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Chase Bank Limits Cash Withdrawals, Bans International... Before you read this report, remember to sign up to http://pennystockpaycheck.com for 100% free stock alerts Chase Bank has moved to limit cash withdrawals while banning business customers from sending...

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Richemont chairman Johann Rupert to take 'grey gap... Billionaire 62-year-old to take 12 months off from Cartier and Montblanc luxury goods groupRichemont's chairman and founder Johann Rupert is to take a year off from September, leaving management of the...

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Cambodia: aftermath of fatal shoe factory collapse... Workers clear rubble following the collapse of a shoe factory in Kampong Speu, Cambodia, on Thursday

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Spate of recent shock departures by 50-something CEOs While the rising financial rewards of running a modern multinational have been well publicised, executive recruiters say the pressures of the job have also been ratcheted upOn approaching his 60th birthday...

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UK Uncut loses legal challenge over Goldman Sachs tax... While judge agreed the deal was 'not a glorious episode in the history of the Revenue', he ruled it was not unlawfulCampaign group UK Uncut Legal Action has lost its high court challenge over the legality...

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UK Uncut loses legal challenge over Goldman Sachs tax deal with HMRC

Category : Business

While judge agreed the deal was ‘not a glorious episode in the history of the Revenue’, he ruled it was not unlawful

Campaign group UK Uncut Legal Action has lost its high court challenge over the legality of the “sweetheart” tax deal between HM Revenue and Customs and Goldman Sachs.

The judge agreed the deal was “not a glorious episode in the history of the Revenue” but ruled that it was not unlawful.

The court was told the 2010 deal, worth up to £20m, was allowed to proceed to avoid “major embarrassment” to the chancellor, George Osborne, and the tax authorities after the bank became “aggressive” and allegedly made threats.

UK Uncut asked Mr Justice Nicol, sitting in London, to declare that HMRC’s decision to let the deal go through was legally flawed and involved a breach of statutory duty.

Tax authority lawyers defended the settlement, saying it was among five big business deals declared “reasonable” by a 2012 report of the National Audit Office.

UK Uncut says it is wrong to allow rich companies to avoid paying millions in tax while the government imposes tough austerity measures on the poor, and ordinary taxpayers are pursued for every penny.

Martin Worthy, a director of UK Uncut Legal Action, said after the hearing that he was disappointed with the ruling. But he added: “This case has shown that the government’s tough talk on tax is just that – talk not substance.”

Dave Hartnett, then permanent secretary for tax, initially shook hands on the Goldman Sachs deal on 19 November 2010 following a long-running dispute over National Insurance contribution payments dating back to the 1990s.

Lawyers for UK Uncut put before the high court in London an email and a witness statement showing that Hartnett overruled legal advice, the HMRC’s own guidelines and its internal review board to ensure the deal went ahead.

Just over a week after the handshake, the Revenue’s high-risk corporate management board attempted to block the deal, just as the chancellor announced that the top 15 banks in the country had signed up to a new code of conduct related to tax.

An email from Hartnett on 7 December 2010 described how Goldman Sachs allegedly “went off the deep end” after the board decision and threatened to withdraw from the government’s code of practice, first published in December 2009.

The email warned: “The risks here are major embarrassment to the ChX [Chancellor of the Exchequer], HMRC, the LBS [the large business service of the HMRC], you and me, not least if GS withdraw from the code.”

The witness statement from Hartnett, who retired as head of tax last summer following strong criticism of the Goldman Sachs deal from the public accounts committee, said the bank withdrawing from the code “would have embarrassed the chancellor”.

Ingrid Simler QC, appearing for UK Uncut, argued that the deal breached HMRC’s statutory duties, and said an “aggressive” bank had been rewarded for several years of failing to pay tax it owed, causing “real disquiet among the taxpaying public”.

She said the exact amount lost to the Revenue was not known but was at least £5m to £10m, and the Commons public accounts committee had received evidence that it could be up to £20m.

