GEORGE Osborne yesterday

announced he was scrapping the 50p

rate as he unveiled a raft of tax cuts
for individuals and businesses but
he decided to stage a raid on pension-
ers, banks, buyers of 2m properties
and other groups to fund his headline
grabbing measures.
In what he described as a Budget
that unashamedly backs business,
the chancellor said he was cutting cor-
poration tax by two percentage points
to 24 per cent. The headline rate will
then fall by one per cent in each of the
next two years to stand at 22 per cent
by 2014.
The chancellors aides said the cut
in business tax along with a reduction
in the top rate for high earning indi-
viduals from 50p to 45p would send a
strong signal that Britain is open for
business.
Osborne said he had decided to cut
the 50p rate after HM Revenue and
Customs and the Office for Budget
Responsibility said it had raised far
less than hoped and could have even
lowered the overall tax take.
He said: No chancellor can justify a
tax rate that damages our economy
and raises next to nothing.
Labour leader Ed Miliband dis-
missed the Budget as one which
would see millions pay more while
millionaires pay less and said the
chancellor had abandoned his prom-
ise that were all in this together.
Osborne said the main aim of his
Budget was to support working fami-
lies and to that end he said he would
increase the threshold at which peo-
ple start paying tax by 1,100 to 9,205
in 2013, the largest real-terms hike in
the allowance for thirty years.
In a bid to prevent a middle
England backlash against plans to
strip higher-rate tax payers of their
child benefit, the chancellor also said
that only those families with some-
one earning over 50,000, rather than
42,000, would lose the benefit.
Even then it will be taken away
gradually at a rate of one per cent for
every 100 earned over 50,000 to a
maximum of 60,000.
For the first time since coming to
power in 2010, Osborne delivered his
Budget against a slightly improving
economic backdrop, but with public
debt set to peak at 76 per cent of GDP
in 2014-15, the governments finances
remain in a parlous state.
Having decided against further
spending cuts, Osborne launched a
series of raids to fund the corporation
tax cut and the hike in the personal
allowance, which will reduce the
exchequers revenues by a combined
17bn over the next five years.
The chancellor said he would raise
3bn over the next five years by freez-
ing tax allowances for pensioners in a
politically risky move that was quickly
dubbed a granny tax.
He announced a series of measures
that will hurt buyers of Britains most
expensive properties, including a hike
in stamp duty on 2m houses from
five per cent to seven per cent.
Osborne also said he would close a
loophole that allows wealthy home
buyers to avoid stamp duty by pur-
chasing a 2m property using a com-
pany, and that he would consult on an
annual charge for those who had used
this method in the past.
Meanwhile, he hiked the levy on
banks yet again to ensure they do not
benefit from the corporation tax cut,
raising 1.8bn for the exchequer over
the next five years.
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George Osborne claimed his Budget was unashamedly pro-business
BUSINESS WITH PERSONALITY
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www.cityam.com Issue 1,597 Thursday 22 March 2012 FREE
50P TAX RATE
GOES AT LAST
But chancellor raids grannies, mansions and banks
BY DAVID CROW
BUDGET
2012
The new jobs website for London professionals
CAREERS.com
News | Budget 2012
2
CITYA.M. 22 MARCH 2012
THE ECONOMY/
PUBLIC FINANCES
lThe Office for Budget Responsibility
(OBR) forecasts that UK GDP will grow
by around 0.8 per cent this year, the
same rate as in 2011, up from its earlier
forecast of 0.7 per cent. The beneficial
effects of falling inflation are expected to
be offset by uncertainty over the
Eurozone and tighter credit conditions
feeding through to the wider economy.
lThe OBRs medium-term growth fore-
cast for the UK remains similar to that
presented in November 2011. In 2013,
growth is forecast to be 2.0 per cent
(revised down from 2.1 per cent in
November), picking up to 2.7 per cent in
2014 and reaching 3.0 per cent in 2015
and 2016. However, the situation in the
Eurozone remains a major risk to the
OBRs forecast.
lThe OBR has revised its forecast for
Eurozone growth in 2012 by 0.8 percent-
age points to -0.3 per cent, and its
growth forecast for 2013 by 0.4 percent-
age points to 1.1 per cent.
lThe OBR predicts that unemployment
will rise 0.3 per cent this year, peaking at
8.7 per cent. It is expected to fall back to
around 6.3 per cent by 2016. Claimant
count is down, but this reflects method-
ological changes as well as better than
expected data. Employment is predicted
to be down by 100,000 on last year at
29.1m. It is expected to grow to 30m by
2016, but 800,000 of those jobs will not
be gained until 2014 onwards.
lThe OBR expects real household dis-
posable income growth to be weak in
both 2012 and 2013 and that it will be
2014 before income growth outstrips
inflation by a significant margin. It has
made a small upward revision to its busi-
ness investment forecast reflecting the
cut in the main rate of corporation tax.
lThe OBR expects the CPI measure of
inflation to fall from 2.8 per cent this
year to 1.9 per cent in 2013 and 2 per
cent by 2015.
lMajor taxes as a percentage of GDP
are expected to rise from 35.8 per cent
of GDP in 2010-11 to 36.2 per cent by
2016-17.
lThe OBR forecasts that public sector
net borrowing (PSNB) will total 126bn
this year, 8.3 per cent of GDP. This is
1.1bn less than its November forecast.
In fact, the OBR expects the public sec-
tor to spend 6.2bn less than it forecast
in November, but it has also revised
down expected tax revenues by 5.1bn,
mainly due to a 3.6bn shortfall in self-
assessment receipts. PSNB is now fore-
cast to decline to 21bn, 1.1 per cent of
GDP, in 2016-17. This is just 2.5bn lower
than the November forecast.
lPublic sector net debt (PSND) is
expected to rise from 67.3 per cent of
GDP this year to a peak of 76.3 per cent
in 2014-15, falling thereafter.
lThe OBR notes that in 2012-13 PSNB
is now predicted to enjoy a much larger
fall than was predicted in November, due
to the governments decision to transfer
the Royal Mails historic pension deficit,
plus a share of its pension funds assets,
into the public sector. This will lead to a
one-off reduction in PSNB of 28bn (or
1.8 per cent of GDP) in 2012-13, and will
reduce PSND by around 23bn from
2012-13 onwards as pension fund assets
are transferred and sold.
PUBLIC SPENDING
lThis is a fiscally neutral Budget over a
five year period, with matching reduc-
tions to both taxation and spending.
lTotal managed expenditure (TME)
peaked in 2009-10 at 48 per cent of
GDP. However, the OBR notes that this
peak was primarily due to a sharp fall in
nominal GDP at the time. TME is forecast
to fall to 39 per cent of GDP by 2016-17,
mostly because of the cuts in departmen-
tal expenditure limits set out in the gov-
ernments fiscal consolidation plan.
lSince November, the OBR has reduced
its forecast for spending by central gov-
ernment by 6bn and 1.6bn for spend-
ing by public corporations. The projection
for local government spending has
increased by 1.5bn.
lA consultation will examine the case
for longer-dated gilts than fifty years and
also perpetual gilts.
TAX
lThe top rate of income tax will fall
from 50 per cent to 45 per cent from
April 2013.
lThe personal allowance will increase
by a further 1,100 in April 2013, taking
it to 9,205.
lA new stamp duty land tax rate of 7
per cent for residential properties over
2m applies from 22 March. A 15 per
cent rate will apply to residential proper-
ties over 2m purchased by certain non-
natural persons and the government will
consult on introducing an annual charge
on such owners.
lA number of VAT hikes will come in
from 1 October 2012, on items from list-
ed building repairs to sports drinks..
lA new limit on all uncapped income
tax reliefs means that for anyone seeking
to claim more than 50,000 of relief, a
cap will be set at 25 per cent of income.
lThe government has accepted the rec-
ommendation of the Aaronson Report
for a General Anti-Abuse Rule (GAAR)
targeted at tax avoidance schemes. It
will bring forward legislation to create it
in Finance Bill 2013.
lAs previously announced, alcohol duty
rates will increase by 2 per cent above
the RPI inflation measure from 26 March
2012.
lTobacco products duty rates increased
by 5 per cent above the RPI measure of
inflation from 6pm on 21 March 2012.
lThere are no changes in fuel duty
plans. A fair fuel stabiliser will come into
effect as previously announced.
lVehicle excise duty (VED) rates will
increase from 1 April 2012 in line with
the RPI measure of inflation. VED rates
for heavy goods vehicles will be frozen.
lFrom 201415, taxpayers will receive
a new personal tax statement. This will
detail the income tax and national insur-
ance contributions (NIC) they have paid,
their average tax rates, and how this con-
tributes to public spending.
BUSINESS
lThe main rate of corporation tax will
fall by an additional one per cent from
April 2012.
lThe corporation tax rate will now fall
by 2 per cent, from 26 per cent to 24 per
cent in April 2012, to 23 per cent in April
2013 and to 22 per cent in April 2014.
lFrom 1 January 2013, the full rate of
the bank levy will rise from 0.088 to
0.105 per cent.
lThe government will introduce a new
3bn eld allowance for oil and gas pro-
duction for particularly deep elds with
sizeable reserves, targeted at the West
of Shetland.
lThe allowance for small elds will
increase to 150m and the size of eld
qualifying for the maximum allowance
will be 6.25 m tonnes (approximately
45m barrels), tapering to no allowance
at 7m tonnes (approximately 50m bar-
rels).
lThe government will introduce legisla-
tion in 2013 giving it statutory authority
to sign contracts with companies operat-
ing in the UK and UK continental shelf, to
provide assurance on the relief they will
receive when decommissioning assets.
lThe government will consult on simpli-
fying the Carbon Reduction Commitment
(CRC) energy efciency scheme to
reduce administrative burdens on busi-
ness. If the burden remains, proposals in
autumn 2012 will replace CRC revenues
with an alternative environmental tax.
lSunday Trading laws will be relaxed,
22 July-9 September 2012, to let retail-
ers make the most of the Olympics.
lFrom April 2013, corporation tax relief
for the video games, animation and high
end television industries.
lMachine games duty (MGD) from 1
February 2013 will be at a standard rate
of 20 per cent and the lower rate will be
5 per cent of net takings.
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What was in Osbornes red
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News | Budget 2012
3
CITYA.M. 22 MARCH 2012
PENSIONS/BENEFITS
lChild benet will be withdrawn
through an income tax charge, applying
to households where someone has an
income over 50,000 a year. For house-
holds where someone has an income
between 50,000 and 60,000, the
charge will apply gradually, preventing a
cliff-edge effect. But above 60,000 the
benefit will stop altogether.
lNew laws will ensure that arrange-
ments where an employer pays a pension
contribution into a registered pension
scheme for an employees spouse or fam-
ily member as part of their employees
exible remuneration package cannot be
used to obtain tax and NIC advantages
for the employee or the employer.
lFrom 6 April 2013, income tax age-
related allowances will be restricted to
existing recipients. This is the so-called
granny tax. The allowance available to
those aged 65-74 will in future be limited
to those born between 6 April 1938 and
5 April 1948, and the higher allowance
available to those aged 75 and over will
be limited to those born before 6 April
1938. In addition, from 6 April 2013 the
age-related allowances will be frozen at
their 201213 levels (10,500 for those
born between 6 April 1938 and 5 April
1948, and 10,660 for those born before
6 April 1938) until they align with the
personal allowance, at which point age-
related allowances will be removed.
lThe government will reform the state
pension into a single tier pension for
future pensioners from early in the next
parliament. The pension age will be
increased in future to take account of
increasing longevity.
ARMED FORCES
lSavings from the end of Afghanistan
operations will leave 100m to improve
military accommodation. Council tax
relief will be doubled to 100 per cent for
deployed military personnel. The families
welfare grant will also be doubled.
PUBLIC SECTOR
lThe Treasury has published its submis-
sion to the pay review bodies on the
advantages of bringing public sector pay
into line with local private sector rates.
Some departments will have the option
of moving to more local systems in 2012.
SMALL BUSINESSES
lThe Enterprise Management Incentive
scheme (EMI), which helps SMEs recruit
and retain talent, will get support to help
start-ups access it, consultation on
amending restrictions that prevent the
scheme being used by academics
employed by startups, and a more than
doubling of the grant limit to 250,000.
Gains on shares acquired through EMI
options will be eligible for capital gains
tax entrepreneurs relief.
lFrom April, the EIS annual investment
limit for individuals will be 1m.
Qualifying company limits will be
increased to fewer than 250 employees
and gross assets before investment of
15m and a post-investment gross
assets limit of 16m. The annual invest-
ment limit for qualifying companies will
increase to 5m under EIS and VCTs.
From April, some restrictions will end on
qualifying shares and types of investor
for EIS and the 1m limit on investment
by a VCT in a single company.
lFrom April, the new Seed Enterprise
Investment Scheme (SEIS), provides
income tax relief of 50 per cent for indi-
viduals who invest in shares in qualifying
seed companies. There is also a capital
gains tax (CGT) holiday: gains realised on
the disposal of assets in 201213 that
are invested through SEIS in the same
year will be exempt from CGT.
lThe government is considering a pro-
gramme of enterprise loans to help
young people set up and grow their own
businesses.
lFrom April 2013 the government will
introduce a new cash basis for calculat-
ing tax for small unincorporated busi-
nesses, perhaps up to 77,000 turnover.
The details are to be worked out.
UK DEVELOPMENT
lThe Growing Places Fund will be
increased by 270m, including 70m for
the Greater London Authority. Up to
150m will also be available from
201314 for large projects in core cities.
l130m will be spent through Network
Rail on the Northern Hub rail scheme.
lEnhanced capital allowances will be
available from 1 April at enterprise areas
in Scotland and Wales.
lLord Heseltine will lead an independ-
ent review of public sector bodies capac-
ity to deliver pro-growth policies.
SCIENCE/TECHNOLOGY
lA new 100m fund will support
investment in university research facili-
ties. 60m will establish a UK centre for
aerodynamics, opening in 2012-13.
lBelfast, Birmingham, Bradford, Bristol,
Cardiff, Edinburgh, Leeds, London,
Manchester and Newcastle have all been
selected to be made super-connected
broadband cities, using the 100m
announced in the Autumn Statement. An
additional 50m will fund a second wave
of ten smaller super-connected cities.
CREDIT EASING
lThe funds for the Business Finance
Partnership have been increased from
1bn to 1.2bn. A shortlist of seven
funds has also been announced: Alcentra,
Ares Management, Cairn Capital,
Haymarket Financial, M&G Investment
Management, Palio Capital Partners and
Pricoa Capital. 700m will now be
shared from the pot between some or all
of these. 100m will be allocated to non-
traditional lending channels, such as
peer-to-peer.
lThe level of lenders Enterprise Finance
Guarantee loan portfolios to which the
scheme applies will increase from 13 per
cent to 20 per cent for 2012-13.
lThe Get Britain Building fund gets
150m more for development finance.
Marc Sidwell
Pages 4, 5, 7, 21,
22-26 & 28-33
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SOMEBODY like me a believer in
lower taxes and less government inter-
vention ought to love this Budget. I
certainly like the fact that the top rate
of tax will fall by five percentage
points (even if this will only happen in
13 months time), and that corpora-
tion tax is being cut to 24 per cent next
month. This will boost incentives and
competitiveness. But despite that
and perhaps because so much of the
Budget had been leaked I was left
feeling underwhelmed. But before I
explain why Im uneasy about the
overall tone of the Budget, let me tell
you what George Osborne got right.
The UK is partially reopening for
business, though the process is far
from complete and is still going into
reverse for the financial services indus-
try, including insurers. Proposed
enhancements announced yesterday
to enterprise management incentive
(EMI) schemes could be great if they
materialise; and a boost to the enter-
prise investment schemes (EIS) and
venture capital trusts (VCTs) will also
help. The rise in the personal
allowance to 8,105 in April and to
9,205 in April 2013 will improve the
incentives of low earners to work and
is therefore welcome. After being raid-
ed last year, helping to trigger a col-
lapse in output, oil and gas companies
were given a boost yesterday. New field
Good tax cuts drownedout
News | Budget 2012
4
CITYA.M. 22 MARCH 2012
EDITORS LETTER
ALLISTER HEATH
allowances will undo some of
Osbornes previous blunder.
There are other positive reforms.
Public spending as a share of GDP is
falling from 48 per cent in 2009-10 to
39 per cent by 2016-17 on the
Treasurys measure. A net 730,000 pub-
lic sector jobs will go between the start
of 2011 and the start of 2017. While
painful, this will help reverse Gordon
Browns catastrophic increase in the
size and tentacles of the state. There is
even a chance that the new general
anti abuse rule (GAAR) for tax avoid-
ance may be implemented sensibly.
The government rightly wants to pre-
vent artificial and abusive tax avoid-
ance but seems to realise that this
must not create uncertainty for nor-
mal transactions.
So much for the good news. The rest
of the Budget, its lack of a proper
philosophical underpinning and the
fact that Osborne felt the need to bash
the rich to justify cutting the top
rate of tax was disappointing. At times,
Osborne sounded almost like Brown;
had their accents not been so differ-
ent, they could have been the same
person. Massive tax hikes on pension-
ers and company cars were buried in
the Red Book and not mentioned prop-
erly in the speech. Silly Sunday trading
laws will be reinstated after the
Olympics; there is still nothing con-
crete on airport expansion, or on the
planning shake-up. There has been no
break with Brownonomics when it
comes to tinkering and fiddling:
Osborne believes in picking winners:
this time, aerodynamics and video
game makers are flavour of the
month. There will be a new, simple tax
calculation for businesses but only for
those with a turnover up to 77,000.
A real supply-side Budget would
have slashed marginal rates for the
majority of taxpayers to boost incen-
tives to work, save and invest and cut
spending faster. Yet the rise in the per-
sonal allowance cuts the marginal
rates of no more than 7 per cent of tax-
payers. Another 300,000 earners will
be drawn into the 40 per cent band,
increasing their marginal tax rates.
The cut in the top rate affects only
300,000 people. Plans to withdraw
child benefit from higher-rate taxpay-
ers have been watered down they
will be cut progressively for families
The chancellor was right to cut income and corporation tax but many of his other moves were awed Picture: GETTY
by a series of silly errors
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CITYA.M. 22 MARCH 2012
News | Budget 2012
5
with one parent on 50,000. They will
be completely withdrawn from those
on 60,000. But this will mean crip-
pling marginal tax rates for parents
earning between 50-60,000: on top of
the 42 per cent current rate (including
employee national insurance), the
Social Market Foundation calculates
that an extra rate of 10.6 per cent will
be payable for parents with one child,
17.5 per cent for those with two and
24.5 per cent for those with three. This
is ridiculous and families with two
adults in work earning 50,000 each (a
combined 100,000) will still get the
benefit but single earner families on
60,000 wont. Middle class welfare is
not a good idea but the way forward
should have been to restrict the bene-
fit as part of a massive package of tax
and spending cuts. Osborne has blun-
dered badly. He also retains crippling
marginal tax rates between 100,000
and 118,000, when taxpayers lose
their personal allowance.
The rise in the personal allowance is
partly being paid for by freezing age-
related allowances and hiking VAT
(including on hot sandwiches). It
makes sense that age-related
allowances are eliminated over time
but this is a brutal and ill-thought out
way of doing it. Pensioners will end up
paying much more tax; this raid on
grannies could derail the entire
Budget and damage Boris Johnsons
reelection chances.
Crucially, the reduction in receipts
from the corporation tax cut is exceed-
ed by increases in other business rev-
enues, stemming in part from yet
another hike in the bank levy so
much for the claim that Osborne is
now at peace with the City and a
massive increase in the tax on compa-
ny cars. Changes to North Sea taxation
and controlled foreign company rules
will also boost revenue, but that is
partly because of increased activity
and therefore a good thing.
The cap on unlimited tax reliefs is a
dramatic change to UK tax law but it
is hard to see its real (as opposed to
political) purpose. Reliefs exist for a
reason. Yet now, for anybody seeking to
claim more than 50,000 in reliefs, a
cap will be set at 25 per cent of income
(or 50,000, whichever is greater). The
main losers will be charities.
There has equally been no clean
break with Browns legacy when it
comes to income tax. Why was the top
rate of tax just cut to 45p, and not to
40p, where it had been since 1988? The
economic justification for not doing so
doesnt make sense it is based on an
estimate by the Treasury of how peo-
ple respond to taxes that appears to
have been chosen merely to justify this
new rate. At 45p, Britains marginal
income rate is well above the G7 and
EU average and the real rate is 47p,
plus 13.8 per cent employers national
insurance. And why wait a year? We
needed shock and awe to jolt the econ-
omy back into action; instead, the UK
is now stuck with a still high tax rate
because of some grubby compromise.
Im all for abolishing daft loopholes.
It makes no sense that people can
avoid stamp duty by using a company
to buy homes. But those who legally
and openly did so in the past are now
going to be penalised retrospectively
with an annual levy on properties held
in companies. This is a very bad princi-
ple and a mini-mansion tax via the
back door. The Treasury argues that
READ OUR BUDGET SPECIAL
5,000 homes are kept in such compa-
nies; many may now be put up for sale,
disrupting the market. Meanwhile,
the new top 7 per cent stamp duty rate
is extortionate and a tax on moving.
For the sake of trying to hide the fact
that he was helping high earners by
cutting their income tax and to allow
him to produce a dodgy spreadsheet
claiming that high earners will now
pay more tax on average, even though
99 per cent wont Osborne chose to
wage class war on a handful of wealthy
folk. There was one over-riding failure
in the Budget: a refusal to accelerate
spending cuts. That forced the chancel-
lor into all sorts of silly tax hikes
especially on pensioners which he
will be paying for politically for years
to come.
allister.heath@cityam.com
Follow me on Twitter: @allisterheath
Pages 7, 21, 22, 23, 24, 25, 26, 28, 29-38
CITYA.M. 22 MARCH 2012
News | Budget 2012
7
A
T SOME point during his Budget
response yesterday, Ed Miliband
inquired as to what planet the
chancellor is on.
It turns out that George is on a plan-
et where its surprising when the mob
goes crazy over policies that cut taxes
on rich people, steal candy from babies
and go to war with Gillian Duffies.
But, but! George said. The electri-
fication of the trans-Pennine railways!
The information age!
Welcome to Georges world: life sci-
ence labs popping up like mushrooms,
electric trains whizzing by, video game
geeks elbowing Chinese factory work-
ers out of the fast lane. For those for
whom enterprise zones and nation-
al loans arent enough, he launched
enterprise loans.
What a splendid vision. The parlia-
mentary clerks wielded their Pritt
sticks manically. George could barely
contain his smugness as hysterical
applause gripped the government
benches, the Liberal Democrats shak-
ing their order papers like ladies wav-
ing handkerchiefs aboard the Titanic.
But every brave new world has its
seedy underbelly. How could he not
have foreseen the threat posed by the
chain-smoking, hot chicken-guzzling
grannies in fleets of company cars?
Perhaps he thought he had out-
manoeuvred them with his frenzied
briefing. One by one every measure
was leaked this one to please Nick
Clegg, that one for the Tory base,
another for Boris.
Is there anything you havent
leaked? staunch Labourite Robert
Flello bawled from the backbenches.
And yet the glut of transparency
only served to make the glaring sore on
the Budget scorecard all the more obvi-
ous. Simplification, the line read
innocently. Age-related allowances.
3.3bn stolen from granny at a stroke.
In how few words did our chancel-
lor lose his moral credibility. There
was no honest argument about the
looming pensions crisis or the hit to
the richest generation in history. With
small words and large numbers,
George declared war on behalf of
Britains debt-saddled youth.
But the grannies will pick the
weapon: handbags at dawn.
Handbags at
dawn: George
declares war
Politicking Osborne falls into a granny trap
AS always with George Osborne, yes-
terdays Budget was first and fore-
most about politics. Having spent
years on the wrong side of Gordon
Browns famous dividing lines, the
current chancellor has become pretty
adept at drawing his own.
First, there was the business-friend-
ly cut in the headline rate of corpora-
tion tax. Labour, you see, has a huge
problem when it comes to business,
and this measure only serves to
underline its image as the party of
the public sector.
Next came the cut in the 50p rate,
which had turned into a political
nightmare for Osborne. Even though
the public supported its retention,
they always knew the Tories didnt
believe in it. Labour attacked the
chancellor for wanting to get rid of it;
Tory backbenchers openly agitated
for its removal.
In one fell swoop, Osborne has
defused the situation by scrapping
the tax band and replacing it with a
new top rate of 45p. Labour might dis-
miss it as a tax cut for millionaires,
but there is no way they will pledge to
reintroduce a 50p rate should they
win the next election. After all,
Labour has always maintained that
they introduced it only as a tempo-
rary measure. Tory backbenchers will
find a new axe to grind.
That doesnt mean Osborne is ideo-
logically committed to lower rates of
income tax for high earners. Aides
yesterday hinted that the 45p top rate
of tax is here to stay. They have
stopped using the temporary tag
and now say that the 45p rate, like all
tax bands, is constantly under
review. Nigel Lawson it aint.
This kind of politicking can only
get you so far, however. While it pro-
vided Osborne with the biggest eye-
catching announcements, it was also
the cause of his worst misstep: a so-
called granny tax that will extract
3bn from pensioners over the next
five years by freezing their personal
tax allowances.
It was the Budgets single biggest
revenue raising measure by some
margin, and yet it barely garnered a
mention in the chancellors state-
ment. Indeed he tried to dress it up as
a good thing for pensioners, promis-
ing to simplify the tax system for
pensioners by doing away with the
complexity of age related allowances.
The terrified look on the faces of
the chancellors aides at yesterdays
press briefing said it all. They were
unprepared for the furore over the
granny tax. The chancellor quoted
the National Audit Office as saying
that many pensioners dont even
understand their tax-free allowances.
After this mornings headlines, that
can no longer be the case.
Wrong-footing the opposition with
tax cuts, neutralising back bench dis-
sent, and burying a 3bn stealth tax
on pensioners in the small-print: a
Budget that Gordon Brown would
have been proud of.
david.crow@cityam.com
POLITICAL COMMENT
DAVID CROW
POLITICAL SKETCH
JULIET SAMUEL
News,
analysis,
comment
Pages
21-38
OUR BUDGET SPECIAL
MORE NEWS
ONLINE
www.cityam.com
@
GAME Group is set to go into adminis-
tration after the crisis-hit retailer
admitted talks with stakeholders had
stalled and that equity in the group
was worthless.
The video games retailer, which
employs 10,000 staff, requested that its
shares be suspended from trading on
the London Stock Exchange yesterday
before filing its intention to appoint
an administrator.
Game said in a statement:
Discussions with all stakeholders and
other parties have not made sufficient
progress in the time available to offer
a realistic prospect for a solvent solu-
tion for the business.
PwC has been lined up as the
groups administrator. Game now has
up to ten days to carry on discussions
with lenders and other parties before
administrators walk in.
Games 1,200 stores worldwide will
continue to trade in the meantime.
The companys woes escalated
recently when major suppliers includ-
ing Nintendo and Electronic Arts
refused to sell their new releases to the
video games shop.
Private equity firm Opcapita had
tabled a rescue deal last week to buy
Games debt from its banks, led by
Royal Bank of Scotland, and pay sup-
pliers outstanding 40m bills in full,
but the deal was given the cold shoul-
der by banks. Game also faces a 15m
rent payment on Sunday.
Game over as
group calls in
administrator
BY KASMIRA JEFFORD
RETAIL

THE problems at Bank of America

Merrill Lynchs (BAML) UK equities
franchise deepened yesterday as it
emerged that two key members of
the groups oils team were leaving.
City A.M. has learned that the high-
ly regarded analyst Alejandro
Demichelis, co-head of the banks oil
and gas team, and his sales trading
colleague Andy Crispin are leaving to
join French rival Exane.
Demichelis, who follows compa-
nies such as BP, Shell, Cairn and
Afren, has worked at BAML since
2005. He joined from the energy con-
sultancy Wood Mackenzie after get-
ting an MBA from Edinburgh
University in 2001. Last year he was
voted number three in the Extel sur-
vey. Crispin was voted number three
in specialist sales in 2010.
It is not clear why Demichelis has
decided to join Exane but it is under-
stood he will be able to participate in
the firms profit-sharing scheme
which might prove financially benefi-
cial
There will be fears that BAMLs
strong franchise in the oil and gas sec-
tor will be under threat, with these
latest departures following the exit of
Andrew Osborne, the groups corpo-
rate broker who specialised in the oils
and gas sector.
Osborne left the firm last year and
later faced a regulatory fine.
Exane poaches highly-rated
oil experts from BoA Merrill
BY DAVID HELLIER AND JULIET SAMUEL
EXCLUSIVE

News
8 CITYA.M. 22 MARCH 2012
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ANALYSIS l GAME Group PLC
15Mar 16Mar 19Mar 20Mar
4.50
4.00
3.50
2.00
2.50
3.00
2.39
20 Mar
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SHARES in Dutch cable company
Ziggo rose over 18 per cent in its
debut on the Amsterdam stock
exchange yesterday despite advisers
pricing the initial public offering
(IPO) at 18.50, the top end of its
expected range.
Ziggo joins Swiss group DKSH in
ending an eight-month hiatus of big
European listings.
Darrell Uden of UBS worked on the
deal and told City A.M. that Ziggos
success should spur further activity.
These benchmark transactions
have been greatly watched by the
market at large as indicators of IPO
activity for the rest of the year. Their
success should signal many more
companies electing to access the
equity capital markets in Europe in
2012, Uden explained.
Private equity firms Warburg
Pincus and Cinven were the biggest
beneficaries of the issue after help-
ing to build Ziggo into a major play-
er.
Ziggo rockets on IPO day
CAPITAL MARKETS

News
10 CITYA.M. 22 MARCH 2012
BORROWING unexpectedly doubled in
February, official figures showed yes-
terday, as tax revenues dropped and
welfare spending rose sharply.
The deficit on current spending hit
11.05bn last month and investment
spending pushed net borrowing to
15.18bn up from 8.88bn in the
same month of 2011.
Excluding the bank bailouts, the
national debt now stands at 63.1 per
cent of GDP, up from 58.8 per cent a
year ago and 63 per cent in January.
Over the financial year to date, bor-
rowing stands at 109.86bn, down
8.93bn from 118.89bn last year.
Current spending rose 4.03bn on
February last year to 52.53bn, with
much of the increase coming from a
1.46bn rise in social benefits.
That takes spending in the financial
year so far to 562.05bn, up 10.09bn
on the 551.96bn seen in the first 11
years of the last financial year.
The increase in other current
expenditure likely reflects govern-
ment departments using up spare
capacity in their budgets before year-
end, said Nomura analyst Philip Rush,
explaining the jump in spending.
Surprise jump in
deficit as welfare
spending goes up
BY TIM WALLACE
UK ECONOMY

