13 PAGES
OF SPECIAL
COVERAGE
INSIDE
Issue 1,246 Thursday 21 October 2010
REALITY BITES
■ Axe falls as Britain
gears up for biggest
cuts since 1976
■ Chancellor slashes
welfare bill by £18bn
to shield departments
■ Middle class child
benefit cut will affect
300,000 more families
SPENDING REVIEW
BY DAVID CROW
GEORGE Osborne yesterday unveiled
the biggest spending cuts since 1976,
as he wrong-footed his Labour oppo-
nents by raiding the welfare budget to
soften departmental cuts.
“Today’s the day when Britain
steps back from the brink, when we
confront the bills from a decade of
debt,” the chancellor said as he
unveiled £81bn of savings across the
public sector.
Osborne claimed he had limited
real-terms cuts in departmental expen-
diture to an average of 19 per cent over
four years, but he paid for this by
announcing £7bn of extra welfare sav-
ings on top of the £11bn unveiled in
his June Budget.
He axed child benefit for higher-rate
taxpayers from 2012 as expected,
although the change will affect
300,000 more families than previously
thought. The measure – which affects
some 1.5m households – will save the
exchequer £2.5bn by 2014-15.
In a shock move, the chancellor
announced a £1bn-a-year carbon
stealth tax on big businesses, earning
him widespread condemnation from
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George Osborne said he would eliminate the structural deficit by the end of the parliament
those affected. Banks were also threat-
ened with higher taxes, although
there was a softening in the rhetoric
against the financial services sector.
“We neither want to let banks off
making their fair contribution, nor do
we want to drive them abroad. Many
hundreds of thousands of jobs across
the whole United Kingdom depend on
Britain being a competitive place for
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financial services,” Osborne said.
He received plaudits for sticking to
the spending cuts he set out in his
June budget, which he hopes will elim-
inate the £109bn structural deficit by
the end of the parliament.
Scotching suggestions he would
delay deep cuts until economic
growth was stronger, the chancellor
insisted that the 500,000 reduction in
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of Apple Inc. App Store is a service mark of Apple
Picture: GETTY
the public payroll would be offset by
private sector job creation.
Although front-line services like
schools, hospitals were shielded from
the worst of cuts, the axe will fall hard
on state funding for university teach-
ing, social housing, prisons, police and
local councils.
And while some big transport proj-
ects have been spared – such as
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■ Businesses furious
at plans for new £1bn
carbon stealth tax
■ Police and prisons
hit hard but hospitals
and schools protected
■ Rail fares to soar by
20 per cent over next
three years
Crossrail and the London
Underground upgrades – there will be
massive rises in train fares and big cuts
to subsidies for bus companies.
Elsewhere, the chancellor aims to
save £1.8bn a year by 2014-15 by
increasing the amount that public sec-
tor workers must contribute to their
pensions. Treasury officials said the
figures implied that employees would
have to increase contributions by three
per cent, equating to a significant real-
terms pay cut.
The state pension age for men and
women will rise to 66 by 2020, six years
earlier than planned, a move that will
save around £5bn a year by the end of
the next parliament.
Osborne repeatedly insisted the
measures were fair, a claim that was
instantly dismissed by Labour, who
accused the coalition of cutting spend-
ing to achieve a long-held ambition to
shrink the state.
As well as cuts to middle class bene-
fits, there were big reductions in wel-
fare for the poorest. Incapacity benefit
was slashed, saving over £2bn a year by
the end of the parliament while hous-
ing benefit was cut for the under 35s,
saving £215m. The government also
scaled back the working tax credits
scheme, bringing in savings of £1.4bn.
MORE: 2, 3, 4, 19, 21, 22, 23, 24, 25
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 2 News | Spending Review
At a glance: George Osborne’s first
comprehensive spending review
SPENDING FIGURES
l This fiscal year current expenditure will
be £637.3bn. In 2011-12, current spending
will be £651.1bn, followed by £664.5bn in
2012-13, £678.6bn in 2013-14 and then
£692.7bn in 2014-15.
l The government will pay £43.3bn of
gross government debt interest this fiscal
year followed by £46.5bn in 2011-12,
£52.4bn in 2012-13, £57.8bn in 2013-14
and then £63bn in 2014-15. Osborne
includes £10bn from lower debt interest
payments in the £83bn of spending cuts,
partly accounted for by falls of £1bn in
2012, £1.8bn in 2013 and £3bn in 2014.
l Capital spending will be £59.5bn this
year, falling to £50.7bn in 2011-12, fol-
lowed by £48.5bn in 2012-13, £45.6bn in
2013-14 and then £47.2bn in 2014-15. This
is £2bn higher than Osborne set out in the
June budget.
l Total current public expenditure will be
£696.8bn this year, £701.8bn in 2011-12,
£713bn in 2012-13, £724.2bn in 2013-14
and £739.8bn in 2014-15. In real terms
spending will be at its 2008 level.
l £6bn in Whitehall savings found –
rather than the £3bn planned in the budg-
et. Achieved partly by cutting the adminis-
trative budgets of every main government
department by a third – which will save
£5.9bn a year by 2014-15.
JOBS
l The Office for Budget Responsibility
forecasts that 490,000 public sector jobs
will be lost over the next four years. Most
will be through natural turnover. Around
1.5m private sector jobs will be created.
BANKS
l A permanent levy will be introduced,
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Editorial
Editor Allister Heath
Deputy Editor David Hellier
News Editor Ben Griffiths
Night Editor Katie Hope
Associate Editor David Crow
Business Features Editor Marc Sidwell
Lifestyle Editor Zoe Strimpel
Pictures Alex Ridley
Commercial
Sales Director Jeremy Slattery
Commercial Director Harry Owen
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The long-awaited spending review saw the light of day yesterday
with the legislation published today.
l All banks must have implemented the
Code of Practice on Taxation by the end of
November.
WELFARE
l Measures forecast to save £7bn a year.
l Universal tax credit to replace all work-
ing age benefits and tax credits will be
introduced over the next two parliaments
at a cost of £2bn over the course of this
spending review.
l Contributory Employment and Support
Allowance will be limited to just one year
for those in the Work Related Activity
Group, saving £2bn in 2014-15.
l The age threshold for the shared room
rate in housing benefit will rise to 35 from
25, saving £215m in 2014-15.
l Local authorities will have direct control
over council tax benefit and will have the
flexibility to manage council tax within a
budget that will be reduced by 10 per cent
from April 2013.
l The mobility and care elements of the
Disability Living Allowance will be aligned
to generate savings of £490m by 2014-15.
l The maximum Savings Credit award in
Pension credit will be frozen for four years.
l The basic and 30-hour tax credits will be
frozen for three years.
l Changes to Working Tax Credit rules
means that couples with children must
work 24 hours per week between them.
The childcare element of the Working Tax
Credit will return to its previous 70 per
cent level.
l Child benefit to be removed from fami-
lies with a higher-rate taxpayer from
January 2013, saving the exchequer
£2.5bn in 2014-15.
l The child element of the Child Tax
Credit will rise by a further £30 in 2011-12
and £50 in 2013-14 above indexation, at a
cost of £1.8bn between 2011 and 2015.
l Universal benefits kept for pensioners
and cold weather payments permanent.
l Equitable Life victims will receive a total
payout of £1.5bn, of which two-thirds will
be found in this spending review period.
BUSINESS
l Its departmental expenditure limit
(DEL) will be cut by £3bn between 2011-
12 and 2014-15 with a cumulative real cut
to its departmental programme and
administration budgets of 25 per cent.
l Train to Gain to be abolished.
l An extra £250m by 2014-15 to be
invested in adult apprenticeships.
l The science budget will be protected at
£4.6bn a year, while savings of £324m
can be found through efficiency.
CABINET OFFICE
l Public sector current expenditure will
rise from £1.8bn in 2010-11 to £2.5bn in
2014-15. Its resource departmental budg-
et will increase by 28 per cent but it will
see its capital budget cut by 28 per cent.
l The cabinet office administration budg-
et will be reduced by £55m by 2014-15.
TREASURY
l The Treasury will see its overall adminis-
tration budget cut by 33 per cent.
COMMUNITIES AND
LOCAL GOVERNMENT
l Overall savings in funding to local coun-
cils of 7.1 per cent a year for four years but
total DEL will be cut by £2.1bn to £3.2bn
Changes to welfare benefits are forecast to save the exchequer £7bn
a year
for communities and by £3.2bn to £22.9bn
for local government.
l Ring-fencing of all local government
revenue grants will end from April 2011.
The local government settlement target
includes funding for the council tax freeze.
l Grant funding for social care increased
by an extra £1bn.
l New social housing tenants will be
offered intermediate rents at around 80
per cent of the market rent, close to dou-
ble the 40 per cent usually charged.
150,000 affordable homes to be built over
the next four years.
l £6bn commitment over four years to
the Supporting People programme.
DEFENCE
l The ministry of defence’s budget will be
cut to £33.5bn in 2014-15. Resource DEL
will rise to £34.2bn by 2014-15 from
£33.2bn in 2011-12. Capital DEL and
Resource DEL will be cut by a cumulative
real 7.5 per cent.
l The government will provide resources
to fund British forces in Afghanistan.
EDUCATION
l Total DEL will rise from £56.1bn in
2011-12 to £57.2bn in 2014-15. Capital
DEL will suffer a cumulative real cut of 60
per cent by 2014-15 while resource DEL
will only fall by one per cent per year.
l The schools budget will rise to £39bn
from £35bn.
l Introduction of a £2.5bn pupil premium
to support the education of disadvantaged
children and a funded increase in school
places for 16 to 19 year-olds. Increase in
the entitlement of free education to three
and four-year-olds to 15 hours a week.
l There will also be 15 hours of free early
education and care to all disadvantaged
CITYA.M. 21 OCTOBER 2010
Pictures: REUTERS/ GETTY/ REX
two-year-olds.
l Sure Start protected in real terms.
l £15.8bn to be spent on maintaining,
rebuilding and refurbishing schools.
ENERGY AND CLIMATE
CHANGE
l Total DEL to rise to £3.7bn from £3bn
but resource DEL to be cut by 18 per cent
in real terms. Capital DEL will rise by a
real 40 per cent.
l £200m to be invested in the develop-
ment of offshore wind technology and
manufacturing at port sites.
l £1bn for a green investment bank.
l Up to £1bn for one of the world’s first
commercial scale carbon capture and
storage demonstrations on an electricity
generation plant.
l £1bn put by businesses into the Carbon
Reduction Commitment (CRC) energy effi-
ciency scheme will go straight to the gov-
ernment. A large stealth tax hike.
FOREIGN AND
COMMONWEALTH
l The departmental budget will be cut by
24 per cent over the four-year period by
slashing the number of Whitehall-based
diplomats and back office functions.
HEALTH
l The only area which will see a real-
terms increase. By 2014-15, £114bn will
be spent on healthcare.
l Aim to save £20bn a year by 2014-15
by raising efficiency and productivity.
l £1bn will be diverted from the NHS to
social care. Creation of a new cancer drug
CITYA.M. 21 OCTOBER 2010
fund while spending on health research
will be protected.
HOME OFFICE
l Overall, savings of an average of six per
cent per year will be found. Overall
resource spending to be cut by 23 per
cent in real terms by 2014-15 and capital
spending cut by 49 per cent in real terms.
l Spending on police will fall by four per
cent each year by cutting bureaucracy.
l £1.3bn to maintain the existing prison
estate and fund essential new-build proj-
ects but plans for a new 1,500-place
prison have been deferred.
INTERNATIONAL
DEVELOPMENT
l The departmental budget will rise to
£11.5bn over the next four years. It will
see a 20 per cent rise in capital DEL and
37 per cent increase in resource DEL.
Overseas development assistance will
reach 0.4 per cent of GNI in 2013.
JUSTICE
l The budget will reach £7.3bn by the end
of the four-year period – an average sav-
ing of six per cent per year.
l £1.3bn to maintain the existing prison
estate and fund essential new-build proj-
ects but plans for a new 1,500-place
prison have been deferred.
l The law officers department will cut its
News | Spending Review 3
DEVOLVED NATIONS HMRC
l Scotland’s budget cut by 6.8 per cent in
real terms; Wales’ to be cut by 7.5 per cent
l The budget of HM Revenue & Customs
will have to find resource DEL savings of
CSR
in real terms over four years; Northern
Ireland’s cut by 6.9 per cent in real terms
over four years.
15 per cent while capital DEL will fall by
44 per cent. SPECIAL
PENSIONS
l £900m will be spent to target tax eva-
sion and fraud, expected to raise £7bn. P4, P19,
l State pension age for both men and
women will rise to 66 by 2020, four years
MONARCHY P21, P22,
earlier than planned.
l Public sector pension contributions will
l A one-year cash freeze in the Civil List.
Total royal household spending will fall by
14 per cent in 2012-13 while grants will
P23, P24-
be staggered and progressive but no
detailed decisions will be taken before the
full commission report in the spring.
be frozen in cash terms. An extra £1m will
support the Diamond Jubilee costs. P25, P26,-
l The government will seek an extra
£1.8bn of savings per year in the cost of
public sector pensions by 2014-15.
l After 2012-13, the royal household will
get a new sovereign support state grant
linked to a share of revenue from the
crown estate. Jessica Mead
P27, P28
City workers (above)
will be keen to hear
the details of the
banking levy to be
released later today,
while protesters
took to the streets in
Whitehall yesterday
(left) to demon-
strate against pub-
If you’re thinking…
lic sector cuts.
‘spending cuts could point
sterling in the right direction,’
contact us.
budget by 24 per cent over the period and
the Crown Prosecution Service will reduce
its cost base.
TRANSPORT
l The total budget will fall by £1bn
between 2011-12 and 2014-15. Capital
DEL will fall by 11 per cent and resource
DEL by 21 per cent.
l £30bn to be invested in projects over
the next four years, of which £14bn will
fund railway maintenance and invest-
ment.
l The cap on regulated rail fares will rise
to RPI plus three per cent for three years
from 2012.
l Crossrail and Thameslink will both go
ahead and key Tube lines will be upgraded.
l The M25 will be widened at 10 differ-
ent junctions and there will be increases to
the charges on Dartford Crossing.
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l Budget reduced to £1.1bn and adminis-
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l The BBC licence fee will be frozen for
six years. The BBC will also have to fund
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exchequer £340m by 2014-15.
 4 News | Spending Review
There was no other choice – now
George Osborne must hold his nerve
EDITOR’S LETTER
ALLISTER HEATH
IT was a timely reminder that action is des-
perately required to tackle Britain’s out of
control budget deficit. At 9:30 yesterday
morning, a full three hours before George
Osborne got up to deliver his spending
review to the House of Commons, the latest
monthly budget deficit figures popped up
on traders’ screens across the City. They
were absolutely grim. Public sector net bor-
rowing rose again to £16.2bn in September,
a record deficit for the month. Even though
the economy had grown during the past 12
months, that figure was even higher than
the £15.5bn suffered a year ago.
The fine print was just as depressing.
True, VAT receipts were up 17.2 per cent
year-on-year in September, not surprisingly
given that the rate was taken back up to
17.5 per cent during that time. However,
the year-on-year increase in income and
capital gains tax receipts slowed to a disap-
pointing 1.5 per cent.
In part, this is because pay growth is now
so weak – for the first time, Osborne may be
regretting his war on City bonuses. In part,
this low revenue growth is because hiking
direct tax is not bringing in as much as the
Treasury was hoping for. The 1,000 or so
hedge fund mangers who have quit the UK
have left behind a £500m-£1bn black hole
in the numbers; hiking capital gains tax
may also have backfired.
Just as ominously, the breakdown of cen-
tral government expenditure shows inter-
est payments shot up to £2.3bn in
September, from £912m a year earlier - an
increase of 155 per cent.
So Osborne’s determination not to shy
away from the challenge of implementing
a dramatic reduction in the state’s share of
the UK economy is to be welcomed – and
was indeed broadly given the thumbs up by
the City. The coalition’s credibility as a
responsible government with a firm grip
on the public finances was reinforced yes-
terday; however, some of the details turned
out to be a bit murky, especially the emer-
gence of vicious £1bn green stealth tax on
business involving carbon credits, which
rightly angered many. At times, the review
– and especially Osborne’s speech – remind-
ed one of Gordon Brown’s statistical
sleights of hand, though at least now all of
the published documents have been audit-
ed by Robert Chote’s independent Office
for Budget Responsibility.
It turns out that total spending will fall,
in real terms, by 3.3 per cent by 2014-15, less
than the 3.6 per cent promised at the emer-
gency budget. The difference is that an
extra £2bn will be spent on capital projects
(and thus an extra £2bn borrowed); this
slight loosening of fiscal policy won’t derail
Osborne’s target, which is to eliminate the
structural deficit on current spending.
What has changed much more dramatical-
ly is the composition of the cuts, which
now involve reducing welfare by a further
£7bn, on top of the £11bn announced in
June, in return for cutting departmental
spending by substantially less.
While cash spending goes up every year,
it will do so at a slower rate than inflation,
which means that total expenditure will
fall in real terms. By way of a benchmark,
since 1970, total real spending has only fall-
en in five years. One of Osborne’s long-term
challenge will therefore be to actually deliv-
er on his real term cuts against the massive
opposition of the public sector, unions and
large swathes of the public. It is a historic
mission.
In real terms, the total cuts are worth
£23.3bn a year by 2014-15. But while that is
the number economists and financial mar-
kets care about – and is clearly too low to
derail the economy, let alone push it into a
double-dip, as some critics claim – this is
not the figure that matters when it comes
to gauging the impact on the public. The
surge in interest payments will continue to
gobble up a much larger share of the over-
all public sector spending cake, meaning
that the squeeze to government depart-
ments and welfare is much larger than the
headline figures suggest.
The real cut to government departments
will hit £42.2bn a year by 2014-15, or rough-
ly 10 per cent; while much less than previ-
ously feared, this will hurt a lot of people.
Many of the reforms to the welfare system –
an additional cut of around £18bn a year in
real terms by 2014-15 – will also have a sub-
stantial impact, on the middle classes as
well as on the poor. But it is a shame that
the debate is being confused by the coali-
tion’s obsession with the idea that it has
saved much more than that; its figure of
£81bn doesn’t really exist or at least doesn’t
describe “cuts” as ordinary mortals would
understand them. It is derived from a base-
line which assumes continuous growth in
welfare payments; it also includes a £10bn
“cut” from lower interest payments caused
by the coalition’s prudence. It is strange
that the coalition seems intent on deliber-
ately exaggerating the scale of its own cuts.
Public spending will drop from 47.7 per
cent of GDP in 2009-10 and 47.3 per cent in
2010-11 (on the Treasury’s figures) to 41.0
per cent of GDP in 2014-15. As Investec
points out, Osborne’s planned reduction in
the budget deficit is of a similar order of
magnitude to the 8.3 percentage point
improvement seen during John Major’s fis-
cal consolidation of the early 1990s (a
deficit of 7.7 per cent in 1993-94 became a
surplus of 0.5 per cent in 1998-99). However,
this occurred at a time when the economy
was growing by 3.5 per cent per annum,
compared with the OBR’s forecast of an
average 2.5 per cent growth looking ahead.
This shows the magnitude of the task fac-
CITYA.M. 21 OCTOBER 2010
Chief Secretary to the ing Osborne; it is always easier to cut a nominal terms to 2014/15. Bizarre.
Treasury Danny deficit when the economy is booming. The pain across the public sector will be
Alexander (left) with The Institute for Fiscal Studies calculates severe, with a net 490,000 state sector jobs
George Osborne that the revised plans imply the deepest six- being abolished over the next four years,
yesterday year period of cuts to public services spend- albeit mostly through vacancies not being
Picture: GETTY ing (defined as all expenditure minus debt filled rather than redundancies. Some
and welfare payments) since the six years believe that an additional 500,000 private
starting in April 1976. A few months ago, it sector jobs could also be lost among con-
seemed that these cuts would have been tractors and others. But the other side of
significantly deeper – the sharpest, in fact, the coin is that OBR believes that private
since the Second World War, a comparison sector jobs will rise by a net 1.5m during
which Labour wrongly continued to use the same time.
yesterday. This is an important shift, psy- All in all, this was a courageous spending
chologically as well as in terms of what the review from Osborne, who was right to
majority of the public will experience. mostly stick to his tough approach. There
Within governments, the cuts are very were the odd lapses, especially the £1bn tax
uneven: to offer some protection to spend- hike on business and the absence of any
ing on schools, hospitals and defence, the new pro-growth policies other than the
axe is to fall hard on higher education preservation of spending on Crossrail.
teaching, social housing, environment, But it is clear that the coalition is serious
food and rural affairs, local government about dragging Britain out of our fiscal
and justice. Weirdly, foreign aid will reach morass. Its next challenge will be to hold its
record levels. The plans also assume no nerve as opposition and protests begin to
increase in the EU budget until 2013/14, mount.
then a massive rise of 24 per cent (£2bn) in allister.heath@cityam.com
ANALYSIS l Total Departmental Expenditure Limits, 2014 - 2015
DWP BIS Defence Education NHS (Health)
£7.8 £14.6bn £33.5bn £57.2bn £114.4bn
Justice Wales
£7.3 £14.6bn
Transport International
£12bn Development
£11.5bn
Home Office Northern
Local
£8.3 Ireland Government
£10.3bn £22.9bn
Other spending Scotland
£26.9bn £27.7bn
Source: Spending Review 2010, Table A.9 Total Departmental Expenditure Limits. Total Departmental Expenditure is the sum
of Resource DEL (excluding depeciation) and CEDL.
1. Other spending comprises: Energy and Climate change, Special Reserve, HMRC, Communities, Reserve, EFRA,
Single Intelligence Account, Foreign Office, Small and Independent Bodies, DCMS, Law Officer’s Departments, Cabinet Office,
HM Treasury, Olympics
CITYA.M. 21 OCTOBER 2010
A three-way
split sharpens
MPC tensions
▲
UK ECONOMY
BY JESSICA MEAD
A RARE three-way split has emerged
among the members of the Bank of
England’s Monetary Policy
Committee (MPC), which earlier this
month voted to hold rates at 0.5 per
cent and asset purchases at £200bn.
Andrew Sentance stuck to his hawk-
ish call of a rise in rates of 0.25 per
cent while dove Adam Posen voted for
a £50bn extension of quantitative eas-
ing, as expected. The remaining seven
members voted to maintain the status
quo, but admitted the near-term risks
to inflation were higher than previ-
ously expected. Some of those voting
to keep policy on hold felt that there
was a growing chance of more stimu-
lus being needed, but that “the evi-
dence was not sufficiently compelling
to imply that such a course of action
was necessary at present”.
Sentance reiterated his arguments
that it was appropriate to withdraw
some of the exceptional monetary
stimulus given the strong momen-
tum of growth in the first half of the
year and that the MPC risked losing its
inflation-fighting credibility.
In contrast, Posen believes the spare
capacity in the economy is sufficiently
large that monetary policy could be
used to stimulate growth without an
undesirable increase in underlying
inflationary pressures.
City economists were unsurprised
by the three-way split – the sixth since
the MPC gained independence in 1997
– and many suggested that the min-
utes pointed to more QE, perhaps as
early as next month, if the Bank feels
looser monetary policy will offset
tighter fiscal policy.
“It could happen as early as the
November MPC meeting if the third-
quarter GDP data show only weak
growth and other data and survey evi-
dence point to a poor start to the
fourth quarter,” said Howard Archer
at IHS Global Insight, but added that
he suspected most MPC members
would prefer to hold fire for now.
News 5
HOW MPC VOTED ON POLICY IN OCTOBER
Takeover Panel
Mervyn King Paul Tucker Andrew Sentance
poised to reject
Cadbury Law
M&A
▲
THE Takeover Panel is today set to
+0.25% reject the most extreme changes to
the takeover regime which were
mooted in the wake of Kraft’s acquisi-
tion of Cadbury, as it concludes a
Spencer Dale Charles Bean David Miles sweeping investigation into the way
large M&A deals are governed.
The Panel is likely to shy away from
the most radical proposals first put
forward by Cadbury chairman Roger
Carr earlier this year, according to Sky
News. These included increasing the
acceptance threshold for acquisitions
and disenfranchising shares held by
short-term investors.
Carr was the first to suggest an
inquiry into the current Takeover
Code, focusing on increasing the
threshold above the current 50 per
cent-plus-one-share level and denying
Adam Posen Paul Fisher Martin Weale investors voting rights if they bought
shares within the offer period.
Instead, the Panel is expected to
plump for a watered-down set of rule
changes, including triggering a put-
up-or-shut-up deadline much earlier
in the bid process to prevent
takeovers dragging on for long peri-
ods; reducing the new shareholder
disclosure threshold to 0.5 per cent of
company shares during a bid, rather
than the current 1 per cent; and forc-
£+50bn QE ing companies to disclose the fees
being paid to advisers.
CITYA.M. 21 OCTOBER 2010 News 7

Morgan Stanley slumps

▲

BANKING
BY VICTORIA BATES
MORGAN Stanley’s chief executive
James Gorman yesterday admitted he
was “not satisfied” with the bank’s
performance in the third quarter,
when it swung into the red due to a
poor trading environment and a write-
down on the planned disposal of casi-
no operator Revel Entertainment.
Morgan Stanley posted a net loss of
$0.07 per share, compared with net
income of $0.38 per share in the third
quarter of 2009, after taking a $229m
hit on the disposal of Revel.
Income from continuing opera-
tions fell by two thirds to $313m,
while net revenues came in at $6.8bn
for the quarter – a fifth below the
$8.5bn the bank raked in a year ago.
Morgan Stanley said its institution-
al securities arm had faltered over the
period due to a slump in Wall Street
activity, with revenues at the division
almost halving since last year to
$2.89bn. After bringing in $1.34bn of
pre-tax income last year, profits at the
division were all but wiped out to
$240m in the third quarter of 2010.
The bank’s staff compensation pot
for the quarter fell by a quarter due to
the poor performance, falling from
$4.9bn in 2009 to just $3.7bn this year.
The decline “primarily reflected lower
compensation costs in institutional
securities”, the bank said.
Wealth management revenues
remained broadly flat from last year
at $3.1bn, while asset management
performed better, swinging into the
black on revenues that almost dou-
bled to $802m.
“Although we continued to make
progress across some key businesses,
our results in aggregate clearly do not James Gorman is
reflect the true potential of Morgan not satisfied with
Stanley’s global client franchise and I Morgan Stanley’s
am not satisfied with our overall per- performance
formance,” said Gorman, who took Picture: GETTY
over from John Mack in January.

