British Gas profits jump to £571m

British Gas profits have risen substantially

Energy supplier British Gas has reported annual profits of £571m at its residential arm, up from £95m in 2006.

The news came as Centrica, British Gas' parent company, reported a 40% rise in operating profits to £1.95bn.

Trade union Unison said the profit was "obscene", coming so soon after British Gas raised the amount it charges for gas and electricity by 15%.

The announcement followed increases from rivals Npower and EDF Energy, who blamed rising wholesale costs.

Rising prices

Centrica said pre-tax profits from continuing operations were £2.1bn.

We need to earn a return to invest in new sources of energy for the UK Sam Laidlaw Centrica chief executive Q&A: Why energy prices are rising

Chairman Roger Carr said: "Centrica delivered very strong financial results during another challenging year for UK energy retailers."

The company said it had worked "diligently" to minimise the impact of a 56% rise in wholesale gas prices in the latter part of 2007.

Centrica said two-thirds of the group's earnings were made in the first half of 2007, when wholesale gas prices were falling.

British Gas did reduce customers' bills in March and April 2007, but consumer group Energywatch says energy companies did not pass on the full reduction to householders.

It has called for a Competition Commission investigation into the way the energy market works.

Rising bills

Dave Prentis, general secretary of Unison, said the increase in British Gas profits was "obscene".

"The unjustifiable price increases are burning a huge hole in customers' pockets and causing misery to millions," Mr Prentis said.

"British Gas should hang their heads in shame knowing that many people, including families, pensioners and the disabled, are too scared to heat their homes adequately this winter, because of the huge bills that follow," he said.

Consumers will feel justified in claiming that they are being taken for a very rough ride by energy companies Adam Scorer, Energywatch

In a BBC interview, Centrica chief executive Sam Laidlaw said the company would use the profits to reduce the UK's growing reliance on imported gas.

"We need to earn a return to invest in new sources of energy for the UK. Centrica is investing £1bn a year in new sources of gas and power... and all of that requires a return," Mr Laidlaw said.

Since 2003, the average gas bill for British Gas customers has risen by 76.7% to £653, according to consumer group Energywatch.

Electricity bills have risen by 74.3%, to £413.

Dividend up

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Centrica has increased its full-year dividend to shareholders by 17% to 13 pence a share, a move criticised by Energywatch.

"It is perfectly true that there is volatility in wholesale energy markets. But it seems equally true that such volatility hits consumers not shareholders," said Adam Scorer, Energywatch's director of campaigns.

"Consumers will feel justified in claiming that they are being taken for a very rough ride by energy companies," he added.

Centrica said customer service at British Gas had "significantly improved", with 200,000 customers returning in the second half of last year.

Overall, the number of gas customers fell in 2007 by 2.4% to just over 10 million, while the number of electricity customers rose by 4.5% to just over six million.

Pakistani leaders set for talks

The opposition PPP is celebrating the election result

The leaders of the two parties that won the most seats in Monday's elections in Pakistan are due to meet to discuss forming a coalition government.

Such a government could force President Pervez Musharraf from power.

The Pakistan People's Party leader, Benazir Bhutto's husband Asif Zardari, will have talks with Nawaz Sharif, who heads the Pakistan Muslim League.

Mr Sharif has said he wants Mr Musharraf to go, but Mr Zardari's party has been less clear-cut on the issue.

Mr Musharraf has said he wishes to stay and work towards stable democratic government in Pakistan.

He said the polls had strengthened moderate forces inside the country.

NATIONAL RESULTS SO FAR PPP (Bhutto's party) : 87 PML-N (Nawaz Sharif): 67 PML-Q: (pro-Musharraf) 40 MQM (Sindh-based): 19 ANP (Secular Pashtuns): 9 MMA (Islamic alliance): 6 Others: 34 Source: Election commission Can Musharraf survive?

Correspondents say the most likely coalition government is between Mr Zardari and Mr Sharif's parties, as they would have more than half of parliament's seats between them.

If a new governing coalition manages to muster a two-thirds majority in parliament, it could call for Mr Musharraf to be impeached.

No guarantees

Mr Sharif has said he is prepared to discuss joining a coalition with Mr Zardari's party in order "to rid Pakistan of dictatorship forever".

But the BBC's Chris Morris in Islamabad says that, while a coalition between the two is the most likely option, there are certainly issues on which they disagree and there are no guarantees an alliance will emerge.