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www.cityam.com
Ziggo CEO Bernard Dijkhuizen is all smiles after a strong IPO.
ANALYSIS l Cumulative Public Sector Net Borrowing
p
180
160
140
120
100
80
60
40
20
Jun
2010-11 borrowing
2011-12borrowing
Sep Dec Mar
2011/12borrowingOBRforecast
AN influential European Parliament
committee has overwhelmingly
backed a draft proposal for a new
capital regime for insurers, includ-
ing amendments that make the new
rules more industry friendly.
The 37-to-five vote makes it virtual-
ly certain the changes will survive in
the final version of the so-called
Solvency II regime, potentially sav-
ing insurers billions of euros, and
boosts the chances of the rules tak-
ing effect on time in 2014.
The package approved yesterday
represents a compromise among the
biggest EU states, ensuring it will
make it into final law.
It allows for the continued use of
so-called matching premiums,
which allow insurers to hold less
capital than they would otherwise
have to against annuities, products
that are popular in Britain, Spain
and Ireland.
The amendments were initially
due to be ditched but were reinsert-
ed after a last-minute deal on 15
March.
Solvency II
reforms clear
major hurdle
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News
13 CITYA.M. 22 MARCH 2012
J SAINSBURY boss Justin King said the
retailers success was not dependent
on others failing as the group contin-
ued to win market share from rivals
like Tesco and posted a surge in fourth-
quarter sales.
Justin King described himself as a
competitive guy as the UKs third
largest supermarket reported a 2.6 rise
in like-for-like sales excluding fuel in
the 10 weeks to 17 March against a
challenging backdrop.
King said convenience, non-food
and online were all growing ahead of
the market, with the latter growing at
20 per cent a year.
He dismissed any concerns of com-
petition from other retailers in the
fresh food arena, highlighting the
supermarkets 85m investment into
quality fresh food and emphasising its
leadership position.
Sales of its Basics range of cheap
products rose by 10 per cent in the
final quarter of the year to 17 March,
while sales of Taste the Difference
ranges were up by 20 per cent.
King said the success of its value
range beyond the Christmas period
demonstrates...this challenge cus-
tomers are facing of saving week-on -
week.
King said this would continue as
households were forced to manage
budgets and save for special occasions
like the Jubilee and the Olympics.
Sainsburys
sees boost in
market share
AVIVA chief executive Andrew Moss
saw his total pay rise by nine per cent
in the year to 1 April, despite the insur-
ers shares having fallen by more than
20 per cent over the past 12 months.
Mosss (pictured) basic pay rose 3.8
per cent, increasing from 925,000
to 960,000. He then earnt a 1.16m
bonus, 480,000 under the firms
long-term incentive plan,
and a further 98,000 in
other benefits, Avivas
annual report revealed
yesterday.
The total of 2.69m is a nine per
cent rise on 2010s figure of 2.47m.
Mosss basic salary is set to rise a fur-
ther five per cent over the next year,
taking it to just over 1m. Shares
in Aviva fell a further six per
cent yesterday as it went ex-
dividend.
Earlier this month Aviva
reported a bigger-than-
expected six per cent rise in
2011 earnings, helped
by stronger profits
from life insurance.
Aviva chief exec gets 9pc
hike in 2011 compensation
BY KASMIRA JEFFORD
RETAIL

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TED BAKER dispelled some of the
retail gloom with a surge in sales
yesterday and said it was well-
placed for opportunities and chal-
lenges ahead as it plots the next
stage of its expansion abroad.
The fashion brand said revenues
increased 14.9 per cent to 215.6m
last year, helped by a good perform-
ance across all of its clothes ranges.
Chief executive Ray Kelvin, who
founded the business 25 years ago
making mens shirts, said the rise in
sales was due to doing what we
always have and the attention to
detail down to the very last button.
Pre-tax profits fell slightly below
analyst expectations to 24.3m.
Kelvin shrugged off a 2.8m
exceptional cost as unexceptional
in that it related to rent paid ahead
of its new stores in Japan and New
York as well as set-up costs related
to its expansion into China.
Meanwhile, the worlds leading
clothes retailer, Zara-owner Inditex,
announced upbeat early spring
sales yesterday as it reported a 12
per cent rise in annual profit driven
by aggressive expansion into fast-
growing Asia. Inditex has 5,500
stores across about 80 countries.
Ted Baker and
Inditex upbeat
as sales surge
RETAIL

Sainsburys boss Justin King highlighted the stores success since Christmas Picture: GETTY
ANALYST VIEWS: HOW HAS THE RETAILER
FARED COMPARED TO RIVALS? Interviews by Kasmira Jefford

CLIVE BLACK | SHORE CAPITAL

Sainsbury has delivered what can only be considered a very sound and
resilient performance against the backdrop of demonstrably challenging times.
Indeed, the group deserves credit for the sales momentum delivered in the fourth
quarter and in the face of some deep fuel related discounts by competitors.

RICHARD HUNTER | HARGREAVES LANSDOWN

Tescos current wobble is providing opportunities for others, and Sainsbury is
one of the supermarkets which seems to be capitalising on the situation. In particular,
the companys drive for value both in terms of price matching and own brand is paying
dividends, while non-food and the free online service are also contributing.

JONATHAN JACKSON | KILLIK & CO

This statement was slightly ahead of consensus expectations...The
group is performing well against its rivals, due in part to its Brand Match pro-
gramme, in which it has promised to refund any difference on the price of a basket
of branded goods versus Tesco or ASDA for baskets over 20.

ANALYSIS l J Sainsbury PLC

p 325
320
315
310
305
300
319.30
21 Mar
16Mar 15Mar 19Mar 20Mar 21 Mar
MINER ENRC yesterday signalled that
it would be making more boardroom
changes as it reported profits which
fell short of City forecasts.
The FTSE 100 company said pre-tax
profits fell 7.5 per cent to $2.8bn
(1.7bn) after hits due to the rising
cost of labour and energy.
Revenues rose 17 per cent to $7.7bn
last year but that was overshadowed
by a 24 per cent jump in costs.
Mehmet Dalman, who took over as
chairman of the Kazakh miner last
month indicated that changes were
on the way.
We have continued to review
board composition, mindful of the
need to progressively refresh the
board, with a view to affording it
with talented and dedicated directors
exhibiting, amongst other qualifica-
tions, domain knowledge, long expe-
rience of best-in-class corporate
governance practices, as well as cor-
porate finance and strategy, he said
in a statement. Dalman replaced
Johannes Sittard, who had been
expected to stand down following a
corporate governance review. Deputy
chairman Sir Richard Sykes and non-
executive director Ken Olisa were
removed from the board at the same
time. ENRC announced a final divi-
dend of 11 cents per share, taking the
full-year dividend to 27 cents, com-
pared to 30.5 cents the previous year
The company postponed a vote in
April on its plans to spend $650m
buying outstanding shares in coal
producer Shubarkol.
Shake-up for
ENRCs board
as profit dips
Lloyds Bank raises 170m
LLOYDS Banking Group has raised
170m through a new share issue as
it looks to keep debtholders on its
side.
The money will be used to restart
dividend payments on certain bonds,
a practice that was suspended by the
European Commission following the
taxpayer bailout of the bank during
the 2008 financial crisis.
Lloyds, which is partly owned by
the government, said it had issued
479.3m new shares at a subscription
price of 35.47 pence per share.
Lloyds said the share issue would
have a neutral effect on its capital
position, and analysts said the move
had been expected given its intention
to restart coupon payments on bonds
issued before the credit crunch.
Michael Symonds, a credit analyst
at Daiwa Capital Markets, said the
deal made sense for Lloyds, allowing
it to pay bondholders without deplet-
ing its capital position.
Lloyds is raising equity to pay
these coupons, as opposed to using
cash, to neutralise the impact on its
capital ratios. This looks like a pru-
dent step given the current focus of
investors and regulators on capital
preservation, he said.
The banks shares closed down 1.6
per cent at 35.6p well below the
average 63p price at which the British
taxpayer acquired its stake in the
bank.
Last month Lloyds reported a
3.5bn loss for 2011, with its earnings
dragged down by a 3.2bn hit to com-
pensate customers for the mis-selling
of payment protection insurance.
BY JOHN DUNNE
MINING

BY JAMES WATERSON
CAPITAL MARKETS

SHARES in APR Energy, a supplier of

temporary power generation,
plunged 19.5 per cent yesterday to
885p after the group said that full
publication of its results would be
delayed.
The company said in a statement
released after the market closed on
Tuesday, that it will release 2011
results in mid-April due to complex-
ities in reporting and accounting for
the various corporate transactions
which have taken place during the
period.
APR is a vehicle run by Pizza
Express founder Hugh Osmond, who
bought the Jacksonville, Florida-
based APR Energy in June for $855m
(540m).
Sources close to APR said it simply
ran out of the time needed to com-
plete the audit.
APR Energy hit as delays
release of full-year results
ENERGY

News
14 CITYA.M. 22 MARCH 2012
NEWS | IN BRIEF
Safestore scrapes pay deal at AGM
UK self-storage operator Safestore
passed a controversial pay deal for direc-
tors at its annual general meeting yester-
day, despite a sizeable protest vote that
saw 22 per cent of investors vote against
the package. The resolution proposed
increasing chief executive Peter Gowers
pay raised from 315,000 in 2011 to
325,000 this year. The companys
shares have lost 16 per cent over the
past 12 months, and in January its pre-
tax profit fell 71 per cent.
Ophir hails strong 2011 trading
Ophir Energy, the Africa-focused energy
company which began trading in London
last year said 2011 had been a strong year.
Revenue lifted from $530,000
(334,000) in 2010 to $14.68m in the 12
months ended 31 December 2011. The
companys fortunes were boosted by a
farm-out from its AGC Profond interests
to Noble Energy. Meanwhile, the loss
before tax was more or less flat at
$19.08m (2010: $19.28m) as higher rev-
enue was offset by rising exploration and
administration expenses. The company
secured a $384m float in July.
Petroplus courted by Russian
A former Russian energy minister is plan-
ning to bid for three refineries owned by
bankrupt oil refiner Petroplus, giving hope
to workers who fear refinery shut downs
and potentially dashing rivals expecta-
tions that industry overcapacity might be
reduced. Fund Energy, an investment vehi-
cle founded by Igor Yusufov, who still sits
on the board of directors of state-con-
trolled Gazprom, plans to bid for Petroplus
refineries at Coryton in England, Cressier
in Switzerland and Ingolstadt in Germany,
a source said.
p
ANALYSIS l Eurasian Natural Resources Corp PLC
700
690
680
670
660
650
643.50
21 Mar
16Mar 15Mar 19Mar 20Mar 21 Mar
Former energy minister Tim Eggars (inset) is at the helm of 3Legs
OIL and gas group 3Legs Resources
whose non executive chairman is for-
mer energy minister Tim Eggars
posted pre-tax losses of 2.3m for the
year to the end of December.
For the same period the year before
it reported a 2.5m profit.
The company said the loss was trig-
gered by rising administrative expens-
es associated with its IPO, higher
staffing costs incurred as a result of
building up the senior management
team and exchange losses on the
translation of foreign currency cash
balances.
Chief executive Peter Clutterbuck
said: The period since 31 December
2010 has seen our group undergo a
process of significant change.
We have now acquired a public
listing and raised sufficient funding
to enable the group to pursue an
active exploration programme over
the next 18-24 months, building on
our existing achievements.
OIL

3Legs Resources is hit by

rise in administration bill
SHARES in Lloyds of London insur-
er Hardy Underwriting soared yes-
terday after it said it had accepted a
280p per share cash takeover offer
from US rival CNA Financial, valu-
ing it at about 143m.
The board believes that CNAs
offer represents the most attractive
outcome for our shareholders and
will enhance Hardys business,
Hardy chairman David Mann said in
a statement.
The insurers share price
increased by more than a third after
the sale was announced,
Hardy effectively put itself up for
sale in December after being hit
hard by a string of natural disasters
last year, and had received offers
from rivals including Ireland-based
Beazley.
But Beazley said in mid-December
it had dropped its possible offer of
up to 350p a share for rival Hardy,
saying that Hardy had sought a
Hardy snapped up by US
rival CNA in 143m deal
BY HARRY BANKS
INSURANCE

News
15 CITYA.M. 22 MARCH 2012
David Mann said the deal was attractive
much higher price.
Smaller Lloyds of London insur-
ers have been seen as ripe for con-
solidation because persistently
weak insurance prices have weighed
on their shares, with forthcoming
strict regulatory capital require-
ments adding further financial
pressure.
Chaucer accepted a 292m offer
from Hanover Insurance last year,
while Brit Insurance succumbed in
2010 to a bid from buyout firms
Apollo and CVC.
While Hardys recent results
reflect the extraordinary level of
natural catastrophe losses across
the global insurance industry, the
Hardy franchise is built on a strong
foundation and has a bright
future, said CNA chairman and
chief executive Thomas Motamed.
CHIP designer ARM Holdings said yes-
terday it had picked John Buchanan
to succeed Doug Dunn as chairman.
Buchanan is chairman of artificial
knee and hip maker Smith &
Nephew, deputy chairman of
Vodafone and a senior independent
director of BHP Billiton. Dunn, who
has been chairman of the Cambridge-
based company since 2006, will step
down at the groups AGM on 3 May.
EDWARD Irwin, a representative of
investment vehicle Elpida, has been
named as a non-independent non-
executive director of Mitchells &
Butlers (M&B).
Elpida, a major shareholder in M&B,
is owned by racing tycoons JP
McManus and John Magnier. Interim
chief executive Bob Ivell also said the
companys search for a new boss was
going well.
Elpidas Irwin is
M&B director
TECHNOLOGY

TECHNOLOGY

ARM names
new chairman
News
16 CITYA.M. 22 MARCH 2012
DUTCH finance minister Jan Kees de
Jager said yesterday that he wanted
the European Commission to look for
alternatives to a proposed financial
transaction tax, which studies had
shown to be inefficient and not help-
ful in stabilising the financial sector.
De Jager said in a letter to parlia-
ment he wanted the commission to
look for alternatives, including a
financial activities tax, a bank tax, or
a stamp duty.
The Netherlands, along with other
European states such as the UK and
Sweden, has opposed the introduc-
tion of a so-called Tobin tax.
Dutch minister
warns EC not
to use Tobin tax
PORTUGALS government successfully
issued short-term debt yesterday,
despite growing worries the country
may follow Greece in requiring
another bailout.
The countrys core public deficit
nearly tripled in the first two months
of 2012, showing a deepening slump
is denting tax collection and stoking
concerns the country may miss its
budget targets.
The gap widened to 799m (677m)
from 274m a year earlier, showing
the debt-laden nation has its work cut
out to hit fiscal targets under a 78bn
EU and IMF bailout even after closely
following the creditors austerity
plan.
However, it did manage to sell
almost 2bn in short term debt, pay-
ing interest rates of 3.6 per cent on 12-
month bills and 2.16 per cent on
four-month debt, well down on yields
paid last month.
Earlier this week, finance minister
Vitor Gaspar dismissed suggestions
that Portugal, facing its worst reces-
sion since the 1970s, is slipping
behind the deficit reduction and
reform timetable set under the
bailout programme.
He ruled out asking for more res-
cue funds but many economists fear
Portugal will be forced to follow
Greeces lead in requesting a new
bailout or even restructuring its debt.
The government insists none of this
will be necessary.
Portugal edges closer to
second Eurozone bailout
EUROZONE

CONSUMER spending has been a lit-

tle more resilient than expected in
the opening months of the year, a sur-
vey from the Bank of England revealed
yesterday.
While consumer demand was only
growing at a gradual pace, the sum-
mary of business conditions offers a
glimmer of hope for the economic
recovery.
Annual growth of spending on con-
sumer services had also edged a little
higher this month [February], the
report said.
Another struggling section of the
UK economy housing has also seen
a pick up in activity, the Banks agents
said.
There had been some further
improvement in the housing market,
with fairly frequent reports of an
increase in viewings, offers and trans-
actions, the report said, yet warned
that activity still remained relatively
low.
The research also warned that the
pick up may partly be due to a jump in
activity before the end of temporary
stamp duty relief for first time buyers.
There was a rise in people buying
properties in order to rent them out,
as an investment, encouraged by the
increase in rents. However the trend
may be about to wane, the survey sug-
gested, as some contacts reported
that the pace of increase in rents had
slowed as more supply had become
available.
Green shoots for retailers
and the housing industry
UK ECONOMY

TAX

RISING oil prices are worrying sen-

ior Bank of England officials, it
emerged yesterday, as the Monetary
Policy Committee (MPC) published
the minutes of its March meeting.
The Bank voted 7-2 to keep mone-
tary policy on hold, with only a pair
of doves Adam Posen and David
Miles calling for even more quanti-
tative easing.
Quantitative easing is currently
taking the Banks asset holding up
to 325bn, while interest rates have
been pegged down at 0.5 per cent
for three years.
Inflation eased slightly to 3.4 per
cent in February, with the Bank
expecting subdued wages growth to
weigh down on price pressures. But
there was a risk that this might be a
less powerful restraining force in
the future, especially if another
round of energy price rises were to
materialise, the MPC warned.
The major development during
the month had been the sharp
increase in crude oil prices, the
minutes stated, describing the out-
look for prices as a clear risk.
If oil prices were to rise to a level
significantly higher than the com-
mittee currently assumed, then that
would tend to slow the global and
domestic recovery, reduce supply
growth, and put upward pressure
on domestic costs and prices, it
said.
The degree to which rising prices
could knock output while also stok-
ing inflation was uncertain, the
MPC admitted.
On a more positive note, the min-
utes said that it appeared more cer-
tain that underlying growth was
likely to pick up in the UK in the
near term, although it warned of
an uncertain economic outlook.
Bank worried
by oil prices
BY JULIAN HARRIS
UK ECONOMY

No US candidate
as World Bank
deadline nears
WARNING OVER US GOVERNMENT DEBT
AMERICAS debt to GDP ratio is on course to explode in the next couple of decades, the
head of the Federal Reserve said yesterday. Ben Bernanke said that a permanent ratio of
around 75 per cent could be sustainable, but that current policy will result in the ratio
spiralling upwards in coming years. Picture: GETTY
NIGERIAN Finance Minister Ngozi
Okonjo-Iweala and former Colombian
Finance Minister Jose Antonio Ocampo
are set to be nominated to lead the
World Bank, sources with knowledge
of emerging market efforts to find can-
didates said yesterday.
The candidacies of Okonjo-Iweala
and Ocampo, who have credentials as
both economists and diplomats and
according to sources the respective
backing of Brazil and South Africa,
pose a challenge to the US, whose hold
on the post has never been contested.
But with its majority of votes and
the expected support of European
countries, the US is still likely to
ensure that another American will
succeed Robert Zoellick, who plans to
step down at the end of June.
Washington has held the presidency
since the Banks founding, but it has
yet to publicly identify a nominee to
succeed Zoellick. The deadline for sub-
mitting nominations is Friday, and the
Obama administration has said it will
name a candidate by then.
WORLD ECONOMY

News
17 CITYA.M. 22 MARCH 2012
GLAXOSMITHKLINE (GSK) and
Johnson & Johnson are taking a cre-
ative new tack in the hunt for
tomorrows drugs by linking with
venture capital firm Index Ventures
in an unusual tie-up.
The two pharmaceutical manu-
facturers will together contribute
half the funding for a 150m
(125m) fund being launched by
Index to invest in early-stage life
sciences projects, primarily in
Europe.
The three-way collaboration aims
to capitalise on Indexs successful
track record in backing companies
with just one or two projects a so-
called asset-centric approach that
has already led to a number of trade
sales and flotations.
Deals such as the sale of
PanGenetics, an Index-backed firm,
to Abbott Laboratories have pro-
duced fat returns and elicited keen
interest from Big Pharma, whose
own in-house research investments
have produced disappointing
returns in recent years.
This is a completely new collabo-
ration model, Index partner
Francesco De Rubertis said.
Under the deal, Indexs existing
limited partners will put up the
other half of the cash and the ven-
ture capital (VC) firm will maintain
full decision-making rights to the
portfolio of companies in which it
invests.
Johnson & Johnson and
GSK launch 125m fund
PHARMA

THE Asian private equity arm of

Morgan Stanley has invested $300m
(189.4m) in a Chinese chemical
firm which is plotting an expansion
into the West.
The bank will take a minority
stake in Tianhe Chemicals Group,
which has a dominant market share
in lubricant oil additives in China
and is the fifth largest globally in
the high-end fluorochemicals sector,
a technology often used in chemical
waterproofing.
Homer Sun, chief investment offi-
cer of Morgan Stanley Private Equity
Asia, will join Tianhes board as part
of the deal.
He said Tianhe has developed a
product portfolio with major techni-
cal barriers to entry.
These will enable it to further
consolidate market share in China
and expand into overseas markets.
Xuan Wei, chief executive of
Tianhe, said: MSPE Asia brings deep
experience adding value to compa-
nies in China coupled with industri-
als expertise and global resources,
and we look forward to working
together to expand our global mar-
ket reach and increase co-operation
with overseas partners.
The deal will help Tianhes plans
to expand into the US and Asia
although that growth is likely to
come initially through cross-border
co-operation rather than acquisi-
tions.
Last year Tianhe, based in the
coastal city of Jinzhou, was reported-
ly considering a $1bn initial public
offering (IPO) in London before mar-
ket turmoil forced it to put off its
plans.
Yesterday, however, sources said
the firm still plans to conduct a list-
ing in future.
Morgan Stanley Private Equity
Asia has invested about $2.4bn in
Asia, primarily in highly structured
minority investments and control
buyouts.
The Tianhe deal is the largest sin-
gle investment from the firms third
Asia fund.
Morgan Stanley seals $300m deal
for stake in Chinese chemicals firm
STEEL

TATA-OWNED Jaguar Land Rover

(JLR) has signed a joint venture that
paves the way for the firm to manu-
facture and sell luxury vehicles in
China, the worlds largest car mar-
ket.
JLR and Chinese manufacturer
Chery Automobile are seeking regu-
latory approval for the venture,
worth around 17.5bn yuan (1.8bn),
they said in a statement yesterday.
The venture, to be located close to
Shanghai in Changshu city, will ini-
tially make Land Rover SUVs, fol-
lowed by Jaguars in the second
phase.
The joint venture will also set up
a research and development facili-
ty, and sell vehicles produced by the
venture, the car makers said in a
joint statement.
Sales in China contributed 17.2
per cent of JLRs revenue in the
quarter to the end of December,
more than those in the UK, the
birthplace of the two brands.
Revenues from the country are
growing at a huge rate, though the
Chinese government recently
removed the car industry from its
list of encouraged industries, mak-
ing it tougher for foreigners to win
new car projects.
This is an important step for JLR
and Tata Motors moving forward,
said Vineet Hetamasaria, car ana-
lyst and PINC Research in Mumbai.
Though this is only an agreement,
and it will be some time before we
see the results.
Unite the union welcomed the
expansion, saying it once again
proves the worldwide appeal of the
British car industry. It added that
it has sought and received assur-
ances that investment and growth
in the UK will continue.
Jaguar seals
China venture
BY KENDAL GAPINSKI
INDUSTRY

NEWS | IN BRIEF
Goldman fails to dismiss lawsuit
Goldman Sachs yesterday lost its bid to
dismiss a lawsuit accusing it of defraud-
ing investors by selling risky debt linked
to subprime mortgages that it planned
to bet against. The decision by US dis-
trict judge Victor Marrero in New York
keeps alive a hedge funds claims over a
$2bn offering of collateralised debt obli-
gations. Marrero said the hedge fund
Dodona I LLC may pursue nearly all its
claims against Goldman.
Cuts at Collins and Canaccord
Workers at Collins Stewart and
Canaccord will today find out whether
they will keep their jobs, with up to 100
set to go in next weeks merger. The cuts
will primarily hit the capital markets
teams London and New York offices,
while corporate advisory division
Hawkpoint will be left largely
untouched. The firms officially sealed
their merger yesterday, with Collins
Stewart becoming a subsidiary.
Royal Mail pensions deal gets OK
Privatisation of the Royal Mail moved a
step closer yesterday after EU regula-
tors approved government plans to take
on its deficit-ridden pension scheme. The
European Commission said the revamp
included measures that would ensure
state-owned Royal Mail would not enjoy
an unfair advantage over competitors.
Land Sec sells 76m mall
LAND Securities (Land Sec) has sold
the largest covered shopping centre
in Liverpool to InfraRed Capital
Partners for 76.5m.
Britains biggest landlord said last
month it was selling the St Johns
Centre, which has an annualised net
rent of 7.5m, following work to
update the food court.
The centre includes 413,000
square feet of retail space, and is
home to more than 100 shops and an
award-winning car park, according
to its website. The sale also includes
a 149-room hotel. Land Securities
said the sale would help it redeploy
capital elsewhere.
InfraRed director Chris Huxtable
said the new owner plans to make
substantial new investment in the
centre to cash in on the 12m shop-
pers that pass through its doors
every year.
Jones Lang LaSalle acted for Land
Securities, while InfraRed was
advised by DTZ.
PROPERTY

The St Johns Centre in central Liverpool will get fresh investment from new owners
STRUGGLING airline Kingfisher will
scrap all overseas flights from this
Sunday, as the Indian authorities con-
sider stripping the company of its avi-
ation licence.
The debt-laden carrier, run by
liquor baron Vijay Mallya, has not
paid staff since December and the tax
authorities have frozen its bank
accounts. It owes $1.3bn (820m) to
its banks. Indian aviation minister
Ajit Singh said yesterday the govern-
ment is awaiting a report from the air
authorities before deciding whether
to strip the firm of its aviation licence
but added: If passenger safety is com-
promised well not let any airline fly.
Safety norms also involves financial
viability.
Kingfisher has submitted an inter-
im plan to operate 20 planes on
between 110 and 125 domestic routes
a day. The carriers fleet, which earli-
er had 64 planes, now has 47.
The company has said it is in talks
with potential investors, some of
which would require India to allow
foreign carriers to own up to 49 per
cent of Indian airlines, a change the
government is considering.
Kingfisher has been trying to fend
off bankruptcy for months, scaling
back flights in recent months as the
surging cost of fuel and higher tax
have battered the firm.
Debt-ridden
Kingfisher to
cut its flights
Nissan brings back Datsun
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NISSAN, Japans second largest car-
maker, is bringing back the Datsun
brand but British motorists hoping
to drive the discontinued range will
be disappointed.
The firm said it is looking to
increase sales in Indonesia, India, and
Russia by reviving the brand for these
emerging markets, and has no plans
to roll out the vehicles in developed
countries.
Phased out in 1981, Nissan is hop-
ing that the Datsun will account for
half of the companys sales by March
2017 in those markets.
Its a green car, affordable car,
small displacement, high local con-
tent, Carlos Ghosn, chief executive
officer, said.
A restoration of the Datsun would
follow a growing trend to bring back
heritage nameplates, including
Toyotas 86, Chryslers Dodge Darn,
and partner Fiats 500.
Ghosn said Nissan plans $400m in
investment over two years and will
double hiring by 2014 in Indonesia.
Shares for Nissan Motors were up
7.4 per cent yesterday after the
announcement.
BY HARRY BANKS
TRANSPORT

