Brown's budget blown - papers 9 December

BILLIONS OF pounds in taxation revenue is at stake due to a pending decision by the European Court of Justice on the taxation of multinational companies The Times says.

The court is ruling in a case involving a German subsidiary of a Dutch company over the issue of interest payments being taxed as dividend income.

The court is expected to rule that taxing interest payments as dividends is illegal in the EU, which could sink a hole in more than one national budget.

Such a decision would also remove significant powers of taxation from governments in favour of European harmonisation, The Times adds.

EQUITABLE LIFE rejected a call to unitise its £14bn with profits fund according to a piece in this weekend's FT.

The paper says insurance industry expert Ned Cazalet called for policyholders to be given access to the assets of the fund without the with profits smoothing because the solvency of the company is in such jeopardy that losing the smoothing would not amount to much in any case.

MORE SUPPORT for the MPC's lastest rates decision came from the Royal Bank of Scotland, which says it does not see any need to increase provision for bad debts in its second half according to the FT.

This places the bank at odd with sector peers that have recently warned of the rising cost of bad debts due to economic uncertainty.

DESTROYING SHAREHOLDER value could come without rewards according to a new Private Members Bill proposed in Parliament The Times says.

Instead of paying off bungling directors and top executives with millions of pounds, the Bill, if it became law, would force boards to take into account actual performance, which would hopefully end the recent practice of paying off huge 'golden goodbyes' even as ordinary workers are handed their P45s.

The Times cites the case of two directors in Marconi who got £4m each after helping virtually bankrupt the company with a disastrous move into a telecoms equipment market that collapsed.

THE KNIVES are out for the encumbent management of Royal & Sun Alliance following an attack by former chief executive Richard Gamble, the man who stitched together Royal Insurance and Sun Alliance back in 1996.

Gamble says the company's current plans to sell off assets means it will lose some of its most profitable operations.

Gamble adds that he is actively seeking the chairman's role at R&SA, a position that is due to become vacant next year.

ABBEY NATIONAL is looking to sell its £1bn train-leasing division as part of the asset sale forced by its year of losses, The Scotsman says.

Potential bidders have been approached the paper says, and the sale is likely to be mentioned as the first disposal when full-year results are announced on 26 February.

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