Separately, Mr Zardari has ruled himself out as prime minister, despite his party's success at the election.

He has said his PPP party would choose another candidate to lead a coalition government that opposition parties are expected to form.

Mr Zardari, a deeply divisive figure in Pakistani politics who has spent several years in prison on corruption charges, is not an MP and is therefore not currently eligible to serve as prime minister.

But there had been speculation that he might enter parliament via a by-election.

Major ally

Mr Zardari has said his party could work with the MQM, a Sindh-based regional party which supports Mr Musharraf.

Mr Sharif has urged Mr Musharraf to resign, and a PPP statement cited alleged remarks by the president that he would step down if the parties supporting him were defeated in elections.

HAVE YOUR SAY

Perhaps Musharraf should leave Pakistan so that reforms can begin

Clifford Power

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In an earlier interview for the US newspaper the Wall Street Journal, Mr Musharraf said he would not resign or retire.

He was re-elected to the presidency last October, in a parliamentary vote boycotted by the opposition as unconstitutional.

He has been a major US ally in the "war on terror" but his popularity has waned at home amid accusations of authoritarianism and incompetence.

With votes counted in 258 out of 272 constituencies, the PPP has won 87 seats, according to the Election Commission of Pakistan.

The Pakistan Muslim League, or PML-N, is in second place with 67 seats so far.

W Bank building 'bias' condemned

Peace Now says Israel's actions discriminates against Palestinians

Israel passed fewer than 6% of building requests by Palestinians in the occupied West Bank in 2000-07, an Israeli anti-settlement group says.

Peace Now says 91 permits were granted from 1,624 requests, in contrast to the 18,472 homes built for Jewish settlers.

The group says the data show "clear discrimination" against Palestinians in West Bank areas under Israeli control.

Military officials accused Peace Now of distorting the figures, which were taken from official Israeli statistics.

Peace Now also said, in the case of illegal buildings, the Israeli army demolished 33% of structures erected by Palestinians and 7% of the unauthorised structures built by Jewish settlers.

IN THE WEST BANK 2000-2007 91 construction permits issued to Palestinians 18,472 homes built for Jewish settlers Almost 5,000 demolition orders against Palestinian buildings issued, one third implemented 2,900 demolition orders issued against settler buildings, 7% implemented Source: Peace Now, citing Central Bureau of Statistics and IDF

The Israeli army is in full control of about 60% of the West Bank. Israel occupied the area, as well as East Jerusalem and Gaza, in the 1967 war.

It has allowed limited Palestinian autonomy in some areas, while settling more than 400,000 Jewish Israelis on occupied land.

These settlements are considered illegal under international law, though Israel disputes this.

Self-demolition

An Israeli military official said the data was misleading because, he said, Palestinians rarely submitted building permit requests.

"If Palestinians would submit request for building permits, there could be thousands more approvals," said Capt Zidki Maman of the West Bank civil administration.

Palestinians frequently complain that the military authorities reject most building requests as a matter of policy.

Capt Maman also accused Peace Now of including data for self-demolished illegal structures in the case of Palestinians but not in the case of settlers.

Correspondents say, however, there is little sign of Israeli government action against more that 100 settlements not approved by the Israeli government established by the Jewish settler movement since the 1990s.

Peace Now said there were 4,993 cases of illegal Palestinian construction identified by the army and 2,900 cases of illegal settler construction.

Angry Serbs plan Kosovo protest

Serbia says Kosovo's independence move is illegal

Hundreds of thousands of Serbs are expected to join a rally in Belgrade to protest Kosovo's declaration of independence over the weekend.

Schools are closed for the day and the rail network is providing free travel.

A large stage has been erected outside parliament for an address by Prime Minister Vojislav Kostunica.

Organisers are hoping the rally will be peaceful, following riots in the capital on Sunday and attacks by Kosovo Serbs on two border posts.

Prayers

Most Serbs bitterly oppose losing the province, which they consider their religious and cultural heartland.

Mr Kostunica called the new country a "false state", and Russia also opposed the move.

The rally is due to start at 1700 (1600 GMT) in central Belgrade.

