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Published: 7:28PM GMT 22 Dec 2009

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The decision by the Office of Fair Trading to abandon its investigation into excessive overdraft charges was inevitable after it came out on the wrong side of last month’s Supreme Court judgment. More than a million claims for refunds that have been pending since the summer of 2007 are now likely to be rejected by the banks, and a great many aggrieved account-holders are going to be extremely disappointed.

So why did the OFT set off in pursuit of the banks by targeting their contractual arrangements with customers, when the chances of success were always slender? It is hard to avoid the suspicion that it was looking for a high-profile scalp to earn kudos from a Government that has an obsession with regulation. Instead, it has emerged with egg on its face.

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Where do we go from here? People who go into the red should suffer a penalty. If they do not, it is responsible account-holders who end up paying the price, through charges on current accounts (which some banks already impose). That said, there is plenty of evidence that some banks have such opaque and onerous charging mechanisms that their customers are getting a raw deal. There are two obvious things such people can do – arrange an authorised overdraft facility, or change banks. But that is not much comfort to those who have already been hit by high charges.

Overall, this case has exposed a serious gap in consumer protection. The OFT believes banks are imposing unfair charges, but has been powerless to stop them. If the banks have any sense – admittedly, that is a big “if” – they will sit down with the OFT to set up a system of charging that is transparent and not excessively punitive. Our banks have rarely been lower in the public’s esteem. Here is a chance for them to start rebuilding their reputation.

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By Peter Taylor
Published: 5:58PM GMT 22 Dec 2009

The regulator yesterday announced it was dropping the investigation into the fairness of fees on unauthorised overdrafts on the grounds that it would now have “very limited scope and low prospects for success” if it were to continue.

Despite the decision, the OFT said it continued to have “significant concerns about the operation of the market for personal current accounts”.

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“Fundamental changes” were still required for the market to best serve bank customers, the regulator said.

John Fingleton, OFT chief executive, said he was committed to securing significant changes to fees on overdrafts that had not been arranged, “whether through voluntary agreement with the banks or by other means”.

In a move that took the industry by surprise, the Supreme Court last month ruled in favour of the banks in a test case – between the OFT and the major high street banking groups – that was launched in July 2007.

The decision overturned two earlier rulings, at the High Court and Court of Appeal, that overdraft charges were subject to laws regulating unfair terms in consumer contracts.

It was a significant victory for UK banks, which receive about a third of their annual income from operational current accounts through overdraft fees – about £2.6bn.

In an interview with BBC radio this week, Kevin Brennan, the Consumer Affairs Minister, said the Government was forcing state-backed Royal Bank of Scotland and Lloyds Banking Group “to co-operate fully in reaching a voluntary agreement with the OFT on matters such as this”.

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By Rowena Mason
Published: 5:47PM GMT 22 Dec 2009

The business group said that companies needed to take matters into their own hands, after lack of action from the Government and a disappointing deal from global leaders at the Copenhagen climate change talks last week.

It acknowledged that improvements had been made in some areas of the energy industry over the last year, including the new planning system, support for nuclear power, tighter emissions caps under the carbon trading scheme and progress from the aviation and shipping sectors.

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However, the group pointed out that in 20 out of 24 areas the UK was lagging behind the timetable needed to reduce greenhouse gas emissions by 20pc over the next decade.

It is particularly concerned about the slow progress being made in improving energy efficiency among businesses and consumers.

“Following the disappointing outcome to the Copenhagen negotiations, the immediate emphasis must now be on those actions that don’t require global agreement and that bring economic benefits in their own right,” said Richard Lambert, director-general of the CBI.

“Rather than piecemeal plans to tackle energy waste, we are calling for the Government to publish a low-carbon delivery plan to help the UK save energy.”

Bruce Duguid, head of investor engagement at the Carbon Trust, also called on business to make its own changes, despite the political failure at Copenhagen.

“While the signals from Denmark were nowhere near as strong as most business would have wanted, Copenhagen does make clear that there is no turning back on the low-carbon economy,” he said.

