over the pay deal awarded to Bob Diamond, its former chief executive. Shareholders were also furious that the bank paid out three times more in bonuses to employees than it did in dividends to Barclays' owners.

Mr Jenkins has pledged to address this imbalance, and in this month's annual results significantly reduced the ratio.

Barclays declined to comment.

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Global Exchanges Close In On LCH Deal

By Mark Kleinman, City Editor

The clearing house responsible for processing billions of UK financial trades will in the coming days unveil a £300m capital-raising that is expected to include an increased shareholding being acquired by the operator of New York's leading technology exchange.

I understand that LCH.Clearnet, an important component in the City's financial architecture, is in the advanced stages of finalising the fundraising as part of a takeover deal led by the London Stock Exchange Group (LSE).

The participants could miss a self-imposed deadline of tomorrow, according to people close to the situation, but they are "on the brink of a deal".

The transaction was not yet finalised on Wednesday afternoon but is expected to involve the LSE taking a stake of up to 60% in LCH, with the Singaporean exchange operator SGX potentially acquiring a minority shareholding.

Nasdaq OMX, owner of the Nasdaq bourse, is in talks to increase its small minority investment in the business. People close to LCH said that SGX could yet withdraw from the deal.

The LSE has revised the terms of its offer following regulatory changes which require clearing houses to hold more capital. Clearing houses act as middlemen in asset trades, ensuring their completion in the event of a default.

Last month, the LSE said in a statement that it was extending a deadline to finalise an agreement with LCH until tomorrow, and people familiar with the talks said the parties were unlikely to require a further extension.

LCH describes itself as "the leading independent central counterparty group in Europe ... [and] clears a broad range of asset classes including - securities, exchange traded derivatives, energy, freight, interbank interest rate swaps and euro and sterling denominated bonds and repos".

These services are becoming increasingly-intensively regulated but their ownership is also being sought after as exchange operators seek to combat the fallout from declining equity trading activity.

The revised offer for LCH will come at a time of frenetic activity in the exchanges sector as its major players grapple for greater international scale.

Earlier this week, it was reported that CME, the US derivatives exchange operator, had held tentative discussions about acquiring the German-based Deutsche Borse.

Elsewhere, Nasdaq's parent has had preliminary discussions about taking itself private with backing from Carlyle Group, the buyout firm, and Intercontinental Exchange is in the process of buying NYSE Euronext for more than $8bn (£5.28bn).

The LSE and LCH declined to comment.

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Hackers Target Oz Website Over Geert Wilders

A website run by Australian broadcaster ABC has been hacked in apparent retaliation for interviewing controversial Dutch politician Geert Wilders.

ABC said the email addresses and some personal information of more than 40,000 people had been compromised.

A Twitter user named Phr0zenMyst claimed it had been carried out as part of a hacking mission named #OpWilders.

"ABC hacked for giving a platform for Geert Wilders to spread hatred #OpWilders - database leaked!" tweeted Phr0zenMyst.

The hacker exposed the details of viewers who had logged in and commented on the website of a 2010 programme called Making Australia Happy.

It is not clear if the hacking attack is connected to any group, such as the anarchic Anonymous, which has launched similar politically-motivated attacks in the past.

Mr Wilders' visit to Australia has prompted several protests

ABC said it would contact the people whose information had been disclosed in the attack. The website in question has now been shut down.

A spokeswoman added: "At this stage, we are still investigating the details of the breach.

"However, we do know that it has exposed the name, username and a ... version of the password that audience members used to register on the programme website."

Mr Wilders' anti-Islamist views have often proved controversial and the 49-year-old had spoken to ABC's Lateline programme ahead of his speaking tour of Australia.

There have been protests outside some of his events, including one in Melbourne where police had to break up scuffles.

In the past he has called for the Koran to be outlawed and has campaigned to end what he called the "Islamification of the Netherlands".

In 2009, Mr Wilders was initially banned from entering the UK on public security grounds, but the ban was later overturned.

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