James Eadie QC, appearing for HMRC, accused UK Uncut of taking legal action “to pursue politics by other means”.

HMRC said in a press statement: “Large business tax settlements are a vital part of how HMRC secures tax revenues for the country and without them Britain’s public finances would be seriously damaged.”

Anna Walker, campaigns director of UK Uncut Legal Action, said: “Obviously, while we are deeply disappointed that this deal has not been declared unlawful, the judge’s ruling that top HMRC officials played politics with major tax deals to protect Osborne’s reputation is a major victory in exposing the truth behind these secret deals.

“Despite not having won the case today, we still feel that this judgment has demonstrated that the government is making a political choice to cut legal aid, public services and the welfare system, rather than take action to make corporate giants … pay their fair share of tax.

“This case has exposed the lengths the government will go to to look tough on tax avoidance and has been vital in holding the government to account for its shameful actions.”

Private members’ ballot: Politics live blog

Category : Business

Andrew Sparrow‘s rolling coverage of all the day’s political developments as they happen, including the private members’ ballot and Google giving evidence about tax avoidance to the public accounts committee

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Tax havens are entrenching poverty in developing countries | Richard Miller

Category : Business

Poorer nations lose three times more money to havens a year than they get in aid. The G8 has the chance to change this

The Guardian has brought yet more news about the widespread use of tax havens by some of the world’s largest multinationals operating in developing countries. From ActionAid’s own investigations we know that these tax havens can all too often provide vehicles for tax avoidance that hits the world’s poorest hardest.

In the case of just one FTSE100 multinational we recently investigated – Associated British Foods, maker of Ryvita and Silver Spoon sugar – we found the company had used tax haven conduit companies to legally avoid enough Zambian tax to put 48,000 children in school. Zambia is a nation where almost half of children fail to complete their education.

Tax haven secrecy can also be used to deflect scrutiny from a range of unaccountable transactions in developing nations. Kofi Annan’s Africa Progress Panel last week highlighted mining deals involving two FTSE100 multinationals, carried out through companies in the British Virgin Islands, Panama and Gibraltar, which the panel claims have deprived the Democratic Republic of Congo of an estimated $1.36bn – almost twice the country’s education and health budgets combined.

From near-deserted Caribbean islands to major financial centres, tax havens offer a harbour for wealth and profits siphoned from around the world. Tax havens provide the legal machinery for tax avoiders, and protection for illegal tax evaders, denying developing economies the public revenues needed for hospitals, schools, clean water and functioning roads. The figures are staggering. According to the Organisation of Economic Co-operation and Development, developing countries lose three times more money to tax havens each year than they receive in aid.

The statistics cannot, of course, show the tax impact of each tax haven company. Some may indeed have real business, and not simply be avoiding taxes in places where real business is done. But this is precisely the point: corporate reporting fails to show the transactions and tax bills of multinationals’ operations in many of these jurisdictions. And these same jurisdictions often deny this information to under-resourced tax authorities in the world’s poorest countries too.

Tax haven structures may be nearly universal, but they are not a fact of nature in modern business. Financial services firm Hargreaves Lansdown and mining company Fresnillo, for instance, have no tax haven subsidiaries at all, despite operating in sectors that are no strangers to “offshore”. Others are making efforts at least to disclose their tax structures around the world: when ActionAid put questions about their tax haven companies to all FTSE100 companies, 15 responded with significant extra details.

Yet overall there is little incentive not to place profits and assets in tax haven companies, or to disclose these profits and assets, unless governments themselves end the secrecy and abusive tax regimes that tax havens offer. The countries represented at June’s G8 have a unique combination of economic and political weight, responsibility and jurisdiction over the problem. The UK alone is responsible for one in five of the world’s tax havens, more than any other single country in the world. Yet while the UK and other wealthy countries have recently begun to push their tax havens to disclose the financial assets that their taxpayers hold offshore, these deals as yet leave developing countries out in the cold.

