PRESS DIGEST - British business - June 10

The Times

TREASURY WEIGHS THE OPTIONS FOR AUTUMN SALE OF NORTHERN ROCK

The Treasury has told its investment banking advisers to weigh up the possibility of selling Northern Rock (NRKx.L) back to the City in the autumn. Senior banking sources said the Treasury was trying to decide whether the lender should be floated on the stock exchange, sold to another financial group or re-mutualised. The government is keen to sell the bank to the private sector at a profit in order to show voters how Gordon Brown has overcome the financial crisis. Nevertheless, Treasury insiders have moved to dampen hopes that Northern Rock would be sold ahead of the next election, saying the government was in no hurry and was aiming to leverage its control of the bank to extract commitments to increase lending to the mortgage market.

BA PAYS ITS CABIN CREW TWICE AS MUCH AS VIRGIN

British Airways BAY.L is demanding significant pay cuts from its cabin crew and pilots after data from the Civil Aviation Authority revealed that the carrier is paying them twice as much as rival airlines. The average salary for BA's cabin crew totals 29,900 pounds compared with 14,400 at Virgin Atlantic [VA.UL]. BA began talks with trade unions representing its cabin crew on Monday in an attempt to cut costs. The group wants to reduce crew numbers by 2,000 via voluntary redundancy or staff turnover and will consider compulsory redundancies if the target is not reached.

The Daily Telegraph

BT VISION BOSS QUITS IN 'FRUSTRATION'

Dan Marks, chief executive of the pay-TV service BT Vision, has shocked the City by resigning after becoming "frustrated" with BSkyB's (BSY.L) dominance of Premiership football. Marks, who spent five years at BT (BT.L), was also deputy managing director at BT Consumer, and had been viewed as a key player within the company's plan to diversify its revenue streams. At the time of BT Vision's launch in December 2006, Marks had expressed an aim to attract three million subscribers by 2010. The service currently has just 430,000 customers, which he has ascribed to the extremely limited access to live Premiership coverage.

SKY WANTS TV SPORTS REVIEW

Satellite broadcaster BSkyB (BSY.L) has attacked a government review that guarantees free-to-air coverage of the nation's "A-list" sporting events. BSkyB has described the policy as "a tax on sport" which benefits terrestrial broadcasters and takes responsibility away from the sports' governing bodies. The current list of "crown jewel" events includes the World Cup, Wimbledon and the Grand National. In September, the government announced it would conduct the review in response to controversy surrounding the 1998 delisting of cricket.

The Guardian

GO-AHEAD PAYS 534 MILLION POUNDS TO KEEP BRIGHTON LINE

Train operator Go-Ahead Group (GOG.L) has retained the Southern rail franchise with a bid of 534 million pounds. The company will pay the amount to the government over five years and 10 months with an option for a two-year extension. The size of the bid surprised Go-Ahead's rivals, as it is understood that the valuation of the franchise, which expects no growth in passenger numbers until 2012, was at least 100 million pounds higher than one of its competitors' bids. The company is also on course to meet tough revenue targets by targeting fare dodgers, increasing space for cyclists at stations and running longer trains on overcrowded suburban services.

INSURERS WARNED AGAINST CUTTING MORTGAGE PROTECTION FOR JOBLESS

Lord Turner, chairman of the Financial Services Authority, has attacked insurers for threatening to water down unemployment protection on mortgages. He also said he would investigate any attempt to push through price increases due to the recession. Speaking to an audience of insurance executives at a conference organised by the Association of British Insurers, the City watchdog said the industry risked repeating the mistakes of past scandals, such as the mis-selling of endowment mortgages.

ILLEGAL DOWNLOADERS DEFY THREATS

According to the 2009 Digital Entertainment Survey, sending warning letters to people who download illegally copied music, television shows and films from the Internet will do little to stop them. The research, carried out by specialist media lawyers Wiggin, shows that only a third of Internet users would consider the letters as a deterrent, a figure that was down from 70 percent in the same survey last year. Four out of five Internet users said they would stop downloading illegally if they were threatened with having their Internet connection cut off.

The Independent

BOOST FOR BUSINESS AS CREDIT INSURANCE TOP-UP EXTENDED

British industry has largely welcomed the government's decision to extend its five billion pound trade credit insurance top-up scheme following slow take-up. The government said that eligibility for the scheme would be backdated to allow suppliers whose credit insurance has fallen since October 1, instead of restricting it to between April 1 and December 31, 2009. Richard Lambert, director-general of the CBI, said the change "gives more help to those businesses left without sufficient trade credit insurance cover since the autumn".

GLAXO IN CHINESE JV TO MAKE FLU VACCINES

Pharmaceuticals giant GlaxoSmithKline (GSK.L) has secured an alliance with Shenzhen Neptunus (8329.HK) to make flu vaccines for China. Glaxo will take an initial 40 percent stake in the joint venture for a contribution of cash and assets worth 21 million pounds. The group will purchase additional shares to obtain majority control within the two years. The deal secures Glaxo's position in the Chinese market as demand for flu immunisation soars. Over the next few years, the alliance will supply seasonal, pre-pandemic and pandemic flu vaccines for China, Hong Kong and Macau.

MOTHERCARE CHIEF NETS PAY OF 1.38 MILLION POUNDS IN 08/09

Ben Gordon, chief executive of Mothercare (MTC.L), saw his remuneration slashed by 15 percent in the year to March 28, as his performance-related bonus was reduced to 372,000 pounds from 950,000 the year before. For the year to March 28, 2009, the retailer posted pre-tax profits of 42.2 million pounds against a pro forma loss of 2.6 million pounds the year before. In 2008/09, Gordon took home total pay of 1.38 million pounds after receiving the bonus, a salary and fees, benefits and shares.

Prepared for Reuters by Durrants