HS2 Challenges Rejected By Court Of Appeal

By Tom Parmenter, Sky News Correspondent

Campaigners have vowed to fight on after the Court of Appeal rejected their latest challenges to the Government's HS2 high-speed rail project.

Objectors including 15 councils and residents' associations along the route had wanted judges to order further assessment of the entire scheme.

But their plea was dismissed on all grounds - although they were granted the right of a final appeal to the Supreme Court, the highest court in the land.

The Department for Transport said the ruling would allow them to press on with the project.

High Speed Rail minister Simon Burns said: "This is the second time in four months a court has rejected attempts to derail HS2.

"I urge opponents not to waste any more taxpayers' money on expensive litigation and instead work with us on making HS2 the very best it can be."

However, campaigners declared they would battle on to ensure the Government does not "duck its environmental responsibilities".

Hilary Wharf, director of the HS2 Action Alliance (HS2AA), said: "We are confident that our position is a strong one and we are pleased that the Court has allowed our appeal to the Supreme Court.

Lord Mandelson has raised doubts about HS2

"It's concerning however that we have to go to the highest court in the land to make the Government give the environment the respect it deserves."

The scheme is the country's largest infrastructure project for a generation and the largest single rail project since the 19th century.

The proposed route would run from London to Birmingham before splitting into lines that run through Manchester and Leeds.

The estimated cost of the scheme has recently risen from £33bn to £42bn, although critics put the figure at closer to £60bn.

They also argue it will cause environmental damage, the loss of homes and disruption to many communities.

Former Labour cabinet minister Lord Mandelson and ex-transport secretary Alistair Darling are among those to have cast doubt on it in recent weeks.

But on Tuesday, David Cameron reiterated its importance to securing Britain's position in his much-trumpeted "global race".

David Elwin QC, appearing for the HS2AA, argued that the scheme needed a strategic environment assessment (SEA) before it could proceed.

He claimed the Government had broken a European directive requiring an SEA and called for the High Court's ruling in March to be overruled.

Nine areas of legal challenge were brought to the High Court but the only one to succeed related to the property compensation consultation, which is now being re-run.

Despite the latest failure, campaigners drew comfort from a split in the three-judge panel on whether an SEA should have been carried out.

Lord Dyson, the Master of the Rolls, and Lord justice Richards, backed the Government but Lord Justice Sullivan disagreed.

Councillor Martin Tett, chairman of the 51m alliance and leader of Buckinghamshire County Council, expressed disappointment at the latest ruling.

He said: "This is another example of the Department for Transport and HS2 Ltd riding roughshod over public opinion, ploughing ahead regardless of what local communities want and ignoring the environmental merits of the alternatives.

"We have evidence that our alternative to HS2 would provide all of the capacity required, far more quickly, at a fraction of the cost and would be less damaging to the environment."

Construction on phase one of the route between London and Birmingham is due to start in 2017.

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RBS Fined £5.6m Over Accounting Failures

The Royal Bank of Scotland has been fined £5.6m by the City regulator for incorrectly and sometimes failing to report transactions made in wholesale markets.

The Financial Conduct Authority (FCA) said RBS failed to properly report 44.8 million transactions between November 2007 and February 2013.

It added that the taxpayer-backed bank failed altogether to report 804,000 transactions between November 2007 and February 2012.

The FCA said it represented 37% of relevant transactions carried out by RBS in this period.

It added that the bank breached FCA rules on transaction reporting and its requirements for firms to have adequate management and controls.

The watchdog said many of the problems with RBS' own systems were compounded by the takeover of ABN Amro in October 2007.

But it said that because of considerable resources available to RBS, it should have been able to overcome these challenges and ensure adequate systems and controls were in place.

Tracey McDermott, the FCA's director of enforcement and financial crime, said: "Effective market surveillance depends on accurate and timely reporting of transactions.

"We have set out clear guidance on transaction reporting, backed up by extensive market monitoring, and we expect firms to get it right."

As well as a financial penalty, firms can expect to incur the cost of resubmitting historically incorrect reports.

Ms McDermott added: "We will continue to take appropriate action against any firm that fails to meet our requirements."

