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Tourism bosses question Hunts China planTOURISM industry leaders havebeen left unconvinced bygovernment plans to treble to thenumber of Chinese visitors to theUK, saying yesterday there werestill too many barriers to inboundtravel that needed to be addressed.

In a speech at the Tate Modern,culture secretary Jeremy Hunt setout how the government plans toturbo-charge the UKs tourismindustry and build on the legacy ofthe Olympic Games.

BY KASMIRA JEFFORD

But Willie Walsh, the boss ofBritish Airways owner IAG and oneof the industrys most vocal critics,said the governments plans didnt

go far enough.The UK is losing out to the rest

of Europe when it comes toChinese visitors and this is entirelyin the governments control. Theyneed to change the visa system and

change it urgently, he warned.He said the cost and complexity

of accessing a UK tourist visacompared to acquiring a Schengen

visa for mainland Europe meansChinese are taking their businessand new found wealth elsewhere.

Mark Tanzer, chief executive ofthe travel industry body Abta, saidHunts tourism campaign is a step

n Standard Chartered must pay $340mto settle the claims, but keeps its licence

n

The bank must also install a monitor tokeep an eye on compliance proceduresand report back to the regulators

n But the bank is not out of the woods four more regulators also want their say

THE AGREEMENT

BUSINESS WITH PERSONALITY

The pressure on Peter Sands might now begin to recede after he agreed to settle the charges leveled by New York regulator Benjamin Lawsky that Standard Chartered is a rogue institution

STANDARD Chartered was last nightforced to take a $340m (217m) hit tosettle US regulators charges that itbroke sanctions against Iran andattempted to hide the evidence.The emerging markets banking

group will also have to bring in amonitor to evaluate money-launder-ing risk controls in its New Yorkbranch, reporting back to the regula-tors for at least two years.

Markets seemed relieved that thebank has successfully avoided havingits licence revoked by the authori-ties, sending its US securities upmore than seven per cent.

In its announcement last night, theNew York state Department ofFinancial Services (DFS) said thebank had agreed that the conductat issue involved transactions of atleast $250bn.

Standard Chartereds own investi-gation had found $14m-worth oftrades were in breach of sanctions.The late-night deal concluded eight

tense days of claim and counter-claim that saw the bank accused ofbeing a rogue institution by theDFSs superintendent BenjaminLawsky.The legal wrangling culminated in

chief executive Peter Sands flying toNew York on Monday night to fight

back against the charges and reachthis agreement with the authorities.The DFS had earlier summoned the

bank to a hearing due today toexplain why it should be allowed tokeep its banking licence. The hearing

www.cityam.com FREE

could have been held in public andprove very embarrassing, but it hasnow been called off.The settlement and the adjourn-

ment of the hearing means the bank

can begin to repair the reputationaldamage caused by this unexpectedblow to its global image but it willstill face ongoing negotiations withfour other US regulators that beganin early 2010.

Standard Chartered is looking tosettle cases with the New York Fed,US Treasury, district attorney andDepartment of Justice.Although substantial, the $340m

fine is far lower than some analystshad feared.RBSs Prateek Datta had initially

thought the best-case scenariowould see the bank face a fine of upto $1bn and had warned that the

levy could potentially have reachedas much as $3bn. In such an eventu-ality the bank might have had to cutdividends and made othereconomies to shore up its capital

ratios. Mediobanca analystChristopher Wheeler had earlierconsidered $500m a high price topay, but added that the bank need-ed to get on with business.

THE CAPITALIST PARTIES AT COWES WEEK

FTSE 100 n5,864.78 +32.90 DOW n 13,172.14 +2.71 NASDAQM3,016.98 -0.18 /$ 1.57 unc / 1.27 unc /$ 1.23 unc

BOAT TRIPPINGISSUE 1,696 WEDNESDAY 15 AUGUST 2012

ROY CALLS FOROLYMPIC SPIRITSee Sport Pages 18-19See Page 11

DAVID HELLIER: Page 2nn

Certified Distribution28/05/2012 till 01/07/2012 is 132,857

in the right direction.But he added that barriers to

tourism such as high levels ofaviation taxes, visa costs and

bureaucracy, inadequateinfrastructure and poor service atthe borders must be addressed as amatter of urgency.

Virgin said: If the governmentwants airlines to fly three times the

number of Chinese tourists to theUK, we need brave policy-making.Heathrow is full. To provide newroutes to emerging markets wehave to sort out the capacitycrisis.

Hunt admitted that Britainattracted only 150,000 Chinese

visitors last year far less thanGermany and France andannounced a 8m investment tohelp boost visitors to 500,000 by2015. This alone could add 500mto the economy per year, he said.

BY TIM WALLACE

STAN CHART PAYS 217M

TO SETTLE IRAN CLAIMS

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Commuters face fare hikeas taxpayer subsidy is cutCOMMUTERS are set to come in fora hammering from January nextyear, when rail companies are nextallowed to raise fares.

Individual fares will be lifted byup to 11.2 per cent, as part of theDepartment for Transports (DfT)plan to shift costs from theExchequer to the passenger.The cap on regulated fares, which

make up about 45 per cent of totaljourneys, will rise by 6.2 per cent inEngland next year headline retailprice inflation for July plus an addi-tional three per cent.

Individual fares could rise by up tofive per cent more or less so longas each franchisee maintains thecap average across their so-calledbasket of regulated tickets.

This basket is weighted by passen-ger volume, so train companies canonly hike prices on popular lines iffare rises are depressed across awide range of their other routes.

Labour, the trade unions andLiberal Democrat transport repre-sentatives came out in opposition tothe move, which aims to reduce theamount society subsidises the coun-trys railways.

David Camerons decision to sidewith the private train operatorsagainst commuters and passengersshows he is out of touch with thecost-of-living crisis facing many

hard-working families, said shad-ow transport secretary Maria Eagle.

INFLATION shocked analysts byflying up in July, driven by soaringair fares and early clothes sales,Office for National Statistics data(ONS) out yesterday showed.

Inflation was 2.6 per cent on theconsumer price index (CPI), upfrom 2.4 per cent in June andconfounding city expectations of asteady decline.

This higher rise in prices wasmainly driven by a take-off in airfares, which climbed 21.7 per centduring the month, and the factthat clothing sales came early.

Other indices painted a similarpicture: the retail price indexincreased 3.2 per cent in the yearto July, and the tax and price index

was up to 2.7 per cent. Both ofthese increases were 0.4 percentagepoints higher than Junes values.

Some analysts have written offthe unexpected development as a

blip, but others have adjusted theirinflation expectations upwards.

We now expect CPI inflation tofall to 2.2 per cent by December previously [our expectation was]1.9 per cent [and then] to rise

back above three per cent in mid-2013 before falling back to aroundthe two per cent target, said ChrisCrowe at Barclays Research.

Dr Nick Collett at ManchesterBusiness School agreed, warningthat petrol prices might be back onthe up, while food prices could be

hit by worrying harvests in UK andthe US.

Inflation on the

up in July afterairline fares rise

Justine Greening seeks spare taxpayer cash to push down fares on regulated lines

2 NEWS

BY BEN SOUTHWOOD

BY BEN SOUTHWOOD

To contact the newsdesk email [email protected]

WHEN the majestic Shardformally opened earlier thissummer I was interested tolearn that its architect Renzo

Piano only catered for 48 car parkingspaces in the buildings bowels.

Its another big shift, he was quot-ed as saying. To tell people, look, stop

going around in cars.Pianos thinking makes a lot ofsense. London is too populated a Cityto create buildings that, through theprovision of extensive undergroundparking facilities, encourage the use ofcars rather than public transport. Butthen maybe the Italian architect had-nt followed too closely the nationsrecent policy on train fare rises.Train fares over the past few years

have a record of rising way ahead ofinflation as operators, rolling stockcompanies and government takeadvantage of a captive commuter pool.

Osborne faces a delicate balancing act on train ticket hikes

WEDNESDAY 15 AUGUST 2012

Yesterday, as inflation figures camein above expectations, the govern-ment announced that train fareswould rise by an average of 6.2 percent through a combination of theunexpectedly high retail price infla-tion rate (3.2 per cent) and an extrathree per cent due to the formula thegovernment has agreed with the trainoperating companies.Transport minister Theresa Villiers

made clear that the fare rises werenecessary in order for Britains railway

network to run more smoothly.She said a huge programme of rail

improvements was underway andthat the government was investing inthe network, but that passengers alsohad to shoulder some of the costs.Villiers hard line, however, may not

be the end of the story. It swiftly

emerged that the Liberal Democratsare opposing the three per cent riseabove inflation rise, favouring a oneper cent below rate.And transport secretary Justine

Greening hinted that a begging bowltrip to the Treasury might yet bearfruit.