Malcolm Calvert drops appeal

against insider dealing conviction
released from Ford prison thanks to
▲

ENFORCEMENT
MALCOLM Calvert, the ex-Cazenove
partner released from jail earlier this
month after serving just a third of his
21-month sentence for insider deal-
ing, has dropped his appeal against
the High Court’s conviction, bringing
to a close the most high-profile
enforcement case in the City regula-
tor’s history.
Calvert, known as “Streaky”, was
good behaviour after serving less
than seven months of his sentence,
though he continues to have to wear
an electronic tagging device.
At the time of his release, appeals
against his sentence were still pend-
ing, but they have now been dropped,
meaning that he will have to pay
£50,000 towards the Financial
Services Authority’s (FSA) legal costs
and a fine of almost £475,000.

BlackRock says it has stabilised

as it beats earnings predictions
September, compared to $317m a year
▲

BANKING
BLACKROCK, the world’s largest asset
manager, posted sharply better-than-
expected quarterly earnings last
night, as it attracted more assets from
clients and earned stronger fees on
the back of a stock market rally in
September.
New York-based BlackRock said
earnings rose to $551m (£347.9m) dur-
ing the three months to the end of
earlier, beating estimates.
However, shares dipped 2.7 per cent
to $169.94 in US trading yesterday.
Investors had hoped to see strong
inflows from BlackRock, which has
been trying to stem an exit of client
money after the $13.5bn acquisition
of Barclays Global Investors last year.
“We believe we’re in the stabilisa-
tion phase,” chief executive Laurence
Fink told reporters yesterday.

WHAT THE OTHER PAPERS SAY THIS MORNING

TRICHET OPPOSES DEAL IN EU BUDGET BATTLE OF BA OVER BY CHRISTMAS

Jean-Claude Trichet, president of the
European Central Bank, has refused to
endorse the full package of Eurozone
sanctions decided by European Union
finance ministers this week. The reve-
lation came amid mounting criticism
in Germany of a compromise deal that
Angela Merkel, the chancellor, agreed
with Nicolas Sarkozy, the French pres-
ident, that watered down measures to
enforce strict debt and deficit control.
FED EYES FLEXIBLE STIMULUS
Officials at the US Federal Reserve
are considering a fresh monetary
stimulus that would combine guid-
ance on the provisional scale of a
new programme and a time frame
for buying assets with the flexibility
to adjust its size at regular meetings.
Although no decision has been made
to launch a new round of quantita-
tive easing, Fed officials are weigh-
ing an approach that allows more
discretionary meeting-by-meeting
decisions than the unconditional
“shock and awe” stimulus it
launched during the depths of the
crisis in 2008 and 2009.
British Airways has offered its cabin
crew a new peace deal that potentially
removes the threat of strikes this
Christmas and end a bitter dispute.
Unite has agreed to put the offer to
BA’s 11,000 cabin crew after the union
secured concessions from the airline
on the reinstatement of staff travel
perks. If crew vote to accept the offer
in a ballot, it will end an industrial dis-
pute that has dragged on for 18
months. BA’s cabin crew have conduct-
ed a series of strikes this year
Guy Hands was accused of suing
Citigroup over music group EMI only
to protect his fortune and the repu-
tation of Terra Firma, his private
equity firm. In the third day of the
trial in New York, the UK financier
was presented with the transcript of
a speech he gave to EMI employees in
September 2007 in which he told
them “60 per cent to 70 per cent of
my wealth is dependent on how EMI
does”.
 Exc
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CITYA.M. 21 OCTOBER 2010
Uniq’s unique
escape trick
FOOD AND DRINK
▲
BY STEVE DINNEEN
CONVENIENCE food maker Uniq has
devised a unique way of resolving its
crippling pension deficit – by effec-
tively selling itself to its pension
trustees.
The firm, which supplies sandwich-
es to Marks & Spencer, is waiting on
regulatory clearance to finalise a
deficit for equity swap that will sign
over 90 per cent of the firm to the
pension scheme.
Existing shareholders will be left
holding the remaining 10 per cent of
the shares. The deal looks set to pre-
vent a winding-up order that looked
almost certain to take effect after the
firm’s pension deficit spiralled to
£436m. Pensions expert Fraser Smart,
managing director of Buck
Consultants, told City A.M. the deal is a
temporary respite but will raise inter-
esting regulatory questions.
He said: “From the company’s per-
Mortgage lending is down 7 per cent
PROPERTY
▲
BY JESSICA MEAD
GROSS mortgage lending fell to just
£12bn last month, which was the low-
est September total for a decade, fig-
ures from the Council of Mortgage
Lenders (CML) revealed yesterday.
This was 7 per cent lower on
September 2009 when lending was
£12.9bn and 1 per cent lower on the
previous month. The September 2010
Shibby loses out as Sugar’s
Apprentices meet at dawn
APPRENTICE REVIEW
GRAEME ALLISTER
J
UST how do the Apprentices
manage to be so peppy at 6am?
Could it be down to the little
motivational chats they give
themselves as they stare into the mir-
ror? “Looking good”, “bring it on”,
“raring to go” they intoned. Suitably
pumped up, they met their master in
the genteel surroundings of Fortnum
& Mason, Simply the Best presumably
playing in their heads.
It was another food task, this time
making and flogging bread and
muffins. Lord Sugar talked of “turn-
ing flour into serious dough”. It’s a
mark of how badly the contestants
want to win that some of them man-
aged a smile.
After the macho posturing and cat
spective this deal is likely to be attrac-
tive since it can focus on running its
business rather than the distraction
that the pension scheme has been in
recent years. However owning 90 per
cent of the business means the
trustees have control which is likely to
lead to some interesting governance
issues around conflicts of interest.”
Uniq, whose chief executive is
Geoff Eaton, also reported its third-
quarter operating profit was slightly
higher than expected, sending its
shares up seven per cent.
ANALYSIS l Uniq
7.80
12 p 20 Oct
10
8 Morgon both worked on the disposal
6 drop in demand in the UK police market.
16 Jul 13 Aug 3 Sep 23 Sep
figure was still £2bn above the record
low in September 2000 when mort-
gage lending totalled just £10bn.
In the third quarter, gross lending
was estimated to be £37.4bn, 9 per
cent up on the second quarter but
still 4 per cent down on the third
quarter of 2009.
CML director general Michael
Coogan said: “Lending volumes do
not seem likely to increase substan-
tially towards the end of the year.”
fighting of previous weeks, the boys
and girls were mixed up. Apollo chose
surgeon (and sometime comedian
and impressionist) Dr Shibby as their
leader.
As a self-confessed “business vir-
gin”, he was keen to be taken serious-
ly: “I’m passionate and I’ll smack your
bums if I have to”. Talk about bedside
manner.
Apollo went for Melissa. Given that
her background is food, she seemed a
good choice but she lacked a little
something. Basic numeracy, per-
haps.
Pitching to the catering
team at the Park Plaza
Riverfront, Melissa kept her
client waiting for 15 min-
utes as she pecked desperate-
ly at a pocket calculator. All
they wanted to know was
how much each bread roll
would cost. Eventually she set-
tled on a figure: £1.82.
On the other team, Paloma
was much more accom-
modating. Ignoring
poor Shibby, she
offered the same
hotel anything
News 9
NEWS | IN BRIEF
Rolet to speak out on regulation
London Stock Exchange chief executive
Xavier Rolet will appear next week
before the Treasury select committee, to
give evidence on its inquiry into financial
regulation in the UK. Rolet has been
vocal in his opposition to new proposals
to split the regulation of the primary
and secondary capital raising markets,
under which the former will pass to the
Financial Reporting Council and the lat-
ter to the new Consumer Protection and
Markets Authority. Rolet believes that
Geoff Eaton, the rules could “severely” impact
Uniq’s chief London’s competitiveness. He will be
executive joined as a witness before the commit-
tee of MPs by Jacques Aigrain, chair-
man of clearing house LCH.Clearnet.
Investec also helped sift through Body armour firm goes under
the intricacies of the deal to set up the Shieldtech, which supplies body armour
Deficit for equity swap. to soldiers in Afghanistan and 25 police
CORPORATE ADVISER The complex negotiations also forces around the UK has gone into
required specialist pensions advice, administration. More than 60 staff at
LAZARD which was provided by occupational the firm and its subsidiary Aegis
pensions experts at Hymans Engineering have been made redundant
Robertson. BDO Pensions Advisory after RSM Tenon Recovery was brought
Advising Uniq on the unusual deal were also involved in helping strike the in as administrators. Gareth Roberts,
were bankers from Lazard. The bank’s deal from the pensions side. one of the joint administrators, said all
corporate advisory arm has a long Slaughter & May was the legal of Shieldtech's contracts are still intact
standing relationship with Uniq. adviser on the deal. but “non-performing” as they seek a
Bankers Peter Kiernan and Virginie Newly-merged financial PR firm potential buyer or investor in the next
MHP Communications is handling the seven to 10 days. The Warrington-based
of Uniq’s French spreads business for public relations account for the chilled company, which previously employed 74
€370m (£325m) in 2006. food specialist. staff, blamed its financial troubles on a
@
13 Oct
He added: “Funding pressures on
lenders remain, and the practical
implications of government and pub-
lic spending cuts are beginning to
emerge, with a resulting impact on
consumer confidence.”
@
Economists said that the weak
mortgage lending figures reflected
an ongoing deterioration in activity
in the UK housing market and only
reinforced the belief that house
prices will fall further.
they wanted, ignoring the fact that
they’d actually have to make them at
@
some point.
“We can absolutely guarantee that
we will meet that deal tomorrow
morning” she insisted after securing
an order for 1,000 rolls. They man-
aged to make 16.
Having lost the task, Shibby took
Paloma into the boardroom and Lord
Sugar’s attempts at creating harmony
by mixing the sexes fell apart com-
pletely. “We’re on different wave-
lengths”, ventured Shibby. “Clearly –
I’m a business woman and you’re a
joke” retorted Paloma.
Also pleading her case was
Sandeesh. In fairness, making
muffins is a bit beneath her:
according to her application
she’s planning to propel Lord
Sugar to world domination.
Perhaps savouring the
thought of making the planet
his boardroom, Lord Sugar kept
her and dispensed with
Shibby. And so the MORE NEWS
doctor left the
building, his
ONLINE
(business) vir- www.cityam.com
ginity intact.
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CITYA.M. 21 OCTOBER 2010 News 11

UK government set to fight

EU maternity leave proposals
France are also opposed to the plans. up some or all of the tab for the rise,

▲
EMPLOYMENT
BY VICTORIA BATES
BUSINESS leaders and the govern-
ment yesterday vowed to fight contro-
versial draft EU proposals to extend
maternity leave to a mandatory 20
weeks at full pay.
Ministers said the UK would “work
hard to oppose the plans”, which
have been approved by MEPs but not
yet by EU governments. Germany and
A spokesman for the Department
for Business said government esti-
mates put the potential cost of the
measure at over £2bn per year – twice
the current spend on maternity leave
– “at a time when economies across
the EU can least afford an increase”.
Minimum maternity leave in the
EU is currently set at 14 weeks.
Business leaders also warned that
the state may force employers to pick
hitting small firms which are already
struggling in the wake of the crisis.
The Institute of Directors said:
“Some large businesses won’t mind
the change because they are already
gold-plating statutory maternity pay
by making their own additional pay-
ments. But the effect on small firms,
almost none of which can afford to
supplement statutory maternity pay,
would be very severe.”

Home Retail’s Terry Duddy

Home Retail
hit as Argos
sales dented
▲

RETAIL a position of operational and financial

BY JOHN DUNNE
HOME Retail Group yesterday said that
cash-strapped customers were aban-
doning its cut price retailer Argos as
sales dopped.
The company, which also owns
Homebase, revealed that its overall
profit had dropped 12 per cent to
£103m in the six months to 28 August.
A plunge in demand for furniture,
video games and televisions con-
tributed to the £14m drop. Like-for-like
sales at Argos fell 6.5 per cent and were
down 0.8 per cent at Homebase. Total
sales fell three per cent to £2.7bn
Homebase escaped steep falls as
improved ranges of garden furniture
and BBQs cited as reasons for the slow-
er decline.
Terry Duddy, Home Retail’s chief
executive, said that £39m of cost-cut-
ting had contributed to a slower profit
decline than otherwise would have
been achieved, and remained positive
about the busy Christmas period.
He said: “We are about to enter our
busiest trading period, and whilst we
are planning cautiously, we do so from
strength.”
The company said that the Argos
iPhone app has been downloaded
more than 850,000 times since its
launch in May and now represents
around one per cent of sales. Internet
sales at Homebase, including its new
“Reserve & Collect” service, grew by 40
per cent in the first half of the finan-
cial year and represents four per cent
of sales. Home Retail Group is now
pressing ahead with a number of store
revamps, with plans to complete refur-
bishment of over 100 Argos stores in
time for Christmas, the group’s busiest
trading period.
ANALYSIS l Home Retail Group
p
240
214.70
20 Oct
230
220
210
26 Jul 13 Aug 3 Sep 23 Sep 13 Oct

The austerity measures have already

hit the lower end of the high street
Home Retail Group attempted to
put a shine on some fairly grim – if
expected – figures yesterday by
claiming its Argos iPhone app had
been a storming success.
However, the truth is that sales at
its cut price chain dropped by six
per cent.
This is made all the more worry-
ing by the fact that cash-strapped
customers usually trade down and
surely no-frills Argos should be ben-
efiting from that.
Nevertheless Home Retail has a
relatively strong balance sheet with
cash forecast at over £300m project-
ed at March 2011, and strong cash-
flow, which some analysts believe
should enable further share buy-
backs and could also be attractive to
a private equity buyer.
Both Investec and Seymour Pierce
view the stock as a hold because of
the long term value in the compa-
ny – a position which seems sensi-
ble amid the economic tumult.
BOTTOMLINE
Analysis by John Dunne
 12 News CITYA.M. 21 OCTOBER 2010

Pre-nups get
legal status
LEGAL lucrative new revenue stream for
▲

BY STEVE DINNEEN family lawyers, with Stephen Foster,

THE AGE of the pre-nup has finally
arrived in the UK.
The Supreme Court yesterday
upheld a landmark ruling that gives
credence to prenuptial agreements in
England and Wales.
The case examined whether the pre-
marriage pact between German
heiress Katrin Radmacher and
Frenchman Nicolas Granatino should
be considered as part of their divorce
settlement.
The ruling yesterday is the first time
such an agreement has been given
legal status. However, in cases where
the pre-nup is considered unfair a
judge can maintain the right to waive
the contract.
The ruling means Granatino, who
has two daughters with the £100m
heiress, will only receive £1m from his
initial £5.8m reward.
head of divorce at Stewarts Law, say-
ing pre-nups could now become the
norm among independently wealthy
couples.
He said: “The Supreme Court have
created a rich man’s, or in the case of
Mrs Radmacher, rich woman’s, charter
to drive a hard bargain prior to mar-
riage. The trickle of pre-nuptial agree-
ments will now become a torrent.”
Joe Vaitilingam, partner at specialist
City divorce law firm Hughes Fowler
Carruthers, welcomed the decision,
calling it “a modern judgment for a
modern age” and adding it should
“deter gold diggers where the wealthy
are involved”.
City figures who will be wishing
they had been able to take advantage
of the ruling include Brian Myerson,
who was ordered to pay his ex-wife
Ingrid a staggering £11m, and Alan
Miller, whose ex Melissa pocketed a
FIONA Nicolas Granatino walked away from
SHACKLETON the Supreme Court yesterday knowing
he would be substantially poorer,
PAYNE HICKS although it wasn’t for lack of high-
BEACH powered legal advice.
On his side were the team from
Payne Hicks Beach, including Fiona
Shackleton, the partner at the firm
most fondly remembered for being
drenched by Heather Mills while she
German heiress
Katrin Radmacher
will only part with
£1m of her £100m
fortune.
Picture: GETTY
messy divorce from Sarah Ferguson.
She later also worked on Prince
Charles’ divorce from Diana.
She joined Payne Hicks Beach in
2001. She also represented former
Arsenal star Thierry Henry’s wife during
their divorce after the forward left for
Barcelona. Her famous quote that “a
courtroom is a barbaric venue in which
to pick over the carcass of a failed mar-

The decision is likely to open up a
@
cool £5m after three years of marriage. was representing Sir Paul McCartney.
Shackleton, nicknamed the “Steel
Magnolia” is one of the country’s lead-
ing family law solicitors. Among her
clients are Princes William and Harry.
However, she was most famous for
representing former Beatle McCartney
riage” has never rung truer than during
the protracted Radmacher case.
Also representing Granatino was the
man dubbed Britain’s top divorce
lawyer, Nicholas Mostyn QC.
He is famed for the £5m payout he
won for Melissa Miller, the wife of a

:USKZOSKYTGZ[XK and pop-queen Madonna during her

divorce from filmmaker Guy Ritchie.
City fund manager, after a marriage
lasting less than three years, in which

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before qualifying as a solicitor in 1980.
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of footballer Ray, a share of her hus-
band’s future earnings after arguing
.O\K_U[XYKRLZNKHKYZINGTIK partner at royal solicitor Farrer and Co.
Her first high profile case was repre-
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 The Capitalist
13
EDITED BY
VICTORIA BATES
GOT A STORY? EMAIL
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JP MORGAN “Dimon said

BOSS DIMON
WARNS ON
UK REGIME
MUCH has been made of rumours that JP
Morgan is to abandon plans to build itself
an all-singing, all-dancing new HQ in
Canary Wharf, with talk rife that the UK’s
punishing tax regime and regulatory
changes are behind the bank’s reluctance
to commit.
And in a little-noticed interview aside
recently, JP Morgan’s chief executive
Jamie Dimon gave the clearest hint yet
that the UK’s tax and regulatory stance
has affected its attitude to doing business
in the country.
Dimon told Fortune magazine that the
future location of its UK HQ is still under
negotiation and didn’t have anything to
do with bonus taxes or balance sheet
levies, insisting that the bank “will always
be in the UK”. But he did, with character-
istic American honesty, go further, a thin-
ly-veiled warning over the bank’s attitude
to Blighty.
“I thought the whole tax issue was
gross and unfair,” he said. “But it did focus
us on the fact we have a lot of eggs in that
one basket [the UK], and that maybe we
need to be thinking a little more about
geographic diversification. I can’t tell you
what will happen, because we are negoti-
Dimon issued a warning over the scope of the bank’s UK activities
ating. But we will take the best deal, pure
and simple.”
First Barclays and HSBC, and now the
US banks are following suit with the
threats. Time for a wake-up call?
GHOSTLY GOINGS-ON
Those keen for a Hallowe’en thrill could
do worse than to tip up on the afternoon
of Sunday 31 October at the Picturehouse
cinemas in Greenwich or Clapham, which
are showing a film about the ghost-ridden
nooks and crannies of London.
“Haunted London”, produced by film
company Timereel and written by its
founder Andrew Gray, flits from appari-
tions on the Underground to phantoms at
tax issues
had focused
JP Morgan
on whether
it has too
many of its
eggs in the
UK basket”
Pictures: REUTERS, GETTY
the Tower of London, and touches on the
City on the way.
Gray tells me one of the tales revolves
around the Bank of England, which is
haunted by an apparition known as the
“Black Nun”. The story goes that Philip
Whitehead, a Bank employee in the early
19th Century, was hanged for forging
cheques – and after his sudden disappear-
ance, his sister Sarah turned up at the Old
Lady of Threadneedle Street to enquire
about his whereabouts.
Upon being told the sad news, the
shock and grief sent her half mad, and for
every day of the rest of her life, Sarah
would return to the Bank to ask where her
brother was. After a 25-year vigil, she died
and was buried in the old churchyard of
St Christopher-le-Stocks, which later
became the Bank’s garden – and since
then, staff have seen her wandering along
the stone pathways from the gallery over-
looking the garden. Spooky stuff.
FASHION FORWARD
Forget savvy hedge fund short selling or
analyst crunch calls – one woman who
can really move stocks is Michelle Obama.
That’s right: according to New York
University professor David Yermack, talk-
ing to the latest edition of the Harvard
Business Review, the American First Lady
has a quite spectacular effect on the share
prices of the retailers whose clothes she
wears on public outings.
The distinguished professor has done
the maths – those companies, 29 in all,
have enjoyed an average boost of $14m
per appearance by Mrs Obama. That’s
far more than with the endorsement
of models, while the effect of fash-
ionista First Ladies such as the love-
ly Carla Bruni-Sarkozy pale in
comparison.

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 14 News
French police have been called in to clear protesters
Start-ups
growing
despite cuts
▲
ENTREPRENEURS
BY DONATA HUGGINS
THE PROSPECT of budget cuts have
not deterred entrepreneurs this
year with the number of start-ups in
the UK growing at its fastest rate
since 2007, according to the latest
Simply Business start-up index
released yesterday.
London experienced the fastest
growth at seven per cent, substan-
tially faster than the rest of the UK.
The upswing is due to growth in
the IT, management consultancy,
financial, legal and advertising
industries.
London saw particularly strong
growth in property-related indus-
tries with architects and property
service companies seeing a 77 per
cent and 31 per cent increase respec-
tively. These particular areas suf-
fered falls across the rest of the
country.
Small businesses are broadly in
favour of government cuts. The
Federation of Small Businesses has
found that 78 per cent of its mem-
bers are in favour.
While RSM Tenon’s entrepreneur
opinion survey shows that a sizable
minority of business owners are
optimistic about the effect of cuts
on their business – 11 per cent think
they will have a positive impact, and
a further 32 per cent are either
unsure or believe that they will have
no effect. Natalie Ellis, the entrepre-
neur behind Prestige Pet Products,
said budget cuts will not kill a
strong business idea.
Ellis said: “Now is a good time to
bring products to market. Once the
economy has turned around, busi-
nesses that have acted now could
find themselves ahead of the compe-
tition. Not to mention, you are prob-
ably safer going it alone than
leaving your fate in someone else’s
hands at the moment.”
CITY VIEWS: HAS THE CHANCELLOR GOT THE COMPREHENSIVE SPENDING REVIEW RIGHT?
AARON CUTMORE | TQ SERVICES
“I think people have got to
learn they can’t have what they
want when they want it. People
got used to just getting things
on credit. We had none
of these problems
in the past.”
Sarkozy calls in the cops
▲
EU ECONOMY
BY STEVE DINNEEN
FRENCH President Nicolas Sarkozy
yesterday moved to wrest control
back from strikers who have brought
the country to its knees.
He said yesterday he has ordered
police to clear access to fuel depots
after workers protesting about
Picture: GETTY changes to the retirement age
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“We know work needs to be
done to sort out the finances
and everybody needs to do
their bit, but I don’t think the
government has thought
this through properly.”
CITYA.M. 21 OCTOBER 2010
blocked access with human chains Transport minister Dominique
and piles of burning tyres. Bussereau added: “To get back to a
All 12 of the country’s refineries normal situation we need four to five
were forced to stop production alto- days.” Workers across France, from
gether and pathways for imported teachers to rail staff, are protesting
fuel were also blocked. Fuel was also against Sarkozy’s austerity measures,
stopped from reaching jets at some of including plans to raise the mini-
France’s biggest airports. mum retirement age and the age
Sarkozy said: “The disorder pro- from which a full pension will be
voked by those blockades produced paid by two years each to 62 and 67
numerous injustices.” respectively.
Stobart in
shock profit
warning
▲
LOGISTICS
BY HARRY BANKS
FREIGHT company Stobart Group has
cut its full-year profit forecast and
warned that government spending
cuts and tax rises could hit volumes
in 2011.
“We have slightly reduced our full-
year profit expectations as a result of
reduced spend by Network Rail and
increased overall finance costs. We
are also cautious that 2011 may see
volumes affected by the increase in
VAT rate and the government spend-
ing review,” said chief executive
Andrew Tinkler.
The company said customers were
demanding shorter lead times, as
hard-pressed retailers ordered fewer
items more often.
Tinkler said this was giving the
company less time to plan deliveries,
leading to a lower vehicle utilisation
rate.
But Stobart said in the longer term
it would benefit from the flexibility
of its business model, which uses its
Paul McCartney (‘Mike’s Brother’) by Sam Walsh © estate of Sam Walsh
own fleet and drivers, reducing the
need to rely on subcontractors, and a
pay-as-you-go system.
Ben Whawell, chief financial offi-
cer, said the company had not seen
much direct effect on volumes from
reduced government spending so far,
but that the size of the cuts expected
from the government spending
review might well have some impact.
Stobart reported a 38.7 per cent
jump in pre-tax profit in its first half
to August 31 to £15.4m, on revenue
from continuing operations up 11.7
per cent at £243.7m, with contract
wins from Tesco and A.G. Barr adding
volume and margin.
Shares in the company tumbled 13
per cent on the release of the state-
ment.
Killick says the statement led to
downgrades in forecasts by an average
of eight per cent.
Interviews by Matthew West
FIONA PAULI | FREELANCE DESIGNER
“We don’t really have a choice.
We do need to save more as a
society, but I don’t think the
retirement age should go up
and I don’t think benefits
should be cut.”
CITYA.M. 21 OCTOBER 2010 News 15

ANALYST VIEWS: HOW HAS SPORTS DIRECT PERFORMED? By Matthew West

DAVID BUIK | BGC PARTNERS KATE CALVERT | SEYMOUR PIERCE

Mike Ashley
heads Britain’s
biggest sports
“ Mike Ashley is incredibly market aware
when it comes to capitalising on opportunities
like the World Cup or other big sporting events,
and when it comes to knowing what will fly off
the shelves he has no peer in the realm. These
“ The business has performed in-line with
expectations and it is still on track to deliver full
year earnings of £195m after a £10m charge for
the bonus share scheme. We were forecasting full
year earnings of £190m and are increasing this to

” ”
retailer.
Picture: PA solid results are just an endorsement of £200m this morning, given the momen-
that ability. tum in the business.

Sports Direct MATTHEW MCEACHRAN | SINGER CAPITAL MARKETS

in good shape “ Overall the business is well placed although we are not changing out forecast. The company had a good first half

”
to the year and benefited from the World Cup but things have become a bit tougher since then. They are going to be pret-
ty cautious into next year but they will want to begin to gearing up for the Olympics and a successful 2012.
▲

RETAIL £105m, up £6m year-on-year.