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US Interviews London Trader In Libor Probe

By Mark Kleinman, City Editor

A City-based trader was questioned by American regulators in London earlier this month as US authorities stepped up a series of probes into the global Libor rate-rigging scandal.

Sky News understands that the unnamed trader, who works for Deutsche Bank, was interviewed by a team consisting of at least half a dozen officials from the US Department of Justice (DoJ) within the last few weeks.

The DoJ officials' presence in London underlines the extent to which national authorities are both working collaboratively and encroaching on one another's turf during their efforts to secure criminal convictions and extract billions of pounds in fines from many of the world's biggest banks.

Tom Hayes, a former UBS and Citigroup trader, was charged by the Serious Fraud Office (SFO) in June with eight counts of conspiring to manipulate Libor for Japanese yen between August 2006 and September 2010.

US officials were reported to have been angered by the arrest of Mr Hayes because he was a principal target of their own investigation.

So far, Barclays, Royal Bank of Scotland and UBS have reached settlements with authorities in the UK, US and Asia totalling approximately £1.5bn, while last month, Singaporean regulators censured 20 banks over allegations that their traders attempted to manipulate local benchmark rates.

Last week, two former interdealer brokers from RP Martin were hit with criminal fraud charges by the SFO, which alleges that they were part of a broad conspiracy involving executives from banks including Deutsche Bank and JP Morgan.

It is unclear whether the Deutsche Bank employee who was questioned by the DoJ is among those already named as being implicated in the Libor scandal, which involved traders submitting false rates that are used to price trillions of dollars in loans and derivative contracts throughout the global financial system.

"The Bank is cooperating in the various regulatory investigations and conducting its own ongoing review into the interbank offered rates matters," a Deutsche Bank spokesman said.

"As per the current status of investigations, we can say that no current or former member of the Management Board had any inappropriate involvement in the interbank offered rates matters under review.

"It has also found that certain employees, acting on their own initiative, engaged in conduct that falls short of the Bank's standards, and action has been taken accordingly."

Sources played down suggestions that the DoJ interviews in London meant that a settlement between Deutsche Bank and regulators was imminent. Any agreement is unlikely to come until next year, they said.

Deutsche Bank is among the City's biggest employers, basing many of its global markets businesses in London.

The bank – Germany's largest – has set aside roughly 500m Euros to cover potential fines for its role in the Libor scandal.

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BMW Takes Stake In British Electric Car Firm

By Mark Kleinman, City Editor

The German automotive giant BMW is to buy a stake in the British company which produces and installs half of the UK's charging points for electric cars.

Sky News can reveal that BMW, which manufactures some of the world's most popular luxury cars, is to buy a small shareholding in Chargemaster.

The deal, which is expected to be announced on Thursday, will underline the potential importance of electric cars to the future of BMW, which plans to launch its first model - the i3 - next week.

BMW's purchase of the shares comes as Chargemaster pursues a flotation on London's junior AIM stock market in an attempt to raise funds for expansion.

The German car-maker is likely to invest roughly £500,000 in Chargemaster stock, giving it a stake of about 2%, according to people familiar with the deal.

Chargemaster, which is based near Luton, is a beneficiary of Government plans to encourage motorists to switch to electric vehicles, with the European Commission demanding that 795,000 charging points are installed across the Continent by 2020.

The UK Government is subsidising up to 75% of the cost of domestic charging points, according to the British company's flotation documents. Annual European demand for electric vehicle charging infrastructure is expected to reach $1bn (£650m) by 2021.

It makes money by supplying home charging units to the likes of Nissan, Renault and Toyota, and produces ranges for workplace and public use.

The BMW shareholding is expected to be trumpeted by Chargemaster as a blue-chip endorsement of its business. The two companies already have a strategic partnership under which the British firm is installing electric charging infrastructure on BMW premises.

To date, however, the growth of electric cars has been constrained by the dearth of public charging points. A network is being set up by Chargemaster in the UK under the brand Polar.

The cost of the vehicles may also be prohibitive from consumers' perspective. BMW announced this week that the i3 would cost 34,950 euros (£30,170), a big premium to the price of comparable conventional cars made by the group.