If you dont ask, you dont get, saidGreening, as MPs on all sides calculat-ed the cost of the planned rises totheir constituents.The train users lobby will no doubt

remind ministers that car ownerswere given a boost in June when the

EMERGING FROM A SANDSTORMStandard Chartereds $340m settle-ment with New Yorks Department ofFinancial Services after it was accusedlast week of being in breach of USsanction with Iran is a victory of sortsfor chief executive Peter Sands and

chairman John Peace. After reactingslowly to the US regulators chargethat the bank was a rogue institu-tion and seeing his companys shareprice hammered in the financial mar-kets, Sands especially has stepped up agear to get the matter sorted.

Christopher Wheeler of Mediobancasaid yesterday: Wed all like to be ableto value the stock on fundamentalsagain. Yesterdays settlement willallow that process to begin.

chancellor George Osborne decided todelay a 3p per litre rise on fuel dutyfor a year after much public pressure.With the Lib Dems and Labour cam-

paigning against these latest trainfare rises, it would be no surprise tosee the Treasury suddenly find somespare money to at least limit the rise

to one per cent above inflation as itdid last year after initially planninganother three per cent plus rise.

For some commuters the plannedrises are very steep (see our chartbelow) and on top of this, oftenthere have been massive increases incar parking charges for those wholeave their cars at their local trainstation.Theres still a way to go on this

debate and my hunch is that extramoney will be found from some-where or other to alleviate some ofthe pain for the nations commuters.

But representatives of the rail indus-try rejected claims that the fare risebenefited them, pointing out thathigher fares were directly linked toreduced taxpayer support.

The government decides the aver-age increase of commuter ticketprices and other regulated fareswhich train companies will berequired to introduce, noted MichaelRoberts, chief executive of theAssociation of Train OperatingCompanies.

Any flexibility train companieshave within the rules is to maximiserevenue for the government, he

added.Nevertheless, public pressure

pushed Tory transport tsar JustineGreening into looking for a way topacify protestors with the publicpurse.

If you dont ask, you dont get, soIll make sure Ill ask, she said, as shesought some way of limiting theextent of the rises.

London Travel Watch, a group thatrepresents passengers in the capital,remained unimpressed. Londonersalready pay a higher contributiontowards the running of rail servicesthan other areas. Passengers wantsimpler, more transparent fares, itsaid, also calling for the Mayor to have

control of rail services in London.FORUM: Page 14

nn

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Lib Dems push to reopen bank reformNick Clegg and Vince Cable are leading apush to reopen talks on UK bankingreforms in a move that could stokecoalition tensions. The senior LiberalDemocrat pair want to re-examinewhether banks retail operations should beallowed to market complex derivativeproducts, in an effort to avoid the mis-selling scandals that have recentlyengulfed several lenders.

Banks cut food commodity fundsEuropean banks are withdrawing vehiclesthat allow investors to speculate on foodprices due to reputational concerns amidpressure from campaigners and politicians.

Kiev opts for ExxonMobil and ShellUkraine is betting that the worlds biggestenergy companies will help it unlock oiland gas reserves under the Black Sea. Kievhas approved a joint exploration bid led byExxonMobil and Royal Dutch Shell.

Clegg to screen Bank chief hopefulsNick Clegg will be given a say in theappointment of the next governor of theBank of England, in a move likely to determore hawkish candidates. The deputyprime minister is a strong critic of thebanks for their failure to lend and isunlikely to favour any candidate with astrongly monetarist approach to replaceSir Mervyn King. Clegg is consulted for allbig public appointments.

Jaguar Land Rover goes 24-hourJaguar Land Rover has begun a 24-hourproduction line at its Merseyside plant inan attempt to meet growing demand.

AstraZeneca agrees deal with PfizerAstraZeneca has reached a deal with Pfizerto give the US Viagra maker future rightsto sell a non-prescription version of itsblockbuster heartburn drug, Nexium.

Spains banks borrow record sumsSpanish banks borrowed a record amountfrom the European Central Bank in July, asother sources of funding evaporatedfurther in the weeks following theannouncement of a 100bn bailout forthe countrys financial industry. The Bankof Spain data indicated that net ECBborrowing rose to 375.55bn from337.21bn in June. It was the tenthstraight month of increases.

WHAT THE OTHER PAPERS SAY THIS MORNING

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CLAPHAM JUNCTION648.00 688.18

WIMBLEDON852.00 904.82

PUTNEY648.00 688.18

RICHMOND1,132.00 1,202.18

TEDDINGTON1,640.00 1,741.68

SURBITON1,640.00 1,741.68

GUILDFORD3,092.00 3,283.70

WOKING2,780.00 2,952.36

SEVENOAKS2,980.00 3,164.76

SEASON TICKET FARES TO LONDONTERMINALS WILL INCREASE BY ANAVERAGE OF 6.2%

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SHARES in online discount firm

Groupon tumbled to an all-time lowin trading yesterday as investorsdeserted the company in reaction toworse than expected sales onMonday night.

Groupons share value fell 27 percent to close at $5.51, less than afifth of its peak following its highly-publicised initial public offeringlast November.

Despite a 45 per cent increase inrevenue in the second quarter ofthe year and surprisingly goodprofit, sales of $568.3m (362.5m)were flat on the previous quarter.

The company, which was thequickest ever to make $1bn inannual revenue, has failed tomaintain the rapid rise thatunderlined Groupons price at itsflotation. The company blamed itswoes on falling demand inEuropean markets.

Groupon hitsall-time low asgrowth falters

BY JAMES TITCOMB

RAIL operators FirstGroup and VirginTrains were on tenterhooks last nightas they braced themselves for the fall-out on the announcement of the win-ning bid for the West Coast Main Linerail franchise.

FirstGroup and Stagecoach Group which owns 49 per cent of VirginTrains were understood to bepreparing statements to the marketslast night ahead of the winnersunveiling.The Department for Transport,

which is awarding the contract, saidyesterday it would reveal the winnerin the next few days, though it is

understood this could come as earlyas today.

Investors had expected anannouncement to the markets yester-day but this was delayed promptingfears government was looking againat the bids submitted.

Shares in FirstGroup bouncedaround in trading yesterday asrumours circulated the firm hadsecured the contract following theregistration of a new company name,Horizon Trains, by FirstGroup.

Virgin and FirstGroup brace for

rail bid falloutBY MICHAEL BOW FirstGroup managing director VernonBarker has also been appointed to thenew companys board.Yesterday a source hinted Virgin was

considering retiring from bidding forfuture UK rail franchises following thefracas over the West Coast bid.

Virgin will take a very hard look atwhether it will continue to bid in thecurrent UK franchising arrangements.We have put in bids over time andbeen trumped by other operators whohave subsequently defaulted, theysaid.The issue was stoked by a letter sent

to the government by Virgin Trainsfounder Richard Branson warning thebid from FirstGroup was unrealistic.

Labour shadow business secretary Chuka Umunna called for clarity on Camerons policy

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THE GOVERNMENT denied lastnight it is using relaxed Sundaytrading laws during the Olympics

and Paralympics as a Trojanhorse to push throughpermanent measures, despitesenior Tories suggesting a rethink.

Labour shadow businesssecretary Chuka Umunna hit outat the government yesterday aftercommunities secretary EricPickles said longer Sundayopening hours would boost theeconomy and a spokesman forCameron admitted a lot of people

will look at the issue. A Number

Downing Street holds firm overSunday laws after Labour attack

BY JAMES TITCOMB 10 spokesman said last night thatCamerons position is that the lawwas a specific thing for theOlympics.

Umunna said in a letter: Thecommunities secretary has madeit clear the government isconsidering permanent change inlight of the operation of this Act.This breaks all the promises madeto parliament, business and tothose working in the retail sector.

Business secretary Vince Cablepledged earlier this year that thetemporary measures would not beused to drive through widerderegulation after the Games.

WEDNESDAY 15 AUGUST 20123NEWScityam.com

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PEARSON will open a higher educationcollege next month, paving the way forthe FTSE 100 firm to expand into agrowing market.The owner of Penguin Books and the

Financial Times yesterday announcedPearson College, which will initiallyoffer an undergraduate degree inBusiness and Enterprise from bases inLondon and Manchester, with studentsguaranteed an internship at a Pearsonfirm as part of the course.Tuition fees will be set at 6,500 per

year, below the 9,000 cap at publicly-funded universities and it is expectedthat successful applicants will be ableto access government-backed loans tocover the up-front charges.

Our degrees are designed by busi-ness, delivered with business, for stu-dents who want to succeed inbusiness, said Roxanne Stockwell, thecolleges managing director.

Pearson hopes an initial batch of 40students will join next month. With A-level results due out tomorrow the col-lege will initially target applicantsthrough clearing, a system that ismainly used by students who failed toget the required grades for their first-

Pearson sets up

own college toaward degreesBY JAMES WATERSON

choice university.The government has been keen to

encourage private entrants into thehigher education market, with limitedsuccess. AC Grayling faced protestsafter announcing his 18,000 per yearNew College of the Humanities lastsummer but yesterday a spokesmansaid they were very pleased with thequality of students who were applyingto join its first intake this September.

