Cable Turns Up The Heat On All-Male Boards

By Mark Kleinman, City Editor

Britain's biggest pubs operator and one of the country's largest sportswear retailers are to be targeted by Vince Cable in a renewed focus on bolstering boardroom diversity.

Sky News understands that the Business Secretary plans to write to the chairmen of approximately 30 FTSE-350 companies which have all-male boards more than three years after an initiative was launched to increase the number of women directors.

Among those which continue to have only men on their boards are Enterprise Inns, JD Sports Fashion, 3i Infrastructure and HellermannTyton, an industrial group.

Since Glencore, the mining and commodities giant, became the last FTSE-100 company to appoint a female director earlier this year, the number of all-male boards among the next 250 largest businesses has fallen from almost 50 to 30.

Mr Cable is expected to express frustration that the remaining laggards have not done more to bolster diversity.

His latest intervention will coincide with the publication of a half-yearly progress report on female representation in boardrooms.

New figures due to be published on Thursday are likely to show that only a couple of dozen further appointments need to be made by FTSE-100 companies during the next 14 months in order to meet the original target of 25% female directors by the end of 2015.

The diversity initiative was spearheaded in 2011 by Lord Davies, the former Standard Chartered chairman and trade minister who is among the UK's most respected businessmen.

Mr Cable and Lord Davies have both backed a voluntary approach to the issue, arguing that quotas would do little to address challenges such as the number of women in senior executive posts at major companies.

The Business Secretary is now turning his attention to other areas of diversity in business, arguing recently that ethnic minority representation in boardrooms remains weak.

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FirstGroup Loses ScotRail Franchise

Transport giant FirstGroup has lost its renewal bid for the ScotRail franchise, it has been confirmed.

The company will continue to operate First ScotRail until the new contract starts on 1 April, according to Transport Scotland.

An announcement by Scottish government officials is expected to be made at 9.30am this morning.

The new franchisee for the £2.5bn contract is Abellio, an offshoot of the Dutch national railways.

FirstGroup chief executive Tim O'Toole said: "We are very proud of our success in operating First ScotRail and our team were recognised last week, once again, as Rail Operator of the Year.

"We have kept our promises and more for ten years, delivering record levels of service including during this extraordinary summer in Scotland with the Commonwealth Games and the Ryder Cup.

"Our bid would have delivered even greater levels of service and growth, and we are disappointed we will not have the opportunity to implement the credible plans we submitted, building on our record of improvement across every measurable score, for the benefit of ScotRail's passengers and employees."

The ScotRail loss is another blow to the revenue potential of FirstGroup.

In May, FirstGroup discovered it had lost out on the new seven-year Thameslink, Southern and Great Northern (TSGN) franchise into London, which was won by Go-Ahead-owned Govia.

A week later it was revealed troubled outsourcing firm Serco won a 15-year contract to operate the Caledonian Sleeper.

The overnight service runs from London Euston, northwest England and more than 40 destinations in Scotland, including Edinburgh, Glasgow, Fort William and Aberdeen.

Last year, shares in the company plunged by 30% after it announced a £615m fund-raising rights issue in a bid to reduce its heavy debt burden.

The RMT rail union said the new contract was a "scandalous" development, insisting it was the ideal opportunity to bring the franchise back into public ownership.

And the TSSA rail union described the Abellio win as "a slap in the face for Scots rail passengers".

TSSA boss Manuel Cortes said: "Only a few weeks ago, the Scottish people were promised the power to run a publicly owned railway which would put them first, ahead of private rail firms.

"Now the Scottish government wants to hand that railway to a firm run by Dutch state railways.

"So Scots passengers will now effectively subsidise Dutch rail passengers so fares can be lower over there."

The news comes as FirstGroup released a trading update for the six months to the end of September, with bus revenue expected to rise 2.1% and rail revenue by 6.5% in the period.

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Watchdog To Clamp Down On Payday Loan Brokers

By Mark Kleinman, City Editor

The competition watchdog will on Thursday outline plans for a clampdown on the middlemen who arrange payday loans in an attempt to drive down the cost of short-term credit.

Sky News has learnt that the Competition and Markets Authority (CMA) will announce that it is amending the terms of reference of its investigation into the payday lending sector to include the lead generators responsible for arranging a substantial proportion of the loans made each year.

It is expected to say that it favours changes to their operations that would make them more transparent to consumers.

The announcement will form part of a broader statement by the CMA setting out the provisional remedies designed to improve competition in the under-fire sector.

The watchdog said in June that its board would decide during the summer whether to modify its investigation to include loan intermediaries, and sources indicated on Wednesday that it had opted to do so.

