Business Blog

21 April 2013 Last updated at 19:04 ET

Hundreds of business leaders have formed a new lobby group Business for Britain to press the government to renegotiate the UK's deal with the EU.

The group backs David Cameron's plan to remake the UK's agreements with the EU if the Tories win the next election.

Some 500 business chiefs - including Lord Wolfson of Next and Sir Stuart Rose of Ocado - have signed a letter in Monday's newspapers backing the plan.

But other business leaders have said it is not possible to pick and chose.

As the prime minister unveiled his plan to renegotiate the UK's relationship with the EU and then hold an in/out referendum on whether to stay in the EU on those new terms or leave, the British manufacturers' association, the EEF, and the UK head of the accountancy firm Deloitte were among those to express doubts.

They suggested it could create uncertainty and lead to a period of "investment chill".

But in its letter in Monday's newspapers Business for Britain states: "As business leaders and entrepreneurs responsible for millions of British jobs, we believe that the government is right to seek a new deal for the EU and for the UK's role in Europe.

"Far from being a threat to our economic interests, a flexible, competitive Europe - with more powers devolved from Brussels - is essential for growth, jobs and access to markets."

Looser arrangement

The group's co-chairman is Alan Halsall, who heads the upmarket pram making company, Silver Cross. He said he thought the new group was needed because there was a misconception about the attitude of businesses to European Union membership: "Business for Britain has been formed because many would have you believe that business doesn't want politicians to try and renegotiate a better deal from Europe."

He said that the economy would do better with a more flexible, looser relationship with the EU.

John Mills, the founder of online retail business JML and the other co-chairman, said the group was politically neutral: "This campaign is not about taking political sides or backing the right horse - it's about doing what's best for British business."

He said he had been a member of the Labour Party for 40 years.

The lobby group's letter comes a week after a major survey by the British Chambers of Commerce suggested most UK companies wanted to stay in Europe, but with some powers brought back home.

Its survey of 4,000 businesses found 64% of those who responded said they favoured making adjustments to the UK's agreements with the EU.

Employment law was the number one area they wanted opt outs from.

22 April 2013 Last updated at 03:36 ET

German airline Lufthansa has cancelled the majority of its flights scheduled for Monday due to a strike over pay.

The airline said only 32 of its flights would run as planned, out of more than 1,700 originally scheduled.

Flights to and from London, Manchester, Birmingham, Newcastle, Glasgow, Dublin, Aberdeen and Edinburgh will be hit. German airports affected are Frankfurt, Munich, Dusseldorf and Hamburg.

The airline said the strike, the second in two months, was uncalled for.

"It's completely out of proportion," a Lufthansa spokesman was quoted as saying by the Reuters news agency.

"Especially given that four further dates for pay talks had already been agreed upon."

Only 20 of its planned 1,650 short-haul flights are to go ahead, while 12 of its 73 scheduled long-haul flights will do so.

Common tactic

Ground staff have called a one-day strike amid an ongoing pay dispute with the airline.

Like many airlines, Lufthansa is looking to cut costs in the face of stiff competition from low-cost carriers and big Gulf airlines, as well as rising fuel prices.

Last week, Lufthansa rejected union demands for a 5.2% wage increase over the next 12 months.

Strikers are also looking for guarantees over job cuts.

Unions staged a similar one-day strike last month. Short "warning strikes" are a common tactic among German unions, designed to put pressure on wage negotiations.

In a statement on its website, Lufthansa said passengers should expect "massive" flight cancellations and delays that will start to affect long-haul flights from Sunday.

The airline said it was offering free alternative bookings.

22 April 2013 Last updated at 03:30 ET

Sandwich chain Pret A Manger has said it plans to create at least 500 new jobs in the UK this year, as part of a plan to add 1,000 new staff worldwide.

Its announcement came as it reported a 17% rise in profits to £61.1m in 2012, with sales also up by 17% to £443m.

Chief executive Clive Schlee said 2012 had been a "strong year" for the firm.

He also responded to criticism that the firm was not hiring enough UK citizens, saying it had 15% more British employees this year than last year.

The group - which was bought by private equity fund Bridgepoint in 2008 - has 323 stores, mainly in the UK, but with others in Hong Kong, the United States and France. The firm said average weekly sales in Paris were bigger than in any other region.

Pret plans to open another 50 new shops worldwide this year, up from 36 new launches last year.

Earlier this year, London Mayor Boris Johnson said that an increasing number of workers at food outlets like Pret were not "native Londoners".

But Mr Schlee told Radio 4's Today programme: "We've responded to a lot of criticism like that.

"It depends on what market you're talking about. Outside London Pret is predominantly British," he said.

"Inside London it's a much more cosmopolitan economy and our staff reflect the nature of the people in London," he added.

Pret started a school-leaver's programme last year aimed at encouraging more British applicants to join the firm.

22 April 2013 Last updated at 07:22 ET

Reforms to energy tariffs could leave some consumers struggling to identify the best deal for their needs, a consumer group has warned.