David Willetts, minister for universi-ties and science, said: Our reformsencourage a diverse and competitivehigher education sector. We supporthigher education institutions andemployers working together to ensurestudents are equipped with the skillsto succeed in the workplace.

Investors eye stimulus as GDPfalls again in troubled EurozoneTHE EUROZONES economy shrankin the second quarter, official data

showed yesterday, althoughpowerhouse Germany continued togrow at a slow pace.

But markets actually rose on thepoor figures as investors hoped thefall in output would pile morepressure on Eurozone leaders tostimulate the economy.

The German DAX jumped 0.87 percent and the Italian FTSE MIB rose0.75 per cent, with banks leadingthe way. Italian UniCredit saw

BY TIM WALLACE shares rise 1.36 per cent per cent,while Santander rose 0.68 per cent.

We anticipate another interestrate cut before the end of the year

and certainly anything quantitativeeasing-based would tend to benefitthe banking sector more thanothers, said Scott Corfe from theCentre for Economics and BusinessResearch (CEBR). But these GDPfigures do make pretty grim readingand build the pressure on the euroas there is a widening gap betweenthe periphery and Germany.

Eurozone GDP fell by 0.2 per centon the quarter, and followed a flat

three months at the start of the yearand a 0.3 per cent contractionrecorded in the final quarter of 2011.

Germanys economy expanded by

0.3 per cent, while Franceseconomic output stagnated for thethird consecutive quarter.

But the periphery performed farmore poorly Spains GDPcontracted by 0.4 per cent and Italy0.7 per cent.

Meanwhile the Greek governmentraised4bn (3.14bn) in three-monthdebt, paying 4.43 per cent to roll overprevious borrowing and avoidrunning out of cash.

LEADERS WEIGH UP SPANISH BAILOUT

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SPANISH Prime Minister Mariano Rajoy yesterday refused to rule out the prospect of hiscountry requiring a full bailout, while senior EU official Olli Rehn claimed that Spanishauthorities have an open mind over a possible rescue package. Rehn, the Europeaneconomic and monetary affairs commissioner, said Brussels stands ready to act.

GROCERS enjoyed a sunny summerwith sales growth almost across theboard, but led by discountsupermarkets, said analyst Kantar

Worldpanel yesterday.Grocery sales at the UKs main

stores grew 3.9 per cent as a wholein the 12 weeks to 5 August,compared to a year earlier,reaching nearly 24bn in total.

Though discounters Aldi and Lidlled the pack, with spendingthrough their tills going up 26 percent and 11.8 per cent respectively,the big four all saw expansion,

while only The Co-operative andFarm Foods suffering a fall in sales.

Discount chainslead sales jumpBY BEN SOUTHWOOD

LLOYDS Banking Group has agreedto sell a 1.05bn portfolio of privateequity-linked investments to CollerInternational Partners, it announcedlast night.

Coller is buying the portfolio for1.03bn in cash. The deal includesthe transfer of undrawncommitments that are expected tobe worth 220m at completion.

The loss-making portfolio, whichLloyds is selling as part of its non-core asset disposal plan, is made upof 71 investments in various privateequity and mezzanine funds. The

bank acquired the assets during itsill-fated takeover of HBOS in 2008.

Lloyds sells off1bn portfolioBY MARION DAKERS

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FUNDING costs and bad debts have

both risen in the UK, NationalAustralia Bank (NAB) saidyesterday, weighing on groupprofits in the t hird quarter.

The bank, which owns theYorkshire and Clydesdale banks,reported profits of A$1.4bn(0.94bn) in the three-monthperiod.

That represents flat performancecompared with the previous sixmonths, but is below the A$1.5bnanalysts expected.

Revenues fell one per cent,largely as a result of higherfunding costs in the UK, thoughbusiness remained strong inAustralia.

Meanwhile charges for bad debtsfell seven per cent to A$524m although charges remainelevated in Britain, where assetquality measures continued to

deteriorate in the commercial realestate portfolio, reflecting ongoingweakness in the UK economy.

UK chief executive DavidThorburn is stepping down fromNABs executive committee tofocus on the restructuring ofbanking operations in the country.

The shakeup includes 1,400 jobcuts over the next three years asthe Yorkshire and Clydesdale moveout of commercial property tofocus on retail and SME banking.

NAB growth isslowed by UKsweak outlook

BY TIM WALLACE

INSURANCE giant Standard Life yes-terday reported an unexpectedly largejump in profits and said it expects togrow even more thanks to forthcom-ing regulatory changes.

Chief executive David Nish told CityA.M.that the imminent implementa-tion of the retail distribution review which will outlaw commission pay-ments to financial advisers will ben-efit Standard Life as the firm hasoperated on similar terms for the lastsix years.

Weve been excluded from half themarket and are now coming back intoa broader market with more proposi-

tions, he said. Were counting downthe days and minutes until wereback.

Half-year operating profits at theEdinburgh-based company were302m, up 15 per cent on a like-for-like basis thanks to strong growth atthe firms British business. Key to thiswas a 17 per cent fall in the cost ofacquiring new business, largelythanks to efficiency savings.

The company believe these lowercosts are sustainable and may be capa-

Standard Lifesprofits expand

ahead of reformBY JAMES WATERSON ble of falling further, said analystKevin Ryan at Investec. Given the sig-nificant spend on IT-based projects inthe last two years, we believe this rep-resents a good result and a vindicationof the investment.

Standard Life said it grew the UK cus-tomer base of its self-invested personalpension business by 22 per cent to147,000, assisted by Britains ageingpopulation. The only negative was a 30per cent decline in profits to 72m atthe firms Canadian unit, which thecompany blamed on low interest rates.

Standard Life posted the biggest gainon the FTSE 100, closing yesterday upmore than eight per cent at 277.4p.

STANDARD Life Investments flagshipglobal absolute return strategies fund,known as the GARS fund, yesterday post-ed a 70 per cent annual increase in assetsunder management taking the size of thefund to more than 17bn.

GARS, an absolute return fund set up byStandard Lifes investment division in2006, saw its asset base rise from 10bnat the end of June last year to 13bn inDecember.Yesterday Standard Life said GARS saw anincrease in asset values of 4bn in the lastsix months alone.The fund is led by former Credit Suisseman Guy Stern, who helps mix around 30different investment strategies, rangingfrom high yield credit to long-short cur-

rency strategies, at any one time to targeta return of six-month Libor rate plus fiveper cent for investors.Hargreaves Lansdown head of researchMark Dampier yesterday said the growthof the fund was a reflection of the low

interest rate environment and investorsgrowing appetite for low return, low riskinvestments.GARS is effectively a global macro hedgefund but without the gearing, he said.Standard Life is also a good brand forIFAs, and that will help quite a lot. If youlook at the background, most investors arescared stiff of losing money these arevery difficult markets and therefore peo-ple are not looking for the same level ofvolatility.

Chief executive David Nish praised his firms simple business model

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THE 17BN SUPERFUND BUCKING TRENDS

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BRITISH airport operator BAA

reported a 4.1 per cent fall in Julypassenger traffic on last year asBritons stayed home to watch theOlympics and tourists deferred theirholidays until after the Games.

BAA, owned by Spanishinfrastructure group Ferrovial, saidyesterday that 9.6m passengerspassed through its five UK airportslast month, compared to about 10min July 2011.

London Heathrow Europesbusiest airport handled 6.6mpassengers, down 4.4 per cent year-on-year.

The drop was more pronouncedin the second half of the month andit is likely that the Olympics playeda part, with UK passengers stayingat home as well as non-Olympicvisitors from overseas choosing todefer their journeys, said BAAschief executive Colin Matthews.

At Heathrow domestic traffic rose1.2 per cent on last year, whileEuropean traffic, which wassignificantly affected by theOlympics, fell 6.6 per cent.

BAA traffic fallsas Brits stay putduring Games

BY CITY A.M. REPORTER

SHARES in Manganese Bronze slid by athird yesterday after the London blackcab maker admitted it had a 4m hole inits accounts.

Engineering firm Manganese Bronze,which is 20 per cent owned by Chinesecar group Geely, has delayed its half-yearresults due to the accounting errorscaused by the implementation of a newIT system. This means that results for2011 and previous years will need to bereinstated.

Group trading in the first sevenmonths of 2012 has been difficult forthe group, and it continues to trade at aloss. First-half sales in 2012 were lowerthan the first half of last year.

Mazars, the firms auditor, did notrespond to requests for comment yester-day.

Manganese Bronze is the parent firmof the London Taxi Company, which has

served the licensed taxi trade since 1899.In March, it won a 1,000 vehicle con-

tract with Azerbaijan to supply its cabs,but there are currently no plans for anyfurther contracts in the country. The

BY CATHY ADAMS company also won a contract with

Bahrain in 2008.Manganese originally made shippropellors, but the London TaxiCompany started making cabs in1947, and since then more than100,000 cabs have rolled off itsCoventry production lines.

