Sunday newspaper round-up: Royal Bank of Scotland, Cadbury, Pre-Budget

6th Dec 2009 10:27

More than 1,000 investment bankers have quit Royal Bank of Scotland to join rival firms for guaranteed cash bonuses and big salary increases, according to banking sources. The staff exodus, which has cut a swathe through the senior ranks of RBS, has been gathering pace since the government first ordered it to clamp down on bonuses this year. Although they account for less than 5% of staff in RBS's investment division, the traders and corporate financiers who have been lured away are estimated to have earned it between £600m and £700m last year ? almost 8% of its 2008 income, the Sunday Times reports.Goldman Sachs will ignite a storm of controversy in the new year when it reveals that its bankers are on course to collect pay and bonuses worth $19bn (£11.4bn), despite 2009 being the worst year for the US economy in 30 years, the Observer reports.A consortium of banks, including RBS, is to own up to one of the most disastrous lending decisions of the debt-fuelled deal boom. It will lead to writing off more than £800m of loans to Four Seasons, Britain's biggest nursing-home chain. Four Seasons is expected to announce early this week that 30 banks have agreed to convert about half its £1.6bn of debts into shares. The decision will safeguard 20,000 jobs at the company, which runs 330 homes with 16,000 beds, the Sunday Times reports. Five of the world's biggest publishers are preparing to launch a joint venture this week aimed at regaining control of their content on the new generation of online reading devices.News Corp, publisher of The Sunday Times, has joined Time Inc, Condé Nast, Hearst and Meredith in the venture. Between them they publish titles such as Cosmopolitan, Time, Vogue and Vanity Fair, the Sunday Times reports.Meanwhile, the Que pro-Reader, billed as the ultimate e-reader, will make its debut in January after 10 years spent developing its technology and raising $200m of private equity finance. Plastic Logic, makers of the Que, is launching the reader at the Las Vegas CES trade fair, America's largest annual consumer electronics jamboree, the Sunday Independent reports.Britain faces decades of rising public sector debt, increasing taxes and, potentially, falling living standards unless it tackles the growing costs of its pensions and health bill, the Treasury will warn this week. In a paper to be printed alongside the pre-Budget report (PBR), the Treasury will warn that the costs of paying for state pensions and the National Health Service are set to rocket between now and 2059 unless action is taken to reduce the bill, the Sunday Telegraph reports.Alistair Darling will not raise capital gains tax from its present 18% rate in his pre-budget report on Wednesday, despite fears of a "soak the rich" budget. Treasury sources last night brushed off speculation that the chancellor will announce a windfall tax on banks or bank bonuses. Though Darling is not expected to increase the top rate of income tax to beyond 50% or announce a new raid on pensions, experts warn that Labour's tax plans are already undermining the City, the Sunday Times reports.Alistair Darling will extend several of the government's recession-busting business support schemes and announce plans to channel funds to cash-strapped start-ups this week, as part of a package of measures to help build economic recovery, the Observer adds.Pensioners facing the lowest annuity payouts in history have been offered some hope as the Bank of England moves towards selling bonds as it unwinds its quantitative easing programme. Until now, under quantitative easing, the Bank has been aggressively buying bonds, pushing up prices, the Mail on Sunday reports.Chocolate wars began in earnest this weekend as the US food giant, Kraft, launched its formal £10bn offer document for UK confectioner Cadbury. The document revealed that Kraft's boss, Irene Rosenfeld, could earn a bonus of between $3m (£1.8m) and $8m this year, has personal use of Kraft Foods' aircraft and a $10,000 a year allowance for financial consultancy, the Sunday Independent reports.Capita, the UK's most powerful outsourcing firm, faces allegations it has overcharged schools by £75m for IT over the past 10 years. Rivals claim it adopted anti-competitive practices that could trigger an Office of Fair Trading investigation. The allegations centre on Capita's dominance of the school IT sector in England and Wales where it enjoys an 80% market share. In the last month, education technology rival Bromcom has submitted a series of complaints about Capita, the Observer reports.Vauxhall's 5,000 UK workers received a pre-Christmas boost in the form of job safeguards from General Motors' European head Nick Reilly. British-born Mr Reilly, who recently moved from Shanghai to run Opel and Vauxhall, said there would be no new job cuts at the group's two main plants at Ellesmere Port and Luton, the Sunday Telegraph reports. Drugs giant GlaxoSmithKline is scouring the globe for acquisitions and could splash out more than $3bn to expand in consumer healthcare, over-the-counter medicines, generics and vaccines. Analysts say the company is looking at acquiring Dr Reddy's, the Indian generics firm that has large selling operations in Africa, the Middle East and Latin America, the Observer reports. Tesco has launched its biggest discount drive on luxury food in an attempt to stop customers defecting to its upmarket rivals Marks & Spencer and Waitrose this Christmas.Britain's biggest supermarket chain has cut the prices of more than 200 products in its Finest range. Offers include 50% off king prawns, on sale for £2.50, and half price lobster thermidore at £10, the Sunday Times reports.Meanwhile, Tesco will update shareholders on Tuesday about its sales, which analysts expect to be 3% up on the same period a year ago. Management at the retail giant will also discuss plans for the peak Christmas period when stores typically make up to 25% of their annual profits, the Sunday Independent reports.