Chargemaster was set up by David Martell, the entrepreneur who made his first fortune from the creation of the Trafficmaster satellite navigation system.

Mr Martell owns 50% of the company, with the flotation of Chargemaster crystallising a paper fortune worth more than £10m. Other investors are understood to include Lord Beaverbrook, the former Conservative treasurer.

Norbert Reithofer, BMW's chief executive, said in relation to the company's electric car development earlier this year that "being the spearhead of change means taking a calculated risk".

Renault, the French car-maker, is also developing an electric marque, the Zoe.

A spokeswoman for the company confirmed that an announcement was planned, while Chargemaster declined to comment.

Last year, Chargemaster made a gross profit of £1.24m on sales of £3.6m.

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GSK: We Are Also A Victim Of China Fraud

By Tadhg Enright, Business Reporter

The boss of GlaxoSmithKline has said that Britain's biggest drugs company was itself a victim of an alleged fraud by four of its China based employees who are accused of bribing doctors with cash and sexual favours.

Speaking to journalists for the first time since details of the scandal emerged, Sir Andrew Witty said: "It appears that certain senior executives in the Chinese business have acted outside of our processes and controls to both defraud the company and the Chinese healthcare system."

"To see these allegations made about people working for GSK is shameful. For me personally they are deeply disappointing."

Four senior GSK executives were arrested by Chinese fraud investigators earlier this month who accused them of having orchestrated a network of middlemen and travel agencies to bribe doctors with 3bn yuan (£320m) and sexual favours to encourage them to prescribe GSK drugs to their patients.

The chief executive said that these allegations are different to those which were subject to an internal investigation earlier this year which found "no evidence of corruption or bribery".

He said it was "too early to tell" if criminal proceedings would be taken against GSK.

"We're working with the authorities. Their investigation is under way. It's too early to know what the outcome of that will be," he said.

His statements come shortly after the firm announced second quarter turnover rising by 2% to £6.61bn globally. It said it still plans to sell off its Lucozade and Ribena brands before the end of 2013.

Sir Andrew said that head office had no knowledge of the matter before being contacted by Chinese fraud investigations and that he had despatched GSK's head of emerging markets, Abbas Hussain, to Shanghai to assist with the investigation.

"Outside and inside the company, people rightly expect us to operate with integrity. To be crystal clear, we have zero tolerance for this type of behaviour," he said.

GSK has not revealed the identities of the accused executives, however, Chinese authorities say they also want to speak to the company's head of China, Mark Reilly, who left the country shortly before details of the scandal emerged.

Sir Andrew said "there are no allegations" against Mr Reilly and that he has been working to help them respond this situation.

He refused to be drawn on whether he would consider waiving any bonus awarded to him this year.

Separately, an editorial released by China's official news agency has hinted that more foreign and local pharmaceutical firms could soon be implicated in allegations of bribery.

The Xinhua news agency said the government was trying to tackle "rampant" malpractice in the pharmaceutical sector, including corruption.

Underscoring the rot in China's health sector, Xinhua said 1,000 doctors, nurses and administrators at 73 hospitals in Zhangzhou city in the southeastern province of Fujian had been found taking kickbacks but gave no further details.

"It will not be surprising if more pharmaceutical companies and hospitals, domestic or international, are to be involved in probes in the days to come," Xinhua said in an English-language commentary.

Chinese police have questioned local employees from another British drugmaker, AstraZeneca, which said it was not related to other investigations.

Authorities have also visited the offices of Belgian drugmaker UCB.

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Vince Cable In Bank Of England 'Taliban' Jibe

The Business Secretary has stoked up tension with the Bank of England by comparing its policymakers to the Taliban over restrictions imposed on banks.

Vince Cable believes that the BoE's demands that banks must boost the levels of capital they hold to protect against future financial shocks is deterring small business lending and holding back recovery.

Mr Cable told the Financial Times: "One of the anxieties in the business community is that the so-called 'capital Taliban' in the Bank of England are imposing restrictions which at this delicate stage of recovery actually make it more difficult for companies to operate and expand."