INDUSTRY

News
18 CITYA.M. 22 MARCH 2012
Nissan Motors CEO Carlos Ghosn speaks at a news conference in Jakarta
Picture: REUTERS
NEWS | IN BRIEF
Intertek expands in America
Testing group Intertek has snapped up a
North American product quality and
benchmarking group for 4.1m. The
firm, 4th Strand, was previously owned
by management and is used by retailers
to test their product lines. Intertek chief
Wolfhart Hauser said: Their services
will increase our consulting capability to
existing North American and global
clients who seek to deliver high quality
products under their own-brand labels
and to our customers more broadly in
the area of product benchmarking.
High speed freight trial starts
The first high speed Channel Tunnel
freight train arrived in St Pancras sta-
tion yesterday morning, a trial that
Eurotunnel said could herald next-day
delivery from continental Europe. Euro
Carex, a group of transport firms and
hauliers, said the 120 tonne delivery
clearly shows the interest of strategic
players in the logistics field... in linking
their infrastructures to key European
economic centres in order to benefit
businesses and communities.
G4S and Serco sign asylum deal
G4S and Serco signed contracts with
the UK Border Agency yesterday to
deliver services such as accommoda-
tion and transport to asylum seekers.
The five-year deal with G4S, the
worlds largest security firm, is worth
203m in centres in the Midlands and
across the north. Meanwhile Serco will
provide services in the north west,
Scotland, and Ireland in the 175m
five-year deal.
DeVere
The independent financial advisory firm
has appointed Reece Fallaize to its pen-
sions support department. Fallaize is a
pensions solutions expert with more than
eight years technical and market experi-
ence. He arrives after two years with The
Sovereign Group.
Barclays
Barclays wealth and investment man-
agement division has announced that
Dame Judith Mayhew Jonas is joining its
wealth management UK & Ireland advi-
sory committee. Mayhew Jonas built her
career as a City lawyer and was political
leader of the City of London corporation.
The advisory committee is made up of
experienced leaders who act as ambas-
sadors for Barclays. Current members
include Ffion Hague, Sir Christopher
Howes, Christopher Mathias, Derek
Zissman, and Sir Michael Peat.
Alvarez & Marsal
The professional services company has
appointed Olivier Dubois as managing
director. He joins the company from
CMA-CGM, the worlds third largest con-
tainer shipping firm, where he was group
chief financial officer. Dubois has thirty
years experience in senior management,
including posts as chief executive of
Theolia, a developer and operator of wind
energy projects, and chief financial offi-
cer at Technip, the oil and gas services
firm.
Signature Litigation
Graham Huntley, one of the UKs leading
financial market litigators and former
head of Hogan Lovells investment bank-
ing and funds dispute resolution practice,
has joined forces with senior litigation
specialist Helen Brannigan to launch a
dedicated commercial litigation practice.
They hope the move will take advantage
of a soaring demand for commercial liti-
gation expertise in complex, international
cases. Huntley is past president of the
London Solicitors Litigation Association.
AT Kearney
The global management consulting firm
has announced four new appointments
to strengthen its position in the global
airport industry. Those joining include
Simon Morris, director of the EMEA air-
port practice at LeighFisher, Richard
Sharp, former head of regulation and
charges at Macquarie Airports, Robert
Hoxie and Natasha Page.
CITY MOVES | WHOS SWITCHING JOBS Edited by Tom Welsh
+44 (0)20 7092 0053
morganmckinley.com
To appear in CITYMOVES please email your career
updates and pictures to citymoves@cityam.com SPECIALISTS IN GLOBAL PROFESSIONAL RECRUITMENT
in association with
Ashurst
The leading international law firm has
announced that James Collins has been
appointed as managing partner, with effect
from 1 May 2012. Collins trained at Ashurst
and became partner in 2005. He is currently a
banking partner in Paris, with particular
expertise in cross-border acquisition finance
and restructuring transactions. He succeeds
Simon Bromwich, who has stepped down to
become head of the firms dispute resolution
practice.
ANALYSIS l Kingfisher Airlines Ltd
p
23
18
19
20
21
22
19.10
21 Mar
16Mar 15Mar 19Mar 20Mar 21 Mar
W
e do not suggest rare
stamps and other
prestige collectibles
could never go down in value.
Its just that their value has
risen steadily, year after year
without pause, since people frst
started investing in them
1
. In
fact, Gladstone would have been
wise to pass some down to his
ancestors.
A rare proposition
As specialists in that market,
we now offer you a unique
proposition - a rare investment
indeed. One that is more than
likely to protect the value of your
investment in rare stamps and
coins, safeguarding your capital
as other markets continue to
fuctuate whilst also allowing you
maximum growth and a healthy
return.
Why such confdence?
Because the asset class
underpinning your investment, rare
stamps, has returned investors over
11% a year on average for the last 40
years
1
. In fact, the totality of rare GB
stamps has not gone down not even
for a year since our records began
in 1880
2
.
During previous periods
of economic chaos there have been
obvious places of refuge. Gilts.
Cash. Commodities like silver or
gold. Today it is hard to see how
any of these will even keep pace
with infation.
So today, where can you
turn?
May we suggest that at the very
least you look into an investment
that has consistently offered
steady returns, no matter what is
happening to the markets rare
stamps, rare coins and other
prestige collectibles.
We dont suggest you shift your
entire portfolio into rare stamps.
But as a safe haven for part of
your portfolio, doesnt it make
a lot of sense?
To fnd out more,
download your free guide at
stanleygibbons.com/BGCA
Which asset class has remained
stable through every Budget
from Gladstone to Osborne?
1. As per the GB30 Rarities Index of rare GB stamps as listed on Bloomberg. 2. According to an independent academic study by Dimson & Spaenjers in
2009. Please note: stamps and certain other collectibles are not designated investments for the purposes of the Financial Services and Markets Act 2000
(Regulated Activities) Order 2001 and as such are not subject to regulation by the Financial Services Authority.
London Jersey Hong Kong
Call 0845 026 7170
or visit www.stanleygibbons.com/BGCA
free
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CITYA.M. 22 MARCH 2012
KEEPING THE FIGURES
IN THE CHOTE FAMILY
CHANCELLOR George Osborne
makes much of the endorsement
given to his Budget by an independ-
ent quango he set up to monitor
Treasury number fudging, the
Office of Budget Responsibility.
These days the direct costing the
Treasury applies to every Budget
measure is independently assessed
and certified by the OBR,
he yesterday declared
pointedly to shadow
chancellor Ed Balls,
who in his days at
the Treasury never
had to contend
with an independ-
ent watchdog vet-
ting his financial
plans.
Of particular
note was the OBRs
endorsement of a
curious Laffer
curve (named
after the
economist
A r t h u r
Laffer) produced by HM Revenue &
Customs, which is answerable to
the Treasury, that shows the opti-
mal top rate of tax to be precisely
what Osborne has cut it to 45 per
cent.
The Treasurys brand new head of
spending Sharon White (pictured)
will doubtless be pleased to have
the analysis in her first budget
endorsed by this arms length,
vigorously independent
body. But luckily she wont
have to bother sending
them a thank you card in
the post. She can simply
wait to express her grati-
tude until she gets home
because the OBR is
headed up by none other
than her husband,
Robert Chote. Whoever
said this Budget penalis-
es families?
Got A Story? Email
thecapitalist@cityam.com
Follow The Capitalist
on Twitter: @citycapitalist
The Capitalist
19
The Treasurys new
head of spending,
Sharon White
POLO ponies took to the 02 Arena
last night for the second staging
of the hugely popular City A.M.-
sponsored Gaucho International
polo event. The Dome welcomed
teams from Ireland, Scotland,
England and Argentina for a cele-
bration of the South American
countrys sporting and cultural
heritage. Guests including Katie
Price were treated to a nail-biting
headline match between England
v Argentina, with the home team
finally sealing the deal with a 1-0
victory on penalties, after full time
finished at 15-15.
Polo at the 02
Ireland and Scotland
start the action
B
RITAINS top share index posted
a fractional gain yesterday after a
volatile session as strength in
market heavyweight Vodafone
countered weaker commodity stocks
hit by below par US data that revived
concerns over demand for metals.
The UK blue chip index closed up
0.54 points, or 0.01 per cent, at
5,891.95, surrendering a 0.3 per cent
gain in the closing auction. The index
fell 1.2 per cent on Tuesday.
Miners fell the most following weak-
er than expected US housing data that
raised concerns about recovery in the
worlds biggest economy.
US blue chips were down 0.1 per
cent by Londons close.
Precious metal miners saw good sup-
port in London, with Fresnillo ahead
three per cent and Randgold
Resources up 3.2 per cent.
Goldman Sachs upgraded mobile
operator Vodafone to its conviction
buy list, lifting the market heavy-
weight 0.3 per cent.
Banks were higher as a sector after a
volatile performance, but only buoyed
by gains in global heavyweight HSBC,
up 0.4 per cent, with domestic lenders
weaker. Part state-owned Royal Bank of
Scotland and Lloyds Banking Group
shed 0.9 per cent and 0.4 per cent
respectively as the sector missed out on
the benefits of a cut in British corpora-
tion tax in the UK 2012 Budget, with an
increase in the bank levy designed to
counter this boost for other businesses.
Housebuilders received a slight
boost from the Budget, traders said,
with the increase in UK growth fore-
casts for 2012 and a fairly upbeat eco-
nomic assessment from Osborne
giving the hard-pressed sector some
relief.
Barratt Developments was a top
FTSE 250 gainer, up 4.4 per cent, with
Bovis Homes ahead 3.2 per cent.
FTSE 100 ticks higher as
boost for Vodafone helps
counter commodity drag
U
S stocks mostly fell yesterday,
weighed by the energy services
sector, but gains in technology
shares buoyed the Nasdaq and
helped keep the S&P 500 near four-
year highs.
The benchmark S&P 500 index, up
11.6 per cent so far this quarter, found
buyers at the 1,400 level, which has
been held for five straight days.
Support at that level suggests more
gains in coming weeks.
The technology sector rose again,
with the Nasdaq 100 technology
index up 0.4 per cent for the day and
up close to 18 per cent this year. It
helped the broader Nasdaq
Composite edge up for the day. A
string of upbeat US economic data
has fuelled the markets surge.
The Dow Jones industrial average
fell 45.57 points, or 0.35 per cent, to
13,124.62 at the close. The S&P 500
Index dipped 2.63 points, or 0.19 per
cent, to 1,402.89. The Nasdaq
Composite edged up 1.17 points, or
0.04 per cent, to 3,075.32.
Tech shares
keep S&P at
4-year high
News
20 CITYA.M. 22 MARCH 2012
BEST OF THE BROKERS
To appear in Best of the Brokers email your research to notes@cityam.com
ANALYSIS l Debenhams PLC
81
80
79
78
77
76
75
p
78.30
21 Mar
16Mar 15Mar 19Mar 20Mar 21 Mar
DEBENHAMS
Citigroup has upgraded the retailer to
buy and has raised its target price from
65p to 85p following Tuesdays results. The
broker is impressed by the firms gains in
market share and gross margins despite a
moribund UK retail market. Citi expects to
see share buybacks beyond this year, with
eight to nine per cent growth in earnings
per share.
ANALYSIS l Vodafone Group PLC
260
240
220
200
180
p
16Mar 15Mar 19Mar 20Mar 21 Mar
171.30
21 Mar
VODAFONE
Goldman Sachs rates the telecoms group
buy and has trimmed its two-year price
target from 242p to 235p. The broker
expects good progress when the firm
reports full-year results on 22 May, with
long-term growth of between one and four
per cent. Goldman reckons the market is
underestimating the strength of growth
potential at partner Verizon.
ANALYSIS l Bovis Homes Group PLC
525
520
515
500
495
490
505
510
p
508.50
21 Mar
16Mar 15Mar 19Mar 20Mar 21 Mar
BOVIS
UBS rates the housebuilder sell but has
raised its 12-month target price from 395p
to 465p after the broker updated its fore-
casts. UBS now expects to see 69 per cent
pre-tax profit growth in 2012, albeit from a
low base and still lagging behind peers. But
the broker is encouraged by signs of recov-
ering returns, and recommends that man-
agement reinvests cash into new sites.
THELONDON
REPORT
16Mar 15Mar 19Mar 20Mar 21 Mar
5,975
5,900
5,925
5,950
ANALYSIS l FTSE
5,891.95
21 Mar
THENEW YORK
REPORT
CHANCELLOR George Osborne
pledged to cut the 50p top rate of
income tax yesterday, claiming it had
raised only 100m a year and was dam-
aging Britains image as a global cen-
tre for wealth creation.
Osborne cut the rate to 45 per cent,
which aides hinted would now be the
permanent top rate of tax. The 50p
rate, which was introduced by Labour
in 2010, was always described as tem-
porary.
The 5p cut in the top rate will not
come in until next year, allowing
Osborne to keep his pledge to retain
the rate while there is a pay freeze in
the public sector.
The chancellor faced a barrage of
criticism from right and left, with
business leaders saying he has not
gone far enough and Labour saying
the 100m revenue analysis had been
politicised.
Aides to the chancellor pointed out
that a new rate of stamp duty and anti
avoidance measures targeted at the
rich would raise five times the amount
the exchequer was losing by scrapping
the 50p rate.
Osborne said: No chancellor can
justify a tax rate that damages our
economy and raises next to nothing.
But the Institute of Directors said:
The chancellor has not gone far
enough or fast enough on income tax.
50p was hugely damaging, but at 45p
we are still uncompetitive... This fudge
will do little to combat the impression
that Britain is a high-tax country.
Accountants said the Treasury
would miss out on revenue this year as
high earners push income into 2013 to
take advantage of the lower rate.
Chancellor to
axe 50p band
by next year
Child benefit red tape tangle
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A RAID on child benefits for higher
rate tax payers was watered down by
George Osborne yesterday, yet the
chancellors amended system was
accused of tying parents up with bur-
densome new red tape.
The coalition had been set to
remove child benefit from any house-
hold where an adult earned enough
to fall into the 40p tax bracket, which
is currently 42,475.
But yesterdays Budget will only
remove the credit entirely from
households where at least one parent
earns 60,000 or more per annum,
using tapered reductions.
For every 100 earned above
50,000, parents will lose one per
cent of the benefits they would be
owed if they stayed on lower wages.
We want to avoid a cliff-edge that
means people lose all their child ben-
efit when they earn just a pound
more, Osborne said.
However, accountants warned that
the new system would be complex
and costly to administer, and could
force up to half a million more peo-
ple into self-assessment.
The measure will apply to unmar-
ried couples who live together as if
they were civil partners of one anoth-
er, said the Chartered Institute of
Taxation (CIOT).
The concept of people living
together as if they were married, or
civil partners, is new to tax law, said
the CIOTs John Whiting. So where a
household is formed, or breaks up,
over a period of time, how does one
define the exact point at which the
household begins, or ceases, to
exist? PwC said the change went
against the focus on simplification.
HOW ARE YOU AFFECTED? P24
BY JULIET SAMUEL
TAX

BY JULIAN HARRIS
BUDGET

BANKS were hit with another hike in

the governments bank levy yesterday
as the chancellor increased it to 0.105
per cent the fourth rise since its cre-
ation just over a year ago.
George Osborne said the 0.017 per
cent increase would make sure that
banks do not benefit from his cutting
of corporation tax to 24 per cent. It will
raise an extra 1.8bn over five years.
But analysts and bankers say lenders
would rather pay a higher rate of cor-
poration tax than a higher bank levy
because they can offset losses against
their UK tax and it only hits profits
made here. Banking analyst Ian
Gordon of Evolution Securities said:
Theres an element of unfairness in
terms of who it hits hardest, its HSBC.
HSBC chairman Douglas Flint has
called the levy a location tax, argu-
ing it is worse than other taxes
because it hits overseas growth. He
said it is the second most important
factor in deciding the banks domicile.
Osborne ups bank levy for
fourth time in 15 months
BANKING

George Osborne steps out to face photographers

News| Budget 2012
21
Businesses cheer corporation tax cut
BUSINESSES received a welcome cut
to their tax bill yesterday as the
Treasury accelerated its reduction in
corporation tax for the second time
in a year.
The chancellor cut the tax to 24 per
cent from April, one per cent lower
than the 25 per cent it had been due
to fall to in his original spending
review.
The measure will cost the
Exchequer 3.76bn, making it one of
the most expensive tax cuts in the
Budget, but George Osborne said his
aim was to signal that Britain is
open for business.
The headline rate of corporation
tax remains the most visible sign of
how competitive our country is, he
said. [This is] the biggest sustained
reduction in business tax rates for a
generation.
Mark Littlewood, head of the
Institute of Economic Affairs said
that Osborne should be commend-
ed for the cut, saying it would
encourage enterprise, stimulate
growth and reward work.
In 2014, corporation tax will be 22
per cent, which Osborne emphasised
is 18 per cent lower than in the US
and eight per cent lower than in
Germany.
BY JULIET SAMUEL
TAX

AN AGGRESSIVE crackdown against

stamp duty avoidance on high-end
properties will begin today, as the gov-
ernment slaps a punitive tax on the
sales of expensive homes that wealthy
people put into companies names.
Sales of properties worth 2m or
more that are enveloped in a bid to
avoid the tax, will now be hit with 15
per cent stamp duty over double the
new level of stamp duty (seven per
cent) on properties of the same price
bought by individuals.
Authorities will also begin consulta-
tions on a retrospective charge on the
ownership of residential properties
owned by non-natural persons such
as companies.
Chancellor George Osborne had
been expected to close a loophole by
which houses could change hands
without paying stamp duty if they
were owned by foreign companies and
the shares in the company, rather than
the property itself, were sold.
Let me make this absolutely clear
to people, Osborne told the House of
Commons, during his Budget speech.
If you buy a property in Britain that is
used for residential purposes, then we
will expect stamp duty to be paid.
I will not hesitate to move swiftly,
without notice and retrospectively if
inappropriate ways around these new
rules are found. People have been
warned.
The Treasurys small print said that
it aimed to put beyond doubt that
Stamp Duty avoidance schemes would
from now on be ineffective, saying
that the mechanism was part of the
governments fairness agenda.
Paul Emery, a tax director at PwC,
said that Osborne was throwing the
book at avoidance.
The consultation on an annual
property tax for high value residential
held by companies and a capital gains
tax on off-shore companies may cause
owners to think twice about their cur-
rent ownership structure, Emery said.
The Treasury told City A.M. that the
new measures would apply to 5,000
residential properties in the UK, which
have an estimated total value of
around 20bn. The level of revenue
raised will depend on the size of the
impending tax, and the number of
properties subsequently sold.
Owners could buy their properties
back from the companies that they are
registered with, but would have to pay
the new seven per cent level of stamp
duty.
CHARITIES fear that changes to tax
relief announced in yesterdays
Budget could strangle major dona-
tions to good causes.
The Charities Aid Foundation (CAF)
warned that a cap on income tax
rebates may put off philanthropists
from making major donations to
good causes, saying the change is at
odds with government policy.
Tax relief on major donations is
not tax avoidance. It is supporting
major donations by people who in
some cases are donating the proceeds
of a lifetimes work to charity, said
John Low, chief executive of the CAF.
Currently, when a higher rate tax-
payer donates to charity some of the
tax they should have paid on the
money goes to the charity and some
can be reclaimed.
But from next year the amount of
tax relief that an individual can claim
back in any one year will be capped at
25 per cent of income, or 50,000.
The reform is intended to close
loopholes that enable high earners to
minimise income tax payments by
wilfully subsidising loss-making com-
panies and the Treasury believes that
it will raise over 300m a year.
George Osborne defended the
reforms, saying: It is also right that
we have tax reliefs that promote
investment, support charitable giving
and reflect genuine business losses.
But it cant be right that some people
make unlimited use of these reliefs
year after year.
The Treasury insists that it will
work with philanthropists to min-
imise the impact on charities.
Cap on income tax reliefs set to raise
300m but charities will suffer most
THE TOBACCO industry has criticised a
tax hike of five per cent over inflation
on its products, which will cost smok-
ers 37p more per pack of 20 cigarettes.
Local shopkeeper and Tobacco
Retailers Alliance spokesperson John
Abbott highlighted tobacco smuggling,
more underage people buying on the
black market and corner shops closing
down as negative knock-on effects
from a rise in tobacco taxation. The
smuggled tobacco market costs the
Treasury 8.2m a day, he added. But
the Treasury said the tax hike will
bring in an extra 70m this year, 50m
next year and 50m in 2014-2015.
Chancellor George Osborne
refrained from heaping extra taxes on
the drinks industry but backed the
alcohol duty escalator which increas-
es tax by two per cent above inflation
implemented by the Labour govern-
ment. The Treasury expects to roll in
an extra 125m in 2013-2014 and then
250m a year after that from this tax.
Heineken managing director Stefan
Orlowski called the duty very bad news
for the nations great beers and pubs.
Tobacco sellers furious
over steep rise in duties
CONSUMER

A GENERAL anti-abuse rule (GAAR)

will be consulted on and implemented
next year with the aim of stopping
firms and individuals using aggres-
sive tax avoidance schemes.
George Osborne described tax eva-
sion and extreme tax avoidance as
morally repugnant, saying he wants
firms to respect parliaments will.
The rule is expected to be based on a
report from Graeme Aaronson QC,
which recommended a system that
should distinguish between standard
tax planning strategies and more
adventurous schemes which stretch
legal definitions.
There will be concerns on uncer-
tainty for normal business transac-
tions though because peoples views
differ on this highly subjective and
emotive area, said PwC tax partner
Mary Monfries.
This is something businesses and
people with complicated tax affairs
will be worried about, so the consulta-
tion period will be important.
Osborne plans crackdown
on avoidance schemes
REGULATION

THE GOVERNMENT has clamped down

on Britains wealthiest property own-
ers by raising stamp duty paid on
homes costing more than 2m to
seven per cent.
The changes to the stamp duty bill
mean anyone who wants to buy a
house above the 2m threshold will
now have to pay at least 140,000 in
tax on the transaction. Previously,
stamp duty on 1m-plus homes
incurred a five per cent levy.
In his Budget speech, George
Osborne made it clear that there
would be no sidestepping of the stamp
duty measures, warning: I will not
hesitate to move swiftly, without
notice and retrospectively if inappro-
priate ways around these new rules
are found.
Property experts were quick to criti-
cise the hike for hitting Londoners the
hardest. According to Land Registry
data, 73 per cent of 2m-plus sales in
the past five years took place in the
capital. Tax consultancy Kingston
Smith said: It would not be surprising
if buyers of these homes seek to reduce
the agreed price to cover the increase
in the stamp duty payable.
Savills confirmed this saying it will
be guiding buyers to price below the
2m threshold.
The government predicts the move,
which came into force today, will raise
150m in the next financial year, ris-
ing to 300m by 2016-17.
Stamp duty
hike to hit
2m houses
PROPERTY

MORE than four million pensioners

will be hit by a granny tax after
George Osborne said he would freeze
the amount of income that is not sub-
ject to tax.
The chancellor is set to raise 3.3bn
from the measure over five years as
part of Treasury measures to simplify
the complicated system of age-relat-
ed allowances. Osborne will freeze the
allowances for around half of Britains
older people. The personal tax
allowances of current pensions will be
frozen at 10,500 for those aged
between 65 and 74 and 10,660 for the
over 75s. Allowances for new pension-
ers will disappear from next year.
Osborne justified the move by citing
the National Audit Offices view that
many pensioners dont understand
the system of age-related allowances.
These allowances require around
150,000 pensioners to fill in self-assess-
ment forms, and as we have real
increases in the personal allowances,
their value is already being eroded.
Yesterdays measures mean 4.41m
people will be worse off by an average
of 83 a year, according to HMRC.
Existing pensioners will be 63 a year
worse off, while new pensions will suf-
fer to the tune of 197 annually,
although the chancellor said nobody
will be worse off in cash terms.
Ros Altmann, director-general of
Saga, said: The reality is that this is
really just a revenue-raising exercise.
Osborne will also end certain tax
and national insurance advantages for
workers whose family members bene-
fit from their pension entitlements.
The age at which people draw their
pensions will rise further after
Osborne set up an automatic review
to keep pace with increased longevity.
He will also introduce a single tier pen-
sion for future pensioners estimated at
around 140 a week.
Granny tax to hit 4m people
BY PETER EDWARDS
PENSIONS

Loopholes on
home sale fee
slammed shut
BY JULIAN HARRIS
PROPERTY

BY JAMES WATERSON
TAX ALLOWANCES

Londons housing market will be knocked by the changes Picture: GETTY

News | Budget 2012
22
CITYA.M. 22 MARCH 2012
ANALYSIS l Savills PLC
p
400
395
390
385
380
375
370
373.00
21 Mar
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NICK Clegg moved closer to securing
a core Liberal Democrat aim on tax
yesterday as George Osborne
announced a shake-up of personal
allowances that will affect up to 24m
people.
Osborne outlined plans to raise the
threshold for paying income tax to
9,205, higher than a planned
increase to 8,105, affecting those
who earn less than 100,000.
The change, from April next year,
means working people will be 220 a
year better off, or 170 after the
impact of inflation, according to the
Treasury. It means two million peo-
ple will have been taken out of tax
altogether since 2010, Osborne
claimed.
Every working person on low or
middle incomes will benefit... This
Budget supports working families
and helps those looking for work.
It also bring the coalition within
touching distance of the goal of a
personal threshold of 10,000, the
chancellor added.
The reform represents a victory for
Clegg, the deputy prime minister
who has been lobbying the
Conservatives in the Cabinet. He also
included it on the first page of the
Lib Dem manifesto in 2010 and pub-
licly called for it this year.
Last night Clegg told activists:
This is a Budget every liberal can be
proud of. Were proud of the fact that
we have delivered the largest
increase in the personal allowance
ever.
Earlier in the day, however, Tory
moderniser Nick Boles used Prime
Ministers Questions to try to claim
party credit for the policy by high-
lighting the fact it has been advocat-
ed by Lord Tebbit and Lord Saatchi.
John Cridland, director general of
employers organisation the CBI, said:
Family budgets have been under
great pressure, and by putting more
money in the pockets of ordinary
people, the chancellor has provided a
much-needed confidence boost.
The move was not universally pop-
ular, however. The Citizens Advice
Bureau (CAB) accused the coalition of
turning its back on the poorest peo-
ple, who they said would be just 33
a year better off because of simulta-
neous benefit cuts.
CAB chief executive Gillian Guy
said: Raising the personal tax
allowance is an empty gesture to
struggling families on low wages
who get housing and council tax ben-
efits. For these families, the weekly
gain is less than the price of a loaf of
bread; a measly 63p per week.
The free market Adam Smith
Institute called for ministers to go
further, however, saying: The gov-
ernment should raise its [personal
allowance] target from 10,000 to
12,400, which would lift minimum
wage earners out of tax altogether.
Hike in income
tax threshold
aids low-paid
BY PETER EDWARDS
TAX

MORE than 300,000 people will be

pushed into the 40p tax band to
help subsidise a tax cut for the low-
est-paid workers.
While the personal allowance, or
the amount that workers can earn
before they have to pay income tax,
is rising, those with higher incomes
will not benefit significantly from
the change because the threshold
for the 40p tax band will be moved
downwards to compensate.
At the moment workers must
earn 42,475 before they start pay-
ing the higher 40 per cent rate of
tax.
From April 2013 this will be
reduced to 41,450, effectively can-
celling out three-quarters of poten-
tial gain from the increased
personal allowance.
The policy will also have the side
effect of pushing over 300,000 peo-
ple into the higher rate of tax for
the first time.
Rather than pass on the full
benet of the personal allowance to
higher rate taxpayers, an equivalent
amount of funding will be provided
to assist in the fair implementation
of child benet reform, the
Treasurys Budget red book
explained.
300,000 are forced into 40p
tax band as limits are altered
BY JAMES WATERSON
INCOME TAX

The income tax threshold change was seen by some as a victory for Nick Clegg
CITYA.M. 22 MARCH 2012
News | Budget 2012
23
HOW MANY PEOPLE IN EACH TAX BAND?
THE ECONOMY should grow quickly
enough for the government to hit its
borrowing targets, the Office for
Budget Responsibility reported yester-
day though it stressed risks remain
from instability in the Eurozone and
rising oil prices.
GDP should start growing strongly
into 2014, inflation is expected to sta-
bilise in 18-months time and the
deficit will have peaked as a propor-
tion of GDP by 2015-16, the independ-
ent body predicted.
The economy is expected to grow 0.8
per cent this year a 0.1 percentage
point improvement on the last OBR
forecast in November two per cent in
2013, 2.7 per cent in 2014 and three
per cent from then on.
As a result there is a 60 per cent
chance the government will meet its
target to balance the budget by the
end of the five-year rolling period
now 2016-17, the OBR said and a 40
per cent chance it will be met a year
earlier. Due to lower-than-expected
spending, the deficit in 2016-17 is like-
ly to be 2.5bn lower than forecast in
November, and this years borrowing is
set to be 1.1bn lower.
The supplementary target, to start
bringing debt down as a proportion of
GDP by 2015-16 is also likely to be met,
forecast to fall 0.3 per cent that year.
Consumer spending will grow slow-
ly until 2014 when wage growth will
really start to outstrip inflation again,
while business investment should
grow 40 per cent over the forecast peri-
od to 2016. While this appears strong,
investment predictions have actually
been cut from Novembers forecast
due to the fall in GDP in the final quar-
ter of 2012 and the OBRs belief that
corporate balance sheets are not as
healthy as official figures suggest.
However, the faster corporation tax
cut has added one per cent to invest-
ment growth over the outlook period.
Meanwhile the OBR believes con-
sumer price inflation will fall sharply
though 2012 as has already begun to
happen before remaining close to
the two per cent target from 2013.
The body has also cut its house price
forecasts, and now expects average
prices to fall 0.4 per cent this year,
rather than 0.2 per cent, before grow-
ing by just 0.1 per cent in 2013 rather
than the 1.9 per cent previously fore-
cast.
PENSIONERS stand to take a hit to the
tune of billions in future years as the
chancellor said that the government
will have to find welfare savings of
10.5bn per year in order to keep to its
deficit reduction goals.
The cuts are not yet detailed but are
likely to fall mostly on pensioners
because old age benefits and tax cred-
its account for most of the welfare bill.
George Osborne said that the
Treasury has yet to work out how it
will find the money and will do so
along with other departments in a
social care bill due later this year.
However, the cuts will not kick in
until after the election, with the wel-
fare bill forecast to be cut by 6.6bn
per year in 2015-2016 and then to
reach the full annual savings of
10.5bn the year after that.
But even with those cuts, the
Budget said: Welfare spending is
expected to grow as a share of [total
spending]. The extent of the cuts
needed point to the scale of the pen-
sions crisis facing the country.
Another 10.5bn welfare
cut may hurt pensioners
BRITAINS spending on its military
mission in Afghanistan will be 2.4bn
less than expected in the years lead-
ing to 2015, George Osborne
announced yesterday.
In line with the process of transi-
tion to Afghan-led security and the
government announcement that UK
combat operations in Afghanistan
will cease by the end of 2014, the
Special Reserve provision for military
operations will be reduced by 2.4 bil-
lion over the Spending Review 2010
period, the budget explained.
However, another 605m will be
spent on urgent operational equip-
ment in the coming financial year
and 100m will be spent on improv-
ing accommodation for up to 1,275
military personnel.
Furthermore, 9,500 deployed per-
sonnel will receive a 100 per cent
council tax rebate, up from the 50 per
cent they now receive, at a cost of
3m. The families welfare grant will
also be doubled, at a cost of 2m, to
help the relatives of 20,000.
Billions saved by planned
2015 Afghan withdrawal
BY TIM WALLACE
DEFENCE

OBR: Osborne
on track to hit
debt targets
BY TIM WALLACE
UK ECONOMY

News | Budget 2012

24
CITYA.M. 22 MARCH 2012
GEORGE Osborne wants public sec-
tor pay levels to vary by region,
reflecting the local labour markets
and the cost of living in each area.
The move is intended to reduce
costs to the taxpayer and increase
flexibility, while giving workers in
the same jobs similar standards of
living across the country.
However, unions disagree on
the basis that it may leave some
workers with reduced pay settle-
ments and slash wages, and so
consumer spending, in the poor-
est areas.
Public pay may
vary by region
REGULATION

ANALYSIS l The OBR believes inflation will be on target from 2013

% 6
5
4
3
2
1
0
1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017
Forecast
ANALYSIS l State spending should fall, relative to GDP
%
49
47
45
43
39
41
37
33
35
1978/79 1986/87 1994/95 2002/03 2010/11
Forecast
Spending
Receipts
ANALYSIS l The deficit may be eliminated in five years time
%
12
10
8
6
4
2
0
-2
-4
March central forecast
2006/07 2008/09 2010/11 2012/13 2014/15 2016/17
ANALYSIS l Debt as a percentage of GDP is set to fall by 2016
80
50
60
70
2015-16 2013-14 2011-12 2009-10
OBRs March central forecast
November central forecast
ANALYSIS l Unemployment is forecast to peak later this year
% 3.5
3.0
2.0
2.5
1.5
1.0
0.5
0
1990 1996 2008 2002 2014 2017
ILO unemployment
Claimant count
m
i
l
l
i
o
n
s
ANALYSIS l GDP growth is set to speed up
%
6
4
2
0
-2
-4
-6
March central forecast
2002 2004 2006 2010 2012 2014 2016
Summary Income after tax and credits 11/12 Income after tax and credits 12/13 Income after tax and credits 13/14
59,123 58,996 58,052
22,762 22,934 23,154
43,161 42,862 41,699
74,276 73,911 72,817
102,781 102,873 102,770
COUPLE, BOTH WORKING, TWO KIDS:
With one parent earning over 60k, the
couples child benefits will be lost.
SINGLE PERSON, NO CHILDREN: All single
people earning 10k to 40k will be 172
and 220 better off in the next two years.
COUPLE, ONE WORKING, TWO KIDS: If
each parent earned 30k they would still
get child benefit. But this couple misses out.
SINGLE PARENT, ONE CHILD: This high
earning single parent will also be hammered
by lower thresholds and no child benefit.
COUPLE WITH NO KIDS: The higher tax
allowance wont benefit the 120k-earner,
while lower thresholds will strike in 13/14.
H
O
W

