Tesco Yet To Hand Finance Chief £1m Payoff

By Mark Kleinman, City Editor

Tesco has not yet handed over a near-£1m payoff to its former finance director just days before a deadline for the UK's biggest retailer to compensate him under the terms of his contract.

Sky News has learnt that Tesco is still to make a "termination payment" of £970,800 to Laurie McIlwee, who resigned as the company's chief financial officer in April amid a strained relationship with Philip Clarke, the then chief executive.

Sources said that the payment, which is due to be made by the end of this month, could be withheld until after the conclusion of an investigation into the misstatement of Tesco's half-year profits by a figure estimated in September at £250m.

Ahead of Tesco's delayed interim results on Thursday, Sky News can also reveal that:

:: Directors are being pressed by leading shareholders to make a swift decision over a timetable for replacing Tesco's chairman, Sir Richard Broadbent, with one source saying an announcement about a succession process could be made as soon as this week.

Tesco's share price has slumped in recent years

:: A key industry survey of supermarkets' relationships with suppliers, handed to retailers by researchers Advantage Group in recent days, rated Tesco poorly against many of its peers, underlining the scale of the task confronting Dave Lewis, the company's new chief executive.

:: Board-level executives at Tesco have been paid at least £75m during the last five years, a period in which its market share has slipped and its share price has also slumped, wiping billions of pounds from its value.

Eight Tesco executives have been asked to stand aside during the investigations into the accounting issues, which largely relate to the timings of payments booked from suppliers.

An update is due to be given on Thursday but the probes are still under way, meaning that Mr Lewis is expected to stop short of a detailed report on the issue.

The profit shortfall is expected to be smaller than the £250m initially feared.

Mr McIlwee, who did not go to Tesco's head office after his resignation, is understood not to have been contacted by Deloitte or Freshfields since they were commissioned by Tesco to undertake their inquiry.

Published earlier this year, Tesco's annual report said Mr McIlwee would cease to be employed by Tesco on 3 October.

"On termination of employment, in accordance with the terms of his contract, Laurie will receive a termination payment of £970,800 consisting of 12 months base salary (£886,420) and benefits (£84,460 consisting of staff discount, private healthcare and health insurance and car and car related benefits)."

The news that the payment has not yet been made comes weeks after Sir Richard's judgement was called into doubt over comments about Mr McIlwee's availability during his notice period.

Tesco refused to comment, while Mr McIlwee could not be reached.

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Government Failing To Deport Foreign Criminals

By Tom Parmenter, Sky News Correspondent

The Government has come under fire from victims of crime for failing to deport hundreds of foreign criminals.

A damning report by the National Audit Office (NAO) revealed 760 foreign national offenders awaiting deportation have absconded and 395 of those have been missing for more than four years.

Some 58 of these offenders are described as "high harm" and present a serious danger to people or property.

David Cameron admitted "the buck stops with me" during Prime Minister's Questions, but he also appealed for support from the other parties over what he called the "obstacles" of human rights legislation.

"We've deported 22,000 foreign national offenders since I've become Prime Minister," he said.

Video: How Police Stop Foreign Criminals

"The report is very clear that since 2013 for the first time we've got a proper cross-government strategy to deal with this."

Home Secretary Theresa May told MPs she is acting to end the abuse of the legal process.

She said: "As the report makes clear, this is a problem that has beset successive governments. It falls to this government to tackle the problems of the past.

"Quite simply, the Home Office did not prioritise the removal of foreign national offenders before 2005."

The report reveals the case of a foreign national whose UK visa had expired, yet authorities took no action over 14 years to remove him.

Even when the Government first began extradition proceedings in 2007 when he was convicted of a string of sex offences, he launched a series of appeals that delayed proceedings for another seven years.

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1. Gallery: Britain's Most Wanted Fugitives

   Dritan Rexhepi is wanted over the deaths of two men in Albania. He's also accused of carrying out a burglary in Belgium, where the home occupants were tied up and threatened at knife point.

2. Pawel Chmielorz was convicted of a string of violent offences in Poland, which resulted in his victims sustaining serious head injuries. He should be serving two-and-a-half years in prison.

3. Robert Grygoruk is wanted for 24 offences including possession of a handgun, producing and supplying amphetamine, supplying 5kg of cannabis, fraud and burglary.

