PRESS DIGEST - Financial Times - March 12

Financial Times

DARLING TO RAISE "GREEN" AND DRINK TAXES

In an attempt to find cash to fund the government's fight against poverty, Chancellor of the Exchequer Alistair Darling is to use his first Budget to raise taxes on drinking and increase "green" taxes. He is also expected to announce that a two pence increase in fuel duties will be delayed by six months to avoid angering motorists who are already suffering from rising oil prices. It is expected Darling will downgrade the mid point of his growth forecast to around two percent and admit that public borrowing will rise in the next few years.

AIRLINES ATTACK CAA PRICE REGULATIONS

Airlines attacked the economic regulation of the three leading airports, as the Civil Aviation Authority announced a big increase in the charges BAA (FER.MC: Quote, Profile, Research, Stock Buzz) can set at Heathrow and Gatwick. In an unusual display of unity, four of the largest airlines operating from the UK, BMI British Midland, EasyJet (EZJ.L: Quote, Profile, Research, Stock Buzz), Ryanair (RYA.I: Quote, Profile, Research, Stock Buzz) and Virgin Atlantic [VA.UL], joined forces to demand an overhaul and break-up of the BAA London airports monopoly. The airlines said the "dramatic" price rises at Gatwick and Heathrow showed the system was "broken and needs to be changed". Charges at Heathrow are to rise by 86 percent and those at Gatwick by 49 percent.

BRUSSELS SEEKS GREATER POWER IN FOREIGN DEALS

The European Commission is attempting to take more power into its hands to strike deals to protect European companies that are investing abroad. Brussels is able set laws governing external trade tariffs but rules giving European companies rights against foreign governments have until now been agreed by member states in bilateral investment treaties. The Lisbon treaty would centralise power over foreign direct investment into the hands of the Commission. The Commission is also looking for agreements on investment in current negotiations on bilateral trade deals between the EU and India and South Korea.

GAZPROM WARNS OF HIGHER PRICES

Russian gas company Gazprom (GAZP.MM: Quote, Profile, Research, Stock Buzz) has announced after a meeting with top energy executives from Kazakhstan, Turkmenistan and Uzbekistan that starting in 2009, natural gas producers in Central Asia want to increase export prices to "European" levels. The move could complicate energy negotiations between Kiev and Moscow and lead to higher prices for consumers in Europe. The announcement signals that Ukraine may face a fourth large increase in gas prices in as many years. A Gazprom spokesman declined to comment on whether the energy company has agreed to the producers' demands.