|
Guardian Business News
Latest financial, market & economic news and analysis | guardian.co.uk
Latest news and features from guardian.co.uk, the world's leading liberal voice
Martin Rowson on David Cameron and RBS chief's bonus ? cartoon
Row erupts after prime minister claims that MPs had no choice but to agree to Stephen Hester's bonus are challenged by Labour Martin Rowson
Buying now cheaper than renting, Halifax says
Halifax report comes amid claims that first-time buyers are beginning to return to the property market Buying a house is now much cheaper than renting, mortgage lender Halifax has claimed, in a remarkable turnaround from three years ago when the soaring property market priced out all but the wealthiest buyers. Halifax calculates that the monthly cost of buying the average three-bed home in the UK is now £600, 16% cheaper than the £716 it would cost to rent the same type of property. That contrasts with the peak of the property market in 2008, when a mortgage on the typical home cost around 29% more than renting. The figures come amid claims that first-time buyers are beginning to return to the property market. The biggest barrier for young buyers - the huge deposits required by lenders - is beginning to crumble as more and more 95% mortgages have become available in recent weeks. Since the start of 2012 several building societies, including Ipswich, Newcastle and Skipton, have launched first-time buyer loans that require just a 5% deposit. Low-deposit mortgages virtually disappeared in 2009 during the credit crisis, but the number available has jumped from 70 to 95 in the last three months, according to analysis by financial information provider Defaqto. Interest rates have also fallen, in part due to the ongoing problems in the eurozone, which has had the unexpected effect of lowering money market rates in the UK. Borrowers can now find 5%-deposit mortgages starting at 4.99%, compared with the typical 6.5% asked from first-time buyers in 2009. Soaring rents are pushing many back into buying, according to Ben Thompson, managing director of L&G Mortgage Club, which sourced 12% of all mortgages in the UK last year. He said that during January it has witnessed a surge in applications from first-time buyers, particularly in London, Surrey, Sussex, Edinburgh and Glasgow. "A lot of people were priced out of the market between 2003 and 2007, then, when the credit crunch came along, prices became more affordable, but they could no longer get a mortgage because of the deposits required. There's huge pent-up demand out there from potential first-time buyers." Home ownership peaked in the UK at 71% of all households and has fallen to 67%, with the advent of buy-to-let and the financial crisis blamed for creating a priced-out "generation rent". Last year Savills forecast that the continuing "mortgage famine" would propel a long-term switch into private renting, which has doubled from 7.5% to 15% of all households since the 1980s and which it said will rise to 20% in the next five years. HSBC this week, in its annual Moving Home Survey, that the property market is still characterised by a "can't buy, won't sell" generational divide, with many under-34s citing high deposits and fear of unemployment as reasons why they are not buying. The housing stock is also being limited by contentment amongst the over-55s with their current property, the survey found. Critics also add that many first-time buyers fail to qualify for mortgages as they are unable to meet the rigorous credit standards required since the onset of the financial crisis. But Halifax said that a surge in rents, plus an average 11% fall in house prices since the peak, has swung the equation back in favour of buying. Martin Ellis, housing economist at Halifax, said: "The affordability gains for buyers relative to renters in the last three years have been significant. The average mortgage payment has fallen dramatically over recent years as a result of falling house prices and mortgage rates. At the same time, rents have risen due to strong demand for rented accommodation." But Halifax added that there were only 510,000 home purchases with a mortgage in 2011, the lowest annual total since 1974 and 6% lower than in 2010. "Despite the improvement in the relative affordability of buying a home, the number of purchasers has continued to fall due to the ongoing challenges in raising a deposit and the considerable uncertainty over the prospects for the UK economy, which have severely constrained housing demand," said Ellis. PropertyHousing marketReal estateMortgagesRenting propertyPatrick Collinson
guardian.co.uk © 2012 Guardian News and Media Limited or its affiliated companies. All rights reserved. | Use of this content is subject to our Terms & Conditions | More Feeds
Interview: architects Richard Rogers, Graham Stirk and Ivan Harbour
Celebrated architect Richard Rogers and his partners discuss £140m penthouses, John Prescott's ministerial 'flair' and Prince Charles's strange ideas about architecture Richard Rogers, at 78, is not about to slow down. "I am enjoying myself, so why would I retire?" says the architect of the Pompidou Centre and the Lloyd's of London building. "I'd like to think I'll be learning a new language or something when I die." But even a master builder can't go on for ever, which is why Richard Rogers Partnership discreetly changed its name, some five years ago, to Rogers Stirk Harbour and Partners. "We wanted," explains Rogers, "to avoid the situation where the name of the practice is someone who died 100 years ago. Architecture is a living thing. If I want to leave something to the future, it has to be able to change ? but retain something of the ethos that we built up over 50 years." Graham Stirk and Ivan Harbour are here today too, flanking Rogers protectively like affectionate, respectful and, just occasionally, faintly exasperated sons. (If Rogers is known for running his practice like a family, he is also famous among those who know him for a close and warm family life ? one into which tragedy came late last year with the unexpected death of one of his sons, Bo.) Leeds-raised Stirk, 54, is trim and wiry, with a narrow tie, dark suit and spiky hair; he is softly spoken and emphatic. Harbour, 49, is a rangily tall redhead, brought up in the West Country, with an easy grin and friendly manner. Between them is Rogers, whose get-up ? turquoise shirt, orange sweater and splendid, canary-coloured socks ? reminds me of Madrid airport's brightly coloured Terminal 4, for which Harbour was lead architect, winning the practice the 2006 Stirling prize. At the moment Harbour is involved in planning Barangaroo, a former container port in Sydney ? the biggest piece of city-making the practice has ever undertaken. Stirk, meanwhile, is working on the new exhibition and conservation centre for the British Museum; he also designed the Knightsbridge residential complex One Hyde Park, infamous for its £140m penthouse, thought to be the most expensive apartment ever put on sale. According to Harbour, their emergence as key figures in the firm is not a revolution. "Between Graham and myself, we have put in 55 years at the practice, so we are not new at it. It's an evolution." Could a practised eye, I wonder, tell a Stirk from a Harbour building? "I hope not," says Harbour. (Though in fact, one might contend that Stirk buildings ? such as the Leadenhall Building in the City of London, and Neo Bankside, a new apartment block next to Tate Modern ? tend to be somewhat orthogonal; Harbour's buildings, such as Madrid airport, more expressive and sculptural.) This self-effacing attitude to individual style comes in part from that ethos Rogers mentions. The practice is run on idealistic principles; it has a manifesto that asserts the architects' responsibility towards "contributing to the welfare of mankind, the society in which we practise and the team with whom we