BY MATTHEW WEST
SPORTS Direct, Britain’s largest sport
retailer, warned 2011 would be
extremely challenging for all retailers
as it delivered a trading update yester-
day.
The company, controlled by
Newcastle United football club owner
Mike Ashley, said group sales for the
nine weeks ending 26 September
were up 5.4 per cent to £295m com-
pared with £218m a year earlier.
Gross profit was also up 5.4 per cent
to £117m, up from £111m a year earli-
er. This followed increases of 8.8 per
cent and 17.8 per cent respectively in
the 13 weeks, which included the
sales surge from the World Cup.
Retail division sales for the same
period increased 6.9 per cent to
£264m compared with £247m for the
same period a year ago and retail
gross profit increased 6.1 per cent to
BEST OF THE BROKERS
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1,729.00
1,650
20 Oct
1,550
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1,350
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p
360 354.50
20 Oct
350
Dave Forsey, chief executive of
Sports Direct, said: “Following the
first quarter of our financial year
which included the World Cup tour-
Trade-in
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continuing strong underlying per-
formance across all our divisions.”
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results would be significantly above
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and that the board remained com-
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ANALYSIS l Schneider Electric SCHNEIDER ELECTRIC Tel: 0845 634 0350
€
105 101.05 S&P Equity Research has upgraded its rat-
20 Oct ing on Schneider Electric from “hold” to http://tottenhamcourtrd.sony.co.uk
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26 Jul 13 Aug 3 Sep 23 Sep 13 Oct

To appear in Best of the Brokers email your research to notes@cityam.com

 16 News
BHP Billiton
fails to impress
Canadian
province over
Potash bid
M&A
▲
BY HARRY BANKS
CANADA’S Saskatchewan province has
opposed BHP Billiton’s hostile bid for
Potash Corp – prompting the minering
giant to offer more concessions on tax
revenue to get the $39bn (£25bn) deal
approved.
Canadian officials have the final
decision on whether to approve the
deal and some analysts said the tough
line taken by Saskatchewan appeared
to be part of the negotiating process.
“I think it’s wrangling rather than
anything more serious. There’s a lot
that BHP is willing to do in order to
ensure that this deal is a success,” said
Evolution analyst Charles Kernot.
The Canadian province said talks
had broken down with BHP after the
miner failed to meet its demands.
BHP, the world’s biggest mining
company, offered Saskatchewan only a
fraction of the C$3bn (£1.8bn) over 10
years that the province is seeking to
make up for expected revenue losses,
the province said in a statement.
Saskatchewan will now give the bid
an unfavourable review later this
week, a source close to the matter said,
possibly leading to the Canadian gov-
ernment quashing the deal.
“BHP Billiton is confident it can
address this concern and, in this
regard, is prepared to make commit-
ments which go beyond the require-
ments of prevailing Canadian
legislation that should effectively
address the tax loss concerns of the
province,” the miner said.
ANALYSIS l BHP Billiton
2300 p 2,192.50
20 Oct
2200
2100
2000
1900
1800
20 Jul 11 Aug 26 Aug 19 Sep 9 Oct
© 2010 McDonald’s.
Rio Tinto to
invest $3bn
in expansion
MINING
▲
BY JOHN DUNNE
GLOBAL miner Rio Tinto approved a
$3.1bn (£1.9bn) iron ore expansion
yesterday, staking a claim to become
the world’s top producer and defying
industry concerns over a new
Australian mining tax.
Iron ore miners are ramping up
production to meet booming
demand from Asia, with most of the
growth in output set to come from
Australia where two of the world’s
biggest producers – Rio Tinto and
BHP Billiton – dominate.
Rio Tinto’s move to boost output by
28 per cent follows this week’s demise
of a planned joint venture with BHP
Billiton in northwest Australia’s
Pilbara region aimed at saving the
companies $10bn in costs.
“Rio and BHP are obviously not tak-
ing much notice of the mining tax if
they are planning all these invest-
ments in iron ore,” said a source.
“BHP Billiton unveiled a six per
cent rise in quarterly iron ore output
Dana chief quits after KNOC takeover
OIL
▲
BY JOHN DUNNE
THE chief executive and founder of
Dana Petroleum, Tom Cross, has
resigned after the hostile takeover by
the South Korean firm KNOC.
Cross had opposed the takeover bid
by South Korea’s state oil company
but told City A.M. yesterday that the
final deal was a “win win” for both
parties.
He walked away with an estimated
£36m from the sale of Dana, which
he set up in 1994 to specialise in
NOW SERVING FULL BEAN ESPRESSO.
FOR PEOPLE WHO LOVE GOOD COFFEE.
CITYA.M. 21 OCTOBER 2010
today [Wednesday] and is also plan-
ning to expand its Australian iron ore
operations to meet booming Asian
demand.”
Rio Tinto’s announcement, com-
bined with BHP Billiton’s production
surge, eclipsed news reports yesterday
that suggested they and other miners
risked being double-taxed under
Australia’s proposed 30 per cent tax
on iron ore and coal.
Rio Tinto, BHP Billiton and London-
listed Xstrata – the big three of
Australian iron ore and coal – accuse
Canberra of reneging on a guarantee
to refund all of the money the miners
pay state governments in the form of
royalties, newspapers said. Without
that guarantee, they could effectively
be double-taxed.
But neither industry analysts nor
political experts believe the issue will
reignite the tax issue and hurt min- 220m tonnes. It plans to boost it fur- plans to take that to 155m tonnes.
ing investment, and pointed to Rio ther to 333m tonnes, which could BHP Billiton, the world’s biggest
Tinto’s expansion plan as evidence. bring it alongside Brazil’s Vale now miner said it was now running most
Rio Tinto’s $3.1bn plan would take the world’s top producer. of its assets at full capacity as suppli-
its annual Australian production to BHP Billiton is running at around ers struggle to keep pace with the
283m tonnes a year in 2013 from 125m tonnes a year, with near-term global appetite for industrial raw
North Sea oil projects. hand to help out or give any advice deals. There is a particular expertise
KNOC took control of the Aberdeen after I have left – we have a very good in the North Sea and Asia.”
oil explorer for around £1.7bn last relationship.” He likened Parkmead Cross, also chairman of BRINDEX,
month and several other board mem- to Dana in the early days and said he the Association of British
bers have already moved on. was expecting great things. “We have Independent Oil Companies, takes
Cross will take over as executive some great contacts at Parkmead and over the reins at Parkmead after the
chairman of the Parkmead Group – a I am looking forward to doing some retirement of non-executive director
an investment company specialising Clive Goodall.
in the oil industry – from 9 Dana founder Tom Cross He added: “I am already a non exec-
November. insists he leaves on good utive director at Parkmead and I am
He said: “I am leaving Dana in very terms with KNOC who looking forward to getting stuck into
good hands with KNOC. They are an the day-to-day operation.”
excellent company and in the end launched a hostile Parkmead, based in Aberdeen is an
paid the right price. takeover of the company expert on exploration projects in the
“I have told them that I will be on North Sea.
TM
 CITYA.M. 21 OCTOBER 2010
Both Rio Tinto and
Xstrata are
increasing their
spending to keep
up with the world-
wide demand for
raw materials.
materials. year, boosting the group’s overall fer-
Meanwhile, miner Xstrata said yes- rochrome capacity to over 2.3m
terday it would invest a further tonnes. The project is due to reduce
$710m to boost its production in overall costs of ferrochrome produc-
South Africa. Under the expansion tion by around six per cent, Xstrata
project, a new smelter will be built said. Ferrochrome is a key component
with a capacity of 360,000 tonnes per in stainless steel.
CITY MOVES | WHO’S SWITCHING JOBS
RBC Capital Markets
The investment bank, part of the Royal Bank of
Canada group, has hired Jonathan Guy and Tim
Huff as directors in its equity research team,
with a focus on mining.
Huff, pictured, joins RBC with over 17 years
of experience, most recently gained at the
Royal Bank of Scotland. Prior to that, he
worked at Cargill, Citigroup and Credit Suisse.
Guy joins from Investec, where he covered
UK mid and small-cap mining companies.
To appear in CITYMOVES please email your career
updates and pictures to citymoves@cityam.com SPECIALISTS IN GLOBAL PROFESSIONAL RECRUITMENT
THE FULL BEAN RANGE.
TM
© 2010 McDonald’s. FOR PEOPLE WHO LOVE GOOD COFFEE.
Regal looks for new
partners in Ukraine
INDUSTRIAL
▲
BY MATTHEW WEST
REGAL Petroleum could seek a larger
partner to help tackle substantial
problems with a number of gas wells
it has drilled in the Ukraine after
admitting yesterday it had suspended
drilling while it carried out a strate-
gic review.
Regal said that two wells in the
Ukraine had reached their target
depth on 29 September. However, hav-
ing drilled to the target depth Regal
has been unable to retrieve the drill
Edited by Victoria Bates
Merrill Lynch
The bank has hired Richard Anooshian
as a financial adviser in its wealth man-
agement division, focusing on Middle
Eastern high net worth and ultra high
net worth individuals.
Anooshian joins from HSBC Private
Bank, where he was co-head of the
Saudi Arabia team and team director
for the Middle East and North Africa
operations. Prior to that, he worked at
Arner Bank in Switzerland and spent
bit on its SV-69 well due to “hole sta-
bility problems and equipment fail-
ures.” Chief executive David Greer
stood down the following day with-
out giving clear reasons for doing so,
while former chief executive Frank
Timis cut his stake in the company
from around six per cent to 3.93 per
cent on 15 October.
The Aim-listed oil and gas group
could now seek a deal with a compa-
ny with “the financial muscle and
technical expertise” to complete the
job it started in the Ukraine, a person
familiar with the company’s position
in association with
26 years at JP Morgan in international
capital markets and private banking.
HSBC Private Bank
The bank has appointed a new sales
quality review team, headed by David
Woodriffe from Barclays Wealth.
Woodriffe joins HSBC at the begin-
ning of November. He was previously
head of risk and business assurance at
Barclays Wealth, and prior to that was
a divisional training and competence
manager at Abbey.
News 17
ANALYSIS l Regal Petroleum
p 14.75
20 Oct
35
25
15
20 Jul 11 Aug 26 Aug 19 Sep 9 Oct
Non-executive director Alastair Graham
(left) will carry out the review following
the departure of chief executive David
Greer.
told City A.M. Two potential partners
could be Shell and BP both of which
already have substantial interests in
the region.
One of Regal’s non-executive direc-
tors is Alastair Graham, a former sen-
ior BP executive with over 29 years
experience of the oil and gas indus-
try. Graham has been given responsi-
bility for carrying out the strategic
review, which is expected to be com-
pleted in a matter of weeks.
Meanwhile, Shell has been linked
with a deal with Regal in the past.
Most recently two years ago.
Baring Asset Management
The investment manager has opened an
office in Dubai in response to growing
demand from the Middle East, headed
by Nisarg Trivedi.
Trivedi joins from the Bank Muscat
Asset Management sales team, where
he was responsible for growing their
distribution network across both retail
and institutional channels in Dubai.
Before that, he was at HDFC Asset
Management.
+44 (0)20 7557 7245
morganmckinley.com
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 News
19

| Spending Review

Not even his voice survived the cuts

SKETCH
JULIET SAMUEL

M
Ps ALWAYS like to take their
medicine with a dollop of
sugar, ideally well-mixed with
a slather of school-boy sneers
and jeers. The public, on the other
hand, won’t swallow anything but the
bitterest pill when it comes to bad
news.
So after a casual slap-around at
PMQs, only an avalanche of the worst
possible tidings would settle the bul-
lies’ playground that is parliament.
“It is unavoidable,” Osborne thun-
dered – or would have, if he had the
voice for it. Time to take an ice pick to
“the interest on the interest on the
interest of the debts”, he declared:
honourable gentlemen, think of the
children!
Hands fluttering this way and that
as if enacting a shadow puppet show,
the Chancellor iterated between inter-
esting shapes. Rows of figures and reg-
ulations saw little action: the fingers
lay like well-behaved soldiers either
side of his notes.
Arguments were punctuated by
splayed fingers in a strangle-the-
puppy formation, thence flowing into Voice shredded, the
an unfortunate slicing gesture upon fingers do the talking
the despatch box for very emphatic
points – “local people”, “brave service Picture: PA
men and women” – chop!
But it was during the transitions licked past the “collapse of the Alexander like an aloof older brother plastic bag. ing a feast, but when the rhetoric
that the nervous ticks made their Presbyterian Mutual Society”, howled and, with increasing frequency, Calm returned as Alan Johnson came, it stuttered. A well-researched
presence known – a sudden convul- down “the hard (but upgraded) road leaned forwards with a searching arose from the opposition benches crib sheet sat uneasily alongside
sive clasping of the fingers, a shift of ahead” and stumbled breathlessly glance back to his right. Was it David like Dracula from his coffin. What an attempts at reasonableness:
the feet, a slightly defensive turn side- upon “rail electrification between Laws he was looking for, the lost first impressive spectacle, this immaculate- “Spending does have to be reduced
ways. All we lacked was a projector to Manchester, Liverpool, Preston and secretary sitting sedately in the sec- ly groomed old timer set amid the but…. Jobs, jobs, jobs… jobs!” Jobs,
light up the dancing digits. Blackpool”. The pinched tones broke ond row? puffed-up pigeons on the front bench- indeed.
Yet it was not the hands, but as they hacked at “tough but fair deci- It wasn’t until Osborne began a es. The silver hair – Tin-Tin meets Mr Across the way, the wrinkles made
Osborne’s fragile vocal chords that sions”, and yet not a hot lemon tea in detailed traffic report of the fate he Whippy – ready to win bronze at their way from our chancellor’s knot-
shredded themselves upon this cruel sight. The House is a harsh place. had planned for the nation’s motor- Crufts. The black-veined tie and suit ted fingers to his larynx and by now
barrage of cuts. One could hear them Behind his manic Chancellor, David ways that the House lit up again. ready for a Halloween gala, if only he had cut deep into his brow. But if his
snapping as we rocketed through the Cameron gazed at the ceiling as if try- Roads – now here was something to hadn’t a chancellor to dispatch. voicebox is all George has to sacrifice
“time limit on contributory employ- ing to do the sums in his head. Clegg get excited about! Philip Hammond’s He smiled over at the government during the coming months, he can
ment and support allowance”, rol- chit-chatted coolly with Danny face drifted sideways like a crumpled benches, a pedantic vampire anticipat- count himself a lucky boy.

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CITYA.M. 21 OCTOBER 2010 News | Spending Review 21

The cabinet’s winners and losers

Which cabinet ministers got the best deal from the Treasury? David Crow assesses the individual spending settlements

WINNER | MICHAEL GOVE WINNER | ANDREW LANSLEY LOSER | VINCE CABLE LOSER | THERESA MAY

HOW THE BIGGEST DEPARTMENTS FARED

Department Departmental spending Departmental spending Diff in real terms by Capital spending Capital spending Diff in real terms
2010-11 2014-15 2014-15 2014-15 by 2014-15

Education - WINNER £50.8bn £53.9bn -3pc £7.6bn £3.4bn -60pc

Health - WINNER £98.7 £109.8bn +0.4pc £5.1bn £4.6bn -17pc
Transport - WINNER £5.1bn £4.4bn -21pc £7.7bn £7.5bn -11pc
Communities - LOSER £2.2bn £1.2bn -55pc £6.8bn £2.0bn -74pc
Local Government - LOSER £28.5bn £22.9bn -28pc
Business - LOSER £16.7bn £13.7bn -25pc £1.8bn £0.8bn -44pc
Home Office - LOSER £9.3bn £7.8bn -23pc £10.1bn £8.3bn -49pc
Justice - LOSER £8.3bn £7.0bn -33pc £8.9bn £7.3bn -50pc
Defence - WINNER £24.3bn £24.7bn -8pc £8.6bn £8.7bn -8pc
Foreign Office - LOSER £1.4bn £1.2bn -24pc £0.2bn £0.1bn -55pc
International Development -WINNER £6.3bn £9.4bn +35pc £1.6bn £2bn +20pc
Environment - LOSER £2.3bn £1.8bn -29pc £0.6bn £0.4bn -34pc
Culture - LOSER £1.4bn £1.1bn -24pc £0.2bn £0.1bn -32pc
Energy - WINNER £1.2bn £1.0bn -18pc £2.9bn £3.7bn +41pc
Welfare - WINNER £6.8bn £7.6bn +2pc £7bbn £7.8bn -6pc

ANALYSIS

Education: After Health and Overseas
Aid, Education has got the best settle-
ment, with cuts of just three per cent.
The schools budget will increase in real
terms from £35bn to £39bn. The capital
budget, which was allocated to the
mammoth Building Schools for the
Future programme, has been slashed,
although Michael Gove thinks this is a
good way of saving money. It’s not all
good news, however. The non-schools
budget will be cut by 12 per cent, mean-
ing pain for sixth-forms and colleges.
The grant given to poorer sixth-formers
will be scrapped while Sure Start nurs-
eries will only be protected in cash
terms, suggesting cuts of around 10 per
cent.
Health: Health is one of the only depart-
ments that will see real-terms increases
over the parliament. However, hospitals
will still feel the pinch: £1bn will be
diverted to social care; and an ageing
population will put more strain on the
NHS.
Transport: One of the most-keenly felt
consequences of the Transport settle-
ment will be massive increase in rail
fares, which are currently capped at RPI
+ 1 per cent. A new measure of RPI + 3
per cent from 2012 would see fares
increase by 7.8 per cent a year based on
current RPI. The Dartford Crossing will
also soar from £1.50 to £2.50 in 2012
while bus subsidies will be cut by 20 per
cent. This means cuts in capital spend-
ing won’t be as bad as feared: Crossrail
will go ahead, as will the upgrade of
London Underground and various rail
projects.
Local Government: The future
Communities department will be a
shadow of its former self. The 55 per
cent cut includes £1.6bn of funding
which is being devolved to local councils,
but they are still very steep.
Business Innovation and Skills:
Funding for higher education will be cut
by 40 per cent, to be replaced by a mas-
sive increase in student tuition fees. The
government will only fund degrees in
science, technology, engineering and
maths. Newer universities will likely
have to close or downsize considerably.
Higher education saving will deliver
around 65 per cent of total savings. The
science budget will be protected in cash
terms, while some key capital projects
will be saved. But these are mainly sops
for Vince Cable, who now has to preside
over the biggest rise in tuition fees in
history – despite campaigning against
such a move before the election.
Home Office: The coalition has man-
aged to protect schools and health, but
the police service will pay the price.
Central government funding for police
will be slashed by a fifth, meaning big
reductions in headcount. An increase in
the amount local police services can levy
on council tax will soften these to cuts
of 14 per cent, but police are still one of
the biggest losers.
Justice: Prisons are full and, due to
huge cuts in capital spending, no new
ones will be build in this parliament.
That means the number of prisoners will
be around 3,000 lower than it is today
by 2014-15. Dangerous and serious
offenders will be locked up but more
criminals will be punished with commu-
nity penalties. Legal aid will be cut by
£350m. Although the department has
lost out, Ken Clarke – a liberal proponent
of penal reform – is likely to be happy
with his settlement.
Defence: The details of Liam Fox’s set-
tlement were announced earlier in the
week. He is definitely one of the winners
and fought a hard fight against the
Treasury, one which could end up hurt-
ing his political career further down the
line.
Foreign Office: As one of the smallest
spending departments, Hague has
secured a pretty good settlement. From
2014-15, the BBC will be forced to fund
the World Service. Once that is taken
into account, the rest of the FCO budget
will fall by 10 per cent over the period.
Innovation Development: By far the
biggest winner in terms of percentage
increase, the government has kept its
pledge to increase overseas aid.
Environment: The number of agricul-
tural bodies will be reduced by 50 per
cent.
Culture: The Olympics budget will be
protected while cuts for grant-funded
museums and arts organisations will be
limited to 15 per cent. That means
swingeing cuts for others: 30 per cent
cuts for Sport England, UK Sport,
English Heritage and Visit Britain.
Energy: Although Huhne has agreed a
big cut to departmental spending, his
capital budget has soared: there is £1bn
for a carbon capture plant; £860m for a
renewable energy incentive scheme; and
£200m for low carbon technologies.
Welfare: It is misleading to look at Iain
Duncan-Smith’s departmental budget, as
most of his spending is on welfare, which
is annually managed expenditure. He has
won an increase in departmental spend-
ing to help administer his landmark poli-
cy: a Universal Credit to replace all other
out of work and low income benefits.
However, there have been huge cuts to
welfare to help pay for this.
 22 News | Spending Review
Markets relaxed about Osborne’s plans
GUEST COMMENT
DAVID JONES
I
T WAS a little like watching spec-
tators at a tennis match in the
City yesterday lunch time, as eyes
flipped back from Osborne on
the TV to prices on dealing screens.
But we could have all saved ourselves
some mild exertion as any financial
Crossrail and
Tube spared
from savings
▲
TRANSPORT
BY VICTORIA BATES
MAYOR of London Boris Johnson yes-
terday painted the chancellor’s deci-
sion to protect the capital’s major
transport funding as a triumph,
upholding London’s competitiveness
as a major economic hub at a time
when tax and regulatory changes are
hammering the city.
Johnson, who has fought a long
campaign over the importance of
investment in London’s infrastruc-
ture, said both the Crossrail project
and major upgrades to the Tube have
been given the go-ahead, providing a
£78bn fillip to the economy.
Funding to Transport for London
(TfL) from the Department for
Transport (DfT) will fall by £2.17bn
over the four years of the Spending
Review, equivalent to a real-terms cut
of 21 per cent. But DfT funds repre-
sent only a third of TfL’s budget,
alongside fares, borrowing and com-
mercial revenue – meaning the cut to
the organisation’s total funding will
be around eight per cent.
Crossrail’s budget has been slashed
Fears of an overshoot grow as budget Lib Dems claim partial
deficit jumps unexpectedly to £16.2bn victory amid the cuts
▲
UK ECONOMY
BY JESSICA MEAD
PUBLIC borrowing unexpectedly rose
to a record high for September,
demonstrating the sheer scale of the
challenge facing the coalition govern-
ment as it yesterday unveiled deep
spending cuts.
Excluding the temporary effects of
financial intervention, net borrowing
was £16.2bn, well above the consen-
sus forecast of £14.3bn. Including the
effects of this intervention, net bor-
rowing was £15.6bn.
market reaction – particularly in
gilts and currencies – was difficult to
find.
Of course, because many of the
broader details had been leaked in
the days ahead of the Chancellor’s
speech there was no real expectation
that the financial markets would be
seeing any big surprises.
Arguably, the more significant
movements yesterday came off the
back of the Bank of England meeting
minutes and the overshoot in the
borrowing figures, initiating a sharp
– if short lived – sell-off for the
Pound, but otherwise it’s all been
rather muted.
And being realistic, financial mar-
kets are never going to be big on the
by £1bn, meaning that delivery of the
project will be delayed by a year to
2018 while efficiencies are found. But
it will be delivered in full, including
branches off to Heathrow,
Maidenhead and other out-of-London
destinations, the Mayor said.
The Tube upgrade, which with
Crossrail will boost network capacity
by 30 per cent, is also going ahead,
though “cosmetic improvements” to
Tube stations have been axed.
Concessions have also been protect-
ed on the London bus network, with
fare increases kept at the level
announced at the end of last year.
But Johnson conceded that the
pain would be felt via a rise in the
congestion charge to £10, a reduction
in spending on electric vehicles,
charging for parking on the TfL road
network and a cut in the funding
allocation to London boroughs.
Tfl, which has already realised
£5bn of savings, will also be subjected
to a structural review led by transport
commissioner Peter Hendy, who will
report early next year on how to deliv-
er further efficiency savings.
Some economists think that the
government is on track to overshoot
its 2010-11 target.
“Six months into the fiscal year, a
simple extrapolated trend suggests
that net borrowing excluding inter-
vention is set to rise to £156bn by the
end of the year, £7bn above the June
Budget forecast of £149bn and bang
in line with last-year’s outturn,”
warned Barclays Capital’s Simon
Hayes.
Although the detail of the figures
showed some welcome improve-
ments, notably in terms of growing
minutiae of a programme of cuts like
this.
We have all known they are com-
ing, we now know what they are and
we all understand the importance of
making these moves – if we are going
to see further confidence returning
to UK Plc it will now be all about the
execution.
BACK FROM THE BRINK
Osborne sees this long term plan as
bringing Britain back from the brink
and it would seem that overall, the
vast majority of the business commu-
nity is in broad agreement of cuts
now rather than later.
However, although it is a long term
plan that will see success measured
Boris Johnson has argued the importance of infrastructure investment Picture: REUTERS
tax receipts, there was a worryingly
sharp increase in the contribution of
debt interest payments, which surged
155 per cent to £2.3bn from £912m a
year earlier.
“This is partly because higher infla-
tion has pushed up the interest
payable on index-linked gilts, but it is
also due to the large increase in gov-
ernment debt which now stands at
57.2 per cent of GDP on the Treasury’s
favoured ‘excluding financial inter-
ventions’ measure,” said Nida Ali, eco-
nomic advisor to the Ernst & Young
ITEM Club
over many years, now the speech has
been done the financial markets will
want to see the processes actually
start.
After the Chancellor sat down,
markets woke up again and we did
see fairly steady gains for the pound
as the afternoon went – although
this is being explained as much as a
story of US dollar weakness yet again
rather than a euphoric vote of confi-
dence in the cuts.
POTENTIAL FOR VOLATILITY
There is still the potential for some
volatility as the further details of the
plans are revealed – for example
today sees what the proposed bank-
ing levy is going to mean for that par-
▲
POLITICS
BY STEVE DINNEEN
THE Lib Dems yesterday insisted they
had won a partial victory despite the
swingeing budget cuts.
The party, which had argued
against reducing the deficit too
quickly in the build up to the election
claimed they had forced through a
number of important concessions.
Lib Dem minister for defence Nick
Harvey claimed the delaying of the
Trident decision was a victory for his
party. He said: “Conducting a value
CITYA.M. 21 OCTOBER 2010
ticular sector, where shares have fall-
en somewhat out of favour with
investors in recent months on a valu-
ation basis. Overall there were no
nasty surprises.
We have seen the City this year go
from distinct nervousness faced with
the prospect of a hung parliament
ahead of the general election to cau-
tious optimism in the months since
it became a reality.
For now at least, it looks like the
new Chancellor is being given the
opportunity – and a bit of breathing
space from markets – to see if these
plans really can sort out the UK’s
deficit.
David Jones is chief market strategist at
IG Index.
Osborne admits
taxes may drive
banks overseas
BANKING
▲
CHANCELLOR George Osborne yester-
day appeared to soften his stance
slightly on the taxes pummelling the
banking sector, admitting for the first
time that draconian measures run a
real risk of hounding firms out of the
country.
“We neither want to let banks off
making their fair contribution, nor
do we want to drive them abroad,”
Osborne conceded.
The new bank levy, details of which
are due to emerge today, will bring in
more every year than the Labour gov-
ernment’s bonus tax, Osborne said,
adding that he will aim to extract the
“maximum sustainable tax revenues
from financial services” in the future.
Chris Cummings, chief executive of
financial services lobby group
TheCityUK, welcomed the commit-
ment to avoid driving banks abroad.
“Our sector will not balk at making
a fair and predictable contribution to
the taxation regime, where the taxa-
tion regime preserves the competitive
position of the UK,” he said.
Stuart Fraser, chair of the policy
and resources committee at the City
of London, added that banks moving
overseas is just one part of the picture.
“Our priority must be to ensure firms
operating across the financial and
professional services industry see the
UK as a good place to be based and in
which to invest,” he said.
for money review of Trident was a key
part of the Lib Dems joining this
coalition government and, as we
expected, the review identified signif-
icant savings.”
Minister in the transport depart-
ment Norman Baker also claimed the
continuation of several high-profile
rail projects was a key Lib Dem policy.
Likewise, minister in the health
department Paul Burstow said the
government’s pledge to protect
spending on social care by allocating
an additional £2bn by 2014/15 was a
success story among the cuts.
CITYA.M. 21 OCTOBER 2010 News | Spending Review 23

Osborne’s unlikely pin-up: Mr Brown Chief in his mind was closing down
the lines of attacks his opponents
might pursue. In that sense, he is not
dissimilar to Gordon Brown, his pred-
ecessor but one and sworn enemy. It
is easy to see where he learnt his
trade; years of being bested by his
Labour rival have taken their toll.
His statement to the House of
DAVID CROW Commons was full of the smoke and
mirrors that were the hallmark of
POLITICAL EDITOR Brown’s years as chancellor. Where a
cut was large in percentage terms, as
were only protected in nominal
terms, meaningless when one factors
in the impact of rising prices on
departmental spending power.
There were also fuzzy, unfunded
pledges to soften the blow of real
cuts. The Educational Maintenance
Allowance – the grant given to poor
sixth-formers – would be replaced by
“more targeted support”. No-one in
government seems to know what this
“targeted support” will consist of – or
how much it will cost.
£50m a year? Osborne is keeping it –
for good. “In my view higher cold
weather payments should be for life,
not just for elections,” he declared,
barely able to conceal his glee at land-
ing another blow on the opposition.
As he ploughed through the one-
hour statement, Osborne’s delivery
even began to mimic Brown’s. Lists
were read out to a machine-gun
rhythm, his finger jabbing the
despatch box as each new item of cuts
or spending was announced.
lor’s 27-page statement to the house.
Instead, it was quietly revealed later
by the energy secretary, when the
media were busy digesting the earlier
announcements.
The pièce de résistance was the
rather disingenuous suggestion that
his departmental cuts will somehow
be softer than the ones Labour would
have had to make (a claim he could
only make because of bigger savings
in the welfare budget).
It was, of course, nonsense: Labour

G
EORGE Osborne has always
been a master tactician first
and an economist second.
Yesterday’s highly political
spending review was no different.
in the case of the Culture department
(25 per cent), but relatively small in
cash terms, he only gave the cash fig-
ure (£1.1bn). He rattled off a list of
budgets that were “protected”, which
Again and again, the chancellor
wrong-footed Labour. What about the
one-off cold-weather payment that
Brown gave to pensioners in the final
winter before the election, at a cost of
Some of the biggest measures were
simply omitted. The £1bn-a-year car-
bon stealth tax that was slapped on
big business and public institutions
didn’t get a mention in the chancel-
wants to cut the deficit more slowly
than the government does and
Osborne knows this. But who cares?
This is politics – and George, like
Brown, only plays to win.

