THE GUARDIAN
Jersey threatens to break with UK over tax backlash
By Simon Bowers in St Helier
A barrage of regulatory clampdowns and political attacks on the Channel Islands' controversial financial industry has prompted one of Jersey's most senior politicians to call for preparations to be made to break the "thrall of Whitehall" and declare independence from the UK.
Sir Philip Bailhache, the island's assistant chief minister, said: "I feel that we get a raw deal. I feel it's not fair … I think that the duty of Jersey politicians now is to try to explain what the island is doing and not to take things lying down.
"The island should be prepared to stand up for itself and should be ready to become independent if it were necessary in Jersey's interest to do so."
In a Guardian interview, he said strained relations with the UK over the past five years had made it "very plain" that Jersey's interests were not always aligned with those of Britain.
DAILY EXPRESS
Sir Mervyn King: Five more years of pain
By Macer Hall
Britain faces at least another five years of pain with no sign of an end to the global financial woes, the Governor of the Bank of England warned yesterday. In a gloomy Treasury Select Committee hearing, Sir Mervyn King, said he is “pessimistic” over the chances for a eurozone recovery and warned Britain is still not halfway through the financial crisis.
The Bank chief told MPs he was “struck” by the speed at which the economic outlook was deteriorating as the eurozone crisis deepened, with conditions now worsening in previously booming areas, such as Asia and other emerging markets. He said he was “pessimistic and particularly concerned” as the problems in Europe continue without any decisive action.
FINANCIAL TIMES
City fear over Cameron’s EU demands
By Alex Barker in Brussels and George Parker in London
The City of London has raised deep concerns over David Cameron’s strategy in Europe, warning that the prime minister’s wishlist of “safeguards” in December could actually have damaged its standing as Europe’s financial centre.
The differences over Britain’s diplomatic priorities, first aired earlier this year, have taken on renewed significance just days ahead of a key European Union summit as Mr Cameron prepares a fresh list of demands for legal protections if a European “banking union” were formed.
Britain rejected a new EU fiscal treaty in December after Mr Cameron failed to win safeguards for the EU single market for financial services – demands France derided as an unacceptable “opt-out” for the City.
THE SUN
‘Fat-fingered newbie who pressed delete’ blamed for NatWest chaos
By Steve Hawkes, Business Editor
The NatWest and RBS IT crisis was last night blamed on a rookie hitting the delete button. A source said an “inexperienced operative” had blundered when a software team tried to halt an upgrade on Tuesday last week. The “fat-fingered” slip — possibly by a low-paid worker in India — deleted an entire day of customer transactions.
Last night Bank of England boss Sir Mervyn King said a supermarket would not have made the same error because they are “utterly focused” on customers. He called for a probe by the Financial Services Authority. RBS Group — parent company of NatWest — refused to comment. It has blamed the meltdown on a software “glitch”.
FINANCIAL TIMES
RBS considers suing over systems debacle
By Daniel Schäfer in London and Patrick Jenkins in New York
Royal Bank of Scotland is discussing at a senior level whether to take legal action against US software maker CA Technologies after a computer update caused a systems failure that left millions of customers without access to their bank accounts.
Two people familiar with the situation said there was a significant chance of litigation being pursued against external technology suppliers for a software glitch that triggered a backlog of transactions that have not yet been fully cleared.
The failure has cost the bank millions of pounds in staff overtime costs and is expected to trigger compensation claims.
The board of the bank, which is mostly owned by UK taxpayers, spent much of Tuesday debating the software failure at a strategy day that was supposed to have focused on longer-term issues.
DAILY MAIL
Reverse gear on petrol tax: As fuel duty is scrapped it's great news for motorists... but another embarrassing U-turn for the Chancellor
By James Chapman, Political Editor
George Osborne scrapped a 3p rise in fuel duty yesterday in yet another Budget U-turn.
The Chancellor said the move – greeted with delight by campaigners and motoring groups – reflected the ‘very difficult economic times’.
A duty rise in January had previously been axed and the latest freeze knocks £2.10 off the cost of filling up a typical family car.
Mr Osborne had already staged four major Budget U-turns, on pasties, caravans, charities and church works.
DAILY TELEGRAPH
Glencore and Xstrata merger close to collapse as Qataris balk at deal
By Alistair Osborne, Business Editor
In a shock announcement, Qatar Holdings, Xstrata’s second-biggest shareholder with 10.4pc, said that, while it saw “merit in a combination of the two companies, it is seeking improved merger terms”.
Qatar was widely thought to be ready to back a deal that had already drawn opposition from investors including Standard Life, Schroders and Fidelity. But Qatar’s statement sounds the death-knell for the merger as it currently stands.