Simon Polito, the CMA director leading the probe, said in June: "We found that 40% of new online borrowers take out their first loan with a lender via a lead generator, but the way in which these companies earn their money – by selling customer applications to the highest bidder – is often not made clear on their websites and some customers are unaware that these companies are not actually providing the loan.

"We want customers to know who they are really dealing with, and the basis on which their applications are being matched with lenders, so that they can make informed choices."

One insider said that the CMA had also begun discussions with prospective creators of a new independent price comparison website for the payday lending industry, underscoring the regulator's commitment to making such a measure a central part of its final recommendations.

The CMA, which has said that its proposed reforms could save the average customer £60 each year, declined to comment ahead of its announcement.

Its proposals, which represent the penultimate phase of its investigation, will come at a time of unprecedented turbulence for the sector.

Wonga, the UK's biggest provider of short-term credit, has in recent weeks been forced to write off £220m of loans following discussions with the Financial Conduct Authority (FCA) about some of its business practices.

The company also reported a slump in profits and this week had one of its advertisements banned by watchdogs because it had failed to set out clearly the cost of its loans.

The FCA has already forecast that its own reforms, including a daily 0.8% cap on the cost of loans, will lead to a radical reduction in the number of short-term credit providers.

It is consulting on those proposals and is expected to confirm them early next month ahead of their introduction in January.

The FCA has already forecast that its own reforms, including a daily 0.8% cap on the cost of loans, will lead to a radical reduction in the number of short-term credit providers.

It is consulting on those proposals and is expected to confirm them early next month ahead of their introduction in January.

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Wonga Ad Banned Over Interest Rate Omission

A television advertisement for under-fire payday lender Wonga has been banned by the industry's watchdog.

The Advertising Standards Authority (ASA) found the commercial, featuring a man writing car repair figures on a napkin before calculating costs, did not include the interest rate payable.

A complaint about the advert had been lodged by the charity Citizens Advice.

The script said that customers would "save money", but the ASA deemed this a comparison with other short-term lenders.

The decision by the watchdog means it cannot be broadcast in its current form again.

Citizens Advice has now had five companies' adverts banned by the ASA, over opaqueness in the true cost of short-term loans.

Wonga and other lenders have been heavily criticised in recent months over the annual percentage rates (APR) charged.

On its website the company makes clear its APR is almost 6,000% if the short-term loans are not paid in full, on time.

Citizens Advice chief executive Gillian Guy said: "Payday loan adverts that break the rules should be taken off the air.

"Adverts must be clear about what taking out a loan means and how much it will cost.

"The consequences are really serious when payday lending goes wrong. High interest rates and fees can mean that a small loan balloons into a huge debt."

This year has been an annus horribilis for Wonga, and the wider sector.

In September Wonga revealed its full-year 201 profit fell by 53% to £39.7m, after it set aside a provision of £18.8m to compensate 200,000 customers over technical problems and the tactic of sending fake legal letters to those in default.

And last week it wrote off the debts of 330,000 customers after admitting it lent money to people who could not afford to pay back borrowings.

The company's new chairman Andy Haste said the company needs "real and urgent" change to make Wonga an "accepted business".

He added: "We want to ensure we only lend to those who can reasonably afford the loan in question."

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Tool Hire Group HSS Joins City IPO Queue

By Mark Kleinman, City Editor

The British tool hire chain HSS is joining the queue of companies lining up for a London stock market listing even as choppy markets prompt others to postpone flotation plans.

Sky News has learnt that HSS' owner, Exponent Private Equity, is in the process of selecting banks to work on an initial public offering that would take place sometime next year.

Insiders said that Exponent was confident of achieving a premium valuation for HSS, which has benefited from the broader recovery of the UK economy, although the precise timing of a flotation would depend on market conditions.

In recent weeks, Miller Homes, the housebuilder, has called off a planned IPO, citing market volatility, although other companies, including Aldermore and Virgin Money, are pressing ahead.

Concerns about the widening impact of the ebola virus and global economic growth have triggered renewed anxieties among investors.

Analysts said that if HSS does pursue a listing, it could be worth around £600m.

Exponent acquired HSS, which trades from 250 sites in the UK and Ireland, in October 2012 from a shareholder consortium that included Och-Ziff, a US hedge fund, and Aurigo, a vehicle set up by Archie Norman, the chairman of ITV and former Conservative MP.

It has expanded both organically and through acquisitions, buying UK Platforms, a nationwide hire company supplying electric and diesel powered access products to the construction and signage industries, last year.

HSS is focused on serving business customers, with 90% of its revenues coming from clients such as Heathrow Airport and Sainsbury's.

The company has been a beneficiary of the growing trend for companies to outsource non-core activities and in contrast to some peers, has positioned itself in the 'operate and maintain' segment of the market.

