Clothing Website M And M Fashions £80m Sale

By Mark Kleinman, City Editor

The online discount clothing website M and M Direct is to change hands for more than £80m amid a frenzy of deals involving some of the UK's best-known retailers.

Sky News understands that TA Associates, the private equity group which bought M and M in 2007, has appointed bankers from Canaccord Genuity to handle the auction, which is expected to attract significant interest.

Set up in 1987 by Mark Ellis and Martin Churchward to sell end-of-line clearance sports products, the website now sells products from more than 300 brands such as Diesel, New Balance and Nike, and claims to attract nearly one million visitors each week.

TA, which is also trying to sell its interest in the premium lifestyle retailer Cath Kidston, bought M and M from ECI Partners, another investment firm, seven years ago.

It has flirted with a sale of the business before, being stalked by Mike Ashley, the tycoon behind Sports Direct International, in 2011.

News of M and M Direct's plan to sell itself again comes on the same day that Asos, one of the City's most popular internet retailing stocks, delivered one of the most disappointing trading updates in its history.

Shares in Asos plunged by 20% as investors digested the revised profit forecast, while shares in Boohoo, the fashion retailer which listed on London's junior AIM market last week, also fell sharply.

M and M, which sells products at discounts of between 40% and 90% off high street prices, is understood to have had a decent Christmas trading period, although the company has not been without its difficulties.

Accounts filed at Companies House for the 12 months ending February 24 last year reveal that the previous year had been especially troubled.

"The company encountered a number of market and strategic issues which led to [its] turnover decreasing by 4%. A wholesale review of the business was conducted and a new strategic plan has been introduced which, along with new management, has allowed the business to return to profitable growth."

A TA spokesman declined to comment.

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Pension Firms 'Lose Billions' After Speech

Britain's financial service providers have lost billions in value after the Chancellor delivered his Budget for 'savers and pensioners', Sky News has calculated.

By mid-afternoon an estimated £4.5bn had been wiped off the value of the top five UK pension companies listed on the blue chip FTSE 100 index.

The investor exodus occurred after George Osborne announced that defined contribution pension holders are to be offered free, impartial and face-to-face advice.

Mr Osborne added in his speech that pensioners must no longer buy annuities if they do not want to.

Annuities provide a fixed income but cannot be transferred between providers.

Legal & General saw £1.8bn wiped from its market value after shares were 14% down in mid-afternoon trades.

Resolution, which traded at almost 10% down for a while, then dipped to 15% down - equal to losing £800m.

Aviva lost an estimated £900m, Standard Life around £350m and Prudential saw £800m wiped due to negative trades.

Meanwhile, independent financial adviser Hargreaves Lansdown saw its share price up 7.5%.

The annuities market has come under scrutiny in recent month, amid calls for widespread reform.

Aviva chief executive recently told Sky's Jeff Randall Live that the industry did need a shake-up.

The Chancellor also said remaining tax restrictions on pensioners accessing their funds would also be removed.

He added that £20m would be spent within two years working with consumer groups and industry on the pension advice structure.

George Bull, senior tax partner at Baker Tilly said: "For people with defined contribution pension plans, the Budget ushers in the biggest changes seen in the last 25 years.

"From 2015/16 pensioners are to be given greater control of their pension pots.

"Rather than being discouraged from withdrawing money early with a punitive tax charge of 55%, they will be encouraged to do so while paying their personal tax rate.

"'Trust the people' says the Chancellor, and it's clear he does as the increase in the tax yield from people taking their savings early is projected to be £3bn over the next four years."

Bookmakers William Hill and Ladbrokes were also bruised by the Budget, after Mr Osborne said fixed-odds betting terminal duty would rise to 25%.

The machines, many of which are located in high street betting shops, have spread rapidly in the last decade and have been a huge windfall for bookmakers.

Deloitte indirect tax partner Barney Horn said it would cost operators around £80m a year and added: "It will increase operating costs and could lead to further consolidation in the market.

"Online gambling operators are unlikely to be able to pass on the costs to consumers, but could be forced to cut back on marketing and player promotions."

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Unemployment Drops By 63,000 In Last Quarter

The unemployment figure for the three months to January has dropped by 63,000 to 2.33 million.

The Office for National Statistics (ONS) added that the number of people claiming Jobseeker's Allowance last month fell by 34,600 to 1.17 million.

Meanwhile, the ONS said average earnings increased by 1.4% in the year to January, up 0.2% on the previous month.