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By Anita Brook
Published: 2:19PM GMT 22 Dec 2009

Set up a filing system and start recording everything

The keeping of accounting records isn’t just sensible, it’s a legal obligation. Companies are required to keep all records relating to their VAT returns for a minimum of six years after the tax year they relate to.

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As a minimum, you must record any income earned or expenses incurred by the company, and retain all related documents, including receipts, cheque stubs, invoices, bank statements, PAYE records, and so on.

Of course, piling records in a box until the end of the year will tell you nothing about your situation. You can get a very basic sense of your cash flow by creating two columns (on paper or computer) with one showing income and one showing outgoings.

You can then give each transaction a reference number and mark this on the relevant paperwork, which can then also be stored in date order.

Categorise expenses

To get a clear picture of where your money is going, however, your transactions need to be recorded in a meaningful way. It’s wise to give your ‘expenses’ record a sheet of its own, with columns representing categories such as ‘rent’, ‘utilities’ or ‘stationery’. This will give you an ongoing sense of where you might be overspending, which can inform your daily business decisions.

Keep petty cash in check

It’s very easy to let small receipts pile up in the petty cash box. If you’re regularly forgetting to record these transactions, try making it a rule that you will only replenish the petty cash box by £100 increments, and only when it’s completely empty and all receipts have been filed.

Reconcile your records with your bank statements

It should be possible to reconcile every figure on your book-keeping records with your bank statements. It’s vital to make time each month when your statement arrives to tick off every transaction on your statement before filing it away. This is a great way to pick up on missing receipts, and gives you a consistent monthly deadline to follow for getting your records in order.

Get everything on a computer

Paper records are workable to a point, but the more complicated your affairs become, the longer you’ll spend rifling through papers if something doesn’t add up.

Keeping your records on a spreadsheet, or using book-keeping software, will allow you to see your total transactions in an instant. You will also be able to search for a figure among your costs should a mystery debit appear on your bank statement, and even produce projections based on the average transactions made in previous months.

Put key dates in your calendar

Make sure everyone involved in filing your book-keeping records is aware of the key deadlines for filing accounts with HM Revenue & Customs and Companies House. If you have an accountant, you will also need to enter the date they require your records to be passed to them in order to meet those deadlines.

Put them in your calendar with a reminder set 30 days prior to each date to ensure that you make time to get everything in order without facing a last minute rush.

Commit to updating regularly

Book-keeping as a means to keeping track of your cash flow really only works when done regularly. If possible, make one person in your organisation responsible for gathering and filing receipts and invoices on a daily basis or weekly, and have an assigned slot each week or month when you as a manager can review the transactions and learn from them.

If you really can’t commit to the above, it may be time to call in an experienced bookkeeper. Of course, there will be an expense associated with this, but since it could free up your time, and give you better information with which to make business decisions, it could be worth the investment.

• Anita Brook is director of chartered certified accountancy firm Accounts Assist (www.accountsassist.co.uk)

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By Ben Harrington
Published: 7:19PM GMT 28 Oct 2009

Gossip has been doing the rounds in recent days that RBS may put its insurance business back on the market.

Last year, RBS tried to sell its insurance division for up to £7bn but pulled the auction after bids failed to match the bank’s price aspirations.

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The chatter now is that RBS has asked advisers from Morgan Stanley to look at strategic options for RBS’s insurance division, although people close to the situation played down the tale.

Banks once again bore the brunt of yesterday’s selling on renewed fears that the EU commissioner for competition, Neelie Kroes, will force British banks to sell some of their most profitable divisions to comply with EU competition regulations on state aid.

RBS slipped 1.2 to 39.6p while Lloyds Banking Group fell 3.8 to 80p. Elsewhere, Barclays retreated 20.8 to 319p.

Overall, it was a torrid day in the wider market. Jitters over the strength of the recovery weighed on the FTSE 100, which tumbled 120.55 points to 5080.42. The FTSE 250 also slid 291.78 points – or 3.1pc – to 8849.50.

David Jones, chief market strategist at IG Index, said: “For the moment financial markets have clearly stagnated, with a realisation hitting home that all the warnings of a return to growth being a long and painfully slow process are not just hot air.”