In 2007, Manganese finalised ajoint venture with Chinese GeelyAutomobile Holdings to producepurpose-built taxis in Shanghai.The shares closed at 16.5p. Manganese makes London black cabs

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London taxi maker hitby errors in its accounts

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SUPERGROUP, the company behindthe cult fashion label Superdry, saidyesterday its co-founder TheoKarpathios has quit to take on newchallenges.

Shares in the company, which hasbeen recovering from a tough year,fell as much as 2.7 per cent in earlymorning trading yesterday, beforeclosing down 1.6 per cent.

Karpathios, who was chief execu-

tive of the groups wholesale

and international divisionsand holds a 14.8 per centstake, will step down fromthe board immediately.A spokesperson

denied thatthere had beenany conflictwith thegroups mainfounder JulianDunkerton, say-

ing he departed on good terms.

Karpathios said: As a co-founderof the business, I will always take aclose interest in SuperGroup and I

look forward to its continuedgrowth and success.

Before joining SuperGroup,Karpathios built up his ownskateboarding and clothingchain Skate of Mind, whichhe sold off in 2004.

SuperGroup dealt blowas co-founder resigns


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Theo Karpathios

LONDON-born actor Robert Pattinson took to the trading floor in New York yesterday toring the New York Stock Exchanges opening bell. Pattinson was in town to promote hisrecent film Cosmopolis an adaptation of a Don De Lillo book in which he plays a wealthyManhattan asset manager travelling across the city in a limousine.

TWILIGHT STAR RINGS NYSE OPENING BELL

BY KASMIRA JEFFORD

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SHARES in United Utilities soared byas much as 18 per cent yesterday onrumours that it might be the subjectof a takeover, but analysts said a bidwas unlikely at the suggested price.

It is understood that several buyersare circling around the UK water com-pany as a possible break-up target,including an international infrastruc-ture consortium of the OntarioTeachers pension fund, Qatari andAbu Dhabi funds, who are thought tobe considering a possible 6.1bn offer.

The China Investment Corporation,a sovereign wealth fund, and US pri-vate equity house Kohlberg KravisRoberts are also understood to beinterested.

However, analysts believe a takeoveris unlikely as the touted price tag ofaround 6.1bn, equating to 900p ashare, is too high.

This is a 31 per cent premium tothe previous closing price of 689p anda 28 per cent premium to the meananalyst target price of 700p, said TinaCook, analyst at Charles Stanley.

But regulated water companies in

International

funds eye upUK water firmsBY CATHY ADAMS general could be the subject of

increased M&A activity as infrastruc-ture and pension funds look for oppor-tunities in a low bond yieldenvironment, say analysts.

Overseas investors have been attract-ed to these types of assets in the pastdue to their stable, and relatively lowrisk revenue streams. FTSE 100 compa-nies Severn Trent and Pennon arethought to be more obvious targets fora takeover.

Guillaume Redgwell, equity analystat Liberum Capital, said: In the longrun we see it as likely that the remain-ing pure play UK water companiescould pass into private hands.

Essar lifts output infirst quarter of yearINDIA-facing power and refinery firmEssar Energy ramped up production

by 29 per cent in the first quarter,according to its quarterly resultsreleased yesterday.

Plant generation was up by 29 percent year on year, driven mainly bythe recently-commissioned Salayacoal-fired power plant.The Salaya power plant in east India

has good availability of 69 per cent asit continued to ramp up to full capac-ity, said Essar.

During the quarter ending 30 June,

BY CATHY ADAMS Essars plants generated a total of1,945 megawatt hours, compared to1,502 over the same quarter of lastyear.

Essar said production at its Vadinarrefinery had increased by 24 per centdue to the early completion of anexpansion programme in March thisyear.

This has led to a 12 per cent increasein the refinerys gross margin per bar-rel of oil to $4.69 (2.99).A full year target of 65 per cent

plant load is in place, although Essaradmits this might be challengingbased on water availability.

United Utilities Group PLC


825

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775

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p 722.5014 Aug

IRELAND-based building materialsgroup CRH said yesterday itexpects the Eurozones economicproblems to deepen a slide in salesin the second half of 2012,preventing it from raising profitsdespite a recovery of USconstruction markets.

The company, which moved itsprimary listing to London last

year, said European sales hadfallen five per cent this year.

Earnings before interest, taxes,depreciation and amortisation fellone per cent to 568m (446.4m).First-half results were propped up

by favourable weather conditions

and improving constructionmarkets in the US, said CRH.

Eurozone set to

stunt CRH profitBY CITY A.M. REPORTER

SHARES in platinum producerLonmin fell by more than four percent yesterday on the news that ninepeople were killed in a dispute at itsWest Marikana mine in South Africa.

Seven Lonmin workers and twopolicemen have been killed in the vio-lence, which is being blamed oninter-union rivalry between theNational Union of Mineworkers andthe Association of Mineworkers andConstruction. Production has beenseverely disrupted since last Friday,when a protest march spurred clash-es. Lonmin added that the situationremains tense, but it is understood tobe stabilising. The shares fell to 711p.

Mine deathshit Lonmin

BY CATHY ADAMS


INVESTOR advisory group Pirc yester-day criticised miner Vedanta for itspolitical donations in India.

Pirc said shareholders should notsupport the FTSE 100-listed firmsannual report, its accounts or thereappointment of executive chair-man Anil Agarwal at the annualmeeting on 28 August.The group said Vedanta made polit-

ical donations of $2.01m in the lastyear, ahead of the Indian generalelection, compared to just $20,000 inthe previous year. Pirc said this wasa questionable use of shareholdersmoney.

It also recommends opposing

Deloittes role as auditor. Vedantadeclined to comment yesterday.

Investor body

slams VedantaBY MARION DAKERS

Violence flared up at Lonmins West Marikana mine in South Africa

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ONCE a year, the Citys socialscene decamps to the smalltown of Cowes on the Isle ofWight for one of the hottest

tickets on the sporting calendar, andlast nights City by the Sea party, acentral fixture in Aberdeen AssetManagements Cowes week, was nodifferent, bringing together a host ofathletes and Square Mile chiefs.

Double Olympic sailing gold medal-list Shirley Robertson and Scottishrugby legend Gavin Hastings min-gled with investment managementchiefs from the likes of Cazenove,LionTrust, Kames Capital andThreadneedle at the function, over-looking the bay where thou-sands of boats havecompeted this week inone of the countrysbiggest sportingevents.

It was the sportsstars who wereat the

centre of the action yesterday, withthe Olympian enjoying a word withAberdeens victorious Sunsail team.

Bosses spotted at City by the Seaincluded Brewin Dolphin chairmanJamie Matheson, Morningstar manag-ing director Richard Romer-Lee andAberdeens distribution head JohnBrett.

Last nights party was one of several

taking place at Cowes week, whichhas seen tens of thousands of sailingfans ands o c i a l i t e sdescend on theisland fromlast Sunday tojoin in on thec o c k t a i l

evenings andd a n c i n g ,with theodd bit ofs a i l i n gthrown in.

WITH the array of dinner parties,live music and pop-up bars ondisplay at Cowes week, it would beeasy to forget that there is actuallysome sailing to be done. Around1,000 boats and 8,500 competitorsare in action over the week, watchedby Team GB sailors fresh fromwinning medals at London 2012.

Hannah Mills and Saskia Clark,who claimed silver medals in last

weeks womens 470 class event, andLuke Patience and Stuart Bithell,who took silver in the mens race,are set to attend on Friday, thepenultimate day of racing.

Competition has been as lively asever this week, and yesterdaysracing saw an upset at one of Cowesweeks flagship events the Britannia

Cup, where hot favourite Powerplaylost out to challenger Pace.

Got A Story? [email protected]

11cityam.com

cityam.com/the-capitalistTHECAPITALIST

LAST nights main event may beover, but those sticking around in

Cowes for the next few days still haveplenty to look forward to.Tomorrow is the famous Ladies Day,where women in sailing arecelebrated not least with the annualgiving out of the Ladies Day Trophy torecognise an outstanding contribution,commitment, or achievement.Come Friday, guests will be treated to aBest of British Day, topping off theweeks red, white and blue theme withevents including whisky tasting, livemusic, a Cowes Parade, and aspectacular fireworks displays once

night falls over the harbour.