The G8 can and must commit to ending the anonymous ownership of tax haven companies and trusts, and making tax havens disclose the information that tax authorities around the world desperately need. To fix the biggest part of this problem the information it generates must be available for all countries – including the poorest – from day one.

When the UK government convenes the leaders of the world’s wealthiest countries at the G8 summit this June, it has an opportunity, an interest and a duty to do something extraordinary: to tackle one of the biggest hidden obstacles in the fight against poverty by putting an end to tax havens. With David Cameron, George Osborne, François Hollande, Angela Merkel, other world leaders and ordinary taxpayers calling for change, this is a once in a lifetime opportunity. None of us – from the richest to the poorest countries – can afford for the G8 to miss it.

Lloyds chairman Win Bischoff to step down

Category : Business

City veteran said the bank’s performance is ‘well on track’ ahead of government sell-off

Sir Win Bischoff said Lloyds Banking Group was “on track” for recovery as he announced he would step down as chairman before next year’s annual general meeting.

The search for a successor for the 72-year old City veteran will be led by a senior Lloyds director and is beginning just days before this year’s annual meeting, which takes place on Thursday.

Bischoff’s departure from a role he took on in September in 2009 has been the subject of speculation for many months although he now looks likely to leave before the sale of the government’s 39% stake.

“Lloyds Banking Group has, over the past four years, made significant progress in its goal to become a strong, efficient, UK-focused retail and commercial bank. Whilst clearly some challenges remain, the performance of the group is well on track. Indeed, in many areas, it is ahead of plan. This gives me every confidence in the future success of the group and it is therefore a good time to start the search for my successor,” Bischoff said.

Anthony Watson, the former fund manager and senior independent director, will lead the search for the new chairman, who will need to give investors enough confidence in the bank to buy shares during any stock market flotation.

In a surprise move in March, the government signalled its determination to privatise Lloyds by linking a bonus for its chief executive, António Horta-Osório, to selling off a stake in the bank at a price above 61p. This is considerably lower than the 73p that the City had previously assumed would be the price targeted by the government.

Bischoff was a key figure at the investment bank Schroders when it was sold to the US bank Citigroup in 2000. He ended up running the entire bank in the fall out of the 2007 credit crunch but left Citi in 2009 after the bank reported a $18.5bn (£12bn) loss.

He was named chairman of Lloyds after the HBOS rescue, which led to the departure of Sir Victor Blank, who had chaired Lloyds during the 2008 crisis. In 2001, Bischoff replaced the Lloyds chief executive, Eric Daniels, with Horta-Osório.

Speculation about Bischoff’s successor is already swirling around Paul Tucker, deputy governor of the Bank of England.

Eddie Stobart drives into legal aid row

Category : Business

Haulage firm arm bids for controversial contracts to provide lawyers in criminal trials amid protests from legal profession

A subsidiary of the haulage firm Eddie Stobart has emerged as a leading contender in bidding for a new generation of criminal legal aid contracts that would deprive defendants of the right to choose their own solicitor.

Lawyers are planning protests outside parliament in opposition to the Ministry of Justice’s proposals, which aim to cut fees, reduce funding of judicial reviews and save a further £220m out of the legal aid budget.

The row within the legal profession over the plans is intensifying. The head of Stobart Barristers has described traditional law firms who rely on legal aid as “‘wounded animals waiting to die” and accused rival lawyers of sending his firm messages urging it to “Truck Off”.

The MoJ’s most controversial proposal is the introduction of competitive tendering in contracts to provide lawyers for defendants in criminal trials.

In order to guarantee winning firms receive a sufficient number of cases each year, the MoJ is proposing to remove the right of defendants funded by legal aid to select their own solicitor.

The arrival of Stobart Barristers last year has reinforced fears among the wider legal profession. Stobart operates by connecting clients directly to barristers, cutting out the need for solicitors.

Trevor Howarth, its legal director, said the firm would be bidding for the new criminal defence contracts. “We can deliver the service at a cost that’s palatable for the taxpayer,” he said. “Our business model was developed with this in mind.