He added: “The huge growth in unemployment on both sides of the Atlantic is certainly hard to ignore, and has clearly affected the latest US consumer outlook.”

Prudential was one of the worst performers, losing 60 to 550½p. Dealers were at a loss for a decent explanation for yesterday’s share price fall as the company’s third- quarter sales results beat some analysts’ expectations.

People familiar with the company said the shares were hit by profit taking and talk that some traders have now started to build short positions in the stock. Others in the sector were also hit by negative sentiment.

Legal & General, meanwhile, slipped 4.8 to 77¾p and Aviva lost 22.7 to 397.8p.

Mining companies were the main drag on the index as base metal prices headed south. Xstrata retreated 91½ to 882p and Kazakhmys lost 111p to £11.13.

Hedge fund manager Man Group lost 30.3 to 301p, its steepest drop since April, as the asset value of its flagship fund dropped. On Tuesday, the Man AHL Diversified Futures fund reported a 3pc decline in net asset value for the past week.

An upbeat note on the property sector from Deutsche Bank failed to buoy the likes of Liberty International. Chris Spearing, analyst at Deutsche Bank, took up coverage of the sector with a positive outlook for the industry. He is expecting “a strong increase in values over the next 12 months as sentiment and liquidity continues to improve”. Liberty, though, slid 28.2 to 451.9p and Hammerson shed 21.9 to 399.1p.

In the travel sector, British Airways slipped 10.4 to 183.3p. Cazenove pointed out that the oil price has risen by about 20pc in the past month. This, according to the broker, is likely to put unwelcome pressure on costs at a time when airlines’ pricing power is weakened by the recession, limiting the ability to recover higher fuel prices.

There were also worries that BA’s merger deal with Iberia may fall apart, although Cazenove points out the consensus view is that the deal will go through.

On a more positive tack, defensive shares, such as G4S, peppered the leaderboard as dealers sought a safe haven for their capital. G4S gained ¾ to 248.2p and National Grid rose 5 to 602½p. Vodafone managed to buck the downward trend as traders chewed over a note from analysts at Royal Bank of Scotland (RBS).

RBS suggested Vodafone should either merge with US rival Verizon Communications or sell its 45pc stake in Verizon Wireless. In a note entitled “Doing nothing is not an option”, Chris Alliott, analyst at RBS, said: “Vodafone shareholders are unlikely to receive full recognition of the Verizon Wireless stake value while the company remains a minority holder.” Vodafone, one of 12 companies to make it onto the leaderboard, ticked up ½ to 138¼p.

The shares were also helped by a relatively upbeat sector note from Barclays Capital, which said the market is underestimating earnings recovery for European telecom operators.

Bid rumours continued to support Smith & Nephew. The shares perked up ½ to 546p.

Among the second liners, Taylor Wimpey was under pressure after UBS lowered its price target to 43p. Mark Stockdale, analyst at UBS, does not believe the company’s UK deferred tax losses other than those relating to the pension deficit will be reflected in the full-year’s balance sheet.

He also thinks a sale of the company’s North American businesses is unlikely to take place in the short term. “Though UK housing data is likely to continue to be positive, we see few catalysts to spur Taylor Wimpey specifically,” Mr Stockdale concluded. The shares fell 4.1 to 35¾p.

In the pub sector, Enterprise Inns retreated 12.8 to 116p following renewed worries the company may be about to launch an equity fundraising. LAIRD Group, which was promoted to the FTSE 250 after Emerald was bought by China’s Sinochem, dived almost 10pc after it confirmed reports that it is carrying out an equity fundraising.

Robert Constant of Cazenove is advising the company on its 1-for-2 rights issue that should raise £89m to help Laird pay down debts. The subscription price is 100p, according to sales documents from Cazenove.

Laird’s fundraising move caught some traders off guard and the shares fell 19.2 to 180p.

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By Duncan Bannatyne
Published: 3:56PM GMT 28 Oct 2009

As usual, I took a sleeping pill and dozed off almost as soon as we were airborne. We were flying with British Airways and I have to say the customer service was excellent and the seats were comfortable enough sleep in for the duration of the flight.

