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It's not exactly an uplifting day in the papers with tales of gloom from the nuclear industry and the maker of BlackBerry handsets, and the likelihood that we're back in recession. So here's some reason to be cheerful, a) it's Friday b) next week's half term and c) you can eat your bodyweight in chocolate at Easter. . . too flippant ? Then read on for the main stories in the business pages.
MARY PORTAS DISAPPOINTED BY COALITION PLANS TO HELP HIGH STREETS
By Zoe Wood
The government will on Friday announce plans to pump more than £10m into run-down high streets around the country as it responds to last year's independent review by TV retail guru Mary Portas, but is already coming under fire for failing to support some of the report's hardest-hitting recommendations. In its formal response, the government is expected to say it has accepted "virtually all" 28 recommendations, which included establishing a national market day and relaxing rules so that empty shops could be turned into gyms and creches. Details of the response will be announced by Grant Shapps, the minister for housing and local government. It is expected to include a new £10m taxpayer-funded high street "innovation fund" to bring empty shops back into use – which could swell to £30m if councils and landlords get behind it. It is also likely to back Portas's call to cut red tape by helping councils revoke "archaic bylaws", making it easier for new markets and businesses to get off the ground, and to look at measures to coax back people put off by high car parking charges. But it remained unclear on Thursday whether the government would support Portas's more controversial ideas. Portas said she welcomed the extra money, but expressed disappointment the government was not going further, such as demanding the secretary of state have an exceptional right to decide the fate of new out-of-town developments.
SETBACK FOR UK NUCLEAR POWER PLANS
By Sylvia Pfeifer, Energy Editor
Two German companies on Thursday ditched multibillion-pound plans to build nuclear reactors in the UK, dealing a blow to government plans for a new generation of atomic power stations and raising concerns about Britain’s energy security. Eon and RWE said they were putting their Horizon nuclear joint venture up for sale. The companies cited the economic crisis and the impact on balance sheets of Germany’s move to abandon nuclear power. “The decision was based on strategic grounds as well as the financial constraints of the two companies,” said Tony Cocker, chief executive of Eon UK, adding that relatively high gas prices in Europe were also a factor. “We therefore have less financial power than we had,” he said. Both utilities remained committed to investing in other forms of energy generation in the UK.
POLICY SLAMMED AS GERMANS GO COLD ON POWER PLANT PLAN FOR BRITAIN
By Steve Hawkes, Business Editor
Britain’s energy strategy is "in tatters" now two German giants have pulled the plug on a plan for new nuclear plants, union chiefs said last night. The Sun told exclusively yesterday how RWE NPOWER and E. ON say they can no longer afford to invest in their £15billion project. Privately, company insiders claim the Government's dithering over long-term returns was also a factor. The German firms planned to open a nuke power plant in Anglesey by 2020 and another in Oldbury, near Bristol, by 2025. But their HORIZON joint venture, manned by 130 staff, is being put up for sale. The Government is relying on EIGHT nuclear sites to go up over the next 15 years to keep power lines buzzing as North Sea reserves run out. And GMB union chief Gary Smith said: "New nuclear is an essential component in keeping the lights on in the UK. We can't keep extending the lifespan of existing nuclear stations and renewables cannot fill the gap on their own. "
APPLE RESPONDS TO REPORT ON FOXCONN
By Chris Nuttall and Richard Waters in San Francisco
Apple sought to stem long-running criticism of its failure to ensure adequate conditions for Chinese workers making its iPhone and iPad as it threw its weight behind an independent report that detailed multiple abuses of labour codes. Hours after Tim Cook, Apple chief executive, toured a Chinese production line of Foxconn, a main supplier, the Fair Labor Association said that the contract manufacturer had agreed to improve working hours, pay, union representation and health and safety conditions for its 1. 2m workers. Human rights organisations have criticised Apple for maintaining profit margins of 30 per cent as it extracts deals from suppliers such as Foxconn, which has only a 1. 5 per cent profit margin. Apple has accumulated nearly $100bn in cash reserves.
HOUSE PRICES FALL SHARPLY IN MARCH
By Norma Cohen
UK house prices fell sharply and unexpectedly in March, according to a closely followed lender’s survey, and for the first time since last September are showing a year-on-year decline. The Nationwide House Price Index fell 1 per cent from February, instead of registering a slight rise as most economists had expected. House prices now stand 0. 9 per cent below their levels at this time last year and for the quarter are 1 per cent below where they were in the last three months of 2011. Robert Gardner, chief economist at Nationwide, said the most likely cause was the expiry of a stamp duty holiday at the end of March which had exempted first-time buyers acquiring properties priced between £125,000 and £250,000. The holiday probably added to demand earlier in the year as buyers brought forward purchases to take advantage of it. On average, Mr Gardner said, the expiry of the holiday would add an extra £1,800 to the purchase of a new home later in this fiscal year.