work". (It is a moot point, of course, whether the creation of a building containing a £140m penthouse contributes to the welfare of society, a point to which we shall return.) Each Monday morning the staff gather for a discussion of current projects, in which everyone from the highest to the lowest can express views ? along the lines of an art-school "group crit" session. There is a profit-share system, and the salaries of the directors cannot rise above a certain proportion of the lowest paid in the firm. Rogers starts waxing lyrical about the profit-share scheme in answer to a question I put to Harbour about why he has never left the practice, which he joined as an architecture graduate in 1985 "to help out on the Lloyd's building for a couple of months". (Stirk joined in 1983, also cutting his teeth on Lloyd's, which was in December accorded Grade I listed status.) After listening patiently for a little bit, Harbour says: "Actually Richard, that's not the primary reason I am still here. The primary reason I am still here is ? every Monday morning it is exciting to come into work because you never quite know what's going to happen, and the debate about architecture and the enthusiasm of the people here is infectious. Richard has been fantastic at encouraging us. I have always felt I can go anywhere within the practice, and I am more excited about tomorrow than yesterday. It's the intellectual environment that I have enjoyed. When I was at college I learned about learning. Here I learned about architecture." He suddenly gets modest. "Of course I know very little about architecture, and the older I get the less I know." He makes it sound a little cultish, as the passion burns in his voice. Rogers tells me that "architecture is about public space held by buildings"; and civic space, both metaphorical and physical, and the architecture that holds it together, is the subject of a lecture the three are giving at the Royal Institute of British Architects on Tuesday. They gesture toward the public square outside the office, on the banks of the Thames near Hammersmith Bridge in London, to illustrate what they mean. (Beside it is the famous restaurant, the River Cafe, run by Rogers' wife, Ruth.) It is privately owned land; but the architects take the view that it adds to the sum of human happiness if they don't lock it off from passersby. And that, in microcosm, is Stirk's argument about One Hyde Park. The important thing, he says, is what they didn't do: "We could have slapped up 12 storeys hard against Knightsbridge, and held the line of the street," he says. Instead, they built a series of pavilion-like structures at right angles to Knightsbridge, allowing passersby to glimpse Hyde Park between the buildings as they wander past. According to Stirk: "We replaced one big slab building that was impermeable. The notion was to say: this is not a citadel. There are retail areas and garden areas at the base of the building. At least people can sit down on extended pavements; there is an area now where people can congregate and breathe." In short, whatever absurdities prevail upstairs, at street level it is still a better public environment than before. The idea of the city has preoccupied much of Rogers' life as an architect and, in later years, a politician. He was chairman of the Urban Taskforce from 1998-2005, championing high-density cities; brownfield not greenfield for building. The taskforce was appointed by then deputy prime minister John Prescott, about whom Rogers has nothing but good to say. "Contrary to what everyone believed, I thought Prescott was a good minister, because he concentrated, and stuck around, and had a certain flair. It was a very important part of my life." The question of "how one builds at the density required of a city centre, and still achieves the right feel at the street scale", as Harbour puts it, is of urgent concern, they argue. "It's about humane scale in intensified development," adds Stirk. "It's about concentrating, rather than spreading," says Harbour. "You need good design to solve the problems of dense spaces." Which is why Rogers has been speaking in the Lords about the government's draft National Planning Policy Framework. He agrees that the planning laws are due for rationalisation. But he fears the proposed reforms will loosen planning regulations too much: we could end up "like the south of France or the southern coast of Spain, with the whole south-east peppered with buildings". He agrees with the National Trust's campaign against the reforms, but from the other end of the argument ? their potential effect on cities and towns, rather than just on the countryside. Cities that sprawl lose energy, he says. It's not so long ago, he warns, that post-industrial city centres, such as Manchester's, were bleak places, more or less uninhabited. Drawing residents back to the heart of cities has made them more attractive, safer, livelier. Intelligent density is the answer, with old and new buildings cohabiting gracefully, argue the architects. "Cities are about juxtaposition," says Rogers. "In Florence, classical buildings sit against medieval buildings. It's that contrast we like." Harbour adds: "In Bordeaux we built law courts right next door to what is effectively a listed historic building, and that makes it exciting. Can you imagine that in London?" There is some hope that the government will change its position ? the MPs of the communities and local government committee have urged ministers, in a report published before Christmas, to drop the notion of the default "yes" to development. But the battle is not yet won, and Rogers will continue to campaign from the Lords. The question of juxtaposition, of course, is one that has bedevilled modernist British architects in the past, particularly in relation to Prince Charles's views on architecture. In 1987, the prince spoke out against Rogers' plans for Paternoster Square near St Paul's Cathedral in a speech at Mansion House. ("You have to give this much to the Luftwaffe. When it knocked down our buildings, it didn't replace them with anything more offensive than rubble.") In 2009, he attacked them again: this time, by warning the Qatari royal family off Stirk's plans for the former Chelsea Barracks in London. The practice was sacked by the Qataris at an hour's notice, and years of work went to waste. Rogers says: "For a long time we thought we were going to be all right, because Prince Charles had other things to think about, like Princess Diana dying. But he has some strange ideas on medicine, some strange ideas on farming and some very strange ideas on architecture. He believes architecture is something that doesn't change. And the problem is he doesn't discuss things, he makes statements." Harbour adds: "He does believe architecture can make the world a better place, so in the abstract, we have a lot in common. But if you are not prepared to debate your position..." Rogers continues: "He loves Christopher Wren! But Wren was hated during his life because he was too modern." Harbour expands: "The irony is that his 'monstrous carbuncle' speech was made in Wren's extension to Hampton Court, which was a modern monstrosity compared to the original building." Harbour once visited the prince's pet architecture project, Poundbury, on the outskirts of Dorset, "when I was on holiday nearby". He didn't much like it. His career, says Rogers, has never been easy. "It's been a bloody lot of work to get here. After the Pompidou Centre, my partner was threatening to become a taxi driver. We went through some pretty difficult times. I thought I was going to have to give up architecture at least three times, not because I wanted to leave architecture, but because it seemed to want to leave me." Despite the Prince of Wales's best efforts, though, Rogers has kept at it. And, says Harbour: "He has many years to go." He adds: "I am still younger than Richard was when I joined the practice." I ask why it matters; is it that he will feel truly grown up when he reaches that age? "A deadly concept, growing up," pitches in Rogers. Harbour adds: "What is work? It's part of your life. The idea of stopping work, if you are fortunate enough to love it, is something I don't understand ? and I know Richard doesn't." Rogers, Stirk and Harbour's lecture on Cities and the Language of Architecture is at the RIBA, London W1, on 31 January Richard RogersArchitecturePrince CharlesRegenerationCommunitiesLloyd'sJohn PrescottCharlotte Higgins