KOSOVO PROFILE Population about two million Majority ethnic Albanian; 10% Serb Under UN control since Nato drove out Serb forces in 1999 2,000-strong EU staff to take over from UN after independence Recognised by US, UK, Germany, Italy and France Not recognised by Russia, Spain, Slovakia, Cyprus Nato to stay to provide security Country profile: Kosovo Tense confusion on border

It will a chance for Serbs to show how much they oppose the independence of Kosovo, says the BBC's Nick Hawton in the Serbian capital.

Tennis star Novak Djokovic and film director Emir Kusturica are expected to attend, AFP news agency reported.

After a series of speeches, the crowd will march to the city's biggest church, the Temple of Saint Sava, where prayers for Kosovo will be said by Serbian Orthodox archbishops.

The US, the UK, Germany and Italy have all recognised Kosovo.

In the coming weeks, an almost 2,000-strong EU mission will be deployed to help the country develop its police force and judiciary.

US to take own food to Olympics

China's Olympic food

China has expressed regret that the US has decided not to trust its food during this summer's Olympic Games.

The US delegation has said it is planning to bring its own food for American athletes.

At a news conference in Beijing, a senior official, Kang Yi, said it was a pity that the US had apparently decided not to trust China's food.

Ms Kang insisted that the food served to athletes at the Olympics would exceed international health standards.

For China, a good Olympic Games means cheering spectators, record-breaking performances and athletes and fans all sitting down to enjoy some good Chinese-made food.

But the US is not so sure about the food part, and plans to import its own meat and cook its own meals for its athletes when they get to Beijing.

Ms Kang and her colleagues were asked about the allegation that chickens on sale here are so full of hormones that athletes would test positive for steroids if they were to eat them.

There is no scientific evidence for this, insisted Lu Yong, who runs Beijing's municipal food safety monitoring centre.

Annan hails Kenya talks progress

More than 1,000 people have died in violence since the vote

Ex-UN chief Kofi Annan has announced considerable progress in talks between Kenya's government and opposition aimed at ending the political crisis.

Talks have been adjourned until Friday, as negotiators consult on a compromise which the BBC's Adam Mynott in Nairobi says has been largely agreed upon.

The deal is understood to involve the creation of a prime minister's post which would be held by the opposition.

Some 1,000 people have died in violence since disputed elections in December.

The opposition alleges the poll was rigged.

"I am beginning to see light at the end of the tunnel," Mr Annan said after negotiators from President Mwai Kibaki's government and the opposition Orange Democratic Movement (ODM) adjourned their talks on Thursday.

The negotiators are expected to report back with a possible final deal to be signed on Friday.

None of the details has been confirmed by Kofi Annan's team, and there have been a number of occasions in the past three weeks when a deal looked close but then disappeared, our correspondent says.

The current uneasy calm in Kenya should not be misunderstood as a return to normalcy International Crisis Group report

The rivals have agreed in principle on a grand coalition as a solution to the crisis, but discussions had reached deadlock over how it would work in practice.

The creation of a post of prime minister - which does not exist under the current constitution - was one of the opposition's demands.

Najib Balal, a senior ODM member, told the BBC on Thursday that the opposition would be prepared to accept the post of prime minister provided it carried the necessary authority and power.

Talks between the two leaders have been in deadlock

Earlier this week, the opposition warned it would launch new mass protests in a week's time if the talks did not break the political deadlock.

Hundreds of thousands of people have been displaced during the ethnic and political violence that broke out after President Kibaki was declared the winner of December's presidential election.

The opposition alleges widespread rigging, and international observers said the poll was flawed.

'Serious obstacles'

The development came as an international think tank warned that further violence could erupt unless a solution to Kenya's political crisis were found urgently.

The International Crisis Group (ICG) said armed groups on both the opposition and government sides were being mobilised for fresh attacks.

Analysis warn that the crisis must be resolved urgently

The ICG report called for legal, electoral and constitutional reforms and for aid to be conditional on a peaceful result.

The report warned "serious obstacles" to peace remained.

In a BBC interview, the ICG's Donald Steinberg also warned against reaching a short-term political deal without addressing long-term issues.

He said that at the root of the violence were the tribal divide-and-rule policies of Kenya's previous ruler, Daniel arap Moi, which had not been addressed under Mr Kibaki.

"The current uneasy calm in Kenya should not be misunderstood as a return to normalcy," said the report.

The report noted that as Kenya is a platform for relief operations in Somalia and Sudan, a haven for many refugees from the region, and a vital trade hub, failure to resolve the crisis would have "severe consequences" for the whole of east Africa and beyond.