T
H
E

B
U
D
G
E
T

C
O
U
L
D

A
F
F
E
C
T

Y
O
U
20k 60k
30k
60k
120k
40k 120k
BY JULIET SAMUEL
WELFARE

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UNEMPLOYMENT is set to peak later
this year before falling sharply in the
years to 2016, the Office for Budget
Responsibility (OBR) reported yester-
day.
However, smaller departmental
budgets mean the number of state sec-
tor employees will fall 730,000 from
2011 to 2016 20,000 more than the
710,000 forecast in November, and
330,000 above the 400,000 predicted
by the OBR last March.
Overall joblessness is now forecast to
peak at 2.8m, or 8.7 per cent, at the
end of this year, before falling to 8.6
per cent next year, eight per cent in
2014, 7.2 per cent in 2015 and 6.3 per
cent in 2016.
Claimant count predictions have
been revised down 97,000 for this year
to 1.65m, and down 136,000 from ear-
lier forecasts to 1.64m, ending in 2016
with a cut of 39,000 to 1.19m.
The OBR also noted long-term
unemployment remains low com-
pared with previous recessions,
though more damage may occur as
youth unemployment has risen eight
percentage points since 2008.
A growing private sector should cre-
ate 1.7m new jobs between 2011 and
the start of 2017, the OBR believes.
After taking out the 730,000 jobs
lost in the state sector, that leaves net
employment growth of one million.
Our latest forecast suggests that
there will be slightly less departmen-
tal spending and therefore less money
available to pay government employ-
ees at the start of 2017 than we
thought in November, the OBR said.
Other things being equal, this
would reduce general government
employment by a further 30,000 in
2017 relative to our projection in
November.
However, the analysis explains, pub-
lic sector wages will be lower in 2017
than previously expected allowing
departments to afford 10,000 more
staff, leaving a fall of 20,000.
Because many of these job losses,
particularly in local government were
front-loaded that is, implemented
toward the start of the period of reduc-
tion the pace of job losses in the pub-
lic sector will be much lower from now
on than it has been for the past year.
State jobs fell by an average rate of
more than 80,000 per quarter from
January to September of last year, the
OBR found, meaning employment
should fall by an average of 30,000 in
each three-month period until the
start of 2017.
Joblessness
to drop from
2013 onwards
BY TIM WALLACE
UK ECONOMY

GEORGE Osborne told the Commons the

50p top rate of income tax raises at
most a fraction of what we were told,
and may raise nothing at all, while
causing massive distortions, justifying,
he said, cutting the rate to 45p from
next year.
Can it be true that high tax rates raise
so little?
If high-earners did not change their
behaviour at all when the tax was imple-
mented, HMRC estimated 300,000 peo-
ple would have paid a total of 6.5bn
extra in 2010-11.
However, the vast majority of the rel-
evant income was simply attributed to
2009-10, known as forestalling, pay-
ing the 40p rate and declaring less
income under the 50p regime. That cut
the yield from an expected 2.5bn to
under 1bn so at first glance, the tax
does indeed appear to be a flop.
However, this forestalling is only pos-
sible in year one if the tax was perma-
nent it could not be repeated, so we
would see how much was paid in a
standard year and so how sensitive
high-earners are to tax changes, gener-
ating an accurate Laffer Curve model on
which to estimate the real impact.
The curve initially used by the govern-
ment was very steep, suggesting a tax
rise would generate a lot of cash.
As this did not happen, the curve used
was amended (pictured left). On this
shallower curve, the government hopes
a small tax cut will barely impact rev-
enues as it boosts incentives to work
and pay the tax.
However, as we have seen this is
based on a very unusual set of figures,
with a huge deal of forestalling, and so
may be as inaccurate as the initial curve.
The model Osborne has used is at
high risk of being severely flawed.
OSBORNE: 50P RATE MAY RAISE NOTHING
CITYA.M. 22 MARCH 2012
News | Budget 2012
25
ANALYSIS l The Laffer curve estimated by HMRC
bn
%
0.5
0.0
-0.5
-1.5
-2.0
-2.5
- 50 -100m
- 700m
45 40 50 55 60
FACTCHECKER WITH TIM WALLACE
THE VERDICT
We will never know exactly how much
the 50p rate could have raised its
introduction and cut were both pre-
announced, allowing savvy high-earners
to shift earnings into different years,
avoiding tax and skewing the figures.
Better or worse off in 12/13? Better or worse off in 13/14?
127 worse off 944 worse off
172 better off 220 better off
299 worse off 1,163 worse off
365 worse off 1,094 worse off
92 better off 103 worse off
Source: PwC
CITYA.M. 22 MARCH 2012
WHAT DOES THE CHANCELLORS BUDGET MEAN FOR YOU? by Tim Wallace
CATHERINE GANNON,
50,MANAGING DIRECTOR
OF LAW FIRM GANNON
Catherine lives with her
children, aged nine and 11,
in a home she owns with a
mortgage. She set up her
firm nine years ago and
worries about red tape and
taxes. When travelling to
meet clients, she uses the
tube. She earns over
100,000, and has a share
portfolio, though not much
by way of pension plans.
PwCs BUDGET TEAM SAYS:
Although the pre-Budget speculation about
an increase in the income levels where there
will be a loss of child benefit did come to
fruition, the limit is now 60,000 which will
not help Catherine. As a result of this
Catherine's income will reduce by around
1,750 per annum from January 2013. On
the flip side the reduction of the 50 per cent
income tax rate to 45 per cent from April
2013 will be welcome. The Budget did
contain details of a reduction of red tape
with the coalition scrapping or improving 84
per cent of health and safety regulations
which should lighten the administrative
burden.
News | Budget 2012
26
CITYA.M. 22 MARCH 2012
CHARLES BUSHBY,
25, MANAGEMENT
CONSULTANT
AT A MAJOR
ACCOUNTING FIRM
After a year in
performance
management,
Charles earns
around 30,000.
He rents in west
London and
commutes using
public transport. He
saves for a pension
through his firms
generous matching
scheme, but still
knows how to enjoy
himself he is a
social drinker.
Charles does not
smoke.
PwCs BUDGET TEAM
SAYS:
If Charles wants to get on
the property ladder soon
he may wish to purchase a
home under the
government backed
NewBuy scheme. For new
build properties, offered by
builders participating in
the scheme, he will require
just a five per cent deposit
for homes with a purchase
price of up to 500,000.
This scheme is not
restricted to first time
buyers. Charles will be
encouraged by the
chancellor increasing the
personal allowance to
9,205 from April 2013 as
part of the overall aim of
increasing this to 10,000
by April 2015. The increase
in the alcohol duty will not
be welcomed by Charles
and many others.
Financially he should
continue to abstain from
cigarettes with 37p being
added to a pack of 20.
PwCs BUDGET TEAM SAYS:
The increase in the personal allowance will be welcomed
and especially the reassertion of the coalitions aim of
bringing this up to 10,000 by April 2015. The chancel-
lor mentioned that the reduction in corporation tax will
not benefit banks as there will be a corresponding rise in
the bank levy. Unwelcome news for many of Jonny's
clients. The increase in fuel duty will affect him but his
fuel efficient moped will reduce the overall effect. With
his plans to leave the UK, Jonny should be mindful that a
new statutory residency test will be introduced from
April 2013 which will aim to bring clarity as to whether
an individual is UK resident for tax purposes.
LAURA MUCHA, 29,
SOLICITOR-ADVOCATE AT
NORTON ROSE
Laura earns between
75,000 and 85,000 and
makes the final payment
on her student loan this
month. However she
remains sensitive to
interest rates as she has
recently bought a flat. She
cycles to work, uses trains
at the weekend and flies
frequently in a personal
capacity. She invests in the
companys pension scheme,
has no children, and is a
social drinker.
PwCs BUDGET TEAM
SAYS:
The announcements with
regard to the personal
allowance increase will
be welcomed but Laura
should be aware that any
future pay rises may well
result in her losing her
personal allowance alto-
gether. Individuals lose
this on a sliding scale for
income levels over
100,000 with entitle-
ment in the 2012-13 tax
year going completely
when income reaches
116,210. Laura may well
have a safer ride to work
with the Budget
announcing a 15m
grant to Transport for
London which will be
used for improving provi-
sion for cyclists at junc-
tions in the capital. The
previously announced
increases in air passen-
ger duty to be introduced
from 1 April will go
ahead and will increase
the cost of Lauras for-
eign excursions
PwCs BUDGET TEAM
SAYS:
Hope is on the horizon
for Martins finances
with the chancellors
announcement that the
income tax additional
rate of 50 per cent is to
be reduced to 45 per
cent from April 2013.
Martins healthy
approach to life, by
running to work and
only using his car at
weekends, means that
he is partially insulated
from the 3p per litre
increase in fuel duty.
The increase of two per
cent in stamp duty land
tax for property
purchases over 2m
may well effect the
future saleability of
Martin's Wandsworth
"des res". Given Martins
high marginal tax rate it
makes particular sense
for him to save via an
ISA. From April the
annual ISA allowance
will rise to 11,280.
JONNY SAYLE, 27, FOUNDER OF SPIRELIFE, A
FITNESS CONCIERGE FIRM FOR CITY WORKERS
Jonny employs three permanent staff and seven
freelancers at his business, which has a turnover
of around 85,000. He takes home a salary of
40,000 and is looking to move abroad, as he
thinks the business could run itself in about six
months. He already travels overseas every
couple of months, mainly for business. Jonny
lives in Barnes, where he rents, and travels
around London by moped. He doesnt have a
pension plan or any significant investments.
Jonny drinks occasionally but does not smoke.
MARTIN WINTER, 58, PARTNER, TAYLOR WESSING
Martin Winter lives in Wandsworth with his wife, in a home
that they own with no mortgage. They have two children, aged
20 and 22 and are concerned about youth unemployment.
Martin runs to work but occasionally uses public transport. He
uses his car only at the weekends, and frequently flies on
business trips. He saves, with ISAs, and the company recorded
average earnings per equity partner of 537,000 in 2011-12.
** PwC comments provided by Nick Jarvis
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TIGHTER THAN THE
CHANCELLORS PURSE STRINGS
THOSE WHO enjoy tucking into
supermarket rotisserie chicken, toast-
ed sandwiches or sausage rolls
bought on the high street may find
they are about to pay more dearly
after the chancellor clamped down
on loopholes allowing shops to avoid
paying VAT on hot food.
From October, supermarkets and
other retailers such as Greggs will be
forced to start paying 20 per cent VAT
on any type of takeaway food served
to customers above the ambient air
temperature.
At present, the VAT is only charged
on hot takeaway items. Retailers have
avoided the loophole by arguing that,
because products are baked on the
premises and not kept warm for
consumer take-away purposes, they
therefore count as cold products.
They have also claimed that their
food is served hot to preserve its qual-
ity rather than to be eaten like pies
which might fall apart if cooled.
A Greggs spokesperson said: We
do not believe that our freshly baked
savoury products should be subject to
VAT and we will be making strong
representation to the government
regarding the proposed changes.
A Subway spokesperson was
unavailable for comment, but some
commentators said that because the
filling is hot when served, there was a
risk its sandwiches could fall into the
VAT category.
HMRC estimates the change could
add an extra 105m in annual rev-
enues to its coffers by 2013-14.
Under the proposals laid out in the
Budget, George Osborne said the gov-
ernment would be cracking down on
other loopholes and anomalies in
our VAT system that apply to large
static caravans, nutritional drinks,
and alterations to listed buildings.
Stephen Coleclough, tax partner at
PwC, said these werent loopholes but
cases that HMRC have lost in the
past labelling the government as
sore losers.
The government is trying to
remove anomalies but has only intro-
duced new ones which will no doubt
lead to yet more litigation, which is
the one thing the government is try-
ing to avoid, he said, adding that
freshly baked bread bizarrely is not
caught in the net.
The changes are expected to affect
up to 3,000 firms, with costs most
likely to be passed to lunchgoers.
ONLINE gambling companies will no
longer be able to hide beyond British
shores as duty becomes payable
according to where the bet is placed
rather than where the gambling firm
is located.
The new consumption-based tax
will affect the many British compa-
nies including Betfair, William Hill,
and Ladbrokes which have moved
offshore since the 2005 Gambling Act
laid out a point-of-supply tax.
In echoing European legislation and
plugging the remote gambling tax
loophole, the Treasury expects 55m
of extra revenues to enter the UK in
2014-2015, 240m the following year
and 270m in 2016-2017.
The industry expects the tax rate to
be 15 per cent, in line with the supply-
based betting duty imposed on UK-
based gambling companies.
Betfair, which moved its HQ to
Gibraltar last year, said it supported
anything that promoted a fair and
level playing field.
Shares in Ladbrokes, William Hill
and Betfair all dropped two per cent.
Offshore firms take a hit as gambling
tax reverts to where online bet placed
DESPITE speculation to the contrary,
George Osborne was adamant yester-
day that the relaxing of Sunday trad-
ing laws will be a temporary measure.
When millions of visitors come to
Britain [this summer] we dont want to
hang up a closed for business sign,
the chancellor said.
But he added the legislation will be
limited... to eight Sundays only from
22 July to 9 September.
Justin King, chief executive of J
Sainsbury, said he saw no reason for
the Sunday trading laws to be relaxed
on a more permanent basis: The cur-
rent status quo is a good British com-
promise Sunday is a special day and
one we are broadly comfortable with.
Ian Geddes, UK head of retail at
Deloitte, said while the extended
shopping hours will boost trading
during the Olympics and ease pres-
sure on the citys infrastructure, the
relaxed trading laws would be unlike-
ly to result in higher spending over
the long term if revised permanently.
Relaxed Sunday trading
will only be for Olympics
RETAIL

THE GOVERNMENT has tried to make

up for last years oil and gas tax raid by
promising to help out explorers in
parts of the North Sea and clear up tax
rules on decommissioning.
Shares in North Sea explorers
spiked yesterday lunchtime as George
Osborne unveiled a 3bn subsidy for
drilling in the West of Shetland area,
which is thought to contain lots of oil
but is largely unexplored.
He also promised laws to support
investment in brownfield sites that
have been closed by big firms such as
BP but still have some fuel left.
Companies will also have more cer-
tainty about the costs of shutting old
sites, after Osborne said tax relief will
be set on a contractual basis by 2013.
These new proposals will cost
45m this year, but the Treasury is
expecting the measures to actually
generate 385m in 2014 as companies
return to the region, having been
scared off investing because of the
uncertain tax regime.
Industry group Oil & Gas UK esti-
mates that an extra 1.7bn barrels of
oil will be recovered from the North
Sea thanks to the clearer tax rules.
They have listened quite carefully
to the industry about the areas for
investment that need some encour-
agement, Alan McCrae, head of ener-
gy tax at PwC, told City A.M.
North Sea oil wins subsidies
BY MARION DAKERS
ENERGY

VAT hike on
chicken and
sausage rolls
BY KASMIRA JEFFORD
RETAIL

BY LAUREN DAVIDSON
LEISURE

News | Budget 2012

28
CITYA.M. 22 MARCH 2012
FITCH Ratings said yesterday
George Osbornes Budget proposals
show commitment to the coali-
tions existing deficit reduction
strategy and do not impact its AAA
credit rating.
As expected, the announcement
did not contain unfunded tax and
spending measures while the
updated economic and fiscal fore-
casts are marginally better than
forecast in the Autumn
Statement, Fitch said.
However, the scale of the fiscal
challenge remains large relative to
its AAA peers and the chancellor
confirmed that austerity will have
to extend beyond the term of the
current parliament if the govern-
ments fiscal targets are to be met,
the statement added.
Britain holds the top level credit
rating from Fitch, Standard &
Poors and Moodys Investors
Service. Fitch and Moodys have
negative outlooks on Britains cred-
it rating while S&P has the country
at stable.
Fitch sees no impact on AAA
rating from Budget proposals
CREDIT RATINGS

THE CHANCELLOR yesterday sig-

nalled his support for more airports
or runways in the south east of
England but airlines were left fum-
ing after he again ignored their calls
to halt a hike in air passenger duty.
George Osborne said the govern-
ment must confront the problem of
air capacity, though he shied away
from backing either a controversial
third runway at Heathrow or the
Thames Estuary airport plan.
And the chancellor made no men-
tion of altering the air passenger
duty, sparking harsh words from a
group of airlines.
Yet again, the Treasury is pressing
ahead with further rises without any
analysis of their effect on the wider
economy, said the chief executives of
EasyJet, IAG, Ryanair and Virgin
Atlantic in a joint statement yester-
day.
In the absence of such a study, we
must assume that the Treasury
knows it cannot justify this job-
destroying tax in overall economic
terms. APD must be scrapped.
The quartet have long urged the
coalition to drop the tax on plane pas-
sengers, which is due to rise by twice
the rate of inflation, or around eight
per cent, in April following a freeze in
2011. The duty will cost passengers up
to 92 per flight.
The levy is expected to raise 2.7bn
this financial year, rising to 3.9bn in
2016, the Treasury has forecast. The
CBI said Osborne has missed an
opportunity to reinforce that the UK
is open for business.
Planes a priority
but passenger
levy must stay
TRANSPORT

ANALYSIS l Faroe Petroleum PLC

p
164
162
160
158
156
154
152
159.00
21 Mar
16Mar 15Mar 19Mar 20Mar 21 Mar
ANALYSIS l Betfair Group PLC
p 905
900
895
890
885
880
875
870
872.00
21 Mar
16Mar 15Mar 19Mar 20Mar 21 Mar
POPULAR ITEMS HIT BY THE VAT CHANGE
AFTER
2.40
AFTER
5.16
AFTER
64,800
4.39
BEFORE
54,000
BEFORE
3.60
AFTER
BEFORE
2.00
66p
AFTER
55p
BEFORE
ROTISSERIE CHICKEN
PIES AND PASTIES
SPORTS NUTRITION
DRINKS
TOASTED
SANDWICHES
STATIC CARAVANS
3.00
BEFORE
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WALL STREET
MAKING NEW HIGHS?
POINT
SPREAD
TRADE
WALL STREET
CHANCELLOR George Osborne
unveiled a hike in company car tax
rates yesterday in a move he claimed
will raise an extra 1.6bn in revenues
over the next five years.
The plan to clobber companies
with fleet cars for more tax came just
minutes after Prime Minister David
Cameron had identified a booming
car industry as key to the health of
the UK economy, and hailed leaders
of the industry.
Tax rates on company cars are to
rise by a percentage point to a maxi-
mum of 35 per cent in 2014-15.
This will be followed by a two per-
centage point rise to a maximum of
37 per cent in 2015-16 and 2016-17.
The graduated rises will apply to
cars emitting more than 75g/km of
carbon dioxide (CO2).
Osborne said in his Budget speech:
To encourage fuel efficiency, we will
extend the 100 per cent first-year cap-
ital allowance for fuel-efficient, low-
emission business cars, reduce the
CO2 threshold for the main capital
allowance rates, and increase the per-
centage list price of company cars
subject to tax.
His statement followed a gushing
tribute to the UK car industry by
David Cameron in Prime Ministers
Question Time.
Cameron hailed Jaguars new tie
up with Chinese car maker Chery (see
p17) and the jobs that were being cre-
ated in the industry.
But Matthew Hall, head of tax at
accountants Wilkins Kennedy said:
These new measures are going to
make many company cars prohibi-
tively expensive to both companies
and their employees.
John Lewis, chief executive of the
BVRLA, a trade body for leasing,
rental and commercial vehicle com-
panies said: This is clearly a Budget
for business and employment that is
likely to stimulate growth for many of
the fleet industrys customers.
However, the chancellors enthusi-
astic efforts to drive down emissions-
based capital allowances for company
cars could be a step too far, too soon.
Meanwhile Lewis attacked the gov-
ernments confirmation that a five-
year tax exemption for zero-carbon
and ultra low-carbon emission vehi-
cles like electric cars will come to an
end in 2015.
He added: This measure could kill
the electric car market stone dead.
Other lobby groups welcomed the
detail in the long term plan from the
government.
Chief executive of the Society of
Motor Manufacturers and Traders
Paul Everitt said: Its important to
know ahead of time whats coming.
Company car
rate hiked to
raise 1.6bn
BY JOHN DUNNE
AUTOMOTIVE

IT was rumoured to be the rabbit in

George Osbornes Budget box, but a
freeze in fuel duty was nowhere to be
found yesterday, to the dismay of
motoring groups.
Fuel tax will go up by 3.02p per litre
on 1 August as planned, the chancellor
said, despite calls from consumers to
prevent near-record oil prices trickling
down to the petrol pumps.
Diesel is at its highest price ever
recorded and this failure to act is a
devastating blow to families and busi-
nesses, said Peter Carroll, founder of
campaign group FairFuelUK. Millions
of people and thousands of businesses
will feel ignored.
The governments fair fuel stabilis-
er, to hold back tax rises when oil is
over $75 a barrel, is in progress.
And excise duty on heavy goods
vehicles will be frozen this year.
Motorists angry as chancellor
sticks to his guns on fuel duty
TRANSPORT

THE TREASURY yesterday unveiled a

50m tax break for Britains entertain-
ment industries.
Osborne announced the long-called-
for introduction of corporation tax
reliefs for the video games, animation
and high-end television industries.
We want to keep Wallace and
Gromit exactly where they are, he
added.
High-profile British dramas such as
Birdsong and Julian Fellowes Titanic
were both produced overseas because
they would have been more expensive
to make here.
As well as keeping British produc-
tions such as Downton Abbey in the
country, Osborne hopes top interna-
tional investors like Disney and HBO
will be tempted to make their premi-
um shows in the UK.
The Treasury expects to forego
15m next year and 35m in 2014-2015
due to the scheme, effective from April
2013 subject to approval from Brussels.
The government was hazy on
details, but Deloitte tax partner Zubin
Patel said the new credit is likely to
reflect the tax reliefs given to the film
industry for productions that incur at
least 25 per cent of costs in the UK.
But there has been a history of
exploitation of these reliefs, he added,
warning that the government should
legislate to protect itself.
Downton Abbey tax cuts for
video game and TV industries
BY LAUREN DAVIDSON
ENTERTAINMENT

The tax relief aims to keep high-cost shows such as Downton Abbey produced in the UK
CITYA.M. 22 MARCH 2012
News | Budget 2012
29
There is not much room for manoeuvre with
the current debt crisis. Im happy the
Budget didnt mess too badly with child-
care as had been reported. It was also
a good idea not to raise duty on alco-
hol as pubs could use the extra help.
COLIN HALL | GRESHAM COMPUTING
This Budget gives an openness for an entre-
preneurial economy, which is important for
employment and growth. Of course, as a
professional smoker and drinker, we got
clubbed again by the price rise on a
pack of cigarettes.
News | Budget 2012
30
CITYA.M. 22 MARCH 2012
THE AIRLINES VIEW
IAG boss Willie Walsh released a joint statement yes-
terday with easyJets Carolyn McCall, Ryanairs Michael
OLeary and Virgin Atlantics Steve Ridgway.
At a time when the government talks about cre-
ating jobs and growth, its blinkered insistence on
further increases in Air Passenger Duty achieves
precisely the opposite. Inbound tourism is a
major employer of young people, but internation-
al visitors are being turned off the UK because of
the exorbitant level of APD (air passenger duty),
which is by far the highest air travel tax in the
world. In every other leading country, aviation is
an expanding industry. In the UK, rises of up to
360 per cent in APD in the last seven years are
squeezing the life out of the economy.
CHIEF EXECUTIVE
WILLIE WALSH
NATIONAL ASSOCIATION OF ESTATE AGENTS
This Budget week is proving to be a
double whammy for first time buyers:
not only has the chancellor failed to
offer any real help to lower and mid-
dle income homeowners and first
time buyers, but from Saturday, the
stamp duty holiday for first time buy-
ers will be coming to an end. Property
is already over-taxed in the UK com-
pared to other OECD countries and
instead of using the Budget as an
opportunity for whole-scale reform of
property taxation, the chancellor has
chosen to further tax property sales
with the introduction of a seven per
cent rate at the upper end of the mar-
ket (homes over 2m). The Budget
was a chance for George Osborne to
support the green shoots of recovery,
but there is very little to support the
UKs fragile property market.
PRESIDENT
WENDY EVANS-SCOTT
National professional body for estate
agency personnel, including those deal-
ing with residential and commercial
sales and lettings, property manage-
ment, business transfer, auctioneering
and land. It is dedicated to the goal of
professionalism within property sales.
THE CBI
The UKs top business lobbying organisation.
It aims to influence government policy on a
wide range of business matters.
An extra one per cent off corporation
tax this year could make a big differ-
ence to investment intentions. Plans
to reduce the top rate of tax to 45p
by April 2013 will show our top and
aspiring talent that this government
wants them to create wealth here.
(Osborne) stuck to his guns and deliv-
ered a fiscally neutral programme.
DIRECTOR GENERAL
JOHN CRIDLAND
THE SHADOW CHANCELLOR
In last years Budget the chancellor
promised to put fuel into the tank of
the British economy. But since then
our economy has stalled and unem-
ployment soared. This Budget should
have put jobs and growth first, but the
Office for Budget Responsibility
delivered this damning ver-
dict: We have made no
other material adjust-
ments to the economy
forecast as a result of
Budget 2012 policy
announcements. And wor-
ryingly, the OBR revised
down business invest-
ment by 6.9 per-
centage points
this year and
2.5 percent-
age points
next year. By
choking off the
recovery, hit-
ting confidence
and pushing up
unemployment,
the chancellors
gamble of raising
taxes and cutting spending too far
and too fast has backfired. Slower
growth and higher unemployment
means an extra 150bn of borrowing
to pay for this economic failure. What
we needed was real help for families
on middle and low incomes. Instead
we got a tax cut for 300,000 people
earning over 150,000, while mil-
lions of pensioners will see an effec-
tive tax rise next year. We needed a
real plan for jobs, including bring-
ing forward infrastructure invest-
ment, a temporary VAT cut and
tax breaks for small
firms taking on extra
workers. Instead the
chancellor stuck with
policies that
arent only
unfair, but
on
jobs,
growth and
the deficit
arent working.
LABOURS SHADOW CHANCELLOR
ED BALLS
THE ENTREPRENEUR
The governments attention to tech-
nology infrastructure in the Budget is
right. Its plans to deliver superfast
broadband to 90 per cent of the popu-
lation, and to fund ultra-fast broad-
band in 10 of the UKs largest cities, is
certainly encouraging. School for
Startups is currently hosting Web
BUSINESS FOUNDER
DOUG RICHARD
Doug Richard is a former Dragons Den investor who now runs School for Startups, which
trains entrepreneurs and helps develop new businesses worldwide
DIRECTOR GENERAL
SIMON WALKER
The Institute of Directors (IoD) provides
support and information for business lead-
ers as well as political analysis
Fuelled Business bootcamps around
the UK and we know how important
connectivity is to small business. It is
the lifeblood of entrepreneurs in the
UK, so these announcements by
George Osborne are definitely a step in
the right direction. However, if this
country is to continue to compete on a
global stage we must not stop until the
whole of the UK has access to ultra-
fast broadband.
THE BRITISH BANKERS ASSOCIATION
The BBA is the leading trade association for
the UK banking and financial services sector
and speaks for over 200 member banks
This was a Budget for business: it was
about making it more attractive for
businesses to do business here in the
UK. It was also about giving business-
es the confidence to invest in their
futures and giving their customers the
confidence to spend again. Crucially it
underlines the fact that bank finance
continues to be available for viable
businesses. It was also about giving
our international trading partners con-
fidence that the country is fully
focused on restoring financial stability
and promoting economic recovery.
Banks are committed to providing the
UKs businesses with the finance they
need to develop and grow, and we wel-
come the National Loan Guarantee
Scheme. The government has said that
it both wants the bank levy to raise a
specific amount 2.5bn and that
any reduction in corporation tax will be
offset by an increase in the levy. The
corporation tax cut would reduce the
amount raised, so the percentage has
been raised to correct this. The end
result is that the banks pay the same.
DIRECTOR GENERAL
ANGELA KNIGHT
The reduction of corporation tax
faster than planned is a positive
step in the right direction, which
we have long called for. Britain
urgently needs to become a com-
petitive, low tax economy, so the
chancellor must not deviate from
this path. It will take time and seri-
ous action to rebuild this countrys
reputation as a place which wel-
comes business, and reducing cor-
poration tax year-on-year helps
that process. We should be aiming
for a corporation tax rate of 15 per
cent by 2020 that would put
Britain in a very strong position.
The chancellor has not gone far
enough or fast enough on income
tax. 50p was hugely damaging, but
at 45p we are still uncompetitive.
Our members will congratulate the
chancellor for resisting the tempta-
tion to limit further tax relief on
pension contributions. The best
news was the confirmation that a
move to a flat-rate state pension
will proceed. Many had started to
worry that this was being blocked
by the Treasury.
CITY VIEWS: WHAT ARE YOUR FIRST IMPRESSIONS OF THE CHANCELLORS BUDGET?* Interviews by Kendal Gapinski
It seems that, overall, the Budget looks like
a good thing. The personal allowance
increase was needed. People are strug-
gling to survive because things are so
hard, so the more-than 1,000
increase should hopefully help.
AMI RICHARDS | FIDELITY
THE TUC
We needed a Budget that looked to the
future and made jobs particularly for young
people the national priority. Instead we
have got a Budget for the rich by the rich.
One minute the chancellor said he found tax
avoidance morally repugnant, the next he
rewarded it by cutting income tax for the
richest by one per cent with precious little
relief for hard-pressed families on ordinary
incomes. Treasury figures show that those on
low and middle incomes will do worse than
those higher up the income scale. This looks
like a Budget made to keep the coalition
together rather than one made for the good
of the country. The chancellor's decision to
raise more than a billion extra pounds in tax
from pensioners by freezing age-allowances
will come back to haunt him.
GENERAL SECRETARY
BRENDAN BARBER
The UKs national trade union body, representing
the vast majority of organised workers
THE DIRECTORS VIEW
www.RateSetter.com Customer Phoneline: 08442490115
In association with RateSetter: A better way to Save and Borrow, Peer to Peer
* These views are those of the individuals above and not necessarily those of their company
JOHN NEWLANDS | CITYONE SECURITIES
T
HE UK Budget has the basic
requirements to keep credit
agencies at bay for now. The
plan is to enact a 7 per cent
stamp duty on property worth more
than 2m, slash the main corporate
tax rate to 24 per cent, lift the personal
allowance by 1,100 to 9,205, and
bring in a much-telegraphed reduc-
tion in the top tax rate from 50 per
cent to 45 per cent. With the Treasury
estimating it would lose 2.4 bn in tax
avoidance this year, the combined
effect of returning tax avoiders may
well give an inflow boost, or a mini-
stimulus ahead of election year.
Government borrowing is expected
at 126bn, only 1bn lower than the
Office of Budget Responsibilitys
autumn forecast. The government
insists debt will rise by 11bn less than
was forecast in the autumn over the
next five years, taking the budget back
to surplus over the same period.
But in order for the debt part to be
slashed, the growth portion must
ameliorate, or at least hold. The OBR
nudged up its 2012 growth forecast to
0.8 per cent from 0.7 per cent, and to
2.0 per cent from 1.8 per cent for 2013.
Will that be possible? UK inflation
hit 15-month lows of 3.4 per cent year-
on-year in February, on track to meet
the Bank of Englands (BoE) projec-
tions required to attain the 2.0 per
cent target. This, in turn, paves the
way for further monetary easing
ahead. As the BoEs third round of
asset purchases is deployed in the next
quarter, mortgage approvals could
remain near their two-year highs,
housing prices regain their ascent and
bond yields be suppressed as their sup-
ply diminishes. The BoEs ability to
maintain quantitative easing while
inflation remains on the decline is a
vital luxury. As global bond yields rise
in tandem (due to improved growth in
the US, better prospects for Eurozone
stabilisation and diminishing risks of
a Chinese hard landing), it is crucial
for BoE purchases to keep a lid on long-
term borrowing costs.
About four months ago, France
engaged in a war of words with the UK
over who deserves its top-notch rating
the most. The UKs deficit stands at 7
per cent of GDP compared to Frances
4.6 per cent. Taking debt by itself,
French debt stands at 83 per cent ver-
sus 76 per cent for Britain. The compar-
isons could go on. But one key factor is
that the UK enjoys greater monetary
freedom than any Eurozone member
via currency policy (the ability to talk
down the pound via the BoEs infla-
tion and growth pronouncements),
monetary policy (stepping up asset
purchase programs to reduce the sup-
ply of outstanding gilts and reduce
borrowing costs) and the fact it is
unburdened by contributing into the
European Financial Stability Facility
or upcoming European Stability
Mechanism).
The 2012 Budget has the necessary
components to maintain the UKs top-
notch credit rating. Getting the main
agencies to remove their negative out-
look would also be possible once the
growth assumptions are likely to stick
even beyond the temporary windfall
of this summers Olympics.
Y
ESTERDAYS budget re-affirmed
the balance the coalition gov-
ernment is attempting to strike
between growth and austerity,
while not delivering anything dramat-
ic, largely due to the widespread leak-
ing of many of the new measures in
advance. This budget felt much like
reading a novel and then seeing the
movie; there was no shock, no surprise
and therefore nothing of substance to
trigger significant price action in the
financial markets.
The focus now switches to ratings
agencies, particularly Fitch and
Moodys. It will be interesting to see
what their reaction will be to the
budget, considering they recently
placed the UK on a negative outlook,
with a possible ratings cut on the
cards in the not too distant future.
However, there was no real move
away from Novembers forecast, both
in terms of public sector borrowing
and GDP. As such, its hard to imagine
there are enough grounds for ratings
agencies to change their latest think-
ing on their UK ratings, unless the
British economys momentum begins
to subside. Does this budget impact
the UKs growing status as a safe haven
investment location? Perhaps not.
SMALL CHANGES
UK GDP projections were increased
marginally for this year, to 0.8 per cent
from 0.7 per cent, by the Office for
Budget and Responsibility (OBR),
though this is no surprise given the
stronger start to the year. At the same
time, the OBRs GDP forecasts for the
following year remain somewhat opti-
mistic, particularly given the sharp
correction in GDP projection for 2012
from that of which the fiscal body
forecast at this time last year. 2013
GDP was revised lower to 2 per cent
from 2.1 per cent, while the remain-
ing projections were left unchanged,
with 2014 at 2.7 per cent and 2015 at 3
per cent.
There was slight disappointment in
the latest government borrowing fig-
ures, which is expected to come in
1bn below the 127bn projection for
the year by the OBR. It had been hoped
that this figure could have undershot
the target more significantly,
although with yesterdays release of
the latest borrowing figures, its clear
last month that borrowing was
ramped up to meet forecasts. There
was no change to the 120bn borrow-
ing forecast for this new fiscal year,
while 2013-14 forecasts was marginally
lowered to 98bn from 100bn.
WINNERS AND LOSERS
The FTSE 100 did edge marginally
higher through the duration of the
speech helped in part by gains in oil
stocks on the back of the announce-
ment of 3bn worth of new field
allowances to exploration off the
shores of the Shetland Islands. The
news helped to lift the share prices of
several oil explorers as the size of the
investment was a bit of a surprise.
Faroe Petroleum was one small cap
stock in particular to have rallied on
the back of the announcement, with
the firms shares price gaining over
5.28 per cent on the day.
Property firms by contrast suffered
weaker demand for their shares, and
investors sold out of companies such
as Savills after the announcement of
aggressive attempts to clamp down on
stamp duty avoidance for homes
worth 2m and more. The announce-
ment of a 15 per cent charge for 2m
homes bought through companies
was a surprise and is aggressive, while
the 7 per cent new stamp duty level for
homes worth 2m was already much
speculated in the press. Savills shares
lost 2.41 per cent as a result.
The budget held
few surprises
for the markets
ASHRAF LAIDI
CHIEF GLOBAL STRATEGIST, CITY INDEX
With the bulk of the chancellors plans
leaked in advance of the big day, it is the
ratings agencies views that matter most
Cuts to deficit will calm Moodys nerves
JOSHUA RAYMOND
CHIEF MARKET STRATEGIST, CITY INDEX
While a few companies were given a rude awakening, there was little to give market watchers nightmares Picture: GETTY
CITYA.M. 22 MARCH 2012
News | Budget 2012
31
ANALYSIS l Faroe Petroleum
p
12:00 11:00 13:00 14:00 15:00
ANALYSIS l Savills
12:00 11:00 13:00 14:00 15:00
p
ANALYSIS l Inflation at 15 month lows
%
4.0
2.0
2009 2008 2010 2011 2012
ANALYSIS l BoE balance sheet at all-time highs
bn 350
300
250
200
150
100
2009 2008 2010 2011 2012
ANALYSIS l UKMortgage approvals 2 year highs (000s)
70
65
60
55
50
45
40
35
30
2009 2008 2010 2011 2012
P
i
c
t
u
r
e
:

G
E
T
T
Y
CONSERVATIVE backbenchers roared
with delight as George Osborne
unveiled a series of initiatives to boost
businesses amid Britains flagging eco-
nomic recovery.
Their main wish had already been
granted after the chancellor scrapped
the 50p top rate of income tax but he
also devised several moves on enter-
prise, investment and exports.
Osborne announced a 200m
increase to the 1bn Business Finance
Partnership, in which the government
matches investments from the private
sector to provide credit to medium-
sized companies.
The Treasury has shortlisted seven
fund managers to take part in up to
700m of the scheme.
It will also increase the Enterprise
Finance Guarantee Scheme (EFG),
which was designed to boost lending
to small companies. The share of their
loan book which they can put into the
fund will be raised from 13 per cent to
20 per cent.
Last night, however, it appeared dif-
ficult to predict the level of take-up
and the cost to the Treasury. Recent
figures showed lending under the EFG
dipped 24 per cent to 77.8m in the
final three months of last year.
John Cridland, director general of
the CBI, said: Increasing the govern-
ments risk sharing under the
Enterprise Finance Guarantee will
make banks more able to boost small
business lending.
Osbornes small business measures
included the Seed Enterprise
Investment Scheme, which will pro-
vide income tax relief of 50 per cent
for individuals investing in certain
seed companies, coupled with a capi-
tal gains tax holiday for profits on the
disposal of assets into such firms.
Small companies are also set to
enjoy a fillip through the Enterprise
Management Incentive scheme, which
yesterday had its grant limit doubled
to 250,000. The investment limit for
Venture Capial Trusts is now 5m.
The government also wants to boost
British exports, which have lost global
market share over the last decade as
Germanys grew. It will more than
double the value of UK exports to 1
trillion by 2020 and will expand the
overseas presence of UK Export
Finance, although the Treasury was
not able to put a cost on the scheme.
Every taxpayer will receive a person-
alised statement breaking down how
their tax is spent, under plans aimed
at increasing the governments finan-
cial transparency.
From 2014 , around 20m taxpayers
will receive a Personal Tax Statement
from HMRC, setting out exactly how
much income tax and national insur-
ance contributions they pay and
detailing where the money goes.
It will also set out their average
annual tax rates and how this con-
tributes to public spending.
The plan is the brainchild of Ben
Gummer, a rising star of the Tory
backbenches and the son of the for-
mer cabinet minister John Gummer.
Chancellor George Osborne said he
wanted a simple and transparent
tax system.
In the information age people
should know what tax they're paying
and what their money is being spent
on. The idea was introduced by my
Right Honorable from Ipswich and I
think it's an excellent idea and I
intend to put it into practice,
Osborne explained.
Every taxpayer to be told
how their money is spent
INCOME TAX

YOUNG people will be able to access

enterprise loans of between 5,000
and 10,000 to enable them to start
their own business, under a pilot
scheme announced in yesterdays
Budget.
The deal will be structured in a
similar manner to the existing stu-
dent loans, with low rates of interest
likely to be pegged close to the RPI
measure of inflation.
Chancellor George Osborne said
that he wants to support entrepre-
neurs aged between 18 and 24.
Young people get a loan to go to
university or college. We now want to
help them get a loan to start their
own business, he explained.
It is hoped that the scheme, which
will be governed by the Department
for Business, Innovation and Skills
(BIS) could be running by the end of
the year, with an initial 10m set
aside to provide funding and cover
administrative costs.
The campaign for the fund has
been led by Richard Bransons Virgin
conglomerate.
Enterprise loans available
for young entrepreneurs
YOUTH UNEMPLOYMENT

THE CHANCELLOR officially launched

his flagship credit easing scheme in
yesterdays Budget, making 5bn of
guarantees available for banks to pass
on a subsidy to small businesses.
But it also emerged that some banks
are setting a minimum floor of
25,000 for loans available through
the scheme, cutting out access for
many micro-businesses that the gov-
ernment wants to target.
Barclays branded its participation in
the scheme as a cashback finance
discount and said: If you take out a
business loan or commercial mort-
gage of more than 25,000 with us,
you could be eligible to receive upfront
cashback.
The value of the discount on the
interest charged on the loan will be
one per cent over five years, the bank
said, meaning it will be less than one
per cent up front.
The policy works by making banks
borrowing costs cheaper and requir-
ing them to pass the subsidy on to
small businesses in discounted loans.
In effect, the government is guarantee-
ing a portion of lenders debt on the
condition that they pass most of the
benefit on to small businesses, with
the rest paid back to the Treasury.
The aim of the policy is to get the
cost of borrowing to small firms down
by one per cent, but there is no target
or public estimate for what increase in
borrowing could result.
Most business leaders and bankers
see the effect as likely to be marginal.
The National Institute of Economic
and Social Research (NIESR) said the
measures do not address the major
factor depressing business investment
this year: a lack of demand.
HSBC is not participating in the
scheme because its cost of borrowing
is already so low that an extra govern-
ment guarantee would make little dif-
ference.
Credit easing targets SMEs
BY JULIET SAMUEL
BUDGET

Osborne sets
UK 1 trillion
export target
BY PETER EDWARDS
ENTERPRISE

News | Budget 2012

32
CITYA.M. 22 MARCH 2012
BORIS Johnson was celebrating yester-
day after chancellor George Osborne
confirmed a 110m investment in
London.
The main package is a 70m devel-
opment fund to attract new business
and new jobs to the capital.
A further 15m will be spent mak-
ing road junctions, such as Waterloo
roundabout, safer for cyclists.
Airport expansion is once again a
possibility with the chancellor saying
that the government must confront
the lack of capacity in the South East.
There will also be an enterprise
zone in the Royal Docks, superfast
broadband and backing for new river
crossings in East London.
With just five weeks to go until the
mayoral election Johnson will claim
the deal proves he is best the best-
placed candidate to access central
government funding.
Budget finds 110m for
London in boost for Boris
Boris Johnson on the campaign trail last month. Picture: Laura Lean / CITY A.M.
BY JAMES WATERSON
MAYORAL ELECTION

AT A GLANCE: ENTERPRISE BRITAIN

BUSINESS FINANCE
200m hike in the 1bn Business
Finance Partnership to boost the supply
of credit to medium-sized companies
and ease the lending drought.
ENTERPRISE FINANCE
Increase the share of small business
loans that can be placed into the scheme
from 13 per cent to 20 per cent.
ENTERPRISE ZONES
100 per cent capital allowances on plant
and machinery investment made in cer-
tain areas of existing enterprise zones at
the London Royal Docks, and Irvine,
Nigg and Dundee in Scotland and
Deeside in North Wales.
CORPORATION TAX
Cut from 26 per cent to 24 per cent
next month, before lowering it to 23 per
cent in April 2013 and to 22 per cent in
April 2014.
DRAGONS DEN LOANS
10m pilot scheme to offer loans for
young entrepreneurs to set up and grow
a business. It will build on the support
already available through schemes such
as the National Enterprise Allowance.
EXPORTS
Aims to reverse Britains falling share of
global exports and sell 1 trillion of
goods and services abroad by 2020.
SME WORKERS
Reform of the Enterprise Management
Scheme, which is aimed at helping
SMEs get the best staff, by providing
extra support to start-ups.
THOUSANDS of jobs will be put at risk
from the increased rate of machine
games duty outlined in the Budget,
according to the Association of British
Bookmakers (ABB).
Effective from February 2013, a tax
rate of 20 per cent will apply to most
gambling machines while a duty of
five per cent will be payable on lower
stake games such as the 10p slot
machine.
We are very disappointed that the
government has introduced an unsus-
tainable rate of tax, said ABB chief
executive Dirk Vennix.
He said bookmakers already pay
over 1bn in tax roughly 400m
more than they make in profit and
the increased tax puts 2,600 betting
shops and 11,000 jobs at risk.
Pubs are also expected to take a hit.
PwC tax director Gareth Martyn said:
For the leisure industry, this [new rate
of tax] will almost certainly be the
most significant announcement com-
ing out of the Budget.
Industry consensus suggests a rev-
enue neutral machine games duty
would be between 15 and 17 per cent,
meaning pub chains and leisure busi-
ness could take a significant hit.
Brigid Simmonds, chief executive of
the British Beer and Pub Association,
called the move a bitter blow and
forecast it will cost the pub sector
14m in extra taxes next year.
She said, Fruit machines and quiz
machines are an important part of the
fabric of British pubs, but this punitive
tax could see many of them disappear.
Higher tax on
game machines
bad for pubs
LEISURE

BUSINESSES with an income of

under 77,000 will be taxed on a cash
basis in an attempt to free three mil-
lion companies from excessive red
tape.
The chancellor said he wants to tax
small firms on the basis of the cash
that passes through their businesses
rather than asking them to spend a
huge amount of time doing calcula-
tions designed for big business.
Businesses will be allowed to grow
within the scheme until their
turnover hits 150,000.
Tax simplified
for small firms
SMALL BUSINESS

THE COALITIONS multi-billion pound

plans for sweeping infrastructure
upgrades are starting to take shape,
with 2bn of pension involvement
revealed yesterday and new plans to
upgrade Londons transport and tech-
nology networks.
George Osborne said British pension
funds have pledged the first 2bn
towards a new Pension Infrastructure
Platform, first trailed in autumn, with
more firms waiting in the wings to
invest once construction work starts.
But hopes that UK firms will fund
the construction sector out of its
slump were downplayed by experts. It
looks increasingly likely that building
and upgrading the UKs infrastructure
will be funded with money from
China pouring into the UK, said
Graham Robinson of Pinsent Masons.
The government itself has also
promised to fund new projects, includ-
ing 130m more for a northern trans-
port hub in Manchester, which brings
together improvements on routes to
towns across the region.
Osborne also confirmed a scheme
first unveiled by Nick Clegg for
Manchester to be the first city to earn
back up to 30m a year in tax to
spend on infrastructure work.
A new Thames crossing in east
London is making progress, Osborne
said, with an exemption from plan-
ning rules mooted to speed up work.
London will also get 15m to make
roads safer for cyclists, and the govern-
ment is meeting with TfL and the
Mayor to explore longer trains and
more station capacity for the capital,
as part of a five-year national rail
upgrade.
The city was also named yesterday
as one of ten super-connected cen-
tres in the UK, with plans to spend
100m on delivering ultrafast broad-
band to 1.7m households and 200,000
businesses. Ten smaller towns will
compete for 50m of similar funding.
But some of the governments 6bn-
worth of infrastructure projects
revealed in November have encoun-
tered roadblocks. The mooted Oxford
to Bicester train route, for example,
has been held up by a fresh inquiry, a
Treasury update showed.
Widely-expected changes to local
planning have been delayed until next
week, but Osborne said yesterday the
National Policy Planning Framework
will be a presumption in favour of
sustainable development and around
50 pages of rules will replace 1,200
existing pages of regulations.
THE CHANCELLOR confirmed that
he will look into privatising some of
Britains roads, weeks after the plan
first leaked.
The coalition will reveal in this
years Autumn Statement whether it
plans to go further with a scheme
for new ownership and financing
model for the national road net-
work.
Osborne said he would be learn-
ing lessons from the water industry,
which was privatised by Margaret
Thatcher in the late 1980s and is cur-
rently under fire for failing to pre-
pare for the current dry conditions,
resulting in a hosepipe ban.
He also said Alan Cooks recom-
mendations will be taken further.
Cook, the chairman of the Highways
Agency, said in a green paper in
November that the road network
should be run on a more commercial
basis.
While Prime Minister David
Cameron promised earlier in the
week that no tolls will be imposed on
existing roads, the Budget did not
include this pledge.
Any proposals for roads now
being brought forward which result
in higher direct or indirect costs to
businesses, private motorists and tax
payers in general will be seen as a
call-to-arms by many groups unwill-
ing or unable to afford higher motor-
ing costs, warned AECOMs
transport director Howard
Blessington.
Privatised roads could be on the way
as chancellor confirms plan to reform
NEW guidelines designed to stream-
line the development process will be
published next Tuesday and come
into effect immediately.
The National Planning Policy
Framework (NPPF), developed by com-
munities secretary Eric Pickles and
planning minister Greg Clark, aims to
boost the economy by introducing a
presumption in favour of sustainable
development.
George Osborne was triumphant
over the decision to rip up 60 years of
accumulated planning guidance, call-
ing it the biggest reduction in busi-
ness red tape ever undertaken.
Global businesses have diverted
specific investments that would have
created hundreds of jobs in some of
the most deprived communities in
Britain to countries like Germany and
the Netherlands, because they could-
nt get planning permission here,
Osborne said.
Opponents fear that the new rules
will allow developers to build on
green belt and other protected land.
Development rules set to
be streamlined in 2012
PLANNING

HOUSEBUILDERS were among the

biggest risers in the FTSE yesterday
after the chancellor said the Get
Britain Building fund, which provides
upfront finance to construction com-
panies, would be expanded.
Shares in Barratt Development
jumped 4.42 per cent while Bovis
Homes shares closed 3.84 per cent
higher as the government announced
it will increase the fund by 150m to
570m, which will help deliver over
3,000 more homes.
The Homes and Communites
agency earlier this week published its
shortlisted 224 schemes that could
receive a share of the investment pot,
which is aimed at jumpstarting
stalled development projects.
Meanwhile, the government also
announced that it will start consulta-
tion on the role Real Estate
Investment Trusts could play in the
social housing sector within the year.
Under the proposals, social hous-
ing associations could convert to Reit
status, freeing them from paying cor-
poration or capital gains tax on prof-
its made from property investment.
Peter Cosmetatos, director of
finance at the British Property
Federation, welcomed the news, say-
ing the emergence of social housing
investment trusts would help stimu-
late investment in housing at large.
Housebuilders in 150m boon
BY KASMIRA JEFFORD
CONSTRUCTION

Upgrades for
road, rail and
IT take shape
BY MARION DAKERS
INFRASTRUCTURE

BY MARION DAKERS
TRANSPORT

CITYA.M. 22 MARCH 2012

News | Budget 2012
33
MANCHESTER
130m northern rail hub
WELSH VALLEY
Working to electrify railways
CAMBRIDGE
A14 road upgrade plan due in June
HASTINGS
56m Bexhill road upgrade
EAST LONDON
RIVER CROSSING
Plus consultation on longer
trains and more capacity
SUPER-CONNECTED CITIES
Belfast, Birmingham, Bradford,
Bristol, Cardiff, Edinburgh, Leeds,
London, Manchester and Newcastle will
share 100m funding
RURAL GROWTH NETWORKS
Devon and Somerset, Cumbria, Swindon
and Wiltshire, Northumberland and
Durham and Warwickshire will
share 15m in pilot scheme
IMPROVED ENTERPRISE ZONES
Royal London Docks, Deeside,
Irvine, Dundee and Nigg will get capital
allowance raises at a cost of 25m this year
ANALYSIS l PROGRESS ON COALITIONS 20BN INFRASTRUCTURE WORK
NORTH SEA
3bn oil and gas exploration
and decommissioning help
THE GOVERNMENT may adopt an
alternative environmental tax to
replace its scheme to cut corporate
energy use if it cannot reduce the
schemes red tape and admin costs,
chancellor George Osborne said in his
Budget statement.
The so-called Carbon Reduction
Commitment (CRC) was devised
under the Labour government but
was yesterday slammed as cumber-
some and bureaucratic.
The mandatory energy efficiency
scheme forces businesses including
banks, hotels, hospitals and schools to
help cut Britains greenhouse gas
emissions by 4m tonnes and corporate
energy bills by 1bn a year by 2020.
The government will also raise a
carbon price support rate for 2014-
2015 by over 30 per cent to 9.55 per
tonne of carbon dioxide from 7.28,
the Budget document showed.
The levy comes into force in 2013
and is expected to raise 1.5bn for the
Exchequer in 2016-17.
Carbon reduction scheme
faces axe if reform fails
ENVIRONMENT

ANALYSIS l Barratt Developments Plc

p 152
150
148
146
144
142
148.80
21 Mar
16Mar 15Mar 19Mar 20Mar 21 Mar
1
6
Development
consent for
new energy projects
since January 2011