4. Evaldas Rabikauskas is wanted for questioning over allegations he raped an intoxicated girl at a house in Lithuania in 2007. He is believed to have links to Hertfordshire.

5. Ioan Cretu, 36, is wanted for murder alleged to have been committed in Romania in 2005. It is thought he may have links to London, particularly the Waterloo area.

6. Dariusz Glowacki is wanted on suspicion of child rape in Poland. Police say he may be responsible for two other sex attacks and has links to the Acton and Slough areas.

7. Constantin Niciu is wanted in connection with the abduction of two men who apparently refused to take part in a human trafficking operation. They were tied up and beaten with a plank of wood.

8. Costin Stoica is alleged to have been in the company of others who sprayed a woman in the face with a noxious substance before stealing her handbag in Romania in 2002.

9. Krzysztof Zakrewski is alleged to have robbed and beaten a man with an accomplice in Poland in 1992.

10. Serhat Aslan is wanted in connection with the fatal stabbing of a 19-year-old man in Turkey in 2004 following an argument.

11. Michal Smolen is wanted for questioning over an assault alleged to have taken place in Poland in 2009.

It is estimated that public bodies spent £850m in 2013/14 managing and removing foreign national offenders, working out at around £70,000 per offender.

Meanwhile, the number of foreign prisoners has risen 4% from 10,231 to 10,649 since 2006, the NAO said.

The number of those removed has fallen to 5,097 from a peak of 5,613 in 2008/09.

The time it takes to deport an overseas criminal has been revealed to be 319 days.

This comes despite a 10-fold increase in the number of Home Office staff working on foreign national offenders (FNOs), from 100 to more than 900.

Amyas Morse, of the NAO, said: "It is no easy matter to manage foreign national offenders in the UK and to deport those who have completed their sentences.

Video: Romanian Police Fighting UK Crime

"However, too little progress has been made, despite the increased resources and effort devoted to this problem."

Conservative MP Philip Hollobone has long raised concerns about the number of foreigners in UK prisons and failures to deport them.

He said: "Most people will be staggered that despite increasing its staffing for deportations from 100 to 900, the Home Office is not actually deporting any more FNOs than it was before.

"My view is that if you are a foreign national who commits a crime in the UK, you should be caught, convicted and sentenced with your sentence served back in your own country at the expense of your fellow nationals."

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Keystone Pipeline A Nasty Headache For Obama

By Hannah Thomas-Peter, Sky Correspondent In Nebraska

The proposed Keystone XL oil pipeline is one of the most controversial projects on American soil, and a nasty headache for Barack Obama.

He must approve it because it runs across a national border, from Canada to oil refineries in Texas.

Say yes and critics will say he is breaking his pledge to combat climate change.

Say no and he will be accused of being anti-jobs, progress, and energy security.

Keystone XL has come to symbolise the fight over America's energy future

His decision has been six years in the making, postponed multiple times.

Now Keystone XL symbolises the fight over America's energy future, at a time when oil prices have hit a two-year low, driven in part by a North American production boom.

Video: Native American Anger At Pipeline

Speaking at an anti-pipeline concert in Nebraska, musician Willie Nelson told Sky News: "I want the President to be watching what's going on here today, learn something, and do the right thing: stop the pipeline."

In part Mr Obama is waiting to see what happens in Nebraska before he makes a decision.

Although there are many who support the pipeline in this state, the anti-Keystone movement has forced a legal battle over the proposed route, stalling the whole process until the local courts make a decision.

Keystone XL would run for more than 1,000 miles, cutting through Nebraska's prime farmland.

Opponents say they oppose a foreign corporation building a pipe through their land.

Many worry that spills could threaten Nebraska's vast underground reservoir, and that the pipeline would increase global dependence on fossil fuels.

The company building the pipeline is Transcanada.

It says Keystone XL will be one of the safest ever built.

It has promised thousands of jobs, and changed its route to minimise impact on environmentally sensitive areas.

Transcanada's pipeline would start in the Alberta oil sands.

Video: How The Oil Is Extracted

It is the third largest proven oil reserve in the world behind Saudi Arabia and Venezuela, producing almost two million barrels of oil every day.

Cenovus energy company spokesperson Al Reid took us on a guided tour of one of his oil extraction operations.

He said: "Before we even produce oil in Alberta at a facility like this, we go through a two to three-year regulatory process that looks at all the environmental and social aspects of what we're going to do."