The latest official data gives the Government a Budget boost, with a record number of people in work.

More than 459,000 are employed compared to a year ago, taking the total to just over 30 million in jobs.

It is the highest figure since records were started in 1971.

The ONS said the jobless rate dropped to 7.2%, with most of the fall being from men.

It added that there was a fall in the number of part-time workers, because they were unable to find full-time jobs.

It said the part-time total was down 32,000 to 1.4 million.

The number of people claiming Jobseeker's Allowance fell by 34,600

Although a reduction was reported, the total is still 41,000 than at the same time in 2013.

Both long-term unemployed and jobless youth figures were down.

The ONS said long-term jobless was down by 38,000 to 828,000, while 912,000 aged 16 to 24 were without work.

The youth figure was down by 29,000.

It said Britons classed as economically inactive fell by 19,000 to 8.9 million.

That figure includes those who have given up looking for work and carers.

The latest data also shows public sector employment on the decline, with a drop of 159,000 to 5.5 million - recorded as the lowest level since 1999.

The big drop was said to include the large numbers of Royal Mail workers now classed as being in the private sector, after the company's flotation last autumn.

Meanwhile, the civil service reduced numbers by 6,000 to 441,000 and local government fell by 25,000 to 2.3 million.

Private sector employment is now 662,000 more than at the same time last year.

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Music Streams Hits $1bn Amid Anti-Piracy Push

Global music sales continue to fall but revenues from streaming and subscription services have topped $1bn (£600m) for the first time.

According to the International Federation of the Phonographic Industry (Ifpi), figures for 2013 show digital streams were up 51% globally.

It said streaming service Spotify now boasts more than 24m users, while established players such as Google and Apple have also launched their own offerings.

However, Ifpi's Digital Music Report 2014 continued the industry's calls for an overhaul of search engine results, which it said can aid online piracy.

"Search engines have pledged to do more to tackle online piracy, but there is still a long way to go," the group said as it released the report in London.

"In August 2012, Google announced that it was altering its algorithm to take account of notices received from rights holders to place infringing sites lower down in search results.

"Unfortunately, this seems to have had little impact.

Ifpi added: "A search for the name of any leading artist followed by the term 'mp3' in the leading search engines still returns a vast proportion of illegal links on the first page of results."

As an example, Ifpi listed the leading five performing artistes from the Billboard 100 and said that copyright infringement pages appeared on searches from Bing, Yahoo! and Google.

Ifpi said that by last January, the global recording industry had sent in total more than 100 million requests to Google to remove links to infringing content.

It said the number of requests would have been higher but Google caps the number of requests on rights groups.

Approached by Sky News, a Google spokesman was unavailable for comment.

Mainstream search engine insiders question the Ifpi methodology, saying they have taken millions of pirated content links off their portals and insist independent evidence does not back-up the piracy-support claims.

Ifpi lambasted Russian social network vKontakte, which it said allowed its 55 million average daily users to upload and share music and video files.

It added that the City of London's Police Intellectual Property Crime Unit (Pipcu), funded by the Intellectual Property Office, has taken a key role in targeting infringement of rights holders.

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Osborne Close To Landmark China Banking Deal

By Mark Kleinman, City Editor

George Osborne is closing in on a landmark deal that would see the City become one of the world's most important offshore centres for trading the Chinese currency.

Sky News understands that the Government hopes to announce by the end of the month the establishment of a London-based clearing bank that would act as a hub for offshore renminbi (RMB) payments.

The move would be significant because of the rapid growth in the volume of international RMB transactions as China's financial system and economy have become less insular.

The Chancellor has made it clear that increasing the City's share of trading in the China's currency represents a vital growth opportunity.

A London-based institution would effectively "oil the wheels" of the clearing process, reducing transaction and settlement costs, a source said.

A number of the country's vast state-owned lenders, including Bank of China and Industrial and Commercial Bank of China, have been vying to be appointed as Beijing's clearing bank in London, according to insiders.

A decision about the chosen institution could be made public within days.

The Treasury is understood to have been hoping to get a deal wrapped up in time for Wednesday's Budget statement, although that was now unlikely, a City source said.

In a speech in Hong Kong last month, Mr Osborne said the UK and China had an economic "two-way relationship of equals".

"Gone are the days when the British finance minister was only interested in securing greater market access to China.

"Now almost two thirds of all RMB payments outside of China and Hong Kong take place in London," he said.

