HSBC (HSBA.L) chairman Stephen Green has criticised the distorted structure and inflated level of bonuses. On the eve of the World Economic Forum’s opening day in Davos, Green, who is also chairman of the British Bankers’ Association, predicted that future payouts would be lower and more rationally calculated. The debate about bankers’ bonuses has intensified in recent weeks following the super-taxes announced in Britain and France to be levied on bonus pools. Bumper Wall Street profits revealed just last week further stoked the controversial issue.
Thousands of British Airways BAY.L cabin crew began voting on Monday about whether to strike over staff cuts. The development forced the airline to begin training pilots and other staff as flight attendants. Unite, the union representing BA’s cabin crew, said only 216 people had responded to last week’s call from the airline’s chief executive Willie Walsh for volunteers to help keep his company flying in the event of a strike. The ballot will close on February 22, and Unite must then give seven days’ notice of industrial action. This means a walk-out could be held from the first week in March.
A programme set up by the Bank of England to support lending to less creditworthy companies has still not spent any money. The Bank said its programme had yet to acquire any high-quality short-term debt, despite evidence that smaller businesses are still struggling to gain access to credit. Credit rating agencies have complained the scheme was so restrictive, limited and expensive to set up that companies do not see much point in using it.
Insolvency body R3 has said this year will see record company collapses and that the level will remain high in 2011. Government figures are expected to mark the official end of the recession on Tuesday. However, R3’s research, which predicts insolvencies would peak at 28,000 in 2010 compared with 22,800 in 2009, suggests the announcement would be a false dawn for many businesses. Peter Sargent, chairman of R3, said although the country went into recession sharply, it is expected to come out of it “through a long, slow drag”.
Standard Life SL.L is launching an entry-level pension product in an effort to attract a younger client base. The life assurance company is seeking to win more customers from a younger demographic with an eight-week advertising campaign on Dave TV, the digital channel of mostly comedy repeats. The Dave campaign is part of a two million pound national push that will mix traditional, online and social media activity. Standard Life said its campaign was targeted at 28-40 year olds for whom a simplified, low-cost, online pension was likely to be the most relevant entry point.
All Leisure ALGP.L, operator of cruises for mature passengers, has seen summer bookings soar four percent alongside annual profits ahead of expectations. Roger Allard, founding chairman of the Aim-listed company, said the market was in good shape. Total revenue for the year to October 31 increased to 73.6 million pounds from 67.5 million pounds. Pre-tax profits dropped to 2.6 million pounds from 9.1 million pounds, but the figures were distorted by derivatives used to counter fuel price and currency fluctuations. Excluding derivative charges, profits dropped to 4.5 million pounds from 6.3 million pounds.
Healthcare Locums HLO.L, the biggest supplier of short-term healthcare professionals in the UK, is set to benefit from increasing demand for nurses in the United States, should Congress pass President Barack Obama’s health reform bill. By 2014, more than 1.2 million new nurses will be needed in the United States. This shortage could be exacerbated if a potential 46 million people gain access to the healthcare system for the first time. Its shares closed up one penny at 270 pence, after rising 112 percent in the past 12 months.
Industrial flooring supplier James Halstead (JHD.L) has revealed advances in first-half turnover and profits. The company’s investors have also been rewarded with a tax-busting commitment to paying an early interim dividend, as James Halstead said sales of its range of non-slip vinyl flooring continued to increase. Chairman Geoffrey Halstead said he would bring forward payment of its interim dividend, up from 7.25 pence to eight pence, to March 31 instead of the usual late-May date. Its shares closed down 2.5 pence at 575 pence.
A new computer system at HM Revenue & Customs could have given “huge numbers” of workers the wrong tax codes. According to the Chartered Institute of Taxation, if the error was not corrected it could cost taxpayers hundreds of pounds. The tax group revealed many people with only one job were being sent two or more notices with different tax codes. Employers and pension companies could end up deducting too much tax if the error was not corrected by the time the new codes came into force in April. The group said that in the worst case scenario people could pay 108 pounds a month too much.
The Treasury will unveil sweeping proposals on Tuesday to overhaul a controversial anti-tax avoidance regime for multinationals. The government hopes a change in focus will defuse complaints about the onerous and complex controlled foreign companies (CFC) regime, designed to prevent multinationals diverting taxable profits to low-tax jurisdictions. The move is being made in an attempt to discourage more large companies from relocating overseas.
Prepared for Reuters by Durrants