ATCOWESWEEK

Scottish rugby legend Gavin Hastings (centre) and Aberdeens John Brett (left) Double Olympic sailing gold medallist Shirley Robertson (centre) with Aberdeens victorious Sunsail team at last nights party

Racing is as intense as everwith Team GB in the crowd

The Aberdeen 1 team take a break from yesterdays excursions

City executivesparty on Isle ofWight at Cowes

Above: Richard Romer-Lee (centre), managing director at Morningstar, withpartygoers at last nights City by the Sea event

Left: Brewin Dolphin chairman Jamie Matheson

Right: Fiona Gilbert, wife of Aberdeen Asset Management chief executiveMartin Gilbert, with Jamie Mathesons wife Angela

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IN BRIEFGoldman headquarters soldn Goldman Sachs headquarters atPeterborough Court have been sold for280m, two years after going intoreceivership. It is understood the370,000 sq f building was sold to FleetStreet Investments II, a Cayman Islands-registered firm. Mayer Brown advisedBerlin-Hannoversche Hypothekenbankon the restructuring that led to the sale.

Riots make UK cities less liveablen Manchester and London are the 51stand 55th most liveable cities in theworld, according to the latest version ofthe Economists liveability ranking, hitby last years riots. London wasnt evenboosted by the 2012 Olympics, since italready had top marks for culture andrecreation. Melbourne retained its topspot, with Dhaka at the bottom.

Icahn keeps it in the familyn Billionaire investor Carl Icahn hasgiven his son Brett $3bn to test his

mettle as a money manager. Havinghired his son as an investment analyst adecade ago, Icahn has now allocatedthe funds to Brett to manage alongsidefellow Icahn Capital manager DavidSchechter.

Wells Fargo settles SEC chargesn US bank Wells Fargo has said it willpay more than $6.5m to settle civilcharges alleging it sold complexmortgage-backed instruments tomunicipalities and non-profits duringthe financial crisis without fullydisclosing the risks.

BBCs Thompson moves to NYTn The New York Times has tappedformer BBC director general MarkThompson as its next president andchief executive, capping an eight-month search for an executive to leadthe company as more people get theirnews through digital products. He willstart in his new role in November.

WEDNESDAY 15 AUGUST 201212 cityam.com

LONDON REPORT

Retailers pickup during lightWall St trading

US stocks ended little changedyesterday in what investorsdescribed as a fatigued marketafter the S&P 500 rose in seven

of the past eight sessions.Retailers were a notable standout

after Home Depot raised its profitforecast due to improvement in thehousing market and US retail salesdata that was stronger thanexpected, though earlier figureswere revised lower. The S&P RetailIndex rose 0.9 per cent, giving anearly boost to the market.

But with the S&P 500 up 12 percent so far this year, gains came offby the afternoon. In the last fivesessions, the S&P has not movedmore than 0.22 per cent in eitherdirection and volume has declinedin what is normally a seasonally

slow period. It is within a stonesthrow of new four-year highs.The Dow Jones industrial average

rose 2.71 points, or 0.02 per cent, to13,172.14. The Standard & Poors 500Index was down 0.18 point, or 0.01per cent, at 1,403.93. The NasdaqComposite Index was down 5.54points, or 0.18 per cent, at 3,016.98.

Estee Lauderjumped 9.3 per centto $60.13 after the cosmetics andfragrance maker reported a higher-than-expected quarterly profit andforecast more sales growth this year.

But Groupon tumbled 27 per centto $5.51 after the worlds largestonline provider of daily dealsmissed quarterly revenueexpectations and gave a cautiousprofit outlook.The 5.16bn shares traded on the

New York Stock Exchange, theAmerican Stock Exchange and

Nasdaq was well below last yearsdaily average of 7.84bn.

S

TRENGTH in risk-sensitive energyand financial stocks hauled

Britains leading share index higheryesterday, as investors continued tofocus on hopes for fresh stimulusmeasures from central banks to spurglobal growth.These hopes were balanced by second-

quarter GDP data from France andGermany which came in above forecasts,easing concerns about the Eurozonestwo biggest economies, although theregion as a whole contracted over theperiod, maintaining support for the casefor European Central Bank action.The FTSE 100 index closed 32.90 points

higher, or up 0.6 per cent at 5,864.78,having shed 0.4 per cent in the previoustwo sessions.

Integrated oils provided the biggest liftfor the blue chips, helped by a firmercrude price on hopes for animprovement in demand from freshstimulus measures.

Banks and insurers also saw good

support, with Standard Life the stand-out blue chip gainer, up 8.1 per cent

after posting above-forecast first-halfresults.

UK water stocks were in demand astakeover speculation swirled around thesector, with United Utilities a top FTSE100 gainer, up 4.9 per cent after reportssuggested it could become the target ofan offer worth 900p per share, comparedwith a 689p closing price on Monday.

Peers Severn Trent, ahead 3.4 per cent,and Pennon Group, up 4.2 per cent, werehigher in sympathy.Volume for the FTSE 100 was modest, at

less than 65 per cent of the 90-dayaverage as the summer lull continued.

FTSE rises on hope of stimulus andjumps in bank and energy stocks

BESTof the BROKERSITV PLC


86

84

83

82

81

85

84.6514 Aug

ITVNomura has moved thebroadcaster fromneutral to buy,saying the firms cost-cutting measures are ontrack and will bolsterprofits. The bank raised

the target price to 115p.

DASHBOARDCITY NEW YORKREPORT

YOUR ONE-STOP SHOP FOR JOB MOVES,BROKER VIEWS AND MARKET REPORTS

FTSE


5,880

5,860

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5,870

5,830

5,840

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5,810

5,864.7814 Aug

Micro Focus International PLC


544

540538

534536

530532

542536.00

14 Aug

MICRO FOCUSINTERNATIONALUBS has upgraded thesoftware firm fromneutral to buy with atarget price of 600p.UBS says Micro Focus is agolden goose offeringhigh returns and growth.

Travis Perkins PLC


1,100

1,090

1,085

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1,095

1,094.0014 Aug

TRAVIS PERKINSPanmure Gordon hasupped the buildersmerchants target from1,050p to 1,200p sayingit expects the strongoperator to outperformthe market. TravisPerkins is rated as buy.

SavillsMarcus Lemli has beenappointed head of the realestate advisers Germanbusiness. He currently leads itsEuropean investment operation.He joined Savills earlier this yearfrom Jones Lang La Salle, wherehe headed its capital marketsand leasing businesses.

CouttsKeith Wilson has been appointed managing director,

head of products and services development at the private

bank. He joins from Barclays Wealth, where he was headof product for Barclays Wealth Advisory. Wilson has alsoheld senior roles in structured markets at Citigroup.

QuilterThe investment management firm has hired David Butlerand Simon Church as regional development managers.Butler most recently worked at Cofunds as a regionalaccount manager. He has also held roles at Prudential.Church was most recently sales development manager atMetlife Europe.

Ground Rents Income Fund

The financial services firm has appointed three non-

executive directors. Malcolm Naish is a previous directorof real estate at Scottish Widows Investment Partnership.Simon Wombwell is chief executive of Brooks MacdonaldFunds, and was previously head of sales and marketingat Scottish Widows. Paul Craig is director of multi-manager at Henderson Global Investors.

SepuraThe radio telecommunications supplier has appointedJonathan Hamill to the post of regional director for UK,Ireland, and for covert specialist sales. He joins from APD,where he was sales and marketing director. He is aformer police officer and previously worked for Sepura in

senior commercial roles between 2007 and 2011.

WHOS SWITCHING JOBS Edited by Tom Welsh

+44 (0)20 7092 0053morganmckinley.comSPECIALISTS IN GLOBAL PROFESSIONAL RECRUITMENT

CITY MOVES

To appear in CITYMOVES please email your career updates and pictures to [email protected]

in association with

NEWS

Housing continued its recoveryin June but it may face troublesHOUSE PRICES continued to recoversteadily in June, driven by a robust

London market, according to datareleased by the Office for NationalStatistics (ONS) yesterday, but datafor July suggests the recovery mightbe short-lived.

Prices rose an average of 2.3 percent across the UK in the year toJune, equal to the steady climb dur-ing the year to May, said the latestONS house price index, propping upthe picture painted by other indicesof the June market.The sticky recovery from the crash

continued to be driven by a boomingLondon market, which saw a 6.5 percent uptick in mix-adjusted averageprices. Prices in the rest of England

BY BEN SOUTHWOOD were also headed upward, with allregions barring the North East seeingincreases.

But Englands overall 2.8 per cent

incline was offset by yet another fallin Northern Ireland, this time of 11.9per cent, a slip of one per cent inScotland, and flat prices in Wales.

Although the economy is in a frag-ile state...a shortage of property isunderpinning prices, explainedDavid Newnes at LSL property servic-es.

With mortgage lending still sub-dued, wealthier buyers are the keydriving force at the minute, withsales activity being dominated by theequity rich, he added.Also released yesterday was a report

by Marsh & Parsons, the Londonestate agent, claiming that the

Olympics failed to put a damper onLondons recovering property market.Though 30 per cent fewer registered

during the Olympic 17 days than had

done in the same period in 2011, andthough there were 22 per cent fewerviewings than last year, 23 per centmore sales were agreed.

