Household Spending Up But Families Get Less

The average UK household spent £483.60 a week in 2011 - the highest amount ever recorded by the Office for National Statistics (ONS).

Last year's level was £10 higher than in 2010, due in part to increases in transport and housing costs.

However, although the average family's weekly spend hit a record high in cash terms last year, it actually fell when adjusted for inflation.

British households spent £498.20 in 2010 when adjusted for inflation, which means spending fell in real terms by 2.9% the following year.

In cash terms, the highest spend in 2011 was on transport, which rose by 80p to £65.70 per week, driven by hikes in petrol and diesel prices.

Rents rose by 70p to cost families' £40.60 a week in 2011

A rise in spending on cinema tickets, leisure classes and sporting events meant that recreation took up the next highest chunk of families' spending, at almost £64 a week.

Housing, fuel and power represented the third largest amount of households' spending at £63.30 a week in 2011 - a weekly increase of £2.90.

Rents were up by 70p to reach £40.60 and average spending on electricity, gas and other fuels was £22.10 per week - another increase of 70p.

But some types of household expenditure fell in 2011.

Spending on household goods and services was down by £4.10 to £27.30 a week, mainly due to a significant drop in the number of people buying furniture and clothing.

There was a small fall in expenditure on audio-visual equipment - including computers - which edged down by 90p to £6.30 a week.

London had the highest average spend - at £574.90 - driven by high housing and fuel costs.

Spending on audio-visual equipment - including computers - fell last year

Weekly spending was lowest in the North East, where the total came to £384.20, Wales with £398.20 and Yorkshire and the Humber with £410.10.

The ONS said there were "notable differences" in the way people of different incomes chose to spend their money.

The 10% of households with the lowest incomes spent a significantly larger proportion of their weekly total on housing, fuel and power, and food and non-alcoholic drinks than the 10% with the highest incomes. 

Better-off households spent a greater proportion on transport and recreation and culture. 

Differences in income also had an impact on internet access - with just four out of 10 low income families having the internet at home, compared with 99% of the highest income households.

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Sir Philip Green Sells Topshop Stake

By Mark Kleinman, City Editor

Sir Philip Green, the high street billionaire, is to sell a chunk of his burgeoning Topshop empire to outside investors in a move that will cement his reputation as one of Britain's most successful businessmen.

I can exclusively reveal that Sir Philip is in advanced talks about selling a stake of up to 25% of Topman and Topshop. The deal, which is not yet finalised, is expected to value the two chains at close to £1bn, confirming their status as the most lucrative franchises in British fashion.

If completed, the spectacular move will add credence to Sir Philip's ambition of becoming a global retail magnate and will represent the latest in a string of deals which have transformed him as the most powerful man in the UK fashion business.

The buyer of the stake in Topshop and Topman, which will be ring-fenced from the rest of Sir Philip's fashion businesses as part of the transaction, is understood to be one of the joint owners of J Crew, the American clothing business.

Sources close to the talks said the deal was yet to be finalised but that an agreement could be announced as early as this week.

J Crew is owned by Leonard Green & Partners (LGP) and TPG Capital, two big American private equity firms which between them have backed companies such as Debenhams, the department store chain, and Neiman Marcus, the upmarket American retailer.

People close to the situation said that LGP, which is based in Los Angeles, had been in talks with Sir Philip about making an investment in Topshop for some time.

LGP also owns companies in the banking, consumer products and healthcare industries, and this year announced that it had raised a fund of $6.25bn to invest in the coming years.

TPG and LGP bought J Crew for about $3bn in November 2010. J Crew is run by Millard 'Mickey' Drexler, the former chief executive of Gap, one of the most successful US fashion exports of the past 25 years.

The spectacular deal to sell a stake in Topshop will be Sir Philip's most significant business transaction since he failed with his second attempt to buy Marks & Spencer eight years ago.

Since then, the women's fashion chain has enjoyed a period of soaring growth fuelled by its knack of producing on-trend clothing at affordable prices. Its partnership with the supermodel Kate Moss has also kept Topshop in the tabloid headlines and raised the profile of Sir Philip's business.

Sir Philip's latest deal will also mark a decade since he created the Arcadia fashion business following an £800m takeover that set him on the path to becoming one of Britain's wealthiest people. The Sunday Times Rich List reported this year that Sir Philip and wife Tina, the legal owner of the business, were worth £3.3bn.