Our lowest
Alan Johnson
said “spread-
sheets and num-
spreads ever.
bers” would
mean job losses
Picture: REUTERS

Coalition cuts
are political,
says Johnson due to big reductions in the welfare
▲

POLITICS
BY DAVID CROW
ALAN Johnson, the new shadow chan-
cellor, yesterday dismissed claims the
spending review was fair and tried to
portray the coalition as ideologically-
driven cutters who would squeeze the
middle classes.
He rounded on the coalition for
“cheering the deepest cuts in public
expenditure that have taken place in
living memory” and warned that
“spreadsheets and numbers” would
translate into hundreds of thousands
of job losses.
The spending review represented a
“reckless gamble with people’s liveli-
hoods which runs the risk of stifling
the fragile recovery,” Johnson
claimed.
In his first major appearance at the
despatch box since becoming shadow
chancellor, Johnson gave a more con-
fident performance than many MPs
expected.
However, his attacks were stymied
by George Osborne’s insistence he
was cutting departmental spending
by just 19 per cent, against Labour’s
planned cuts of 20 per cent, largely
bill.
Johnson dismissed these claims,
insisting Labour would cut public
spending by about half the amount
the coalition is planning.
Johnson taunted the chancellor for
rattling off a list of international bod-
ies who supported his austerity meas-
ures, such as the European Central
Bank, the IMF and the OECD.
The Irish finance minister had also
boasted about getting backing for his
cuts from these bodies, Johnson
claimed – just four months before the ì Low dealing spreads on major global indices.
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Both the child benefit cut and bank-
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the exchequer.
 24 Spending Review Reaction
THE GILTS EXPERT
KILLIK & CO provides advisory services to
private investors of all sizes. It offers
advice on a wide range of financial matters,
including CFDs, equities, fixed income mar-
kets and funds of funds
INVESTMENT STRATEGIST
PATRICK GORDON
“The gilts market reaction has been
fairly muted to the spending review
although we did see a move earlier in
the day in reaction to the unexpected
rise in September public spending. In
the background, the quantitative eas-
ing story is providing support and is
keeping gilt yields low. Yesterday’s
events had the potential to cause
movement but they have not because
expectations were largely met.”
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CITYA.M. 21 OCTOBER 2010
THE HEADHUNTER
“Everybody knows these cuts are
vital – nobody wants to see the
country go the way of Greece or
Ireland.
The kind of clients we deal with at
Taylor Bennett, the very high end
private sector jobs, will be unaffect-
ed for the most part.
However, there are going to be very
few public sector jobs
around so it will be
very tough indeed
for someone
TAYLOR BENNETT is a leading executive search working in public
firm exclusively focused on corporate commu- sector recruitment.
nications within the UK, continental Europe, But if we want to
Middle East and Asia. avoid living in
a banana
DIRECTOR republic, this
HEATHER MCGREGOR is unavoid-
able.”
All eyes were on
the Chancellor
yesterday
afternoon.
Picture: PA
INTERVIEWS BY
STEVE DINNEEN
THE RETAILERS’ VIEW
THE British Retail Consortium (BRC) is the
lead trade association representing the
whole range of retailers, from the large mul-
Or this? tiples and department stores through to
independents. It is recognised for its influ-
ence within government
DIRECTOR GENERAL
STEPHEN ROBERTSON
“These are serious plans to tackle the impact on their future prospects is clear.
budget deficit and will remove some of Retailers need the government to com-
the uncertainty which was driving down municate exactly how the cuts will be
consumer confidence. Beginning to deal delivered as soon as possible so that they
with the deficit now is right. Delays can make investment plans.
would just store up more pain for later, It’s a tough judgement but the govern-
risking increased borrowing costs, higher ment has achieved the right balance
taxes and more job losses. between public spending cuts and tax
But individual households and communi- increases. There are testing times
ties will continue to be cautious until the ahead.”
THE GOVERNMENT CONTRACTOR
SAS UK develops information delivery software, MANAGING DIRECTOR
working on large outsourced government con- IAN MANOCHA
tracts as well as providing training and support
“Osborne’s rallying cry of ‘We must leave
no stone unturned in our search for
waste,’ is a positive one. If the public sec-
tor is to deliver on cuts, drive greater effi-
ciencies, reduce fraud and error, and
provide the services demanded of the
public, then it must pinpoint wasteful
practices and eliminate them.”
CITYA.M. 21 OCTOBER 2010
THE SMALL BUSINESS CHAMPION
LEADING entrepreneur, champion of small business and
BBC Dragon, says the government is right to follow the
lead of successful companies
CHIEF EXECUTIVE
JULIE MEYER
“As any chief executive of any size company
knows, you can and must keep costs in line, but
at the end of the day, you can’t survive as a
company unless you have a growth story.
Countries are no different. That’s what
entrepreneurs do – they build growth sto-
ries. So as the nation readjusts its costbase
to the new reality, the entrepreneurs are
hard at work building growth, creating
jobs, and through that, channelling taxable
corporate income into the Treasury.”
THE TaxPayers’ Alliance is Britain’s independent
grassroots campaign for lower taxes, arguing
that high taxation is bad for the economy
DIRECTOR
MATTHEW SINCLAIR
“It’s great news that the government is
going ahead with necessary spending
cuts to get the deficit under control and
that politicians are finally setting out
clear plans to deal with the fiscal crisis.
Many wasteful programmes are being cut
and that will mean savings for taxpayers
now and in the future. Unfortunately a
number of measures that would save sig-
THE BUSINESS LOBBYIST
THE CBI is the UK’s top business lobbying
organisation, with influence over government,
policymakers and legislators
DIRECTOR GENERAL
RICHARD LAMBERT
“The Chancellor has got the strategic
direction of this spending review
right. He has stayed the course out-
lined in the June budget, with eco-
nomic growth a top priority.
We particularly welcome the extra
£2bn a year on capital spending, and
the focus on areas that support
growth.
The spending cuts, though painful, are
essential to balance the UK’s books
and build its future prosperity.
We will wait to see the legislation on
taxing banks, but the Chancellor has
recognised two crucial points. He said
THE ECONOMIST
SCHRODERS manages £164.0bn on behalf of
institutional and retail investors, financial
institutions and high net worth clients
THE TAX CAMPAIGNER
nificant amounts of money while min-
imising the impact on services haven’t
been taken, like a freeze in the
International Development budget or
pay cuts for the best paid public sec-
tor staff. Sensible and necessary cuts
have been announced today but more
can be done to deliver good value for
taxpayers.”
he did not want to drive banks
abroad, and he recognised that hun-
dreds of thousands of jobs in the UK
depend on our competitiveness in
financial services.
It is essential that all policy makers
recognise these important points. It is
also vital that banks both rebuild their
balance sheets and lend to companies,
and excessive taxation would threaten
both of these aims.
The additional investment spending
THE DIRECTORS’ VIEW
THE Institute of Directors provides support
and information for business leaders as well
as political analysis
DIRECTOR GENERAL
MILES TEMPLEMAN
“We strongly support the government’s
determination to stick to its overall plan
of reducing public spending quickly. The
only way we get a private sector recov-
ery underway is through macro-eco-
nomic stability, and this will only be
achieved with sustainable public
finances.
EUROPEAN ECONOMIST
AZAD ZANGANA
“With over 80 per cent of the deficit
reduction plan coming from public
spending cuts, today’s Comprehensive
Spending Review was crucial in main-
taining the newly found confidence of
international investors in UK govern-
ment debt.
Despite rumours of re-profiling and
THE TRADE UNIONIST
THE TUC has 58 affiliated unions representing 6.2m workers in the UK. It holds political sway
and has close ties with the Labour party
GENERAL SECRETARY
BRENDAN BARBER
“Right across government the
Chancellor has announced eye-watering
cuts that will have a desperate impact
on communities, business and hard-
pressed families. But he has not had the
guts to spell out the detail, and instead
tried to talk up a few crumbs of good
news.
Worst of all, to score a cheap party
political point about Labour spending
plans, he has loaded cuts on to benefits
and welfare payments. Those who have
not had a minister fighting their corner
but who are most vulnerable to cuts
have lost the most today. The poorest
have become the victims of a political
jape. But the biggest tragedy of all is
that the spending review is likely to fail
on its own terms. These cuts will
depress the economy by causing a mil-
lion job losses and undermining business
| Reaction 25
will improve the country’s critical
infrastructure, create jobs and stimu-
late growth. The chancellor rightly
emphasised the reform of public serv-
ices. It is only with fundamental re-
engineering that we will see the leap
in productivity needed to save money
and deliver high-quality services at the
same time.
We welcome the commitment of the
coalition to tackle the spiralling cost of
public sector pensions.”
Opponents of today’s spending reduc-
tions need to wake up to that fact.
The alternative is a tax hike which
would damage the economy in both
the short and long term.
If today’s spending review is to suc-
ceed the government will have to
deliver fundamental root and branch
reform which transforms the produc-
tivity of the public sector.
We need to remember that if the
public sector had matched the private
sector’s productivity growth over the
last decade, the deficit would now be
£60bn less than it is. Less can be
more.”
postponement of cuts, the chancellor
did not disappoint by sticking to his
Emergency Budget spending num-
bers – only allowing public spending
to rise to £693bn by 2014/15, from
£637bn this year. Though this is an
increase in nominal terms, once we
take economic growth and inflation
into account, this reduces govern-
ment spending as a share of GDP
from 47.3 per cent to 40.9 per cent
by 2014/15.”
and consumer confidence. There will be
plenty of pain, but little to gain
Public servants did nothing to cause
the recession, but will pay a heavy price
today. Their pay has already been
frozen, now they face half a million job
losses and increased pension contribu-
tions that will add up to a reduction in
take home pay.
With spending cuts
likely to cause anoth-
er half million pri-
vate sector job cuts,
the idea that they
will all get shiny
new private sector
jobs is wishful think-
ing. And if you add all
of those meant
to be returned
to jobs by wel-
fare reform,
you end up in
the realm
of fantasy.”
 26 News | Spending Review
Sixth forms set to suffer, but
spending on schools is safe
▲
EDUCATION
BY MARION DAKERS
SIXTH forms and further education
colleges face stark cuts, though
schools have been granted a real term
budget rise, the coalition confirmed
yesterday.
The education maintenance grant,
introduced by Labour to encourage 16
to 19 year olds to remain in education,
will be scrapped to save £500m.
Chancellor George Osborne said it
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would be replaced with targeted sup-
port for the less well-off, and that
schools will receive a 0.1 per cent
increase in spending in real terms
throughout the five-year parliament.
Labour education
spokesman Andy
Burnham described
the plan for schools as
a “complete con”
The Department of Education must
find savings worth three per cent of
its overall budget.
The Association of Colleges said the
news was “not as dire as we expected”
but noted that further education col-
leges have already made savings and
now face another 25 per cent budget
cut. Andy Burnham, shadow educa-
tion secretary, said protection of the
schools budget was a “complete con”
as spending per student will fall as the
number of young people increases.
More higher earners will lose their benefit
Child benefit
cuts hit more
▲
WELFARE
BY MATTHEW WEST
THE withdrawal of child benefit from
higher rate taxpayers in 2013 will hit
300,000 families more than the gov-
ernment had first believed, it
emerged yesterday.
Chancellor George Osborne said
child benefit would remain in place
until young people left education “at
the age of 18 or even 19” rather than
being reduced from 19 to 16.
Government officials now said the
lower figure had been a “cautious” ini-
tial estimate and had not been vetted
by the Office of Budget Responsibility.
The change means 1.5m families,
rather than 1.2m as previously sug-
gested, will lose the benefit.
Officials said the lower figure had
been a “cautious” estimate and did
not take into account those families
that would have lost the benefit had
the age limit been reduced.
Government announces £7bn
more savings on welfare budget
▲
WELFARE
THE chancellor announced a fresh
crackdown on benefit fraud yesterday
as well as a further £7bn of cuts to the
welfare budget on top of the £11bn
savings announced in June.
George Osborne said the current
“complex” system of means-tested
working age benefits and tax credits
will gradually be replaced by a univer-
sal credit that would “sharpen” work
CITYA.M. 21 OCTOBER 2010
Picture: REUTERS
The controversial plans, which see
those earning more than £43,875 lose
the entitlement, would also raise
more than double the £1bn annual
savings the government had first fore-
cast, to £2.5bn a year, Osborne said.
The proposals have been a constant
headache for the coalition since they
were announced at the Conservative
party conference at the beginning of
this month.
Shortly after the proposals were
announced it emerged single income
families on more than £43,875 would
lose child benefit, while a family in
which both parents worked but
earned £40,000 each, giving a com-
bined income of £80,000, would still
receive the benefit.
Labour shadow chancellor Alan
Johnson, attacked Osborne over the
figures saying: “The discrepancy
between previous projections and
what the chancellor announced today
beggars belief.”
incentives and reduce fraud and
error.
But low income families with chil-
dren would be protected from the
effects of the “essential savings”
through an above inflation increase
of £30 in 2011 and £50 in 2012 to
child tax credit. The welfare reforms
included freezing working tax credit
for three years while the mobility
component of the Disability Living
Allowance would also be removed.
CITYA.M. 21 OCTOBER 2010
Millions forced to
work longer as
pension age raised
▲
PENSIONS
BY MATTHEW WEST
MILLIONS of people will be forced to
work longer before they can collect
their pension the government said
yesterday as it first equalised the state
pension age to 65 from 2018 and then
raised it to 66 from 2020.
The government said around 5.1m
people would be affected by the
changes but said £30bn would be
saved between 2015 and 2020
through a reduction in spending on
state pensions and pensioner bene-
fits.
It said a further £13bn would be
saved through increased income tax
receipts and national insurance con-
tributions.
The increase to the state pension
age was four years earlier than pro-
posed under the Labour government
but four years later than had been
originally proposed by the coalition.
The government also accepted the
initial findings of Lord Hutton’s
Chancellor says he will
protect scientific research
▲
SCIENCE
THE CASH budget for UK science will
be maintained, the chancellor
pledged yesterday as he prioritised
support for the UK’s world class sci-
ence community. While the value of
the spending will decline by around
10 per cent in real terms, the govern-
ment will spend £4.6bn a year on
resources by 2015.
Science minister David Willetts
said after the spending review
announcement that roughly £2.75bn
will go to the UK’s seven research
Department of Justice is Queen agrees to £6m cut
amongst most badly hit to annual civil list budget
▲
JUSTICE
BY STEVE DINNEEN
CRIMINAL justice faced one of the
biggest shake-downs of the spending
review yesterday, with 20 per cent of
its budget being cut.
The coalition said the majority of
this will come from shedding bureau-
cratic workers and the cuts will be
phased in over the next five years.
However, senior police officers say
the cuts will mean at least 11,600 offi-
cers are at risk of losing their jobs.
The coalition says police pay and
conditions will be modernised, cen-
tral targets will be removed and there
will be increased efficiencies in the
police “back office.”
It is thought justice secretary Ken
Clarke fought for the cuts to be held
to 17 per cent but was overruled by
report on public sector pensions pub-
lished earlier this month, which
called for government workers to
make greater contributions to their
own retirement.
It said it would implement an
increase in employee contributions
equivalent to three per cent from
April 2012, which it said would save
£1.8bn a year by 2014.
The government also confirmed it
intended to implement the previous
government’s proposals for a nation-
al pension savings scheme, now
called the National Employment
Savings Trust (NEST).
Steve Beet, public sector pensions
partner at PricewaterhouseCoopers,
said with people living longer, even
with the introduction of more flexi-
ble retirement arrangements, the
state pension age needed to rise.
But Beet warned: “In the context of
a public sector pay freeze, higher
employee pension contributions, as
early as 2012 could place an extra bur-
den on take home pay.”
councils, £1.6bn directly to universi-
ties and £100m for national acade-
mies such as the Royal Academy of
Engineering.
Capital projects that have been
ring-fenced include the Centre for
Medical Research and Innovation at
St Pancras. The department of health
will also increase spending on
research in real terms.
The spending review document
said the government plans to save
£324m a year by 2015 within science
through efficiency savings, which
will be reinvested.
the Treasury.
The Police Federation, the body
that represents officers in England
and Wales, had forecast even more
severe cuts which could have meant
the loss of 40,000 policing jobs.
Osborne said: “By cutting costs and
scrapping bureaucracy we are saving
hundreds of thousands of man hours
-- our aim is to avoid any reduction in
the visibility and availability of police
in our streets.”
He said spending on fighting ter-
rorism, earmarked as one of the
greatest threats to the country by the
new National Security Strategy
unveiled this week, would be priori-
tised.
Elsewhere in the justice depart-
ment, a fifth of prison, probation and
court officer staff face the chop as well
as another fifth of back-office workers.
20,000
public and private
sector firms
affected
Qualifying firms
use at least
6,000MWh
of electricity per
year
HSBC’s Canary Wharf headquarters (above) is attempting to reduce emissions by installing solar panels on the roof of the tower
Big businesses hit by
a carbon stealth tax
▲
ENVIRONMENT
BY VICTORIA BATES
GREEN energy campaigners were hor-
rified yesterday as the government qui-
etly introduced a shock £1bn stealth
tax on firms’ carbon emissions.
Amid a spending review which was
generally positive for the cleantech
industry, the coalition said it would
scrap plans to “recycle” contributions
to the Carbon Reduction
Commitment (CRC) energy efficiency
scheme back to the organisations per-
forming best on the emissions scale.
Instead, the money raised will be
poured back into Treasury coffers to
support the public finances.
The CRC, introduced in April, is
MONARCHY
BY STEVE DINNEEN
EVEN the Queen felt the pain of yes-
terday’s cuts.
George Osborne said the Queen
had “graciously” agreed to do her bit.
She has agreed to a freeze in the
palace’s cash allowance, known as
the Civil List and funded by the tax-
payer, for a year. The bulk of the grant
goes towards paying staff, with the
rest spent on items like stationery,
laundry and garden parties.
HM The Queen is facing
up to having her Royal
budget cut as part of the
cuts, in a show of solidar-
ity with her loyal subjects
News | Spending Review
Allowances
sold at
£12
per tonne of CO2
designed to target the UK’s largest
businesses and public sector bodies
by forcing them to purchase carbon
allowances if they use over 6,000
MWh of electricity per year.
However, the original scheme acted
as an incentive to big firms to improve
their energy efficiency record, since
revenue raised from the allowances
was set to be recycled back to organi-
sations on a declining scale based on
their carbon performance.
Industry figures yesterday warned
that scrapping plans to recycle rev-
enue back to organisations would
turn the scheme into a stealth tax
and would no longer incentivise
firms to try and reduce emissions.
Roman Webber, Deloitte’s UK
Osborne said: “Going forward, she
has also agreed that total Royal
▲
Household spending will fall by 14
per cent, or £6m, in 2012-2013 while
grants to the household will be
frozen in cash terms.”
Buckingham Palace costs taxpayer
£38m, a year, excluding security costs.
A palace spokesman said: “The
household obviously has some chal-
lenging times ahead, like many areas
of government.”
The monarch, under pressure to
reduce costs, had already agreed to
the £7.9m cost of the Civil List being
frozen for 20 years from 1990. That
arrangement expired this year.
In October Buckingham Palace
announced it had scrapped its
Christmas party after it was deemed
inappropriate to celebrate while the
economy was still recovering.
27
Part of commitment
to reduce
emissions by
50%
by 2050
renewable energy head, said the
measure came as a “big shock” to the
industry. “It was unexpected and may
turn a previously revenue neutral
scheme into a carbon tax,” he said.
Stephen Robertson, director-gener-
al of the British Retail Consortium,
said he was “surprised and dismayed”
at the move, which he said would hit
retailers particularly hard since they
use a lot of property.
City organisations which operate
from expansive properties designed
to accommodate large numbers of
staff will also be adversely affected.
Many firms have already put in place
schemes to bring down their carbon
emissions, including installing solar
panels or greenery on rooftops.
BBC Trust may
have quit over
free licences
MEDIA
THE Trustees of the BBC board consid-
ered resigning en masse if the coali-
tion pressed ahead with plans to
shoulder the institution with the cost
of providing free licences to over 75s.
The dramatic move was prevented
by an eleventh hour deal that
involved a six-year licence fee freeze –
which will cost it 16 per cent of its
budget – and it taking on the cost of
both the World Service and Welsh
programming body S4C.
The BBC said the deal is “tough but
fair” and will guarantee its future
independence. The £556m it would
have been burdened with if it had to
pay for 4m free licences would have
grown exponentially as the average
age increases.
 28 News | Spending Review
Capital spend is silver lining
▲
CAPITAL EXPENDITURE
BY STEVE DINNEEN
AN unexpected perk of the
Comprehensive Spending Review was
an increase of £2m in capital expendi-
ture on the figure announced in the
June budget.
Osborne says capital spending will
be £59.5bn this year, falling to
£50.7bn in 2011-12, £48.5bn in 2012-
13, £45.6bn in 2013-14 and rising
again to £47.2bn in 2014-15.
This is a full £2bn higher than
Osborne set out in June, in which
the chancellor axed £11bn worth of
capital projects, and has been
Rail prices to
rise by up to
30pc by 2015
▲
TRANSPORT
BY STEVE DINNEEN
COMMUTERS will face more misery
as the price of rail fares rockets over
the coming years.
The capped regulated price of train
tickets will rise by three per cent over
inflation over three years, starting in
2012.
The price for those commuting
long distances into the capital could
rocket, with a season ticket from
Brighton to London set to rise almost
£1,000 a year. The Campaign for
Better Transport has calculated the
hike will translate to a 30 per cent
increase in fares by 2015, including
the effects of inflation.
The hikes will help the government
reduce its £5bn annual spend on rail
transport.
Those travelling by bus will not be
spared, with bus subsidies paid to
operators being slashed across the
country.
Even motorists will be hit, with
road and bridge tolls set to rise,
including the Dartford River Crossing
in Essex.
The price hikes will be used to plug
the gaps caused by a dramatic lurch
in the transport budget.
Cuts to local governments could push Aid to China and Russia
outsourcing firms into administration is cut from DfID’s budget
▲
LOCAL GOVERNMENT
BY MARION DAKERS
LOCAL government will bear the brunt
of some of the harshest cuts in the
entire spending review, prompting one
expert to predict the collapse of a num-
ber of companies that rely on outsourc-
ing work.
The department of communities
and local government will see its day-
to-day spending cut by 33 per cent in
real terms over the next four years,
and capital spending slashed by 74
described as a silver lining to the
deep cuts.
The money will safeguard a host of
infrastructure projects including a
new bridge over the Mersey at Runcorn
and funding for new hospitals includ-
ing the St Helier, Royal Oldham and
West Cumberland projects.
Osborne said it was necessary to
“ruthlessly prioritise” capital spend-
ing on areas of the economy that will
promote growth. High on his list was
investment in green infrastructure,
including ear-marking £1bn for a
“green investment bank”.
He also set aside £1bn for a carbon
capture project and £200m for off-
Overall the Department for
Transport will see its budget decline
21 per cent in real terms over the next
four years, with capital spending
dropping 11 per cent.
However, the new Mersea Gateway
Bridge, a large-scale capital project,
will still go ahead despite speculation
it could face the axe, as will a project
to widen sections of the M1 motor-
way.
Transport secretary Philip
Hammond said: “While we have had
to make some difficult choices, I am
confident that our focus on the long
term will ensure that we can contin-
ue to build a transport system that
supports economic growth and
reduces carbon.
“We have secured investment to
allow us to go ahead with important
projects such as high-speed rail, sup-
port for ultra-low carbon cars and
major road-building and public trans-
port programmes.”
Transport secretary
Philip Hammond says
the cuts will allow the
government to ensure
future growth
per cent to from £6.8bn to £2bn.
Meanwhile, the overall cash hand-
ed down from central to local govern-
ment will fall by 26 per cent in real
terms, from £29.7bn to £24.2bn.
KPMG’s head of local and regional
government, Iain Hasdell, said: “As
local government gets smaller and
poorer in cash terms, those organisa-
tions in its supply chain will experi-
ence many difficulties finding
alternative contracts. Several finan-
cial collapses of companies and
organisations within this supply
shore wind technology.
Osborne said: “When money is
short we should ruthlessly prioritise
those areas of public spending which
are most likely to support economic
growth, including investments in our
transport and green energy infra-
structure, our science base and the
skills and education of citizens.”
Richard Lambert, director-general
of the CBI, said maintaining capital
expenditure will help to promote eco-
nomic growth. Cultural develop-
ments will benefit, with extensions to
both the Tate Gallery and British
Museum saved by the additional
funds.
Osborne promises affordable properties
to cushion large social housing savings
▲
PROPERTY
CHANCELLOR George Osborne said
yesterday that 150,000 affordable
homes will be built by 2015, in a bid
to ease the housing shortage.
The spending review also promised
to make it simpler to get permission
to build new homes.
The plans are intended to support
private sector growth to balance out
chain will result over the near term.”
Outsourcing group Connaught,
which had contracts for services from
social housing maintenance to grass
cutting, has already folded.
Chancellor George Osborne said
yesterday that fire, police and schools
services would be ring-fenced from
local government cuts.
“Town halls will now face extreme-
ly tough choices about which services
they can keep on running,” said
Baroness Margaret Eaton, chairman
of the Local Government Association.
US backs the UK military
as details of cuts emerge
▲
DEFENCE
THE CUTS to the defence budget
announced on Tuesday were fleshed
out yesterday, as the US government
gave its support to the UK’s military.
The Ministry of Defence’s budget
will be cut to £33.5bn a year in
2104–15, but will rise slightly in 2011.
Day-to-day and capital spending will
be cut by a cumulative 7.5 per cent in
real terms.
The recommendations of the
Trident value for money review are
cuts to the housing welfare systems.
However, some commentators were
sceptical of the private sector’s ability
to plug the gap. “The government’s
planned cuts to local housing
allowance could well result in heavy
additional financial burdens on the
private rented sector, at precisely the
time that demand for affordable
housing to rent will be increasing,”
said David Salusbury of the National
▲
DEVELOPMENT
OVERSEAS aid was shielded from yes-
terday’s cuts, though the department
for international development (DfID)
will halt aid payments to China and
Russia and reduce its administration
costs to help bring the deficit down.
The department’s budget will rise
to £11.6bn over four years to meet UN
aid commitments, which will
include spending £500m to help
fight malaria. International climate
finance will be £2.9bn over five years.
CITYA.M. 21 OCTOBER 2010
expected to reduce spending by
£750m over five years, and some
£3.2bn over the next 10 years.
The ministry will also make a 25
per cent cut in civilian and military
non-frontline organisations by 2015.
The Pentagon’s press secretary
Geoff Morrell said in a statement yes-
terday: “We are confident that the UK
will continue to have the capacity to
provide top-tier fighting forces in
Afghanistan and other future mis-
sions in defence of our shared inter-
ests and security.”
Landlords Association.
The government has promised to
reexamine its own property expendi-
ture, having appointed Sir Philip
Green to review its real estate hold-
ings. Osborne said yesterday a pilot
property management body will be
rolled out in London and Bristol this
year, and is set to make “substantial
gains” from the government’s portfo-
lio once rolled out nationwide.
However, the government
announced a commission on aid
impact to examine the value for
money of all the UK’s aid obligations.
Free market think-tank the Adam
Smith Institute criticised the ring-
fence, saying in a statement: “Why
the chancellor thinks that the British
taxpayer should fund the Indian
space programme is unclear. At a
time when the British government is
cutting spending domestically it
makes no sense to increase overseas
aid spending.”
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30 CITYA.M. 21 OCTOBER 2010

