Business Blog

22 April 2013 Last updated at 03:49 ET

Philips, the world's biggest lighting maker, has reported a 38% jump in first quarter LED sales from a year earlier.

The pricey but long-life and energy-efficient bulbs now represent 23% of its lighting sales.

The Dutch healthcare and consumer appliances group said it made 162m euros ($211m; £139m) in the first three months of the year.

Appliances sales were up 10% from a year earlier, but other parts of the business were stagnant.

"We reiterate our view of a slow first half of 2013 due to adverse market trends, especially in Europe and the US," said chief executive Frans van Houten, who insisted that the firm was nonetheless on course to hit its targets for the year.

Healthcare sales fell at an underlying rate of 1% from a year earlier, while overall lighting sales were flat due to weak demand from the construction sector.

One of the parts of the business to do better was its home entertainment division, as losses on its TV sales declined, pushing the unit back into an 8m-euro profit. Philips agreed in January to sell that division to Japan's Funai Electric for 150m euros.

The company wants to focus on its healthcare, light bulbs and home appliances businesses as part of its "Accelerate!" restructuring plan.

The group's profit for the quarter somewhat beat market expectations, and represents a rebound from a sizeable loss in the previous three-month period.

However, income from its continuing operations - excluding its home entertainment division - was down about a quarter from the same period a year earlier.

Philips is looking to boost growth by increasing innovation. On Saturday, the firm announced a new partnership with Swedish medical group Elekta and the Netherlands Cancer Institute to develop new MRI scanners that can be used to guide targeted radiotherapy.

Earlier this month, Philips' lighting division unveiled a prototype LED strip light that would be twice as energy efficient as existing fluorescent lighting used in offices.

22 April 2013 Last updated at 07:12 ET

New proposals to help pub tenants struggling to pay rent or beer prices have been unveiled by the government.

They include a new code of practice and the backing of a "powerful" adjudicator after complaints about abuse of the "beer tie".

So-called "tied pubs" are required to buy supplies - often at high prices - from pub companies that own the pubs.

Half of the "tied pubs" in the UK earn less than £15,000 a year, said Consumer Minister Jo Swinson.

The Department for Business, Innovation and Skills said it hoped that the new proposals would help to save tenants £100m a year.

The code will apply to companies that own more than 500 pubs, to focus on an area of the industry where 90% of complaints are received, it said.

The adjudicator would have the power to enforce the code, investigate breaches and deal with disputes through possible sanctions and fines. The new proposals may also allow tied pubs to have independently picked guest beers.

Pubs under pressure

Business Secretary Vince Cable said: "We gave pub companies every chance to get their house in order. But despite four select committee reports over almost a decade highlighting the problems faced by publicans, it is clear the voluntary approach isn't working."

"Pubs are small businesses under a great deal of pressure, many of which have had to close. Much of that pressure has come from the powerful pub companies and our plans are designed to rebalance this relationship," he said.

Jo Swinson said the government was "committed to stamping out abuse of the beer tie and helping British pubs to thrive".

"It has been a huge concern of mine that pubs, often the hub of our communities, are closing down at an alarming rate. What is also shocking is that the figures show that almost half of tied pubs earn less than £15,000 a year, and struggle to make ends meet because of rising beer prices and rent.

"I have heard about a variety of unfair practices such as large unjustified increases in rent, and am clear that this sort of behaviour is not good enough.

"These proposals will put a fairer system in place and will make sure that tied pubs are no worse off than free-of-tie pubs," she added.

Pubs 'quango'

Dave Mountford, a branch secretary for GMB, the union for tied tenants, said: "The test for tied tenants is whether this code is drafted in such a way that it will bring down rents to the same level as free-of-tie pubs."

"GMB want to ensure that pub [chains] are not allowed to put up rents by the backdoor by overcharging for products tenants are tied to buy from them."

A spokesman for Punch Taverns, the largest bar and pub operator in the UK, said: "We will be looking at the contents of today's announcement in detail, but we remain confused by the government's attitude to pubs.

"This year's Budget provided much-needed support to Britain's pubs, but the government is now proposing a state-backed pubs quango.

"A founding commitment of the Coalition was to reduce regulation, but ministers now seem intent on wrapping Britain's pubs in red tape."

22 April 2013 Last updated at 05:21 ET

Google's executive chairman, Eric Schmidt, has defended his company paying just £6m in UK corporation tax.

His comments came after a committee of MPs last year denounced multinationals - including Google - who pay little tax on their UK earnings, as "immoral".