guardian.co.uk © 2012 Guardian News and Media Limited or its affiliated companies. All rights reserved. | Use of this content is subject to our Terms & Conditions | More Feeds
George Osborne wants business to make the case for scrapping top tax rate
Make the argument for how detrimental the 50% tax rate is for jobs and investment, chancellor tells British executives in Davos George Osborne urged business to make the case for the scrapping of the 50% income tax rate as he gave his clearest signal yet of his desire to reduce taxes on the wealthy. The Conservative chancellor told a lunch of British executives in Davos: "I have always said this is a temporary tax. The long-term damage of this tax is potentially quite considerable, and that's why it is temporary." Osborne said that his predecessor, Alistair Darling, had made it clear that the tax was not intended to be permanent when it was announced as a emergency measure to repair some of the damage to the public finances caused by the recession of 2008-09. He added: "Frankly, if the business community wants to make the argument about how detrimental the 50% tax is for investment and job creation, it should go away and do it." But Treasury sources played down the prospect of any change to tax rates in this year's budget, saying that officials were still waiting for a full year's data on how much revenue the 50% rate had reaped. HM Revenue & Customs will conduct a study once the evidence has been collected. George OsborneIncome taxTaxEconomic policyLarry Elliott
guardian.co.uk © 2012 Guardian News and Media Limited or its affiliated companies. All rights reserved. | Use of this content is subject to our Terms & Conditions | More Feeds
Occupy activists attempt to take over Davos debate
Movement tries to stage its own debate on 'remodelling capitalism' at World Economic Forum venue Activists from the Occupy movement attempted to disrupt a debate in Davos attended by the Labour party leader, Ed Miliband, calling on him and the other delegates to leave the stage and join them on the floor of the packed debate on "remodelling capitalism". The event, which was open to the public as part of a 10-year programme by the organisers of the World Economic Forum to engage with a wider audience, was eventually brought back under control when other public participants refused to support the efforts of Occupy activists. Eyewitnesses said about 30 activists had strategically placed themselves in the large auditorium in the local Swiss Alpine High School and had attempted to conduct the debate on their own terms. A representative of Occupy ? who started the proceedings and gave her name only as Maria ? had already been scheduled to take part in the debate, in which Juan Somavía, director general of the International Labour Organisation, was also a speaker. After the event Miliband told the Guardian: "Occupy wanted us to do the debate in a different way." But, he said, they had been outnumbered by other members of the public. He had argued: "This is a big moment of opportunity. There are real opportunities to show there are solutions that can be moved forward. I understand why people are angry." The Guardian's economics editor, Larry Elliott, who chaired the debate said: "Eventually the will of the audience prevailed and we had a good, productive discussion." The Occupy protesters have set up a camp of igloos in this Swiss Alpine resort attended by prime ministers, central bankers, business people and charitable organisations from across the globe. Earlier on Friday a number of them had attempted to gain entry to the high security venue where the major events are held and Klaus Schwab, the septuagenarian who founded the WEF, has offered to meet them on Saturday. Occupy movementProtestDavosEd MilibandJill Treanor
guardian.co.uk © 2012 Guardian News and Media Limited or its affiliated companies. All rights reserved. | Use of this content is subject to our Terms & Conditions | More Feeds
Asil Nadir's cash deposits 'would be 300 times as big as Nelson's Column'
Polly Peck chairman's claims that money he allegedly stole was matched with cash deposits are ridiculed in court Prosecutors have ridiculed Asil Nadir's explanation that hundreds of millions of pounds, allegedly stolen from the Polly Peck empire he ran until its collapse in 1990, had been matched by cash deposits put back into the group via a Northern Cypriot subsidiary. Drawing to a close his five-day opening remarks, Philip Shears QC, cast doubt on claims that huge cash deposits were made by, or on behalf of, Nadir's elderly mother into an account at Industrial Bank of Kibris (IBK), a small bank privately owned by the Polly Peck executive chairman. Shears said the limited paperwork supporting these claims included forgeries. One document purporting to be a bank slip appeared to detail a deposit of 148.8m Turkish lire denominated in 100 lire bank notes. "Such a huge quantity of bank notes is likely to have weighed approximately 135,185kg ? over 135 tonnes," said Shears. "As for the space taken up by such a volume of bank notes ? if all the notes were piled on top of each other they would reach something like 300 times the height of Nelson's Column." He added: "What is also open to question is how the defendant's mother was physically able to transport and deposit such vast quantities of banknotes to a branch of the IBK on a regular basis. Without being flippant, we are now in the realms of fork-lift trucks and vans stuffed full of banknotes." When it was put to him by police in the early 1990s that no one at Polly Peck appeared to know about these payments into IBK, Nadir had said: "The whole accounts department, the whole treasury department here and in parts of Cyprus and Turkey, were the people actually doing everything. To say nobody's aware of it is not a reasonable statement." Nadir, 70, denies 13 counts of theft relating to £34m allegedly stolen from Polly Peck between 1987 and 1990. The Serious Fraud Office claims these transfers were only part of a wider pattern of theft which saw Nadir siphon almost £150m out of the stock market-listed company for his own ends. Auditors, directors and investors were allegedly fooled into thinking the money had been switched to subsidiaries in Northern Cyprus and Turkey. The deception was said to have been carried out with the help of a band of Nadir loyalists in Mayfair and Northern Cyprus. One executive who allegedly blew the whistle on Nadir's cover-up story later claimed to have received repeated threats and said his house had been petrol bombed. By September 1990 the purportedly cash-rich Polly Peck, which appeared to be generating much of its profits from Turkey and Northern Cyprus, agreed plans for a dividend payout and was making preparations to repay loans. According to the prosecution there was an increasing sense of crisis in the group as Nadir's repeated promises to arrange for cash held by Turkish and Cypriot subsidiaries to be repatriated to Polly Peck were not honoured. On 25 October the group had defaulted on its borrowings and was declared insolvent, owing £550m. Administrators were blocked from gaining full access to the accounts, records and bank statements of Polly Peck's Northern Cypriot and Turkish subsidiaries, Shears told the jury, initially because of injunctions obtained by some of these firms. Shears told the court Nadir had fled the UK months before he was due to stand trial in 1993 "in order to avoid prosecution". He returned to the UK in 2010. Shears suggested jurors, when they come to hear evidence from witnesses, may feel they have to make allowances for fading memories. He added that "quite a number" of witnesses who could have given evidence back in 1993 have died so their statements will be read out instead. Among them is the late Kemal Birgen, who had been general manager of IBK up to April 1991. Birgen had stated that deposit slips supporting Nadir's version of events were forgeries. After making such claims, Shears told the jury, Birgen later said he had been threatened, was sent dead chickens, and his house had been petrol bombed. The trial continues. Asil NadirCrimeSimon Bowers
