Households Raid Savings At Record Rate

By Ed Conway, Economics Editor

Households are pulling money out of their savings accounts at the fastest rate in modern record, according to Bank of England figures.

In the past year, families have withdrawn £23bn from their long-term savings accounts to convert into cash and put into current accounts - the equivalent of around £900 for every household in the country.

It is the most dramatic evidence yet that Britons are paying for the rising cost of living by raiding their savings accounts.

Analysis of the Bank's figures by Sky News shows that in the year to October, the amount of cash in time deposits and cash ISAs fell by 4.7%, while the amount families have in their instant access current accounts or in their pockets rose by 11.2% - some £71bn.

According to economists, the shift of cash is the biggest since comparable records began in the 1970s, and reverses much of the sharp increase in saving that happened at the height of the recession.

On Thursday, the Chancellor's Autumn Statement is expected to focus on measures to help households deal with the rising cost of living, including energy bills.

Since the recent recession began, millions of workers have suffered repeated effective pay cuts as inflation has outstripped pay rises.

As well as paying for household bills, economists also believe that people's use of savings may have contributed to recent economic growth.

The news comes amid growing evidence that consumers' appetite for spending is on the rise in the run-up to Christmas.

Consumer spending was one of the main contributors to the sharp rise in gross domestic product in the third quarter, and a further strong increase is implied by the Bank's money figures.

But while the figures suggest that the economy is strengthening, they will also be taken as further evidence that savers are being deterred from putting money aside by record low interest rates.

According to new figures from the Bank, the average interest rate on long-term savings accounts has now dropped to 2.4% - the lowest level since comparable records began in 1999.

Some also suspect that with households still facing a significant squeeze as a result of higher living costs, many are having to dig into their savings in order to afford day-to-day items.

Simon Ward, chief economist at Henderson Global Investors, pointed out that on top of the £900-per-household shift of cash out of long-term savings, families have also put £21bn - a further £800 per household - which might normally have gone into savings accounts into their spending money.

"Consumer strength usually reflects increased borrowing but this hasn't been the key factor recently," he said.

"Instead, households have been running down their savings accounts balances, probably in reaction to the pathetic interest rates now on offer.

"Increased spending is lifting growth and incomes, and money is flowing back to other households, in a virtuous circle."

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Man Arrested For Shining Laser At Helicopter

A 46-year-old man has been detained by officers after shining a laser directly at a Metropolitan Police helicopter.

The crew of the helicopter used onboard video equipment to trace the source of the laser, after it was used while the aircraft was near Orpington, southeast London, at 12.40am on Tuesday.

Officers on the ground were directed to the St Paul's Cray area of the town, where the man was arrested.

A laser pen was also recovered at the scene.

The man was taken to a south London police station where he admitted the offence.

He was given a police caution for endangering the safety of an aircraft.

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RBS And NatWest Cyber Monday Meltdown 'Over'

RBS and NatWest have promised further investment in their technical systems after the latest glitch which left customers unable to access their cash across the UK.

Thousands of people vented their anger on Twitter after all the high street banks' systems went down on one of the busiest shopping days of the year, Cyber Monday, for three hours from 6.30pm.

As well as bank cards, there were problems with RBS and NatWest's websites and smartphone apps.

RBS - which owns NatWest - issued a statement on Tuesday morning via the social network saying: "The systems issues that affected our customers last night have now been resolved and all of our services are now back working normally."

The banking group did not believe the IT problems were related to high transaction volumes on Cyber Monday but was unable to give an explanation for the failure in its computer systems following a number of high profile outages in recent years.

It had earlier said on Monday night: "We are very sorry for the system issues that affected our customers this evening. Our customers are reporting that services are coming back on line.

Complaints piled up on Twitter as customers could not access cash

"If customers have been left out of pocket as a result of these system problems, we will put this right.

"If any customer is unable to resolve an issue caused by the disruption, they should get in touch with our call centres or come into a branch in the morning where our staff will be ready to help."

The group said Ulster Bank, which is also owned by RBS, was "partly affected" while several customers in Ireland reported problems.