“We at Stobart are well known for taking out the waste and the waste here is the duplication of solicitors going to the courtroom. At the moment there are 1,600 legal aid firms; in future there will be 400. At Stobart, we wouldn’t use 10 trucks to deliver one product.”

Howarth said he had received emails from solicitors with the heading “Truck Off”. He added: “I have already taken calls from barristers [on our panels] who say they have been contacted by solicitors telling them they won’t use them again if they take instructions from us.”

On removing a defendant’s right to choose their solicitor, Howarth said: “I don’t think the lack of choice is damaging. [People are not] entitled to access justice with an open cheque. No one is stopping them paying for their own choice of solicitor.”

Barristers and solicitors held a protest meeting in Manchester last month. Another protest meeting by lawyers is being organised for 22 May outside parliament.

Under the plans, defendants on legal aid will no longer be able to choose which lawyer represents them in a police station or a magistrate’s court. They will still be able to choose which barrister represents them at crown court.

Paul Harris, president of the London Criminal Courts Solicitors’ Association, warned that the quality of legal representation would decline. “How is anyone facing serious criminal allegations going to feel being represented by a haulage company?” he asked. “The individual will have no choice. The state will prosecute you and then choose your lawyer. By removing choice, providers will have less incentive to compete on quality. We will end up with far more miscarriages of justice.”

The Bar Council, which represents barristers, has launched an online petition under the slogan “Say No to Cut Price Justice”. Maura McGowan QC, chairman of the Bar Council, said: “It is against the public interest to introduce a system where legal services are provided on cost alone, by the lowest bidder, and not on quality … where you have no choice of who represents you.”

Sadiq Khan MP, Labour’s justice spokesman, told the Law Society Gazette: “No one wants a second-rate system where you are forced to accept whatever representation you are given regardless of quality.”

An MoJ spokesperson said: “Quality-assured lawyers will still be available. Quality standards will be assessed as part of the tender process and we will ensure they are maintained by the lawyers who win contracts. We will continue to uphold everyone’s right to a fair trial, but with £1bn a year spent on criminal legal aid we have to look again at how to deliver better value for every penny of taxpayers’ money spent.”

Sainsbury’s profits rise again

Category : Business

Sainsbury’s said it had outperformed competitors and celebrated the ‘milestone’ of non-food sales reaching £1bn for the first time

Profits at Sainsbury’s have risen again as the supermarket maintained its run of success under chief executive Justin King.

It came as the retailer also announced it was taking full control of Sainsbury’s Bank in a £248m deal to buy the 50% stake held by taxpayer-backed Lloyds Banking Group.

Full-year results to 16 March showed underlying profits up 6.2% to £756m, though the bottom-line pre-tax figure fell 1.4% to £788m when property disposals were included.

King, who took over at the supermarket amid sliding sales nearly a decade ago, remained bullish about its prospects despite the economic downturn.

He said: “Whilst we see no near-term change in the current economic situation, we remain confident that by continuing to invest in our long-standing strategy and by understanding and helping our customers, we are well positioned for future growth.”

Total sales rose by 4.6% to £25.6bn, driven by 33 consecutive quarters of like-for-like sales growth.

Sainsbury’s said it had outperformed competitors, citing figures from earlier this year which showed it had achieved 16.8% market share, its highest for a decade.

The results were boosted by what it called the “milestone” of non-food sales reaching £1bn for the first time.

Grocery online sales were nearing the £1bn mark, while Sainsbury’s convenience stores took £1.5bn, the company announced. During the year, it opened 14 new supermarkets, eight extensions and 87 convenience stores.

The supermarket, which sponsored the Paralympic Games and was also involved in the events to celebrate the Queen’s Diamond Jubilee, said: “It has been a year like no other.”

David Tyler, chairman of Sainsbury’s, said the decision to take full ownership of Sainsbury’s Bank would “benefit both customers and shareholders and allow its full potential to be realised”.