guardian.co.uk © 2012 Guardian News and Media Limited or its affiliated companies. All rights reserved. | Use of this content is subject to our Terms & Conditions | More Feeds
Stephen Hester bonus puts David Cameron under pressure
Row erupts after prime minister claims that MPs had no choice but to agree to RBS head's bonus are challenged by Labour David Cameron was under fire for failing to intervene to block a bonus of nearly £1m for Royal Bank of Scotland's chief executive, Stephen Hester, and for allegedly misleading parliament after he blamed Labour for negotiating a contract that prevented the government from intervening. Boris Johnson, the mayor of London, speaking in Davos, piled the pressure on the prime minister by describing the bonus as "absolutely bewildering". Labour called on Cameron to appear before MPs to explain why he did nothing to block the bonus. The row erupted on Friday morning when Lord Myners, the former Labour Treasury minister who negotiated the contracts with the new state-controlled banks, challenged the prime minister's claim that ministers had no choice but to agree to the Hester bonus, announced in the same week that the coalition announced proposals to hand shareholders more power to block pay deals. "There is nothing in the employment contract of Stephen Hester or any director of Royal Bank of Scotland which binds the company or its remuneration committee to pay a mandatory bonus," Myners said. "All matters relating to bonuses are at the full discretion of the board of directors and the shareholders, including UKFI, who have elected them." The prime minister, who indicated in recent weeks that Hester's bonus would be less than £1m, said the government had little room for manoeuvre because of the contract negotiated by the last government. The bonus is in shares, which rose to £981,000 last night ? up from the £963,000 they were valued at by the bank in its announcement late on Thursday. The exact value will be determined in 2014 when he finally receives them while a three-year bonus he was handed in shares shortly after he joined in October 2008 ? worth £6.4m ? has now been deemed worthless by the bank. Downing Street said that Hester's contract meant that he had to be considered for a bonus in "good faith". But the prime minister's spokesman admitted that a bonus was not mandatory and that the government, through UK Financial Investments, could have blocked it. The spokesman said: "The contract says that he should be considered for bonus in good faith. That decision is taken by the board. Yes, shareholders have a role in that. UKFI, as the government's shareholder, takes a very active interest. But we are not the only shareholder in that company ? The board is required to act in the interests of all its shareholders and the board takes this decision." Downing Street admitted that Cameron was not relaxed by the bonus but said that Hester has reduced the RBS balance sheet by £0.5tn and has increased business lending in the last year. But George Osborne, the chancellor, defended the bonus after a speech in Davos ? but also distanced the government from the decision. "I would bet his bonus will be a lot less than the bonuses of other people running banks are going to get and half of what he got last year." Bob Diamond, chief executive of Barclays ? who was also in Davos, speaking at an event on "building trust" ? refused to talk specifically about Hester's bonus, but commented: "If we don't celebrate reward for success we won't have an economy." Diamond declined to comment on the scale of his own bonus, which could be in the region of £10m. Osborne added: "The alternatives [to the Hester payout] would have been worse for the taxpayer. Either there would have been a much larger bonus, of the kind he would have got a few years ago. Or the British government would have had to take over complete ownership of RBS and over-ruled the board, and I think that would have cost the taxpayer more as well." His comments did not appease critics. Ed Miliband, also in Davos, described it as a " disgraceful failure of leadership" by the prime minister. "He owns, through the British government, 83% of the Royal Bank of Scotland. He must now explain, not least to the British people, why he has allowed this to happen." Labour sought to increase the pressure on the government by writing to the prime minister to ask him to set out to MPs why he said he was bound by a contract which is flexible. Simon Danczuk, a Labour MP, said in the letter: " I trust you will want to come to the house to explain why you previously told the house that you did not have any such power, as well as to explain why your government has decided, in its role as the majority shareholder in RBS, to approve a bonus to Stephen Hester worth almost £1m." The TUC's general secretary, Brendan Barber, also in Davos, described the decision to hand Hester a bonus as terrible. "The government might have been able to subcontract the decision [to UK Financial Investments] but they can't sidestep the responsibility." Already doubful that government plans to hand shareholders new powers to tackle high pay would be effective, Barber said: "The government through their stakes in the banks had the possibility of sending the signal. They've really bottled the decision". It is not clear whether John Hourican, head of the RBS investment bank or Ellen Alemany, head of the US bank, will receive their bonuses this year. Stephen HesterBankingRoyal Bank of ScotlandDavid CameronExecutive pay and bonusesNicholas WattLarry ElliottJill Treanor
guardian.co.uk © 2012 Guardian News and Media Limited or its affiliated companies. All rights reserved. | Use of this content is subject to our Terms & Conditions | More Feeds
Letters: Join our global charter to stop world hunger now
This week, with the world's business, political and economic leaders meeting in Davos, we should not be seeing tens of thousands of people dying of starvation and 13 million at risk of losing everything they have in Kenya, Ethiopia and Somalia, because of a hunger crisis that was predicted and preventable (What we want to discuss at Davos, 25 January). The world is failing people in east Africa and this must change now. While solutions are never easy, it is within our power to stop natural disasters turning into human tragedies of such horror. The crisis in east Africa is a terrible reminder: we have not done enough. Promises have been made by governments and not kept. Plans have been written and quietly sidelined. There are practical steps that we can and must take to stop catastrophes like this before they start. Steps including investment in services for poor people, improving response to crises, affordable food for all and reducing conflict and violence. The Charter to End Extreme Hunger is a statement that indifference is not good enough, that promises must not be broken, that inaction is fatal and that the solutions are within our grasp. This charter should form a commitment from world leaders gathered in Davos to take us to a future where a crisis like this never happens again. Commit to the charter and we can get to work.