2
b
n
pledged to new
Pension Infrastructure
Platform
National planning
policy framework
due next week
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LON GD ONCE FIX AM...........1656.00 7.50
SILVER LDN FIX AM ..................32.18 0.04
MAPLE LEAF 1 OZ ....................34.73 0.10
LON PLATINUM AM................1654.00 -10.00
LON PALLADIUM AM...............696.00 -1.00
ALUMINIUM CASH .................2200.00 -185.00
COPPER CASH ......................8436.00 -138.00
LEAD CASH...........................2042.00 -5.25
NICKEL CASH......................18765.00 15.00
TIN CASH.............................23165.00 -435.00
ZINC CASH ............................2030.00 -44.00
BRENT SPOT INDEX................124.18 -1.45
SOYA .....................................1345.00 -21.50
COCOA..................................2372.00 83.00
COFFEE...................................183.60 11.00
KRUG.....................................1717.10 -3.00
WHEAT ....................................169.75 -0.12
AIR LIQUIDE......................................100.30 1.03 101.00 80.90
ALLIANZ..............................................92.72 -0.37 107.45 56.16
ANHEUS-BUSCH INBEV ....................55.00 0.40 55.20 33.85
ARCELORMITTAL...............................15.44 -0.15 26.40 10.47
AXA......................................................12.78 -0.23 15.97 7.88
BANCO SANTANDER...........................6.23 -0.16 8.42 4.94
BASF SE..............................................67.25 0.02 70.22 42.19
BAYER.................................................54.79 0.79 59.44 35.36
BBVA......................................................6.49 -0.20 8.81 4.94
BMW ....................................................68.81 0.59 73.95 43.49
BNP PARIBAS.....................................38.00 -0.33 55.44 22.72
CARREFOUR ......................................18.69 -0.33 28.39 14.66
CRH PLC .............................................16.28 0.06 17.03 10.28
DAIMLER.............................................45.22 0.18 53.95 29.02
DANONE..............................................51.20 -0.64 53.46 41.92
DEUTSCHE BANK..............................38.70 -0.10 44.56 20.79
DEUTSCHE BOERSE .........................51.23 1.53 57.68 35.65
DEUTSCHE TELEKOM.........................9.08 0.05 11.38 7.88
E.ON.....................................................18.27 0.00 23.54 12.50
ENEL......................................................2.84 -0.02 4.86 2.78
ENI .......................................................18.24 -0.19 18.72 11.83
FRANCE TELECOM............................11.61 -0.01 15.98 10.92
GDF SUEZ ...........................................19.90 -0.01 28.98 17.65
GENERALI ASS...................................12.56 -0.61 16.44 10.34
IBERDROLA..........................................4.53 -0.06 5.95 4.16
INDITEX ...............................................72.20 0.46 72.48 51.58
ING GROEP CVA...................................6.83 -0.13 9.50 4.21
INTESA SANPAOLO.............................1.49 -0.03 2.19 0.85
KON.PHILIPS ELECTR.......................15.57 -0.45 23.01 12.01
L'OREAL..............................................88.97 0.48 91.24 68.83
LVMH..................................................132.15 0.65 136.80 94.16
MUNICH RE .......................................116.10 1.10 117.55 77.80
NOKIA....................................................4.00 -0.08 6.36 3.33
REPSOL YPF.......................................20.10 0.83 24.90 17.31
RWE.....................................................36.40 -0.11 47.29 21.15
SAINT-GOBAIN...................................35.63 -0.02 47.64 26.07
SANOFI ................................................58.76 0.33 59.56 42.85
SAP......................................................54.06 0.06 54.85 32.88
SCHNEIDER ELECTRIC.....................51.32 0.57 61.83 35.00
SIEMENS .............................................78.59 0.15 99.39 62.13
SOCIETE GENERALE.........................24.20 -0.45 49.47 14.32
TELECOM ITALIA..................................0.91 -0.00 1.10 0.70
TELEFONICA ......................................12.91 -0.10 18.34 12.32
TOTAL..................................................41.60 -0.08 43.73 29.40
UNIBAIL-RODAMCO SE...................153.45 0.35 162.95 123.30
UNICREDIT............................................4.00 -0.14 12.44 2.20
UNILEVER CVA...................................25.54 -0.09 27.16 20.96
VINCI ....................................................39.52 -0.04 45.48 28.46
VIVENDI ...............................................13.96 -0.04 21.37 13.54
VOLKSWAGEN VORZ ......................132.05 -1.00 152.20 86.40
Price Chg High Low
EUSHARES
WORLD INDICES
FTSE 100 . . . . . . . . . . . . . . 5891.95 0.54 0.01
FTSE 250 INDEX. . . . . . . . 11656.75 23.51 0.20
FTSE UK ALL SHARE . . . . 3061.07 1.16 0.04
FTSE AIMALL SH . . . . . . . . 797.06 -2.16 -0.27
DOWJONES INDUS 30 . . 13124.62 -45.57 -0.35
S&P 500 . . . . . . . . . . . . . . . 1402.89 -2.63 -0.19
NASDAQ COMPOSITE . . . 3075.32 1.17 0.04
FTSEUROFIRST 300 . . . . . 1091.74 -1.71 -0.16
NIKKEI 225 . . . . . . . . . . . . 10086.49 -55.50 -0.55
DAX 30 PERFORMANCE. . 7071.32 16.38 0.23
CAC 40 . . . . . . . . . . . . . . . . 3527.37 -3.46 -0.10
SHANGHAI SE INDEX . . . . 2378.20 1.36 0.06
HANG SENG. . . . . . . . . . . 20856.63 -31.61 -0.15
S&P/ASX 20 INDEX . . . . . . 2517.20 0.00 0.00
ASX ALL ORDINARIES . . . 4347.00 0.00 0.00
BOVESPA SAO PAOLO. . 66860.05 -435.51 -0.65
ISEQ OVERALL INDEX . . . 3299.25 -6.93 -0.21
STRAITS TIMES . . . . . . . . . 2904.76 -1.93 -0.07
IGBM. . . . . . . . . . . . . . . . . . . 854.99 -9.05 -1.05
SWISS MARKET INDEX. . . 6290.00 -6.16 -0.10
Price Chg %chg
3M........................................................88.91 -0.44 98.19 68.63
ABBOTT LABS ...................................60.39 -0.01 60.56 46.29
ALCOA ................................................10.27 -0.17 18.47 8.45
ALTRIA GROUP..................................30.15 0.02 30.71 23.20
AMAZON.COM..................................191.73 -0.60 246.71 160.59
AMERICAN EXPRESS........................57.05 0.14 57.50 41.30
APPLE...............................................602.50 -3.46 609.65 310.50
AT&T....................................................31.84 0.05 31.97 27.29
BANK OF AMERICA.............................9.82 0.01 14.29 4.92
BERKSHIRE HATAW B.......................81.21 -0.24 85.51 65.35
BOEING CO.........................................75.01 -0.13 80.65 56.01
CATERPILLAR..................................109.00 -1.76 116.95 67.54
CHEVRON.........................................107.91 -1.17 112.28 86.68
CISCO SYSTEMS................................20.50 -0.07 20.65 13.30
CITIGROUP.........................................37.80 -0.28 46.90 21.40
COCA-COLA.......................................71.12 0.53 71.77 62.45
COMCAST CLASS A..........................29.71 -0.06 30.05 19.19
CONOCOPHILLIPS.............................77.29 -0.28 81.80 58.65
DU PONT(EI) DE NMR........................52.61 -0.10 57.50 37.10
EMC CORP..........................................29.19 0.33 29.68 19.84
EXXON MOBIL....................................86.01 -0.59 88.13 63.47
GENERAL ELECTRIC.........................20.07 0.00 20.85 14.02
GOLDMAN SACHS GRP..................125.99 -0.03 164.40 84.27
GOOGLE A........................................639.98 6.49 670.25 473.02
HEWLETT PACKARD.........................23.46 -0.52 43.28 19.92
HOME DEPOT.....................................49.79 0.41 49.93 28.13
IBM.....................................................204.69 0.44 207.52 154.32
INTEL CORP .......................................27.78 0.03 27.96 19.16
J.P.MORGAN CHASE.........................45.12 -0.26 47.80 27.85
JOHNSON & JOHNSON.....................64.76 -0.20 68.05 55.76
KRAFT FOODS A................................38.31 -0.04 39.06 24.30
MC DONALD'S CORP ........................96.72 -0.93 102.22 72.89
MERCK AND CO. NEW......................37.70 -0.06 39.43 29.47
MICROSOFT........................................31.91 -0.08 32.95 23.65
OCCID. PETROLEUM.........................97.73 -0.23 117.89 66.36
ORACLE CORP...................................29.41 -0.69 36.50 24.72
PEPSICO.............................................65.36 0.08 71.89 58.50
PFIZER ................................................21.77 -0.03 22.17 16.63
PHILIP MORRIS INTL .........................86.12 -0.42 86.70 60.45
PROCTER AND GAMBLE ..................67.20 -0.01 67.95 56.57
QUALCOMM INC ................................66.43 -0.32 67.00 45.98
SCHLUMBERGER ..............................74.01 -1.70 95.53 54.79
TRAVELERS CIES..............................58.51 -0.65 64.17 45.97
UNITED TECHNOLOGIE ....................82.72 -0.54 91.83 66.87
US BANCORP DELAWRE..................31.54 -0.16 32.18 20.10
VERIZON COMMS ..............................39.78 0.15 40.48 32.28
VISA CL A..........................................116.75 0.23 119.72 70.92
WAL-MART STORES..........................60.56 -0.04 62.63 48.31
WALT DISNEY CO ..............................43.27 0.03 44.13 28.19
WELLS FARGO & CO.........................34.02 -0.30 34.59 22.58
COMMODITIES CREDIT & RATES
BoE IR Overnight ............................0.500 0.00
BoE IR 7 days.................................0.500 0.00
BoE IR 1 month ..............................0.500 0.00
BoE IR 3 months ............................0.500 0.00
BoE IR 6 months ............................0.500 0.00
LIBOR Euro - overnight ..................0.263 0.00
LIBOR Euro - 12 months ................1.437 -0.01
LIBOR USD - overnight...................0.152 0.00
LIBOR USD - 12 months.................1.053 0.00
HaIifax mortgage rate .....................3.990 -0.02
Euro Base Rate ...............................1.500 0.00
Finance house base rate................1.500 0.00
US Fed funds...................................0.250 0.00
US Iong bond yieId .........................3.390 -0.07
European repo rate.........................0.150 0.00
Euro Euribor ....................................0.316 0.00
The vix index ...................................15.10 -0.48
The baItic dry index ........................884.0 5.00
Markit iBoxx...................................238.93 0.26
Markit iTraxx ..................................111.78 -1.19
Price Chg High Low
Price Chg %chg Price Chg %chg Price Chg %chg
USSHARES
NB GIobaI FIoatin . . . .99.5 0.5 103.0 92.5
Ruspetro . . . . . . . . . .189.3 -2.7 200.0 125.0
BAE Systems . . . . . .309.0 -4.6 340.8 248.1
Chemring Group . . . .421.5 -13.4 736.5 368.8
Cobham . . . . . . . . . . .220.4 0.0 236.5 165.9
Meggitt . . . . . . . . . . . .396.1 -3.3 408.3 304.9
QinetiQ Group . . . . . .145.2 -0.4 153.2 101.5
RoIIs-Royce HoIdi . . .823.5 -3.0 842.5 557.5
Senior . . . . . . . . . . . . .194.6 0.8 201.0 135.6
UItra EIectronics . . .1722.0 7.0 1779.0 1305.0
GKN . . . . . . . . . . . . . .209.2 -0.3 245.0 157.0
BarcIays . . . . . . . . . . .244.7 -0.8 308.9 138.9
HSBC HoIdings . . . . .567.4 2.1 667.2 463.5
LIoyds Banking Gr . . .35.9 -0.3 62.4 21.8
RoyaI Bank of Sco . . .28.5 -0.1 44.4 17.3
Standard Chartere .1624.0 0.0 1690.0 1169.5
AG Barr . . . . . . . . . .1222.0 0.0 1395.0 1031.0
Britvic . . . . . . . . . . . . .380.2 -0.6 444.0 289.9
Diageo . . . . . . . . . . .1525.0 12.0 1553.0 1112.0
SABMiIIer . . . . . . . . .2573.0 7.5 2660.0 1979.0
AZ EIectronic Mat . . .291.8 3.1 338.1 206.1
Croda Internation . .2156.0 21.0 2238.0 1593.0
EIementis . . . . . . . . . .184.8 -2.0 196.1 107.5
Johnson Matthey . .2321.0 15.0 2403.0 1523.0
C/$ 1.3206 0.0023
C/ 0.8326 0.0015
C/ 110.21 0.5031
/C 1.2010 0.0021
/$ 1.5861 0.0001
/ 132.36 0.3537
FTSE 100
5891.95
0.54
FTSE 250
11656.75
23.51
FTSE ALLSHARE
3061.07
1.16
DOW
13124.62
45.57
NASDAQ
3075.32
1.17
S&P 500
1402.89
2.63
Smiths Group . . . . .1039.0 -3.0 1340.0 869.5
Brown (N.) Group . . .242.7 1.4 304.5 227.0
Carpetright . . . . . . . . .665.5 0.5 748.0 375.0
Debenhams . . . . . . . . .78.3 1.8 80.4 51.2
Dignity . . . . . . . . . . . .835.0 -3.0 854.5 690.0
Dixons RetaiI . . . . . . .18.8 1.3 19.9 9.4
DuneImGroup . . . . . .502.0 2.0 524.5 383.9
HaIfords Group . . . . .309.5 0.2 405.9 268.6
Home RetaiI Group . .122.5 6.6 228.5 72.5
Inchcape . . . . . . . . . .386.2 9.8 425.4 268.1
JD Sports Fashion . .759.0 10.0 1030.0 570.0
Kesa EIectricaIs . . . . .74.0 -0.2 151.4 60.2
Kingfisher . . . . . . . . .300.0 -0.8 304.2 217.0
Marks & Spencer G . .389.5 9.5 402.2 301.8
Next . . . . . . . . . . . . .2915.0 21.0 2935.0 1937.0
Sports Direct Int . . . .287.0 3.1 296.1 181.5
WH Smith . . . . . . . . . .549.5 2.0 559.0 433.8
Smith & Nephew . . . .634.0 -1.0 715.0 521.0
Synergy HeaIth . . . . .861.0 18.0 981.0 809.5
Barratt DeveIopme . .148.8 6.3 150.3 67.5
BeIIway . . . . . . . . . . . .828.0 7.0 851.0 540.5
BerkeIey Group Ho .1349.0 3.0 1414.0 1019.0
Bovis Homes Group .508.5 15.6 518.5 326.5
Victrex . . . . . . . . . . .1317.0 -5.0 1590.0 1025.0
YuIe Catto & Co . . . . .243.5 4.7 253.0 148.0
BaIfour Beatty . . . . . .289.9 3.0 348.6 214.6
CRH . . . . . . . . . . . . .1353.0 -1.0 1687.0 1053.0
GaIIiford Try . . . . . . . .606.0 -9.5 623.0 346.3
Kier Group . . . . . . . .1203.0 -15.0 1489.0 1097.0
Drax Group . . . . . . . .521.0 -3.5 581.5 371.9
SSE . . . . . . . . . . . . . .1315.0 9.0 1423.0 1193.0
Domino Printing S . .562.5 2.5 701.5 434.3
HaIma . . . . . . . . . . . . .391.8 -3.5 429.6 306.3
Laird . . . . . . . . . . . . . .209.1 -1.1 213.6 127.9
Morgan CrucibIe C . .327.6 -2.9 360.0 224.0
Oxford Instrument .1238.0 3.0 1262.0 645.0
Renishaw . . . . . . . . .1367.0 -14.0 1886.0 800.0
Spectris . . . . . . . . . .1756.0 -8.0 1823.0 1039.0
Aberforth SmaIIer . . .655.0 6.0 714.0 494.0
AIIiance Trust . . . . . .373.5 0.5 392.7 310.2
Bankers Inv Trust . . .425.4 -0.2 433.8 346.5
BH GIobaI Ltd. GB .1195.0 5.0 1212.0 1058.0
BH GIobaI Ltd. US . . . .12.0 0.2 12.2 10.4
BH Macro Ltd. EUR . . .19.7 0.1 20.2 16.3
BH Macro Ltd. GBP 2050.0 5.0 2078.0 1668.0
BH Macro Ltd. USD . . .19.7 0.2 20.2 16.2
BIackRock WorId M .665.0 -6.0 815.5 574.5
BIueCrest AIIBIue . . .164.2 -0.3 176.2 160.6
British Assets Tr . . . .129.3 1.1 139.4 109.0
British Empire Se . . .440.3 0.9 533.0 404.0
CaIedonia Investm .1537.0 -3.0 1800.0 1337.0
City of London In . . .300.3 0.8 306.9 257.0
Dexion AbsoIute L . .140.3 -0.2 150.0 130.0
Edinburgh Dragon . .246.6 3.4 253.1 201.4
Edinburgh Inv Tru . . .499.7 4.9 504.0 422.5
EIectra Private E . . .1720.0 9.0 1755.0 1287.0
F&C Inv Trust . . . . . .315.6 1.7 327.9 261.5
FideIity China Sp . . . . .82.9 0.6 114.3 70.0
FideIity European . .1144.0 6.0 1287.0 912.0
HeraId Inv Trust . . . . .522.0 2.0 545.5 419.0
HICL Infrastructu . . . .119.6 0.1 121.3 112.7
John Laing Infras . . .106.6 -2.9 110.6 103.8
JPMorgan American .958.0 3.0 965.5 721.5
JPMorgan Asian In . .196.5 1.5 244.0 170.1
JPMorgan Emerging .563.5 1.5 610.5 480.1
JPMorgan Indian I . . .371.0 6.7 459.0 313.1
JPMorgan Russian .582.0 -2.0 741.0 415.1
Law Debenture Cor . .392.1 -1.6 398.7 323.0
MercantiIe Inv Tr . . .1061.0 8.0 1119.0 823.0
Merchants Trust . . . .387.4 2.7 431.8 341.5
Monks Inv Trust . . . .335.6 1.8 367.9 298.1
Murray Income Tru . .668.5 6.0 674.0 568.0
Murray Internatio . .1002.0 6.0 1007.0 818.5
PerpetuaI Income . . .271.0 1.3 276.0 236.5
PersonaI Assets T .34300.0 120.0 35350.030600.0
PoIar Cap TechnoI . .400.9 3.0 404.0 299.5
RIT CapitaI Partn . . .1224.0 -2.0 1360.0 1173.0
Scottish Inv Trus . . . .485.6 -1.9 524.0 417.0
Scottish Mortgage . .702.5 4.0 781.0 565.0
SVG CapitaI . . . . . . . .278.7 1.6 295.5 165.1
TempIe Bar Inv Tr . . .937.0 5.0 970.0 791.0
TempIeton Emergin .608.0 5.0 684.5 497.0
TR Property Inv T . . .157.8 0.6 206.1 136.2
TR Property Inv T . . . .71.9 1.7 94.0 59.8
Witan Inv Trust . . . . .498.4 0.9 533.0 401.5
3i Group . . . . . . . . . . .209.0 -2.4 301.1 166.9
3i Infrastructure . . . .122.8 0.3 125.2 115.0
Aberdeen Asset Ma .247.1 -1.9 265.8 167.8
Ashmore Group . . . .370.0 1.7 420.0 306.4
Brewin DoIphin Ho . .162.4 -2.4 176.5 113.7
CameIIia . . . . . . . . . .9775.0 66.010950.0 8800.0
CharIes TayIor Co . . .139.5 1.5 165.0 115.6
City of London Gr . . . .67.0 0.0 93.6 61.3
City of London In . . .355.3 0.3 440.0 304.3
CIose Brothers Gr . . .783.5 -15.0 860.0 590.0
F&C Asset Managem .70.0 0.4 81.7 56.1
Hargreaves Lansdo .490.0 -1.0 646.5 402.5
HeIphire Group . . . . . . .1.9 0.0 16.0 1.4
Henderson Group . . .127.7 1.2 173.1 95.1
Highway CapitaI . . . . .13.0 0.0 21.0 7.0
ICAP . . . . . . . . . . . . . .422.0 -2.0 541.5 311.6
IG Group HoIdings . .450.4 0.4 502.5 393.6
Intermediate Capi . . .280.2 -4.7 345.0 197.9
InternationaI Per . . . .269.3 7.3 388.8 148.5
InternationaI Pub . . .120.0 0.5 121.5 112.0
Investec . . . . . . . . . . .390.7 -2.6 522.0 318.4
IP Group . . . . . . . . . . .119.5 -0.5 120.0 36.0
Jupiter Fund Mana . .238.4 2.5 310.5 184.9
Liontrust Asset M . . .112.9 3.4 113.3 57.9
LMS CapitaI . . . . . . . . .59.5 0.0 64.8 54.0
London Finance & . . .19.5 0.0 23.5 18.0
London Stock Exch 1007.0 13.0 1076.0 756.5
Lonrho . . . . . . . . . . . . .12.3 -0.3 19.8 8.9
Man Group . . . . . . . . .138.5 -2.6 259.6 104.5
Paragon Group Of . .190.7 -1.8 206.1 134.6
Provident Financi . .1165.0 2.0 1175.0 915.0
Rathbone Brothers .1275.0 7.0 1316.0 977.0
Record . . . . . . . . . . . . .11.0 0.0 35.5 10.5
RSM Tenon Group . . . .8.8 0.0 40.0 5.6
Schroders . . . . . . . .1606.0 13.0 1906.0 1183.0
Schroders (Non-Vo .1270.0 11.0 1554.0 970.0
TuIIett Prebon . . . . . .350.0 0.0 428.6 262.3
WaIker Crips Grou . . .45.5 0.0 51.5 40.0
BT Group . . . . . . . . . .217.6 1.6 220.0 161.0
CabIe & WireIess . . . .32.2 -0.2 49.4 31.3
CabIe & WireIess . . . .37.5 -0.5 63.3 14.2
COLT Group SA . . . .101.5 0.3 154.0 84.1
KCOM Group . . . . . . . .68.1 0.1 84.0 58.5
TaIkTaIk TeIecom . . .145.0 -1.2 150.0 118.9
TeIecomPIus . . . . . . .669.0 10.0 802.0 452.3
Booker Group . . . . . . .82.6 0.9 83.0 57.0
Greggs . . . . . . . . . . . .549.5 4.0 558.0 445.0
Morrison (Wm) Sup .304.0 4.3 328.0 268.5
Ocado Group . . . . . . .118.8 -4.5 237.0 52.9
Sainsbury (J) . . . . . . .319.3 13.8 362.8 263.5
Tesco . . . . . . . . . . . . .332.3 -0.5 420.1 310.5
Associated Britis . .1203.0 17.0 1228.0 963.5
Cranswick . . . . . . . . .803.0 -4.0 842.5 588.5
Dairy Crest Group . . .344.5 -1.5 409.7 311.0
Devro . . . . . . . . . . . . .321.6 0.6 332.2 232.0
Tate & LyIe . . . . . . . . .705.0 -5.0 720.5 538.0
UniIever . . . . . . . . . .2059.0 -5.0 2189.0 1810.0
Mondi . . . . . . . . . . . . .595.5 -3.5 664.0 413.5
Centrica . . . . . . . . . . .313.8 1.2 333.0 278.8
InternationaI Pow . . .366.9 5.8 368.8 279.4
NationaI Grid . . . . . . .636.0 5.0 659.0 569.0
Pennon Group . . . . . .713.5 6.0 737.5 620.0
Severn Trent . . . . . .1577.0 19.0 1610.0 1375.0
United UtiIities . . . . .610.0 5.0 637.0 560.0
Cookson Group . . . . .716.0 21.5 724.5 395.8
Rexam . . . . . . . . . . . .423.2 4.3 427.0 299.8
RPC Group . . . . . . . .382.8 3.3 393.2 242.1
Smith (DS) . . . . . . . . .176.9 -0.8 183.7 113.3
Price Chg High Low
Persimmon . . . . . . . .675.5 15.5 706.5 374.0
Reckitt Benckiser . .3544.0 0.0 3597.0 3036.0
Redrow . . . . . . . . . . . .131.6 1.3 136.2 103.5
TayIor Wimpey . . . . . . .50.9 0.6 52.8 28.7
Bodycote . . . . . . . . . .402.8 -0.6 426.5 225.6
Fenner . . . . . . . . . . . .455.2 -7.3 483.7 280.0
IMI . . . . . . . . . . . . . . . .965.5 0.0 1119.0 636.5
MeIrose . . . . . . . . . . .422.3 7.0 423.7 268.0
Northgate . . . . . . . . . .215.4 -6.1 346.7 190.9
Rotork . . . . . . . . . . .1987.0 4.0 2099.0 1501.0
Spirax-Sarco Engi . .2099.0 12.0 2184.0 1649.0
Weir Group . . . . . . .1859.0-123.0 2236.0 1375.0
Evraz . . . . . . . . . . . . .390.5 -2.2 460.5 315.0
Ferrexpo . . . . . . . . . . .321.4 -4.2 499.0 238.7
TaIvivaara Mining . . .245.9 -12.7 589.0 195.2
BBAAviation . . . . . . .215.0 0.0 223.4 156.0
Stobart Group Ltd . . .130.9 0.1 152.8 112.0
AdmiraI Group . . . . .1168.0 -30.0 1754.0 787.0
AmIin . . . . . . . . . . . . .345.7 -2.8 427.0 270.6
BeazIey . . . . . . . . . . . .142.4 3.4 151.8 109.6
CatIin Group Ltd. . . .422.2 0.4 449.0 337.0
ITE Group . . . . . . . . . .233.1 1.9 258.0 157.7
ITV . . . . . . . . . . . . . . . . .87.2 0.3 89.9 51.7
Johnston Press . . . . . . .7.3 -0.1 9.0 4.1
MecomGroup . . . . . .171.0 1.0 310.0 134.5
Moneysupermarket. .125.7 0.2 130.3 85.5
Pearson . . . . . . . . . .1215.0 8.0 1255.0 1038.0
PerformGroup . . . . .309.0 -8.2 318.1 150.0
Reed EIsevier . . . . . .542.0 -0.5 578.0 461.3
Rightmove . . . . . . . .1386.0 17.0 1446.0 933.0
STV Group . . . . . . . . .115.5 7.5 168.0 76.3
Tarsus Group . . . . . .147.4 2.4 165.0 119.5
Trinity Mirror . . . . . . . .38.0 1.8 54.3 35.3
UBM . . . . . . . . . . . . . .615.0 4.5 626.0 416.0
UTV Media . . . . . . . . .139.5 1.0 150.0 92.5
WiImington Group . . .99.0 -2.0 157.0 78.5
WPP . . . . . . . . . . . . . .854.5 7.0 865.0 578.0
YeII Group . . . . . . . . . . .4.0 -0.1 11.0 3.4
African Barrick G . . .407.0 0.1 616.5 393.5
AngIo American . . .2503.0 -2.0 3344.0 2138.5
AngIo Pacific Gro . . .329.1 -4.1 340.0 237.9
Antofagasta . . . . . . .1192.0 -9.0 1491.0 900.5
Aquarius PIatinum . .159.7 2.5 370.0 130.9
Avocet Mining . . . . . .187.2 -5.3 286.8 177.5
BHP BiIIiton . . . . . . .1947.0 -18.0 2631.5 1667.0
Bumi . . . . . . . . . . . . . .730.0 -1.22 743.0 718.0
Hiscox Ltd. . . . . . . . . .405.7 -6.1 424.7 340.5
Jardine LIoyd Tho . . .708.0 -0.5 764.5 576.0
Lancashire HoIdin . . .769.0 14.5 790.5 581.5
RSA Insurance Gro . .115.2 0.2 139.8 99.6
Aviva . . . . . . . . . . . . . .353.0 -20.7 452.7 275.3
LegaI & GeneraI G . . .134.2 -0.8 136.0 89.8
OId MutuaI . . . . . . . . .161.9 -0.5 164.6 98.1
Phoenix Group HoI . .570.0 4.5 688.0 451.1
PrudentiaI . . . . . . . . .779.0 4.0 792.0 509.0
ResoIution Ltd. . . . . .276.8 -3.9 316.1 229.5
St James's PIace . . . .367.1 1.6 376.0 294.0
Standard Life . . . . . . .236.5 -8.7 250.7 172.0
4Imprint Group . . . . .289.0 -2.5 295.0 200.0
Aegis Group . . . . . . .182.8 1.8 185.9 115.7
BIoomsbury PubIis . .112.5 -0.5 138.0 91.3
British Sky Broad . . .687.5 3.0 850.0 618.5
Centaur Media . . . . . . .41.0 0.3 56.8 32.5
Chime Communicati .214.5 2.3 298.5 163.0
Creston . . . . . . . . . . . .62.0 2.0 121.0 47.0
DaiIy MaiI and Ge . . .444.0 -2.3 515.0 343.4
Euromoney Institu . .806.5 6.5 809.5 522.5
Future . . . . . . . . . . . . . .13.0 0.0 26.5 8.3
Haynes PubIishing . .215.0 0.0 257.0 192.0
Huntsworth . . . . . . . . .46.8 -1.3 76.3 32.3
Informa . . . . . . . . . . . .440.0 4.0 446.0 313.9
Centamin (DI) . . . . . . . .78.4 -1.4 154.2 77.0
Eurasian NaturaI . . .643.5 -20.0 973.5 522.0
FresniIIo . . . . . . . . . .1737.0 50.0 2150.0 1302.0
GemDiamonds Ltd. .310.6 10.1 316.8 179.8
GIencore Internat . . .415.8 2.0 531.1 348.0
HochschiId Mining . .471.3 8.4 657.0 365.9
Kazakhmys . . . . . . . .934.0 -6.5 1493.0 730.0
Kenmare Resources . .47.5 -1.1 61.5 31.0
Lonmin . . . . . . . . . . .1114.0 5.0 1760.0 941.0
New WorId Resourc .434.5 0.9 1060.0 409.4
Petra Diamonds Lt . .177.4 0.3 189.0 97.0
PetropavIovsk . . . . . .629.5 15.0 1073.0 543.5
PoIymetaI Interna . . .968.0 17.5 1175.0 877.0
RandgoId Resource 6595.0 205.0 7565.0 4510.0
Rio Tinto . . . . . . . . .3436.0 -28.5 4595.0 2712.5
Vedanta Resources 1352.0 -9.0 2518.0 928.0
Xstrata . . . . . . . . . . .1142.0 -4.0 1550.0 764.0
Inmarsat . . . . . . . . . . .473.8 6.4 628.5 389.3
Vodafone Group . . . .171.3 0.5 182.7 155.1
Genesis Emerging . .507.5 2.0 548.5 424.0
Afren . . . . . . . . . . . . . .128.4 -1.8 171.2 73.6
BG Group . . . . . . . . .1509.5 -4.0 1564.5 1144.0
BP . . . . . . . . . . . . . . . .481.6 -2.6 504.6 363.2
Cairn Energy . . . . . . .346.1 4.3 531.8 291.9
EnQuest . . . . . . . . . . .132.6 4.2 157.3 85.7
Essar Energy . . . . . .149.3 0.4 489.8 101.6
ExiIIon Energy . . . . . .193.7 5.3 469.7 184.2
Heritage OiI . . . . . . . .156.0 -3.2 311.3 155.0
Ophir Energy . . . . . . .430.0 5.8 440.8 184.5
Premier OiI . . . . . . . . .424.0 1.4 520.5 310.0
RoyaI Dutch SheII . .2234.5 -2.5 2402.0 1883.5
RoyaI Dutch SheII . .2258.5 -6.0 2489.0 1890.5
SaIamander Energy .226.5 -2.0 317.6 182.3
Soco Internationa . . .317.5 -5.1 400.0 278.0
TuIIow OiI . . . . . . . . .1480.0 -21.0 1601.0 945.5
Amec . . . . . . . . . . . .1143.0 -2.0 1207.0 740.5
Hunting . . . . . . . . . . .927.5 -17.5 968.0 530.0
Kentz Corporation . .451.0 0.3 508.0 362.5
LampreII . . . . . . . . . . .338.9 8.9 395.2 220.7
Petrofac Ltd. . . . . . .1683.0 3.0 1714.0 1108.0
Wood Group (John) .732.0 -7.5 763.5 469.9
Burberry Group . . . .1537.0 6.0 1600.0 1092.0
PZ Cussons . . . . . . . .319.5 2.5 387.9 285.0
Supergroup . . . . . . . .626.0 -3.5 1600.0 435.2
AstraZeneca . . . . . .2851.5 -12.0 3194.0 2543.5
BTG . . . . . . . . . . . . . .344.0 -0.7 365.0 213.4
Genus . . . . . . . . . . . .1287.0 -8.0 1368.0 853.5
GIaxoSmithKIine . . .1425.0 -8.5 1497.0 1153.0
Hikma Pharmaceuti .695.0 -6.0 869.0 555.5
Shire PIc . . . . . . . . . .2165.0 8.0 2300.0 1791.0
CapitaI & Countie . . .194.8 -1.0 203.7 154.5
Daejan HoIdings . . .3049.0 49.0 3060.0 2282.0
F&C CommerciaI Pr .100.8 -0.2 108.0 92.6
Grainger . . . . . . . . . . .108.8 -2.2 133.2 77.3
London & Stamford .114.3 1.3 140.0 103.9
SaviIIs . . . . . . . . . . . . .373.0 -9.2 427.1 256.2
UK CommerciaI Pro . .71.5 0.1 85.5 65.1
Big YeIIow Group . . .310.0 -12.0 344.4 218.0
British Land Co . . . . .503.5 -0.5 629.5 444.0
CapitaI Shopping . . .348.8 0.1 408.6 288.7
Derwent London . . .1785.0 -5.0 1880.0 1400.0
Great PortIand Es . . .364.9 -0.6 445.0 312.9
Hammerson . . . . . . . .423.3 -0.9 490.9 345.2
Hansteen HoIdings . . .76.8 0.0 89.5 68.0
Land Securities G . . .732.0 1.0 885.0 612.0
SEGRO . . . . . . . . . . . .244.1 -5.6 331.3 195.0
Shaftesbury . . . . . . . .509.0 -1.0 539.0 441.2
Aveva Group . . . . . .1663.0 1.0 1799.0 1298.0
Computacenter . . . . .430.0 9.8 490.0 324.7
Fidessa Group . . . . .1659.0 7.0 2109.0 1444.0
Invensys . . . . . . . . . . .198.6 -2.6 357.3 180.9
Logica . . . . . . . . . . . . .99.1 -2.5 144.8 59.0
Micro Focus Inter . . .455.0 -7.0 471.2 242.9
Misys . . . . . . . . . . . . .356.0 0.1 420.2 214.9
Sage Group . . . . . . . .291.2 -4.2 312.4 231.7
SDL . . . . . . . . . . . . . . .725.0 8.0 756.0 586.0
TeIecity Group . . . . . .710.5 -1.5 721.5 450.5
Aggreko . . . . . . . . . .2260.0 1.0 2316.0 1522.0
Ashtead Group . . . . .269.2 4.5 270.8 99.4
Atkins (WS) . . . . . . . .780.0 2.0 820.0 490.2
Babcock Internati . . .776.5 4.0 783.5 566.0
Berendsen . . . . . . . . .531.0 -1.5 568.0 402.7
BunzI . . . . . . . . . . . .1002.0 7.0 1008.0 676.5
Cape . . . . . . . . . . . . . .464.0 8.3 591.5 295.0
Capita . . . . . . . . . . . . .748.5 1.0 767.0 611.5
CariIIion . . . . . . . . . . .303.8 2.9 403.2 281.0
De La Rue . . . . . . . . .926.0 -1.0 1001.0 730.0
DipIoma . . . . . . . . . . .412.1 2.1 427.9 284.0
EIectrocomponents .256.1 -1.1 294.9 182.2
Experian . . . . . . . . . . .988.0 7.5 990.0 665.0
FiItrona PLC . . . . . . . .462.4 0.4 467.2 293.0
G4S . . . . . . . . . . . . . . .272.7 1.0 292.1 219.9
Hays . . . . . . . . . . . . . . .90.0 -1.0 119.6 58.9
Homeserve . . . . . . . .246.2 -2.2 532.0 214.7
Howden Joinery Gr . .126.7 -0.2 130.4 93.1
Interserve . . . . . . . . . .298.5 1.1 341.3 252.8
Intertek Group . . . . .2500.0 40.0 2521.0 1744.0
MichaeI Page Inte . . .488.5 0.1 567.0 323.0
Mitie Group . . . . . . . .281.1 -4.9 288.3 196.1
PayPoint . . . . . . . . . . .617.5 7.5 638.0 397.0
Premier FarneII . . . . .219.1 2.0 301.0 144.5
Regus . . . . . . . . . . . . .107.1 3.1 119.0 64.0
RentokiI InitiaI . . . . . . .85.0 -0.9 100.9 58.2
RPS Group . . . . . . . . .240.7 -1.3 253.0 156.6
Serco Group . . . . . . .547.5 5.5 597.5 458.0
Shanks Group . . . . . .100.0 -0.8 130.9 90.8
SIG . . . . . . . . . . . . . . .120.1 0.5 153.5 77.0
Travis Perkins . . . . .1080.0 1.0 1112.0 715.0
WoIseIey . . . . . . . . .2558.0 65.0 2593.0 1404.0
ARM HoIdings . . . . . .593.5 9.0 645.0 464.0
CSR . . . . . . . . . . . . . .245.5 -2.0 391.4 154.1
Imagination Techn . .703.0 30.0 707.1 296.9
Spirent Communica .155.0 1.9 160.3 105.8
British American . .3229.0 32.0 3245.0 2346.0
ImperiaI Tobacco . .2558.0 64.0 2576.0 1880.0
Betfair Group . . . . . . .872.0 -17.0 1030.0 567.0
Bwin.party Digita . . .153.9 0.7 204.0 100.6
CarnivaI . . . . . . . . . .2031.0 -4.0 2642.0 1742.0
Compass Group . . . .659.5 3.0 668.0 512.5
Domino's Pizza UK . .465.0 9.6 526.0 377.0
easyJet . . . . . . . . . . . .443.8 -6.3 478.4 302.5
FirstGroup . . . . . . . . .294.0 -0.1 370.2 282.5
Go-Ahead Group . . .1295.0 -22.0 1598.0 1190.0
Greene King . . . . . . .519.5 6.5 522.5 410.0
InterContinentaI . . .1436.0 -12.0 1497.0 955.0
InternationaI Con . . .173.3 -4.4 258.7 132.0
JD Wetherspoon . . . .417.3 -1.3 468.3 380.5
Ladbrokes . . . . . . . . .152.5 -3.5 161.8 114.0
Marston's . . . . . . . . . . .99.1 0.8 112.0 84.6
MiIIennium& Copt . .484.6 -15.3 540.0 371.2
MitcheIIs & ButIe . . . .276.5 1.0 336.8 215.6
NationaI Express . . .249.6 3.6 270.2 201.6
Rank Group . . . . . . . .129.5 0.1 153.7 109.5
Restaurant Group . . .293.0 -1.5 335.0 254.9
Spirit Pub Compan . . .58.3 0.8 61.0 35.3
Stagecoach Group . .263.1 0.7 287.4 208.2
TUI TraveI . . . . . . . . . .193.3 2.3 250.0 136.7
Whitbread . . . . . . . .1747.0 17.0 1752.0 1409.0
WiIIiamHiII . . . . . . . . .243.1 -5.3 253.2 176.8
Abcam . . . . . . . . . . . .343.0 -0.5 460.0 320.0
Advanced MedicaI . . .79.0 0.0 96.0 64.8
AIbemarIe & Bond . .350.0 -4.0 400.1 281.0
Amerisur Resource . .24.3 -1.3 29.0 9.5
Andes Energia . . . . . . .53.3 -0.3 82.8 17.5
Andor TechnoIogy . .505.0 -15.0 685.0 387.1
ArchipeIago Resou . . .65.0 0.0 79.0 55.5
ASOS . . . . . . . . . . . .1765.0 25.0 2468.0 1142.0
AureIian OiI & Ga . . . .19.5 0.1 77.0 16.0
Avanti Communicat .246.8 3.0 499.8 241.3
BIinkx . . . . . . . . . . . . . .67.3 -3.0 158.0 50.5
Borders & Souther . . .66.3 -1.8 80.5 43.5
BowLeven . . . . . . . . . .92.5 -2.0 382.3 62.0
Brooks MacdonaId 1252.0 -93.0 1372.5 940.0
CIuff GoId . . . . . . . . . . .88.3 0.3 119.0 66.5
Cove Energy . . . . . . .208.5 -3.5 242.0 61.0
Daisy Group . . . . . . .109.0 0.0 127.0 88.6
EMIS Group . . . . . . . .485.0 -8.3 580.0 397.5
Faroe PetroIeum . . . .159.5 8.0 183.3 130.0
GuIfsands PetroIe . . .137.0 -2.8 317.0 135.8
GWPharmaceuticaI . .90.1 0.1 130.0 78.5
H&T Group . . . . . . . . .300.0 5.0 395.0 285.0
Hargreaves Servic .1215.0 5.0 1258.0 855.0
HeaIthcare Locums . . . .2.5 0.5 2.7 2.0
ImpeIIamGroup . . . .342.5 -10.0 387.5 225.0
Iomart Group . . . . . . .137.0 -1.3 151.0 85.5
James HaIstead . . . . .505.0 10.0 515.0 410.3
London Mining . . . . .267.3 -5.8 436.5 257.5
Lupus CapitaI . . . . . .129.0 1.0 150.0 86.0
M. P. Evans Group . .470.0 3.5 475.0 371.0
Majestic Wine . . . . . .438.5 8.8 510.0 315.0
May Gurney Integr . .284.3 3.3 302.0 236.0
Monitise . . . . . . . . . . . .36.0 -0.5 40.0 20.5
MuIberry Group . . . .1953.0 34.0 1995.0 1290.0
Nanoco Group . . . . . . .70.0 -2.0 93.3 38.0
NauticaI PetroIeu . . .319.0 -5.8 444.3 223.5
NichoIs . . . . . . . . . . . .653.8 11.8 653.8 437.5
Numis Corporation . . .94.4 2.4 119.6 72.0
Pan African Resou . . .15.8 -0.6 18.3 9.5
Patagonia GoId . . . . . .38.5 0.5 70.0 36.0
Prezzo . . . . . . . . . . . . .68.0 1.0 71.5 53.5
Rockhopper ExpIor .343.8 -0.3 393.5 141.0
RWS HoIdings . . . . . .535.0 0.0 560.0 377.0
Secure Trust Bank .1075.0 0.0 1110.0 755.0
Sirius MineraIs . . . . . .20.9 0.1 32.0 6.4
Songbird Estates . . .116.3 1.0 160.3 103.0
VaIiant PetroIeum . . .527.0 10.5 628.5 400.0
Young & Co's Brew . .667.5 0.0 712.0 565.0
Dixons RetaiI . . . . . . .18.8 7.6
Home RetaiI Group . .122.5 5.7
Sainsbury (J) . . . . . . .319.3 4.5
Imagination Techno .703.0 4.5
Barratt DeveIopmen .148.8 4.4
Gem Diamonds Ltd. .310.6 3.4
EnQuest . . . . . . . . . . .132.6 3.3
RandgoId Resources6595.0 3.2
Bovis Homes Group .508.5 3.2
Cookson Group . . . . .716.0 3.1
Weir Group . . . . . . .1859.0 -6.2
Aviva . . . . . . . . . . . . .353.0 -5.5
TaIvivaara Mining . . .245.9 -4.9
Big YeIIow Group . . .310.0 -3.7
Ocado Group . . . . . . .118.8 -3.7
Standard Life . . . . . . .236.5 -3.6
Chemring Group . . . .421.5 -3.1
MiIIennium & Copth .484.6 -3.1
Eurasian NaturaI R . .643.5 -3.0
Avocet Mining . . . . . .187.2 -2.8
Risers FaIIers
MAIN CHANGES UK 350
Price Chg High Low Price Chg High Low Price Chg High Low Price Chg High Low Price Chg High Low Price Chg High Low Price Chg High Low
Price Chg High Low Price Chg High Low
GILTS
AEROSPACE & DEFENCE
CONSTRUCTION & MATERIALS
ELECTRICITY
ELECTRONIC & ELECTRICAL EQ.
EQUITY INVESTMENT INSTRUM.
FINANCIAL SERVICES
FIXED LINE TELECOMS
FOOD & DRUG RETAILERS
FOOD PRODUCERS
FORESTRY & PAPER
GAS, WATER & MULTIUTILITIES
GENERAL RETAILERS
HEALTH CARE EQUIPMENT & S.
HHOLD GDS & HOME CONSTR.
INDUSTRIAL ENGINEERING
INDUSTRIAL TRANSPORTATION
MEDIA
LIFE INSURANCE
PERSONAL GOODS
PHARMACEUTICALS & BIOTECH
REAL ESTATE INVEST. & SERV.
SOFTWARE & COMPUTER SERV.
SUPPORT SERVICES
TOBACCO
TRAVEL & LEISURE
AIM 50
NON LIFE INSURANCE REAL ESTATE INVEST. TRUSTS
http://corporate.webfg.com
mailto:
globaltechsales@webfg.com
AUTOMOBILES & PARTS
BANKS
CHEMICALS
BEVERAGES
GENERAL INDUSTRIALS
MOBILE TELECOMS
OIL & GAS PRODUCERS
OIL EQUIPMENT & SERVICES
MINING
NONEQUITY INVESTM. COMM.
Tsy 5.250 12 . . . .101.02 -0.03 105.1 101.0
Tsy 9.000 12 . . . .103.17 0.00 110.8 102.4
Tsy 2.500 13 . . . .283.68 -0.04 287.7 282.6
Tsy 4.500 13 . . . .103.90 -0.03 106.4 103.8
Tsy 8.000 13 . . . . .111.43 -0.03 116.5 111.4
Tsy 5.000 14 . . . . .111.08 -0.03 112.9 109.3
Tsy 8.000 15 . . . .126.49 -0.01 129.2 123.8
Tsy 4.750 15 . . . . .113.73 -0.02 115.4 109.1
Tsy 4.000 16 . . . . .112.98 0.05 114.7 105.6
Tsy 2.500 16 . . . .343.22 0.05 344.2 318.0
Tsy 12.000 17 . . . .119.70 0.00 128.0 118.4
Tsy 1.250 17 . . . . .115.45 0.14 116.6 108.4
Tsy 8.750 17 . . . .139.43 -0.22 141.9 133.3
Tsy 5.000 18 . . . .120.34 0.12 122.5 110.6
Tsy 3.750 19 . . . . .113.24 0.23 115.6 100.7
Tsy 4.500 19 . . . . .118.38 0.19 120.7 106.5
Tsy 4.750 20 . . . .120.59 0.23 123.5 107.7
Tsy 2.500 20 . . . .361.75 0.16 367.1 322.1
Tsy 8.000 21 . . . .148.75 0.32 153.4 134.8
Tsy 1.875 22 . . . .125.28 0.43 129.1 113.3
Tsy 4.000 22 . . . . .114.47 0.42 118.2 100.0
Tsy 2.500 24 . . . .322.93 0.54 334.7 282.2
Tsy 5.000 25 . . . .125.01 0.55 130.6 108.5
Tsy 1.250 27 . . . .121.21 0.69 127.0 106.6
Tsy 4.250 27 . . . . .116.02 0.59 122.7 99.1
Tsy 6.000 28 . . . .140.00 0.56 148.0 120.7
Tsy 4.125 30 . . . .308.20 0.63 322.8 268.3
Tsy 4.750 30 . . . .122.66 0.60 130.5 104.3
Tsy 4.250 32 . . . . .115.24 0.66 123.1 97.5
Tsy 4.250 36 . . . . .115.07 0.74 123.9 96.8
Tsy 4.750 38 . . . .124.48 0.75 134.2 105.0
Tsy 4.500 42 . . . .120.77 0.84 130.8 101.3
% %
TECHNOLOGY HARDW. & EQUIP.
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SALE
FROM
MENS SUITS
179
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CITYA.M. 22 MARCH 2012 35
Wealth Management | Markets
Wealth Management | Pensions
36 CITYA.M. 22 MARCH 2012
The government has resisted tinkering with pensions
but this probably wont last for long, writes Philip Salter
50p rate taxpayers
should utilise their
fleeting allowance
B
UDGETS are rarely driven by
economic sense. More often
than not politics triumphs over
clarity. And the coalition, like
all previous governments, tried to
manage expectations threatening in
the lead up to yesterday to tinker with
the rules on additional rate taxpayers
relief on pensions, only to leave the
rules unchanged. As such, no news,
became good news. But all is not well.
Two pressures are pushing high earn-
ing savers in opposite directions: the
lowering of income tax from 50 to 45
per cent in April 2013 is driving them
to frontload pension contributions,
while the threat of future tinkering
risks the appeal of betting on politi-
cians in the long term.
Additional rate taxpayers cant rely
on the goodwill of future chancellors.
The 50,000 annual limit on pension
contributions came in following
George Osbornes decision to overturn
Alistair Darlings punitive anti-fore-
stalling rules. However, although the
pensions industry celebrated the less-
er of two evils, a long-term investment
was once again subject to the whims
of political expediency. The politicisa-
tion of pensions was also exemplified
in the 14 October 2010 changes to the
lifetime allowance for tax relief on
pensions that will come in on 6 April
2012, reducing the pension lifetime
allowance from 1.8m to 1.5m.
This time around the pensions
industry got a relatively easy ride.
However, as Graham Farquhar,
employment tax partner at Ernst &
Young notes: From April 2013 pen-
sion contributions paid into spouses
or family members registered pen-
sion schemes cannot be used to
obtain any tax or national insurance
contribution advantages. This will
prevent the diversion of employer
pension contributions into spouses or
family members pension funds. This
practice isnt especially widespread,
but is indicative of the mindset of gov-
ernment and HMRC towards pen-
sions.
GET STUCK IN
Despite future uncertainties, pensions
remain a worthwhile tax break par-
ticularly for additional rate taxpayers.
As such, before income tax drops to 45
per cent in April 2013, additional rate
taxpayers should load up their pen-
sions pots. Steve Latto, head of pen-
sions at Alliance Trust Savings,
expects a pensions contribution boom
over the next 12 months for 50 per
cent rate taxpayers: As the annual
allowance for pensions remains
untouched, a 50 per cent rate taxpayer
could make a gross contribution of