The bank, launched in 1997, has delivered five successive years of profit growth, the company said. Profit before tax in 2012/13 was £59m.

King said: “We see a great opportunity to increase the number of bank customers by offering accessible, high- quality financial service products which reward customers who bank and shop with us.

“We expect the bank to become an important source of profit diversification and growth, building on the strengths of our core business.”

Are the UK growth pessimists right?

Category : Business

Past five years appear to be a dress rehearsal for future: smaller economy, falling living standards, austerity and fed up voters

Since the start of the crisis five years ago, mainstream economics has been waiting for life to return to normal. Whatever ideological differences they might have, Keynesians and monetarists share a faith that all it takes is time and the right policies to bring back the good times. What unites them is the belief that the tough time the world has been going through since the summer of 2007 is an aberration.

But what if it isn’t? What if – in the memorable phrase of Tony Crosland when the wheels came off the economy in the mid-1970s – the party’s over? What if the 25% share of the vote taken by Ukip at last week’s local elections is not just a here today, gone tomorrow protest, but a sign of the political disaffection to come?

Should that prove to be the case, it will necessitate a complete re-think of political economy, since the model of the past 70 years has relied on decent levels of growth providing the resources not just to raise personal consumption levels but also to allow the expansion of welfare provision.

There are three reasons why this might be an over-gloomy assessment. The first is that growth does at last seem to be picking up, even if slowly and unevenly. In the US, the housing market is on the mend and the financial system has been largely patched up. In Britain, demand for mortgages is rising, new car sales are robust and the forward-looking business surveys are looking stronger. Consumers seem to be fed up with being miserable and have started to spend a bit more.

The second reason why the dark clouds may eventually be banished is that this is not the first time people have predicted the end of growth and been proved wrong. You don’t need to go all the way back to Malthus for an example: in the 1970s, there were plenty of doomsters who said the limits to growth had been reached.

The final reason, linked to the second, is that every now and then a burst of technological innovation has come along to revitalise the western industrial model. It happened at the end of the 19th century with a wave of innovations that included the automobile, the aeroplane and the cinema, and there are those who think what’s happening in digital, biotechnology, robotics and energy will perform the same function over the next 10-15 years.

Let’s take these points in turn. It is certainly true that western economies – the eurozone apart – are enjoying some growth. It is also true that the emergency policy actions of late 2008 and early 2009 prevented a severe recession from turning into a rerun of the 1930s. But five years on these emergency measures are still in place. Not just that, they have been augmented over time and are now permanent features of macro-economic policy. We have become hooked on stimulus and this is not a healthy sign.

An alternative history of the past 40 years goes as follows. The growth pessimists were broadly right, but what they did not anticipate is that the west would find new, ingenious and often dangerous ways of keeping the show on the road: financial de-regulation, personal debt, globalisation, exploiting the environment. There are still a few tricks policymakers can turn, such as shale gas and quantitative easing, but essentially these are just new versions of the old tricks. The game is up.

Nor, if the American economist Robert Gordon is right, can we rely on the cavalry to arrive in the form of technological change. Gordon argues that the current wave of innovations will prove less growth rich than those of a century ago.

Stephen King, the chief economist at HSBC, says in his new book, When the Money Runs Out, that we should not take progress for granted and should instead be bracing ourselves for the end of western affluence. He says the stagnation is far from temporary and will reach crisis proportions before too long.

King paints a dystopian vision of the future in which nations recoil from globalisation and become more willing to fight over resources. Populations lose their faith in governments and in money that has been debased by attempts to revive growth.

You don’t need fully to buy into this argument to see that King might be on to something. In Britain, we have a set of economic assumptions: that the economy will expand by 2% or so a year; that rising house prices will provide owner-occupiers with a nest egg; that the nation is wealthy enough to spend more on the steadily increasing cost of health, education, pensions and care for its elderly citizens.

