15 JUNE 2011
Teachers votefor walk outs
TEACHERS have become the latestgroup of public sector workers to votefor strike action, threatening to bringBritain to a halt over the summer.Members of the National Union of Teachers (NUT) and the Association of Teachers and Lecturers (ATL) are threat-ening to stage walkouts on 30 June.NUT general secretary ChristineBlower said: “The government’s unnec-essary attack on public sector pensionshas convinced NUT members thatthere is no alternative but to supportstrike action.” Tube drivers in London are due totake industrial action next week, in a wave of strikes that could bring thecapital to a halt during the popular Wimbledon tennis season. The CBI hit out at union leaders overthe industrial action, attacking the vot-ing process that secured the walkoutdecision and calling for a change in thelaw.“This strike is an attempt to causemaximum disruption for Londonerson a minimal turnout,” said Katja Hall,CBI chief policy director.“It can’t be right that just 29 percent of the balloted workforce voted infavour of this strike.“We are calling for the law to bechanged so strikes can only go ahead with the backing of a significant pro-portion of the workforce,” she added.
RBS TAKES CONTROL OF 42 MARRIOTTHOTELS
Royal Bank of Scotland has taken con-trol of a £1bn property portfolio of Marriott hotels after failing to securea debt-for-equity restructuring of oneof its largest individual real estateloans made during the property boom. RBS on Tuesday night appoint-ed Ernst & Young as receivers to theportfolio of 42 hotels across the UK.
BANK CHIEFS’ PAY RISES BY 36PC
Bank chiefs’ average pay in the USand Europe leapt 36 per cent last yearto $9.7m, according to data compiledfor the Financial Times. Two of theindustry’s biggest names – JamieDimon, the JPMorgan Chase chief executive, and Goldman Sachs’ LloydBlankfein – were paid more than 15times their 2009 earnings. Mr Dimonreceived nearly $21m in 2010, toppingthe FT’s survey of the salary and bonus packages awarded to 15 top bankers. Mr Blankfein earned $14.1m,including a $5.4m cash bonus – upfrom $863,000 in 2009.
IMF WARNS RUSSIA OF REFORM ORRECESSION
Russia has dashed hopes that the2008-2009 economic crisis would spurneeded economic reforms aimed atmodernising the economy, a missionfrom the International Monetary Fund has concluded.
US DERIVATIVES REFORMS TO BEDELAYED UNTIL END OF 2011
Derivatives rules are set to be delayed by six months in an effort to quelllegal uncertainty around financialreform that some worry could roilmarkets. Gary Gensler, chairman of the Commodity Futures TradingCommission, said officials wouldmiss a July 16 deadline to finaliserules stemming from the sweepingDodd-Frank financial reforms passedlast year.
NETWORK RAIL FAILED TO ADDRESSSAFETY RISKS SAYS REGULATOR
Network Rail must take urgent actionto improve its safety procedures, therail regulator said yesterday after theprivate maintenance company missedeight out of ten of its performance tar-gets. It failed a string of targets forpunctuality and serious delays inEngland, Scotland and Wales, withlong-distance services on the East and West Coast Main Lines suffering the worst of the disruption.
TO GO OR NOT TO GO . . . UNION SAYSTHAT IS THE QUESTION
The owner of a call centre and a lead-ing union are locked in a legal battleover how long staff take to go to thelavatory. The CWU has called for a day of action to protest at the BirchwoodIndustrial Park in Warrington today and has pledged to dress up in Victorian clothes to make its point.
UK ECONOMY REMAINS STEADY ASGLOBAL GROWTH WOBBLES
The UK’s economic recovery is expect-ed to remain on track over the comingmonths in the face of a deterioratingoutlook for France, Italy and the euroarea as a whole. Britain’s relativeresilience emerged in the closely- watched leading indicators indexcompiled by the Organisation forEconomic Co-operation andDevelopment (OECD).
SURGEON INTERRUPTS CAMERON’SHOSPITAL VISIT
A senior surgeon interrupted a hospi-tal visit by David Cameron and Nick Clegg to complain that the TV crewsfilming them were not observingstrict hygiene rules. David Nunn leftthe Prime Minister and Deputy PrimeMinister stunned with his angry out- burst during the walkabout at Guy’shospital in London Bridge.
UNIBAIL MAY BE SHOPPING FORSPANISH MALLS
Unibail-Rodamco SA, a leadingEuropean property company, could beon the prowl for property in Spain,according to analysts. An acquisitionof shopping centers in Spain that fitUnibail's business would appear “well-timed and strategically sound,” says John Lutzius, managing director of the European offices of Green Street Advisors, a boutique research firm.
CHINA TIGHTENS, COMMODITIES SHRUG
Fresh monetary tightening by China'scentral bank was largely shrugged off by commodities, a sign investors aregetting more comfortable with infla-tion-tackling measures from the world's top commodities consumer. The People’s Bank of China said it willlift the amount of capital banks mustkeep on reserve by half a percentagepoint.