Ivan Glasenberg, the Glencore chief executive who has worked on the merger for three years, was last night in frantic talks with advisers over the company’s next move.
The missive from Qatar, which is being advised by Lazard, gives Mr Glasenberg little choice but to sweeten the terms or walk away. Xstrata is understood to be expecting some sort of move to appease Qatar and other shareholders.
THE INDEPENDENT
Murdoch ready to break up his scandal-hit media empire
By Stephen Foley, New York
Rupert Murdoch, bloodied by the phone-hacking scandal and under pressure over his stewardship of his media empire, is close to giving his blessing to a radical restructuring of News Corp that could see him relinquish day-to-day control of his newspapers.
The company is considering separating Mr Murdoch's beloved newspaper publishing division into a separate stand-alone company in a move that would inoculate the rest of the business from the hacking scandal and make it easier to resume its courtship of BSkyB, but which is likely to raise pressure for big cost-cuts across the UK titles. The split opens up the possibility that Mr Murdoch will no longer hold any executive role in the newspapers. Under the plan as conceived, he will remain chief executive of News Corp, while the leadership of the publishing company is to be decided. News Corp's board is to discuss the plan today, and an announcement could come as early as tomorrow.
bbc.co.uk
Unite says 82% of members can't make pay last the month
More than eight out of 10 of Unite union members who responded to a survey said their monthly salary does not last until the next pay day.
Based on a survey of 350,000 of its members, Unite said 82% were unable to make their wages last the whole month.
It added that 12% of that group had subsequently needed to resort to payday loans.
The union also said that the average monthly pay of its members this year was £150 less than a year ago.
Unite's survey said of its members that could not make their wages last a whole month, a further 38% had to be helped financially by their friends and family, 29% used a second job or their savings, and 21% had an overdraft or used credit cards.
Unite general secretary, Len McCluskey said working men and women were "under horrific strain".
THE TIMES
Disgraced bank chief fights back against his pursuers
By Patrick Hosking, Financial Editor
Fred Goodwin claims he is being “unfairly and wrongly” chased for compensation by Royal Bank of Scotland shareholders who accuse him of misleading them when they were persuaded to stump up £12 billion just months before RBS collapsed.
Lawyers for the former chief executive, his senior colleagues and the bank say they were tripped up by “unforeseeable and entirely unprecedented” events and deny they misled investors.
They also deny concealing from shareholders the existence of a significant line of credit from the US Federal Reserve, which could have been a warning signal, when tapping them for fresh capital shortly before the bank collapsed in 2008.
The comments are contained in a 36-page letter from Herbert Smith, the City lawyers representing Mr Goodwin, his former colleagues Sir Tom McKillop, former RBS chairman, and Johnny Cameron, former RBS investment banking chief, as well as the bank itself. They say they will “vigorously defend themselves” against a claim for £3 billion by the RBS Shareholders’ Action Group, which represents 7,400 individual investors and 80 institutions that lost money after backing the RBS capital-raising in April 2008.
THE SCOTSMAN
BP’s sell-off continues as it off-loads £179m North Sea assets
By Scott Reid
Oil major BP is selling its stakes in two North Sea fields for $280 million (£179m) as it picks up the bill for the Gulf of Mexico disaster.
The group said Japanese trading company Mitsui would buy its 13.3 per cent stake in the Alba field and an 8.97 per cent interest in the Britannia field under the cash deal.
BP, which sold $400m of gas fields in the North Sea earlier this year, is off-loading smaller assets to concentrate on six major projects in the UK and Norwegian sections of the North Sea.
The latest deal is part of a $38 billion asset disposal programme which is raising funds to help pay for the ongoing cost of cleaning up the 2010 Gulf of Mexico oil spill.
cityam.com
National debt goes up as income tax takings drop
By Ben Southwood
The UK’s public finances took a hammering last month, according to data released yesterday by the Office for National Statistics (ONS).
A budget deficit of £17.9bn for May pushed the net national debt to £1.013 trillion, hitting 65 per cent of GDP. Just one year ago, net debt stood at the comparatively low figure of £921.3bn, representing 61.3 per cent of GDP.
These headline figures ignore the cost of bailing out the banks, and other off balance sheet items the exchequer is liable for, such as projects under the private finance initiative and pensions payments.
A spokesman for HM Treasury argued that “it is too early in the financial year to draw conclusions, especially as today’s data include a number of one-off factors and temporary distortions”. The Treasury points to the possibility of revisions, especially since this month marks the transition from COINS to OSCAR, a new public spending system.