Desmond Tutu Chair of The Elders
Jan Egeland United Nations Emergency Relief Coordinator 2003-2006
Lord Malloch Brown Former minister of state in the foreign and commonwealth office
John Holmes United Nations Emergency Relief Coordinator 2007-2010
Gareth Evans Former Australian foreign minister
Lord Carey of Clifton Former archbishop of Canterbury
Dr Hugo Slim Humanitarian academic
Louise Arbour Former UN high commissioner for human rights
Ross Mountain Director of the UK's Humanitarian Emergency Response Review
David Miliband MP (Lab)
Iman Somali-American fashion model, actress and entrepreneur
Tom Stoppard British playwright ? Ten years ago one of the most successful global health initiatives in history was launched ? the Global Fund to fight Aids, tuberculosis and malaria (Report, 27 January). Through targeted investments the fund is saving more than 100,000 lives every month. Greater progress is on the horizon. During these 10 years, more than 3 million people gained access to Aids treatment, over 9 million people were treated for TB, and 230m insecticide-treated bed nets were distributed to prevent malaria in the developing world. Yet the future of the Global Fund is under threat. It has had to cancel its next funding round, effectively postponing the scale-up of life-saving interventions until 2014 ? and just as we are on the verge of major progress, even talking of ending Aids within a generation. This situation can be remedied if governments meet their commitments to the fund. The UK government has shown real leadership in its support for the fund, which it has rated as "very good value for money". In difficult times, it has continued to support this vital organisation; other governments should do likewise.
Andrew George MP Lib Dem
Jeremy Lefroy MP Conservative
Pamela Nash MP Labour Global Fund to Fight Aids, Tuberculosis and MalariaDavosSomaliaKenyaEthiopiaAfricaAids and HIV
guardian.co.uk © 2012 Guardian News and Media Limited or its affiliated companies. All rights reserved. | Use of this content is subject to our Terms & Conditions | More Feeds
Letters: Time to call the bankers' bluff
As a shareholder in RBS (like the rest of us), I would like to see how the CEO's £1m bonus is justified, given the consequences of his actions on the profitability of the parent company, UK plc (RBS hands chief £1m bonus and fuels political storm, 25 January). He has made redundant 33,000 members of staff. Suppose half of these stay unemployed for a year (an optimistic estimate) ? 16,500 people. Then UK plc foots the bill for their benefits and for the lost tax revenue. Suppose the average salary of those made redundant is £25,000 ? with a typical tax loss of £3,400 each. This equals £56m. To which we must add jobseeker's allowance payments of on average £67 a week for six months and any other possible benefits ? maybe an average of another £3,000 a year, which equals another £54m. So Mr Hester's actions for the RBS branch of UK plc have cost the parent company about £110m. I propose that his bonus is not awarded and his salary is urgently reviewed.
Huw Kyffin
Canterbury ? Should the prime minister be awarded a bonus in recognition of the unemployment he is creating?
Leslie Gilbert
London ? The current wave of hostility toward the payment of bonuses ? most recently expressed in Ed Miliband's call for RBS chief Stephen Hester to be denied his bonus ? is a worrying sign for the UK economy. Our latest research into accountancy and finance professionals' expectations for the economy shows 53% believe 2012 will see no deterioration in the UK's economic position. This remarkably positive collective view is a direct result of a strong performance across the industry in 2011. Unless we get more of the same in 2012, we can forget any prospect of a sustained recovery in the UK. Seeking to deny people doing a good and important job the rewards for their accomplishments, whether they work for a public-owned company or not, is the most efficient way to drive talent to markets where enjoying the rewards of success is not considered taboo.
Dave Way
Marks Sattin Recruitment ? It is time the government stood up to the bankers and called their bluff. It said it had to give Stephen Hester his bonus because, if it had not, the entire RBS board would have resigned. The response to that should have been: "Do so." After all, there must be a limit to the number of bankers who can and would wish to emigrate to Geneva, the Cayman Islands or the Channel Islands etc.
Valerie Crews
Beckenham, Kent ? I have three questions which I would like to put to the megabucks-earning bankers, in the unlikely event that any of them ever read the Guardian. First, is there any limit to the size of pay and bonus package which they would regard as morally acceptable? Second, do they ever feel any sense of guilt at helping themselves to such a generous share of the national cake, especially when so many of their fellow citizens are poorly paid or out of work? Third, how can they possibly spend these unimaginably large sums, especially in cases where they've been receiving similar amounts for several years?
Simon Green
Hull ? In most jobs, the "reward" for performing well is to keep the job or have one's contract renewed ? and even that is not guaranteed in the current climate. If someone does not do their job properly, sooner or later their employment will be terminated; that alone is supposed to be a sufficient "incentive" to work hard and achieve results. Why can bankers not be given the same terms and conditions of employment that the rest of us enjoy?
Dr Pete Dorey
Bath, Somerset ? Appalled at the RBS ludicrous salaries and bonuses? Then switch to a more ethical bank at once. If we all did that, the message might just possibly get heard and even acted on.
