Victory For Consumers On Credit Card Charges  
Ministers will announce today that charging consumers for using credit and debit cards to pay for goods and services will be banned by this time next year.

At the moment, many companies invoke a surcharge on customers who pay by card, particularly low-cost airlines, which were in the vanguard of using the practice. But many other sectors have now jumped on the bandwagon.

People now pay a surcharge on cinema tickets, cars, utility bills, package holidays and even on their tax bill if they use a credit card, which is costing consumers hundreds of millions of pounds a year.

After intervention by Which?, who complained about the fees to the Office of Fair Trading (OFT), ministers have got involved and say that people are sick of being “ripped off” by the hidden charges, hence the pending legislation.

Financial secretary to the Treasury, Mark Hoban, said: “We’re leading the way in Europe by stopping this practice. The Government remains committed to helping consumers get a good deal in these difficult times. Consumers are sick of the rip-off culture and we are determined to do what we can to end it.”

Richard Lloyd, the executive director of Which?, said last night: “The Government’s decision to ban rip-off debit and credit card surcharges is a huge victory for consumers.

“This announcement goes further than the Office of Fair Trading’s proposals, finally putting an end to these unfair charges. More than 50,000 people supported our campaign to see these fees stamped out.

“Given that airline passengers alone pay more than £265,000 a day in card surcharges, businesses shouldn’t drag their feet over this. While the law will come into force at the end of 2012, we want companies to be upfront and fair over card charges today.”

However, it is expected that the ban on fees will be vigorously opposed and it will be an interesting to watch developments between now and next Christmas.

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Christmas Shopping On-Line 
A survey has shown that consumers will spend £186m on-line on Christmas Day, with that figure almost doubling on Boxing Day.

E-retailing group Interactive Media in Retail Group (IMRG) predicts that there will be a 12 per cent increase in on-line spending over the Christmas period than there was in 2010. And price comparison website Kelkoo puts the on-line spend hike at over 16 per cent.

Last year the busiest time for on-line shopping was on Christmas Day, when 1.4 million people visited the Argos website and placed 73,000 orders. The hour between 9.00 and 10.00 that evening saw 100,000 visitors alone.

David J. Smith, chief marketing and communications officer at IMRG, said: "The amount of money consumers spend online every Christmas Day is continuing to show double-digit growth. When you consider that the growth for the same day in 2010 was 26 per cent, the increase is all the more impressive as it is coming from a very high base.

"Although shopping on Christmas Day might not appear to quite be in the Christmas spirit, it is worth considering that many of these sales could actually be associated with popular gifts people have received, such as downloadable content for MP3 players and Kindles."

And Ross Clemmow, director of marketing operations at Argos, said: "On Christmas Day, when the presents have all been opened and the turkey has been eaten, many of our customers' thoughts turn to shopping and the great deals that can be had.

"For some it's about buying practical items for the year ahead – many have received vouchers or money they're keen to spend, while others choose to prepare for the following Christmas well in advance by securing bargains on decorations and lights."

However, many shoppers will still follow the more usual Christmas tradition of queuing in person for their bargains on Boxing Day morning, when an estimated 5.6 million drivers are predicted to hit the roads.

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Cheque Guarantee Cards Won’t Return 
Research from the Payments Council “provides clear evidence that no case exists for reinstating the cheque guarantee card scheme” because almost 90 per cent of users said that their cheques continued to be accepted without it.

In fact, only 40 per cent of consumers who had used their card to guarantee a cheque in the last twelve months were aware that the scheme had actually closed in June.

A Payments Council survey found that over 80 per cent of businesses poled still accepted cheques from customers without a guarantee card, particularly f they knew them. And only one of the 501 businesses that accepted guarantee cards before the scheme closed said that the closure had had a detrimental effect on its business.

Adrian Kamellard, chief executive of the Payments Council said: "We have committed that cheques are here to stay, so we were pleased that the demise of the guaranteed cheque has had little impact on the way people use cheques, nor has it stopped businesses accepting them.”