Mr Carney is expected to meet Mr Cable

Mr Cable has expressed similar views before, but the strong language of his latest intervention comes less than a month into the tenure of new Bank governor Mark Carney.

It remains to be seen whether his remarks will persuade policymakers to soften their stance or simply harden their resolve.

Chancellor George Osborne was reported to share Mr Cable's views.

One Treasury official told the FT that it was hoped that Mr Carney would rein in the "jihadist" tendency in Threadneedle Street against the banks.

The BoE's new Prudential Regulation Authority (PRA) has ordered Britain's five biggest lenders to raise £13.4bn to plug a £27.1bn gap in their finances.

Nationwide, Britain's biggest building society, was reportedly left with a £1bn hole, with its chief executive Graham Beale describing the BoE's leverage ratio measurement as "crude".

Two weeks ago it announced that it had been able to meet the PRA's demand for it to strengthen its leverage ratio - a key measure of financial strength - to 3% from 2%, without raising extra funds from investors.

British Bankers' Association chief executive Anthony Browne believes Mr Cable was quoting other people in the Taliban reference, rather than trying to use the word himself.

Mr Browne said: "But there clearly is concern in various parts of the industry about the pace at which they're required to raise their capital ratios."

The PRA was recently formed

The Bank of England declined to comment directly on Mr Cable's comments.

It maintains that it does not want banks and building societies to address their capital shortfalls by reducing lending to the real economy and would not accept any such plans.

It is believed that Mr Carney is will be meeting Mr Cable shortly to discuss issues including the rules on capital strength.

Meanwhile Britain's biggest  banks have agreed to publish information about how much they are lending at a local level in an effort to identify parts of the nation where it is harder to borrow money.

Royal Bank of Scotland, Lloyds, Barclays, HSBC and the Nationwide are among seven banks and building societies that will provide a breakdown of the lending they have done to households and businesses in 10,000 postcodes areas.

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Kevin McGeever In Fake Hostage Claim

An Irish property tycoon charged with falsely alleging he was kidnapped and held hostage after he vanished for eight months, cannot afford to post bail, a court hears.

Kevin McGeever, who once sold homes from an international portfolio in Dubai, has claimed he does not have enough money to cover a 12,500 euro (£10,700) bond.

The 68-year-old, who walked into Strokestown District Court, Ireland wearing dark glasses and a black leather jacket, was remanded in custody after also being charged with wasting police time.

McGeever appeared in court looking malnourished and dishevelled

The court heard the pensioner, with an address at a mansion named Nirvana, in Ballywinna, Craughwell, in the neighbouring Co Galway, was in "no position" to pay his bail.

McGeever, who has a faint scar on his forehead from where the letters "TIEF" were scrawled before his dramatic reappearance late one night on a country road in January, did not speak during his case.

Sitting on a defendant's bench in the packed, wood-panelled courtroom, squeezed among dozens of others, he spoke briefly to a solicitor as his case was called.

Joan Devine, acting on behalf of McGeever's Dublin-based solicitor Tom Brabazon, requested the judge set a lower bail amount of 8,000 euro (£6,899).

"He is not in a position to come up with that kind of money," Ms Devine said.

Judge Geoffrey Browne rejected the application and remanded McGeever in custody with consent to bail.

The once successful businessman, originally from Swinford in Co Mayo, was reported missing on May 27 2012 and found eight months later wandering barefoot on a rural road in the west of Ireland.

The night he was discovered near Ballinamore, Co Leitrim, by a man and a woman, Catherine Vallely and her friend Pat Rehill, he was described as being a shrunken figure, in a dishevelled state, with a long beard, hair and finger nails.

He was said to be malnourished and dehydrated, and as having lost several stone in weight when found.

McGeever was charged under sections 12(a) and 12(b) of the 1976 Criminal Law Act, relating to knowingly giving false information that an offence had been committed and wasting Garda time.

The charges allege McGeever made false reports and statements to gardai between January 29 and February 28 this year that offences of false imprisonment, assault, and threats to harm had occurred.

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Network Rail Chief Higgins Poised To Quit

By Mark Kleinman, City Editor

Network Rail is kicking off a hunt for a successor to its chief executive as it finds itself embroiled in a fresh row over punctuality targets and executive bonuses.

