Hundreds of small firms to go bust by Christmas


Business Secretary Peter Mandelson, is being urged to do more to help small businesses

Hundreds of small firms will go bust by the end of the year if ministers fail to deliver quickly on their pledge to increase bank lending, business leaders have warned.

Despite repeated calls for action from Gordon Brown and Chancellor Alistair Darling, it emerged that companies were still suffering from banks doubling overdraft charges and increasing interest rates.

The squeeze on bank lending puts huge pressure on the Government amid public expectation of a return for its £37 billion bailout with taxpayer cash.

Abbey yesterday increased rates by half a percentage point and Mr Brown was facing further embarrassment today as the nationalised northern Rock was expected to axe its tracker mortgages.

As Business Secretary Lord Mandelson prepared for a grilling by the House Of Lords, it emerged he had been personally warned by business leaders yesterday that firms were facing bankruptcy before Christmas.

Read moreHundreds of small firms to go bust by Christmas

Government black boxes will collect every email

Home Office says all data from web could be stored in giant government database

Internet “black boxes” will be used to collect every email and web visit in the UK under the Government’s plans for a giant “big brother” database, The Independent has learnt.

Home Office officials have told senior figures from the internet and telecommunications industries that the “black box” technology could automatically retain and store raw data from the web before transferring it to a giant central database controlled by the Government.

Plans to create a database holding information about every phone call, email and internet visit made in the UK have provoked a huge public outcry. Richard Thomas, the Information Commissioner, described it as “step too far” and the Government’s own terrorism watchdog said that as a “raw idea” it was “awful”.

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National road toll devices to be tested by drivers next year

Trial could lead to £1.30-a-mile charges

Hundreds of drivers are being recruited to take part in government-funded road-pricing trials that could result in charges of up to £1.30 a mile on the most congested roads.

The test runs will start early next year in four locations and will involve fitting a satellite-tracking device to the vehicles of volunteers. An on-board unit will automatically deduct payments from a shadow account set up in the driver’s name.

Paul Clark, the Transport Minister, confirmed yesterday that the trials would proceed despite previous statements from the Government suggesting that it had abandoned the idea of a national road-pricing scheme. In 2004 a feasibility study considered a range of possible prices, up to £1.30 a mile. It said that the highest rate “would be paid by only 0.5 per cent of traffic”.

The on-board unit could be used to collect all road charges, such as congestion charges in London and Manchester and tolls for crossing bridges and using new lanes on motorways.

In the longer term the technology could be used to introduce pricing on all roads, with the price varying according to the time of day, direction of travel and the level of congestion.

Drivers would use the internet to check all their payments on a single bill. They would choose whether the bill showed where they had travelled or simply the amounts they had paid.

Read moreNational road toll devices to be tested by drivers next year

UK energy prices rising twice as fast as EU average


Energy bills in the UK rise faster than in the EU, figures show. Photo: David Sillitoe

Energy prices in Britain in the past year have risen twice as fast as the European Union average, according to latest figures.

Gas and electricity prices in the UK rose by 29.7% in the last 12 months compared with a 15% increase for the EU.

The figures, released by the Organisation for Economic Co-operation and Development (OECD), show bills are up just 14% in France and 12.2% in Germany.

Ed Mayo, chief executive of government watchdog Consumer Focus, said: “The UK energy consumer is being clobbered faster and harder than those in Europe. Other countries may be doing more to keep their prices down and we should learn from them.

“The UK has a relatively free market, but the freedom to cut prices in the early years now seems to be the freedom to raise prices with impunity.

Read moreUK energy prices rising twice as fast as EU average

RBS unveils capital plan as writedown hits £6.1bn

Royal Bank of Scotland (RBS) today revealed that the value of its assets has fallen by £6.1 billion this year as it “regretfully” laid out plans to raise £19.7 billion to prop up its balance sheet.

Related article: Rescued RBS to pay millions in bonuses

RBS hopes to raise £15 billion through offering new ordinary shares to investors at 65.5p each, above today’s share price, which fell slightly to 64.8p.The offer is fully underwritten by the Government so, if investors choose not to buy stock, the Treasury will buy the shares, using taxpayers’ funds.

The lender, which raised £12 billion through a rights issue only four months ago, also said today that it will issue £5 billion in preference shares to the Government, which will buy the stock using taxpayers’ money.

Preference shares mean the Government must be repaid before the bank may pay dividends to shareholders.

RBS revealed this morning that it had written down the value of its assets by a further £206 million in the third quarter, adding to the £5.9 billion it declared in the first six months of 2008. The potential third-quarter writedown of £1.2 billion was reduced to £206 million by an accounting change.