The Chancellor said he was unashamed about having secured agreements establishing a swap line with China's central bank and allowing Chinese banks to apply to set up UK-based wholesale branches.

"Now London firms are able to invest directly in Chinese stocks and shares in RMB - something that's just not currently possible anywhere else in the West - thanks to our agreement with the Chinese Government last year.

"Ultimately what we all want to see is RMB being used more and more as a currency of choice in the world.

"The UK and Chinese Governments are in active discussions about the appointment of a renminbi clearing bank in London."

City sources cautioned that the Prudential Regulation Authority (PRA), the banking oversight arm of the Bank of England, would also need to approve any deal.

The PRA is leading the consultation on rule changes that would mean Chinese banks operating in the UK as branches rather than subsidiaries, effectively entailing lighter-touch regulation by the UK authorities.

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Paddy Power Rapped Over Pistorius Advert

The bookmaker has been heavily criticised for an advertising campaign in which it offered "money off if he walks" in connection with South African athlete Oscar Pistorius, who is on trial for the murder of his girlfriend Reeva Steenkamp.

The Advertising Standards Authority ruled Paddy Power had brought advertising into disrepute over a campaign that drew a record 5,525 complaints - the most complained about UK advert of all time.

The advert, placed in the Sun on Sunday, used an image similar to an Oscar statuette with the face of Pistorius, next to text stating: "It's Oscar Time. Money back if he walks. We will refund all losing bets on the Oscar Pistorius trial if he is found not guilty."

The advert as it appeared in full

Unusually, the ASA ordered the immediate withdrawal of the advert pending its investigation of complaints that it trivialised the issues surrounding a murder trial, the death of a woman, as well as disability.

Others complainants said the ad was likely to cause serious or widespread offence.

In its defence, Paddy Power said "it strongly believed" that its betting offer did not trivialise the issues surrounding the Pistorius case but said that, because of the high level of media coverage of the trial, it was "unsurprising" that complaints had been received.

It insisted its ad was a reflection of public interest, not a commentary on death, violence or disability.

And while it accepted "if he walks" could be ambiguous, it was a play on words and not intended to be offensive.

Paddy Power said it did not intend to offend

The newspaper involved said it did not intend to cause offence to readers, and regretted that it had.

Advertising rules stated that references to anyone who was dead must be handled with particular care.

The ASA said the ad was likely to be interpreted as making light of the issues surrounding the trial, which included the death of a woman who had been shot by her boyfriend.

"We acknowledged that the ad had appeared in the context of a high profile murder trial that had received extensive media coverage and was of interest to the public," the watchdog said.

"We considered it would therefore have been reasonable to foresee that serious or widespread offence was likely to be caused by placing an ad that sought commercial advantage based on that trial and which made light of the sensitive issues involved."

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China's Smog 'Deters Top Foreign Executives'

China's chronic air pollution is now a major reason why foreign executives do not want to work in the country, a survey has found.

A boost in car usage is partially behind the smog problem

According to the American Chamber of Commerce in Beijing (ACC), thick smog that affects many areas is making it difficult for companies to recruit top executives willing to move to Asia.

It said 48% of 365 foreign firms in its annual survey, covering businesses in China's northern cities, said air quality concerns were thwarting the lure of overseas postings senior executives.

The ACC said pollution is "a difficulty in recruiting and retaining senior executive talent".

Chinese parents also fear for the health of their children

It added that the 2014 figure is a leap from the 19% of firms citing smog as a problem in 2010.

But it added China's slowing economy remained the top risk for companies.

Foreign executives and diplomats have voiced increasing concerns about China's pollution.

Off-the-scale smog forces some people to stay indoors

They fear its effects both for themselves and their dependent families.

Almost all Chinese cities monitored for pollution in 2013 failed to meet health standards.

The US embassy in Beijing even has its own monitoring app, which invariably shows higher pollution rates than those issued by the government.

Pilots are to learn how to land through thick smog

Northern China suffers significantly, as it is the industrial base for much of the country's cement and steel production.

Its colder climate also exacerbates the problem, as coal is used for heating.

Beijing is also regularly hit by smog from cars and industry from surrounding areas.

Meanwhile, China's commercial capital Shanghai, in the south, suffers less as a result of air pollution.

The capital Beijing is surrounded by industrial provinces

The ACC's Shanghai branch did not see pollution as a major problem.

Chinese Premier Li Keqiang "declared war" on pollution at the opening of the annual session of parliament earlier this month.