Which? said that more than three million households could find it difficult to compare prices under plans to reform tariffs.

It has called for energy prices to be displayed in the same way as petrol prices.

The regulator said that the new system would prompt people to shop around.

'Too complicated'

Regulator Ofgem's proposed tariff comparison rate (TCR) aims to simplify energy tariffs and allow consumers to compare prices across the market.

It would work in a similar way to an APR used by financial services providers.

However, as it is based on medium usage of gas and electricity, Which? said that it would not be a relevant measure for many people.

This would include 500,000 low energy usage households, who could spend over the odds as a result of making their tariff choice based on the TCR.

"These current proposals are far too complicated and will fail to achieve their aim of making it easier for people to find the best deal," said Richard Lloyd, executive director at Which?.

"The government should introduce single unit prices for each energy tariff so people can easily see the best deal for them at a glance. Only then will people have the confidence to switch, injecting much needed competition into the broken energy market."

But an Ofgem spokesman said that the TCR was only one part of the reforms, which also featured a plan to ensure that bills included details of the cheapest tariff available by the start of next year.

Other changes to be introduced this year include:

• a cap on the number of tariffs. Suppliers will only be allowed to offer eight (four for electricity and four for gas)
• an end to multi-tier tariffs (e.g. the first 1,000 units at a higher rate)
• banning price increases during a fixed-term contract.

"Our key goal is to try and get consumers engaged with the market as 70% are currently not taking part," an Ofgem spokesman said.

"Which? is misrepresenting the purpose of the tariff comparison rate and how it fits into the full scope of Ofgem's reform package. The tariff comparison rate acts as a prompt to consumers to take a look at comparative deals."

A spokesman for the Department for Energy and Climate Change said: "We are taking powers in the Energy Bill to ensure these vital reforms are not delayed or frustrated, and will shortly set out government action to bolster what Ofgem is already doing.

"This includes requiring suppliers to provide personalised estimates of potential savings and a tool to enable consumers to compare tariffs on a like for like basis."

22 April 2013 Last updated at 04:04 ET

Online betting exchange Betfair has rejected a £912m takeover approach from CVC Capital Partners and other investors.

Betfair said it had received a preliminary bid proposal last week offering 880 pence per share in cash or investments in a new entity.

But the offer "fundamentally undervalues" the company, said Betfair.

Chairman Gerald Corbett said that the company had a "unique business" that "this proposal fails to recognise".

Betfair said it had received the proposal on Friday from CVC together with investors Richard Koch, Antony Ball and partners.

Earlier this month, CVC said it had held preliminary discussions with the investors about a takeover approach.

Mr Koch, a co-founder of LEK Consulting, holds a 6.5% stake in Betfair. Mr Ball is a non-executive director at Luxembourg-listed investment group Brait.

Their preliminary proposal offered 880 pence per share in cash or an "unlisted securities alternative made up of shares and loan notes in a new entity".

But Mr Corbett said: "We have a unique business with a market position, profitability, cash flow and prospects that this proposal fails to recognise."

Betfair's exchange processes more than seven million transactions a day.

Shares in Betfair, which rose 15% last week, closed at 805 pence on Friday.

22 April 2013 Last updated at 02:59 ET

Boeing has started replacing batteries on some of its grounded 787 Dreamliner fleet, moving a step closer to getting the planes flying again.

It comes after US aircraft regulators approved a revamped battery design.

Problems with the plane's battery had resulted in the entire fleet of the 787s being grounded and deliveries of the aircraft being halted.

Japan's All Nippon Airways and Japan Airlines are among the first carriers that will have the batteries replaced.

All Nippon Airways (ANA) and Japan Airlines (JAL) are the two biggest operators of the 787 Dreamliner.

"We began the work as we have received instructions from Boeing following the Federal Aviation Administration (FAA) approval," a spokesman for JAL said.

"But we have not decided on the timing of the 787 flight resumption."

Ryosei Nomura, a spokesman for ANA, said that the technicians had started installing new batteries on five of its 17 Dreamliner aircraft.

The carriers still have to wait for approval from various regulators before they can start to fly the planes commercially.

Further approval

The FAA, which approved the battery design last week, has said that it will issue a final directive on the Dreamliner this week.

Other international regulators are likely to follow. but it may still be a couple of weeks before flights resume.

The plane is the first in the world to use the lithium-ion batteries, which are lighter, hold more power and recharge more quickly.

But after incidents in which some of the batteries emitted smoke, all of the 50 Boeing 787 planes in service were grounded in mid-January.

The problems sparked a battery fire on a parked JAL 787 at Boston's Logan International Airport and another incident in which battery smoke forced an emergency landing of an ANA 787 in Japan.

The grounding has cost Boeing an estimated $600m (£393m).

Japanese carrier ANA lost some 1.4bn yen ($15m; £9.5m) in revenue through January's disruption alone.