House prices continue to recover in June

Jun 12Jul 11Jul 10Ju1 09Jun 08

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THE last three Olympics haveseen a titanic battle betweenthe US and China to head themedals table. If you combinethe total of the last three

Games, China stands just ahead,with 121 golds to the United Statess116. But, the US topped the table inboth 2004 and 2012, while Chinaedges ahead because of its massivehaul in Beijing.

Is this a portent of the widerstruggle for global hegemony in thetwenty-first century? Just 20 yearsago in Barcelona, the US was wellahead with 37 golds to Chinas 16.The Chinese have caught up. Or so itseems.

Building a team for success is a

major challenge, and I have massive

COMMUTERS are suffering frommore than just the symptoms ofan Olympic hangover. Onceagain, the annual ritual of fareincreases is upon us. Some

newspaper headlines have declaredincreases of 11 per cent. In fact, theaverage increase for the so-calledregulated basket of fares, due tocome into effect in January 2013, is 6.2per cent still eye-wateringly high.Around half of all fares on the rail-

way are subject to regulation. Increases

are made up of two parts. Firstly, JulysRPI inflation figure (which camethrough at a whopping 3.2 per cent),and secondly an additional 3 per centincrease that the government hasgiven the green light to (which may yetbe softened by the chancellor, as hap-pened last year). Contrast that withchanges to average earnings and it isunderstandable why the rises are diffi-cult for commuters to swallow. In 2011,household earnings fell in real termsby more than 3.5 per cent. They areunlikely to rise by much in 2012.

So what lies behind the govern-ments approach? Firstly, there is a

Spread betting, CFDs Trade today atwww.cityindex.co.uk

FACT OF

THE DAY

GBP/USD is testing its 200-day moving average

once again, having done so unsuccessfully on

six occasions over the last six weeks.

cityam.com/forum

Putting locally

elected politicians inthe frontline willincrease accountability

THEFORUM

Twitter: @cityamforum on the web: cityam.com/forum or by email: [email protected]? Disagree? Got a sharp comment?

The Forum wants you to join the debate. Top responses will be reprinted in The Forum.

14WEDNESDAY 15 AUGUST 2012

ALEXANDER JAN

Commuters are sick of fare rises:Lets plug the democratic deficit

long-term policy to shift more of thecost of the railway onto its users.Excluding London Underground, gov-ernment support stands at around 33

per cent of the 12bn annual cost ofrunning and improving the railways.In an ideal world, the Treasury wouldlike to bring this close to zero.

Secondly, the investment needs ofthe railway have been growing.Passenger numbers have been increas-ing rapidly and are expected to contin-ue. For London and the South Eastalone, the government estimates a 31per cent increase in demand by 2026.Finding room for that growth meansmajor projects such as Crossrail andThameslink and lots of new rollingstock. These cost billions of pounds.The government is determined that a

significant chunk of that should bepicked up at the farebox.Thirdly, the government is looking to

drive through efficiencies. Last year, avalue for money study by Sir RoyMcNulty estimated that efficiencies ofaround 30 per cent are achievable overthe next five or so years. By reducingthe level of subsidy, the hope must bethat the railway will be subject tomore financial discipline and that willhelp to drive down costs.These are understandable objectives

but the problem for ministers is thatthe travelling public doesnt appearconvinced. Commuters into the capi-tal have limited choice. Apart frommoving house or changing jobs, com-muters are pretty much stuck with thetrain into work, irrespective of what itcosts. The annual season ticket is oftenseen as another form of tax that haslittle relationship to the service theyare getting. And improvements on therailway can take a long time. Crossrailhas been talked about for decades.People dont tend to pay in advance fora better car or home they enjoy thebenefits up front and pay later. Also,

trains are victims of their own success.As official forecasts show, manyimprovements are rapidly soaked upas passenger numbers rise. Gettingyour fellow passengers armpit orelbow out of your face, or guarantee-ing a seat in the morning rush, is along-term challenge.

How can the circle of increasing

demand, reduced government sup-port, fare rises and a perceived lack ofaccountability be squared? One solu-tion may lie in handing more powersto London government. A fierce debateabout Tube investment and fares inLondon gripped the recent race formayor. This is testament to the factthat voters recognised candidates had

some power over these issues and theycould choose between a mayor whowould cut fares and one who wasmore reluctant to do so.

Putting locally elected politicians inthe frontline for defending fareincreases will increase accountability.Debates about investment, service lev-els and the price of tickets can thentake place between those who usethem and those who are directlyresponsible for ensuring their delivery.Giving a voice to passengers outside

Greater London would be important.Technical and administrative bound-aries would need to be overcome, butNew York and other cities appear capa-ble of addressing these problems.

The democratic deficit for this vitalpublic service makes price hikes onthe railway hugely unpopular andhard for people to accept. Lets give themayor and the counties control ofthe commuter railway and the faresthat go with it. Hardly an Olympianchallenge compared to deliveringLondon 2012.Alexander Jan is global head of Arups

Transaction Advice team for transport.

respect for those behind the triumphof Team GB. But, from anorganisational perspective, it issimple. The aim is unequivocal towin. The methods are well known just look at Mo Farahs brutaltraining regime. To succeed indistance running, an absolutelypunishing routine is needed.

The same can be said for the

transition China is making from a

peasant to an industrialisedeconomy. The goal is clear. The wayof achieving it is well understood, asmany countries have already gonethrough the same process. But howdo you move beyond this to create asuccessful post-industrial economy?

We have been here before. The oldSoviet Union used terror, irondiscipline and massive inequality tobuild an industrial economy. Itsucceeded. But it had no idea of howto move beyond this, to thecomplexities and subtleties of aninformation-age economy.

It is easy to make a case for USweakness. Its twin deficits, inbalance of payments and itsgovernment accounts, stand

alongside an increasingly divided

and embittered policy discourse.But in terms of its ability to

innovate in a complex globalisedsociety, you only need to witness thespectacular success stories of thepast 30 years. Microsoft, Google andFacebook are all American.

The networks which make upAmerican society are fluid anddynamic. They have the sorts ofstructure that both encourageinnovation in the first place, andstimulate its widespread adoption.

The network of government, thenetwork of companies, the networkof universities, all of these arestrongly coupled to one another. TheUS has learned how to make public-private partnerships work, not by

reams of turgid legal contracts, but

by honing the structure ofconnections between these threecrucial sectors of the economy.

In contrast, the networks ofChinese society are much more rigidand hierarchical. The CommunistParty is the prime example. ButChinese culture in general is farmore inclined to defer to authority,and to the established wisdom.

The twenty-first century willbelong to those who are best attechnological innovation. The open,fluid and dynamic structure of thenetworks of American society putthe US still in prime position.

Paul Ormerod is an economist andpartner at Volterra Partners. and authorof Positive Linking: How Networks Can

Revolutionise the World (Faber & Faber).

AGAINSTTHE GRAIN

PAUL ORMEROD

Americas vibrant networks leave it ideally placed to fend off rising China

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15

Defending UK aid[Re: British aid policy is harming those itseeks to rescue, yesterday]Alan Oxley clearly has precious littlegrasp of British government aid policies.Far from ignoring innovation, as heasserts, last weekends hunger summitcalled for new and innovative ideas totackle chronic hunger. We work closelywith private companies like GSK andUnilever to find ways to make nutritiousfood available to poor families, and ourresearch will give farmers better crops. Itis also inaccurate to say that economicgrowth is not a prio rity. We have radicallyrestructured our aid to help create theright conditions for growth, and to helpmarkets and societies flourish. This isessential if the poorest are to pull

themselves out of poverty. We know fullwell that forests are also a major sourceof income, shelter and fuel for some ofthe poorest people. However, all the factsprove that the solution is far from asstraightforward as Alan Oxley believes.Many tropical forests are on soils whichcannot sustain agriculture and aresusceptible to fire. Solving global hungerand chronic poverty is far more complexthan simply cutting down trees. Instead,we must find sensible solutions whichprotect forests, help farmers grow morefood and help the poorest afford the foodthey need.

Stephen OBrien, parliamentary undersecretary of state at the Department ofInternational Development

IF THE reports of irregularpayments by the defencecontractor EADS turn out to betrue, Ian Foxleys name will soonstand alongside that of the

former Olympus chief executiveMichael Woodford. Whistleblowingis the name of this game, but whatare the lessons for employees thatwant to spill the beans?

The City has been hit with a raft ofregulation since the financial crisis.

