WH Smith to open 16 more post offices in its stores

CWU fears for job losses after hundreds of staff were made redundant when WH Smith took on initial batch of post offices in 2006

WH Smith has walked into a row with post office workers after signing a deal to operate more outlets in its stores.

The retailer expects to open 16 more post offices in its branches, subject to six-week public consultations, under an agreement revealed alongside its annual results yesterday. WH Smith said it has also renewed a contract to operate 82 post offices in its stores for a further five years.

Chief executive Stephen Clarke, who took over from long-term WH Smith boss Kate Swann earlier this year, said the post offices were part of a plan to make the best use of store space and encourage more shoppers to visit.

However, a spokesperson for the Communication Workers Union (CWU) said: "We have grave concerns over WH Smith taking on a further 16 post offices."

Postal workers have been involved in a series of strikes since plans were revealed to franchise around 70 crown post offices, which are currently run by the government-owned service.

The CWU said the deal with WH Smith put the future of post offices at risk. It cited the case of a post office in Runcorn which has now moved to a Tesco store, while another in Grays, Essex, is being temporarily run from a council building.

The union is also concerned about job losses after hundreds of long-term staff were made redundant when WH Smith took on its initial batch of post offices in 2006. However, WH Smith said all staff would be transferred under rules which protect pay and conditions, and no redundancies were planned.

The row overshadowed another rise in profits, in line with expectations, at WH Smith despite falling sales. Pre-tax profits rose 6% to £108m as the company cut costs, improved efficiency and switched to selling more profitable items such as stationery, as sales fell 5% to £1.2bn. Underlying sales, which strip out the impact of new store openings and closures, slid at WH Smith's high street and travel stores, by 6% and 4% respectively, as sales of its core categories – stationery, books and newspapers/magazines – slipped back.

The company expects to open about 40 outlets a year in overseas airports, hospitals and railway stations. In the next half year it will open 20 outlets including its first stores in Russia and Qatar. The company now has 141 international outlets.

It is often criticised for shoddy looking stores in the UK with one Twitter account devoted to picturing its dirty carpets, but Clarke said WH Smith had spent £12m on improvements in the past year and more updates were in the pipeline.

Article Source : http://www.guardian.co.uk

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East coast rail pays out millions in dividends to taxpayers

State-run train service paid out more than £200m in 2012-13 and is expected to return around £1bn over next five years

East coast, the sole state-operated train service in the national rail network, paid more than £200m in dividends and premiums to the taxpayer in 2012-13, figures to be published on Tuesday show.

Industry sources now predict that Directly Operated Railways (DOR), the Department for Transport's arms-length company, will return around £1bn in total to the government over the five years it expects to run the service.

DOR stepped in after National Express handed back the keys two years into the seven-year franchise it won in 2007 to run the long-distance train service from London to Edinburgh.

Action for Rail, a trade union-backed campaign, is pressing to keep the line in public hands. The Labour party has also criticised the government for prioritising the privatisation of east coast in the redrawn rail franchising timetable.

Sir Richard Branson's Virgin has expressed an interest in running the line, along with a host of foreign, state-backed train operators. Last week a French joint venture of Keolis-Eurostar, two companies majority owned by state railways SNCF, confirmed it would bid to run the line.

An invitation to tender will be issued to shortlisted operators in February 2014. The contract is due to be awarded in October next year for a handover in February 2015, just ahead of the next general election. Any delay would give a potential Labour government the opportunity to keep the line in public hands.

Article Source : http://www.guardian.co.uk

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GDP grows 0.7% as UK economy shows steady recovery

Manufacturing and construction estimates were upgraded while GDP figure for second quarter unrevised at 0.7%

Britain's economic recovery is on a steady course after stronger-than-expected growth in manufacturing and construction output offset falls in consumer and government spending during the second quarter of the year.

The Office for National Statistics said GDP was unrevised at 0.7% in the three months to the end of June and the trade deficit narrowed to £5.5bn from £6.3bn in the first quarter, leading several analysts to forecast even stronger growth in the second half of the year.

The improving picture will add to pressure on the Bank of England to explain its new policy of forward guidance, which has set a target for unemployment that it says is likely to be reached in 2016, but could arrive earlier should this year's rise in GDP be maintained.

Chris Williamson, chief economist at the financial data provider Markit, said: "The UK economic recovery gained momentum in the second quarter, and a further acceleration of growth looks likely in the third quarter in what's looking like an increasingly broad-based and sustainable-looking upturn."

The ONS said industrial production rose 0.8%, upgraded from 0.6%, while manufacturing output jumped by 0.9%, up from a previous estimate of 0.7%. Construction output surged 1.9%, up from a prior estimate of 1.4%.

However, Vicky Redwood, chief UK economist at Capital Economics, pointed out that much of the rise in these sectors was accounted for by stock building rather than sales.

The reliance on stock building for growth was emphasised by a more modest rise in household spending of 0.3%, while export growth slipped to 3.0% from the previous estimate of 3.6%.

Redwood said: "The breakdown now looks a bit less favourable than before. In particular, stock building is now thought to have accounted for about a third of the rise in GDP, whereas the contributions from consumer spending, investment and net trade have all been revised down.

"And there are some other slightly disappointing revisions. The annual rate of GDP growth in the second quarter has been revised down from 1.5% to 1.3% and GDP growth in 2012 has been nudged down from 0.2% to 0.1%.

"There are clearly still reasons to be cautious about assuming that the recovery can maintain its recent impressive pace," she said.

Williamson said he recognised that the underlying picture was not all rosy, especially following a steep downward revision to business investment. Instead of growing 0.9%, investment fell 2.7%.

"However, the extent of the revision and the volatility of these numbers should perhaps be seen more as a reminder of how unreliable the GDP statistics can be rather than a genuine cause for concern at this stage."

Annalisa Piazza, a UK economist at Newedge Strategy, said: "Looking ahead, we see chances that GDP might even be stronger, with a 1% quarter-on-quarter [rise] pencilled in for the third quarter.

"That said, the solid performance of UK GDP doesn't seem to convince Bank of England monetary policy committee members that the country needs a less accommodative policy stance.

"In a recent speech, the MPC's Paul Tucker suggested that the UK recovery will remain bumpy. Policymakers are clearly still concerned about the UK's slow productivity growth and the possible negative effects on the labour market. Such a scenario is consistent with the current policy stance."

Article Source : http://www.guardian.co.uk

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