Reports started to emerge of bank cards being refused at around 6.30pm on Monday.

RBS' apology, along with an earlier tweet about mobile banking problems

One customer from Canterbury, Kent, tweeted: "Natwest down again. Looked like a melt in Londis when my card got declined for milk and tuna."

Josh Barlow, a Sheffield Hallam journalism student, wrote: "This is happening every month if not more and it's getting ridiculous."

RBS and NatWest came under fire in March after a "hardware fault" meant customers were unable to use their online accounts or withdraw cash for several hours.

A major computer issue in June last year saw payments go awry, wages appear to go missing and home purchases and holidays interrupted for several weeks, costing the group £175m in compensation.

The latest meltdown will heap more embarrassment on the banks because it came on so-called Cyber Monday, when retailers are hoping for their busiest day of the year as pre-Christmas shoppers search the internet for bargains.

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Energy Bills: Govt Gives £50 Savings Breakdown

The Government says it has outlined how it will cut household energy bills by £50 - as Ed Miliband prepares to dismiss the plan as "smoke and mirrors".

The Labour leader will insist in a speech today that the "cosy deal" reached with the 'big six' power firms will still see bills going up this winter, saying ministers do not "get" the cost-of-living crisis.

Chancellor George Osborne will announce full details of how the Government will achieve its pledge of reducing energy bills by £50 a year in his Autumn Statement on Thursday.

But a breakdown has been released in advance of that speech, which says £12 of the figure will come in the form of a government rebate.

A reduction of between £30 and £35 will be achieved through cutting green levies, ministers say, while voluntary action by energy companies to cut network costs will mean a one-off £5 saving.

Mr Miliband wants a 'real price freeze'

Some of the large energy companies released statements in the wake of the Government's announcement, detailing how they would contribute to savings.

The energy issue has dominated the political agenda since Mr Miliband promised to freeze prices for 20 months if he wins the next general election.

Mr Miliband is due to launch his attack when addressing staff at the VW National Training Centre in Milton Keynes.

"A lot of people think that David Cameron and George Osborne are trying to catch up with One Nation Labour on the cost-of-living crisis: from pay-day lending to energy bills," he will say.

"But the truth is they are struggling to catch up with the British people who live at the sharp end of an economy where the link between the wealth of our nation and family finances has been broken. That is the cost-of-living crisis that is happening in our country today."

Mr Miliband will say the Autumn Statement should feature "a real price freeze and action to reset the market to stop them overcharging again in the future".

Mr Osborne will reveal the full details of the plan on Thursday

He will add: "It's right that the debate in Britain is now about the cost-of-living crisis. Political leaders need to understand the new challenges our country faces. That is the test of this Government this week. All the signs are that they simply don't get it."

But Mr Osborne has insisted that families will benefit from the plan.

He told BBC's Andrew Marr Show: "There is going to be an average of £50 off people's bills. We are absolutely insistent that this is going to be brought in."

Mr Cameron and Nick Clegg confirmed on Sunday the plan to reduce the burden on consumers by cutting the green taxes, which add £112 to each bill.

The cost of the Energy Company Obligation Scheme, which funds energy efficiency measures for low-income households and makes up the vast majority of the environmental levies, will be halved under the plan.

Around £12 of the £50 savings to bills will come from a reworking of the Warm Home Discount in a £300m deal. The remainder will come by switching the funding for energy measures to general taxation.

A £1,000 grant for energy efficiency measures for anyone buying a new home, which will be funded by a fresh crackdown on tax avoiders, will be included in the plan.

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Glasgow Helicopter Crash: Ninth Body Found

Police say another body has been found inside the Clutha pub in Glasgow where a police helicopter crashed, bringing the total number of victims to nine.

They have also identified a fifth person who died as Samuel   McGhee, 56, from Glasgow.

Deputy Chief Constable Rose Fitzpatrick said: "We can now confirm that Samuel McGhee died during the incident on Friday. Our thoughts are with his family and friends tonight as they are with all those affected by this tragedy.