Announcing half-year profits of £15.3m last month, up 35% on the previous year, Chris Davies, HSS chief executive, said: "The group has achieved a strong first half performance, with our long-term strategy continuing to drive revenue and EBITDA growth.

"In all customer groups, regions and product categories we have achieved organic growth - supplemented by positive contributions from our specialist acquisitions."

Exponent declined to comment on Wednesday.

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EDF Go Ahead for Hinkley Point Nuclear Reactor

French energy giant EDF has been given approval to build a new nuclear power station at Hinkley Point in north Somerset, it has been confirmed.

The new-build power station is part of a plan to replace 20% of Britain's ageing nuclear power infrastructure.

Approval for the construction has been confirmed by regulators at the European Commission, following prior approval by Competition Commissioner Vice-President Joaquin Almunia.

The EU examined the bid over concerns the UK Government was giving excess help to the plan.

Mr Almunia said: "After the commission's intervention, the UK measures in favour of Hinkley Point nuclear power station have been significantly modified, limiting any distortions of competition in the single market.

"These modifications will also achieve significant savings for UK taxpayers.

"On this basis and after a thorough investigation, the commission can now conclude that the support is compatible with EU state aid rules."

Britain has previously estimated the new build cost at £16bn but some forecasts have put the total price up to £25bn.

The EU said that under treaty rules, member states are free to determine their energy mix.

It said that the UK has decided to promote nuclear energy and this decision is within its national competence.

However, it insists that when public money is spent to support companies, the commission has the duty to verify that this is done in line with the EU state aid rules, which aim to preserve competition among member states.

Known as Hinkley Point C, it will replace the A station, which is being decommissioned, and the operational B station.

Video: Nuclear Deal 'To Boost Industry'

It is the first in a new generation of UK nuclear power stations.

EDF had earlier said: "A new nuclear power station at Hinkley Point will not only provide a clean, secure and affordable source of electricity for around five million homes, but it will also provide around 900 jobs at the new power stations for more than 60 years."

The lengthy building programme is expected to create 25,000 jobs for almost a decade.

The industry's trade body head, Lord Hutton of Furness, welcomed the decision and said: "The Nuclear Industry Association is pleased the deal for Hinkley Point C has been approved.

"This is an important step in securing the UK's home-grown low-carbon electricity generation while adding jobs and prosperity to the economy."

:: EDF Energy CEO Vincent De Rivaz will be interviewed by Ian King Live tonight at 6.30pm.

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Nick Clegg: Tories Plagiarised Our Tax Policy

By Faisal Islam, Political Editor

It seems a long way from the agreeable TV debate star, to Rose Garden love-ins and that new politics.

And on Wednesday, Deputy Prime Minister Nick Clegg will attempt what seems impossible: to get Britain to agree with him, or at least his party, once more.

He sat down with Sky News to explain how.

First, a tax allowance rise which will mean a £100 tax cut for 29 million people from 2016.

If it sounds suspiciously like Prime Minister David Cameron's tax cut, then Mr Clegg says it's because the Tories "plagiarised" the policy.

Video: Davey: 'I Don't Fancy Either'

"I had to fight tooth and nail against David Cameron and George Osborne, who kept saying to me privately: 'This is your tax cut. If you want this Nick, you are going to have to do this, that or the other'," Mr Clegg said.

"In all the budget negotiations, getting it up to £10,000 and then £10,500 was something I had to press very hard (for)."

The difference: the £1.5bn cost will be funded by capital gains and other tax rises on the wealthy.

Taking millions out of the tax system since 2010 is central to Mr Clegg's pitch.

But I asked him how it was that the tax allowance cut, effectively of £12bn compared to his 2010 VAT tax rise, of, yes £12.5bn.

"I've been very open about the fact ... that we can't pretend and longer that you can balance the books by gouging out more and more money from public spending alone," he said.

On the floor of the Liberal Democrat conference there was a defeat for the leadership on airports policy.

Specifically, maintaining a policy of refusing further growth in runways on England's South East, rather than accepting expansion at London Gatwick.

It was a difficulty rather than a disaster. But it was emblematic of two problems.

The grassroots still retaining greener, more left wing credentials than the leadership, and the shadows of a coalition negotiation.

Would Mr Clegg still have entered coalition knowing that months before the election he'd be stuck at 7% to 8%.

"Yes, 10 times over, 100 times over, 1,000 times over," he said.

"Liberal Democrats are a political party. We're not a think-tank or a discussion group. We want to change this country for the better."

Mr Clegg also called for the Prime Minister to stop dragging his feet over a TV debate.

But Mr Clegg is oddly serene. It has been a serene conference with little of the torpor of Manchester, not the splits and defections that we saw with the Conservatives in Birmingham.

But perhaps the Titanic en route to the iceberg was also rather serene.

The great hope according to Norman Lamb: a major new announcement on mental health.

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