PRESS DIGEST - Financial Times - July 9

Financial Times

DARLING CALLS FOR "CHANGE OF CULTURE"

Chancellor of the Exchequer Alistair Darling launched another attack on City pay practices on Wednesday, calling for a "change of culture" that would reward long-term stability rather than short-term gains. But City courses said the thinly detailed remuneration proposals contained in his long-awaited white paper are characteristic of a government that lacks "the courage of its own conviction". Darling's main proposal was to force the Financial Services Authority to report on an annual basis on how banks are meeting the code of conduct's remuneration guidelines and how it is dealing with businesses that do not comply. The chancellor may bring forward more proposals after Sir David Walker publishes his report on bank governance next week.

PRIVATISE JOBS SERVICES, REPORT URGES

A new report by the Social Market Foundation will call on Thursday for the privatisation of all employment services run by Jobcentre Plus, in a move that would create a multi-billion-pound market in welfare-to-work provision. The think-tank's reforms are proposed as a cost-effective measure that would act as an antidote to a system too centralised, complex and blighted with "bottlenecks, inconsistencies and inefficiencies". Currently, jobless people are given support depending on their type of benefit and length of claim, having to go through a complex system that begins with Jobcentre Plus and can end with private providers several months later. The report's authors suggest a single provider should modify employment support to individual needs from the first day to last, taking into consideration health problems, skills and history of recent employment.

BACKLOG FEARED AS TAX STAFF OVERTIME BAN TAKES HOLD

It is feared the overtime ban which was introduced this week by thousands of tax officials to protest about the use of extra hours to mask the impact of job cuts could lead to significant backlogs and delays at HM Revenue & Customs. The ban comes as a new internal survey shows morale has dived to a new low, with only 11 percent of employees saying the Revenue was well-managed. Revenue & Customs expressed its disappointment about the overtime ban but said it was confident services would not be disrupted. The Public and Commercial Services Union, which represents the 70,000 officials who launched the ban, said the department had become increasingly reliant on overtime, noting that over the past financial year 4.5 million pounds or 10 percent of the processing area's budget was spent on overtime.

SEGRO WINS APPROVAL FOR BRIXTON PURCHASE

Segro (SGRO.L) is set to complete the 107 million pounds takeover of industrial property rival Brixton (BXTN.L) as both boards have approved the final terms of the deal. The two companies have reached an agreement to swap 1.75 shares in Segro, worth about 40 pence, for every Brixton share. Segro will also confirm on Thursday the details over a 250 million pounds capital raising that will fund the takeover, which will be structured as a placing of shares rather than a rights issue. Brixton's shareholders will still have to approve the terms of the deal before it can be completed.

SUN COMES OUT TO BOOST BOOKER SALES

Shares in Booker (BOK.L) closed up 1.50 pence at 34.25 pence on Wednesday after the cash-and-carry group announced that the good weather had boosted its fourth-quarter sales. In the 12 weeks to the end of June, sales jumped by 7.8 percent compared with the corresponding period last year, with non-tobacco sales rising by 10.4 percent. Sales of tobacco products increased by 3.9 percent. The upbeat results came on the same day that the wholesaler held its annual meeting and directors Jonathan Prentis, Bryan Drew and Bryn Satherley sold a combined total of about seven million pounds worth of shares.

PHORM'S LAUNCH HOPES HIT BY TALKTALK

Carphone Warehouse (CPW.L) has become the latest company to drop Phorm's (PHOR.L) Webwise service after its TalkTalk broadband unit decided to follow BT Group's (BT.L) example which said on Monday it had no "imminent plans" to work with the targeted advertising group. TalkTalk said it was not the right time for it from a commercial or operational point of view to launch the service which matches advertising to broadband users' interests based on their online behaviour. The news, which distances Phorm's prospects for a UK launch, sent the group's shares down 16.75 percent to 201.87 pence. Virgin Media has said it remains interested in Phorm's technology but has not performed any trials of the service and is talking to rival providers.

CO-OP LAUNCHES OWN-BRAND HOLIDAYS

The Co-operative Group launched its own-brand holiday packages service for summer 2010, in a joint venture with Cosmos Holidays, Britain's biggest independent tour operator, and sister airline Monarch, part of Globus Group. Despite the challenging market conditions, the group is hoping that its brand will attract customers concerned about the failures that have hit the airline and tour operators. Co-operative Travel is offering more than 220 holiday options in 22 destinations, focusing on favourites such as Spain and Florida.

CREDITORS MEET OVER FOUR SEASONS' FATE