50,000 with a net effective cost to
them of only 25,000. From April
2013, the same contribution would
have a net effective cost of 27,500.
With the carry forward rules remain-
Lines are open Monday to Friday 7.45am 7pm. Calls may be recorded. Selftrade is a trading name of Talos Securities Limited and registered trade
mark of Boursorama. Talos Securities Limited is incorporated in England and Wales (Registration No. 4196325, Registered Address: Boatmans House,
2 Selsdon Way, London E14 9LA), is authorised and regulated by the Financial Services Authority (FSA Register No. 208271), is a member of the
London Stock Exchange and PLUS Markets plc and is an HM Revenue & Customs Approved Plan Manager.
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the of member
House, Boatmans
trade registered
ing intact an individual could make a
200,000 gross contribution at net
effective cost of 100,000 now.
Elmer Doonan, partner at SNR
Denton thinks taxpayers may have
been reprieved this year, but could
find the relief on pension contribu-
tions is curtailed in the future, so they
should consider utilising the annual
allowances to the maximum while
they can. Currently, 50p taxpayers
paying 40,000 into their pension pot
get 10,000 added by the government
and can claim a further 15,000 relief
through ticking a box on their self-
assessment tax form (amazingly some
high rate taxpayers neglect to do this).
But its not too late to make use of
unused allowances from previous
years as Dominic OConnell, head of
tax, trust and estate planning at
Coutts notes: Some taxpayers may be
able to re-coup tax relief from three
years ago, offering relief on contribu-
tions of up to 200,000.
There are likely many people with
money to claim this back. As James
Sumpter, financial planning director
of Bestinvest explains: Those who
earned over 150,000 in 2009/10 and
2010/11 were restricted to a maximum
contribution of 20,000-30,000, so
many will have unused allowance if
they did not make a large contribu-
tion in 2011/12 that used this up (see
table). As such, Sumpter explains that
for 2012/13 an individual could con-
tribute 50,000 plus 60,000 of carry
forward allowance giving a total of
110,000, although they would need
income in excess of 260,000 to get 50
per cent tax relief on the entire contri-
bution.
Politics and pensions dont mix.
The solution to future meddling is to
separate the two. Even if this govern-
ment pledged to keep things constant
the next government could tear up
the rulebook again. Raj Mody, who is
partner and head of PwCs pensions
group thinks what we really need to
see is a stronger commitment from
government to a long-term stable
framework for pensions tax, possibly
supervised by an independent com-
mission, so pensions arent subject to
short-term political interference.
Quangos arent the flavour of the
month, but at least in this instance,
the separation of power from the exec-
utive makes a lot of sense.
Its time to squirrel away Picture: GETTY
POTENTIAL UNUSED ALLOWANCES
2009/10 20,000 30,000
2010/11 20,000 30,000
2011/12 50,000 0
Total 90,000 60,000
Tax year
Contribution
made
Carry forward
allowance
Wealth Management | Personal Finance
37 CITYA.M. 22 MARCH 2012
With soaring property prices in the
capital, the stamp duty hike will not
just hit the super-rich, says Craig Drake
London will be
hit hardest by
levy increase
I
N YESTERDAYS budget, chan-
cellor George Osborne increased
the stamp duty land tax rate to
7 per cent for residential proper-
ties over 2m as well as introducing
a stamp duty land tax of 15 per cent
for residential properties worth
more than 2m purchased by com-
panies and other entities.
As Paul Emery, PwC tax director,
points out, investors in UK commer-
cial real estate will breathe a huge
sigh of relief that the tax is restricted
to residential property, otherwise
this could have had a significant
impact on liquidity in the commer-
cial real estate sector. But the hike is
still significant for home owners,
and more importantly, home sellers.
It is important to note that the hike
in stamp duty is not a Mansion Tax,
but rather a transaction tax.
However, after decades of successive
governments pursuing artificially
low interest rates and in doing so
inflating the housing market, hit-
ting homeowners with this new tax
will be seen by many as vindictive.
Rather like John Waynes character
in Rio Bravo telling the outlaw to
pick up the gun You want that
gun, pick it up, I wish you would
before shooting him, governments
have ratcheted up house prices and
held them up as a sign of political
success and are now taking shots at
those sitting in expensive properties.
LONDON-CENTRIC TAX
Nowhere will feel the effects of this
new tax hike quite as much as
London this year the Royal
Borough of Kensington and Chelsea
saw its average house price break
2m for the first time up from
650,600 a year ago. Burdensome
planning application procedures
restricting the supply on new homes
and rock-bottom Bank of England
interest rates now mean that many
London family homes will be impact-
ed by the new measures: There is a
massive shortage of family homes in
Londons villages and given price
growth expectation, growing
demand will push average three and
four bedroom family homes in many
areas, such as Islington, into the top
stamp duty tier within a year or two,
making it even harder for families to
commit to staying in the city, says
Sue Foxley, head of research at
Cluttons.
STRATIFIED MARKET
According to Peter Rawlings, chief
executive of estate agents Marsh and
Parsons, a big effect of the measures
on the London market will be price
bunching, with plenty of properties
at the 1.99m mark and then little
else until the 2.35m mark.
Rawlings doesnt foresee the hike as
completely deterring those looking
to purchase multi-million pound
houses, but it may well lead to an
increase in people looking for a prop-
erty below the 2m threshold with a
view to renovating it and pocketing
any profits when they sell, rather
than handing over an additional 2
per cent to the Treasury.
2m no longer constitutes a Belgravia mansion Picture: GETTY
LONDON HOUSE SALES OF OVER 2M
Barnet 3,230,212 82
Bromley 2,704,778 18
Camden 3,498,393 256
City of London 2,330,000 3
Hammersmith & Fulham 2,922,685 139
Islington 2,6667,725 36
Kensington & Chelsea 3,640,483 672
Lambeth 2,619,588 17
Merton 3,376,626 83
Richmond upon Thames 2,735,335 106
Wandsworth 2,683,433 107
Westminster 3,572,480 435
Total 3,355,865 2,115
London Boroughs
Avg. Sold Price
(last 2 years)
No. of 2m properties
sold (last 2 years)
Source: Zoopla
I
TS hard to work out where George
Osborne draws his lines in the sand. But,
in so far as he draws them anywhere, yes-
terdays Budget indicates he doesnt
always draw them in the right places. So,
while there were some welcome steps in taxa-
tion policy, it seems nearly impossible to
detect a coherent strategy.
Initially, the coalition was focused almost
exclusively on deficit reduction, promising a
balanced budget by about the time of the next
election. Already, there has been slippage.
With growth in the economy more sluggish
than the chancellor had hoped, the response
has not been to cut spending to stem the
bleeding in the public finances, it has been to
treat the comprehensive spending review as a
fixed point and the deficit target as more of
an aspiration.
Osborne muddies the waters by claiming to
be paying down the debt. He is doing noth-
ing of the sort. He is adding hundreds of bil-
lions to the national debt, hes just gradually
slowing its rate of growth. The chancellor
could only start to pay down the debt today if
he was willing to find an immediate 120bn
or so of further spending cuts. And he isnt
remotely willing to.
If the sort of growth rates forecast by the
Office for Budget Responsibility namely, per-
sistent growth of between 2 per cent and 3 per
cent from next year onwards fail to materi-
alise, the governments fiscal consolidation
plans will be in tatters. Perhaps the OBR will
be proven completely right. But its predictions
to date have been on the optimistic side and it
seems easier to imagine how things might go
worse than expected than it is to imagine how
they might go better. If a serious upswing in
the economy does not materialise, the coali-
tion will need to consider a second, more com-
prehensive spending review.
In terms of taxation, the Budget was always
going to be fiscally neutral. It was to be a ques-
tion of shifting burdens, not reducing them.
But for nearly forty minutes, it didnt look like
we were going to get much of a Budget at all.
Osborne told us that for eight consecutive
Sundays over the summer, we will be able to
buy things from major retail outlets rather
than being prohibited from doing so by the
state. He had a lot to say about simplifying the
tax rules, which seemed to hinge on exactly
how to define a hot cup of tea or a chicken
sandwich. There will be some new tax breaks
for those who make computer games and also
for cartoonists. A few modest infrastructure
projects in the north of England got the green
light. Buried away in the details of his propos-
als was a plan for reducing the VAT on ski lifts
to just 5 per cent. These proposals might be
good or bad ideas, but they hardly sounded
like a determined plan to ignite growth in the
economy.
Finally, he got to the meat of his proposals.
And here there was a smattering of good
news. The 50p rate was to be trimmed back to
45p. The politics of coalition government pre-
vented the chancellor from abolishing the
additional rate altogether. If he is to do so
before the next election, this will be a chasm
he will have crossed in two leaps.
Unsurprisingly, the top rate had brought in
considerably less revenue than its advocates
had forecast and having one of the highest
rates of marginal tax in the developed world is
hardly easy to square with a desire to make
Britain a thriving, business-friendly environ-
ment. The opposition benches were horrified,
of course, but it is worth remembering that in
13 years of Labour government, they were con-
tent to have a top rate of just 40p for 99 per
cent of their term of office.
A downwards acceleration in corporation
tax also brought welcome news as did a prom-
ise to cut this to as low as 22 per cent in the
years ahead. The Liberal Democrats cherished
goal of a 10,000 personal income tax thresh-
old is now just 800 short of being achieved.
However, those on salaries a little over 40,000
wont feel much of the benefit as the 40p tax
rate is starting to kick in at a lower and lower
level. If rewarding hard work and enterprise is
a policy rather than a soundbite, this is a
deeply worrying trend.
A hike in stamp duty to 7 per cent and the
closing of loopholes around foreign compa-
nies purchases of property may appease those
who believe we can all live off the tax receipt
of tycoons who live in mansions, but are
unlikely to raise substantial revenue for the
Treasury.
Yesterday, Osborne had little room for
manoeuvre. He used that room reasonably ele-
gantly. But there remains too timid an
approach on reducing public spending and
too much of a hope that growth will somehow
miraculously kick in to the economy if we just
wait long enough. His Budget was littered
with tactics, but weak on strategy. Not a bad
effort, overall. But could do much better.
Mark Littlewood is the director general of the
Institute of Economic Affairs. www.iea.org.uk
38
The Forum
CITYA.M. 22 MARCH 2012
George Osborne claims to be
paying down the debt. Hes
doing nothing of the sort
There was some good news
in this timid Budget but we
need a strategy for growth
cityam.com/forum
MARK LITTLEWOOD
Agree? Disagree? Got a sharp comment?
The Forum wants you to join the debate.
COMMENT NOW ON
Twitter: @cityamforum;
on the web: cityam.com/forum;
or by email: theforum@cityam.com.
Top responses will be reprinted in The Forum.
39
The publishing
industry should
have read its own
business books
Amazons gorilla
warfare teaches
a tactical lesson
P
UBLISHING is full of contradictions. Over
the last decade, business book publish-
ers have been full of advice they never
followed themselves. The industry that
brought us the handbook for the digital age,
The Long Tail, didnt attend to its prediction
that mass markets would fragment into thou-
sands of micro markets.
Did You Spot The Gorilla, from Random
House Business Books, explains the psycholog-
ical mechanisms that make us ignore vital
intelligence. Yet book publishers have long
known that the dead tree model was facing
massive decline. And what did the likes of
Random House, HarperCollins, Hodder,
Macmillan and Hachette do? Did they avoid
the gorilla?
The publishing industry certainly saw the
growing power of online selling, and so threw
its brands behind Amazons e-tail bookshop.
But it failed to notice the other gorilla lurking
in the undergrowth: electronic publishing.
The one advantage that traditional book
publishing companies had over any competitor
that might emerge was that they had distribu-
tion tied up. They could identify and nurture
talent as they saw fit, since their partners were
booksellers who were the channel to market.
What a team they made.
For Amazon to succeed, as both a retailer
and a publisher, it would need to breach that
formidable partnership. Luckily, the publish-
ers opened the door by giving Amazon
favourable terms. My contacts in the book
trade say Amazons volume of online sales
means it can get up to 60 per cent discounts on
books. Small independent bookshops are lucky
to get 30 per cent.
Inevitably, many smaller bookshops have
been driven out of business. Even Borders went
to the wall. Amazon doesnt declare its figures
to the book trade, so we cant get an accurate
overall picture, but according to Nielsen
BookScan, printed book sales through the high
street were down by 25 per cent (28m)
between January and June last year.
Between 2005 and 2010, Amazons market
share has tripled, while that of the independ-
ent shops has halved, according to BMLs Books
and the Consumer survey. Amazon has 30 per
cent of the market, while independent shops
have just 5 per cent.
The e-publishing revolution is even more
striking. In the same period, it grew by 623 per
cent. Amazon now not only allows authors to
e-publish directly through Kindle Direct, cut-
ting out the middlemen, but, through
Amazon Publishing, owns several imprints for
both physical and online editions, plus collab-
orations like The Domino Project. Meanwhile,
one hope for independent bookshops is to put
their decades of experience in the book trade
to use as boutique agents, editors and e-pub-
lishers.
The book creation industry, having put its
sales partners out of business in order to stay
in the game, must now defend its business
against all comers. Perhaps the industry
should have heeded one of its own recent
titles, Common Sense Rules by Deborah
Meaden. Or at least that business classic, The
Art Of War. As Sun Tzu said, We cannot enter
into alliances until we are acquainted with the
designs of our neighbours.
Nick Booth is a business and social media commen-
tator. Contact him on Twitter: @ohthisbloodypc
Red-handed Ken
[Re: Ken Livingstone is blameless
in his tax planning, yesterday]
Doug Richard misses the point in
his article regarding Ken
Livingstones tax affairs. No criti-
cism has been made of the prac-
tice of an individual setting
themselves up as a business to
regulate their income. All the con-
demnation of Livingstone stems
from his past comments where he
condemned tax avoidance. He
stated in newspapers that those
who establish themselves as com-
panies were rich bastards who
just dont get it and shouldnt be
able to vote or stand for
Parliament unless they were pay-
ing their full share of tax. Its in
this light that Livingstone should
be judged. His remarks are hypo-
critical and display a staggering
lack of judgement. He cant be
trusted on his promises and is
therefore the wrong man to run
London for the next four years.
Priti Patel,
Conservative MP for Witham
Nice savings
I largely agree with Doug Richard,
but he forgot to include national
insurance (NIC) in his calculation
of Ken Livingstones tax savings.
NICs are the big saver in taking
dividends rather than salary, at
13.8 per cent marginal rate from
the employer plus 2 per cent from
the employee. By taking dividends,
Mr Livingstone is paying tax at 46
per cent rather than 58 per cent.
Simon Robinson
Email: theforum@cityam.com
RAPID RESPONSES
NICK BOOTH
CITYA.M. 22 MARCH 2012
The Forum
D
AYS before voters
in Illinois went to
the polls, Rick
S a n t o r u m
described Novembers
presidential election as
the most important
since 1860. Absurd his-
torical analogies are usu-
ally more Newt Gingrichs thing, but Santorum got one
thing right. His candidacy for the presidency, like
Abraham Lincolns over 150 years ago, is now history.
Even with a victory in Illinois, Santorums best
endeavours to catch Mitt Romney appeared slim at
best. In defeat, he is increasingly looking like a rebel
without a cause. Romney not only won by a double-
digit margin in the popular vote, but he trounced
Santorum in the delegate count. Added to Romneys
win in Puerto Rico on Sunday, the frontrunner has
accumulated approximately 65 delegates to
Santorums 10 since the primaries in Alabama and
Mississippi. Earlier this week, Santorums campaign
unconvincingly tried to downplay Romneys sizeable
lead, claiming that it was the only campaign not talk-
ing about delegate math. Theres a reason for that.
Santorum will now look to Missouri, Louisiana,
Wisconsin, and, of course, his home state of
Pennsylvania. As this race has shown, Santorum is
more than capable of winning states. His main prob-
lem, however, has always been delegates. Despite vic-
tory in Mississippi, Santorum now appears to have
lost or drawn the state with Romney in the delegate
count. For all his fighting rhetoric, Santorum has yet
to convey how and when his campaign will eventually
start closing the gap with the frontrunner, simply
because without 80 per cent of the remaining dele-
gates, he cant. Santorum is now resigned to pursuing
the Gingrich strategy, campaigning solely to stop
Romney from winning the nomination. This will be a
tough sell to both voters and donors. And he is slowly
losing both.
Those familiar with Gingrich werent surprised that
the former speaker has so far refused to suspend his
campaign, even in light of his defeats in Mississippi
and Alabama. Calls to drop out for the sake of the
movement will continue to fall on deaf ears, simply
because Gingrich believes that he is the movement,
and if he perseveres to the convention, the Republican
faithful will yet again learn to love him. The former
speaker has now faded entirely into oblivion, finishing
fourth in Illinois behind fellow straggler, Ron Paul. For
the past few weeks, Gingrichs only role in the race
has been to frustrate Santorum and block the former
senators attempts to unify support against Romney.
But even with Gingrich floundering in Illinois,
Santorum was unable to get close to Romney.
The next few weeks of the campaign will likely see
some additional Romney endorsements, but most of
the focus will be on both the party leadership and
grandees calling on the frontrunners challengers to
drop out. Santorum will repeatedly face the same
question as Gingrich: why are you still in the race?
When conservative constituencies such as
FreedomWorks and RedState.com are either drop-
ping their opposition to Romney or conceding that
the race is over, its really over. The challenge now for
Romney will be to ensure that he gets to Tampa with-
out having to expend valuable resources on bother-
some Republican races or explain primary defeats
when he already has the nomination locked up. Will
he limp across the finishing line? Thats up to his fel-
low Republicans.
Ewan Watt is a Washington DC-based consultant.
You can follow him on @ewancwatt
Romneys rivals wont
quit as his lead grows
Email: theforum@cityam.com
Twitter: @cityamforum
In association with
BY EWAN WATT
US ELECTIONS
A
RECENT Thomson Reuters survey of
500 compliance officers at financial
services firms emphasised two
things about the extraordinary
growth in the importance of the profes-
sion in todays job market. Firstly, it
showed how lucrative compliance roles
have become 70 per cent expected the
cost of senior compliance staff to be higher
in 2012. Secondly, it highlighted how
financial service firms are struggling to
surmount an increasing burden of regula-
tory information.
These points are linked. Fergus Hooley,
director of compliance at Hays Recruiting,
says the changing regulatory landscape is
fuelling a consistent demand for experi-
enced compliance professionals. Demand
has risen across most areas of financial
services, but particularly in asset manage-
ment and hedge funds, insurance, and cor-
porate and retail banking.
At the same time, theres an ongoing
shortage of the suitably qualified. A rela-
tively young profession, theres no huge
pool of newly-qualified candidates to flood
the market. This finite reserve of experi-
ence has meant that good people are
being rewarded, challenged and retained
and are therefore unwilling to leave exist-
ing posts.
Base line salaries are high, and employ-
ers are increasingly willing to offer extend-
ed benefits. Robert Half, the recruitment
consultants, project that salaries for regu-
latory accounting managers within the
financial services industry will average
between 78,750 and 95,000 in 2012.
So why is there such a shortage? And
how can those looking to pursue a career
in compliance take advantage of these
broad trends and position themselves for a
potential role in a zeitgeist profession?
PERSONALITY
Tara ONeill, head of risk and compliance
at Bruin Financial, a leading recruiting
firm for financial services, says that the
idea that compliance is boring is old-
school. Its as dynamic as any area of
financial services and prospective candi-
dates need to prove the ability to hit the
ground running.
Shes found it difficult to find candi-
dates who are right for compliance roles,
and often that difficulty stems from per-
sonality. Our clients arent compromising
on what they want. These professionals
need gravitas as well as knowledge, they
must be culturally right and they need pol-
ish.
Effective compliance professionals need
the ability to say no but be able to explain
why, to be able to identify a problem and
then create a solution, and crucially to
make money in line with FSA regulations.
The job is not just about crunching
numbers, but robustly communicating the
implications of these numbers, making a
decision and sticking with it. The ability to
demonstrate a combination of analytical
and communication skills is essential.
EXPERIENCE
Alongside personality, employers put a pre-
mium on experience. But this creates an
apparent paradox. It is not easy to enter
the profession in the first place because
employers only want those they can trust
to make the right decisions. They dont
want to suffer the financial or reputation-
al impact of an FSA fine. But if you cant
already provide that confidence then
youre unlikely to get the experience.
ONeill says that some firms, a small
number, are willing to take on those
without specific compliance experience
if they show the necessary attributes
and the required personality. You must
already show potential through your
academic achievements, and although
there is no specific compliance qualifica-
tion, a regulatory-orientated degree in
business or economics could help.
Equally, proven ability in a business-fac-
ing, solution-orientated role will help
any application.
KNOWLEDGE
Crucially, however, candidates must
demonstrate that they know what com-
pliance is, that they dont want to be a
lawyer, and that they specifically want a
career in the profession.
James Beale, partner at ADL Partners,
relegates experience to second place,
behind the candidate first and foremost
demonstrating they genuinely want a
career in the profession. This has not
always been so important. But with firms
upscaling the quality of their compliance
teams, they want the genuine article.
There is still time, however, to act and
take advantage of this lucrative employ-
ment trend. According to Beale, although
the upsurge in demand is short to medi-
um term as a direct reaction to regulator
requirements and political pressure, the
demand for better compliance is long-
term. Since it is a defined function and in
the limelight, it will attract more profes-
sionals.
Choosing a career in compliance should
not be a thoughtless, easy step. But for
those with the savvy to know what employ-
ers want, and how they must be reassured,
there are plenty of opportunities to thrive.
CAREERS.com
2,000
jobs in total
JOBSof theWEEK
W W W. C I T Y A M C A R E E R S . C O M
TODAY ON
CAREERS.COM
40
Technical specialist
Central London
600-750 per day
A Solvency II expert, with an excellent
understanding of Pillar 3, is needed to
build and develop templates in the insur-
ance and buy side markets.
www.cityamcareers.com/job/7390
Senior compliance manager
Central London
Market rate
The successful candidate will be required
to lead a team of managers, have in-depth
technical compliance knowledge and
excellent interpersonal skills.
www.cityamcareers.com/job/7239
Senior compliance manager
Central London
40k-80k per annum
A socially responsible firm requires a gen-
eralist or specialist expert to join its multi-
skilled team. Candidates require excellent
intellect and a flexible mindset.
www.cityamcareers.com/job/5663
Finance compliance officer
Central London
500-600 per day
A global investment bank needs a compli-
ance officer to work in its corporate
finance advisory team. Candidates must
have experience of debt capital markets.
www.cityamcareers.com/job/6670
Compliance manager
Central London
65k-75k, plus bonus
A leading global investment bank requires
a manager, with knowledge of EU direc-
tives, to offer advice on the compliance
and regulatory aspects of new products.
www.cityamcareers.com/job/7374
Over
300
jobs in IT
More than
150
clients advertising
More than
60
roles in private law
practice
Over
300
roles in compliance
More than
225
jobs in risk
Compliance isnt the
easy path to fortune
But those with the right qualities are rewarded, writes Tom Welsh
Scan here to go to
CITYAMCAREERS.COM Compliance professionals must act decisively to keep on top of new regulations Picture: GETTY
GET TO GRIPS WITH THE STARK CONTRADICTIONS
OF THE CURRENT BUSINESS ENVIRONMENT
ON THE PART-TIME MANCHESTER GLOBAL MBA.
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CAREERS.com
41
F
OLLOWING a Masters of Business
degree (MBA), graduates might
be forgiven for forgetting their
school and forging headlong
into the workplace. The promises
made for MBA study are career pro-
gression and increased earnings and
students will want to take their new
skills directly into a job and see rapid
return from their significant financial
investment.
Its equally true that some see alum-
ni networking as at the less exciting
end of the cocktail circuit. Recreating
the social side of the MBA experience
may not appear directly relevant to
your job. But remaining an active,
proactive member of your schools
network of alumni can provide con-
siderable benefits to career develop-
ment.
William Wong, alumnus of
Imperial College Business School, calls
himself a master networker. While
studying for his MBA, he knew practi-
cally everyone in his cohort. The rela-
tionships he formed helped him in
his wider career and working with an
international cohort encouraged him
to think freshly about business.
These benefits extended beyond
graduation. According to Nicola
Pogson, head of alumni relations at
Imperial College Business School,
although connections made while
studying are important, and initially
the strongest, alumni events and the
tools offered by school alumni pro-
grammes can intensify, refresh, and
develop new relationships with stu-
dents from other cohorts. Graduates
use these relationships to find work,
to gain assistance in a career move, or
to simply ask for advice.
Online networking platforms have
enhanced these opportunities. Alice
Whittington, senior alumni relations
officer at Said Business School, notes
its online directory, which allows
members to specifically search for
and contact alumni using criteria like
employer, industry, business interests
and city. Krista Slinn, head of alumni
relations at Cass Business School, says
her school has a similar platform, an
email service which lets alumni con-
tact other alumni for advice on career
progression. Schools have dedicated
LinkedIn pages and special groups for
graduates in particular career paths
that allow alumni to make targeted
contact with those who interest them.
These might seem like yet more pro-
Both former students and business schools have good reasons to stay in touch, writes Tom Welsh
Successful together Picture: GETTY
MBA alumni networks
can boost your career
fessional networking arenas, but
Wong thinks the school connection is
a key advantage. Being contacted via
the school gives you the benefit of
knowing where someone has come
from. Its not like receiving an email
from out of the blue. The common
bond of the business school can make
networking more effective.
Alumni networks provide more
than useful contacts. Social functions
will often accompany practical busi-
ness events. Slinn recalls a recent lec-
ture to alumni in Monaco by the
deputy dean of Cass on the longevity
crisis. Wong emphasises how conven-
ient and specific these educational
events can be he recently participat-
ed in an online lunchtime public
speaking workshop for alumni.
Schools are keen to encourage for-
mer students to continue their busi-
ness education after graduation, and
offer a wealth of guest speakers, panel
discussions and face-to-face meetings
with academics. Cass allows alumni to
return and take part in an elective
programme each year, free of charge.
Business schools engage so actively
with former students because success-
ful alumni burnish their reputation.
But equally, a highly-rated school only
adds to the value of a graduates MBA.
Alumni networks are only as effec-
tive as their participants are enthusi-
astic. However much the schools
provide, its essential that graduates
themselves see the benefit in taking
advantage of these provisions.
A school with proactive alumni,
willing to represent, promote and
encourage new talented students to
consider an MBA there, and who are
keen to demonstrate how their degree
has benefited them, has an advan-
tage. And the success of an alumnuss
business school shines reflected glory
back onto the alumnus.
Business Education
42
27
CAREERS.com
CITYA.M. 22 MARCH 2012
| Business Education
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ogramme for you,
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T
ODAY, many consider London to
be the European home of the
MBA. But it was only in 1965
that London Business School
first offered the degree in the city.
Now the location of such well-
regarded business schools as Imperial
College, Cass Business School and
London Business School, London can
also boast good connections with the
rest of the UK. Oxford Universitys Sad
Business School, Cranfield School
of Management, Cambridge
Universitys Judge
Business School, and
many other UK-based
institutions are with-
in a short journey of
the capital.
Add to this the
citys enviable his-
torical links
throughout Europe,
and to a certain
extent the world, and
its easy to understand
why studying for an MBA
The popularity of the citys business schools rests on excellent employability
Connections with nance are a part of Londons attractiveness Picture: GETTY
London is at the global
heart of MBA learning
in London can hold
such a huge appeal
to business school
applicants.
Put simply,
London is an
extremely vibrant
and compelling city
in which to study, says
Oliver Ashby, business
development manager at London
Business School. As one of the most
powerful business centres in the
world, a third of the worlds largest
companies are headquartered in
London, a quarter of businesses here
are foreign-owned and all of the lead-
ing financial institutions are repre-
sented here. Not only is the location
ideal for business but, culturally,
London offers a gateway into Europe
and the world and an abundance of
diverse activities, people and experi-
ences.
The Association of MBAs (AMBA), a
UK-based postgraduate and manage-
ment accreditation agency, gives its
approval to 189 business schools in
more than seventy countries. AMBAs
chief executive Sharon Bamford says
that the diversity of class-intake
among Londons MBA programmes
means that graduates are highly
employable on a global scale.
The UK, more than anywhere else
in the world, offers a complete inter-
national MBA experience, with an
average of thirty to forty nationalities
represented in a typical cohort of
forty-five. Thus, in studying HR, strate-
gy or international marketing, for
example, a student is not just learning
taught content from a professor, but
developing an understanding of these
subjects from their peers in the con-
text of China, India, Latin America,
Australia and Europe, and differing
sectors in each of those countries.
Emphasising the globally renowned
reputation of studying business in
London, the recently released QS
Global 200 Business Schools Report
2012 found that the city claims the
most respected business schools in
Europe. The reports European rating,
compiled using MBA recruiters opin-
ions on which institutions produce
the most employable graduates,
found that ten of the sixty-seven
schools in Europe were located in, or
within commutable distance to
London. Four of these schools feature
in the exclusive top cluster of institu-
tions: London Business School, Oxford
Universitys Sad Business School, the
University of Cambridges Judge
Business School, and Imperial College
Business School.
London is still recognised as an
international hub, reflected in both
its population and the companies that
are based or headquartered here,
points out Erica Hensens, MBA pro-
gramme director at Cass Business
School. For those who are already set-
tled here and want to keep their base
here, they have an opportunity to
study a postgraduate qualification
that will expose them to the rigours of
academic study at this level, the
organisations based in a city like
London and the vast network that an
MBA opens up for them, without
uprooting themselves and their fami-
lies. They gain experience of working
in a culturally diverse environment.
RICHARD BURNS
QS TOP MBA
%
46
39
9
6
Imperial College MBA
Cost: 36,000 (from Oct 2012)
Class size: 47
Average Work experience: 5.5 years
Percentage International: 87%
Source: Imperial College Business School,
figures for class of 2011
Cass Business School MBA
Cost: 34,500 (from Sept 2012)
Class size: 80
Average Work experience: 7.6 years
Percentage International: 87.5%
Source: Cass Business School, figures
for class of 2011
London Business School MBA
Cost: 57,500 (from Aug 2012)
Class size: 404
Average Work experience: 5.7 years
Percentage International: 89%
Source: London Business School, figures for
class of 2013
AGE RANGE OF CASS BUSINESS
SCHOOL COHORT 2011
25-29
35-39
40+ 30-34
Source: Cass Business
School, class of 2011
T
E
R
R
E
S
T
R
I
A
L
JOHN BISHOPS SPORT RELIEF
HELL BBC1, 9PM
Coverage of the comedians gruelling
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Fill the grid so that each block
adds up to the total in the box
above or to the left of it.
You can only use the digits 1-9
and you must not use the
same digit twice in a block.
The same digit may occur
more than once in a row or
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separate block.
COFFEE BREAK
Copyright Puzzle Press Ltd, www.puzzlepress.co.uk
KAKURO
QUICK CROSSWORD
LAST ISSUES
SOLUTIONS
KAKURO
WORDWHEEL
Using only the letters in the Wordwheel, you have
ten minutes to nd as many words as possible,
none of which may be plurals, foreign words or
proper nouns. Each word must be of three letters
or more, all must contain the central letter and
letters can only be used once in every word. There
is at least one nine-letter word in the wheel.
SUDOKU
Place the numbers from 1 to 9 in each empty cell so that each
row, each column and each 3x3 block contains all the numbers
from 1 to 9 to solve this tricky Sudoku puzzle.
SUDOKU
QUICK CROSSWORD
ACROSS
1 Tie the limbs of a bird
before cooking (5)
4 Clothes drier (5)
7 Chest bones (4)
8 Strainer (5)
9 Mosque ofcial (4)
10 Hard fruits (4)
12 Study intensively
for an exam (4)
15 Spinning toys (4)
17 Highway (4)
19 Walking-stick (4)
20 Happen again (5)
22 Brand name of a
ballpoint pen (4)
23 Heavenly being (5)
24 Root vegetable (5)
DOWN
1 Flings up, as with a
coin, for example (6)
2 Impulse (4)
3 Alarm (5)
5 Take a rm stand (6)
6 Pitch tents (6)
11 Large nation
(inits) (3)
13 Lessen the
strength of (6)
14 High-pitched (6)
16 Place of worship
associated with
a sacred thing
or person (6)
18 Worthless
material (5)
21 Cofee shop (4)
H
C
B
N
A L
G
E
I