But critics say the bitumen underground there is 'dirty' oil.

It needs heating to be extracted and transported which can emit more greenhouse gasses than with other similar fuels.

But a recent State Department report said that building Keystone XL would not have a significant impact on climate change, in part because oil sands development will happen anyway.

Heritage Foundation energy policy expert Nick Loris said: "It's a great idea.

"You have a pipeline that's bringing up to 830,000 barrels of oil a day and it's coming from a safe reliable trading partner.

"Because oil is a globally traded commodity, the more oil we put in the market, the better Americans will be whether that is exported or not."

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Breaking Bad Dolls Pulled By Toys R Us

Toys R Us has responded to calls from Florida mothers and has removed its four collectible Breaking Bad dolls from the shelves.

The dolls are based on the series about Walter White, a high school chemistry teacher who turns into a crystal meth dealer, and his sidekick Jesse Pinkman. The figures have a detachable bag of cash and a bag of methamphetamines.

The toy company said the dolls are being removed immediately from its website and US stores.

"Let's just say, the action figures have taken an indefinite sabbatical," Toys R Us said in a statement.

The retailer had maintained that the figures were sold in limited quantities in the adult-action-figure area of its stores.

Bryan Cranston reacted to the controversy

However, a petition launched on change.org last week said the dolls are a "dangerous deviation from their family-friendly values".

"While the show may be compelling viewing for adults, its violent content and celebration of the drug trade make this collection unsuitable to be sold alongside Barbie dolls and Disney characters," the mother, identified as Susan Schrivjer, wrote.

Bryan Cranston, the actor who played White, responded to the controversy, tweeting, "I'm so mad. I am burning my Florida mom action figure in protest."

The debate has also spurred die-hard adult figure collectors to rally behind Toys R Us.

Daniel Pickett, of Manhattan Beach, California, launched a petition on change.org in favour of the toy seller keeping the dolls. So far, it has collected nearly 3,000 signatures.

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PM Praises 'Northern Powerhouse' Vision

A blueprint to boost the economic might of cities in northern England has won support from David Cameron.

The Royal Society's City Growth Commission report says cities such as Manchester, Liverpool, Leeds and Sheffield should set their own tax, immigration and infrastructure policies in line with Scotland getting greater powers.

The report says the plan could boost UK productivity by 5% annually and increase economic growth by £79bn a year by 2030.

The commission's chair, former Goldman Sachs economist Jim O'Neill, told Sky News that while devolving powers from Westminster was long overdue, the critical issue was solving a "hopeless" infrastructure.

Among the proposals was an Oyster Card for the north, similar to London's integrated transport card, a high-speed tube system and super-fast broadband.

"It's not just about devolving power. More boldness from other authorities including central government is needed," he said.

"Ask anybody that ever contemplates going from Hull to Liverpool or Leeds to Manchester or the other way, our modern infrastructure is just hopeless here compared with many other parts of the world.

Mr Cameron welcomed the think tank's proposals

"Controversially, as we concluded pretty early on, doing something to give a state-of-the-art infrastructure between those close geographic northern cities is probably way more important for them than HS2 in terms of the economic connectivity of the people in those cities."

The devolution aspect - dubbed "devo met" by the commission - could see new powers overseen by a directly elected mayor.

Mr Cameron welcomed what he called the think tank's "northern powerhouse" proposals at Prime Minister's Questions, in the wake of the referendum on Scottish independence and his pledge to devolve more powers to Edinburgh.

"I think Jim O'Neill has done an absolutely first-class job," Mr Cameron said.

"I think there's a real opportunity here... to create a northern powerhouse by looking at how we can use high-speed rail and other infrastructure to link up our great northern cities so that we really have a proper rebalancing of our economy."

The Tories are currently pushing to exclude Scottish MPs from voting in the Commons on English only laws but have no concrete proposals on devolution.

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Apple Warns Users Over Chinese iCloud Attack

Apple has acknowledged the iCloud security threat for the first time, posting a new security warning for users of its online service.

In a post on its support site the technology giant said: "We're aware of intermittent organised network attacks using insecure certificates to obtain user information, and we take this very seriously.

"If users get an invalid certificate warning in their browser while visiting www.icloud.com, they should pay attention to the warning and not proceed."