"Sadly I can also confirm the discovery of a further body within the site. This takes to nine the total number of people who died on Friday night.

Rescue workers are preparing to remove the wreckage of the aircraft

"Our absolute priority has been to locate the bodies of people who were within the pub at the time of the incident and recover them safely. This process takes time, as formal identification procedures have to take place before we can notify relatives and publicly confirm identities.

"We are doing all we can to support the families of those who have lost loved ones. It is essential that we maintain sensitivity and dignity for the families of the deceased."

She added: "This remains an ongoing investigation and search focused on the Clutha Vaults pub. The site is extremely challenging and the efforts of colleagues from the Scottish Fire and Rescue Service and investigators have been painstaking."

The other named victims include PC Kirsty Nelis, 36, PC Tony Collins, 43, and civilian pilot David Traill, 51, who were killed when their aircraft smashed through the roof of the pub in Stockwell Street.

Emergency services at the scene

Gary Arthur, 48, from Paisley, was among the six people who died inside the pub when the ceiling caved in.

The four other victims have not yet been identified. Police have warned that more bodies could be recovered from the wreckage.

Mr Arthur's daughter, Celtic and Scottish women's footballer Chloe Arthur, 18, paid tribute to him on Twitter, writing: "You'll always mean the world to me. I promise to do you proud. I love you with all my heart."

Many of PC Nelis' friends have changed their Facebook profile pictures to a black square cut across by a thin blue line in her memory.

Friends have paid tribute to PC Kirsty Nelis

Andrina Romano said: "For my beautiful friend Kirsty and all others involved. You will never be forgotten and I will miss you every day. Rip."

Today, Scottish Secretary Alistair Carmichael will visit the city to meet emergency service personnel before signing the book of condolence at Glasgow City Chambers.

On Sunday, a service for the victims was held at Glasgow Cathedral, with Scottish Justice Secretary Kenny MacAskill and Deputy First Minister Nicola Sturgeon among those attending.

The Prince of Wales and the Duchess of Cornwall have sent their "most heartfelt thoughts and sympathy to the families of those who were lost or injured in Friday's truly shocking helicopter accident in Glasgow".

A special service was held at Glasgow Cathedral

The Clutha had been packed with more than 100 people watching a ska band when the crash happened at 10.25pm on Friday.

Twelve people remain seriously injured in three Glasgow hospitals.

A total of 32 were admitted and 20 of them have been discharged. The wounded suffered mostly chest, spinal and head injuries as well as fractures and lacerations.

The cause of the crash is being investigated by the police and the Air Accidents Investigation Branch.

Police Scotland Chief Constable Sir Stephen House said: "Until the helicopter is completely removed from the scene and the right people are in the premises and are able to look through the rubble completely and start to clear it, we cannot say about exact numbers.

The mangled wreckage of the helicopter remains embedded in the building

"No one will be putting pressure on them in terms of time but things are proceeding, we are making progress and I know that people want to be reassured of that.

"It may appear that it's not going as fast as people want. The answer is it's painstaking and it's important that everything there is treated with the courtesy and respect it deserves."

The Eurocopter EC135 Type 2 helicopter involved in the crash was one of many that underwent safety checks as a precaution last year, it has emerged.

Police said the aircraft was tested on the advice of its operator Bond Air Services last May after reports of cracks on the machines.

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Energy Firms Reveal New Price Promises

Several of the 'Big Six' energy providers have announced changes to their energy prices, on the day the Government said it would take action to reduce the cost to consumers.

'Big Six' energy provider npower, which recently raised its customer bills by more than 10%, has announced a decision to put a freeze on any more hikes until 2015.

British Gas subsequently announced it would drop prices in 2014. Its announcement was then followed by rival SSE.

The Government has designed a fund that would give a rebate to electricity customers.

Npower chief executive Paul Massara said: "We welcome today's announcement as an Important step in cutting energy costs for our domestic customers. As a result of this announcement we will reduce our bills.

"We are currently calculating how large this reduction will be, and can assure our customers that it will fully reflect the reduction in the costs to our business."

