PRESS DIGEST - Financial Times - June 30

Tuesday June 30 2009

Financial Times

GREEN GROUPS TO SUE TREASURY ON RBS INVESTMENTS

Environmentalists have launched a lawsuit against the Treasury to ensure that taxpayers' money invested in the Royal Bank of Scotland (RBS.L) supports only projects that meet minimum green and human rights standards. Three green groups - the World Development Movement, Platform and People & Planet - lodged the case at the High Court on Monday. The action is the latest indication of how the government's stakes in some of the largest commercial banks in Britain could affect companies' operations.

MOBILE INDUSTRY TO CUT WASTE.

On Monday, the majority of the European Union's telecoms industry pledged to produce a common charger, to end hours spent combing the office to find such a device to fit your handset. The commitment by ten large manufacturers will also help reduce waste caused when old chargers are thrown away. Malcolm Harbour, a British Conservative MEP, said: "It is particularly welcome that the Commission was able to reach agreement with the industry without introducing new regulation."

PLANS TO RAISE ONE BILLION POUNDS FOR START-UP FUNDING

The government has announced plans to commit 150 million pounds ($246.9 million) to a vehicle to bridge a funding gap for technology start-ups. According to Lord Drayson, minister for science and innovation, the move would encourage private investors to contribute alongside the government with a target to reach one billion pounds over 10 years. "US funds are big enough to put tens of millions into a company and to finance follow-on funding. This will allow us to do the same in the UK," he said. The new vehicle will be called the UK Innovation Investment Fund.

MANDELSON AVOIDS PLEDGE ON ROYAL MAIL

On Monday, Lord Mandelson refused to commit to part-privatising Royal Mail before the general election. The business secretary insisted he still intended to sell a stake of 30 per cent in the group as part of plans to bail out its pensions deficit and reform Royal Mail's regulation. However, he admitted the part-privatisation of the postal operator could be delayed until after the election, which must be held by next June. In an interview with Sky News, Mandelson said: "I want to do this before the next election but we do have the problem of the economy." Conservative leader David Cameron has accused Prime Minister Gordon Brown of having "bottled" the politically contentious sale.

SERCO WINS DEAL TO BUILD PRISONS

Serco (SRP.L) has won a 600 million pound contract to construct and run two new prisons in Maghull, Merseyside, and Belmarsh, south-east London. The deal, which involves charities Turning Point and Catch-22 in the prisons' planning stages, would see Serco become the largest private operator of prisons in Britain. Turning Point believes its involvement will also help stop prisoners reoffending because of the charity's experience with dealing with drug abuse. The head of Serco's civil government business, Tom Riall, said it was "the first award of its kind to an alliance between the private and third sectors".

FSA WORRIES OVER JOBLESS INSURANCE

The Financial Services Authority has expressed concerns that consumers with unemployment insurance were not being treated fairly. According to the City watchdog, a number of insurers had recently raised premiums charged for mortgage payment protection insurance, or reduced the level of cover. These changes come as soaring unemployment makes it increasingly likely that people will need to claim on the product. In some cases, premium increases have been in the region of 70 per cent.

BT'S PENSION SCHEME TO HOLD LESS IN EQUITIES

The biggest private sector retirement fund in the UK, the BT Group (BT.L) Pension Scheme (BTPS), had only enough money at the end of 2008 to pay roughly 57 per cent of promised benefits if the group were to become insolvent. The revelation was disclosed in the latest annual accounts of BTPS distributed to members. It showed that in 2007, some 57 per cent of the assets were allocated to equities. The telecommunications firm now intends to pare back sharply its future investments in equities, with its target being cut to 33 per cent of the portfolio.