Attempts to log in to Apple's iCloud service in China have seen users directed to a spoof website which may be harvesting passwords.

iCloud users are being asked to be vigilant

Web connections to the login page are blocked and a dummy site that looks virtually identical is presented instead.

Those using Chrome and Firefox browsers are automatically notified that they are no longer on Apple's website, but users of Chinese browser Qihoo will see no indication of the issue.

Apple said its servers have not been compromised in any way.

Since details of the attacks first emerged, some internet activists have claimed that China is behind them.

However, Hua Chunying, a spokesman for China's foreign ministry, said the government was "resolutely opposed" to hacking.

State-owned internet provider China Telecom added that the accusation was "untrue and unfounded".

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China Growth Weakest Since Financial Crisis

The slump in China's property market contributed to a further slowdown in the country's economic output in the third quarter of the year.

Official figures showed GDP growth at its weakest level since early 2009 during the period, rising by 7.3% on an annual basis.

The performance, while better than some analysts had expected, followed growth of 7.5% in the previous quarter, and the slowdown reinforced expectations that Beijing would announce more targeted stimulus measures.

Communist leaders are trying to steer China toward growth based on domestic consumption instead of over reliance on trade and investment but the deterioration in output growth raises fears of politically dangerous job losses.

Premier Li Keqiang has stated repeatedly that the country can tolerate slightly lower growth.

The Chinese economy - while still growing an an enviable rate - has a number of problems with the collapse in property values currently at the top of the list.

The government took action to help arrest house price declines and falling construction last month by cutting mortgage rates for some home buyers for the first time, though it was too early for the impact of those measures to be felt in the third quarter.

Developers have huge inventories of unsold homes, and increasingly risk-averse banks are wary about financing new mortgages which would only increase their exposure to the weakening sector.

Separate property data for September also released on Tuesday showed that the slowdown had deepened in the quarter, with real estate investment falling compared with a year ago, while revenue from property sales dropped 8.9%.

High infrastructure spending has helped maintain robust employment but that mini-stimulus is now fizzling out - hence the focus now on Beijing's policymakers.

A majority of economists do not see aggressive action, in the form of interest rate cuts, in the short term.

Leaders have previously ruled out massive stimulus as China is still struggling with a mountain of local government debt built up in 2009 when Y4trn (£401bn) was spent to cushion the impact of the global financial crisis.

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Yahoo Nets Profits Boost From Alibaba Stake

A rise in mobile revenues and proceeds from the sale of Alibaba shares helped Yahoo shares gain more than 5% after-hours in New York.

The third-quarter update beat expectations and prompted chief executive Marissa Mayer to launch a defence of her strategy after it came under attack from activist investor Starboard Value.

Crucial mobile advertising revenue was $200m (£124m) and she estimated that gross revenues from mobile would be more than $1.2bn (£770m) this year.

The sale of part of Yahoo's stake in the Chinese e-commerce firm Alibaba yielded $6.3bn, taking profits for the quarter to $6.8bn (£4bn).

But there is concern that Yahoo's total revenue during the three months to September rose by just 1% from last year - a dramatic contrast to the 20% increase posted by rival Google.

Yahoo still owns nearly 384 million Alibaba shares

Yahoo's share of the roughly $141bn worldwide market for digital advertising now stands at 2.4%, down from 3.9% in 2011, according to the research firm eMarketer.

Starboard Value - a New York hedge fund - went on the attack, claiming that Ms Mayer, who took the top job in 2012, had been wasting money on ill-advised acquisitions and a bloated payroll while mismanaging its lucrative stake in Alibaba.

Ms Mayer, a former Google executive, told investors the $1.6bn she had spent during her tenure had made Yahoo more competitive in the mobile-device market.

And she insisted that Yahoo would not have been in a position to make as much money as it had on its Alibaba holdings if she had not taken steps to ease "years of tension and hard feelings" that existed between the two companies.

"This team has now been in place for two years and we've achieved much more than many people realise," Ms Mayer said.

Yahoo still owns nearly 384 million Alibaba shares, currently worth about $35bn (£21.7bn), eclipsing the value of Yahoo's ongoing internet business.

The investment leaves Ms Mayer facing further questions over how the windfall will be spent.

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US Firm Bolsters Ebola Vaccine War Chest

The race to develop the first vaccine to combat ebola has intensified, with a US firm investing a further $200m (£120m) to accelerate testing.