I know my experience is shared by many other people and it reflects a broader trend in the airline industry. It seems that the competition between major operators is intensifying, perhaps as a result of losses sustained in the recession, and standards of comfort and convenience for customers are improving as a result.

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Many premium customers have had to downgrade to avoid blowing their travel budgets, so the need to hang on to the remaining first class and business class customers is more acute than ever; at the same time, people are commonly staying at home rather than flying abroad for holidays, so airline operators are competing for fewer standard class customers with less money to spend on travel.

The struggle for superiority revolves around two key service benchmarks: on-time arrivals and customer comfort. And as there are only a couple of aircraft manufacturers in the world, the onus is on operators to find different ways of marking themselves out as the most comfortable and well-appointed in the market.

Just as the quality of the changing rooms and exercise equipment is paramount in my chain of health clubs, so airline operators are all desperate to offer the best seats. That has been reflected in Virgin Airlines’ fight to protect the disputed exclusivity of its Herringbone design seat for its upper class passengers; Virgin has spent tens of millions on the novel design, which saves space and maximises the number of seats, but it has since been copied by rivals.

Last week, Virgin’s patent application was upheld by the Court of Appeal and, in the meantime, the operator is pursuing legal action against other operators who brought in the seats. This could be disastrous news for those other operators, who face the prospect of stripping their planes of seats and spending time and money on refitting. But it does demonstrate perfectly the lengths to which operators are prepared to go in to in order to compete.

The jockeying for position among rival airline companies will benefit consumers, who can expect to receive a better service at a fairer price, but ironically the running of airports themselves is lagging way behind. BAA owns all main airports in the South East of England and has enjoyed a monopoly on the market, but this week Heathrow Airport was voted the “worst airport in the world” for the second consecutive year, in a survey conducted by the airport lounge service, Priority Pass.

Competition is what’s needed to make the running of airports as slick as that of airline operators. Thankfully, there is change afoot. BAA’s predominant market share of airports in the South East is about to be broken up, as the company has agreed to sell Gatwick Airport – which I personally think is the worst airport in the UK. If the deal goes through as expected, it will help a move towards the airline company model, with increased competition and incentives to improve facilities and services.

That can only be good news for customers like you and me and will make our holiday experiences even better. In the meantime, I’m looking forward to another long sleep on the flight home.

• Duncan Bannatyne is the founder and chairman of Bannatyne Fitness and author of “How to Be Smart with Your Money”

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By Paul Farrow
Published: 1:59PM GMT 28 Oct 2009

The Investment Management Association (IMA) said net sales of £18.7bn had already surpassed the amount sold in 2000 (which held the previous record at £17.74bn), with three months remaining.

Advisers said that investors has turned to investment funds because of the dismal rates of interest they were getting on savings accounts and because of the recovery in the stock market. Leading stock market indices have returned more than 30pc since their March lows.

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The IMA said that equity funds had now taken over from bonds as the most popular asset class. Net retail sales reached just under £1bn for equity-based funds in September, compared to £566m for corporate bond funds. The third quarter saw total net equity sales of £2.4bn, compared to £2.1bn for bonds. It is the first time since 2007 that the quarterly sales for equity funds had beaten bond funds.

Meanwhile, Isa sales totalled £162.3m, the seventh consecutive month for positive net sales, the IMA added.

The figures are in stark contrast to 2008 when the fund management industry suffered its worst year on record as nervous investors withdrew their money from the stock market. Net retail sales amounted to just £3.8bn in 2008 – the previous low was £4.9bn in 2004.

Richard Saunders, chief executive of the IMA, said: “This year will break the record for investment fund sales. Total net retail sales for the year-to-date reached £18.7bn in September. This already surpasses the previous record for a full year, which was in 2000. September is the sixth consecutive month in which net retail sales have topped £2bn.

He added: “Investors are showing an increasing interest in equity funds, after a period in which bonds have dominated. The geographic spread is wide, with significant flows into funds investing other than in the UK.”