We have also seen a more aggressiveapproach by the Serious Fraud Office(which has not always been success-ful just ask the Tchenguiz broth-ers). This is fertile ground forwhistleblowers, but potentially prob-lematic for employers.After all, not all whistleblowers

have a valid case. Whistleblowing hasalways been high on the agenda ofthose leaving jobs without thelength of service required for anunfair dismissal claim. And spuriousclaims are rife, as some whistleblow-ers try to extract money without justcause. However, new regulation pro-posed by the government wouldremove many specious opportuni-ties, as the requirement for there tobe a public interest, rather than sole-ly a private interest element in anydisclosure, will be emphasised.This legislation will leave the pub-

lic-spirited, genuine whistleblowerfree to act, and we can expect to seemany more whistleblowing cases inthe City. It would be surprising if thefixing of Libor turns out to be theonly activity waiting to be exposed.Whistleblowing requires the disclo-

sure of wrongdoing, in good faith, tothe employer or a small number ofother prescribed persons. Protectionagainst detriment for example dis-missal on the grounds of the disclo-sure, automatically attaches to thewhistleblower. Compensation is loss-based, but unlimited. If the whistle-

TOP TWEETSInflation in the UK has been above targetsince 2005. That is a very long time to have atemporary blip.@Detig

I would like to point out that it is NetworkRail, a nationalised company, that is forcingup rail fares.@Old_Holborn

Weve seen huge increases in rail fares whenstandard prices are already extortionate. Andsome people still think HS2 is a good idea?@kelly_1984

Extended Sunday trading: increased choiceand competition, more jobs, better transport,more economic activity. Lets do it.@LMackenzie86

Is Sir Roger Carr right that government mustdesign an industrial strategy for UK growth?

YESSir Roger Carr is right to highlight the symbiotic relationship

between government and the market economy. But developing anindustrial policy to boost the UKs competitive edge is difficult. Whatseems like the future can quickly become a damp squib. We alsoneed to be clear on the ground rules, so that ministers can be heldaccountable for public money. Otherwise whats to stop the businesssecretary backing firms for political gain? The most obvious place foran industrial policy to start is to build a world class infrastructureplatform on which UK companies find it cheap and easy to dobusiness. Boosting investment in transport, telecommunications andenergy projects must therefore be the governments priority. Thisagenda wasnt helped by successive governments slashing capitalspending to close the deficit. For the immediate and long-termhealth of the economy, its time those decisions were reversed.Ian Mulheirn is director of the Social Market Foundation.

Ian Mulheirn

NOKevin Dowd

Advocates of industrial policy are intellectually lazy. They must

believe that the civil servants who design industrial policy aresuper-smart, super-humanly selfless and have access to dispersedinformation they cannot possibly have. They must believe thatcivil servants are able not just to beat the market, but beat themarket by a margin sufficiently large to offset the costs of usingtaxpayer rather than voluntary funds. They must believe that thesame civil servants can be counted on to withstand self-interestedpressures brought to bear by the politicians they report to, and bythe industrial interests who have captured the politicians. Andthey must be able to explain why we should try this course ofaction again, when we have never got it to work before. If thegovernment wants to help business, it should stop meddling withit and acknowledge that corporatism doesnt work.Kevin Dowd is an economist and a partner at Cobden Partners.

RAPIDresponses

blower is, like Woodford, a very sen-ior executive with a bonus and shareoption rights, and whose marketabil-

ity is highly likely to be adverselyaffected by the publicity, very largesums can be awarded.

But what should a prospectivewhistleblower do? Getting hold ofyour employers whistleblowing poli-cy is essential, as is ensuring thatyour disclosure is made to the cor-rect person not necessarily youremployer. A disclosure incorrectlymade will not confer protection.

But anyone faced with this predica-ment should first consider whetherto blow the whistle at all. Legal pro-tection against detriment is all welland good, but analysing objectivelywhether to raise ones head abovethe parapet is the preliminary step.Almost irrespective of the outcome, awhistleblowers career can beadversely affected. The prize,whether financial or moral, has to beworth the price.

Back in the 1970s, Stanley Adams, apharmaceutical industry whistle-blower, shopped HoffmannLaRoche to the authorities for price-fix-ing. Although the company wasfined, Adams was imprisoned whenhis identity was revealed. He neverworked in the industry again afteran inexcusable breach of confidenceby the authorities.

Thankfully, we now live in moreenlightened times. But speaking outwill never be a one-way bet.

Mark Watson is an employment lawpartner at Fox Williams.


MARK WATSON

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Whistleblowing is

a career gambleeven if successful

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FIAT is on a roll with its little 500and Panda city cars, both ofwhich have been critical andcommercial successes. But the

problem with introducing cool,trendy little cars is that they canmake older cars in the rangesuddenly look long in the tooth. So itis with the Fiat Punto, a car that nowlooks rather dull compared to thesetwo little upstarts.Which is a big factor in why Fiat has

introduced a revamped version of thePunto that includes the option of thetwo-cylinder TwinAir petrol engine.Its the same award-winning enginethat has added such a colourfulsoundtrack to the 500 and Panda

models. Its award-winning because,although it only has two cylinders, itstill has four-cylinder-like accelerationand economy figures that approachthat of some diesel cars. The low-fric-tion, lightweight 875cc petrol enginehas plenty enough pull allowing peo-ple to zip around in a little petrol carwith diesel-like economy. The onlytrade-off to this technology is theengine note. It sounds insect-like anda lot like the original two-cylinderengine from the original Nuova 500from the late 1950s, which is a verygood thing. In the 500, people haveloved the TwinAir engine becausethis green little car sounds like itsabsolutely flying and it feels properlycharacterful and retro. It suits the500 more than any other engine Fiatoffers.

But will it work in the bigger Punto?Fiat hopes the 85hp engine will addthe same kind of excitement to thePunto model as it has to the 500,while at the same time delivering lowfuel consumption, low CO2 emissionsand low running costs.

So keen is Fiat to communicate howtrendy and environmentally cleanthis car is that it is offered inUnplugged Green: a colour you canonly choose if you have the TwinAirengine. Our test car comes in thistraffic-stoppingly vibrant colour witha black roof, black grille, glossy blackdoor mirrors and two-tone black andchrome alloy wheels. It attracts a lotof positive attention.

Inside, our car has black gloss andchrome details as well as uniqueTwinAir seats. The interior is comfort-

able and reasonably stylish andtheres a decent amount of space forfour adults. Theres nothing to dislike,though it has to be said there is noth-ing to write home about either.

Driving the Punto around town, theengine throws out its boisterous almost Vespa-like note but somehowthe noise doesnt work like it does inthe 500 where it makes the perky lit-tle car sound faster than it is. Theresno doubt that the TwinAir is a cleverlittle engine. Its surprisingly versatile

and is powerful enough when pulingaway quickly. Its easy to drive in town theres a city driving button thatlightens the steering and the ride isgood. Its fine on the motorway too.But its not a particularly thrilling carin the bends and the constant screamof the engine as it redlines to everygear change is more annoying thanexciting in the Punto. It does add char-acter, Im just not sure that I could livewith it.

Conversely, the TwinAir engine is

the only engine Id want if I bought a500.

Still, its clean and its green andrunning costs should be low. It isnt asmuch fun as it promises to be onpaper. Indeed, somehow it just does-nt quite add the young and fun feel-ing that Fiat had planned for it probably because its a larger andheavier car than the 500. Its goodenough for a buyer with a family thatcannot squeeze into the 500 but whowants the unusual TwinAir engine.

The Fiat Punto TwinAir falls short on design, experience and overall pizzazz. Though it certainly is green.

16WEDNESDAY 15 AUGUST 2012

LIFE&STYLEcityam.com

MOTORING

CAR TALKBY RYAN BORROFF

Jaguars F-Type two-seaterIt feels as if we have been waiting forever. Thankfully Jaguar will showits new F-Type two-seater rear-wheel drive sports car at the Paris MotorShow on 27 September. The car will be launched in droptop form with a

choice of three petrol engines 340PS and 380PS versions of Jaguars3.0-litre supercharged V6 and a flagship supercharged 5.0-litre V8.

WORDS BY

RYAN BORROFF

THE VERDICT:DESIGN hhhiiPERFORMANCE hhhiiPRACTICALITY hhhiiVALUE FOR MONEY hhhii

THE FACTS:FIAT PUNTO TWINAIR

PRICE: 12,1000-62MPH: 12.7 secsTOP SPEED: 107mphCO2 G/KM: 98g/kmMPG COMBINED: 67.3mpg

Super rare supercharger from AudiIs this the most beautiful racing car of all time? Audi certainly thinks so. It justbought an extremely rare 1939 Auto Union twin-supercharger Type D SilverArrow racing car, one of the two legendary Karassik cars which were lost

in the USSR for years. The car was notable for placing the engine behind thedriver. Its o n show at the Goodwood Revival from 14-16 September.

Vauxhall science weekend for true nerdsThe Vauxhall Ampera x super/collider Science Weekend starts tomorrow. Thefour-day science-fest is a series of science and learning events at the newlyunveiled Kings Cross Filling Station. Events include an installation by Patrick

Stevenson-Keating, plus talks, socials and live demonstrations featuring thelatest gadgets and scientific developments for a post-petrol future.