Johnson & Johnson (J&J) said it was aiming to produce one million doses to protect against the virus next year, 250,000 of which are expected to be available by May, if clinical trials in January are successful.

But it warned it would need additional partners to speed up production and its trial programme and that could even mean a collaboration with rival GlaxoSmithKline (GSK) - adding that talks had already taken place.

There is currently no proven vaccine against the deadly disease but several companies are developing products - vaccines which have provided protection against the aggressive strain in monkeys.

Clinical tests on two - from GSK and NewLink Genetics - are already under way with trials also due to begin at the start of 2015.

The World Health Organisation (WHO) hopes that tens of thousands of people in West Africa, including frontline healthcare workers at high risk of infection, can start receiving ebola vaccines from January as part of large-scale clinical trials.

West Africa's ebola outbreak began in March and has killed more than 4,500 people, most of them in Liberia, Sierra Leone and Guinea, according to the WHO.

It believes that up to 1.4 million could have been affected by the virus by 2015.

J&J, which is best-known in the UK for its range of consumer products including soaps and cleaning wipes, has said it would test its vaccine for safety and immune response in healthy volunteers in Europe, the US and Africa.

Its chief executive Alex Gorsky said: "We have an important responsibility as a leading global healthcare company to do all we can to address this urgent unmet medical need."

Mr Mukpo is transported to a medical facility in Nebraska

Meanwhile, US photojournalist Ashoka Mukpo, who was working for American network NBC in West Africa, has recovered from the disease.

He is among eight people to have been treated for ebola on American soil - one of whom, a man from Liberia, had died.

Video: British Troops Leave For Africa

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1. Gallery: The Desperate Fight To Contain The Ebola Outbreak

   A man rests outside the clinic.

2. A woman is comforted after medical officials remove her husband, who is suspected of having the disease.

3. Officials try to prevent themselves from spreading the disease.

4. A local who has just brought his brother to the centre. He had to rely on plastic bags tied around his hands to try to protect himself.

5. A man thought to be infected with ebola waits for treatment.

6. Patients wait to be seen by medical staff.

7. Workers try to decontaminate themselves.

8. A worker with a child who may have caught ebola.

9. A makeshift hand-washing station in Monrovia.

10. Decontaminated boots of medical staff.

11. The basic conditions make containing the disease very difficult.

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Homebase: A Quarter Of Stores To Be Closed

The owner of the DIY chain Homebase is to close a quarter of its stores over the next three years, leaving thousands of jobs hanging in the balance.

Home Retail Group (HRG), which made the announcement as it confirmed its half-year results, said it planned to shut 25% of its 323 stores by 2018 through scheduled lease expirations and sales.

It said a review of the business had found Homebase was saddled with "inconsistent store operating standards" as well as "a large estate with low sales densities that result in a challenged financial model."

The chain, which currently employs 17,000 people, is to lose its managing director Paul Loft in the wake of the findings.

A spokesperson told Sky News: "HRG has announced a three-year plan for Homebase to revitalise the business for the future.

Argos, also owned by HRG, was already getting a digital makeover

"Part of the plan will be to right-size the store estate through scheduled lease expiries and a series of sales to other retailers.

"Once they are identified, our colleagues will be the first to be informed about any of the affected stores, and where possible we will redeploy colleagues to other stores within the Group, or encourage retailers buying our leases to offer roles within their businesses locally".

The transformation to a greater digital offering was confirmed against a backdrop of rising sales at Homebase.

Home Retail said group underlying first-half profit rose 13%, particularly reflecting sales growth at Argos.

Profit before tax reached £30.9m in the six months to 30 August though its full-year result would depend on Argos' Christmas trading, HRG said.

Argos has itself undergone a turnaround, with Home Retail moving away from its traditional catalogue store offering towards digital click & collect.

Argos saw sales from mobile and tablet devices rise by 45%.

Homebase like-for-like sales grew by 4.1% over the six-month period while its improved website helped multi-channel sales rise 12%.

John Walden, chief executive of HRG, said "Homebase is a good business with the basis for future growth.

"In this context, Homebase will pursue a three-year plan through to the end of 2018 to improve the productivity of its store estate, strengthen its propositions and accelerate its digital capabilities by leveraging Argos' investments.

"This will position Homebase as a smaller but stronger business, ready for investment and growth."

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