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By James Hall
Published: 7:01PM GMT 28 Oct 2009

Lord Harris of Peckham, Carpetright’s founder, said that like-for-like sales in its UK and Ireland stores rose by 5.6pc over the three months to October 24. The figures came on top of a 1.4pc rise over the 13 weeks to August 1.

“I think things are a lot better than they were and we are not unhappy,” he said.

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Lord Harris was cautiously optimistic about the economic outlook, although analysts said the sales increase came on the back of a double-digit decline last year.

“While we remain cautious about the retail market in the balance of the financial year, we have made a solid start,” said Lord Harris.

The Tory donor said that he is “hopeful” the Conservative Party will win the general election next year. “I do not think anything’s a given but I am hopeful. There will still be a fight on our hands even if the Tories win,” he said, adding that he speaks to Tory leader David Cameron regularly and offers him advice. Carpetright fell 14 to 886p.

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By Alistair Osborne and Helia Ebrahimi
Published: 1:10AM GMT 29 Oct 2009

The company said last night that following a meeting between advisers to both transport groups, it decided that it would not be feasible to conclude a successful deal this year, potentially putting its financing in jeopardy. The decision was taken at a board meeting yesterday.

National Express, which has £977m debts, has to refinance around £490m of its loans by next September, and if it fails to launch a rights issue by the end of the year risks breaching banking covenants.

Brian Souter, the Stagecoach chief executive, approached National Express the weekend before last following the collapse of a £765m cash bid by private equity company CVC and Spain’s Cosmen family – National Express’ biggest shareholder with 18.5pc of the stock. Stagecoach proposed National Express shareholders taking no more than 40pc of any combined group.

Last night, however, it emerged that the National Express board, led by chairman John Devaney, had concluded it was “unlikely that a combination with Stagecoach could be successfully executed in 2009, even if appropriate terms could be agreed”.

It added: “Accordingly, to avoid any further disruption to the business and to allow the group to secure the additional equity funding it requires before the end of 2009, all discussions with Stagecoach have now ceased.”

The Stagecoach approach had the backing of the Cosmens but had been characterised by National Express as “highly preliminary”.

National Express warned on profits last week partly due to the performance of its North American operations – a significant factor in the withdrawal of the CVC bid. In that process, the company secured an undertaking from the Cosmens to support any rights issue if its consortium with CVC walked from its proposed 500p offer. The Spanish family would now be expected to back the rights issue – unless another bidder, such as FirstGroup, emerges.

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By Rupert Neate
Published: 10:34PM GMT 27 Oct 2009

However, the shares gained ground later in the day to close up ½p – almost 1pc – at 52½p as investors gained confidence that the publisher of the Yellow Pages is getting closer to agreeing terms with its 300-plus lenders.

The shares, which lost 10pc on Tuesday, have fallen by 29pc since it announced the plan to refinance its £3.8bn debt in September.

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Yell said it had extended the deadline for lenders to agree to its proposals to 5pm today, after it failed to secure a deal by its original deadline of 5pm on Monday.

The media group, which is advised by Deutsche Bank and JP Morgan Cazenove, said the deal has been delayed by the difficulty of securing the backing of such a large lending syndicate. It is understood that the process has been complicated further by about 1pc of lenders being legally required not to vote in favour of the plans.

The company will be forced to ask the courts to enforce its plans if lenders do not agree to its proposals.

Bankers advising on the refinancing said they expect the final remaining lenders to sign up to the scheme before today’s deadline.

Paul Richards, an analyst at Numis, said: “Having delayed for a week, to then come out and say, ‘We are delaying for two days’ is very specific. I think the group must have very high confidence that it will get there on Wednesday.”

Yell, which has been hit by a slump in advertising, plans to reduce its debt to £3.3bn with a £500m equity raising. It then hopes to pay off a further £300m within 18 months.

The directories publisher is offering its lenders a more favourable interest rate on the debt in exchange for their consent to extend its debt maturities until 2014.

Many of Yell’s debts result from a spree of acquisitions, including the €3.3bn (£2.3bn) spent buying its Spanish directories business in 2006.

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