WHAT THE OTHER PAPERS SAY THIS MORNING
Broadgate victory is great first step
IT is merely a small, symbolic victory in a much bigger battle against redtape but it is great news that Jeremy Hunt will today announce that he won’t be listing Broadgate Estate, as we reveal on our front page. EnglishHeritage’s indefensible bid to protectthis unexceptional complex aroundLiverpool Street station, built in themid-1980s, has rightly been slappeddown by the culture secretary. A much-needed plan to redevelop theestate and to build a new home forUBS, the bank, will now go ahead.
is delighted to have playeda major role in demonstrating theabsurdly anti-growth and anti-compet-itive implications of listing such adevelopment – and to marshal thegrowing opposition to the decision. Among those who signed up to ourcampaign to dismiss EnglishHeritage’s over-reach were Boris Johnson, Lord Wolfson (the CEO of Next) and a raft of others. What was so infuriating about theattempt to halt the redevelopment was that it took no account of theneed for growth, jobs and regenera-tion. London’s finance hub hasthrived by reinventing itself, as exem-plified by the transformation of theSquare Mile and the emergence of Canary Wharf; if a 26-year old office block can’t be knocked down any-more, then what next? Would every-thing be deemed worthy of preservation, regardless of cost? Downthat road lies stasis, stagnation andthe transformation of a dynamic econ-omy into a fossilised, irrelevant snap-shot of a bygone age. It must becomeeasier to change and adapt to modernneeds in a world where talent and cap-ital are so footloose – not harder.Big firms feel that London is a farless attractive place to do business as aresult of the 52p tax rate (includingnational insurance), a raft of other taxhikes and numerous new labour mar-ket rules. So it is refreshing that they will at last be sent a strong signal thatthe coalition is trying to reopen theUK for business.Given the good news on Broadgate,let us hope that George Osborne useshis Mansion House speech tonight tointroduce other reforms. He willannounce that he backs the ring-fenc-ing of the retail part of large universal banks, a move which will reduceuncertainty for City firms. But he willface a crowd that is growing increas-ingly worried that the government islosing its reformist credentials inmany areas. Tax is a real issue, withserious anger about the raid on NorthSea oil and gas firms. It is also increas-ingly obvious that the UK has one of the highest direct tax burdens of any major economy, as confirmed again by accountants UHY. The research works out the take home pay for work-ers, taking into account personal taxesand social security contributions, andreveals the UK charges the 7th highesttaxes. The calculations are based on asingle, unmarried taxpayer with nokids; the UK would score even worsefor families, as these enjoy tax breaksin other countries. Only Mexico,Estonia, Italy, France, India andGermany take more than the UK froman employee earning $25,000 a year.For a person earning $200,000, only France, Israel, Germany, Ireland, theNetherlands and Italy take more intax. None of this is going to change ina hurry, unfortunately, but Osborneneeds to try and compensate for it by unveiling more pro-growth, supply-side policies. Broadgate is an excellentmove – now we need more from where that came from.
email@example.com Follow me on Twitter: @allisterheath
US banking giant JP Morgan’s mort-gage chief David Lowman has left the bank after it overcharged active USmilitary personnel on their homeloans.His departure comes just fourmonths after another executive wasdrafted in to manage the lender’smortgage unit over him.Lowman, who joined JP Morganfrom Citigroup in 2006, had beenplaced under chief administrativeofficer Frank Bisignano.“Dave Lowman and I have decidedhe will leave the firm,” Bisignano saidin an internal memo.He added that Lowman would takesome “much needed time off”. JP Morgan said in February it hadreturned 10 homes to families pro-tected by a law that entitles thehouseholds of military personnel tocheaper mortgages, after they had been found to have been takenimproperly in foreclosure actions.
JP Morgan loses Lowman
JP Morgan mortgage chief David Lowman has left the bank
NEWS | IN BRIEF
Price of gold to soar to $5,000
Standard Chartered bank has tipped theprice of gold to soar as high as $5,000(£3,051) per ounce by 2020. The bullishview of the gold market indicates theperceived security of the commodityamong investors, who have rushed to theprecious metal since the financial crisis.The bank says limited gold production,the gold purchasing programmes of cen-tral banks and the increasing demand forthe commodity in India and China willcombine to push up its price. Spot goldprices closed at $1,520 an ounce yester-day.
BIS advising on Southern Cross
Mandarins from the department of health have been advised by the govern-ment’s corporate finance unit - the busi-ness department’s Shareholder Executivebranch - ahead of a crunch meetingtoday with embattled care home opera-tor Southern Cross. The struggling firmwill meet with the government, as wellas landlords and HM Revenue & Customs,to discuss its future today. TheShareholder Executive is best known forhaving advised on plans to save carmaker MG Rover.
Floor, Centurion House,24 Monument Street, London, EC3R 8AJTel: 020 7015 1200 Fax: 020 7283 5334Email: firstname.lastname@example.org www.cityam.com
Business Features Editor
Head of Distribution
This newspaper adheres to the system of self-regulation overseen by the Press ComplaintsCommission. The PCC takes complaints about theeditorial content of publications under the Editor’sCode of Practice, a copy of which can be found at www.pcc.org.uk
Printed by Newsfax International,Beam Reach 5 Business Park,Marsh Way, Rainham, Essex, RM13 8RS
If you have any comments about the distributionof City A.M. Please ring 0207 015 1230, or email@example.com
CBI policy directorKatja Hall has calledfor a change in the lawto prevent low ballotturnout strikes