In an interview to be broadcast on The World at One on BBC Radio 4, Mr Schmidt said his firm invested heavily in the UK and its services boost the economy.

He conceded that "Britain has been a very good market for us".

"We empower literally billions of pounds of start-ups through our advertising network and so forth," he said.

"And we're a key part of the electronic commerce expansion of Britain, which is driving a lot of economic growth for the country."

He added that Google's behaviour reflected the way all big international companies manage their taxes.

"The same is true for British firms operating in the US, for example," he said.

"I think the most important thing to say about our taxes is that we fully comply with the law and we'll obviously, should the law change, we'll comply with that as well."

Chancellor George Osborne, along with leaders in France and Germany, have called for international action to tackle so-called "profit shifting" by multinational companies to avoid taxes.

North Korean trip

Mr Schmidt also spoke about his well publicised trip to North Korea in January, saying his aim had been to plant a "seed" in the minds of government officials that letting the internet into the reclusive state would be necessary to having a "proper country."

"North Korea is by far the most isolated country on earth," he said.

"There's essentially no internet access. There are roughly a million mobile phones, but they don't even have the basic capability of browsing.

"So the average North Korean person is completely cut off from any of the kinds of conversations or knowledge that's going on globally. It's by far the worst such [country]."

But Mr Schmidt could not gauge the North Koreans' response.

"One of the characteristics of the North Koreans is that you can't tell what they're going to do because they don't actually acknowledge what you say," said Mr Schmidt.

He said officials listened to his speech, but that "they don't really answer you".

"The fact of the matter is the North Korean government is particularly good at PR about themselves. And if you look at the PR and essentially the spin and the stuff they say, it's bizarre."

22 April 2013 Last updated at 07:32 ET

The UK government is preparing to sell its one-third stake in Urenco, the world's second-largest provider of nuclear fuel.

The uranium enrichment company is estimated to be worth about 10bn euros ($13bn; £8.6bn).

Business and Energy Minister Michael Fallon said the "time is right" for the sale, adding it made "good commercial sense".

Several buyers are said to be interested in buying the stake.

They include French nuclear group Areva, the Canada Pension Plan Investment Board, and reactor builder Westinghouse.

The remainder of Urenco is owned by the government of the Netherlands, as well as by the German power companies E.On and RWE.

"The decision to proceed towards a sale comes after the government secured agreement from its Dutch and German partners," the UK's Department for Business, Innovation and Skills said.

As yet, no decisions have been taken with regards to how or when the sale will happen.

"Any sale will only be concluded if the government is satisfied that the UK's security and non-proliferation interests can be protected and that value for money is achieved for the UK taxpayer," the department said.

As Urenco owns top secret uranium enrichment centrifuge technology, which the authorities are eager to protect from falling into the wrong hands, all three countries would need to approve any sale of a stake.

21 April 2013 Last updated at 07:33 ET

Former Chancellor Alistair Darling has urged Labour to be cautious about committing itself to future spending plans right now amid a growing debate in the party over the issue.

Reports that Labour has decided to go into the next general election pledging to spend more than the government have been dismissed by senior figures.

Ministers say Labour is "turning left".

Given the uncertain economic picture, Labour should "concentrate its fire" on the coalition, Mr Darling said.

Prime Minister David Cameron has said Labour's plans would return the country "to the mess" it found itself in before the coalition took power while deputy prime minister Nick Clegg said Labour has "retreated into the comfort of opposition" and was promising more "reckless spending, borrowing and debt".

Despite Labour's lead in national opinion polls. there has been unease in certain sections of the party about the lack of detailed policies being put forward and calls for greater clarity about its spending plans should it return to government.

A pamphlet produced by the Fabian Society next week - said to have been discussed at senior levels of the party - will urge Labour to break with the coalition's plans and pledge to spend more in certain areas after 2015.

Shadow chancellor Ed Balls has insisted no decision has been taken on whether, if returned to power in 2015, Labour would stick with the coalition's spending plans - as Tony Blair did for two years after winning the 1997 election.

The Conservatives have said not to do so would be irresponsible and would set back efforts to cut the multi-billion pound deficit.

But Mr Darling - who was chancellor between 2007 and 2010 - said the government's own spending plans were unclear and Labour should not reveal its intentions until it hears what Chancellor George Osborne is proposing.