But the promise comes with a caveat - over the cost the company pays for energy sourcing and distribution.

Mr Massara said: "We don't plan to increase energy prices before Spring 2015, unless there are increases in wholesale energy costs or network charges."

Meanwhile, British Gas said its reduction in household gas and electricity prices would start on January 1.

It said the average reduction would be 3.2%, which is equivalent to £41 on average off the annual dual fuel bill.

With the additional £12 customer rebate for the Government's Warm Home Discount (WHD) scheme, the annual saving would be £53 to the average dual fuel customer.

Today's announcement by British Gas means a part reversal of its averaged 9.2% price increase, which was announced on October 17.

In a statement, SSE said: "On the basis of today's announcement and the planned consultation, SSE plans to reduce its household energy prices before the end of its financial year.

"The overall impact of the proposed changes, including the rebate which is expected to apply in Autumn 2014, should lead to a typical dual fuel customer benefiting by around 4%.

"This should equate to a saving of around £50 for a typical dual fuel customer"

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Fears UK Is Paying Taliban Compensation Claims

MPs are investigating whether the Taliban could be claiming compensation from UK taxpayers under human rights legislation, Sky News has learned.

A Ministry of Defence claims report for 2012-13 observes: "There is recent anecdotal evidence that a number of claimants are inflating or inventing claims.

"Claims are also being made a number of years after the supposed event when effective investigations are all but impossible."

Figures obtained by Sky News show the MoD paid out almost £24m in compensation to civilians in the UK and abroad last year compared with £9m in 2012 and £4.4m in 2011.

Many of last year's claims were made by Iraqi nationals, the data shows.

Conservative MP Julian Brazier, a member of the defence select committee which is investigating the claims, told Sky News: "The Taliban themselves who as the enemy will obviously look at any crack they can find in the system to have a go at our guys.

Julian Brazier says the claims will be investigated

"There are these claims out there, some of them pretty spurious but deeply worrying to our military commanders and indeed to the soldiers concerned on some occasions."

The concern within the MoD is that a perceived readiness to pay out quickly in order to calm a situation has encouraged Afghans to try their hand at making fraudulent or inflated claims.

Tom Tugendhat, a former adviser to chief of defence staff General Sir David Richards and ex-governor of Musa Qala in Helmand Province, has experience of having dealt with compensation claims.

He told Sky News it can be difficult to establish the truth, saying: "The problem is that when you get into urban areas it becomes more complicated.

"If, for example, there has been an accident and a vehicle has run over a sheep, clearly the compensation that the British Government will offer is real and the competition for who will get it in some areas can be quite severe.

"Now at times like that, could it have gone to people who weren't entitled? Yes, it certainly could."

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Glasgow Helicopter Crash: At Least Six Dead

Police and firefighters working to try to rescue people from the wreckage of a pub hit by a helicopter say they have made contact with survivors inside.

The police aircraft came down on the Clutha Vaults pub in Glasgow, which was packed with more than 100 people at the time who were  listening to a band.

Sky News sources have confirmed there have been fatalities and earlier Scotland's First Minister told people to prepare for the worst.

Firefighters on the roof of the pub this morning

Grace MacLean, who had been inside the pub when the helicopter struck, told Sky News: "Someone started shouting and the band cut the music ... and then all of a sudden this cloud of dust came.

"You couldn't breathe for inhaling a mouthful of dust. You couldn't see anything. You were clawing at the walls to see where the exit is."

Police said that 32 people, with "multiple types of injury" had so far been taken to hospitals across the city - Victoria Infirmary, Glasgow Royal Infirmary and the Western Infirmary - following the crash at 10.25pm on Friday.

The Police have given no details of what has happened to the crew of two officers and a civilian pilot on board the helicopter.

Firefighters said they had made contact with people trapped inside the Clutha bar but said it was difficult to tell how many were inside because the building was "very unsafe".

Assistant Chief Officer Lewis Ramsay said: "We've had some contact and we're working away just now to make sure that the building is safe in order to get people out.

