Thursday paper round-up: Reckitt Benckiser, Citigroup, AA

8th Apr 2010 06:38

Britain's corporate pay league reached new heights yesterday when it was disclosed that Bart Becht earned a £93m pay packet as chief executive of Reckitt Benckiser last year.The bumper payout came only days after the CBI Director-General said that executives risked being viewed as aliens from a different galaxy because of their enormous pay. Richard Lambert made his remarks after the disclosure that Frank Chapman had received a £28 million package as BG Group chief executive, while Irene Rosenfeld of Kraft saw her pay rise by 41 per cent to $26.3 million after the Cadbury takeover, the Times reports.Britain will need "drastic" austerity measures to prevent public debt exploding out of control, the Bank for International Settlements (BIS), has declared. Interest payments on the UK's public debt will double from 5pc of GDP to 10pc within a decade under the bank's "baseline scenario" before spiralling upwards to 27pc by 2040 - by far the highest among the OECD club of developed countries. Greece fares better, while Britain's interest burden is far worse than Italy's, the Telegraph reports.A former Citigroup manager warned risk managers at the troubled bank as early as 2006 that his division was selling billions of dollars worth of rotten loans to investors. At the height of America's property boom Citigroup was buying about $50 billion of mortgages a year, which it sold on to investors with a guarantee that the mortgages would not default. Richard Bowen, a former underwriter at CitiMortgage, told the Financial Crisis Inquiry Commission yesterday that in 2006 the bank started to relax its rules on the type of mortgage that it was willing to buy, the Times reports.Seaprately, Citigroup's disastrous foray into complex securities before the financial crisis was partly based on the recommendation of outside consultants hired to advise the bank's leaders, a former senior manager revealed. In testimony on Wednesday to an inquiry into the turmoil, Thomas Maheras, a former co-head of Citi's investment bank, lifted the lid on a move that led to more than $50bn in losses and forced the US government to bail out the company, the FT reports.Meanwhile, Alan Greenspan was accused of failing to prevent the financial crisis as he attempted to defend his leadership of the Federal Reserve and set out new rules to stop it from happening again. Mr Greenspan, who chaired America's central bank from 1987-2006, was on Wednesday lambasted for failing to implement capital rules that would have stopped banks' from over-stretching themselves, the Telegraph reports.Guy Hands, the billionaire tax exile, launched an attack on the Governments handling of the economy yesterday, warning that the UK could end up as "one of the weakest states in Europe". Mr Hands, who runs the private equity firm Terra Firma, quit Britain for the tax haven of Guernsey last year, saying at the time that his move was partly in protest at the Government's 50% tax rate on high-earners, the Times reports.The majority of the flagship reforms envisaged in the government's much-vaunted Digital Britain initiative to "reboot" the British economy have been abandoned as ministers turn their attention to fighting the general election. The government was preparing on Wednesday night to ditch proposals to fund regional television news in its digital economy bill, which was supposed to implement much of the initiative, the FT reports.AA patrolmen have voted to stage the first strike in the vehicle breakdown recovery service's 105-year history, in protest at the company's plans to restructure its final salary pension scheme. The Independent Democratic Union said 57 per cent of the ballots received from 87 per cent of its 2,400 AA members by the deadline were in favour of striking. It said a decision about whether to strike would depend on the company's response, the FT reports.The number of cars on Britain's roads has seen the first peacetime decline since records began in 1904, according to figures published yesterday. Although the last decade has seen a slight flattening of the growth curve, the UK's total car fleet - or "parc" - has registered annual growth continuously for the 64 years since the end of the Second World War. But that all changed in 2009. The UK parc came in at 31,035,791 last year, a 0.7% fall compared with 2008. the Independent reports.Rupert Murdoch launched a renewed attack on Google, calling on rival newspaper publishers to "stand up" to the internet search giant and block it from showing their content online for free. The statement is the latest salvo in a long-running battle between Mr Murdoch's News Corporation and the California-based technology group, the Independent reports.