PRESS DIGEST - Financial Times - June 2

The Financial Times

UNITE CHIEF CALLS FOR OIL PROFITS WINDFALL TAX

Derek Simpson, co-head of the Unite union, has urged Prime Minister Gordon Brown to impose a large windfall tax on profits of oil companies and to distribute the raised cash through "something like a council tax cut". With its 1.9 million members and 3.5 million pound contribution to Labour in 2007, Unite is the ruling party's largest donor. Other demands by the union include the lifting of the ban on secondary industrial action, introduced by Margaret Thatcher. During Labour's national policy forum to be held in July, Unite will also ask for the compulsory provision of private pension schemes equivalent to a minimum wage for pensioners for employees of all UK companies.

START-UPS SQUEEZED AS SUPPLIERS REIN IN CREDIT

A poll by the leading credit management specialist Graydon UK reveals that 56 percent of the 400 companies questioned would become more picky about who they offer credit to during the remainder of 2008. The feedback demonstrates the spread of the credit squeeze beyond the banking and mortgage sectors to commercial lending in all parts of the economy. "Suppliers are looking long and hard at those companies who are asking them for credit," said Martin Williams, Graydon UK's managing director. The brunt of tighter credit policies is being borne by businesses that have been trading for less than 20 months, as they are perceived as the most risky, said Williams.

LONDON SHOPS PUT UP A BRAVE FRONT

According to a regular survey by estate agency Colliers CRE, the number of vacant shops on 10 prime London streets was no higher in January 2008 than a year earlier. The results are yet another indicator that London's shops, which attract tourists whose spending power has been improved by the weaker pound, are surpassing the performance of the rest of the country. Figures from the British Retail Consortium reveal that while sales in the rest of the country fell in the year to April 2008, they rose by 2.7 percent in existing shops in London.

MIGRATION FEARS RISK ADDING TO SKILLS SHORTAGES

A study published on Monday by the Work Foundation warns that Britain could lose out if it fails to attract adequate numbers of highly skilled "knowledge workers" in sectors such as finance, engineering, IT, scientific research, healthcare and education. With its ageing population and skill shortages in areas such as science and engineering, Britain will increasingly be competing to attract labour from around the world, says the report's author Katerina Rudiger. The foundation is concerned politicians need to do more to win over highly skilled migrants by assuring them that they would be welcome. Rudiger warned that the new points system being introduced by the government to stem the influx of low-skilled non-EU migrant workers would be insufficient on its own. "Politicians need to actively make the case for highly-skilled migration," she said.