Two police officers and one civilian pilot were on board the helicopter

"We are determined that we are going to get the building stable and we will be in there to carry out those rescues."

There are 125 firefighters working at the scene and rescue services have brought in sniffer dogs to help find those still inside.

Those who helped at the scene told how they worked to form human chain to carry unconscious people out of the pub. Among them was Labour's international development spokesman Jim Murphy, who told Sky News: "I just saw dozens and dozens of people coming out of the pub. It is a horrible, horrible scene."

It is still unclear what caused the crash, with one eye witness saying the aircraft "dropped like a stone" and police have now launched a full investigation into the crash under the direction of the Crown Office and Procurator Fiscal Service. 

Investigators from the Air Accident Investigation Branch (AAIB) were on the scene on Saturday morning trying to piece together what had happened.

Deputy Chief Constable Rose Fitzpatrick said: "Our thoughts are with all those who have been affected by this incident and we are continuing work with our colleagues in the Scottish Fire and Rescue Service and the Scottish Ambulance Service to recover people from the scene.

Those inside the pub gather outside after the crash Pic: Paul Agnew

"A full investigation is now underway however at this early stage it is too early to provide details on why the helicopter came down. There were three people on board the helicopter - two police officers and a civilian pilot and on a busy Friday night, there were a number of customers in the bar.

"We are working hard to recover people still inside the building and we will make further details available when we have them."

The helicopter, a EC135 T2, which is widely used in the police force, has a good safety record with one incident in 2007 after which the AAIB asked manufacturers Eurocopter to look at a stability system switch.

First Minister Alex Salmond said that given the scale of the Glasgow helicopter crash, "we must all prepare ourselves for the likelihood of fatalities".

Gordon Smart, editor of the Sun's Scottish edition, saw the crash from a multi-storey car park nearby.

He told Sky News: "I thought it was a plane that was going to crash. I looked up at the sky and I could see the helicopter falling, tumbling ... and then there was an eerie silence for the last part of the fall.

"But the thing that was disturbing and shocking was there was no explosion. I couldn't understand why a helicopter would fall from that height and not explode. To see the angle, the speed and the trajectory of the fall ... it was a horrific sight."

The Clutha is situated in Stockwell Street in Glasgow

Members of Esperanza, the band playing at the time, all escaped from the wreckage unharmed. They posted on their Facebook site: "Best wishes to everyone from tonight...Hope everyone who got out managed to get home or somewhere safe to stay. To everyone who was injured...please get fixed soon. And please please please let us know of the people who we haven't heard from yet...hope they're found ok."

Prime Minister David Cameron tweeted: "My thoughts are with everyone affected by the helicopter crash in Glasgow - and the emergency services working tonight."

A number of St Andrew's Day events were being cancelled on Saturday morning as the tragic toll of Friday night's crash started to become apparent.

Members of the public concerned about relatives who may have been involved in the crash can call an emergency helpline on 0800 092 0410.

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Helicopter Fell 'Like A Stone Out Of The Sky'

Eyewitnesses have described the "terrifying" moment when a police helicopter spun out of control and plunged into a bar which was hosting a live music gig.

Grace MacLean was in The Clutha in Stockwell Street, Glasgow, and said people became aware of the crash only when the ceiling of the venue started to cave in.

She told Sky News: "There was a band on, they were quite loud, and we just kinda heard a whoosh and some smoke.

"We looked around and no-one really knew what was going on. Everyone just carried on listening to the band.

Emergency services at the scene

"And then we kind of looked again and the roof was gradually coming down.

"Someone started shouting and the band cut the music ... and then all of a sudden this cloud of dust came.

"You couldn't breathe for inhaling a mouthful of dust. You couldn't see anything. You were clawing at the walls to see where the exit is.

"No-one had a clue what was going on. There was no loud noise.

"People were helping each other out. Everyone started helping people who were hurt. People had some head injuries. Lots of people were covered in dust. There were lots of people shocked.

"No-one knew it was a helicopter crash until people told you."