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DANIEL WILLS
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Agriculture markets are characterised by
high supply uncertainty and price volatility.
UN data indicates that average food price lev-
els are still well below the 2007/08 peak lev-
els, reflecting the generally higher supply
but it does not make modity bet is the exception rather than
the rule, which is why it made news
HOARDING FEES
ETFS’s £750 fee is the least of it: bullion
much financial sense, recently when one investor in ETF
Securities’ (ETFS) Gold Bullion Securities
hoarders also have to negotiate with the
current custodian of the gold – that is,
writes Juliet Samuel exchange-traded commodity (ETC) chose
to trade in his paper gold for the real
the bank in whose vaults it lies – to have
it shuttled up to ground level and put
thing. The ETC has around $5bn in assets into a suitably secure vehicle. Then there
under management but this is the first is the cost of insurance during transit

cover from inventories compared to 2007/08
But investors should be aware that higher
prices have historically prompted a supply
surge in the following season. With most agri-
cultural commodities now near multi-month
or multi-year highs, investors continue to pare
positions in most agriculture ETCs. The excep-
tion is cocoa, that has seen inflows after
prices dropped steeply recently.
T
HERE is a story that John Maynard
Keynes once messed up when specu-
lating on wheat futures. Instead of
buying at a low price and selling
higher, without ever having to take deliv-
ery of the wheat, he was caught out: the
market went the wrong way. The
Cambridge academic rushed to sort out
storage for dozens of sacks of grain in the
and only instance of an investor taking
delivery of the physical gold backing the
security.
The news begs the question of how
many more investors could choose to
swap their paper assets for bars they can
hoard in their mattress. ETFS’s head of
product development Townsend Lansing
thinks not many – most inquiries into the
and fees to negotiate for the opening of
an unallocated account in a new storage
facility.
If you want your gold stored in an allo-
cated account (which means that even if
the custodian goes bankrupt, the gold is
yours and is not counted towards the
counterparty’s assets like a bank account),
you will have to pay extra. And most stor-
CITYA.M. 21 OCTOBER 2010
The low cost way to
store your gold
Picture: GETTY
age institutions also charge an annual
fee for storing the goods, with quotes
varying from 0.12 per cent of the gold’s
value to 0.5 per cent or higher. With all
these costs to be negotiated, it is hard to
provide a definitive total cost figure, but
a lone retail investor is unlikely to have
the advantage in striking a deal.
DIFFERENT RULES
If even after the costs, you are set on get-
ting your hands on the yellow stuff,
don’t assume that every physical gold-
backed product will give you delivery.
Deutsche Bank’s physical gold-backed
ETC, for example, does not allow deliv-
ery because of concerns that doing so
would force the product’s fees above
0.29 per cent and that the product
would thereby become non-UCITS com-
pliant.
The rules are not 100 per cent clear:
UCITS funds are not permitted to take
delivery of commodities, but regulators
have not stipulated whether this means
that they cannot invest in products that
merely offer the possibility of commod-
ity delivery. An ETC’s policy will simply
depend upon its providers’ preferences.
Once the gold is yours, you do have
options beyond shipping it straight back
into JP Morgan or HSBC’s vaults. The
Deutsche Borse, for example, recently
launched its Xetra Gold fund in the UK:
the product enables investors to receive
their gold in units of one ounce and will
let you choose the custodian bank and
personally witness the bars’ delivery.
BullionVault, meanwhile, will store and
insure your gold for a 0.12 per cent
annual fee.
Gold redemption might not make
financial sense, but there are nonethe-
less dozens of options for the cost-con-
scious investor to explore. Short of
burying the bars in your garden, howev-
er, you will have to place your trust in
the reliability of an established financial
institution at some point.
LISTED PRODUCT NEWS
DONATA HUGGINS
RBS SEMINAR ON COVERED WARRANTS
RBS are holding a seminar next Wednesday
on covered warrants. Andrew McHattie, an
expert on warrants, will guide new investors
through a variety of trading strategies.
McHattie is currently the editor of Warrants
Alert and Covered Warrants Alert and has
previously worked for Phillips & Drew on
both its international gilt and European equi-
ty trading desks. RBS will also give a talk on
gaining leveraged exposure to the global
markets. The seminar will be held at 250
Bishopsgate from 5.30pm to 7pm on
Wednesday 27 October.
NEW RESEARCH PLATFORM ON ASCENTRIC
The Fund Research Centre has launched a
new tool on the independent wrap platform,
Ascentric. It covers funds and ETFs on both
its platform and the wider market. Users of
the platform can access their fund research
and fund-related material in a single place.
The interactive tools allow users to save
their portfolios and add up the whole cost of
their investment decision. There is also a
search engine and filter tool available to help
users review fund performance, ratings,
asset allocation, regional allocation, country
and market capitalisation.
Investment | Listed products
David Illingworth of
Smith and Nephew
AUTOMOBILES SAW LARGEST ETF OUTFLOWS
The largest outflows for ETFs this quarter
were automobiles and healthcare at $114.7m
and $4.5m respectively, according to
BlackRock’s iShares in their quarterly ETF
Landscape Global Handbook. The banking
sector saw the largest inflows at $284.4m.
While media and retail also saw inflows of
$141.7m and $95.3m respectively. Year-to-
date the STOXX Europe 600 sector ETFs
have seen inflows of $699.1m, even if last
week it experienced a $37.7m outflow in sec-
tor. The food and beverage sector saw the
largest outflows at $167m year-to-date.
31
THE
TIPSTER
Picture: Micha
Theiner/City A.M.
SMITH AND NEPHEW
SEEM TO BE PICKING UP
D
ESPITE missing out on much of the
recent rally in stocks, demand for
Smith and Nephew seems to be pick-
ing up. Recent research highlights it
as a potential takeover target, but aggres-
sive call option buying would indicate the
stock could be in for a big move higher. ETX
Capital is quoting 568.43p-570.07p.
A month ago the tipster recommended
holding William Hill shorts until they hit
the 162p level. It did just that on Tuesday.
It would be wise now to reverse to a long
position at this level. It might also be a
good idea to place a trade with Betfair
next week when it starts to float since it
might create a knock on effect for the
other bookmakers. This also applies to
Ladbrokes. Spread Co offers a 161.13p
–162.37p spread on William Hill and
132.1p–132.8p on Ladbrokes.
The markets liked what they heard from
the comprehensive spending review (CSR)
and the FTSE made a final surge in recog-
nition before closing yesterday. The posi-
tive move higher could encourage the bulls
so we could see further gains from the
FTSE. Capital Spreads is quoting a price of
5,719.0-5,720.0 for the FTSE 100 index.
The CSR contained few big surprises
yesterday, however the pound did not like
the bank levy idea very much. Sterling
weakened towards the recent range lows
against the euro. A break above the
£0.8840 recent highs could signal further
losses towards £0.8895. CMC Markets
offers a spread on at euro-sterling
£0.8792-£0.87938.
Gold is nowhere close to its $1,384 high,
yet it is still supported by the uptrend. This
could offer investors not already long on
the yellow metal an opportunity to pick
some up. WorldSpreads offers a $1,344.2-
$1,344.7 spread on rolling spot gold.
Tuesday’s move by the Chinese to hike
interest rates looks like it will have little
effect in the longer term. The greenback is
showing signs of weakness and the mining
sector is working hard to recover its losses.
Much like the index as a whole, the UK
mining sector price is within striking dis-
tance of fresh 2010 highs and is bolstered
by recent solid earnings news. There could
be more scope on the upside. The current
IG Index price on the UK mining sector is
24343-24389.
Following the release of Diageo’s annual
report, forecasters have revised up their
expectations for the drinks provider. Its
stocks gained between 1.0 per cent and 2.5
per cent yesterday as investors preferred
defensive stocks. The current IG Index
price on Diageo is 1,158.8p-1,161.2p.
Good news keeps coming out for BP
stocks at the moment. The moratorium on
deepwater drilling has lifted some 7 weeks
earlier than expected. The stocks could run
all the way up to 543.39p. IG Index is cur-
rently offering a spread of 434.96p-
435.85p.
Donata Huggins
RBS Bishopsgate
Picture: GETTY
 32 Markets & Investment CITYA.M. 21 OCTOBER 2010

LONDON’S TOP 250 Trade these shares from £1.50 with Interactive Investor - www.iii.co.uk
Company Name Closing Price Price Change 52wk High 52wk low Company Name Closing Price Price Change 52wk High 52wk low Company Name Closing Price Price Change 52wk High 52wk low Company Name Closing Price Price Change 52wk High 52wk low
(p) (p) (p) (p) (p) (p) (p) (p) (p) (p) (p) (p) (p) (p) (p) (p)
3i . . . . . . . . . . . . . . . . . . . . . . . .297.30 –2.60 307.10 246.90 Cookson . . . . . . . . . . . . . . . . . . .561.00 –3.50 616.00 347.60 Kazakhmys . . . . . . . . . . . . . . . .1324.00 +6.00 1634.00 955.50 Sage . . . . . . . . . . . . . . . . . . . . . .270.80 –0.50 286.80 208.20
3i Infrastructure . . . . . . . . . . . . . 113.60 +0.30 115.00 97.00 Croda Intl . . . . . . . . . . . . . . . . .1487.00 –22.00 1540.00 692.00 Kesa Electricals . . . . . . . . . . . . .155.80 –3.70 172.40 98.45 Sainsbury(J) . . . . . . . . . . . . . . . .386.80 +3.70 397.00 307.60
A.B. Foods . . . . . . . . . . . . . . . .1035.00 –12.00 1096.00 790.00 Daily Mail ‘A’ . . . . . . . . . . . . . . . .515.00 — 539.00 381.00 Kingfisher . . . . . . . . . . . . . . . . . .241.90* +1.60 255.00 196.50 Schroders . . . . . . . . . . . . . . . . .1493.00 +11.00 1503.00 1056.00
Aberdeen Asset Man . . . . . . . . . .171.10 +0.10 172.80 111.00 Dana Petroleum . . . . . . . . . . . .1799.00 –1.00 1817.00 968.50 Ladbrokes . . . . . . . . . . . . . . . . .131.70* –1.20 164.60 114.60 Schroders N/V. . . . . . . . . . . . . . 1185.00 +7.00 1211.00 864.00
Admiral. . . . . . . . . . . . . . . . . . .1612.00* –1.00 1695.00 1003.00 Davis Service . . . . . . . . . . . . . . .417.50 –2.30 442.30 356.00 Lamprell . . . . . . . . . . . . . . . . . . .371.00 –13.00 386.80 157.30 Scot. & Sthrn Energy. . . . . . . . . 1114.00 –11.00 1206.00 1006.00
Aegis . . . . . . . . . . . . . . . . . . . . .125.10 –1.60 137.30 103.10 Debenhams . . . . . . . . . . . . . . . . .71.50 –1.30 90.00 51.95 Lancashire Hldgs . . . . . . . . . . . .569.00 –4.50 582.50 416.70
Afren . . . . . . . . . . . . . . . . . . . . . 115.90 +2.90 121.80 76.50 Derwent London . . . . . . . . . . . .1524.00* –23.00 1633.00 1174.00 Land Securities . . . . . . . . . . . . . .681.00* +3.00 743.50 543.00 Scottish Mortgage. . . . . . . . . . . .654.50 +1.50 661.00 475.00
African Barr Gold . . . . . . . . . . . .557.00 +0.50 685.00 520.50 Dexion Absolute . . . . . . . . . . . . .138.20 –0.20 148.00 131.20 Legal & General . . . . . . . . . . . . .104.50 –0.70 107.50 69.05 SEGRO . . . . . . . . . . . . . . . . . . . .298.50 –1.50 389.30 244.00
Aggreko . . . . . . . . . . . . . . . . . .1662.00* –18.00 1697.00 727.50 Diageo . . . . . . . . . . . . . . . . . . . 1160.00* –3.00 1176.00 951.50 Lloyds Banking Gp . . . . . . . . . . . .70.30 –0.20 79.15 45.30 Serco . . . . . . . . . . . . . . . . . . . . .621.50 –5.00 656.50 491.20
Alliance Trust . . . . . . . . . . . . . . .350.30* +1.40 352.70 292.80 Dixons Retail . . . . . . . . . . . . . . . .27.35 +0.23 39.75 23.07 Logica . . . . . . . . . . . . . . . . . . . .129.80 –1.20 149.10 100.80 Severn Trent . . . . . . . . . . . . . . .1360.00 +10.00 1404.00 939.50
AMEC . . . . . . . . . . . . . . . . . . . .1047.00 +3.00 1066.00 728.00 Domino’s Pizza . . . . . . . . . . . . . .451.00 –3.00 484.70 278.20 London Stk Exchange . . . . . . . . .686.00 +0.50 949.50 540.50 Shaftesbury . . . . . . . . . . . . . . . .442.00 –9.90 465.00 348.00
Amlin . . . . . . . . . . . . . . . . . . . . .393.80 –1.30 437.60 350.80 Drax . . . . . . . . . . . . . . . . . . . . . .373.20 +2.70 478.00 321.50 Lonmin . . . . . . . . . . . . . . . . . . .1797.00 +28.00 2198.00 1344.00 Shire. . . . . . . . . . . . . . . . . . . . .1513.00 +20.00 1532.00 1009.00
Anglo American . . . . . . . . . . . .2871.00 +89.50 3015.50 2153.00 Dunelm . . . . . . . . . . . . . . . . . . . .469.00 +6.00 482.00 319.40 Man . . . . . . . . . . . . . . . . . . . . . .261.50 +1.70 373.60 199.60 Smith & Nephew . . . . . . . . . . . . .568.00* +17.50 700.50 525.50
Antofagasta . . . . . . . . . . . . . . .1264.00 +20.00 1344.00 755.50 Easyjet . . . . . . . . . . . . . . . . . . . .451.20 +2.10 499.90 339.80 Marks & Spencer. . . . . . . . . . . . .409.40 –0.60 419.10 321.90 Smith(Ds) . . . . . . . . . . . . . . . . . .167.20 +3.70 168.20 103.00
Aquarius Platinum . . . . . . . . . . .375.10 +3.20 490.00 211.50 Edinburgh Inv Tst . . . . . . . . . . . .438.70 +1.00 441.70 338.00 Meggitt . . . . . . . . . . . . . . . . . . . .303.90 –1.10 331.00 229.80 Smiths . . . . . . . . . . . . . . . . . . .1219.00 –31.00 1297.00 885.00
ARM Holdings . . . . . . . . . . . . . . .385.60 –3.10 419.50 143.00 Electrocomponents . . . . . . . . . . .239.10 –1.70 251.00 144.80 Melrose . . . . . . . . . . . . . . . . . . .295.40 +1.30 302.00 160.00 SOCO Intl . . . . . . . . . . . . . . . . . .330.00 –3.60 510.00 323.00
Ashmore . . . . . . . . . . . . . . . . . . .377.40 –2.60 400.50 215.00 EnQuest . . . . . . . . . . . . . . . . . . .131.50 +1.60 133.50 87.35 Mercantile IT . . . . . . . . . . . . . . . .975.00* +1.50 1002.00 822.50 Spectris . . . . . . . . . . . . . . . . . .1097.00 +2.00 1128.00 653.00
Astrazeneca . . . . . . . . . . . . . . .3334.00 +21.50 3389.50 2668.00 Essar Energy . . . . . . . . . . . . . . .515.00 +15.00 517.00 358.50 Michael Page Intl. . . . . . . . . . . . .475.10 –0.80 495.40 316.70
Atkins(Ws) . . . . . . . . . . . . . . . . .772.50 –4.50 801.00 532.50 Eurasian Nat Res . . . . . . . . . . . .933.00 +20.00 1276.00 801.00 Micro Focus . . . . . . . . . . . . . . . .382.30 +4.10 550.00 272.20 Spirax-Sarco Eng . . . . . . . . . . .1831.00* +9.00 1859.00 1060.00
Autonomy Corp . . . . . . . . . . . .1505.00 +61.00 2012.00 1278.00 Euromoney Inst Inv . . . . . . . . . . .605.00 –2.50 630.00 371.80 Millen & Copthorne . . . . . . . . . . .569.50 +10.00 572.50 321.40 Spirent Comms . . . . . . . . . . . . . .140.80 –1.20 148.20 86.50
Aveva . . . . . . . . . . . . . . . . . . . .1413.00 –2.00 1504.00 856.50 Experian . . . . . . . . . . . . . . . . . . .712.50 +0.50 726.00 550.00 Misys . . . . . . . . . . . . . . . . . . . . .286.90 –1.70 298.00 196.60 Sports Direct Intl . . . . . . . . . . . . .143.90 –3.60 154.30 89.85
Aviva . . . . . . . . . . . . . . . . . . . . .400.70* +1.80 450.50 290.20 Ferrexpo . . . . . . . . . . . . . . . . . . .340.00 +0.80 396.20 140.70 Mitchells & Butlers . . . . . . . . . . .310.80 +0.60 343.90 228.30 SSL Intl . . . . . . . . . . . . . . . . . . . 1159.00 +1.00 1190.00 616.00
Babcock International . . . . . . . . .573.50 +9.50 660.50 489.00 FirstGroup . . . . . . . . . . . . . . . . .401.50 +24.20 428.40 331.20 MITIE . . . . . . . . . . . . . . . . . . . . .200.00 –0.70 254.20 187.60 St James’s Place . . . . . . . . . . . . .279.40 +2.40 298.00 203.40
BAE Systems . . . . . . . . . . . . . . .349.90 –14.00 389.90 288.10 Foreign & Col Inv Tst. . . . . . . . . .295.10 +0.40 297.20 248.70 Mondi . . . . . . . . . . . . . . . . . . . . .550.50 +6.50 551.00 304.70 Stagecoach. . . . . . . . . . . . . . . . .205.10 +17.60 209.00 137.00
Balfour Beatty . . . . . . . . . . . . . . .262.20* –2.00 304.80 228.60 Fresnillo . . . . . . . . . . . . . . . . . .1244.00 +21.00 1333.00 647.00 Monks Inv Tst . . . . . . . . . . . . . . .333.00 +0.60 336.40 265.00 Standard Chartered . . . . . . . . . .1942.00 –17.00 1969.50 1366.50
Barclays . . . . . . . . . . . . . . . . . . .291.10 +2.25 394.25 253.40 G4S . . . . . . . . . . . . . . . . . . . . . .264.50 –1.10 285.70 238.70 Morgan Crucible . . . . . . . . . . . . .246.00 –0.50 249.60 142.90 Standard Life . . . . . . . . . . . . . . .228.00* –2.60 238.00 170.00
Barratt Development . . . . . . . . . . .84.25 –3.90 172.50 84.05 Genesis Emerging Mkts Fd . . . . .530.00 +4.50 536.00 370.00 Morrison Wm . . . . . . . . . . . . . . .298.00* +3.00 307.10 255.00 SuperGrp . . . . . . . . . . . . . . . . .1061.00 –12.00 1312.00 499.00
BBA Aviation . . . . . . . . . . . . . . .198.50* –1.00 220.00 145.90 GKN . . . . . . . . . . . . . . . . . . . . . .175.70 +3.30 183.30 100.40 Murray Intl Tst . . . . . . . . . . . . . . .921.50* — 938.00 720.00 TalkTalk . . . . . . . . . . . . . . . . . . .131.00 +1.40 153.80 106.60
Berkeley . . . . . . . . . . . . . . . . . . .821.00 –13.50 923.00 735.00 GlaxoSmithKline . . . . . . . . . . . .1292.00 –0.50 1347.00 1088.00 National Express. . . . . . . . . . . . .249.40 +11.10 258.60 155.86 Talvivaara Mining . . . . . . . . . . . .528.00 +1.00 547.50 341.40
BG . . . . . . . . . . . . . . . . . . . . . . 1176.50 –10.00 1248.00 966.90 Great Portland Estates . . . . . . . .341.40 –7.60 368.60 236.60 National Grid . . . . . . . . . . . . . . .582.00 +2.50 607.65 474.80 Tate & Lyle . . . . . . . . . . . . . . . . .502.50 +1.50 509.00 388.00
BHP Billiton . . . . . . . . . . . . . . .2192.50 +53.50 2346.00 1618.50 Greene King . . . . . . . . . . . . . . . .422.00 +1.70 484.00 372.50 Next . . . . . . . . . . . . . . . . . . . . .2248.00 +8.00 2360.00 1733.00
BlackRock Mining . . . . . . . . . . . .670.50 +8.00 695.00 475.00 Halfords . . . . . . . . . . . . . . . . . . .407.70 –0.20 562.50 370.10 Northumbrian Water . . . . . . . . . .345.10 +1.80 353.00 225.30 Taylor Wimpey . . . . . . . . . . . . . . .23.80 –1.40 46.34 22.83
BlueBay . . . . . . . . . . . . . . . . . . .486.50 +0.50 495.00 251.00 Halma . . . . . . . . . . . . . . . . . . . . .329.90 –1.20 345.50 218.40 Ocado Grp . . . . . . . . . . . . . . . . .139.20 +3.50 169.00 120.90 Telecity . . . . . . . . . . . . . . . . . . . .480.90 –9.50 546.00 323.50
Bluecrest Allblue GBP . . . . . . . . .173.50 +0.70 173.80 151.00 Hammerson . . . . . . . . . . . . . . . .418.10 +1.50 460.30 332.20 Old Mutual . . . . . . . . . . . . . . . . .136.40* –1.30 146.90 95.30 Templeton Emrg Mkts . . . . . . . . .648.50 +3.00 657.50 455.00
Booker . . . . . . . . . . . . . . . . . . . . .53.70 +0.50 55.10 37.50 Hargreaves Lansdown . . . . . . . .454.80 +4.60 478.00 259.40 Partygaming . . . . . . . . . . . . . . . .271.80 — 339.70 205.80 Tesco . . . . . . . . . . . . . . . . . . . . .432.65* +1.35 454.90 368.40
BP . . . . . . . . . . . . . . . . . . . . . . .435.40 –0.30 658.20 296.00 Hays . . . . . . . . . . . . . . . . . . . . . . 115.50 –4.30 125.30 82.50 Pearson . . . . . . . . . . . . . . . . . . .975.00 –6.00 1069.00 812.00 Thomas Cook . . . . . . . . . . . . . . .184.00 +0.10 277.20 167.50
Brit Insurance . . . . . . . . . . . . . .1018.00 –22.00 1045.00 709.00 Henderson . . . . . . . . . . . . . . . . .136.00 +0.30 157.80 112.10 Pennon . . . . . . . . . . . . . . . . . . . .598.00 +0.50 616.50 440.40 Travis Perkins . . . . . . . . . . . . . . .823.50 –13.50 915.00 647.50
British Airways . . . . . . . . . . . . . .278.10 –1.30 285.80 172.40 Heritage Oil. . . . . . . . . . . . . . . . .341.60 +4.40 585.00 295.90 Persimmon . . . . . . . . . . . . . . . . .360.00 –10.00 520.00 335.90 TUI Travel . . . . . . . . . . . . . . . . . .230.40 +2.40 313.90 189.20
British Amer. Tob . . . . . . . . . . .2461.00 +13.50 2482.00 1832.00 Hikma Pharma . . . . . . . . . . . . . .755.00 +4.00 813.00 452.20 Petrofac . . . . . . . . . . . . . . . . . .1480.00* +15.00 1492.00 900.00 Tullett Prebon . . . . . . . . . . . . . . .403.30 –2.60 429.30 261.20
British Empire Tst . . . . . . . . . . . .479.00 –0.30 490.60 338.50 Hiscox . . . . . . . . . . . . . . . . . . . .346.50 –1.50 371.60 299.60 Petropavlovsk . . . . . . . . . . . . . .1004.00* +7.50 1370.00 834.00 Tullow Oil . . . . . . . . . . . . . . . . .1253.00* –11.00 1375.00 979.50
British Land . . . . . . . . . . . . . . . .508.50* +4.00 515.00 416.00 Hochschild Mining . . . . . . . . . . .478.00 –6.30 522.00 220.00 Phoenix Group . . . . . . . . . . . . . .688.00 –11.50 775.00 550.50 UK Commercial Prop. . . . . . . . . . .78.20 +1.20 84.90 71.00
Britvic. . . . . . . . . . . . . . . . . . . . .470.50 –1.50 518.00 341.50 Home Retail . . . . . . . . . . . . . . . .214.70 –5.20 326.30 201.70 Premier Farnell . . . . . . . . . . . . . .280.00* +2.00 283.80 140.60 Ultra Electronics . . . . . . . . . . . .1824.00 +4.00 1850.00 1198.00
Brown(N.) . . . . . . . . . . . . . . . . . .284.00 +1.70 284.70 204.80 Homeserve . . . . . . . . . . . . . . . . .479.80 +0.80 502.00 422.00 Premier Oil . . . . . . . . . . . . . . . .1602.00 –7.00 1717.00 984.00 Unilever . . . . . . . . . . . . . . . . . .1800.00 +9.00 2024.00 1662.00
BSkyB . . . . . . . . . . . . . . . . . . . .694.00 –11.50 732.00 521.00 HSBC Hldgs . . . . . . . . . . . . . . . .660.00 –0.50 766.80 595.20 Provident Financial . . . . . . . . . . .799.50 –12.00 986.00 795.00
BT . . . . . . . . . . . . . . . . . . . . . . .150.20 +1.90 153.00 108.40 Hunting . . . . . . . . . . . . . . . . . . .636.50 –5.00 661.00 429.10 Prudential . . . . . . . . . . . . . . . . . .630.00 –4.00 665.00 475.70 United Utilities . . . . . . . . . . . . . .592.00 +1.50 620.00 429.20
Bunzl . . . . . . . . . . . . . . . . . . . . .762.00 +1.50 784.50 614.00 ICAP . . . . . . . . . . . . . . . . . . . . . .474.20 –1.90 485.20 291.70 PZ Cussons . . . . . . . . . . . . . . . .370.00 –5.90 383.00 231.70 Utd Business Media . . . . . . . . . .646.50 +6.00 656.50 408.30
Burberry . . . . . . . . . . . . . . . . . . .974.00 +14.50 1065.00 513.00 IG . . . . . . . . . . . . . . . . . . . . . . . .541.50 +0.50 550.00 291.00 Qinetiq . . . . . . . . . . . . . . . . . . . . 110.50 –1.00 179.10 96.00 Vedanta Resources . . . . . . . . . .2229.00 +55.00 2967.00 1795.00
Cable & Wire Comms . . . . . . . . . .53.85 +0.10 150.00 52.30 Imagination Tech Gp . . . . . . . . . .438.70 +15.20 438.70 193.70 Randgold Resources. . . . . . . . .6175.00 –50.00 6755.00 3930.00 Victrex . . . . . . . . . . . . . . . . . . .1306.00 –4.00 1355.00 726.50
Cable & Wire Wwide . . . . . . . . . . .72.55 +0.50 94.80 60.05 IMI . . . . . . . . . . . . . . . . . . . . . . .833.00 +7.50 836.50 410.00 Reckitt Benckiser . . . . . . . . . . .3416.00 –4.00 3667.00 2971.00 Vodafone . . . . . . . . . . . . . . . . . .168.35 +2.10 169.10 126.50
Cairn Energy. . . . . . . . . . . . . . . .424.50 –5.40 497.60 306.80 Imperial Tobacco. . . . . . . . . . . .1956.00 +22.00 2159.00 1728.00 Reed Elsevier . . . . . . . . . . . . . . .553.50 — 566.00 454.60 Weir . . . . . . . . . . . . . . . . . . . . .1600.00* +20.00 1614.00 639.00
Caledonia Invs . . . . . . . . . . . . .1780.00 +4.00 1792.00 1496.00 Inchcape. . . . . . . . . . . . . . . . . . .351.60 +5.70 351.90 235.00 Regus . . . . . . . . . . . . . . . . . . . . . .84.90 –0.05 125.50 64.05 Wellstream Hldgs . . . . . . . . . . . .738.00 –10.50 810.00 429.70
Capita . . . . . . . . . . . . . . . . . . . . .785.00 +0.50 829.50 693.00 Informa . . . . . . . . . . . . . . . . . . . .418.50 –2.40 439.40 263.30 Renishaw . . . . . . . . . . . . . . . . .1212.00 +29.00 1229.00 479.00 WH Smith . . . . . . . . . . . . . . . . . .478.20 –5.80 551.00 392.20
Capital & Counties . . . . . . . . . . .146.50* +1.50 147.10 99.60 Inmarsat . . . . . . . . . . . . . . . . . . . 611.00* +4.50 831.00 544.00 Rentokil Initial . . . . . . . . . . . . . . .100.20 –1.10 140.20 91.15 Whitbread . . . . . . . . . . . . . . . . .1729.00 +1.00 1732.00 1215.00
Capital Shopping Centres . . . . . .389.00* +4.80 523.50 300.10 Intercontl Hotels . . . . . . . . . . . . 1172.00 –3.00 1244.00 762.50 Resolution . . . . . . . . . . . . . . . . .251.50 –2.70 264.80 220.10 William Hill . . . . . . . . . . . . . . . . .161.70 +1.80 217.80 158.70
Carillion . . . . . . . . . . . . . . . . . . .341.20* — 361.90 272.00 Intermediate Capital . . . . . . . . . .322.00 +3.00 331.50 233.50 Rexam . . . . . . . . . . . . . . . . . . . .321.60 +2.70 348.80 271.40 Witan Inv Tst . . . . . . . . . . . . . . . .482.60 +1.90 487.00 396.30
Carnival . . . . . . . . . . . . . . . . . .2568.00 –8.00 2937.00 1876.00 Intertek . . . . . . . . . . . . . . . . . . .1845.00 –7.00 1881.00 1136.00 Rightmove . . . . . . . . . . . . . . . . .767.50* +2.50 796.50 456.90
Catlin . . . . . . . . . . . . . . . . . . . . .336.10 +1.00 394.60 303.20 Intl Personal Fin . . . . . . . . . . . . .302.10 –1.10 310.00 181.40 Rio Tinto . . . . . . . . . . . . . . . . . .4056.00 +108.00 4165.00 2631.00 Wolseley . . . . . . . . . . . . . . . . . .1632.00 — 1742.00 1155.00
Centamin Egypt . . . . . . . . . . . . .175.00 +0.50 194.40 103.50 Intl Power . . . . . . . . . . . . . . . . . . 411.60* +7.20 412.00 248.20 RIT Capital Partners . . . . . . . . .1151.00 +24.00 1215.00 940.00 Wood Group (John). . . . . . . . . . .427.80 –3.00 452.90 279.60
Centrica . . . . . . . . . . . . . . . . . . .324.00* –0.40 347.00 238.40 Invensys . . . . . . . . . . . . . . . . . . .309.00 –0.70 350.30 224.90 Rolls Royce . . . . . . . . . . . . . . . .627.00 +4.50 643.50 434.50 WPP . . . . . . . . . . . . . . . . . . . . . .727.50* –6.00 744.00 528.00
Charter Intl . . . . . . . . . . . . . . . . .800.50 –2.50 855.50 563.50 Investec . . . . . . . . . . . . . . . . . . .508.00 +1.50 565.00 411.50 Rotork . . . . . . . . . . . . . . . . . . .1800.00 –7.00 1906.00 1101.00 Xstrata . . . . . . . . . . . . . . . . . . .1291.00 +42.50 1349.00 832.50
Chemring . . . . . . . . . . . . . . . . .3049.00 +28.00 3711.00 2551.00 ITV . . . . . . . . . . . . . . . . . . . . . . . .64.50 –0.75 71.75 41.04 Royal Bank Of Scot . . . . . . . . . . . .46.00 –0.95 58.95 28.25 LONDON TOP 250 BY MARKET CAPITALISATION
Close Bros . . . . . . . . . . . . . . . . .768.50* –0.50 803.50 657.00 Jardine Lloyd Thompson. . . . . . .597.00 +16.00 604.50 420.70 Royal Dutch Shell A . . . . . . . . .1989.50 +4.00 2068.50 1621.00
Cobham . . . . . . . . . . . . . . . . . . .242.80* +3.90 278.60 205.50 Johnson Matthey . . . . . . . . . . .1951.00 +37.00 1953.00 1397.00 Royal Dutch Shell B . . . . . . . . .1934.50 +2.50 1997.50 1550.00 * Ex-Dividend † Suspended
COLT Group . . . . . . . . . . . . . . . .120.50 +0.70 144.20 107.70 JPMorgan Emerg Mkts . . . . . . . .601.50* +2.50 618.00 443.00 RSA Insurance . . . . . . . . . . . . . .132.50* –0.40 137.40 114.10
Compass . . . . . . . . . . . . . . . . . .522.00 +3.50 574.50 382.00 Jupiter Fnd Mgmt . . . . . . . . . . . .280.90 –4.10 294.00 180.00 SABMiller . . . . . . . . . . . . . . . . .2058.00 –17.50 2103.00 1571.00 www.interactivedata.com

