PRESS DIGEST - British business - Aug 31

The Times

LIBYA SNUBS BRITISH BANKS IN FAVOUR OF ITALIANS

British banks HSBC (HSBA.L) and Standard Chartered (STAN.L) have been beaten by Italian rival UniCredit (CRDI.MI) in the race to establish banking operations in Libya. Earlier in 2010, Libya's central bank offered two licences for foreign banks on the condition that the companies worked in partnership with local investors. However, it decided to issue only one licence, to UniCredit. A week before the licence was granted, the Libyan Investment Authority increased its holding in UniCredit to more than seven percent by buying a two percent stake worth 657 million pounds.

MINISTERS MAY SCRAP 10.5 BILLION POUND PLAN TO BUILD REFUELLING TANKERS

The government is reconsidering a 10.5 billion pound plan to purchase air refuelling tankers for the Royal Air Force. Under a private finance initiative, the previous government agreed to acquire 14 aircraft from a consortium called Air Tanker, which represents defence companies Rolls-Royce (RR.L), Babcock (BAB.L), Thales (TCFP.PA), Cobham (COB.L) and Airbus (EAD.PA). However, concerns were raised over the deal's cost after it emerged that Air Tanker spent 100 million pounds on infrastructure and a hangar at RAF Brize Norton and paid its chief executive 379,000 pounds last year. One insider said: "PFI is clearly the wrong way to do this deal."

VIRGIN PILOTS IN NEW TALKS

The airline Virgin Atlantic [VA.UL] will hold talks with its pilots on September 6 in order to resolve the continuing dispute over days off. The British Pilots' Association last night said plans for strike action would be reviewed if the matter was not resolved after the "last ditch talks".

The Daily Telegraph

DIAGEO CALLS FOR HIGHER BEER TAX

Diageo (DGE.L), the world's biggest alcoholic beverages company, will submit a proposal to the Treasury today that suggests that every type of drink should be taxed at the same rate. The submission is the conclusion of a consolation with the Treasury and would, according to the maker of the world famous Guinness brand, increase the government's income by as much as 1.9 billion pounds a year. "Full equivalence" would make the strongest drinks the most expensive and is therefore offered as an alternative to an increase on the price of binge drinking products, such as alcopops and strong cider.

SHELL'S 1.1 BILLION DOLLAR NIGERIA PIPELINE NEARS FINISH

Royal Dutch Shell (RDSa.L) has said it "is close to completing" a 1.1 billion dollar pipeline that will service its Nigerian unit. The Anglo-Dutch company is developing the pipeline to help maintain its facilities in the Niger Delta, an area which has witnessed pollution of land and water. The company's efforts to supply oil from the area have been hit by frequent attacks by saboteurs and protesters. Mutiu Sunmonu, managing director of Shell's Nigerian operations, said: "Projects such as these will have only a limited impact on oil spills until the widespread oil theft, sabotage and vandalism activities are stopped."

ROAD TO RECOVERY: RECRUITER HAYS SET TO UNVIEL FULL-YEAR RESULTS

Hays (HAYS.L), the recruitment agency offering professional staff, will announce its full-year results on Thursday that are expected to indicate the industry has taken a turn for the better. In July's quarterly figurers the company reported an eight percent like-for-like increase in income, in the main driven by the growth in the Asia-Pacific market, so investors are anticipating that the first year-on-year growth since 2008 is maintained. Although the consensus is that its operating profit will be lower than last year's 158 million pounds, the broker acting on Hays' behalf, RBS, said that a stronger than expected revenue momentum should sooth dividend sustainability fears.

The Independent

TAXPAYERS SET TO POCKET 27 BILLION POUNDS FROM BANK BAILING OUT

When the government sells its stakes in Lloyds Banking Group (LLOY.L) and Royal Bank of Scotland (RBS.L), the taxpayer will receive up to 27 billion pounds. According to calculations by The Banker magazine, this will include the sale of shares and various fees. The Banker said the timing of any sale is crucial, but the estimates are based on a general stock market increase that is in line with nominal economic growth. Editor Brian Caplen said for every ten pence increase in Lloyd's share price, the government makes 2.76 billion pounds. RBS and Lloyds reported half-year profits of 1.4 billion pounds and 1.6 billion pounds respectively.

The Guardian

CABIN CREW COULD STRIKE AGAIN AS BA REJECTS DEMANDS

Bill Francis, the British Airways BAY.L executive responsible for cabin crew, has reiterated the airline's commitment to trying to find a way to resolve the current industrial dispute, despite being accused of dismissing the latest proposals by the Unite trade union. In an email, Unite's joint secretary Tony Woodley informed union members that its proposal for BA to reinstate travel perks and include the Advisory, Conciliation and Arbitration Service in staff disciplinary proceedings had been rejected by the airline. Unite is now hoping that its scheduled meeting with BA next week will result in negotiations that will break the deadlock. Meanwhile, an industry source has suggested that BA believes it is in the commanding seat in talks due to the low consultative ballot turnout among union members.

MILESTONE FOR BROADBAND BRITAIN AS BT SIGNS UP ITS 15 MILLIONTH.

BT (BT.L) has announced plans over the next 18 months to invest an additional 2.5 billion pounds in fibre-optic broadband, which will deliver high-speed access to two-thirds of the UK. Since 2002 BT said it has been signing up about 5,000 new customers a day. Despite having just over five million broadband customers under its retail division, almost two-thirds of BT's 15 million customers opt to use its rivals such as TalkTalk or Sky as an Internet service provider. Olivia Garfield, BT's strategy director, said increased broadband activity in Britain has been a "success story", driven by greater availability and low prices, and BT's fibre-optic broadband rollout would "help the UK climb the league tables for speeds".

Prepared for Reuters by Durrants