'Not working'

Mr Osborne will outline spending plans for 2015-6 - the first full year after the next election - in June, with further extensive cuts expected. The government is seeking to cut more than £80bn from public spending between 2010 and 2015 and has said austerity measures will continue to 2018.

"I don't think my Labour colleagues need to take a position (on spending) until we see what the present government is proposing," Mr Darling told Sky News, adding that the current environment was "very uncertain and unpredictable".

"We don't actually know what they are doing. It's very difficult to plan ahead in any sort of sensible way. I think what we are better doing at the moment is concentrating our fire on the government."

Figures to be published on Thursday will show whether the UK grew in the first quarter of this year, or has slipped back into recession, which would be the third downturn since 2008.

'Great triumph'

Mr Darling said Mr Osborne's credibility had been further weakened in recent days by another downgrade to the UK's credit rating, by the Fitch agency, and by a warning from the International Monetary Fund (IMF) that the UK may need to slow the pace of deficit reduction if growth did not pick up.

"How long does the present government simply lumber on and hope something will turn up?" he added.

"What you saw last week were more and more people saying (Mr Osborne's) policy isn't working. I've been saying that for the last three years, and it was pretty unfashionable to do so, but what you're now seeing are respected figures inside and outside the UK calling into question the strategy."

But Mark Field, Conservative MP for the City of London, told Sky's Murnaghan show that Mr Osborne was "getting caught in the crossfire" of a heated political battle about austerity measures in the United States.

"The big test isn't so much what the IMF say but what the markets say," he said.

"The one lesson is that we have kept our interest rates very low. The lesson from 1931 and from 1976 is once you lose market sentiment then really all is lost.

"It has been a great triumph from George Osborne and one he should be rightly proud of."

21 April 2013 Last updated at 09:08 ET

UK Chancellor George Osborne believes the SNP "are tying themselves in knots" over plans to retain the pound in the event of a yes to independence.

He insisted that a currency union could only work as part of a political and economic union.

Scotland's SNP government wishes to maintain sterling in the event of a yes vote in next September's referendum.

Deputy First Minister Nicola Sturgeon said keeping the pound was the "common sense position supported by the facts".

However, in a UK government article published on the HM Treasury website, Mr Osborne and his Treasury chief secretary, Danny Alexander, said the Nationalist plan "did not add up".

They write: "The conclusion is clear. The pound we share now works and it works well. Under independence all the alternatives are second best. So our question to the Nationalists - are you really saying second best is good enough for Scotland?"

The opinion comes ahead of the publication on Tuesday of the UK government's analysis of the implications for the currency of Scottish independence.

The Scottish government has set out plans to retain the pound as part of a "sterling zone" with the rest of the UK.

Economics experts in the Fiscal Commission Working Group, set up by First Minister Alex Salmond, have already concluded keeping sterling as the currency in an independent Scotland was "sensible" and an attractive choice for the rest of the UK.

The article by the two Treasury politicians stated: "This isn't a question of whether or not Scotland could go it alone - of course Scotland could.

"The real question is whether going it alone is the best way for people living in Scotland to realise their aspirations and provide security for themselves and their family.

"We hope very much that people living in Scotland will decide to stay. The United Kingdom has done so much together and can achieve so much more in the future."

It added: "So, if Scotland does vote Yes on 18th September 2014, they [SNP] say they want to hand, to what would become a foreign government, key decisions over the Scottish economy.

"This is one of the big contradictions in their whole economic approach. Campaigning to 'bring powers home' with one hand, while giving them away with the other. Calling for 'full fiscal freedom' with one breath, but calling for a 'full fiscal pact' with the next. It simply doesn't add up."

The senior UK government figures said the UK was a "deeply integrated" single domestic market with a large percentage of Scottish exports being done with the rest of the UK and thousands of people working for the same companies across borders.

'Right for Scotland'

But Scottish government minister Ms Sturgeon said that an independent Scotland using the pound would mean sterling's balance of payments would be "massively boosted by Scotland's huge assets, including North Sea oil and gas - which alone swelled the UK's balance of payments by £40bn in 2011-12".

She added: "At present, the Scottish Parliament controls just 7% of Scotland's revenue base, and that would only increase to 15% under the terms of the Scotland Act.

"With independence, Scotland will control 100% of our revenues, which is what it needs to be able to build a stronger economy and fairer society.

"The combination - which only comes with independence - of keeping the pound, accessing Scotland's abundant resources, and taking decisions on tax and other economic policies that are right for Scotland, is the best way to boost jobs and growth."