Labour's international development spokesman Jim Murphy happened to be driving past the pub immediately after the crash.

Firefighters on the roof of the pub where the helicopter crash-landed

"I jumped out and tried to help," he said. "There were people with injuries. Bad gashes to the head. Some were unconscious."

He described how a human chain formed to help pass unconscious casualties out of the pub so that "inch by inch, we could get the people out".

Scores of passers-by in the area ran to the venue after seeing or hearing the aircraft go down.

Connor Gillies, from Radio Clyde News, told Sky News of the "scenes of chaos" and "continuous stream of sirens" in the area on Friday evening.

Mr Gillies described seeing "blood on the shirt" of Mr Murphy, who he said was "clearly very shaken, very upset by the whole thing".

Wesley Shearer, who posted pictures on Twitter of the scene, said there had been "talk of fatalities", but this has not been confirmed.

"This is unbelievable," he tweeted shortly after the crash. "Just spent 20 minutes pulling people out of the bar."

MP Jim Murphy helped people out of the venue

Jan Hollands, who also tweeted pictures from the scene, said she heard the crash and described it as "scary".

At 7am, one worried man was waiting at a police barrier hoping to hear of news about his father, who was in the pub on Friday night.

"My dad was sitting there with his lady friend. She went to the toilet and boom, it came straight through the roof … right on top of the spot where they were sitting.

He added: "That was the last I heard. I'm going to stay here … It cannot get much worse."

:: Police have issued an emergency telephone number for concerned relatives - 0800 092 0410.

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Energy Bills: Govt Wants Price Freeze Until 2015

The Energy Secretary has written to the big six energy providers asking them to freeze their prices until after the 2015 general election, according to Sky sources.

The call, barring any big increase in wholesale fuel costs, is to try to avoid another round of price rises that could be blamed on Government green levies, industry sources have said.

Annual bills could be cut by around £50 by the move, it is claimed.

Ed Davey has promised to help firms by introducing changes to the green levies that Prime Minister David Cameron and Chancellor George Osborne have pledged to "roll back".

Energy Secretary Ed Davey is believed to be seeking a deal with firms

He first wrote to the firms last week and followed up his appeals with fresh letters this week.

It is understood the companies have so far given no commitment to his proposal.

Ministers are proposing to change the Energy Company Obligation (ECO) - one of the green levies branded "green crap" by a Tory source last week.

The Government wants to be able to announce a pledge or deal in the Autumn Statement on December 5.

The Department of Energy & Climate Change described the claims as speculation, stating there would be no comment on the issue ahead of next week's statement.

Bills are burned during a protest this month against prices and budget cuts

The move comes ahead of a speech by Ed Miliband later in which he will pledge to end the energy "rip-off".

The Labour leader is to call for a tough new regulator with powers to order firms to pass on wholesale savings to customers, and intervene in the market to ensure they get good value in the future.

An independent Energy Security Board would be created modelled on the Office for Budget Responsibility, to help draw up and implement a timetable for building energy capacity and ensure the lights stay on.

He will also promise action to boost competition among suppliers, simplify bills for customers and "secure energy which is affordable and available".

Labour leader Ed Miliband is to pledge to end the energy "rip-off"

The shake-up - described by Mr Miliband as the biggest since privatisation in the 1980s - would be implemented during the 20-month price freeze he has pledged if Labour wins the general election.

Launching the party's energy green paper at Manchester Town Hall, Mr Miliband will refer to the famous "Tell Sid" campaign advertising British Gas privatisation under Margaret Thatcher.

"In the past three years it has become clear to everyone but this government that the energy market is broken," he is expected to say.

"Prices are rising year on year without justification. And Britain is not getting the investment in energy we need to secure supplies for the future...

"We have a new message for Sid: We will freeze your bills for 20 months. We will reset the market with real competition and proper regulation so that prices are affordable. We will secure the investment we need.

"We will stop you being ripped off and, together, we will power Britain into the next century."

Other commitments include preventing power generation companies doing exclusive deals with their retail arms and ensuring all environmental and policy levies on bills are delivering "value for money".

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