There would need to be a radical scaling back of expectations in the event that the trend rate of growth is no longer 2 to 2.5% a year but 1%. Some of the promises we have made ourselves about the future would look extravagant, even reckless. There would be hard choices to be made between higher taxes and pared-back provision of public services. There would be a struggle to secure the fruits of what little growth there was, which those with the sharpest elbows would win. Many people would be in the position of seeing their living standards drop year after year, and would be mightily unhappy as a result.

In reality, a dress rehearsal for this sort of world has been going on for the past five years. The economy is smaller now than it was in 2008; living standards have fallen sharply; austerity has been imposed and – as the support for Ukip shows – there is a great deal of disgruntlement about.

Received political wisdom is that David Cameron and the Conservatives have the most to lose from the rise of Ukip. That’s true if Nigel Farage is merely surfing a wave of Euroscepticism, but if he’s tapping into a deeper well of disquiet the political leader with the real headache is Ed Miliband.

Why? Because social democratic parties thrive in times of abundance and wither in times of dearth. A growing economy allows parties of the left to increase investment in public spending and to redistribute resources from rich to poor. When they preside over falling living standards and cuts in social provision, they get kicked out.

Many natural Labour supporters voted for Ukip last Thursday, even though the past three years under the coalition should have made the official opposition the receptacle for protest. Labour should have done much, much better. That it didn’t boils down to two things. The opposition is still blamed for the state of the economy when the crisis broke. More significantly, perhaps, Labour needs to show that the growth pessimists are wrong and that it has a plan for remedying the UK’s deep structural problems after the next election. As yet, it has not remotely done so.

• Stephen King: When the Money Runs Out; Yale University Press

WPP: Big is beautiful at Sorrell’s marketing group – but for how long?

Category : Business

World’s largest marketing services group continues to grow, but questions remain what would happen if its chief left

This week MediaGuardian 25, our survey of Britain’s most important media companies, covering TV, radio, newspapers, magazines, music and digital, looks at WPP.

L’Oreal is one of the seemingly few global advertisers that Sir Martin Sorrell hasn’t managed to snare, yet after he pocketed almost £18m for running WPP last year some investors have been left muttering a version of the beauty brand’s famous strapline: “Is it really because he’s worth it?”

WPP’s chief executive took a rare blow on the chin last week, bowing to shareholders’ outrage at the scale of his pay packet, accepting a £150,000 salary cut, a 20% reduction in bonus and a significantly reduced long-term incentive programme.

Investors will get a chance to have their say at WPP’s annual meeting in June, with some complaining the board is too quick to kowtow to the company founder’s will. “WPP will probably trot out ‘oh but he formed this company from scratch …’, and he has sold [people] that [line] over and over again,” says one City source. “Entrepreneurs only tend to get paid out once when they float their company. Sorrell likes to be paid like an investment banker.”

It has been 28 years since he took the gamble on Wire and Plastic Products, a stockmarket-listed manufacturer of wire baskets, which he has used as a vehicle to create the world’s largest marketing services company. Last year WPP made more than £1bn in pre-tax profits and £10bn in revenues. It has a market capitalisation of more than £13bn.

“WPP is doing incredibly well, I think Martin is a force of nature and has built an amazing company,” says a senior advertising executive who once worked with Sorrell. “It is the most successful communications group in the world and Martin has led it brilliantly.” But some wonder whether the sprawling juggernaut – which employs 165,000 staff globally – is getting beyond the control of even the indefatigable Sorrell.

“It is too big, it is a bit like the Roman empire and is held together by one man’s force of will,” says the senior adman. “Therein lies the danger, there is something Napoleonic about it all. WPP is so big, it is almost unmanageable.”

Maybe so, but City analysts love the company – last year WPP’s share price rose 31% from 675p to 888p: “It will take more than another fat pay cheque to Sir Martin to spook the shareholders into selling,” says Anthony de Larrinaga, managing director at financial research company WYT.