BANK OF ENGLAND FACES CALLS FOR FULL REVIEW OF HANDLING OF FINANCIAL CRISIS
By Jill Treanor
The Bank of England is facing calls to publish a full account of how it handled the financial crisis after the Treasury admitted it had made mistakes when the UK's banking system was on the brink of collapse. In a 60-page review the Treasury was found to have failed to foresee the financial crisis and been too slow to recruit enough people. It now needs to slow down its high staff turnover if it is to handle any future crisis. The Treasury's account – the result of the public accounts committee calling for a "lessons learnt" report – portrays tensions at the top of the tripartite system of regulation, which divides responsibility between the Treasury, the Bank of England and the Financial Services Authority. This system is being ripped up by the coalition, which is handing more power to the Bank of England. The publication of the Treasury's review sparked Andrew Tyrie, chairman of the Treasury select committee, to call on the Bank of England to do the same.
'UK ECONOMY IS BACK IN RECESSION', CLAIMS GLOBAL THINK-TANK
By Adrian Lowery
The UK economy shrank in the first quarter of this year and is therefore officially back in recession, according to a leading global think-tank. The Organisation for Economic Co-operation and Development said output fell 0. 1 per cent in the January to March period, which would mean two consecutive quarters of economic contraction. The most recent official figures showed the economy experienced a 0. 3 per cent fall in gross domestic product in the last quarter of 2011 - worse than the previous estimate of a 0. 2% fall.
Two quarters of negative economic growth would mean the economy is officially in recession but official figures for GDP in the current quarter will not be available until 25 April.
CO-OP BID FOR LLOYDS BRANCHES IN BALANCE
By David Shand
The boss of the Co-operative Group yesterday said its bid to buy more than 600 Lloyds Banking Group branches may come to nothing, as he issued a gloomy outlook for the UK economy. Peter Marks said “a number of regulatory and economic issues” needed to be addressed before a decision is taken on whether to proceed with a deal in the next few weeks but there was “no question” of the mutually owned group’s ability to run a bank. Lord Levene’s new British banking venture NBNK plans to step in should the Co-op deal unravel but Marks ¬reiterated the Co-op was in exclusive talks with Lloyds, which has to offload 632 retail branches worth an estimated £1-1. 5billion to comply with European state aid rules.
MAN FROM THE PRU CASHES IN AFTER ASIA SUCCESS
By Miles Costello
Prudential awarded its chief executive Tidjane Thiam an annual bonus of almost £1. 6 million last year after he made the group’s Asian business its biggest profits generator for the first time. Britain’s biggest insurer paid the bonus on top of Mr Thiam’s base salary of £900,000 a year. Including additional benefits, the Pru is thought to have paid its boss about £2. 8 million for 2011, when operating profits rose 7 per cent to more than £2 billion, including £709 million from the Asian arm. The insurer is also thought to have handed Mr Thiam roughly £1. 9 million in shares under a 2009 incentive scheme. It takes Mr Thiam’s package for the past year to about £4. 7 million. Full details of executive pay at the insurer will be disclosed today in the annual report.
BLACKBERRY MAKER RESEARCH IN MOTION TO FOCUS ON BUSINESS CUSTOMERS AFTER REVENUE FALLS 25PC
RIM has been struggling as Americans are abandoning their BlackBerrys for flashier touch-screen phones such as Apple's iPhone and models that run Google's Android software. BlackBerrys have been popular among business customers, in large part because of their security. But RIM has had limited success trying to enter consumer markets in recent years. The company admitted in a conference call that "some BlackBerry models are not selling as well as anticipated"…"We plan to refocus on the enterprise business and capitalize on our leading position in this segment," chief executive Thorsten Heins said. "We believe that BlackBerry cannot succeed if we tried to be everybody's darling and all things to all people. Therefore, we plan to build on our strength. "… Heins, who refused to rule out a sale of the business, made the remarks after RIM announced quarterly results that fell short of Wall Street expectations.
GLASGOW CENTRAL NOW BUSIEST RAIL STATION OUTSIDE LONDON
By Alastair Dalton
It has been Scotland’s railway cathedral, serving commuters and long-distance travellers alike for 133 years from the age of steam to today’s hi-tech tilting trains.
And Glasgow Central was yesterday blessed with a new accolade – becoming the busiest British station outside London.
Nearly 25 million passengers crossed Central’s vast concourse last year, a million more than in 2010, according to new Office of Rail Regulation figures.
The boost helped the station to leapfrog Birmingham New Street to take ninth place overall, behind King’s Cross in London.
Owner Network Rail said two new platforms on a former car park had helped to increase passenger numbers by enabling the station to handle more trains.
SOURCE OF GAS-RIG LEAK IS FOUND
By Rob Hastings
The owners of a North Sea gas rig have found the source of a leak that forced hundreds of workers to be evacuated. Oil company Total said the gas is coming from a rock formation 4,000m below the seabed before escaping from a leak on the platform roughly 25m above sea level. Total is examining ways to block the leak, though it could take months. Any risk of explosion is said to be minimal.
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- "Know your broker” threatens small firms
- AMI backs fully advised market
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