Professor Charles Warlow
Edinburgh Executive pay and bonusesStephen HesterRoyal Bank of ScotlandBankingEthical businessEthical money
guardian.co.uk © 2012 Guardian News and Media Limited or its affiliated companies. All rights reserved. | Use of this content is subject to our Terms & Conditions | More Feeds
This impotence over Stephen Hester and the bankers looks like a suicide strat...
The political elite who claim to be powerless on the RBS chief's bonus can no longer assume their hierarchy will remain intact There's a typically Wildean saying on Wall Street that there are only two appropriate responses to being given your bonus: "Fuck you", or "Fuck you, I quit". No doubt RBS chief Stephen Hester is far too refined a character to slip into such coarse vernacular, but news that he is to be awarded a £963,000 bonus ? in a year when the share price of his taxpayer-owned bank halved ? is being glossed in fist-gnawingly familiar terms. As the BBC's Robert Peston had it on Thursday night when the news broke: "I am reliably told that they feared Mr Hester and much of the board would have quit if the payment had been vetoed by the government as the majority shareholder." Ah, the old Financial Services Flounce ? a move perhaps as mythical as the Ninja Death Touch, and one that never seems to be met with the single appropriate response to it: namely, an offer to pay the bus fare. Just once it would be intriguing to see someone take a punt and test whether the bankers who would accept just the million quid a year would fail to hit their targets in a significantly worse way than the likes of Mr Hester have failed to hit theirs. Then again, as a public sector worker, Hester has other options available to him if he is dissatisfied with his remuneration. The most obvious would be to join the next protest strike with his brethren and sistren from the teaching and caring professions and so on ? know your rights, Stephen! ? and I must say that were he to be photographed marching huffily next to a nurse I think I would develop Stendhal syndrome and faint with intoxication at the beauty of it all. I already imagine he has got rid of his Newton's Cradle executive toy, and spent the last week with a mini chrome brazier burning on his desk. And yet, and yet ? The remarkable thing about the Hester bonus announcement ? which had all the unpredictability of Norman Wisdom approaching a banana skin next to a swimming pool ? is that it still retains the power to shock. Of course, we are reminded that Hester was only brought in after RBS's spectacular collapse, so perhaps he should be given a cookie and a few million quid just for that. And I know we only own about 80% of his company, so we should probably know our place and pipe down. Nevertheless, to the untrained eye it doesn't feel the cleanest of breaks with the après moi le déluge spirit of disgraced former boss Sir Fred Goodwin. In fact, it feels a bit, "No, après MOI le déluge". In the meantime, you might as well just accept that "bonus" has officially become an auto-antonym ? one of those words that can also mean the opposite of itself. "Cleave", for instance, can mean both to put asunder and to stick together. And so with "bonus", which is defined as "something given or paid in addition to what is usual or expected", but appears to be quite the most usual or expected thing about a banker's remuneration. The very idea is due a linguistic rebranding, and should henceforth be swaddled in the sort of meaningless marketing terms that blight everything from gyms to water bottles. A bonus should become known as a "corporate wellness gift" or "farmhouse-style holistic remuneration". By far and away the most significant aspect of the Hester payout and what it symbolises, however, is that politicians could act to stop it but don't. Theirs is the same pose that has been adopted by western lawmakers for the last three years, and which historians may come to regard as a mass-suicidal strategy of the political elite. Time and again since the collapse of Lehman, every aspect of the way the financial crisis has unfolded has been presented by those in charge as ineluctable. This may have deflected some heat from governments in the short term. But, as demonstrated by the reaction to Hester's bonus, the public unfortunately still believe it doesn't have to be this way. The public are right. There's a passage in the journalist Ron Suskind's book, Confidence Men, which details the emergency 2008 treasury meeting to which the major Wall Street firms were summoned to be informed how much money the US government was giving them to save the system they'd almost collapsed. No sooner was the offer on the table than the Merrill Lynch chief executive, John Thain, is said to have demanded: "What kind of protections can you give us on changes in compensation policy?" Yet Bank of America's Ken Lewis was incredulous. "If we spend another second talking about compensation issues," he countered, "we've lost our minds!" Clearly, even within the absolute senior echelons of banking there are different schools of thought on how to act. But in choosing to appear mere spectators to some deterministic algorithm that is playing out the only way it can, politicians have underscored a growing perception about themselves ? which is that they are impotent. Two years ago, this was a pose they could still just afford. But after a 2011 in which all manner of hierarchies were shaken, and in some cases destroyed, can they really be intensely relaxed about the uncharted places it could lead? Stephen HesterBankingRoyal Bank of ScotlandMarina Hyde
guardian.co.uk © 2012 Guardian News and Media Limited or its affiliated companies. All rights reserved. | Use of this content is subject to our Terms & Conditions | More Feeds
Letters: The trouble with tobacco haters
Why doesn't Mr Chapman debate with a good and satisfied customer of the tobacco companies (Plain packs will make smoking history, 25 January)? Someone who has seen what will replace it as a smoothing, calming contemplative helper. Someone whose friends died of alcohol consumption, not tobacco. Someone who has smoked for nearly as long as he has lived. Someone who knows about the fanatical attitude of haters of tobacco. Someone who is not so naive about advertising and packaging. Someone who has almost outlived a fanatical anti-smoking father. Someone who is fed up to the teeth with people who think they really know what health is. Someone who is not afraid of the cowardly, crooked politicians who stifle the debate about pleasure in the now. Someone who knows that time is elastic. Someone who knows how easy it is to lie with statistics. Someone who is not a professional agitator, who knows there is no such thing as a professional smoker but knows there are hundreds of dreary, professional, highly paid anti-smokers. Someone who thinks laughter is good for you as it drains fear from the body. Someone who has something better to do than to try and control the quiet lives of others. Someone who knows we are all a bit different and is fed up with the growing regimentation of people. Someone who knows that smokers can live perfectly average-length lives but heavy drinkers rarely. Someone who is shocked by the growing conformity among people, and what that might mean for a reasonable free society. Someone who prefers the centre of Bohemia to Australian suburbia. Someone who knows we have to die.
