PRESS DIGEST – British business – April 12

The Daily Telegraph

‘CADBURY’S LAW’ ADDS TO CITY’S ANGER AT LABOUR

Senior figures from the financial services industry have
criticised a “Cadbury’s Law” to protect British companies from
being taken over by foreign organisations, as proposed by the
Labour party in the manifesto it released on Monday. The critics
of the proposed law say that it could damage industry, the
economy and pension fund returns. The proposal was prompted by
the recent controversial take over of British confectioner
Cadbury by the American food group Kraft. The law would include
measures to require takeovers to be approved by two-thirds of
shareholders instead of the flat majority currently required.

XSTRATA CHIEF’S 27 MLN POUNDS ADDS TO ANGER OVER PAYOUTS

It has been revealed that Mick Davis, the chief executive of
mining group Xstrata (XTA.L: ), earned 27 million pounds last
year, adding further to public and political anger about large
executive payouts. He received 4.9 million pounds in salary and
a bonus for 2009, and gained the rest of the money from the sale
of share options that he has accumulated since 2001 and deferred
performance incentives from between 2005 and 2008. He is said to
have been in receipt of lower rewards from 2006 to 2009, when
Xstrata performed more poorly against its rivals.

NAB LOOKS AT 2 BILLION POUND FLOAT FOR RBS ASSETS

Australian bank National Australia Bank’s 1.5 billion pound
bid for 318 high street branches being sold by British bank
Royal Bank of Scotland (RBS.L: ) may require NAB to raise
additional capital in the UK. Advisers Morgan Stanley and
Goldman Sachs are said to have been engaged by NAB to asses the
potential of a two billion pound UK listing of the company in
the UK if its bid is successful. RBS is being forced to sell
many of its branches as punishment for accepting state aid when
it nearly collapsed.

WEAK POUND FAILS TO DELIVER EXPORTS SURGE

The total value of UK exports increased by only 0.05 percent
in the final quarter of 2009 compared to the same period of
2008, despite hopes that the weakness of sterling would be
beneficial for the exports sector. The total number of companies
exporting goods fell 3.4 percent to 49,756, according to
government figures. Policy makers within the government and the
Bank of England have previously predicted that exports would
help push the UK into recovery, but these figures belie those
assertions. The small growth is partly attributable to the slow
recovery of the global economy.

The Guardian

MORE THAN 100 BUSINESS LEADERS OPPOSE NIC RISE

On Sunday the Conservative party announced the names of a
further 23 business leaders backing the party’s opposition to
government plans to increase national insurance. Among the 23
are Moni Varma, founder and chairman of rice supplier Veetee and
a former Labour donor, and Ralph Topping, chief executive of
betting chain William Hill (WMH.L: ). A total of 104 business
leaders, employing between them more than one million people,
have now signed a letter opposing the tax rise.

RMT RESUMES TALKS WITH NETWORK RAIL

The Rail, Maritime and Transport union will meet with
Network Rail Monday at the conciliation service Acas as the two
parties aim to avoid strikes by thousands of rail workers. The
dispute revolves around Network Rail plans to cut 1,500 jobs and
alter rosters to allow more work to be carried out at evenings
and weekends. The RMT executive is expected to agree to a
timetable for fresh ballots after four days of planned strike
action were called off last week when Network Rail launched a
successful legal challenge.

BAE TOPS LIST OF WORLD’S LARGEST WEAPONS MANUFACTURERS

BAE Systems (BAES.L: ) has topped a list of the world’s 100
largest arms manufacturers, marking the first time that the list
has been topped by a company outside the U.S. Figures from the
Stockholm International Peace Research Institute show that BAE
arms sales totalled $32.4 billion in 2008. The record
performance was largely down to increased sales at BAE’s U.S.
subsidiaries, with sales at the company’s Land and Armaments
group in the U.S. rising from $7 billion to $12 billion.

TREASURY SAW BUY-TO-LET THREAT TO FIRST-TIME BUYERS

A Treasury briefing paper released due to a freedom of
information request from the PricedOut campaign group shows
that, as early as 2004, the Treasury privately acknowledged the
link between a rise in buy-to-let activity and a shortage of
affordable properties for first-time buyers. A Treasury briefing
paper drafted in response to a 2004 request by former Prime
Minister Tony Blair surmises that “the increase in (buy-to-let)
activity may have the effect of crowding out FTBs as, typically,
rental properties and those being sought by FTBs often have the
same characteristics”.

The Times

QUESTIONS OVER BRANSON AS BA FOUR FACE COURT

The founder of Virgin Atlantic Sir Richard Branson may see
his company’s reputation suffer, as BA (BAY.L: ) executives on
trial for price fixing agreements between the two companies are
questioned in court about his personal involvement. Virgin has
been granted immunity from prosecution in exchange for revealing
the collusion on setting fuel surcharges between 2004 and 2006,
so no legal action will be taken against Branson if it is proved
he had any knowledge of the affair. However, doubts about his
character may affect Virgin’s current bid for Royal Bank of
Scotland (RBS.L: ) branches.

A DECADE OF PLENTY COMES TO AN END FOR CONSULTANTS

Research from the Management Consultancies Association has
shown that over 5,000 consultants lost their jobs in 2009, with
overall spending on them falling by six percent to 7.96 billion
pounds. The last time that the consultancy industry suffered
such a slump was over ten years ago. Demand for consultants’
expertise in areas such as strategy and IT projects declined
significantly, with the only growth in demand being for human
resources and business process engineering services as companies
look to cut costs.

The Independent

CONFIDENCE AMONG TOP EXECUTIVES IS ON THE WANE

A survey from Deloitte indicates that recent improvements in
the UK’s economic situation have failed to raise confidence
amongst chief executives in the FTSE 250. Of the heads of
Britain’s 250 biggest companies, a third expected a “double dip”
recession and 93 percent viewed the possibility of a hung
parliament in negative terms. A rise in positive sentiment among
the owners of smaller businesses, however, was also noted.

Stock Market

PRESS DIGEST – British business – April 12