China has also pledged to make 60% of its cities meet national pollution standards by 2020.

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New £1 Coin Is 'Most Secure In The World'

The Chancellor has used his Budget to introduce a major change for the nation's pockets - a new pound coin to be introduced in 2017.

The high-tech coin will have the same shape as the 12-sided threepenny bit and will be the hardest in the world for criminals to copy, the Government said.

"After 30 years loyal service, the time is right to retire the current £1 coin, and replace it with the most secure coin in the world," a Treasury spokesman said.

"With advances in technology making high value coins like the £1 ever more vulnerable to counterfeiters, it's vital that we keep several paces ahead of the criminals to maintain the integrity of our currency.

"We are particularly pleased that the coin will take a giant leap into the future, using cutting-edge British technology, while at the same time paying a fitting tribute to past in the 12-sided design of the iconic threepenny bit."

The threepenny bit went out of service in 1971

Currently, 3% of the current pound coins are fake, meaning a total of more than £45m in circulation are forgeries, according to the Treasury.

Several features of the new £1 coin should make it harder to fake, including its shape and its construction from two differently-coloured metals.

It will be similarly coloured to the gold and silver euro and the £2 coin.

The historic three pence piece, fondly known as the threepenny bit, was in circulation from 1937 until decimalisation in 1971 and was in the first group of coins to feature a portrait of Queen Elizabeth. 

The new coin is similar to the £2 coin in colour

As with all coins now, the Queen's face will be on the heads side of the new coin, but there is to be a public competition to decide the design for the tails side.

The design, which will be roughly the same size of the existing £1 coin, means vending machines and parking meters will have to be overhauled.

But it already has the backing of the Automatic Vending Association, which said the cost for adapting existing machines would be "minimal".

Kelvin Reynolds, of the British Parking Association, added: "Parking operators have long expressed concerns about a rise in counterfeit £1 coins and the inconvenience this causes to motorists when coins are rejected by parking payment machines and the losses incurred as a result."

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Co-op Picks Banks For £600m Pharmacies Sale

By Mark Kleinman, City Editor

The troubled Co-operative Group is set to pay millions of pounds in fees to two City advisers as it prepares the sale of its pharmacies division.

Sky News understands that the mutual, which is reeling from the loss of its chief executive last week, has appointed Rothschild and UBS to sell the UK's third-largest chain of retail chemists.

Insiders said on Wednesday that the Co-op anticipated receiving bids for the unit of somewhere in the region of £600m, meaning that the banks would be in line for fees running to several million pounds.

The sale of the pharmacies business was flagged by Euan Sutherland prior to his abrupt exit as the Co-op's chief executive following the leaking of details of his pay package to a national newspaper.

Insiders said the plan to offload the chemists and the Co-op's much smaller farming operations was unaffected by Mr Sutherland's departure.

The pharmacies unit comprises 750 outlets, employing 6500 staff and serving 200,000 customers a week.

The business has struggled because of cost-cutting within the NHS's prescription drugs budget although it is still profitable, making operating profit of £28.2m on sales of £764m in the year to January 5, 2013.

The Co-op had been due to report its 2013 results next week but said on Wednesday that it would delay its announcement until mid-April.

Lord Myners, the former City Minister who sits on the Co-op board, warned last week in an interim report on the mutual's governance and structure that it risked running out of money without urgent reforms.

He has proposed professionalising the board and abolishing the current structured of elected regional representatives.

The mutual said it was reshuffling its senior executive ranks on Wednesday, with changes across its group of businesses.

Richard Pennycook, the Co-op's interim chief executive, said:

"I am pleased to be announcing these changes to our management team, which mean we are better positioned to tackle the complex issues we face.

"We are focused on the hard work needed to complete the development of our new strategy. This is the right team to deliver that strategy in the interests of all our stakeholders - customers, colleagues and members."

The Co-op declined to comment further on the pharmacies sale.

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Budget 2014: The Key Points You Need To Know

The Chancellor George Osborne has delivered his fifth budget. Here are the key points.

Savings

:: Tax-free ISAs to be boosted to £15,000 per year from July. Junior ISAs up to £4,000 a year.

:: Stocks and shares ISAs can be tranferred to new single ISA scheme.

:: Premium Bonds cap lifted from £30,000 to £40,000 in June, and to £50,000 next year.

:: 10p rate of tax for savers to be abolished.