David Hockney
Bridlington, East Yorkshire SmokingHealthTobacco industryDavid HockneyDavid Hockney
guardian.co.uk © 2012 Guardian News and Media Limited or its affiliated companies. All rights reserved. | Use of this content is subject to our Terms & Conditions | More Feeds
Facebook to file for IPO next week, reports say
The social network is looking at a deal, underwritten by Morgan Stanley, that could put its value between $75bn and $100bn Status update: Facebook will file for an IPO next week, perhaps as early as Wednesday, in a deal that could value the company between $75bn and $100bn, reports the Wall Street Journal. But Facebook company spokesman Jonathan Thaw told the Guardian that the social network is "not going to participate in IPO-related speculation". Facebook, based in Menlo Park, California, is said to be close to choosing Morgan Stanley to underwrite the deal for a 10% stake, which could amount to up to $10bn. Goldman Sachs was at one time anticipated to be the lead underwriter on the deal after it was brought on to lead a $1.5bn private offering of the social network's shares early last year, attracting a flood of media attention and client interest in the deal. However, in an embarrassing turn of events the investment bank was forced to curtail the offering to clients outside of America. Goldman is still expected to rake in huge fees as an active manager on the Facebook IPO, although it will play second fiddle to Morgan Stanley. Goldman Sachs declined to comment. Morgan Stanley did not immediately respond to a request for comment either. FacebookIPOsMorgan StanleyGoldman SachsUnited States
guardian.co.uk © 2012 Guardian News and Media Limited or its affiliated companies. All rights reserved. | Use of this content is subject to our Terms & Conditions | More Feeds
Artisan markets are lovely ? but they ain't going to save the economy | Debor...
The days when ordinary people sold their own produce and bought the produce of other ordinary people are long gone One brief phrase in Nick Clegg's call for tax cuts, aimed at low- to middle-income families, says more about Britain's current economic predicament than the rest of the debate around the subject put together. Clegg calls for the tax system to be rebalanced so that it "encourages ordinary people to drive growth". That sounds splendid. The trouble is that "encouraging ordinary people to drive growth" is harder than it sounds. In fact, in a developed economy, it's something of an oxymoron. Sure, consumption drives growth, and everyone needs to consume. But consumption needs production. What can "ordinary people" produce that other ordinary people will want to consume, so that they can drive growth? The harsh answer is: not much. Here is the great paradox of our so-called market economy. The access of ordinary people to ordinary markets has been severely curtailed by technological advancement, mass production and the globalisation that it ushered in. One only has to look, literally, at actual markets themselves, to see how things have developed. Farmer's markets, or artisan markets ? they are lovely places to shop, and sell quality goods, locally produced. But they are expensive. Shopping at that sort of market is a luxury. The markets frequented by low to middle-income families are quite a different matter. They are cheap, yes. But the goods offered are imported goods, of low quality and made by the poor of developing nations. The growth driven by ordinary people tends to be in far-off nations, not in our own economy. The same divisions can be seen on local high streets. In areas without much money, small shops have been routed, unable to compete with the hangar-sized retail services offered by big companies. In areas with money, however, small shops selling specialised items thrive, staving off the march of the chains by virtue of the very fact that they are more individual, less "ordinary". The days when ordinary people sold their own produce, and bought the produce of other ordinary people are long gone. In general, neither the artisanal producer nor the artisanal consumer is ordinary. This is the basic but unacknowledged problem that Britain has been struggling with for ages: how can people be kept consuming when they are not producing? How can national economies be sustained when local economies are dying? These questions, simple as they may seem, are actually at the very heart of contemporary political debate. The last Labour government, let's face it, gave the wrong answer to the first of these questions, an answer which was not in the least opposed by the "opposition". That answer was to create cheap money, in the form of cheap debt. The financial crisis has very comprehensively illustrated that this was not a tremendously sustainable solution. The great mystery now is how anyone ever believed that it was. But Labour also tried to answer the second question. It created lots of public sector jobs, largely based in places with ailing local economies, which provided employment in dying places. This may not have addressed the underlying problem. In fact, it was funded using the unsustainable revenue generated by wrong answer number one. But it was, nevertheless, socially ameliorative, a sticking plaster over a wound, but better than nothing. It has not taken long for George Osborne's belief that the public sector was strangling the private sector to be exposed for the risible fatuity that it is. The public sector grows when the private sector fails. It is not the other way round. But there is not a great deal of consolation in merely establishing that the Tories have no more of a clue about how to lead the nation to the "sunny uplands" than Labour did. A lot of Britain's problems are encapsulated in the very fact that politicians feel perfectly comfortable pontificating so patronisingly about "ordinary people" at all. Yet they all do it. Labour even boasts that it's "ordinary people" that the party exists to champion. Ask any politician what makes a person "ordinary" and they'll offer some guff about "the decent, hard-working backbone of the nation". It's nonsense. What they mean is (airy waggle of wrist): "Oh, the undifferentiated mass that we don't expect much of, except votes." Much of the particular trouble with Britain is that its much-trumpeted revolt against "the class system" was so unimaginative. Private education may be widely reviled. Grammar schools may have been (almost) eradicated. Yet the emphasis on academic success has actually intensified. There is little sense that anything other than a specific type of quite substantial educational attainment can pluck a person out of the ranks of "ordinary people" (with even that something of a gamble). "Everyone else" has to make do with some "lesser" form of qualification, or come to terms with "educational failure". Sure, being dumped into a secondary modern at 11, to be designated as "factory fodder" was pretty horrible. But it seems to me that children now are just given more time to come to terms with the idea that they are "not academic", and therefore, well, not much use. Amid all the talk of how Britain needs "practical skills", usually accompanied by some statistic involving the creation of a piddling number of apprenticeships, there remains a suspicion that this is merely a way of shutting down opportunity, and promoting elitism by other means. Yet what could possibly promote "elitism" more effectively than distrust of the practical, especially in an economy that relies so heavily on services? Sure, our economy needs to be able to compete globally. Sure, that's not easy when the global market is so competitive. But people need to be able to compete locally, too. Among many other economic