4

4

B L A D E C H A F E
A E S P S
A X I L A R M P I T
C I N N A R
Q U E B E C A R I A
U R E D T A P E N
I D E S U N P L U G
E M A Y E E
S A I L O R A U L D
C T Y S I
E J E C T J E W E L
4 9 8 7 5 1
3 6 4 1 5 8 2
2 4 1 7 9 5 8 6
1 8 9 6 3 9 7
2 8 9 7 3 1
4 3 1 7 8 5 9 6 2
2 9 3 2 1 8
6 8 9 1 8 7 9
1 2 5 4 3 3 9 8
7 5 4 9 2 8 6
8 1 3 1 6 2
4
4
4
4
4
4
4
4
4
WORDWHEEL
The nine-letter word was
CHIPBOARD
Lifestyle | TV&Games
43
It was the most eagerly awaited
launch of the year. City A.M. has
been putting the iPad 3 sorry
new iPad through the paces.
Steve Dinneen finds out if its another
success story or a bit of a damp squib
iPad, I saw, I conquered
S
ocial media generally means you can get
away with seeing less of people, which is
great, because most people are unbear-
ably awful.
It also means you can carefully vet the peo-
ple you interact with and block them at will, on
a whim, just for the hell of it. You can pretend to
be erudite and urbane instead of the social
equivalent of a dropped birthday cake. Its a
good system. It works. You should try it just
dont expect to be my friend. Ill probably hate
you.
The system, though, has its drawbacks, one
of which is that it can be difficult to filter out
life beyond your digital bunker. You find the
outside world creeping in, taking you by sur-
prise, like noticing the person youre sharing a
decompression chamber with has just passed
wind. This week a variety of people have
demonstrated this, playing their parts like
hideous trained monkeys in a fetid online
sideshow so grotesque it makes you want to
gouge your eyes out with the fingers of the
person sitting next to you.
Topping this weeks table of human beings
who make me pray for global Armageddon was
Liam Stacey, who admitted to posting on
Twitter how amusing he found it when Bolton
Wanderers midfielder Fabrice Muamba suf-
fered a near fatal heart attack during a game
last week, before proceeding to racially abuse
him. Another chap is due to stand trial for
allegedly posting offensive messages about
dead soldiers on his Facebook page. And one
man made the news for refusing to post a
months worth of daily Facebook apologies to
his ex-wife (a punishment that has given me a
newfound respect for the bonkers US judicial
system) after posting a series of vindictive com-
ments about her.
You can hardly blame social media, though.
People have always been prone to revealing
what unpleasant, lumbering goons they are
when under the cover of anonymity. They are
the same people who scrawl racist graffiti in
public toilets the internet just makes your
living room that toilet. In this increasingly
strained metaphor, that makes social media
merely the pen.
Incidentally, a study published this week
found that social networks are also associated
with a kind of socially aggressive narcissism.
The bigger your pool of friends, the more likely
you are to mail naked photographs of yourself
to public figures. Or something. I didnt actually
finish reading it. I was too busy updating my
Facebook status. Its hilarious.
Dont blame
Twitter for the
awfulness of
human beings
THREE OF THE BEST
HD APPS FOR YOUR NEWiPAD
BAREFOOT WORLD ATLAS (5.49)
This app is ostensibly an educational tool for
children, although its so much fun its proba-
bly wasted on them. It features a 3D globe
you can scroll around, discovering cities, his-
torical sights and interesting facts about the
world. It makes great use of the retina
screen, with crisp, vivid colours as well as
excellent use of sound. Children will benefit
particularly from the audio recording of the
information. A great example of what the
new iPad is capable of.
SOLAR WALK (1.99)
Another great educational tool that will wow
adults as much as younger users. Solar Walk
lets you scroll and pinch your way around the
galaxy. The graphics are astonishing and you
can call up information on each celestial
body. But the best function is the ability to
scroll through time, watching the planets
whizz by on their seemingly endless cycles. If
you didnt get what you wished for in the
Budget, this will remind you that in a few mil-
lennia, none of it will matter very much.
WAKING MARS (2.49)
This is a simple game that somehow adds up
to far more than the sum of its parts. Youre
an explorer searching through the undiscov-
ered caverns of Mars, where you come across
various new kinds of flora and fauna. The
addictive gameplay involves developing alien
ecosystems by planting seens, which allows
you to progress further into the Martian
landscape. The graphics are sharp and the
interface is perfect for a casual but immer-
sive iPad gaming experience.
Developers early
to the HD party
will be cashing in
on the App Store
right now.
Barefoot World
Atlas (left) is one
of the best
GEEK SPEAK
@steve_dinneen
1080P HD VIDEO
The new iPads camera is capa-
ble of shooting quality high def-
inition video. If youre filming in
good light, the results can be
pretty astonishing. It has an
image stabiliser to reduce
wobble. The new screen also
makes video playback notice-
ably better
BETTER REAR CAMERA
The rear camera has been
upgraded in line with the
iPhone 4S. The five-element
optics system is combined
with a five-megapixel, back-
side-illuminated sensor, giv-
ing crisper images than the
iPad 2 and better perform-
ance in lower light
NEW IN-HOUSE APPS
A new portable version of
iPhoto offers a brilliantly intu-
itive interface and some very
clever editing tools. Its a
great portfolio for your pic-
tures but some lack of func-
tionality means you cant
entirely give up your desktop
photo library just yet
THAT SCREEN
The new iPads biggest selling
point is its retina display. At
four times sharper than its
predecessor, it really is
remarkably crisp. The apps
built to take advantage of it
(see below) look gloriously
sharp its only a matter of
time until the rest fall into line
SAME BATTERY LIFE
It almost goes without saying
that Apple hasnt sacrificed
any juice for all the new bells
and whistles. Youll still get a
solid 10 hours of use (and the
same plodding recharge time).
While it can warm up a little
we didnt experience any
uncomfortable overheating
DICTATION
I said Id eat my hat if Siri did-
nt come with the new iPad. It
tasted pretty good. Instead
we got a rollout of Apples
voice dictation software,
allowing you to speak your
notes or messages. Siri fans
will just have to wait until
next time
WEIGHT AND SIZE
iPad 2 users will notice the new
iPad has gained a little weight
not much but enough to pick up
on (at just over eight per cent).
It is also (very) slightly thicker,
in order to squeeze in a bigger
battery. If it was a call between
keeping battery life and a slight
weight gain, its the right choice
THE VERDICT
Some people were disappointed by the lack of a complete
redesign for the new iPad (as they were with the wildly
successful iPhone 4S). The truth is, the only thing the iPad
2 really lacked was a sharper screen the other extras we
now have are just icing on the cake. The 4G capability
makes little difference for UK users, although at least you
can be assured the new iPad is future-proofed. The only
product that comes close this is the iPad 2. If you already
own the previous generation, upgrading would be a little
extravagant. If not, this is the very best out there. I
would love a chance to stop banging the Apple drum but
right now it is so far ahead of its rivals it is unreal.
*****
Lifestyle | Technology
CITYA.M. 22 MARCH 2012 44
Sport
46
THE ULTIMATE EXPERIENCE
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with rst class dining and enthralling football
at all Arsenal home matches.
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arsenal.com/clublevel
MANAGER Arsene Wenger last night
warned his in-form Arsenal team not to
take their foot off the gas after a sixth
straight Premier League win lifted them
above neighbours Tottenham for the first
time this season.
Defender Thomas Vermaelens first-
half header his second winner in suc-
cessive matches hauled the Gunners
one point above Spurs, who enjoyed a 13-
point advantage as recently as January.
A hard-fought and often nervy win
also tightened their grip on a Champions
League place that looked a forlorn hope
just weeks ago, but Wenger was mindful
not to succumb to triumphalism. We
must not think that the most difficult
thing is done, said the Frenchman.
Probably the most difficult thing still
remains to do, and to achieve it it is
important we keep humility, focus and
fight for each other. That is what we had
to do tonight.
Nine games remain but Arsenal are
now the highest-placed London team
and head a three-way battle with Spurs
and Chelsea for the remaining two
Champions League qualifying places.
Recalled Aaron Ramsey blazed over
from 10 yards before Vermaelen bravely
headed captain Robin van Persies right-
wing corner through a crowd of Everton
defenders in the eighth minute.
Everton, who remain 10th, mounted
strong protests when midfielder Royston
Drenthes would-be equaliser was disal-
lowed for offside wrongly, it transpired.
Drenthe and Marouane Fellaini wast-
ed later chances to level while Van Persie
almost extended Arsenals lead, hitting a
post from a Kieran Gibbs knock-down.
Vermaelen hauls Gunners
above Spurs for first time
FOOTBALL

0
1
EVERTON
ARSENAL
ENGLAND batsman Jonathan Trott
has backed Warwickshire colleague
Ian Bell to recover from his slump
after showing him the way with a
century in the second tour match
in Sri Lanka.
Trott (right) and fellow opener
Andrew Strauss both hit tons
before retiring as England declared
on 272-4, ending day two 203 runs
behind a Sri Lankan Development
XI, who made 44-1 before stumps.
Off-form Bell, who also struggled
against Pakistan in the Middle East
earlier this year, continued to toil,
managing just 14, but Trott insists
serious concerns over his
county team-mate remain
unwarranted.
In the 12 months
before the UAE tour
[against Pakistan], Ian
was probably our lead-
ing run-scorer with
Alastair Cook, said
Trott.
Hes obviously had a
few bad Tests, which is
disappointing, but hell
want to put that right.
Ive played a lot of
cricket with him for
Warwickshire and England so I
know his game pretty well. He
looks in good
touch and hell
be okay.
Bell is one of
Englands main
worries ahead of
the first of two
Tests, which
starts on Monday.
Fast-bowler Stuart Broad
continued his recovery from
a sprained ankle by trap-
ping Malinga Warnapura
for lbw, his fourth wick-
et of the match
MANCHESTER CITY manager
Roberto Mancini hailed Carlos
Tevez last night after the rebel
striker came off the bench to
inspire a comeback win that
reignited the flagging clubs
Premier League title charge.
In his first match for six
months following a bitter feud
with Mancini, Tevez injected
fresh vigour into a wilting side
trailing to resurgent Chelsea
and then played the killer pass
for Samir Nasris late winner.
It hoisted City to within one
point of leaders Manchester
United, whom they could over-
take on Saturday, and inflicted
a first defeat of caretaker Blues
boss Roberto di Matteos hith-
erto flawless four-game run.
Chelsea had looked set to
end Mancinis own 100 per
cent league record at Eastlands
this term when defender Gary
Cahills deflected shot crept in,
but striker Sergio Agueros
penalty levelled before Nasri
struck with five minutes left
with help from Tevez.
I am happy because he did
well, the City chief said of
Tevez. Hes not in good form
or 100 per cent fit but he
knows football. We didnt
deserve to go down 1-0 but we
desired to win this game. I
think we are back on track. Its
more than three points.
Citys 20th successive home
league win set a new Premier
League record and ended Di
Matteos honeymoon spell
since replacing the sacked
Andre Villas-Boas. The Italian
blamed a harsh penalty deci-
sion, given for Michael Essiens
handball.
I think it was tough on us.
We fought very hard and
deserved a point at least, said
Di Matteo. The penalty gave
them a big lift. I thought it was
harsh; I dont think he could
make his hand disappear. It
was harsh but it was handball.
Defender Cahills oppor-
tunistic shot ricocheted off
Yaya Toure past the wrong-foot-
ed Hart in the 60th minute,
setting up a shock. But on
came Tevez, Aguero equalised
and the recalled exile teed up
midfielder Nasri to dink home.
CRICKET

BY FRANK DALLERES
FOOTBALL

2
1
MAN CITY
CHELSEA
Man Utd 29 22 4 3 73 27 70
Man City 29 22 3 4 71 21 69
Arsenal 29 17 4 8 58 35 55
Tottenham 29 16 6 7 53 35 54
Chelsea 29 14 7 8 49 34 49
TOP FIVE
TEAM PLD W D L F A PTS
Bell toils again but centurion Trott
insists England pal will bounce back
Tevez sinks
Chelsea on
comeback
Tevez sinks
Chelsea on
comeback
Rebel striker sets up Nasri winner in first
game for six months as City cut United lead
Rebel striker sets up Nasri winner in first
game for six months as City cut United lead
47
EUPHORIC QPR manager Mark
Hughes last night urged his team to
use an incredible three-goal fightback
capped by Jamie Mackies injury-time
winner as a springboard in their fight
for Premier League survival.
Trailing to Sebastian Coates and
Dirk Kuyt strikes with just 13 minutes
left, Rangers roared back through
Shaun Derry, former Liverpool striker
Djibril Cisse and Mackie to climb two
points clear of the bottom three.
A first win in seven was tainted
only slightly by a souring of relations
between fans and captain Joey
Barton, and offered Hughes fresh
hope of generating momentum need-
ed to escape an immediate return to
the Championship.
It could be a defining moment
and we have to make sure it is, said
the former Fulham boss. You hope
for nights like this where things go
for you and you go back on level
terms. Now its important we look to
the weekend and make sure we dont
let this go to waste.
Barton was booed off by home fans
when substituted after a poor display
and later took to Twitter to admit: I
was awful tonight. Worst Ive ever
played in my career.
He added: Disappointed with fans
booing, were [sic] meant to be in it
together. They wont break me, guar-
anteed. Ive been through much
worse.
Hughes defended his skipper, say-
ing: He wont let it affect him and
hell play a big part in what we do
from now to the end of the season.
Hughes toasts defining moment after
13-minute treble hoists QPR to safety
FOOTBALL

3
2
QPR
LIVERPOOL
A 93RD-MINUTE equaliser from
forward Rafael van der Vaart
ended Tottenhams three-match
losing run but could not prevent
them from slipping behind arch-
rivals Arsenal into fourth place.
Spurs looked doomed to a
fourth consecutive defeat when
Stoke striker Cameron Jerome
poked the visitors in front 15 min-
utes from time, but Van der Vaart
headed home winger Gareth
Bales cross to snatch a draw.
Tottenham were cheered by a
Chelsea defeat that keeps the
fifth-placed Blues, who they visit
on Saturday, five points adrift in
the Premier League table, and
manager Harry Redknapp insisted
his side could still regain their
advantage over their north
London neighbours.
We can still finish above
Arsenal, said Redknapp. Arsenal
can think its all over. Its not all
over. Theres a long way to go yet.
Therell be twists and turns.
Its all to play for still. Theyre not
going to win every game, I dont
think.
Stoke took the lead against the
run of play from a Glenn Whelan
free-kick headed goalwards by
Robert Huth and helped in by
Jerome. Spurs, missing winger
Aaron Lennon and striker
Emmanuel Adebayor, struggled to
test goalkeeper Asmir Begovic,
but earned a point in injury time
when Van der Vaart beat Huth to
Bales left-wing delivery.
We can catch Arsenal
again, insists Redknapp
Muamba was effectively
dead for 80 mins - medic
Results
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email sport@cityam.com
SPORT | IN BRIEF
Olympic Park legacy boost
HOCKEY: The 2015 European
Championships will be the first
major international competition
to be held at the Olympic Park
post-London 2012, it was
announced yesterday. The move
is a boost to hopes the Games
will leave a sporting legacy in the
East End.
Lydiate voted top player
RUGBY UNION: Wales flanker
Dan Lydiate has been named
player of the tournament for the
Six Nations. Lydiate, who helped
his country complete the Grand
Slam on Saturday, pipped Ireland
fly-half Jonathan Sexton and
Italy captain Sergio Parisse.
Meanwhile, Ireland hooker Jerry
Flannery has retired after failing
to recover from a back injury.
Mackies last-gasp goal lifted QPR out of
the bottom three Picture: GETTY
BOLTON midfielder Fabrice Muamba
was in effect dead for almost 80
minutes before his miraculous resus-
citation following an on-field cardiac
arrest at Tottenham on Saturday.
Trotters club doctor Jonathan
Tobin said Muamba did not respond
to repeated attempts at mouth-to-
mouth and 15 rounds of electric
shock treatment on the pitch and on
the way to the London Chest Hospital.
Medics there eventually revived the
23-year-old, who last night remained
under close observation at the spe-
cialist centre in Bethnal Green, but is
now conscious and continues to show
gradual improvement.
It was 48 minutes from the time
he collapsed to the time he reached
hospital, and then a further 30 min-
utes that they were working on him
in the hospital without his heart beat-
ing and without him breathing, said
Dr Tobin. In effect, he was dead in
that time.
Dr Andrew Deaner, a cardiologist
at the hospital who was at the game
and ran on to help, added: If I was
ever going to use the term miracu-
lous it could be used here.
FOOTBALL

FOOTBALL

1
1
TOTTENHAM
STOKE
Tevez (right) came
off the bench with
City trailing 1-0
Picture: GETTY
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