US missile hits 'toxic satellite'

The Pentagon used a missile to shoot down the satellite Enlarge Image

The US has successfully struck a disabled spy satellite with a missile fired from a warship in waters west of Hawaii, military officials say.

Operatives had only a 10-second window to hit the satellite - USA 193 - which went out of control shortly after it was launched in December 2006.

Officials were worried its hydrazine fuel could do harm, but it is not yet known if the fuel tank was destroyed.

The controversial operation has been criticised by China and Russia.

On Thursday, China called on the US to provide more information about the mission.

Russia suspects the operation was a cover to test anti-satellite technology under the US missile defence programme.

The US denies the operation was a response to an anti-satellite test carried out by China last year, which prompted fears of a space arms race.

Precision needed

The BBC's Jonathan Beale in Washington says this operation was hugely ambitious.

BROKEN SATELLITE Owner: National Reconnaissance Office Mission: Classified Launched: 14 Dec 2006 Weight: 2,300 kg (5,000lbs) 1,134kg (2,500lbs) could survive re-entry Carrying hydrazine thruster fuel

The operation went ahead hours after the space shuttle Atlantis landed, removing it as a safety issue for the military.

The satellite - believed by some commentators to be a radar imaging reconnaissance satellite - was passing about 130 nautical miles (250km) over the Pacific.

Graphic of how the satellite was hit

Earlier the military said it would use an SM-3 missile fired from the cruiser USS Lake Erie, which is posted on the western side of Hawaii along with the destroyers USS Decatur and USS Russell.

But it is not yet known how successful the operation was - the missile needed to pierce the bus-sized satellite's fuel tank, containing more than 450kg (1,000lbs) of toxic hydrazine, which would otherwise be expected to survive re-entry.

The Pentagon said confirmation that the fuel tank has been hit should be available within 24 hours.

US officials said without an attempt to destroy the fuel tank, and with the satellite's thermal control system gone, the fuel would now be frozen solid, allowing the tank to resist the heat of re-entry.

If the tank were to land intact, it could leak toxic gas over a wide area - harming or killing humans if inhaled, officials had warned.

Debris

Officials expect that over 50% of the debris will fall to Earth within the first 15 hours after the strike - or within its first two revolutions of Earth.

USA 193 lost control a few hours after launch on a Delta II rocket

Left to its own devices, about half of the spacecraft would have been expected to survive the blazing descent through the atmosphere, scattering debris in a defined "corridor" which runs across the Earth's surface.

Professor Richard Crowther, a space debris expert with the Science and Technology Facilities Council (STFC), said that if struck with the missile, about 25% of USA 193 is likely to survive the fall to Earth.

"The smaller the debris is the more likely you are to get burn-through. So if you fragment something before re-entry, less mass will survive to hit the Earth," he told BBC News.

Russian suspicion

But Russia's defence ministry has effectively branded the US operation a cover for testing an anti-satellite weapon.

The Russian defence ministry argued that various countries' spacecraft had crashed to Earth in the past, with many using toxic fuel on board, but that this had never before merited "extraordinary measures".

A spokesman for the Chinese foreign ministry in Beijing, Liu Jianchao, said China was concerned about the "possible damage to security in outer space and to other countries".

"We demand that the US... swiftly brief the international community with necessary data and information in time, so that relevant countries can take preventative measures," he said.

Last year, China carried out a test using a ground-based ballistic missile to destroy a satellite in space, prompting international alarm and fears of a space arms race.

On Tuesday, a US State Department spokesman stressed that the action was meant to protect people from the hazardous fuel and was not a weapons test.

The US government has also denied claims that the main aim of the operation was to destroy secret components on USA 193.

Officials say classified parts would be burned up in the atmosphere and, in any case, that would not be a reason for shooting down the satellite.

SATELLITE DESTRUCTION 1 SM-3 missile launched from a US Navy cruiser in Pacific Ocean 2 The three-stage missile headed for collision location, where the relative "closing" speed was expected to be 10km/s (22,000mph) 3 Satellite came in range at altitude of 247km (133 nautical miles), close to edge of Earth's atmosphere 4 Missile made contact with satellite with objective of breaking fuel tank, freeing hydrazine into space 5 Much of the debris will burn up but an as yet unknown amount is expected to be scattered over hundreds of kilometres