Arcadia's six other brands, which include Dorothy Perkins and Miss Selfridge, will not be included in the transaction, according to people close to the discussions.

The funds from the stake sale will be used to accelerate Top Shop's international expansion. Sir Philip has been in talks with a wide range of potential investors and partners for several years as he targeted growth in the US and Asia.

Topshop outlets in the US have performed well since flagship stores opened in Chicago, Las Vegas and New York, fuelling the billionaire's ambition to open shops in a much larger number of markets. Earlier this year, he struck a deal with Nordstrom, the New York-listed department store chain, to sell Topshop and Topman-branded clothing in up to 100 outlets.

Sir Philip is understood to be determined that his staff do not see the sale of a stake in Topshop as undermining his commitment to the rest of his brands.

Arcadia employs 43,000 people and is one of Britain's biggest private sector employers. Sir Philip has defended the company's tax arrangements amid the escalating row over corporate taxes because the business is owned by his Monaco-based wife.

He pointed out last month that Arcadia had paid more than £2bn in tax since he acquired the business, including £591m in corporation tax.

Announcing Arcadia's annual results last month, Sir Philip said pre-tax profit had increased before exceptional items from £133.1m to £166.9m in the year to August 25.

Sir Philip also owns the BhS chain, which has struggled amid tough trading conditions on the high street. He has explored a sale of the chain in the past.

Goldman Sachs, Sir Philip's long-standing City adviser, is understood to have been working on the deal to sell a stake in Topshop for at least six months.

Sir Philip refused to comment on the talks to bring a new investor into Topshop and Topman on Tuesday night. LGP could not be reached for comment.

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Ex-FSA Chief Sants In Talks With Deloitte

By Mark Kleinman, City Editor

The former chief executive of the Financial Services Authority (FSA) risks igniting a conflict of interest row by entering negotiations about a job with Deloitte, the accounting firm, just months after he left the City regulator.

I have learned that Hector Sants, who stepped down from the FSA in June, is in talks to become an equity partner at Deloitte. If he accepts the post, he would advise clients across a range of industries including in banking and financial services, insiders said today.

Deloitte, one of the 'big four' accounting firms, has made Mr Sants an offer but he has not yet accepted it and his appointment could fall through, according to people close to the discussions.

People close to Mr Sants said that he was considering a number of options and would not make up his mind about his next move until a period of gardening leave expired at the end of the month.

If he does opt to join Deloitte, it could be controversial given the amount of FSA work channelled through the big accountancy practices in recent years.

Deloitte's rivals were paid millions of pounds for assisting with widely-derided inquiries into the banking crisis, although it is unclear how much Deloitte itself made in fees from the regulator during Mr Sants' five years in charge.

Mr Sants is widely-regarded as an ethical individual whose personal conduct during his career has been beyond reproach.

It is unclear how much Mr Sants would be paid by Deloitte but he would be expected to rejoin the ranks of well-rewarded executives as a member of the partnership at one of the City's most profitable professional services firms.

If he does take the Deloitte role, Mr Sants would be the latest in a string of former executives from the City regulator to accept lucrative posts in the City.

Jon Pain, who headed the FSA's supervisory division, joined KPMG, another member of the 'big four', as a partner in its regulatory practice. Margaret Cole, the head of enforcement at the FSA, now works for PricewaterhouseCoopers, a third member of the powerful quartet.

Mr Sants would also be joining Deloitte at a time when the accounting profession is under intense scrutiny regarding the dominance of its audit work for FTSE-100 companies and across other areas such as tax planning and remuneration consulting.

Prior to joining the FSA in 2004, Mr Sants was an investment banker with Credit Suisse First Boston. He arrived at the regulator during the era of light-touch banking regulation that preceded the crisis of 2008, with banks allowed to operate with minimal oversight and wafer-thin capital levels.

Mr Sants was promoted to be chief executive of the FSA in July 2007, with one of his first decisions being not to raise objections to the takeover of the Dutch bank ABN Amro by a consortium led by Royal Bank of Scotland (RBS).

It was that deal that exacerbated the funding crisis at RBS and led to the bank requiring a £45bn rescue by British taxpayers, along with massive amounts of other Government support.