Although there is an ongoing debate about whether Sorrell, who hates to see a prize asset go to a rival, overpaid in deals such as the £1.1bn purchase of research firm TNS, WPP is ticking the right boxes. “WPP is well-postioned from the three key angles of geography, clients and devices/product mix,” says Johnathan Barrett at Singer Capital Markets.

WPP’s engine is fuelled by its massive media buying capability: its Group M division uses its advertising buying power to get the best deals for clients across media including TV, press, radio and online. The advertising and media buying operation made £4.2bn in revenues last year, almost 42% of the total, and operating profits of £755m, just under half of WPP’s total.

The growth rate of WPP’s media buying operation alone, which is well over double the size of any rival in the UK, was a storming 7.4% in 2013′s first quarter. Group M controls about £1.2bn of UK TV ad spend, 30% of the market, and is almost as strong in other media. Potentially most concerning is that in most cases the closest rival media agency group is lucky to hold a market share of about half that of WPP.

“It has reached a stage that [media owners] can’t say no to Group M,” says a senior executive at a rival agency. “Their clout is unmanageable.” An example is Group M’s highly-publicised move to pull its £300m annual TV ad spend from Channel 4, close to a third of the £1bn the broadcaster takes in ad revenue annually, in a bid to drive down prices on commercials for WPP clients.

“[The outcome] was a draw, of sorts,” says one TV industry insider. “Group M didn’t come out looking so good reputation-wise, the publicity and the boycott turned out to be an uncomfortable place to be.” WPP would counter that such views are rivals’ sour grapes.; that other media groups have pulled client ad spend to get better deals, and that Channel 4 is perhaps not the force it was in terms of value for money Rival Aegis Media once boycotted Channel 5 for the best part of nine months, and more recently there was a spat with News International over the value it delivers for advertisers.

“Dominance and market leadership are two different things,” says a spokesman for WPP. “There is no lack of competition in the market. Group M is a strong leader in this highly competitive market, and benefits of leverage accrue to the clients.”

ITV’s family of channels has a 46% share of the TV advertising market, Channel 4 about 28%, Global Radio almost 60% of the radio advertising market and News International’s newspapers 25% share of press advertising. They are big enough to handle forceful negotiations, some say, adding that if you want to look at market dominance focus on Google’s 92% share of the UK search market.

“ITV and Associated [owner of the Daily Mail] may be able to withstand Group M, but most others are bullied and fall over,” says the senior media industry executive. But for how long will WPP still have that kind of power? What happens when Sorrell steps back is the question WPP-watchers describe as the elephant in the corner of the room.

The 68-year-old has ruled with an iron grip and there are those who believe that WPP will founder without him. “They’ll be fine until he goes,” says a senior advertising executive. “Then it’s a house of cards.”

Philip Lader, WPP chairman, said last week that there are twice-yearly discussions to prepare for Sorrell’s eventual departure – which could theoretically be abrupt, given his contract allows him to leave “at will” – and that the aim is not to “identify another Martin”.

“We earnestly endeavour to remain prepared for this inevitable transition,” Lader told shareholders. “That time, however, is not now. There’s no ‘elephant’ in the [WPP board] room.”

‘University of John Lewis’ to offer staff work-based degree scheme

Category : Business

Staff-owned retailer announces plan to offer senior managers a level-6 vocational qualification equivalent to an honours degree

John Lewis is planning to offer its staff the chance to study for “degrees” under a work-based scheme dubbed the “University of John Lewis”.

The staff-owned retailer said it would offer senior managers a level 6 vocational qualification, said to be equivalent to an honours degree, by the end of the year. The department store chain already offers a range of existing programmes leading to qualifications. Last year 1,330 John Lewis partners gained a retail diploma, with a third picking up a level

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Death is tobacco companies’ business | Tanya Gold

Category : Business

You can’t blame tobacco firms for resisting plain packaging. But what’s the government’s excuse?