FTSE 100 ends up following Falling dollar boosts

mixed reactions to the cuts commodity stocks
US stocks rose more than 1 per pledge to seek the “maximum sus- Volume was in roughly in line with

THELONDON cent by London’s close, as investors

cheered positive third-quarter earn-
tainable” revenue from the finance
sector, including a long-flagged levy THENEW YORK the average for the year so far but was
below Tuesday’s high volume sell-off.

REPORT REPORT
ings from firms including Boeing. on banks that the industry had lob- Materials shares led the broad mar-
“Traders are piling back into equi- bied heavily to minimise. ket higher. Freeport-McMoRan
ties after better-than-expected earn- A surprising third-quarter loss Copper & Gold gained 2.8 per cent to
ings from the US. Yesterday’s sell-off from US peer Morgan Stanley also $95.35 and the S&P materials index

B
RITAIN’S top share index feels like investors were nervous, weighed on sector sentiment. rose 2 per cent. Commodities gained

W
closed higher yesterday, led by rather than the end of the rally,” Autonomy was the top FTSE 100 ALL Street bounced back yes- as the US dollar dropped to a near 15-
miners on the back of firmer said Joe Rundle, head of trading at riser, up 4.2 per cent, extending terday as a fall in the dollar year low against the yen.
metals prices, with investor ETX Capital. gains made on Tuesday when the spurred buying in industrial The Boeing Company gave the
sentiment buoyed by positive corpo- Chancellor George Osborne gave software firm accompanied third- and commodity-linked biggest boost to the Dow, up 3.3 per
rate earnings releases from the details of the harshest government quarter results with an upbeat out- shares, while another batch of strong cent at $71.36. The company reported
United States. spending cuts in decades, taking an look, as Goldman Sachs and corporate earnings added to gains. a quarterly profit that beat expecta-
The market reaction to the gov- axe to the welfare state in an effort Nomura repeated “buy” ratings on The Dow Jones industrial average tions and raised its full-year forecast,
ernment’s spending review was to reduce a record budget deficit. the stock. gained 129.35 points, or 1.18 per cent, helped by a recovery in the commer-
muted. And the Bank of England’s nine- Smith & Nephew rose 3.2 per to 11,107.97. The Standard & Poor’s cial airplane market.
The FTSE 100 ended up 25.04 strong Monetary Policy Committee cent, with traders citing a positive 500 Index rose 12.27 points, or 1.05 Delta Air Lines and US Airways
points, or 0.4 per cent, at 5,728.93, split three ways as expected in read-across from results on Tuesday per cent, to 1,178.17. The Nasdaq Group jumped after they reported
having closed 0.7 per cent lower at October, with one member wanting from the orthopaedic products Composite Index added 20.44 points, strong profits. Delta surged 10.9 per
5,703.89 on Tuesday. more stimulus, another repeating firm’s US peers Stryker Corp and or 0.84 per cent, to 2,457.39. cent to $12.97 and US Airways
Miners rebounded after a steep his call for a rate hike and the rest Johnson & Johnson. Equities and the greenback have jumped 7.4 per cent to $10.84.
decline in the previous session voting for no change. Smiths Group, BSkyB and BAE had an inverse relationship lately After the dollar’s rise on a surprise
when China, the world’s biggest “A pretty muted response all Systems fell after going ex-dividend. because the Federal Reserve’s ultra- Chinese interest rate hike on Tuesday,
consumer of metals, surprised mar- round in terms of any real reaction Smiths and BAE Systems have low interest rate policy has led the currency’s change of fortune
kets by announcing its first interest to the comprehensive spending been hurt by the UK defence cuts investors to buy riskier assets like prompted a snap-back in stocks.
rate rise since 2007, a move designed review, or even the Bank of England announced on Tuesday. stocks and commodities. Eaton Corp was among major
to rein in a booming economy. minutes,” said Henk Potts, markets “The correlation has come back industrial companies that raised their
Advances in key metals prices strategist at Barclays Wealth. ANALYSIS l FTSE strongly and much of that has to do profit forecasts for the rest of the year,
underpinned the gains, with copper, “Investors continue to have a very 5,728.93 with the Fed and the promise of asset sending its shares up 4.1 per cent at
5,800 20 Oct
aluminium and nickel adding 0.8 to difficult balancing act between purchases,” said Quincy Krosby, mar- $86.82.
2.4 per cent as the dollar dipped. what still looks like a relatively 5,600
ket strategist at Prudential Financial Earnings from financial companies
Global miner Rio Tinto rose 2.7 bright outlook for the rest of this in Newark, New Jersey. were mixed. Wells Fargo & Co report-
per cent after it approved a $3.1bn year in terms of the corporate pic- The euro and the popularly traded ed higher earnings, but Morgan
5,400
iron ore expansion to meet booming ture, and what is clearly a darken- S&P E-mini futures contract have Stanley reported a surprise loss.
demand from Asia. ing macro picture, specifically into tracked each other closely in the last Wells Fargo rose 4.3 per cent to
Peer Xstrata was one of the FTSE’s the second half of this year and into 5,200 month. In the last 22 sessions, they $25.60, while Morgan Stanley fell 0.04
top risers yesterday, gaining 3.4 per 2011,” he said. have had a positive correlation coeffi- per cent to $25.38. US Bancorp rose
cent on announcing its expansion Banks lagged the broader market, cient of 0.8, implying a very strong 0.1 per cent to $22.83 after reporting
in South Africa. with traders pointing to Osborne's 26 Jul 13 Aug 3 sep 23 Sep 13 Oct relationship between the two. higher earnings.
 City Focus
Make sure you are the centre
of attention when presenting
Don’t let PowerPoint
seduce you with its
bulletpoints, writes
Jeremy Hazlehurst
H
ERE’S a statistic for you: according
to Microsoft, 30m PowerPoint pre-
sentations are made every day. You
are probably thinking one of two
things now. Either that this is a wonderful
thing, and it means that clear, concise
information is being conveyed all over the
planet as we speak. Or you imagine a horri-
ble hell of confusing and meaningless
slides flashing before your eyes, signifying
absolutely nothing.
PowerPoint divides people. A Yale profes-
sor and expert in the visual presentation of
data called Edward Tufte says that it “rou-
tinely disrupts, dominates, and trivializes
content”, making us less efficient. Nasa
uses PowerPoint for its communication
and Tufte claims that this contributed to
the Space Shuttle Columbia disaster in
2003, which led to the deaths of seven
astronauts. But then again, if Nasa uses it,
can it really be so useless?
“PowerPoint is a technology, just like the
wheel is. We wouldn’t say that the wheel
was good or bad, we’d ask how humans
use it,” says Clive Holtham, professor of
information management at Cass Business
School. “The problem is much less to do
with PowerPoint than humans.”
The use of bulletpoints is one of the
major flaws of computerised presenta-
tions. In the old days before audio-visual
presentation, people wrote out reports –
risks were spelled out in full sentences and
people saw, read and digested the report
before the meeting, whose main purpose
was discussion. Bulletpoints make it far
easier to hide problems – whether deliber-
ately or not, says Holtham.
Technology is seductive, but if it is used
badly it can make presentations less clear
and more complicated. Don’t underesti-
mate the power of the human voice to per-
suade, says Holtham. “It worked well for
many millennia. Even in the modern era,
Churchill or Kennedy or Martin Luther
King could inform and persuade in a few
minutes purely by voice. Of course they
had trained and honed their skills.”
Remember that you are the persuader, and
the computer is just a tool.
ODD JOBS
When sailors are
taken hostage, it’s
not only soldiers
who leap into action
SEAN WOOLLERSON
PIRACY INSURER, JLT
| Careers
The key to a good presentation is to have
a narrative, and use technology to clarify
or stress points in that narrative. To aid
this, Holtham says that he has started
experimenting with a system called Pecha
Kucha, which uses 20 slides timed to
change every 20 seconds. This limits pre-
sentations to six minutes 40 seconds, and
also means you need to think of a presen-
tation as a story. “It requires vastly more
preparation and planning, indeed chore-
ography, so that it becomes virtually a per-
formance rather than a boring lecture.
There is very little need for words on the
screen. There needs to be a very strong sto-
ryline,” says Holtham.
Dave Paradi, author of 102 Tips to
Communicate More Effectively Using
PowerPoint, agrees that it is all about the
story. “By first deciding how you will move
the audience from where they are now to
where you want them to be at the end of
the presentation, you dramatically cut the
time spent creating slides,” he says. “A
good structure to your message makes it
clear what supporting visuals you need.”
He says that you should never read out
your slides: “Make your presentation a con-
M
Y FIRST job after university was
with M&S, but I joined JLT about
20 years ago and now one of the
big things I deal with is Somali
pirates in the Gulf of Aden. I get calls in
the middle of the night to tell me that a
ship has been kidnapped – my wife
thinks that I’ve wandered into a John
Grisham novel.
About 22,000 ships go through the
Gulf of Aden every year and we look
after the interests of about 5,000, mostly
tankers and gas carriers. These days
more of them get ransom and kidnap
insurance. Piracy has always been out
there, it’s not a new phenomenon for
us, but the ransom element has got
worse since 2008.
We’ve had 10 ships taken over the past
18 months and we have a ship that has
been taken at the moment. It’s been well
versation instead of a reading a report.”
Using a black slide focuses attention away
from the screen and on to you. “There is no
rule that says you must always have a slide
showing when you are speaking. When
you want to focus the audience on a key
point or example you are sharing, use a
black slide so there is nothing to distract
the audience. They will listen more intent-
ly to what you are saying,” he says.
The unloved bulletpoint should also be
avoided, and replaced by visuals such as
graphs that have more visual impact. A
good slide has three things: 1) a headline
that summarises the key message of the
slide; 2) a visual that summarizes the key
message of the slide; and 3) a visual that
illustrates the point.
You should select colours that have
enough contrast. Paradi suggests using
www.ColourContrastCalculator.com to test
them. Also use a sans-serif font that is seen
easily, such as Arial or Calibri in 24 point
or larger. Most importantly, though,
remember two things. Firstly, that you are
telling a story. And secondly, that what
you have to say is more important than
your slides, no matter how pretty.
over 100 days and
we have a full crew
on board.
In other kidnaps we
have had a crew mem-
ber shot and killed, and
another had a bullet in
his leg for 47 days and
was running out of fresh
water, with no antibiotics.
We are dealing with real lives and it
can be stressful, especially as the
pirates seem to be getting more vio-
lent.
We have to be careful about talk-
ing about how we negotiate – we
don’t want the pirates to know.
But I can say that we select a secu-
rity advisor, normally a former
special forces person, and they
advise us on how to negotiate the
HELEN DARROZE 33
TALKS TRUFFLES
WITH TIM BARBER IN
FOOD AND DRINK, P35
ASK THE EXPERT |
HOW TO DELIVER
BAD NEWS
By KAY-YUT CHEN AND
MARINA KRAKOVSKY
L
UCKILY for most of us, we don’t have to
announce anything as difficult as cuts
in the welfare budget, unlike George
Osborne, who outlined his comprehen-
sive spending review yesterday. Yet at some
point in their careers all managers have to
deliver bad news. So when you do, what’s
the best way?
For starters, explain, explain, explain.
Decades of research in psychology and
behavioural economics point to the impor-
tance of providing explanations for your
actions. Whether you’re making an unfair
offer, playing uncooperatively in a Prisoner’s
Dilemma game, or announcing a layoff,
explaining why you're doing what you’re
doing and showing that you mean well typi-
cally softens the blow. In the absence of
explanations, people have a tendency to
assume the worst of intentions for your
behaviour. And though it seems to the more
rational-minded among us that the only per-
tinent information is the objective out-
come – such as pounds lost or saved – to
most people what is in your heart and mind
matters quite a bit.
Second, focus on the most pertinent com-
parisons. Human nature means that bad
news makes for good copy, and dire rumors
spread faster than good tidings. It’s not sur-
prising, then, that listeners tend to focus on
the most dramatic aspects of a situation
rather than the most level-headed.
The focus should Thirdly, make sure that you are framing
be on you your news in the best way for you. Give sta-
tistics, background and information to back
Picture: GETTY up why you are doing what you are. There
are many ways to spin a situation, so make
sure that your justifications are clear and
well backed-up with facts and figures. Then
you are more likely to bring people with you.
Finally, be decisive. Though some people
thrill to uncertain prospects, most loathe
uncertainty. Part of the danger in delivering
bad news is that it
will be seen as a
sign of more trou-
ble to come. So if
the news you’re
delivering is the
worst of it, say so.
Kay-Yut Chen and
Marina Krakovsky
are the authors of
Secrets of the
Moneylab: How
Understanding
People Will
Increase Your
Profits (Portfolio
Penguin)
release.
They talk to the owners and the
pirates. Our job is to raise the funds
when the money is agreed on. So
when a ship is taken we start the
process of making sure that we are
in a position to pay the ransom, we
go to Lloyds and start talking to
the underwriters and give them
situation reports every day.
The pirates are des-
perate, but really
what they are inter-
ested in is the cargo –
they are not going out to
kill people. This situation is
going to carry on because
their situation in Somalia is so bad, and
the Gulf is so hard to patrol. Sometimes
I think that it’s all a long way from
ladies’ shoes.
 Lifestyle
34 CITYA.M. 21 OCTOBER 2010

| Books

A Qatari takes on Wall St

LIFE
Zoe Strimpel is COACH
touched and amused
by this pre-9/11 novel
about oil futures How to buy a
man a watch
for a present
KAPITOIL
BY TEDDY WAYNE
Duckworth, £8.99
hhhhi

IT’S 1 October, 1999 and Karim, a genius
computer progammer from Doha, is
landing in New York. He’s been brought
to help a company called Schrub Equities
protect itself from the Y2K bug – New
York’s biggest security concern at the
time.
The opening of this first novel by
Harvard-educated Teddy Wayne is the
first of Karim’s diary entries – he’s
recording his attempts at conversation
with a spoiled American teen on the
plane. Karim is earnest, awkward and
bewildered by the culture of his tempo-
rary new home, even in the air. He’s also
willing to go to any lengths to improve
his English and carries a recording device
around with him – left on at all times –
for the purpose.
While at Schrub – who’s offices are in
the World Trade Centre – Karim invents a
brilliant new programme called Kapitoil,
which predicts oil futures by analysing
news stories. It’s lucrative, and suddenly
Karim finds himself in a whirl of private
jets and high-finance high-jinx. Yet he’s
more confused than ever about the machi-
nations and customs of Wall Street and is
still desperately trying to find his feet in
New York, negotiating his conflicting feel-
ings about his family alongside his devel-
oping affection for his co-worker, Rebecca.
Karim’s voice throughout is a hilarious,
touching delight: always logical, always
grammatically correct, part business and
part computer jargon, helplessly sincere.
This is a uniquely amusing novel about oil
(novels about oil don’t grow on trees), and
presents an endearing and comedic hero.
Any City reader worth their salt should
enjoy it hugely.
THROUGH THICK AND THIN
BY GOK WAN
Ebury, £18.99
hhhii
PART of being a cultured, urban woman is
cringing when Gok Wan pops up on
screen, right? Definitely, except that a part
of you – yes you – may also be unable to
change the channel. A camp-as-Christmas
half-Chinese man getting British women of
all ages and shapes to strip off in an evan-
gelical bid to make them feel better about
themselves is just not something it’s easy
to walk away from.
And love him or hate him, Wan has
managed to muscle his way into the
female consciousness in a far more posi-
tive way than other makeover gurus – I’d
take him over the awful Nicky Hambleton-
Jones, former presenter of Ten Years
Younger, poo analyst Gillian McKeith or
Trinny and Susannah, any day.
And oddly, his autobiography is rather
gripping. He weighed 21 stone as a teenag-
er and, soon after entering Central School
of Speech and Drama, became anorexic,
eating 40 laxatives a day and a spoonful of
honey. But his family (mother English,
father Chinese) – who sound brilliant –
helped him get through it and maintain a
will to live.
Wan’s big battle in life was food – as it is,
to various degrees, with everyone who isn’t
happy with their bodies. He describes his
emotional relationship with food with
admirable clarity and honesty, the whole
swirling mess of associations with family
and love interspersed with recipes with
names such as Grandma’s Eggs and 2AM
Steak.
The early years – full of gory detail of
food binges, purges, near-death starvation,
the agony of coming out as gay and eventu-
al rallying – are gripping. In the final third,
the story falls off and becomes a bit similar
to the rubbish one fears it will be from the
outset – a flurry of women in TV that Wan
loves, and exciting moments in media.
But it’s an honest book, full of graphic
and therefore gripping detail, and – cringe
or no cringe – it’s also a teensy wheensy bit
inspiring.
In 1999, Wall Street’s NEVER LOOK AWAY
biggest worry was BY LINWOOD BARCLAY
Y2K. Orion, £18.99
Picture: GETTY hhhhh
OH goodie: another installment of liter-
ary crime fiction so gripping it reads like
a dirty airport thriller. Indeed, Barclay’s
latest is being hailed as his best – which is
no small feat for the much-acclaimed
author of No Time For Goodbye and Too
Close To Home.
The central question of the book is this:
can you ever know someone through and
through?
David Harwood is a happily married
reporter for a newspaper in New York
state (Barclay himself works for the
Toronto Sun), writing stories about local
political corruption that earn him plenty
of enemies. One day, he and his wife Jan
and little Ethan go on an outing at an
amusement park, but the day is shattered
when someone tries to abduct Ethan.
Both parents race after him, and eventu-
ally David finds him sleeping in a push
chair nearby. Elatedly he goes to find Jan
– except that he can’t. She’s disappeared.
What’s more, the park has no record of
selling her a ticket, and she doesn’t show
up on any security video. Nor is she at
home. The police soon start to suspect
that David killed Jan and concocted the
park abduction story. But he begins dig-
ging into his wife’s past and learns he
never really knew her. As the tension
mounts, Barclay shows how even the
most innocent action can seem suspi-
cious, and how much of life is based on
unexamined. A chilling triumph and a
must-read.
E
VERY smart chap should have a smart
watch, and preferably more than one – the
sheer diversity of classy watches out there
means that the old idea of making your
money, buying a Rolex and having that as your
one watch is no longer current. Different watch-
es can be worn for different occasions or moods,
which is one reason why they make great pres-
ents – you can never have too many.
“The starting point is always deciding
whether you want mechanical or quartz,” says
Alastir Laidlaw, co-founder of Mayfair boutique
Jura Watches. “Quartz will be cheaper, but the
mechanical watch is far more prestigious
because it’s an engineering marvel.”
Next decide what sort of occasion it’ll be
worn for – is it for work or the weekend, formal
dos or sporty outings? If a chap already has a
smart, conservative watch – say a Rolex or a
Patek Philippe – for dressy gatherings, there’s
no point in doubling it up.
Even within these broad categories there are
many sub-categories. For instance, sports
watches include diving watches, pilots’ watch-
es, yachting watches, even space watches (suit-
able for – or, at least, inspired by – astronauts).
“If you think about the interests of the per-
son receiving the watch, there are plenty of
things [in terms of design and branding] to fol-
low and associate with,” says Laidlaw.
For instance, brands like BRM and TAG
Heuer are particularly associated with motor-
ing; Bremont has links with flying; Corum with
yachting. And while the association is helpful, it
shouldn’t be limiting: for example diving watch-
es, such as the IWC Aquatimer pictured
(£4,250 from Watches of Switzerland), can be
sported all the time, rather than just when
wearing flippers.
It’s common to worry about wrist size,
though the trend over recent years towards
oversize watches has meant most watches
seem large on the cuff. Bigger is brasher, and
the trend is getting smaller,
but only slightly.
“There’s a
watch for every-
body, and it’s
worth finding
out what that
watch is, so
don’t just go
for the first
thing you like,”
says Laidlaw.
Timothy Barber