In 2010, Mr Sants resigned from the FSA following the new Coalition Government's decision to abolish the FSA and fold its responsibilities into two new bodies, one of which will be overseen by the Bank of England.

George Osborne, the Chancellor, persuaded him to stay on as a deputy governor of the central bank while overseeing the FSA's transition to the new regulatory framework.

Mr Sants, who resigned for the second time in March, could not be reached for comment today. Deloitte declined to comment.

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Tesco Confirms It Could Pull Out Of US

Tesco has confirmed a review of its loss-making US operations with "all options under consideration" as it attempts to convince the City on its wider turnaround plans.

The move, which was exclusively revealed by Sky's City Editor Mark Kleinman last night, prompted a 4.6% surge in its share price in early trading.

The plan could see Britain's biggest retailer either close or sell all of its American stores, which trade under the Fresh & Easy brand

Tim Mason, the chief executive of Fresh & Easy, is to leave the company today after a career of over 30 years, Tesco said.

Tesco confirmed too that its battle to retain strong market dominance in the UK remained strained as like-for-like sales, excluding fuel and VAT, fell 0.6% in the third quarter - figures which pile more pressure on the supermarket giant's boss, Philip Clarke.

In his statement confirming the review, Mr Clarke said: "My role is to deliver long-term value for shareholders. Following a year in which my priority for Fresh & Easy was to improve its performance, I have now made a fully informed assessment of its long term potential.

"Whilst the business has many positives, its journey to scale and acceptable returns will take too long relative to other opportunities. I have therefore decided to conduct a strategic review of Fresh & Easy with all options under consideration."

Fresh & Easy currently operates approximately 200 stores employing 5,000 people.

The brand was launched in 2007 but has never made a profit, losing several hundred million pounds overall - £74m in the first half of this year alone.

Kleinman reported that Mr Clarke was already under pressure because of the group's sluggish performance in its home market which resulted in a £1bn transformation programme focused on improving customer service and the availability of fresh produce.

While Tesco had been treading water under its new boss, rivals including J Sainsbury and Waitrose have been performing strongly though there are signs of progress with grocery sales growth outperforming the market.

Regarding Tesco's turnaround attempts, Mr Clarke said today: "I am pleased with the performance of our food business in the UK.

"Our six-part plan is about improving the shopping trip for customers for the long term and this is a positive early sign. We've now refreshed nearly 300 stores, upgraded or introduced well over 3,000 products and added innovations such as Delivery Saver to our already successful online grocery business."

He described general merchandise sales as "not good enough".

Despite the tough non-food trading, Tesco's fightback against its resurgent rivals has not gone unrewarded as market share data from Kantar Worldpanel on Tuesday revealed that Tesco had seen the best sales growth of the "big four" players in the four weeks to November 25 and grew its market share.

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TV Manufacturers Fined For Price Fixing

Six television manufacturers have been fined a record 1.47bn euros (£1.2bn) by EU competition regulators for fixing the price of a key component.

Philips, LG Electronics and Samsung SDI are among those firms affected by the case, which examined the prices of TV cathode ray tubes in two cartels lasting nearly a decade, European Commission (EC) investigators said.

The biggest penalty of 313.4m euros (£254m) was imposed on Dutch-based Philips, and LG was hit with the second-largest fine of 295.6m euros (£240.4m).

The EC said the other companies involved were Panasonic, Toshiba and France's Technicolor.

Taiwanese firm Chunghwa Picture Tubes blew the whistle on the price-fixing and escaped a fine.

The two cartels - one of which involved tubes used for televisions and the other for computer monitors - operated across the world between 1996 and 2006.

During this period, the EC said executives from the companies would discuss how to fix prices at so-called "green meetings", which regularly ended with a round of golf.

EU Competition Commissioner Joaquin Almunia said in a statement: "These cartels for cathode ray tubes are 'textbook cartels': they feature all the worst kinds of anti-competitive behaviour that are strictly forbidden to companies doing business in Europe."

The violations were especially harmful for consumers because cathode ray tubes make-up between 50% and 70% of the total price of a screen, he added.

Cathode ray tubes - which use an electron beam to create the images - have largely been superseded by new display technologies including liquid-crystal display (LCD) and plasma displays.