TwinAir engine adds spice to the Punto. But the characterful twin-cylinder feels a little lost in this bigger carLess trendy Fiat Punto is revamped

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ENGLAND manager Roy Hodgsonhas called upon his young side tolearn from the example setby London 2012s Olympians in

their pursuit of success over thecoming seasons.

In tonight facing Italy in Berne,England revisit the opponents towhom they lost during JunesEuropean Championship andHodgson, speaking ahead of thefriendly fixture in Switzerland,recognises the lessons that can belearned from the Olympic athleteswho withstood a level of pressureunder which England have onlyever suffered.

Team sports have to be differenti-ated but we saw how well they did interms of meeting expectation,Hodgson said. So many athleteswho were hopes lived up to thoseexpectations. They answered thosedreams in front of a home crowd.

We need to understand thatwhen we play we are under thesame spotlight.

Also how well they performed ininterviews, the humility theyshowed when they win, thegrace they showed topeople they had beat-en. The way theyshowed and admit-ted their disap-pointment.

Chelseas FrankLampard (right)will captainEngland in the

a b s e n c eof Steven

Gerrard ofLiverpool, but

though both may fea-ture in a generation ofinternational players in

which fans have some-times lost faith, Hodgson

believes the attitude of the

public to be every bit as important asthat of the players.

There was incredible supportwithin stadiums, tremendous behav-iour, he added. So maybe it is some-thing we need to look at in moreglobal terms.

To be frank you cant compare, forexample, the atmosphere and theway they behave in the Olympic

Stadium to the Charity Shield. It is avery different public.

Maybe it is a wake-up call for us allthat you dont need that hatred andabuse that football players have tosuffer. We didnt see too much of thatin the Olympic Games.

We must understand they areperforming to a quite differentaudience.

Manager calls forchange among bothplayers and fans

Hodgson hopes Olympianscan inspire English football


SPORTcityam.com/sport

BY DECLAN WARRINGTON

@cityam_sport

ENGLAND fast-bowler StuartBroad admits he is friends withthe man at the centre of theKevin Pietersen Twitter row,

but insists he has had noinput into the controversialparody account.

Posts on the site from the userKP Genius have been blamedfor widening the chasm betweenthe squad and batsmanPietersen, who has since beenfrozen out over his dispute withEngland chiefs the ECB.

Broad yesterday took theunusual step of releasing a

statement confirming he knowsRichard Bailey, the man behindthe account, but denying havingany part in the mocking of hiserstwhile colleague.

Mr Bailey is a friend of mine,said Broad, after talks with theECB. But we had noconversations regarding thisissue at all and I am pleased thathe has now decided to close theparody account down.

Pietersen has been told hemust apologise for sending textmessages to South Africa playersallegedly deriding England team-mates, or face his exclusion fromtomorrows final Test againstthe Proteas at Lords being madepermanent.

Seamer Tim Bresnan hasplayed down the chaos hangingover Englands attempts tosalvage a draw from the three-match series and retain theirNo1 Test ranking, and believesthe team could even flourish

without the prolific Pietersen.It may be an even better side

[without Pietersen]. Its one ofthose things where a talentedplayer is being replaced byanother, he said. So whyshould we miss a certainindividual because hesunavailable for selection?

Broad rejectsblame for KPTwitter prank

BY FRANK DALLERES

n Six the number ofuncapped players inEnglands presentsquad. Jack Butland,John Ruddy, RyanBertrand, StevenCaulker, Jake Livermoreand Tom Cleverley allawait their debuts.

n 286 the number ofcaps Englands squadhas between them, 90of which belong to oneman: Chelsea midfielderFrank Lampard.

n 287 the number ofcaps between theabsent Steven Gerrard,Wayne Rooney,Gareth Barry andGlen Johnson.

n 543 the number ofcaps between absentregulars Joe Hart,Ashley Cole, RioFerdinand, John Terry,Johnson, Barry,Gerrard, and Rooney.

England manager Roy Hodgson believes that football can learn from the example set by the Olympics

Three Lions orthree cubs?

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IN BRIEFUnited agree Henriquez dealn FOOTBALL: Manchester United areto sign 18-year-old Chilean strikerAngelo Henriquez from Universidadde Chile. He is expected to return tothe club on loan.

Lyon confirm Spurs Lloris bidn FOOTBALL: Lyon chairman Jean-Michel Aulus has confirmed the clubrejected a bid from Tottenham forgoalkeeper Hugo Lloris. This yearthere was an approach fromTottenham that was quickly rejected,he said.

Kone heads to Wigann FOOTBALL: Wigan have signedstriker Arouna Kone from Levante fora fee of 2.7m. The Ivorian has signeda three-year contract.

Keen to match the All Blacksn RUGBY UNION: RFU recruit PeterKeen has targeted England matchingNew Zealands success. He said:[New Zealand] is what you areaiming for. Bring it on.

Well win more

medals in Rio,insist GB chiefs

He will end up signing for Madrid before themarket shuts

Croatia manager Igor Stimac on Luka Modrics proposed transfer to Real Madrid

cityam.comWEDNESDAY 15 AUGUST 2012

BY FRANK DALLERES

At Aberdeen, we know teamwork matters.Thats why we all pull together.

Aberdeen Asset Management Cowes Week

11 18 August 2012.

www.aberdeen-asset.com/cowes

August 2012.11 18

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August 2012.

CManagementdeen Asset

pullally wewe knowdeen,

eekWowesC

.togetherwork matters.teamwe know work matters.

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August 2012.11 18

.com/cowesdeen-asset

August 2012.

COWES WEEK

DIARYSARAH GOSLING

THE sun is out at AberdeenAsset Management CowesWeek. Yesterday saw acracking days sailing with the

perfect weather of sun and wind often described as champagnesailing conditions.

It was the ideal day for regularevent guest HRH Duke ofEdinburgh to be at the Royal YachtSquadron watching from the startline and then getting out in alaunch and close to the action. Myspies tell me he is having dinner at

Ainslie has arrived just as the true Cowes sailing business begins

the house next door, so I will keepmy eagle eyes open to catch him.

The other famous name to be inCowes for dinner is Ben Ainslie.Here to thank his sponsors, hes

Results

arrived quietly and, weighed downwith those five Olympic medals, iskeeping a low profile.

Incidentally, David Howlett hasbeen awarded the gold star for yetagain coaching Ainslie to anotherOlympic gold. Every sailor he hascoached since 1988 has won gold,which is a brilliant record.

Today we enter the second half ofthe regatta and this is the pointwhen you now start to study theresults. There are a number of boatswho have won all their races so far

and they will be looking to stayahead of their competitors. As theforecast is very windy, they couldend up with a few hours ashorelooking at the results, scores andpermutations. Fingers crossedthey get out there and give usmore great action to watch fromthe green.

Sarah Gosling is a double gold medal-winning former Olympic sailor.

Just how goodwas 2012 tally?

BRITAIN will not repeat themistakes of Australia and letperformance levels plummet aftera successful home Olympics, someof the countrys leading sportpowerbrokers vowed yesterday.

Olympics minister HughRobertson and elite performanceagency UK Sport are confident TeamGB will instead improve on theirrecord-breaking London 2012 medaltally at the next Games in Brazil.

That belief is based on theguarantee that total central fundingfor all sport leading up to Rio 2016will dip only fractionally from

512m to 508m, as well as anumber of other factors.

Robertson cited the 10 sports thatfailed to meet their London targetsas obvious sources of potentialimprovement and identified thetwo sports set to join the Games golf and sevens rugby as strongmedal hopes.

Were delighted to get 65 medals[at London 2012], but we knew itwas possible, said UK Sport chiefexecutive Liz Nicholl.

Most countries have had upliftin funding [for a home Games] butthis has not been sustained. Were

in a really good place to maintainthis momentum.

Australia won a record 58 medalsand finished fourth in the table atthe Sydney Games in 2000, but havesteadily deteriorated since, ranking10th in London with just 35.

Peter Keen, UK Sportsperformance advisor, said it was

entirely reasonable to expectBritain to surpass its Londonperformance at the next Games.

He added: Planning for Rio isvastly better unrecognisably better than it was six years ago. Wereactually starting to get it.

Team GB won a record tally of 29gold medals at London 2012.

Brits punched

above weightUK SPORT may believe thatBritains 65 medals at London2012 were no great surprise, buta new study based ondemographic and historical dataindicates Team GB truly didpunch above their weight.

Britain won 14 more medalsthan they were entitled to, basedon population size, grossdomestic product, performanceat past Olympics and number ofathletes, according toconsultancy Economics Insight.

Only Russia overachievedmore, while Britainsperformance was comparable

with China, according to thereport. Brazil were the worstperformers, by the samemeasure, while Australia were

second worst, falling 16 medalsshort of their predicted tally.

Of all sports, Britains rowersoverachieved the most, withtheir nine medals exceedingprojection by six.

Country Medal over-performance(no. of medals)

Russia 25Great Britain 14China 14South Korea 11Iran 8

:8G@K8CFE

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