The cheque guarantee system meant that cheques up to £50 or £100 were honoured by the bank, as long as the card number was written on the back, even if there were insufficient funds in the account.

The scheme was used predominantly by tradesman for small jobs, guaranteeing them payment by often elderly customers. However, t would appear that knowledge of the customer’s bilty to pay is guarantee enough.

Mr Kamellard added: “It’s particularly reassuring to find that older people have taken the change in their stride, however, our research has highlighted that there is a small minority of customers and businesses who might need extra help – so that will be what we’re focussing on next.”

And Andrew Tyrie, chairman of the Treasury Committee, said: “The Payments Council must do more to ensure that banks do not phase out cheques on the quiet."

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Banking Industry To Be Overhauled 
Chancellor George Osborne has confirmed that the Government will implement the recommendations contained in the report produced by the Independent Commission on Banking, chaired by Sir John Vickers.

The recommendations include ring-fencing retail banking from investment banking and requiring banks to hold greater cash buffers against potential loss or future financial crises.

Mr Osborne also announced that the state-owned Royal Bank of Scotland (RBS) would reduce the size of its investment bank, saying that RBS must "go further" in shrinking its global banking and markets division, which was largely blamed for losses that led to the lender's collapse in October 2008.

The Chancellor said: "We believe RBS's future is as a major UK bank, with the majority of its business in the UK and in personal, SME and corporate banking, adding that RBS would have to scale back its "riskier activities that are heavy users of capital or funding".

Mr Osborne said: "Our objective is clear. We want to separate high street banking from investment banking, to protect the British economy, protect British taxpayers and make sure that nothing is too big too fail.
"Second, we will make sure the banks have bigger cushions so they are better able to withstand losses."

While accepting the changes would cost the industry £3.5bn to £8bn a year, Mr Osborne said that the costs would be "far outweighed" by the benefit to the economy of avoiding future financial crises. He said these could reach £9.5bn a year on "modest" assumptions.

However, John Longworth, director general of the British Chambers of Commerce (BCC), said the reforms in themselves would not help the wider problem of businesses gaining access to bank lending.

"Businesses still find it difficult to get access to capital, or capital on reasonable terms, in what is a highly risk-averse environment.

"Given the timescales for the implementation of credit easing, the time may now have come for the government to consider the introduction of an SME bank."

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Small Businesses To Boost UK Economy 
Research suggests that new, technology-based businesses are likely to generate over £360m to the UK economy and create tens of thousands of jobs over the next twelve months.

According to T-Mobile, which commissioned the research, mobile technology is at the heart of the new breed of small businesses, dubbed TOTs by Henley Business School. These are firms that are Twelve months old; have an Optimistic outlook on business; and are Technologically-minded.

Most of these business owners rely on smart phones for emails, diaries and accessing business apps. They also use social networking sites like Twitter, Facebook and LinkedIn to promote products, network with potential customers and get real-time feedback on products and services.

The study goes on to say that such businesses are growing faster than the average start up, with over half of them predicting that they will increase revenues by 30 per cent or more over the next 12 months.

Martin Stiven, Vice President of Business for T-Mobile, said: "It’s clear that Britain is benefiting from these optimistic young firms that have embraced technology and are creating jobs. We must do everything we can to help TOTs continue to be as successful as possible."

Over 90 per cent of TOTs export goods and services to markets around the world, with almost half trading with Western Europe and over 40 per cent with Eastern Europe.

Professor Dominic Swords of Henley Business School, said: “TOTs have made it through the teething phase and have a different mindset that will challenge traditional businesses.

They see opportunities in challenges, showing the benefits of a positive attitude in winning market share and leading a growing business. However, they’re not foolishly optimistic. They’re realistic about the challenges they face, with 82 per cent developing strategies to manage the risks and uncertainties in the future.”

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