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Starbucks Close To Deal On Paying More Tax

By Mark Kleinman, City Editor

Starbucks will try to end the damaging row over its UK tax affairs by striking a deal with the Government that it believes will involve paying a comparable level of corporation tax to Costa Coffee, the British-based chain.

The US-owned coffee shops group is close to agreeing with Her Majesty's Revenue & Customs (HMRC) a binding agreement over its UK corporate and tax structures.

The new terms could land Starbucks with a corporation tax bill of in the region of £10m for the current financial year.

In the 14 years since arriving in the UK, the chain has paid just £8.6m in corporation tax.

I have learned that the two sides have been in discussions about whether the agreement will be backdated as a gesture from Starbucks that would reflect its concern over the impact of the recent row on its image among British customers.

Sources close to the talks said that a retrospective application of the new structure was now unlikely.

A full statement will be made by Starbucks before the end of the week.

The company is unlikely to refer directly to Costa's tax bill, but insiders said that it had been "a reference point" in talks between Starbucks and the Government.

Tax experts questioned the premise of that discussion because Whitbread, Costa's owner, operates under a different tax structure.

In 2010-11, Costa paid around £15m in UK tax, while a year later it is expected to have paid £18m.

Costa has about 1479 shops in the UK, some of which are run by franchisees, while Starbucks owns approximately 720.

Multinationals with large operations in Britain, including Amazon and Google, have faced intense criticism in recent weeks over their minuscule UK tax bills.

The light tax burdens have been generated by a practice called transfer pricing, which involves charges being made by companies in the same group based in different jurisdictions, with the effect of depressing profits in the higher-tax jurisdiction.

In Starbucks' case, that relates to the royalty fee paid to a sister company in the Netherlands for the right to use its brand and coffee recipe.

Earlier this week, the Chancellor committed £77m of additional funding to combat tax avoidance and evasion.

The Treasury and Starbucks declined to comment.

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Olympic Stadium: West Ham Poised To Take Over

West Ham United are poised to win the battle for the Olympic stadium after being named as "first ranked" bidder to take over the venue.

The London Legacy Development Corporation board (LLDC) unanimously made the decision in favour of the Premier League club ahead of rivals from Intelligent Transport Services in association with Formula One, UCFB College of Football Business and Leyton Orient.

London Mayor and LLDC chairman Boris Johnson said: "We had four good bids, as everybody knows. The bid that has been ranked top is West Ham United. I am very pleased about that.

"It will, if it goes through, mean a football legacy for the stadium but there is still a lot of negotiation to go on between the LLDC and West Ham United about the terms of the deal."

If the move goes ahead, West Ham would move from their Upton Park home, but the new stadium is not expected to open before August 2015 at the earliest.

The main issue still to be resolved is how future commercial windfalls from the £468m stadium will be split.

West Ham's owners David Sullivan and David Gold will be expected to share the profits from any future sale of the club to ensure the taxpayer is not left out of pocket.

The deal would see West Ham leave their Upton Park home

Other undecided factors include adaptations to the stadium and who bears the cost, and gaining planning permission and appropriate national governing body approvals.

If football use can be agreed, the stadium would be reconfigured to provide retractable and moveable seating so there could be a quick changeover between athletics and football use.

That work is expected to cost £130-£150m, with the bulk funded by public money, including a £40m loan from Newham Council, the local authority.

Mr Johnson said: "There is no deal-breaker as such - it is just a question of making sure that an asset which is a public asset and something that taxpayers put half a billion pounds into, that the value of that is properly reflected in the commercial deal that is now being done with a private sector entity.

West Ham's David Gold and Karren Brady welcomed the decision

"People will understand that my job is to get the best possible deal for the taxpayer."

West Ham said the LLDC's decision "guarantees a true and lasting legacy for east London and the best possible outcome for the British taxpayer".

Vice-chairman Karren Brady said the stadium could become a "multi-use destination of which east London and the nation as a whole can be proud".

"I have never lost sight of our vision to play our part, along with the Stadium's major stakeholders, in ensuring it grows into a global asset. It is the 'jewel in the crown' of the Park, watched by the world," she added.

A previous deal for West Ham to take up the lease collapsed in October 2011 due to legal challenges from Leyton Orient and Tottenham Hotspur.

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