Wednesday newspaper round-up: UK Deficit, RBS, Tesco

25th Apr 2012 06:54

Angela Merkel launched a staunch defence of Europe's fiscal pact as politicians from the Netherlands, Spain and Greece scrambled to keep their own austerity measures on track. In a rare concession, the German Chancellor admitted that austerity alone would not solve the crisis but she insisted that the wave of political opposition to fiscal discipline was wrong. "We're not saying that saving solves all problems," Ms Merkel said at a conference in Berlin. "[But] you can't spend more than you take in. You can't live your whole life this way. Everybody knows this," according to The Telegraph. The movement to oust Rupert Murdoch as chairman of News Corporation gathered pace on Tuesday, after a major British shareholder group said it was planning to table a resolution against him. The Local Authority Pension Fund Forum (LAPFF), whose members control £100bn of investments, said those with top-tier Class B voting stock were preparing to file a motion jointly with American shareholder group Christian Brothers Investment Services. They will call for an independent chairman to replace Mr Murdoch, to help address the "lax ethical culture and lack of effective board oversight" exposed by News Corporation's "still emerging scandals," The Telegraph reports.Bank bonuses should be subjected to longer deferral and claw-back periods to curb the excesses still prevalent in the City, a Bank of England policymaker has urged. Andrew Haldane, executive director for financial stability and a member of the Financial Policy Committee, said "while bank performance has fallen off a cliff, executive pay remains close to pre-crisis Himalayan heights". He argued in a speech given in Berlin that bonus deferral, or claw-back periods, should be extended to 10 years or more on an internationally co-ordinated basis, from three or four years at present, to make bankers responsible and accountable for their decisions for longer, The Telegraph says.Stagnating growth blew a hole in tax revenues last year, raising fears that George Osborne will struggle to bring the blockbuster deficit under control. A day before the publication of key figures charting the economy's performance in the first quarter, the official data showed that tax revenues in the 2011-12 fiscal year were £16bn below the level forecast in the 2011 Budget. Michael Saunders, UK economist at Citigroup, said: "The improvement in the fiscal position seems to be stalling. We expect that revenues will undershoot again in the 2012-13 year ? and underlying fiscal improvement will stall ? reflecting continued weakness in the economy." This came as David Miles, a member of the Bank of England's Monetary Policy Committee, said last night that the economy could have shrunk in the first three months of the year, tipping Britain back into the first double-dip recession since the 1970s, The Times reports.There was no doubting the twin passions of Steve Morgan, the executive chairman of the housebuilder Redrow, yesterday. The owner of Wolverhampton Wanderers FC wore his maroon and white company tie and gold Wolves cufflinks to announce plans to raise nearly £80m to fund the expansion of Redrow ? a business he founded nearly four decades ago. Displaying no visible signs of dismay at Wanderers' relegation last weekend, he said that he planned to plough nearly £20m into the housebuilder and fully underwrite the rest of the fundraising. Redrow will use the funds raised to expand its London division and to take advantage of other "strategic opportunities" outside the capital, The Times says.Chief executive Philip Clarke's attempts to revive Tesco's fortunes suffered a setback yesterday as figures showed Britain's biggest grocer continues to lose customers to its rivals. Tesco saw its market share slip to 30.7% in the 12 weeks to 15 April, from 30.9% a year earlier. The company, until recently seen as an unstoppable growth engine threatening to engulf British retail, hit the rocks in January with a shock profit warning that sent shares tumbling. Last week Clarke vowed to get back to retail basics in order to stem the decline, pledging 8,000 more staff and a revamped, "warmer" décor in a £1bn bid to lure customers back, The Scotsman writes.Royal Bank of Scotland could dramatically reduce the number of its outstanding shares in a 10-for-1 swap, instantly boosting their price to a level not seen since 2008. The state-backed bank is proposing to swap every 10 existing shares for one worth 10 times as much in a rare move that could help it shake off the stigma of its near collapse and government bailout during the financial crisis. While largely cosmetic, the "reverse stock split" would restore the bank's share price to a trading range more typical of the London market. On Tuesday's closing price of 23.2p, the new share price would be £2.32, The Financial Times reports. AB