Sunday newspaper round-up: RBS, Bumi, easyJet

17th Feb 2013 16:03

George Osborne was yesterday said to be considering a mass giveaway of the government's shares in the Royal Bank of Scotland before the next general election. Reports suggested that taxpayers would each receive a pre-election boost of several hundred pounds under proposals being worked on by the Treasury to pay back those who actually financed the RBS bailout. The amount that would be pocketed by individuals was said to be between 300 pounds and 800 pounds. The Treasury believes that offloading the UK government's 82 per cent stake in the bank would release 30bn pounds into the economy. Yesterday, the Treasury insisted it would dispose of its stake in Royal Bank of Scotland "at the right time and in the interests of the taxpayer", amid reports a pre-election share giveaway was under serious consideration, Scotland on Sunday reports.Labour costs are still too high for export success despite a drop in real earnings, the Bank of England has warned. Falling productivity and sluggish output are cancelling out 'unusually weak' pay growth, putting up the price of UK goods and services in foreign markets. Adding to the poor trade picture, according to the Bank, is declining demand for the City's financial services, exports of which plunged 2.8 per cent in each of the first three quarters of last year, against average quarterly growth of 4.8 per cent between 2004 and 2007, The Financial Mail on Sunday says. Tesco is poised to make a decision on the size of a potential multi-billion pound investment in India following representations by David Cameron as part of a UK trade mission. The Sunday Telegraph understands that Philip Clarke, the chief executive, has spoken to the Prime Minister in the past few days regarding the retailer's hopes for opening stores under its own name. Mr Cameron, who begins a three-day visit to the country tomorrow, is believed to have committed to Mr Clarke that he would press his Indian opposite number, Manmohan Singh, about the opening up of foreign direct investment (FDI) channels for British retailers. If the Prime Minister is able to secure the right assurances, a decision on a major Indian investment programme could be made by Tesco's board as soon as this summer, sources indicated, The Sunday Telegraph says.A cabinet split has emerged over deteriorating relations with China and a surge in cyber-spying blamed on Beijing. The prime minister and chancellor are anxious to avoid escalating tension with the People's Republic amid fears that increasing hostility could damage trade relations. But William Hague, the foreign secretary, insists Britain must not bow to "coercive" behaviour by the Chinese and is refusing to reduce diplomatic pressure over human rights abuses. He is being backed by Nick Clegg, the deputy prime minister, who believes Britain must take a principled stand on issues such as the treatment of the people of Tibet, says The Sunday Times. Nat Rothschild has declared himself the winner in the battle for Bumi plc. Investors will cast their votes on Thursday on Rothschild's plan to sack 12 of the 14 directors and install a new chairman and chief executive. The company has urged shareholders to reject his proposals. This weekend both sides were frantically courting the Abu Dhabi Investment Council, whose stake of more than 3% could be decisive. To win, Rothschild needs to secure just over half the voting shares. He and Tom Daniel, his cousin and a Bumi co-founder, have bought stock to increase their combined stake to 25%. A victory on Thursday for the British financier would mean more chaos, according to a Bakrie representative. "If Rothschild takes control, the Bakries will commence litigation, call a [shareholder] meeting to appoint new directors, and report to the regulator in Jakarta," he said, according to The Sunday Times.EasyJet has been dragged into a row over pilots' pay ahead of this week's annual meeting, which could lead to a strike. Balpa, the pilots union, accused the airline of "penny pinching" in negotiations with staff while rewarding top executives with bumper bonuses. Jim McAuslan, general secretary of the union, has written to Sir Mike Rake, the airline's outgoing chairman, saying pilots "feel estranged from their company". EasyJet announced this month that it was creating 330 permanent jobs for pilots, with the potential to earn a salary of up to £146,000 a year, The Sunday Times writes.The new boss of Thomas Cook is considering selling Neilson, the holiday giant's specialist skiing arm, as part of a shake-up of the company. Harriet Green is in the final stages of a review aimed at reducing Thomas Cook's £1.6bn debt mountain. Green may look to raise funds from selling Neilson, which is best known for ski trips but also offers sailing holidays. Analysts believe it could be easily separated from the group and suggested that other businesses, such as Gold Medal, which Thomas Cook bought in 2008, could also be offloaded. Thomas Cook said: "We are reviewing every part of our business as we aim to turn round Thomas Cook in the UK, and this involves considering many options," The Sunday Times explains.Business Secretary Vince Cable said controversial Lib Dem tax proposals -such as a French-style levy on jewellery and paintings - were unlikely to go any further. He insisted the proposals contained in an internal policy document leaked to the Mail on Sunday, which also included an extension of the 'mansion tax' on main residences worth more than £2m to holiday homes and rental properties, were "emphatically not party policy. Some of the [working group's] ideas are interesting, some are a bit wacky," said Dr Cable, in an interview on Sky News. "The idea of taxing jewellery is completely impractical and intrusive. There are ideas in there I'm sure will not get any further." The document is set to be debated by activists at the party's spring conference next month, in preparation for the 2015 general election manifesto, The Sunday Telegraph reports.AB