OUT OF OFFICE
ZOE STRIMPEL
Francis O'Connor's LAST CALL: ENLIGHTMENT IN HAMPSTEAD
stylish set at the Director Ed Hall’s new tenure at the
Hampstead Theatre. Hampstead Theatre got off to an amusing
start with Enlightenment – a play that is
stylish and wide-ranging, if not particular-
ly enlightening. Lia and Nick lose their 20-
year-old son in a terrorist attack in the Far
East. Things becomes sadder and odder
from here – but if you’re an NW3 dweller
in the mood for some local theatrics, this
is a good bet. Until 30 October; to book, call
0207 722 9301.
MARMITE POP-UP RETURNS
Love it or hate it, Marmite is popp-
ping up with a vengeance at
Selfridges (and three other UK loca-
tions) in the run-up to Christmas.
The shop will have 150 Marmite-
themed products, from t-shirts
to tableware, cufflinks to choco-
late, stationery, snacks and
more. Marmite lovers: rejoice.
This week until Christmas, www.mar-
mitepopup.co.uk.
ANCIENT EGYPT AT BRITISH MUSEUM
Yet another show guaranteed to
capture the imagination at the BM:
this time via the Book of the Dead,
a compilation of spells designed
to guide the deceased through
the dangers of the underworld,
ultimately ensuring eternal life.
The beautifully illustrated
spells on papyrus and linen were
used for over 1,000 years. 4 Nov to 6
March. www.britishmuseum.org.
CITYA.M. 21 OCTOBER 2010
It’s the season of the most
celebrated ingredient of all
Renowned chef Helene Darroze
introduces Timothy Barber to the
joys of the white Alba truffle
A
LL this talk of tightening belts is
enough to make one want to do
precisely the opposite. Thankfully,
when it comes to big, indulgent
blowouts of the kind where the only
important cut is that of the expensive
meat on your plate, the most indulgent
ingredient of them all is in season.
The “Alba Madonna” – Italy’s white truf-
fle – is like some sort of fairytale nectar,
found growing in one blessed region –
around the Piedmont town of Alba – and
gestating the kinds of tastes and
aromas that would make even
the most hardened anti-
gourmand swoon.
“It’s really quite erot-
ic,” says The
Connaught hotel’s two
Michelin-starred
French chef, Helene
Darroze, in an accent
that’s more Gallic than a
croissant with café au lait.
We’re standing in the hotel’s
snug basement kitchen where
Darroze is rustling up a white truffle
risotto.
STUFF OF DREAMS
Upstairs, in The Connaught’s sumptuous
restaurant, Darroze’s six-course truffle
menu is being served – and it’s a thing of
wonder, believe you me. A huge roasted
scallop basking in a parmesan foam and
topped with white truffle shavings is sex
on a plate, while the dessert – sponge pud-
ding in a glass with mascarpone cream,
almond foam and slices of truffle – is the
stuff of the most glorious dreams.
Truffle, of course, is a fungus, an under-
ground mushroom that’s both fragile and
very, very pricey. It doesn’t travel well and
even refrigerated it doesn’t last long – a
week if you’re lucky. “The price varies every
day according to what’s being found, since
it’s brought over here and delivered imme-
diately,” says Claire Wells of London Fine
Foods, which sells white truffles online on
a next-day basis. “It’s a living funghi, so it’s
vital it’s kept in a cool environment and
eaten as soon as possible.”
Chefs worship it, but it’s suitable for
earthy, uncomplicated dishes too, which is
why Darroze is showing me how to use it
for a humble risotto. Not that hers is exact-
ly humble – duck fat is used instead of olive
oil, the rice is the finest Arborio around,
Recipe: Risotto with white truffles
BY HELENE DARROZE
For six people
l 240g Italian short-grain rice
l Two shallots
l 50g of bone marrow (optional)
l 50 g grated parmesan
l 10 cl dry white wine
l 1.5 liters of chicken stock
l 50g of butter
l 5 cl whipped cream
l 10cl of olive oil
l Salt
l Espelette pepper
l White truffles:
5g or more per person
and huge dollops
of whipped cream
are spooned in for extra
creaminess. Stirring in stock, Darroze
points out the most important aspect of
cooking with white truffle – that you
shouldn’t actually cook with it. “Only add it
in shavings at the end, never cook it – it’s
too delicate and the taste will be broken,”
she says.
Defining the tantalising qualities of the
truffle isn’t easy: a touch of caramel there, a
hint of hazelnut there, a floral zing
matched with an earthy nuttiness,
sparkling lightness offset by bold, brassy
punch. It’s elusive, which means deciding
what to serve it with isn’t straightforward.
“For me there are only two meats which
go with white truffle: chicken and veal,”
says Darroze. “Sometimes female pheasant
is delicate enough too, but not male.”
VERY ITALIAN
However, white fish – and particularly scal-
lops – are perfect, as is parmesan. Given
parmesan has such a strong taste, isn’t
that surprising? “Perhaps, but it compli-
ments it very well and of course it’s very
Italian,” says the chef, hurling great
clumps of the grated cheese into the risot-
to. “A salad of rocket leaves with parmesan
and truffle shavings is so simple, but very
good.”
Darroze ladles the risotto into ramekins,
There are three essential rules for a perfect
risotto:  spoon, for about four minutes
1. The choice of rice. It must be round and of
Italian origin – Carnaroli, Vialone Nanno,
Arborio. The one Darroze prefers is the
Acquerello organic grain risotto rice. Do not
wash it before putting it in the pan, other-
wise it will withdraw its starch, which
Darroze says is indispensable to the final
result of the risotto.  Add the white wine and cook,
2. Always use a wooden spoon.  stirring constantly, for about five min-
3. The quality of the broth to be used for
cooking risotto. If you choose to cook a risot-
to with shellfish, use fish stock. For a risotto
with mushrooms, vegetables or meat, use
chicken or a simple vegetable broth.
Above, Helene grabs a large truffle an assistant has been
Darroze makes truffle scrubbing clean with a brush, and grates
risotto in the kitchen off shavings over the risotto, squeaking
of The Connaught with pleasure as she notices the deep pink
hotel. hue tingeing the dappled white of the truf-
fle’s interior.
Picture: Micha “That means it probably grew near
Theiner/City A.M. poplar trees instead of oak – that’s the very
best kind of white truffle,” she says. Well,
one wouldn’t expect anything less.
The Truffle Menu at Helene Darroze at The
Connaught is £95 per person with a £36 supple-
ment for white truffle. www.the-connaught.co.uk
WHITE TRUFFLES | WHERE ELSE TO EAT THEM
AT Babbo, the smart Italian while both The Square and The
restaurant on Albemarle street , Greenhouse have white truffle
chef Douglas Santi is offering specials on. At the latter, the
dishes including homemade Poularde de Bresse (chicken from
tagliolini with quail egg cream Bresse in France) served in two
and white truffles and Guinea services (breast first, then leg)
fowl with chestnut and white with quenelle Lyonnaise, lobster
truffles. bisque & shavings of white truf-
Everyone's favourite Italian fles sounds spectacular.
maestro Giorgio Locatelli is serv-
ing a dedicated truffle menu at www.babborestaurant.co.uk
Locanda Locatelli , as is Marco www.locandalocatelli.com
Torri at Ristorante Semplice www.ristorantesemplice.com
– we like the sound of the cheese www.squarerestaurant.com
fondue with white truffle – www.greenhouserestaurant.com
To make the risotto, finely chop the shallots,
cut the bone marrow in small dices and grate
the Parmesan Reggiano.
Pour the olive oil in a pan with the bone
marrow. Add the shallots. Cook, stir-
ring frequently with a wooden
or until the shallot is soft and
translucent.
Stir in the rice and cook,
stirring frequently, for about
five minutes or until the rice is
almost chalky in colour and glis-
tening.
utes or until the wine has been absorbed
by the rice.
Begin adding the chicken stock, about one
cup at a time, and cook, stirring constantly, until
the liquid has been absorbed by the rice.
Lifestyle 35
GOING
OUT
TIM BADHAM
Restaurants
with bars are
on the rise
T
HE MOST exciting launch on the way this
Autumn has to be the brand new
Hakkasan Mayfair, opening its doors on
Bruton Street mid November. The tucked
away Hanway Place original has been an amaz-
ing success since its launch nearly 10 years ago.
Along with fine, modern Chinese cuisine it ush-
ered in a new breed of dark, sexy and very
trendy restaurant bars to the capital.
The new site takes this now international
brand (with its new Abu Dhabi owners) to the
next level with two floors including a spacious,
75-seat lounge bar upstairs and another small
bar on the main dining floor in the basement.
You can expect similar dark woods and sleek
design, this time by Paris-based designer
Guillaume Richard, and with the more
amenable location this should be the hot new
place to be seen.
Partly thanks to Hakkasan, restaurant bars
are no longer just a place to kill time before din-
ner but destination spaces, and some of the
most sophisticated bars in town. The top Asian
restaurants lead the way with Zuma and Nobu
Berkeley high on the most wanted list, and
Roka too (in both the West End and Canary
Wharf) with its funky yet homely Shochu
Lounge. There’s also award-winning new comer
Aqua Spirit with its wonderful terraces.
At the end of Charlotte Street, Caprice
Holdings’ Bam-Bou has a relaxed and little-
known top floor Red Bar. Less Asian but with
its own seductive top floor bar is the uber styl-
ish L'Atelier de Joel Robuchon, featuring fan-
tastic cocktails and cosy granite fireplaces.
Other newcomers include the performance-
lead Circus in Covent Garden and the very hip
Hix in Soho, with its comfy sofas and arty, met-
ropolitan feel. Sketch of course was one of the
forerunners and still maintains its chic looks
and a certain mystique. Momo’s exotic Kemia
Bar also still boasts one of most exclusive
restaurant bars in London.
Other members bars attached to restaurants
include Quo Vadis – its discreet lounge club
comes complete with billiards room – and the
alluring Almada underneath Automat. If you
want to step back in time then try Mosimann’s
in Belgravia, where the stunning Belfry houses
a wonderful mezzanine balcony bar with sub-
lime, old school service to match.
Tim Badham is the founder of Innerplace,
London’s leading provider of VIP entertainment,
including film premieres, fashion shows, launch
parties and members club access.
www.innerplace.co.uk
Do not add additional stock until the previ-
ous cup has been absorbed. Keep adding
stock and stirring until the rice is al dente.
After 20 minutes there shouldn’t be any
stock left.
Now add the butter and parmesan while
still stirring. When everything has been
absorbed, season with salt, Espelette pepper
and some olive oil.
Serve the risotto all'onda, that is to say
slightly liquid and smooth. To this, add at the
last moment the whipped cream. Serve the
risotto into bowls and grate the white truf-
fles over it. Serve immediately. 
Tip: Store white truffles in rice with which
you can later cook the risotto. The rice will
taste the truffles.
Left, Olive wood Alessi truffle slicer,
£45, www.alessi.com
 36 Lifestyle | TV& Games CITYA.M. 21 OCTOBER 2010

BBC1 BBC2 ITV1 CHANNEL4 CHANNEL 5 TV PICK

TERRESTRIAL
6pm BBC News
6.30pm BBC London News
7pm The One Show
7.30pm EastEnders; BBC News
8pm Watchdog
9pm CHOICE
Have I Got News for You
9.30pm Reggie Perrin
10pm BBC News
10.25pm Regional News
10.35pm Question Time
11.35pm This Week;
Holiday Weatherview
12.25am Sign Zone: Panorama
12.55am Sign Zone: Countryfile
1.55am Sign Zone: Antiques
Roadshow 2.55am Sign Zone: The
Big School Lottery 3.55am-6am
BBC News
6pm Eggheads
6.30pm Strictly Come Dancing
– It Takes Two
7pm The Culture Show: New
series. A restoration project at
Chichester Cathedral.
8pm Nigella Kitchen
8.30pm Autumnwatch 2010
9.30pm Autumnwatch
Unsprung: With sound recordist
Chris Watson.
10pm Never Mind the
Buzzcocks
10.30pm Newsnight; Weather
11.20pm The Culture Show
12.20am The Apprentice:
You’re Fired!
1.05am BBC News 3.55am Close
4am-6am BBC Learning Zone
6pm London Tonight 6pm The Simpsons 6pm Home and Away: Mitzy
6.30pm ITV News 6.30pm Hollyoaks tries to prove that Dex’s
7pm Emmerdale 7pm Channel 4 News behaviour is inappropriate.
7.30pm Wrong to Buy?: Tonight 7.55pm 4thought.tv 6.25pm Live from Studio
8pm Emmerdale: 8pm CHOICE Five: Topical reports.
Nathan pays for his smug River Cottage Every Day 7pm Five News at 7
testimony against Ryan. 9pm The Taking of Prince Harry 7.30pm CHOICE Live UEFA
8.30pm Coronation Street 10.30pm True Blood Europa League Football:
9pm Law & Order: UK 11.45pm 3 Minute Wonder: Manchester City v Lech Poznan
10pm ITV News at Ten The Jarman Award (Kick-off 8.05pm).
10.30pm London News 11.50pm Reaper 10.10pm FILM The Glimmer HAVE I GOT NEWS FOR YOU
10.35pm Cops with Cameras 12.45am King of the Hill Man: Action thriller, starring BBC1, 9pm
11.35pm The Late Debate 1.10am King of the Hill 1.35am Reginald D Hunter and Janet Street-
FILM Teenage Caveman: Horror, Steven Seagal. 1996.
12.05am Grimefighters starring Andrew Keegan. 2001. 12.05am SuperCasino Porter join team captains Ian Hislop
12.30am The Zone; 3.05am Drifting 3.20am ER 4.05am House Doctor 4.30am and Paul Merton for the current affairs
ITV News Headlines 4.10am Unreported World Great Scientists 4.55am Rough quiz.
2.35am The Jeremy Kyle Show 4.35am Dispatches: How Guide to Journeys 5.10am
3.25am Wrong to Buy?: Tonight the Rich Beat the Taxman Michaela’s Wild Challenge 5.35am-
3.50am-5.30am ITV Nightscreen 5.25am-6.10am Countdown 6am Michaela’s Wild Challenge

SKY SPORTS 1 BRITISH EUROSPORT 5.30am-6am Home Shopping Brian 3.55am Switched 4.15am DISCOVERY HOME &
SATELLITE & CABLE

7pm Sky Sports News at
Seven 7.30pm Premier League
World 8pm The Rugby Club
9pm Ringside 10pm Time of
Our Lives 11pm The Rugby
Club 12am Ringside 1am
Premier League World 1.30am
Time of Our Lives 2.30am The
Rugby Club 3.30am Ringside
4.30am Premier League World
5am-6am The Rugby Club
SKY SPORTS 2
7pm ATP Tour Uncovered
7.30pm Live Premier League
Snooker 11pm WWE: Late
Night – Raw 1am WWE: NXT
2am-5.30am Premier League
Snooker
SKY SPORTS 3
6pm PGA Grand Slam of Golf
8.30pm European Tour Golf
10pm Live PGA Tour Golf 1am
Golfing World 2am-3.30am
European Tour Golf
6.40pm Champions Club
7.10pm Triathlon 8.10pm
Strongest Man 8.55pm Boxing
9.55pm Fight Club 11.55pm-
12.25am Champions Club
ESPN
6pm Live UEFA Europa League
Football 8pm Live UEFA
Europa League Football 10pm
Goal! 10.30pm Premier League
World 11pm MMA Live
11.45pm UEFA Europa League
Highlights 1.45am Press Pass
2010 2.15am MMA Live 3am-
5.30am Live NHL Ice Hockey
LIVING
7pm Private Practice 8pm
Drop Dead Diva 9pm Nikita
10pm Chuck 11pm Criminal
Minds 12am CSI: Crime Scene
Investigation 2am Charmed
3am Nothing to Declare
3.50am Yvette and Karl: Life
Begins At 40 4.40am The
Jerry Springer Show
BBC THREE
7pm The Best of Top Gear
8pm Are You Fitter Than a
Pensioner? 9pm Little Britain
Abroad 10pm EastEnders
10.30pm Russell Howard’s
Good News 11.05pm Family
Guy 11.55pm Are You Fitter
Than a Pensioner? 12.55am
Little Britain Abroad 1.55am
Russell Howard’s Good News
2.25am The World’s Strictest
Parents 3.25am The Real
Hustle: High Stakes 3.55am-
4.55am Lip Service
E4
7pm Hollyoaks 7.30pm Friends
9pm The Big Bang Theory
9.30pm How I Met Your
Mother 10pm PhoneShop
10.35pm The Inbetweeners
11.05pm School of Comedy
11.40pm Misfits 12.45am
Scrubs 1.35am Glee 2.20am
Misfits 3.15am What About
Accidentally on Purpose
4.40am-6am Switched
HISTORY
7pm Nostradamus: 500 Years
Later 8pm Ice Road Truckers
10pm America: The Story of
the US 11pm Extreme Trains
12am Ice Road Truckers 1am
Barbarians 2am Nostradamus:
500 Years Later 3am
Colosseum: Rome’s Arena of
Death 4am-5am UFO Files
DISCOVERY
8pm How Do They Do It?
8.30pm How It’s Made 9pm I
Shouldn’t Be Alive 10pm
Deadliest Catch 11pm Greatest
Tank Battles 12am Bear Grylls:
Born Survivor 1am Deadliest
Catch 2am Industrial
Revelations 3am Weaponology
3.50am Treasure Quest
4.40am Days That Shook the
World 5.30am-6am How Does
That Work?
HEALTH
7pm Deliver Me 8pm Half Ton
Hospital 9pm I’m Pregnant and
Homeless 9.30pm I’m Pregnant
and in Prison 10pm Strange Sex RIVER COTTAGE EVERY DAY
11pm Embarrassing Illnesses
CHANNEL4, 8pm
12am I’m Pregnant and Hugh Fearnley-Whittingstall champions
Homeless 12.30am I’m the importance of breakfast, visiting a
Pregnant and in Prison 1am school to demonstrate how to make
Strange Sex 2am Embarrassing pancakes and drop scones.
Illnesses 3am Half Ton Hospital
4am Midwives 5am-6am
Bringing Home Baby
SKY1
7pm The Middle 7.30pm The
Simpsons 8pm Modern Family
8.30pm The Simpsons 9pm
An Idiot Abroad 10pm A
League of Their Own 11pm
NCIS: Los Angeles 12am FILM LIVE UEFA EUROPA LEAGUE …
Deadly Suspicion 2008. CHANNEL5, 7.30pm
1.40am Road Wars 2.10am Manchester City v Lech Poznan (Kick-
Oops TV 3.10am Bite Size off 8.05pm). All the action from the
Brainiac 3.20am Lost 4.20am Group A meeting at the City of
Tabatha’s Salon Takeover Manchester Stadium.

COFFEE BREAK
Copyright Puzzle Press Ltd, www.puzzlepress.co.uk

QUICK CROSSWORD
   

SUDOKU KAKURO
16 37 8 17 20 30 11 
29 19
13    
25 28
Place the numbers from 1 to 9 in each empty cell so that each 41 
row, each column and each 3x3 block contains all the numbers Fill the grid so that each block 4 20
7 24
from 1 to 9 to solve this tricky Sudoku puzzle. adds up to the total in the box 13 5 14
 
above or to the left of it. 7 10
You can only use the digits 1-9 21 
    and you must not use the
9 23 24
45    
same digit twice in a block.
  The same digit may occur 39  
24 12 22
  more than once in a row or
column, but it must be in a
11
16
10
23
17
 
32 12
   separate block.
10 14
13 26
    20 15
 

   ACROSS DOWN
1 Telegraph code (5) 1 Foam used in hair
 
  WORDWHEEL S M
3 Egyptian capital (5)
7 Untwist (6)
styling (6)
2 Unemotional person (5)
Using only the letters in the Wordwheel, you have 4 Defence plea of being
    10 Notion (4)
ten minutes to find as many words as possible,
A T 11 Hindu woman’s
elsewhere (5)
none of which may be plurals, foreign words or
proper nouns. Each word must be of three letters I garment (4)
5 All right (4)
6 Seabird with a massive
LAST ISSUE’S or more, all must contain the central letter and
letters can only be used once in every word. There
I R 12 Expert who is devoted
to one occupation or
wingspan (9)
SOLUTIONS KAKURO is at least one nine-letter word in the wheel.
E C branch of learning (10) 8 Forty winks (3)
15 Entire range of 9 Greek island (5)
QUICK CROSSWORD 8 5 3 2 6 8 4 skills used in a
/ $ 6 6 2 $ 3 5 , /
4 3 2 1 3 5 1 2 SUDOKU          particular field (10)
13 Traveller who uses
runners to cross snow (5)
9 4 7 8 5 9 8 4         
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6 + $ 5 . 3 $ < ( ( 6 2 1 2 7 3 1
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= , % 6 , 7 1 4 6 9 8 7 5 21 Addition (4)
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7 5 $ 1 6 $ & 7 , 2 1 9 1 3 5 2
        
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17 Transmitting live (2-3)
2 / 6 & / 23 More recent (5)
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6 ( , 1 ( ( 7 + ( 5 4 2 1 9 8 7 5
 Sport
37
INTER EDGE SPURS IN SEVEN
GOAL SAN SIRO THRILLER
ITALIANS HOLD ON DESPITE BALE
HAT-TRICK: PAGE 39

‘Confident’
Henson still Pietersen is
world class, ready for
Ashes tour
insist suitors
Saracens

Sarries chief Edward
Griffiths ready to let
Wales star complete TV
stint before joining club
says Frank Dalleres
SARACENS chiefs believe forgotten
man Gavin Henson is still “world
class” and could make a huge impact
▲
CRICKET
BY TOM DREW
ENGLAND star batsman Kevin
Pietersen says he is “full of confi-
dence” going into the Ashes after a
recent spell in South Africa.
Pietersen joined Kwazulu Natal
Dolphins in an attempt to rediscover
Gavin Henson is a world class player his form, having been dropped from
who would make an immense contri-
bution to any professional club where
England’s last one-day team after a
period in which he has failed to score
he chose to play.”
Henson’s contract with the BBC
a Test century since March 2009.
Pietersen said: “I felt brilliant in
could tie him down until December,
depending on his progress in the
South Africa. I’m full of confidence
going to Australia.
show, but Saracens are accepting of
that and are exploring whether he
“It was amazing to be out there and
to work with Graham Ford, a guy I’ve
might still be able to train with them
in the interim.
worked with since I was seven years
old, a good family friend.”
“We would expect existing com- Having played in the last Ashes
mitments to be hon- tour of Australia in which England
oured. But there may were humiliated 5-0, the former
Sport
36

if he decides to relaunch his career at be scope for players CITYA.M. 19 OCTOBE

Nottinghamshire and Hampshire
Vicarage Road. to train alongside GEECH SET
LIONS RETUFOR SHOCK
SCOT TARG RN
2013 TOUR: ETED FOR
R 2010

man is acutely aware of the need to

And they are ready to let him see those commit-
out his commitments to television ments,” Griffiths Saracens in
show Strictly Come Dancing if it added. transfer talks
means clinching a deal for the Wages aside, with Wales
celebrity Wales centre. Henson would also star Henso
Henson, 28, is one of three or four cost Saracens some-
P34
properly prepare for the winter Tests.
He said: “There were a few of us
Keane sides
with Rooney
involved in that, so we’ve handed over
in striker’s some sort of knowledge as to how we
United row want to try and do better and be bet-
n FOOTBALL
ter prepared for what is thrown at us
▲

EXCLUSIVE BY FRANK DALLERES

▲

BY FRANK DALLERES Saracens director MANCHESTER

Venter has not of rugby Brendan Keane has United great
SARACENS told unsettle Roy
signings, such shied away from bold

players Sarries have targeted as cover thing in compensa- Wales star have held talks with

this winter and I’m sure we will do.”