Sky News has learned that Sir David Higgins, who has served as chief executive only since February 2011, is planning to step down within the next year, after the transition to Network Rail five-year control period takes place in spring 2014.

His exact departure date has not been finalised, although insiders said the search for his replacement was underway and that a headhunting firm would be appointed imminently to oversee it.

It will mean a new leader of the company responsible for the UK's tracks, signals and stations at a crucial time in its history.

According to one person close to the situation, Richard Parry-Jones, Network Rail's chairman, had asked Sir David to commit to the role for the bulk of the next funding period, which he declined to do. The chief executive then agreed with the board that he would make way for a successor.

"It is an entirely amicable departure," said an insider.

Sir David originally joined the board of Network Rail as a non-executive director in April 2010, having run the Olympic Delivery Authority – the body responsible for staging last year's London Olympics – from its creation until the beginning of 2011.

Network Rail is overseen by the Office of Rail Regulation (ORR) and is structured as a private company limited by guarantee, but with some of its income delivered through grants from the Government. It is also a not-for-dividend company in that its profits are either reinvested in the railway or handed back to the Government

The ORR has set a punctuality target for the 2014-19 control period of 92.5pc of all trains arriving on time and with no operators achieving below 90pc. A final spending settlement, likely to be in the region of £37bn, will be agreed with the regulator later this year.

Network Rail has dozens of public members who act like shareholders in a quoted company although they have no direct financial interest in it. It partly funds its capital expenditure plans by raising debt in the bond markets..

Sir David's tenure has been dogged by angry exchanges about executive pay. It emerged last week that Network Rail's five executive directors could receive a combined total of more than £11.1m over the next few years if they meet performance targets. Unions have criticised the potential pay-outs as "rewards for failure".

At its annual meeting earlier this month, Network Rail defended the rewards, saying: "If exceptional performance is achieved – that is, if Network Rail delivers savings to the taxpayer of at least £450m, raises train punctuality to the highest levels ever seen in this country while delivering a massive programme of capacity-boosting projects ahead of time and under budget – then the hypothetical maximum pay-out for the company's executive directors would be just over £2m in total."

"However, as this year has demonstrated, there is no reward for failing to meet targets and underperformance in any one or more element will result in lower payments."

Sir David stands to make up to 100% of his £577,000 annual salary under a long-term incentive plan paying out in April 2015, although sources said he would relinquish any right to a pay-out assuming he does leave Network Rail before that date.

Among the possible internal successors to Sir David would be Robin Gisby, managing director of network operations, and Simon Kirby, managing director of infrastructure projects, although Mr Parry-Jones may opt to appoint an external candidate.

The new chief executive will take over at a time of major expansion on Britain's rail network, with projects such as Crossrail and the controversial High Speed 2 under development.

Network Rail has said publicly that it will not meet punctuality targets for long-distance services for the current five-year funding period which ends in March next year, making the achievement of the targets a key challenge for Sir David's successor.

A spokesman for Network Rail, which took on responsibility for Britain's railways from the discredited Railtrack in 2002, declined to comment.

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All FTSE 350 Firms 'At Risk Of Cyber Attack'

Every British company in the FTSE 350 list is vulnerable to cyber attacks from so-called economic terrorists which puts national security at risk, experts have warned.

The top firms on the London Stock Exchange are leaking crucial data that could be used by hackers to steal secrets and damage both businesses and the wider economy, according to a study by accountancy firm KPMG.

It found every single company left a trail of sensitive material online and revealed firms in the aerospace and defence sectors left themselves most exposed to an attack.

Hactivist from Anonymous have been responsible for some attacks

Martin Jordan, head of cyber response at KPMG, warned flaws in web security could ultimately threaten public safety.

"What our research has shown is that companies do not have full control of their web presence at a time when cyber security has been turned upside down," he said.

"Hacking is no longer about a few hacktivists. Now, hacking has become automated on an industrial scale - often with state sponsored agencies behind it - and attackers are aiming for an increased competitive edge by stealing company secrets."

The KPMG study found each firm leaked an average of 41 usernames and 44 email addresses.