recalibrations, there needs to be acknowledgement that global markets crush local markets, and some willingness to tackle the kinds of protectionism that global markets employ. Peter Mandelson this week popped up to give dire warnings about "creeping protectionism". Yet large companies constantly use protectionism to grow their own organisations. They sell spare parts at a premium, for example, and only to their own salaried fitters, when they should be obliged to sell them at a market rate to people who mend things locally. The very idea that you need to provide the serial number on your cooker so that the company that manufactured the thing that broke in the first place will deign to come and mend it ? minimum call-out: something exorbitant ? ought to be anathema to free marketers, but somehow just isn't. The degree to which "ordinary people" are trammeled in their choices about the services they can offer, or consume, is massive. Then politicians stroke their chins, and suggest that changes in the tax system are the thing that will help "ordinary people" to drive the economy. It's a bit of a farce, really. I find a line from Blake's Songs of Experience particularly haunting: "Wisdom is sold in the desolate market where none come to buy." Certainly, the commodity does appear, at the moment, to be in perilously short supply. Public sector cutsFinancial crisisPublic services policyPublic financePublic sector paySupermarketsRetail industryBankingFinancial sectorNick CleggEconomic growth (GDP)EconomicsDeborah Orr
guardian.co.uk © 2012 Guardian News and Media Limited or its affiliated companies. All rights reserved. | Use of this content is subject to our Terms & Conditions | More Feeds
Facebook set to file for flotation
Social networking site expected to offer a 10% stake, raising up to $10bn and valuing the company at $100bn Facebook could fire the starting gun on the biggest-ever technology company flotation by filing papers for an initial public offering as early as next week. Morgan Stanley is close to being picked as the lead underwriter for the social networking firm's stock market listing, according to a Wall Street Journal report. The company is understood to be looking at a valuation of between $75bn and $100bn (£63bn). Facebook is expected to offer a 10% stake, raising up to $10bn in an exercise which could also make millions in fees for banks and other advisers. The appointment of Morgan Stanley as lead book-runner would be a blow to Goldman Sachs, which was seen as the frontrunner after arranging a $1.5bn private offering of Facebook shares in January last year. The float would dwarf Google's 2004 listing, which is still the largest American internet stock market float. The search engine giant raised $1.9bn, based on a valuation for the entire company of $23bn. Expectations of an imminent filing with the US securities and exchange commission, the precursor to any public offering, have been high since Wednesday, when Facebook suspended trading of its shares on the private secondary market. The California company's law firm, Fenwick & West, said it would not approve transactions until Friday, the end of the week, according to US reports. Suspensions are normal practice before public offerings, to limit insider dealing until all the information about the company is made public. FacebookInternetSocial networkingIPOsStock marketsJuliette Garside
guardian.co.uk © 2012 Guardian News and Media Limited or its affiliated companies. All rights reserved. | Use of this content is subject to our Terms & Conditions | More Feeds
Hornby: the end of the line | Andrew Martin
If play is the work of childhood, Hornby's struggle is grim news for the future of UK manufacturing On reading that Hornby, the maker of Scalextric and model trains, had lost out badly in Christmas sales to iPads and computer games, I thought of Pete, a friend from my 70s boyhood in York. He and his father, a draughtsman on British Rail, ran "N" gauge trains through a pretty landscape (gently undulating, thanks to papier-mache) that occupied the entirety of their box room. Being jealous, I would take the mickey: the little plastic figure of a porter had tipped over, as had the lady-with-shopping-basket. A massacre had occurred within a scene supposed to be as quotidian as possible. Pete, a shy lad, would go red as he stood them up. I myself had to be content with a bog standard "OO" gauge Hornby oval with one siding, a signal and a coal bunker. My own sons ? now in their mid-teens, and perhaps the last Hornby generation ? have had to make do with equally minimalistic train sets. By way of compensation, I would take them to the Pendon Museum near Abingdon to see the greatest model railway layout in England. It was commenced in the 60s by the late Roye England, a thin, bespectacled vicar manque in beret and mac who ate only Crunchies, black bananas and boiled eggs "because they were quick", so leaving time for his layout. He once spent six years making a lineside pub; it was thatched with human hair from a hairdresser's in Swindon; the basis of the hollyhocks in the garden was cats' whiskers. While my boys and I were still in thrall to Pendon, I learned that an older, divorced friend of mine had retained the model railway base he'd made with his own sons. It was propped behind a cupboard in his hallway, and I asked whether I might take it off his hands. "Well no," he said, "I mean ? the memories." It had been a crass request, because if there's one thing every father knows about raising boys, it's that time spent making things with them is sacred. (Another is that computer games put them in a foul mood.) But the news from Hornby has implications beyond the domestic sphere. Before going into model trains, Frank Hornby had patented Meccano in 1901, a toy inspired by his childhood love of the cranes at Liverpool docks. Both products reflected his view that "play is the work of childhood", and the boy who owned the one also had the other. Roye England certainly did, and when he was about 10 years old he had shocked his parents by making ? when everyone else was out ? a Meccano model of the Forth railway bridge. It was 16ft long. Pete too was a Meccano boy, and I know he became an engineer of some sort. His birthright was a path to follow, and a coherent worldview, not least since central York was a full-sized railway layout when he and I were growing up there. Today that area is barren, except for some office suites, one of which houses a call centre for a credit card firm. A few years ago, I was cycling past it, and I saw the young men in there, talking into their mouthpieces or looking vacantly out of the window. I wanted to try to write something about why it was sad that Britain had lost most of its manufacturing, and a piece was commissioned by an editor who enjoined me to interview some economists. This was the height of the Blair boom, and I spent hours on the phone before I could find one who minded in the least. The economists would chortle down the line: "We were an entirely agricultural economy in the 18th century. Do you propose going back to that?" One said: "If it suddenly proved impossible to import manufactured goods, we'd simply start making them again ourselves." Now everyone wants manufacturing back, even the party that killed it off. Yet George Osborne's "march of the makers" seems about as chimerical as "big society", and the bad news from Hornby will do nothing to help matters at all. HornbyManufacturing sectorYoung peopleRetail industryChildrenAndrew Martin
guardian.co.uk © 2012 Guardian News and Media Limited or its affiliated companies. All rights reserved. | Use of this content is subject to our Terms & Conditions | More Feeds
|
Online
Company Registration