Wayne Rooney d striker
decide whethe
Gavin Henson the England as that of Matt Stevens, any dispute to “look after No1” in
and will
Ospreys star r to swoop for the join up withand ex-Bath prop set to hierarchy. with the Old
Trafford
the club in
can reveal. by tomorrow, City A.M. when his two-year January Rooney is
Henson is expires. Howeve ban for cocaine use United after being tipped to leave
six
ers Sarries one of a handful of play- ty is complic r, Henson’s availabili- rumours that years at the club amid

for injured fly-half Derick Hougaard, tion, as he remains Pietersen has also defended under-
chiefs have remains contrac ated by the manager Sir his relationship with
possible recruits identifi fact that he
Alex
Hougaard after fly-half ed as would demand ted to Ospreys, who orated beyond Ferguson has deteri-
was ruled Derick from compensation repair.
months. out for six whom he is and Keane, Ferguso
“We have had Henson wants on unpaid leave. before a falling-o n’s trusted captain
Henson’s camp] some contact with a London to resume his career fielder leaving ut led to the
mid-
[with club in believes Rooneyunder a cloud in 2005,

as reported first in City A.M. on contracted to Henson is in fire Australia captain Ricky Ponting
too early to but it would closer to his order to be
decide. We have be much their children, who
live with interests before should put his own
or four players got three mother, singer
we could stick we have identified, or Church, in
the capital. Charlotte “Players and the club’s.
Saracens chiefwith what we’ve got,” cited public He has also the time. It’s managers fall out all
up with Church knowledge part of life,”
“If I was to offer
executive of his said Keane.
Griffiths told
City A.M. last Edward reluctan as a reason break- is a good lad, advice to Wayne, who
“When you night. ce to for his

Tuesday (right). Ospreys, albeit on Hougaard you lose a player like

options. We have to look at all the
options. One are looking at all the
anybody in. option is not bringin
We
next 48 hours.” will decide within the
dressing room.return to the Ospreys
play for the
Africa at
December,
g depends
on his
He has been
Barbarians against
Twickenham
but his
invited to
South
on 4
appearance
with the BBC. Strictly commitments
sure he looksI would tell him to make
pieces of meat; after No1. Players are
When your
Luckily for
and he’s fit.”
Real Madrid
that’s how
time’s up, yourI look at it.
Wayne he’s time’s up.
at a good age
talks with injury who has faced calls to step down fol-
The major question mark over him, unpaid leave, but hit Saracens. lowing recent losses and criticism
Henson, 28,
sial signing would be a controver- Hougaard possible biddershave been mooted as
, limped off for Rooney,
game since having been out of the Saturday’s
narrow during said to have
told United who is
March 2009 defeat to Leinster Heineken Cup not discuss chiefs he will
and persona due to injury a new contract
l issues. The Achilles. The after hurting his to leave. But and
tre is keen to celebrity cen-
went surgery South African under- Real manage wants
his stint on make a comeback, after on the injury
Mourinho yesterda r
y played down Jose

however, is rustiness, as he has not negotiations are from former team-mate Shane Warne.
television’s in London yesterda prospect of
Dancing reaches Strictly , after y a the
hopeful of forcingan end, and is still
Come due
to outline which doctors were star, predicti move for the England
the Wales team his way back into But Premier his recovery schedule. any differen ng he would patch up
ship runners ces
and next year’s for the Six Nations are preparin
g
-up Saracens “I don’t think with Ferguson.
World Cup. six months. to be without him for able],” said Mourinh he will [become
avail-
Youngster Alex
in line to replace Goode man will persuad o. “I think the big

played competitive rugby since not yet thought to Fabregas an Picture: GETTY Pietersen said: “Ponting is a great
him in the interimis Ferguson is e him to stay.”
. Henson is one
of “three or four” Rooney when set to be pressed on
players on Saracens today ahead he faces the

have reached that to return fordShWalcott ready Strauss: Australia off the
’ shortlist. media
Picture: ACTION League clash of United’s Champions
IMAGES with Bursasp
TREVOR STEVEN or.
ON ROONEY

March 2009 owing to injury and off- player and one of the greats of the
: P35

field issues. But he is keen to make a stage. Griffiths akhtar test mark with KP critic game, when he feels it’s his time, then
ARSENAL ism
been sideline
both trained d by injury for a month,
Champions yesterday ahead of the CRICKET
▲

Shakhtar arrive

comeback with a London club and said: “Before SHAKHTAR DONET

Saturday against speaking to a number of players. I’m he calls it time.”
League fixture behind in London second
SK
Emirates Stadium at only onthe Gunners in Group ENGLAND who has gone
Sky Sports 2, kick-off “Cesc is availabl . goal H, but captain Andrew Test century 18 months without
7:30pm
“He had a little e,” said Wenger teams started difference after both has hit back at Australi Strauss before , would not
be dropped
a
FOOTBALL their campaig misfirin an the series
ns with could g batsman Kevinclaims that
▲

.
the hurdle and setback but got over two wins. Among their “I couldn’t see starts.
BY FRANK DALLERES fitness. I do is ready to play ex-Arsenal striker ranks will be a disrupti Pietersen
added. that happen
at full for Eduardo, who be ing the Ashes. ve influence
dur- characte“We all know what
ing,” he
start him or not know yet whether

Edwards Griffiths, the Saracens chief there was any Leinster and not going to put a time-frame on it His comments were echoed by
Russia left
ARSENAL boss not I derailed earlier this year after injury Ex-Aussie coach r he is, we know sort of
make a late Arsene Wenger will be whethe but he is available. his career in called Pieterse John Buchan big Ashes series these sort of
decision will not, r I take a gamble It “I will north London an tend
throw captain on whethe because he or Eduardo be happy and . individualist” n “fragmentary and best in him and to to bring out the
winger Theo Cesc Fabrega r to long time. I have has been out sad
for a happy ,” Wenger added. “I to see upset the squad and warned
he
encouraging. me that’s very
s and He’s been out
Walcott back
against Shakhta
to make up
into action [on Tuesday] but physica my mind because he was will be which during the could that happens of form,
tic boy with always a fantas- starts next month. series, to all of us, and
Fabregas andr Donetsk tonight. ready, fit and
wanting to lly he is will also be a fantastic mentality.
who’s played anyone

executive, insists he and director of formal agree- Griffiths is confi- but I think it will be days rather than Australian all-rounder Marcus North
But Strauss
Walcott, who has a play. sad because said: any length of international cricket for
I worked very has never been a “Kevin Pietersen one
I
have right toe problem. But his ankle Theo hard to get time
and he is in is all feeling him and England cricket problem innings to knows it only takes
the squad.” he could not he left with the the team. Buchan for the form. For Kevin get yourself
back in
the promise completely mark to say an it might be one
of his first season.” fulfil will that. I’m sure is off first-class games of
come to the Kevin Ashes, that precede the
Strauss also party.” it may be
in the first the

rugby Brendan Venter retain faith in ment, out of dent of finding a weeks.” who called the suggestion that
insisted that
Pietersen, match, but he’ll come Test
good a player right; he’s too
not to.”

the British and Irish Lion. courtesy we’d approach and solution sooner Henson is hopeful his return to Ponting should resign “laughable”.
“He is a world class player eager to talk to the club that holds his regis- rather than later. competition will help him force his North said: “Playing in a lot of dif-
relaunch his career,” Griffiths told tration.” “Discussions continue but it would way back into the Wales squad for ferent teams over the last 10 years I’ve
City A.M. yesterday. “There is a com- Saracens have moved quickly fol- be wrong to provide running com- next year’s Six Nations and World never come across a captain as good as

@
plete appreciation at Saracens that lowing Hougaard’s Achilles injury on mentary,” he said. “We have been Cup campaigns. Ricky. It’s a silly question to me.”

SPORT | IN BRIEF
Beat Webber or forget Make Money from
title, McLaren stars told
Moody set for England return
RUGBY UNION: England have been
handed a boost ahead of the November EVERY
internationals with the news that Bath
flanker Lewis Moody could play again
this weekend after recovering from an
PREMIER LEAGUE

@
eye injury. Moody said: “We are just tak- of Webber. We need two cars at the
Match!
▲

ing each day as it comes but the injury
keeps getting better and better.”
Fifa to test goal-line systems
FORMULA ONE
front, competing for the front row of
MCLAREN duo Lewis Hamilton and the grid in qualifying, and then deliv-
Jenson Button must finish ahead of ering a race result on the podium.”
The 7 bets

FOOTBALL: Goal-line technology is a
step closer after the International FA
Board agreed to consider systems that
confirm within a second that a goal has
been scored. Companies are now sub-
mitting their systems for Fifa testing.
“
Red Bull’s Mark Webber at this week- Prew recognises that his team has
end’s Korean Grand Prix to have a finished poorly in the last two races, Downurload
chance of winning the world champi- failing to secure a podium position in yo the bookies
onship, says their chief engineer.
The English pair lie more than 25
points Behind Australian Webber,
either, but feels both the car and driv-
ers are ready for the challenge that
the newly approved Yeongnam cir-
FRrt EtodaEy... DON’T WANT
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repo
who holds a 14-point lead over his cuit presents.
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Scotland coach to blood starlets
RUGBY UNION: Scotland head coach
Andy Robinson has named four
uncapped players in his squad for the
autumn internationals. Ruaridh Jackson
and Joe Ansbro will join Edinburgh duo
Greig Laidlaw and Jim Thompson in
hoping to face New Zealand and South
Africa at Murrayfield in November.
”
nearest rival in the drivers’ standings He said: “I feel we’ve under-deliv-
with just three races remaining. ered points in the last couple of races,
Phil Prew, McLaren’s principal race which is a frustration to the drivers Generating 129 winners
engineer, believes his drivers need a and the team. But they know that the
strong grid position and a top-three car has the pace and the potential to from 152 bets last season
finish to still be considered a champi-
onship threat.
be competing, and finishing higher
up than we’ve achieved recently. They
MORE NEWS
He said: “I think our target this both want to win races and they both ONLINE www.FootballOffer.co.uk/CAM
weekend is very much to get on the want to win this championship, and www.cityam.com
podium. In fact we need to be in front to do that we have to be winning.”
 38 Sport | Football CITYA.M. 21 OCTOBER 2010

Results
UEFA CHAMPIONS LEAGUE GROUP A
FC Twente....................(0) 1 Werder Bremen ............(0) 1
Janssen 75 Arnautovic 80
Att: 23,269
Mancini plays down January mega deal
Inter Milan..................(4) 4 Tottenham.........................(0) 3
Zanetti 2 Bale 52, 90, 90 are favourites to sign Rooney, who Ferguson and United, and I only want

▲
PREMIER LEAGUE
Eto'o 11 (pen), 35
Stankovic 14 Att: 70,520 BY TOM DREW has refused to sign an extension to a
United contract that expires at the
to speak about my players. Rooney is
not my problem. I am Manchester
Striker is welcome at
Inter Milan
Tottenham
P W D L F A GD Pts
3 2 1 0 10 5
3 1 1 1 9 7
5
2
7
4
MANCHESTER CITY manager Roberto
Mancini has played down speculation
end of next season.
Mancini said: “At this moment all I
City manager. I have enough prob-
lems with my own players.”
Chelsea, says Anelka
FC Twente 3 0 2 1 4 7 -3 2
Werder Bremen 3 0 2 1 3 7 -4 2 that he is planning to make a sensa- can say only that Rooney is a strong While underlining the club’s inten-
tional move for Wayne Rooney and player, like Lionel Messi, Fernando tion not to make any more major CHELSEA striker Nicolas Anelka
GROUP B insists he expects the striker to stay at Torres and Carlos Tevez. This is my signings in January, Mancini refused admits he would welcome the chance
Lyon...................................(1) 2 Benfica ................................(0) 0 Manchester United. opinion of him as a player. I can say to rule out a move for Rooney next to play alongside Wayne Rooney at
Briand 21 Despite describing Rooney as a that Rooney is a great player, but I summer. He added: “In the summer, Stamford Bridge. The Blues are
Lopez 51 Att: 39,427
Schalke 04 ...................(1) 3 Hapoel Tel-Aviv..............(0) 1 “great player” Mancini denied that think he will stay at Manchester if there is a good player available who tipped to move for him and Anelka
Raul 3, 58 Shechter 90 his club have made any contact with United. For me he is a Manchester can change something for us, then said: “Rooney is a good player, every-
Jurado 68 Att: 51,230 the England ace and ruled out a bid United player, so it is not correct to we can talk about it, but at this body knows his quality, if he wants to
P W D L F A GD Pts for the 24-year-old in the January speak about the situation. I have moment I think Rooney will stay at come to Chelsea then he is welcome,
Lyon 3 3 0 0 6 1 5 9
Schalke 04 3 2 0 1 5 2 3 6 transfer window. Big-spending City respect for Rooney, for Sir Alex United because he is their player.” but I am not the owner.”
Benfica 3 1 0 2 2 4 -2 3
Hapoel Tel-Aviv 3 0 0 3 2 8 -6 0

ROONEY HITS OUT AT UNITED

GROUP C
Man Utd..........................(1) 1 Bursaspor..........................(0) 0
Nani 7 Att: 72,610
Rangers..........................(1) 1 Valencia..............................(0) 1
Edu 34 Edu 46 (og)
Att: 45,153
P W D L F A GD Pts
Man Utd 3 2 1 0 2 0 2 7
Rangers 3 1 2 0 2 1 1 5
▲

Valencia 3 1 1 1 5 2 3 4 PREMIER LEAGUE DOES IT ALL ADD UP?

Bursaspor 3 0 0 3 0 6 -6 0
BY FRANK DALLERES
GROUP D WAYNE ROONEY says Manchester
Barcelona......................(1) 2 FC Copenhagen..............(0) 0 MANCHESTER UNITED rebel Wayne United don't match his ambition any
Messi 19, 90 Att: 93,450 Rooney has come clean over his deter- more, so does he have a point? United
Panathinaikos...........(0) 0 Rubin Kazan.....................(0) 0 mination to leave Old Trafford and
Att: 65,821 were once known for their financial
P W D L F A GD Pts
blamed his decision on the club’s lack muscle but in two years have been
Barcelona 3 2 1 0 8 2 6 7 of ambition. blown away Rooney’s main suitors
FC Copenhagen 3 2 0 1 3 2 1 6 Rooney questioned United’s ability Manchester City and Real Madrid.
Rubin Kazan 3 0 2 1 1 2 -1 2 to continue to win trophies and insist-
Panathinaikos 3 0 1 2 1 7 -6 1
ed he had only refused to sign a new MANCHESTER UNITED
CRICKET contract after failing to receive reas-
SECOND ONE DAY INTERNATIONAL : Australia v India surances they would bring in world-
(Visakhapatnam); Australia 289-3 (M J Clarke 111no, C L White JANUARY ’09: NET SPEND £9m
89no, M E K Hussey 69) v India 292-5 (V Kohli 118, S K Raina class signings. In: Z Tosic (£9m) Out: None
71no, Yuvraj Singh 58). India beat Australia by 5 wickets. The England star also denied sug- SUMMER ’09: NET SPEND -£62.5m
TENNIS gestions from Sir Alex Ferguson that In: A Valencia (£16m), M Owen (free),
ATP TOUR IF STOCKHOLM OPEN (Stockholm)—SSingles Rnd he had failed to show the club G Obertan (£3m), MB Diouf (£4m)
1: T Kamke (Ger) bt J Hajek (Cze) 6-0 6-2, M Bachinger (Ger) bt respect, after the manager broke his Out: C Tevez (end of loan), C Ronaldo
L Kubot (Pol) 6-4 4-6 6-3. Mens Singles Rnd 2: S Wawrinka silence on the conflict with his most
(Swi) bt R Haase (Ned) 7-5 6-7 6-4, J Nieminen (Fin) bt T (£80m), F Campbell (£3.5m),
important player on Tuesday.
Berdych (Cze) 6-1 6-4. Manucho (£2m)
Rooney’s admission paves the way
ATP KREMLIN CUP (Moscow)—M Mens Singles Rnd 1: H JANUARY ’10: NET SPEND -£750k
Zeballos (Arg) bt J Tipsarevic (Ser) 4-6 6-4 6-3. Singles Rnd 2: for a sensational January transfer
window switch to arch-rivals In: None Out: D Simpson (£750k)
P Cuevas (Uru) bt N Davydenko (Rus) 7-6 7-6, R Stepanek (Cze)
bt M Kukushkin (Kaz) 6-3 6-2, M Baghdatis (Cyp) bt P Starace Manchester City, who are thought to SUMMER ’10: NET SPEND £15.9m
(Ita) 6-4 6-3. be leading the chase. Rooney accused In: C Smalling (£10m), J Hernandez
Womens Singles Rnd 2: M Jose Martinez Sanchez (Spa) bt A (£6m), Bebe (£7.4m)
Bondarenko (Ukr) 6-4 1-6 6-1, D Cibulkova (Svk) bt T Pironkova Injured Rooney missed last night’s United of lacking
(Bul) 6-4 6-1, S Errani (Ita) leads A Kleybanova (Rus) 1-0, V clash with Bursaspor and some book- ambition. Out: B Foster (£6m), C Cathcart (£500k)
Azarenka (Blr) bt A Petkovic (Ger) 6-4 2-6 6-1. makers were offering even money Picture: PA TOTAL NET SPEND: -£38.35m
WTA BGL LUXEMBOURG OPEN (Luxembourg, Luxembourg)— that the 24-year-old had played his
Womens Singles Rnd 1: P Hercog (Slo) bt I Lisjak (Cro) 6-2 1-1 last game for the club. MANCHESTER CITY
ret, A Ivanovic (Ser) bt J Larsson (Swe) 6-3 6-0, P Schnyder
(Swi) bt Y Wickmayer (Bel) 6-4 6-4, B Zahlavova-Strycova “I met with [United chief executive] in August I asked for assurances fied.” Rooney, whose relationship
(Cze) bt T Bacsinszky (Swi) 7-5 6-1. Singles Rnd 2: J Goerges David Gill last week and he did not about the continued ability of the with Ferguson is said to have deterio- JANUARY ’09: NET SPEND £47m
(Ger) bt C Suarez-Navarro (Spa) 6-2 6-1, I Benesova (Cze) bt J give me any of the assurances I was club to attract the top players in the rated beyond repair, said he would SUMMER ‘09: NET SPEND £105m
Groth (Aus) 6-4 7-5, K Flipkens (Bel) bt A Rezai (Fra) 6-0 6-1.
seeking about the future squad,” world. always be grateful to the Scot. JANUARY ‘10: NET SPEND £7m
Rooney said in a statement released “I have never had anything but “Despite recent difficulties, I know SUMMER ‘10: NET SPEND £106.5m
TODAY’S DIARY just hours before the game. complete respect for MUFC. How I will always owe Sir Alex Ferguson a TOTAL NET SPEND £265.5M
Europa League Group A “I then told him that I would not be could I not have done given its fantas- huge debt,” he added.
Man City v Lech Poznan (8.05) ............................................................................ signing a new contract. I was interest- tic history and especially the last six “He is a great manager and mentor REAL MADRID
SV Red Bull Salzburg v Juventus (8.05) ..........................................................
ed to hear what Sir Alex had to say years in which I have been lucky to who has helped and supported me
Group B yesterday and surprised by some of it. play a part? from the day he signed me from JANUARY ’09: NET SPEND £37m
Aris Salonika v Bayer Leverkusen (8.05)..........................................................
“It is absolutely true, as he said, “For me its all about winning tro- Everton when I was only 18. For SUMMER ‘09: NET SPEND £148.5m
Atletico Madrid v Rosenborg (8.05) .................................................................. JANUARY ’10: NET SPEND £0m
that my agent and I have had a num- phies – as the club has always done Manchester United’s sake I wish he
Group C
ber of meetings with the club about a under Sir Alex. Because of that I think could go on forever because he’s a SUMMER ’10: NET SPEND £54m
Lille v Levski Sofia (8.05) ........................................................................................ TOTAL SPENT £239.5M
Sporting v AA Gent (8.05)...................................................................................... new contract. During those meetings the questions I was asking were justi- one off and a genius.”
Group D
Dinamo Zagreb v Club Brugge (8.05) ................................................................
Villarreal v PAOK Salonika (8.05) ........................................................................
Group E
AZ v Dynamo Kiev (8.05) ........................................................................................
FC Sheriff v BATE (8.05) ........................................................................................
Group F
Ferguson turns to cow metaphor to explain his beef
Palermo v CSKA Moscow (8.05)..........................................................................
Sparta Prague v Lausanne Sports (8.05) ........................................................ chose a metaphor involving cows to than the one you’ve got in your own right and curled a 20-yard shot past
Group G
Anderlecht v AEK Athens (6pm)..........................................................................
MANCHESTER UTD 1 illustrate that Rooney would come to
regret switching clubs.
field. But it never really works out
that way.
goalkeeper Dimitar Ivankov.
Defender Nemanja Vidic headed
Zenit St Petersburg v Hajduk Split (6pm)........................................................
“He wants assurances? Have I won “It’s probably the same cow wide when he should have doubled
Group H
VfB Stuttgart v Getafe (6pm)................................................................................
Young Boys v Odense BK (6pm) ..........................................................................
BURSASPOR 0 30 trophies or what?” quipped
Ferguson. “We have a structure at
which is only as good as your own
cow. We have to deal with that –
the advantage before half-time and
the Premier League side wasted fur-
the club which is good, we have some players like to think that ther chances to add to their tally after
Group I
the right staff, the right manager, it’s a better world somewhere the break. French midfielder Gabriel
▲

Debrecen v PSV (6pm).............................................................................................. CHAMPIONS LEAGUE

FC Metalist Kharkiv v Sampdoria (6pm) ........................................................ BY FRANK DALLERES the right chief executive, he’s a else. It never really works like Obertan nodded off target from a
Group J brilliant man. There’s nothing that.” good position, while Mexico striker
Borussia Dortmund v PSG (6pm) ........................................................................ MANAGER Sir Alex Ferguson issued a wrong with Manchester United, Rooney’s shadow hung over Javier Hernandez was also guilty of
Karpaty Lviv v Sevilla (6pm).................................................................................. passionate defence of Manchester not a thing wrong with it.” Old Trafford last night during dragging a shot wide.
Group K United and his own record after a low- Ferguson revealed United an unspectacular victory, albeit
FC Utrecht v Steaua Bucuresti (6pm)................................................................
Napoli v Liverpool (6pm)..........................................................................................
key European win overshadowed by
his escalating public row with Wayne
owners the Glazer family had
been contacted last night
earned by an eye-catching strike
from Nani, that cemented United’s GROUP C
Group L Rooney. and today would be “the place at the top of Group C. Valencia’s TEAM PLD W D L F A PTS
Besiktas v FC Porto (6pm)...................................................................................... Ferguson hit back at Rooney’s criti- end of it”. failure to win at Rangers makes Man Utd 3 2 1 0 2 0 7
CSKA Sofia v Rapid Vienna (6pm) ...................................................................... cism of United’s ability to challenge He added: “Sometimes United strong favourites. Rangers 3 1 2 0 2 1 5
for trophies by pointing to his own you look in a field and Portugal winger Nani (left)
SPORTS EDITOR FRANK DALLERES hugely successful spell in charge. you see a cow and you opened the scoring in the seventh Valencia 3 1 1 1 5 2 4
email sport@cityam.com Then in a bizarre twist the Scot think it’s a better cow minute when he cut in from the Bursaspor 3 0 0 3 0 6 0
CITYA.M. 21 OCTOBER 2010
Bale scored a sec-
ond-half hat-trick
and still finished
on the losing side.
Picture: PA
Bale hat-trick
not enough to
rescue Spurs
INTER MILAN 4 red for bringing down Jonathan
TOTTENHAM 3 Eto’o’s expertly placed penalty.
▲
CHAMPIONS LEAGUE
BY TOM DREW
TOTTENHAM manager Harry
Redknapp hailed Gareth Bale as the
best left-sided player in the world
after his hat-trick brought 10-man
Spurs to within a whisker of a sensa-
tional draw.
A masterful first half of football
from Inter left Tottenham four goals
and one man down after goalkeeper
Heurelho Gomes was sent off, but
Bale spared Spurs’ blushes with a
stunning second half performance.
Redknapp said: “We were bang in
trouble at 4-0 down. Any kind of score
could have come. We could have been
sitting on the end of a seven, eight,
nine-goal defeat. It was a fantastic hat-
trick from Gareth Bale, an amazing
performance again from him. He’s as
good a left-sided player as there is any-
where around, possibly there would-
n’t be too many in the world better
than him at the moment.”
Spurs started the match in the
worst style imaginable, conceding
Sport | Football 39
Hodgson fears Torres switch
as expected, the United manager
NAPOLI grants Rooney’s wish to leave Old
Trafford.
Reds back in High Court
“I think I’d have to say we’d cross
LIVERPOOL that bridge when we come to it,” said LIVERPOOL’S former owners Tom
Hodgson. Hicks and George Gillett could start a
ITV4, ko 6pm
“I am pretty sure when a great play- claim for damages today when their
er like Wayne Rooney is looking to lawyers return to the High Court.
▲
EUROPA LEAGUE
BY FRANK DALLERES leave his club, Manchester United will Legal representatives for Royal Bank
be in a position to target an awful lot of Scotland will also be in attendance,
LIVERPOOL manager Roy Hodgson of players around the world. for what has been billed as a routine
has admitted striker Fernando Torres “I am not naive enough to think hearing relating to the injunction
could jump ship for Manchester there is no danger we will ever lose a granted to RBS allowing the club’s
United if they lose their own prize player like Fernando Torres. I can only sale to finally proceed last week. Reds
asset, Wayne Rooney. hope we won’t and I will make cer- managing director Christian Purslow,
Torres has emerged as the most tain I do everything in my power to meanwhile, has stepped down.
likely target for Sir Alex Ferguson if, keep him happy at the club.”
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after one minute from Javier Zanetti’s
controlled finish. Gomes then saw
Biabiany, but substitute goalkeeper
Carlo Cudicini could not stop Samuel
Dejan Stankovic then scored from
outside the area and Eto’o completed
Inter’s first-half rout with a finish
that Cudicini might well have saved.
Redknapp’s half-time team talk
inspired his charges, who looked a
changed team in the second period,
epitomised by Bale’s performance.
The Welshman’s first will rank among
the best of his career. Picking up the
ball in his own half, the winger beat
two players and ran 67 yards before
coolly beating Julio Cesar.
The score remained 4-1 until a fran-
tic final two minutes in which Bale
notched his second, a carbon-copy fin-
ish after leaving Zanetti for dead, and
completed the first hat-trick of his
career after a deft pass from Aaron
Lennon found him unmarked on the
left of the area.
GROUP A
TEAM PLD W D L F A PTS
Inter 3 2 1 0 10 5 7
Tottenham 3 1 1 1 9 7 4
W Bremen 3 0 2 1 3 7 2
Twente 3 0 2 1 4 7 2
FOREX • STOCKS • CFDS • FUTURES • COMMODITY CFDS • FX OPTIONS • BONDS • EQUITIES

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