Read moreRBS unveils capital plan as writedown hits £6.1bn

Rescued RBS to pay millions in bonuses

RBS ‘making monkeys’ out of the government, says Vince Cable


Royal Bank of Scotland. Photograph: Newscast

Royal Bank of Scotland, which is being bailed out with £20bn of taxpayers’ money, has signalled it is preparing to pay bonuses to thousands of staff despite government pledges to crack down on City pay.

The bank has set aside £1.79bn to cover “staff costs” – including discretionary bonuses – at its investment banking division for the first six months of the year alone. The same division caused a £5.9bn writedown that wiped out the bank’s profits for the same period.

The government had demanded that boardroom directors at RBS should not receive bonuses this year and the chief executive, Sir Fred Goodwin, is walking away without a pay-off. But below boardroom level, RBS and other groups are preparing to pay bonuses to investment bankers who continue to generate profits.

Read moreRescued RBS to pay millions in bonuses

House prices fall 14.6pc in a year

House prices have fallen for the twelfth month in a row and are now 14.6pc lower than last year, the latest figures from Nationwide show.

Houses for sale: house prices are falling by almost £80 a day, according to Nationwide
The average house price has dropped by £27,000 in the past year, says Nationwide Photo: PA

Prices fell 1.4pc in October and the average house has seen £27,000 wiped off its value in the past twelve months.

The number of completed housing sales has now fallen to its lowest level since the Nationwide series began in 1974, the building society added in its lastest House Price Survey, driving the decline in prices.

The crisis in the financial sector and the latest Government data suggesting a recession is imminent is likely to worsen the housing market slump and has “uncomfortable implications”, Nationwide said.

“A looming recession and continued financial market instability have uncomfortable implications for the housing and mortgage markets, and will undoubtedly affect the pace of recovery in house prices,” Fionnuala Earley, the Nationwide’s chief economist, said.

Read moreHouse prices fall 14.6pc in a year

London suffered its first October snowfall in 74 years as a winter chill set in across England

Snow covers parts of England as winter weather sets in


A blizzard hit Stevenage as temperatures fell across the country Photo: Gary Dowson

Thousands of homes in Bedfordshire, Hertfordshire and Buckinghamshire were left without power after the cold weather damaged high voltage cables.

Supplier EDF Energy said the bad weather has prevented engineers from fixing the problem.

Luton Airport was forced to divert a number of its flights on Tuesday evening while airport workers cleared snow from the runway.

Read moreLondon suffered its first October snowfall in 74 years as a winter chill set in across England

Europe on the brink of currency crisis meltdown

The crisis in Hungary recalls the heady days of the UK’s expulsion from the ERM.

The financial crisis spreading like wildfire across the former Soviet bloc threatens to set off a second and more dangerous banking crisis in Western Europe, tipping the whole Continent into a fully-fledged economic slump.

Currency pegs are being tested to destruction on the fringes of Europe’s monetary union in a traumatic upheaval that recalls the collapse of the Exchange Rate Mechanism in 1992.

“This is the biggest currency crisis the world has ever seen,” said Neil Mellor, a strategist at Bank of New York Mellon.

Experts fear the mayhem may soon trigger a chain reaction within the eurozone itself. The risk is a surge in capital flight from Austria – the country, as it happens, that set off the global banking collapse of May 1931 when Credit-Anstalt went down – and from a string of Club Med countries that rely on foreign funding to cover huge current account deficits.

The latest data from the Bank for International Settlements shows that Western European banks hold almost all the exposure to the emerging market bubble, now busting with spectacular effect.

They account for three-quarters of the total $4.7 trillion £2.96 trillion) in cross-border bank loans to Eastern Europe, Latin America and emerging Asia extended during the global credit boom – a sum that vastly exceeds the scale of both the US sub-prime and Alt-A debacles.

Read moreEurope on the brink of currency crisis meltdown

Police will use new device to take fingerprints in street

Civil rights campaigners say images must not be added to databases


Photograph: Roger Tooth

Every police force in the UK is to be equipped with mobile fingerprint scanners – handheld devices that allow police to carry out identity checks on people in the street.

The new technology, which ultimately may be able to receive pictures of suspects, is likely to be in widespread use within 18 months. Tens of thousands of sets – as compact as BlackBerry smartphones – are expected to be distributed.

The police claim the scheme, called Project Midas, will transform the speed of criminal investigations. A similar, heavier machine has been tested during limited trials with motorway patrols.

To address fears about mass surveillance and random searches, the police insist fingerprints taken by the scanners will not be stored or added to databases.

Liberty, the civil rights group, cautioned that the law required fingerprints taken in such circumstances to be deleted after use. Gareth Crossman, Liberty’s policy director, said: “Saving time with new technology could help police performance but officers must make absolutely certain that they take fingerprints only when they suspect an individual of an offence and can’t establish his identity.”

Read morePolice will use new device to take fingerprints in street