A Chinese building was claimed to be behind Sino spying pic: China8.com

"Our findings send out a clear message to business," Mr Jordan added. "While the internet may be a shop window to the world, it can also be a substantial security risk. FTSE 350 companies should accept that cyber threats are real.

"Protecting their networks is not just about self-interest. It is about safeguarding the economy and, in the case of critical national infrastructures, it is also about the safety of the population."

Cyber experts simulated the steps a fraudster might take to get inside the FTSE 350 companies. Their research was conducted using data available in the public domain and without breaching security, KPMG said.

Mr Snowden said National Security Agency cyber activity was widespread

It revealed aeronautical and defence firms leaked the highest number of internal email addresses - a fundamental component used in phishing to gain unrestricted access to a company's network.

Companies in the support services sector and the software and computer services sector were among the most vulnerable, KPMG said.

Other findings showed 53% of the FTSE 350 firms did not have up-to-date security or relied on old server software.

Ross Parsell, of defence firm Thales UK, said the report underlined a "high level of naivety" about cyber security among businesses.

"The consequences of cyber attacks are now so severe that cyber defence must become a board room discussion," he said.

Edward Snowden was holed up at a Moscow airport

American officials have long complained of cyber attacks emanating from China, with one security firm pinpointing a military building allegedly responsible for attacks.

However, since then former National Security Agency (NSA) analyst Edward Snowden claimed that the US was involved in widespread surveillance of the internet, email, text and voice calls globally, along with an offensive cyber programme.

:: According to cyber experts, the US remains the world's largest producer of commercially available spyware and covert software.

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Jane Austen To Be On £10 Notes From 2017

The novelist Jane Austen will be the new face of £10 notes from 2017, the Bank of England has said as the design was revealed.

Campaigners hailed the move as "a brilliant day for women".

Austen, who wrote the aptly titled Persuasion, often poked gentle fun at the establishment in her books and highlighted the frustrations of women faced by barriers in society.

A 35,000-name petition had been presented to the Bank amid criticisms that, with Sir Winston Churchill likely to take the place of social reformer Elizabeth Fry on the £5 note as early as 2016, there would be no female figures on UK currency apart from the Queen.

Austen, who is also famous for penning the likes of Pride and Prejudice and Emma, was described last month as a "candidate" to replace Charles Darwin on the £10 note. At the time she was only referred to by the Bank as "waiting in the wings".

Following a campaign backed by dozens of MPs, the Bank has also announced that it is reviewing the way people are chosen to feature on banknotes given that its choices must "command respect and legitimacy".

The public is being invited to email suggestions of how it could improve the way it selects historical figures.

The current design for the Churchill £5 note, due to be introduced in 2016

Asked by Sky's Rhiannon Mills about the influence of the campaign on the decision, Bank of England Governor Mark Carney said: "We listened to those concerns and I'll be candid, that affected the timing of the decision, but the substance of the decision? Absolutely not.

"Jane Austen is a great choice ... she's one of the greatest figures in English literature.

"The timing was affected because there was a misimpression of the possibility of there being no women on our banknotes.

"We understood those concerns and it was important to act on it."

Freelance journalist Caroline Criado-Perez, who set up the petition on campaign site Change.org, said: "Without this campaign, without the 35,000 people who signed our Change.org petition, the Bank of England would have unthinkingly airbrushed women out of history.

"To hear Jane Austen confirmed is fantastic, but to hear the process will be comprehensively reviewed is even better."

Current criteria used for selecting banknotes include looking at whether the person has made a lasting contribution which is universally recognised and making sure that the choice is not controversial.

The Governor takes the final decision on the advice of Bank officials, although members of the public have a say in the early stages of the process and are invited to submit suggestions.

The new Austen note design features the quote: "I declare after all there is no enjoyment like reading!" from snobbish Pride And Prejudice character Caroline Bingley.

The banknote also shows a portrait of the author which was adapted from a sketch drawn by her sister Cassandra, as well as an image of Godmersham Park, the home of Austen's brother which was said to have inspired much of her work.

Austen was born in 1775 in Steventon, Hampshire, but, despite her novels never going out of print, she achieved relatively little recognition during her lifetime.

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