The coalition government acts as an agent for Big Tobacco, even as it auto-moralises. I do not think it is mad to call its actions murderous. It has pulled excellent anti-smoking legislation from the Queen’s speech on Wednesday, which would have forced the tobacco companies to use only plain packets, and chopped their one remaining marketing strategy entirely dedicated to cutting new smokers off at the knees. (Established smokers rarely change brands.) Potential smokers would have seen a dull, unfashionable box, illustrated with a photograph of gangrene or something equally hideous, rather than a glossy confection designed to mislead. Now the policy is ash and Big Tobacco is free to pursue its vocation of severely shortening the lives of one in two of its customers. And where the UK leads, the world follows; this is good news for tobacco’s markets elsewhere.

Could this be connected to Lynton Crosby, who will oversee the strategy for the 2015 election? He was the marketing man behind tobacco’s attempts to thwart plain packaging in Australia – although there, at least, he failed. Or does the government feel pressure from Ukip, some of whose members seem to think that smoking, along with misogyny, homophobia and racism, is patriotic? (I once watched a Ukip grandee rub a black girl’s hand on a platform and say, “Look, it doesn’t come off”). Of course Ukip backs smoking. It thrives on the rhetoric of the pub and assumes that because everyone smoked on D-Day, it was the smoking that won the war. The freedom to smoke is a freedom of sorts – and Nigel Farage smokes. This is like David Cameron legislating for morning coats; and if only Farage felt the same liberalism towards gay marriage.

Who else smokes these days? Children mostly, and poorer children more than anyone, and the numbers are rising. Two-thirds of smokers start before the age of 18, and 39% before the age of 16; only half will manage to stop before it kills them, although most wish they could. Andrew Lansley, the former health secretary, acknowledged this in 2011 when the government was still mouthing anti-inequality bites. “Smoking rates are much higher in some social groups, including those with the lowest incomes,” he wrote. “These groups suffer the highest burden of smoking-related illness and death. Smoking is the single biggest cause of inequalities in death rates between the richest and poorest in our communities.” How true. Yet smoking is a stick to beat the poor with: that benefit claimants all smoke and watch Sky TV is one of the government’s favourite cliches. Perhaps now they see its use.

When representatives of Imperial Tobacco, British American Tobacco (BAT), Philip Morris International and Japan Tobacco International met the government this year, Imperial Tobacco threatened to pull its packaging manufacture from the UK even though plain packaging and no packaging are hardly the same thing; no one is suggesting cigarettes be delivered by elf. They insisted plain packaging would assist counterfeiters and smugglers. If this fascinates you, I suggest you watch British American Tobacco’s amusing and ostensibly racist promotional video Who’s In Control?, in which cartoon eastern European gangsters drool over the financial possibilities of regulation – although anti-counterfeiting measures can easily be incorporated into plain packets. Are these theoretical gangsters Bulgarian, or Romanian, is the obvious question. Elsewhere in Who’s In Control, the super-imposition of physical violence and drug abuse with regulation veers into paranoia.

We could muse further on these apocalyptic fantasies, but the tobacco companies will not publish their impact studies. They were burnt before, when a 2011 BAT report designed to thwart plain packaging in Australia was shown to be ruthlessly skewed and scientifically worthless. It is true that the exact impact of plain packaging is unknown, and will remain so while the tobacco companies so diligently oppose it. But the independent studies undertaken all agree – young people and women don’t like plain packets, and tobacco knows it. By its terror shall we know its desires.

I don’t blame the tobacco firms. Death is their business. When BAT says, after exhausting its arguments, that “We will take every action possible to protect our brands, the rights of our companies to compete as legitimate commercial businesses selling a legal product, and the interests of our shareholders”, I almost admire its dedication to cash. Yet the British government, theoretically dedicated to the health of its citizens, has a duty not to sink to lobbyists, even if Nigel Farage does smoke. It attacks the habits of the poor, but does nothing helpful. As ever with this government, hollow rhetoric will do.

Twitter: @tanyagold1