:: Zero tax band to cover £5,000 of savings.

Reliefs

:: Alcohol escalator to be scrapped for all alcohol duties, instead a rise with inflation.

:: Scottish whisky duty to be frozen as it is "a huge British success story".

:: Cut of 1p in duty per pint of beer.

:: Export finance lending interest rate to be cut by a third and lending doubled to £3bn.

:: From 2015, all long haul air passenger flights carry same, lower, band B tax rate.

:: Right to Build scheme for builders of their own homes including £150m of finance to support it.

:: New £200m fund for councils "to bid for" to fix potholes across Britain.

:: Additional £140m help for flood damage.

:: September's fuel duty rise will not be brought in.

Taxes

:: Duty on fixed-odds betting terminals to rise to 25%.

:: Horse race betting levy to be extended to bookmakers based offshore.

:: Bingo duty will be halved to 10% "to protect jobs and protect communities".

:: Tobacco duty to remain at 2% above inflation and escalator will not be stopped.

:: Increased disclosed tax avoidance schemes scrutiny for the wealthy.

:: City fines over Libor rate-rigging to continue going to military charities and emergency service charities.

:: From midnight anyone buying home over £500,000 through corporate entity to pay 15% stamp duty to "avoid abuse".

:: "We will expand the tax on residential properties worth over £2m to those worth more than £500,000."

:: Private jets, previously not taxed, will see tax levied on flights.

Income Tax

:: Personal tax allowance rises to £10,500 next year, giving average saving of £800.

:: 40p tax rate threshold to rise from £41,450 to £41,865 from next month and then up by further 1% to £42,285 next year.

:: Transferable tax allowance for married couples rising to £1,050.

Pensions

:: All retirees on defined contribution pensions to be offered free, impartial, face-to-face advice.

:: No need for pensioners to buy annuities if they do not wish to.

:: Removal of all remaining tax restrictions on how pensioners have access to their pension pots.

:: Income requirement for flexible draw-down from £20,000 to £12,000, raised cap draw-down limit from 120% to 150%.

:: Lump sum small pot level lifted five-fold to £10,000.

:: Almost doubling total pension savings as a lump sum to £30,000.

:: £20m  to be spent in next two years working with consumer groups over pension advice.

:: New Pensioner Bond paying market leading rates, issued by National Savings and Investments, open to everyone aged 65 or over. Available from January next year.

 

Spending and Welfare

:: Foreign aid to be 0.7% of national income.

:: Public sector spending reduction to reach £1bn by 2015-16.

:: A permanent cap on welfare, excluding state pension, set at £119bn in 2015-16, rising in line with forecast inflation to £127bn in 2018-19.

Growth

:: Independent OBR growth forecast revised upwards to 2.7%, up from 2.4% in Autumn Statement.

:: Growth next year is also revised up to 2.3%, then 2.6% in 2016 and 2017, with growth expected to return to long-term trend of 2.5% in 2018.

:: 1.5 million new jobs forecast in next five years.

Borrowing

:: Deficit this year of 6.6% reduced to 5.5%  next year, then expected to be 4.2%, 2.4% and finally 0.8% in 2017-18. Following year forecast surplus of 0.2%.

:: Expect to borrow £108bn this year, £12bn less than forecast last year. No borrowing from 2018-19.

:: OBR forecasts public debt to be 74.5% of GDP this year; 77.3% next year; peaking at 78.7% in 2015-16 - lower than the 80% previously forecast - before falling to 78.3% in 2016-17, then falling to 76.5% and then 74.2% in 2018-19.

:: The new £1 coin to thwart forgery and "In honour of our Queen".

Jobs

:: Support for more than 100,000 new apprenticeships.

:: New Alan Turing Institute for computing "big data" to boost Britain's IT prowess.

Business

:: New allowance for ultra high pressure, high temperature oil field for North Sea oil and gas.

:: Tax relief of up to 25% for touring theatrical productions.

:: VAT relief on fuel for air ambulances and inshore rescue boat services across Britain, and a new air ambulance for London.

:: Accept recommendation to move collection of Class 2 NICs into self-assessment, abolishing for 5 million people "this wholly unnecessary bureaucracy".

:: Corporation tax - high street stores will get £1,000 off their rates, and businesses the £2,000 Employment Allowance.

:: From next year, corporation tax to drop from 21% to 20% and under-21s taken out of the jobs tax.

:: Business rates discounts and enhanced capital allowances will be extended for another three years.

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