Monday newspaper round-up: RBS, mining companies, taxes

30th Jan 2012 07:06

The chief executive of Royal Bank of Scotland last night bowed to mounting public anger and agreed to give up a £1m bonus. Stephen Hester's move emerged last night hours after it had been announced that Labour was to trigger a Commons vote on his controversial award. Ministers welcomed the decision, which may help contain the Coalition's growing political embarrassment over executive pay at state-owned banks. It may also raise questions about Mr Hester's long-term future at RBS, which he has run since it was rescued by the taxpayer in 2008. Mr Hester was said to have been concerned he was becoming a "pariah". City sources suggested last night that he and members of the bank's board had considered resigning because of the growing row over his remuneration. He had been in line for a bonus of shares worth almost £970,000, on top of his £1.2m salary, The Telegraph reports. France has added some more rocket fuel to Monday's already volatile summit of EU leaders by pledging to introduce a 0.1% tax on financial transactions in August. President Nicolas Sarkozy, who is trailing heavily in the polls ahead of April's election, said France would go it alone in a bid to "create a shock" and inspire other European countries to follow his lead. That is despite vocal opposition from other EU leaders, not least David Cameron. France's plans came amid an escalating row over German demands for independent scrutiny of Greece's finances and the on-going lack of a firm debt-swap deal with private holders of Greek bonds, The Telegraph says. The heads of the world's biggest mining companies met in secret in Davos last week to discuss ways to halt the growing threat of resource nationalism. Governments around the world, including Britain, have sought to grab a greater share of high commodity prices by raising taxes, but mining executives fear that this is a threat to investment and global growth. Senior executives from the biggest miners ? known as "the governors" ? met to discuss a range of issues including a unified response to resource nationalism. Among the companies thought to have been represented were Anglo American, Rio Tinto, Glencore, Codelco and Rusal. The executives are understood to have decided that it is not possible to pursue collective action. They hope, though, that if many companies separately use the same argument they will persuade governments that raising taxes will have damaging long-term consequences, according to The Times.EasyJet's board is preparing a charm offensive over directors' pay after founder Sir Stelios Haji-Ioannou threatened to block a deal that would see ten executives awarded shares worth about £8m over the next three years. Directors of the low-cost carrier are planning to use a vote at next month's AGM as a "motion of confidence" after Stelios, who still owns 37.5% of the shares, vented his fury at the proposed pay-outs. EasyJet last night refused to comment, but a source close to the company said board members will make a staunch defence of its remuneration policy in meetings with shareholders over the next few weeks, The Scotsman says. Rank, the gaming group at the centre of a controversial £586m takeover last year, is in talks to acquire the casino wing of debt-laden rival Gala Coral in a deal worth up to £250m. The two parties have started negotiations over a sale that would allow Rank to merge its 35-strong Grosvenor Casinos chain with the 24-strong Gala operation. The talks have been under way for some time, though no deal is thought to be imminent. A break-up of Gala, which also owns Coral bookmaker and a bingo arm, has been on the cards ever since the company became embroiled in a complex debt restructuring in 2010. Last month it disclosed it had net debts of £1.3bn. Rank has long been mooted as a possible buyer of the casinos, though acquisitions were temporarily put on hold last year when it was itself controversially purchased by its biggest shareholder - Malaysia's Guoco - in a nil-premium 150p-a-share deal, The Telegraph says. Corporation tax should be halved to boost business and revive Britain's economic growth, according to a think tank. The Centre for Policy Studies is urging David Cameron to cut corporation tax to as little as 10% because it is the "only source of a viable economic recovery". In last year's Budget, George Osborne, the Chancellor, pledged to cut the main rate of corporation tax to 23% from the current 26% by 2014, the lowest rate in the G7 group of leading economies. A report by the think tank, however, argues that the Government needs to take a more drastic approach, reducing it to 20% in this year's Budget. It states: "A cut in the rate to 20% would be a quantum leap towards encouraging the enterprise economy which this country needs. It would be a wake-up call to business both domestic and international. It would also be a significant simplification of the tax system," The Telegraph reports. AB