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Tuesday 22 November 2011

Don't just book it, Thomas Cook it. So runs the slogan. Would you

 

Don't just book it, Thomas Cook it. So runs the slogan. Would you? Here's interim (that's reassuring) chief executive Sam Weihagen doing his safe-as-houses routine: "It's business as usual. We are trading within all our covenants. We have all the protection in place like any other travel company, and customers should not worry at all." Well, not quite like any other travel company. Thomas Cook of course holds an Air Travel Organisers' Licence from the Civil Aviation Authority which means customers should get their money back in the event of calamity. But the simple fear of being stranded a week after passengers of Austria's Comtel Air had to bribe pilots with £20,000 just to return to Birmingham is bound to unsettle would-be customers. There's a circle at work here and it is vicious. Given the choice between a similarly priced holiday with Thomas Cook or, say, Thomson, why would you risk the former? To counteract this, Thomas Cook might have to slash prices. That will eat into margins, cut profits and put banking covenants at risk. It might very quickly find it needs to borrow even more money. The company insists: "This is a robust business that has a strong future". We'll see.

Europe's second biggest tour operator Thomas Cook has announced it is in negotiations with its banks

Europe's second biggest tour operator Thomas Cook has announced it is in negotiations with its banks about its growing £900 million debt.

As a result it plans to delay the announcement of its annual results due on Thursday.

It comes just a month after the company asked the bank for £100 million credit to see it through the quiet winter trading period.

The Thomas Cook share price opened 60% down following the news, adding to the downward spiral of the shares which have slumped 80% over the past year.

 

The holiday group had already issued three profits warnings this year, resulting in its chief executive Manny Fontenla-Novoa quitting in August.

It had also merged its high street travel business with the Co-operative Travel - and there were reports at the weekend that the company plans to shut 200 shops, putting 1,000 jobs at risk.

landslide victory by Mariano Rajoy's People's party (PP) in Sunday's general election did nothing to stop Spain's debt problems worsening on Monday as the prime minister elect remained powerless to calm the markets.

mariano rajoy
Mariano Rajoy: little room for manoeuvre. Photograph: Juan Medina/Reuters

 

Spaniards were proud of having avoided an Italian-style government of unelected technocrats after they gave conservative Rajoy the go-ahead to introduce reform and impose further austerity.

But commentators warned that, similar to the technocrats running Italy and Greece, he had only limited options. "None of his predecessors have accumulated as much power as he will have," said Jesús Ceberio, a former El País editor. "But, paradoxically, none had such little room for manoeuvre."

Rajoy is hampered by the country's system for handing over power, which takes a month, and the impatience of markets that sent the cost of Spanish debt higher on Monday morning. He must also obey the dictates of an EU, dominated by German chancellor Angela Merkel, which has imposed severe austerity programmes on member countries with debt problems. "A large part of his most immediate programme is already set out in the fiscal consolidation plan demanded by Europe," Ceberio said.

Rajoy will, for example, be unable to choose Spain's deficit levels over the next three years, as strict targets have already been set by the EU.

The PP leader has warned that he does not carry a magic wand and will not be able to perform instant miracles, even though yields on Spanishbonds are floating dangerously towards the 7% level that economists consider unsustainable.

Rajoy's main message to investors is that Spain will be "compliant", meaning it will meet the deficit target of 4.4% set by the EU for next year. In a country where growth is zero and austerity already threatens a double-dip recession, that is likely to require further massive spending cuts or tax hikes, or a mixture of both.

On Sunday night he pledged to make Spain respected in, among other places, Frankfurt. That was recognition that the country now depends heavily on the Frankfurt-based European Central Bank, which has been buying Spanish bonds to keep yields down.

Rajoy is, however, in tune with Merkel, with whom he spoke by phone on Monday. Merkel's spokesman, Steffen Seibert, said they discussed "Spain's great problems".

Reforms that bring no cost to Spain's cash-strapped treasury, such as to the labour market, may come first.

Jaime García, an economist at a PP thinktank, said he expected Rajoy to announce "shock measures" soon.

PP leaders have urged the outgoing socialist government of prime minister José Luis Rodríguez Zapatero to speed up the transfer of powers, even though the law requires parliament to meet on 13 December before Rajoy can take over.

"There are extraordinary problems which demand that a holiday period between governments should not exist," said PP spokeswoman Soraya Sáenz de Santamaría. Economist Nicholas Spiro, of Spiro Sovereign Strategy, said: "The fact that investors have to wait another month for Mr Rajoy's cabinet to take the reins only adds to the uncertainty."

euro crisis

Ian Langsdon/European Pressphoto Agency

President Nicolas Sarkozy at an Armistice Day ceremony in Paris this month. Mr. Sarkozy, facing re-election in April, fears becoming the next casualty in the euro crisis.

Euro crisis hits UK property sector

 

This month’s statistics from Rightmove highlight how the relentless stream of economic uncertainty around the euro zone crisis has eroded consumer confidence to the extent that it now dominates decisions when it comes to moving home. A 13% fall in the number of new sellers coming to market compared with the previous month, and an 11% fall compared with November 2010, illustrate a growing reluctance to make big financial decisions in these times of uncertainty. Those that have chosen or been forced to sell have dropped their prices by £7528 (-3.1%) in the last month, only the third fall so far in 2011 but the biggest monetary fall since December 2007. Miles Shipside, director of Rightmove, said: “Markets dislike uncertainty, and so do people who are deciding whether or not to enter the property market. Agents report that many would-be sellers are postponing their marketing until the new year, influenced by the current wall-to-wall media coverage of the Greeks and Italians attempting to get their own far-flung houses in order. It’s no great surprise that those who have braved the stormy conditions have had to accept a substantial ‘haircut’ on their asking prices.” The month-on-month fall of 3.1% is the third largest in percentage terms ever recorded by Rightmove. Though it reported a 3.2% fall last November, this year’s price drop is coupled with a substantial fall in the number of new sellers. New listings are down 11% on the same period a year ago. The current weekly run-rate of 21,375 new properties coming to market is the lowest recorded in November since the Lehman Brothers crash-affected period in 2008, when it was similarly depressed at 20,098. Such a shortage would typically be expected to help support prices, but, unusually, coincides with the third largest percentage fall ever measured. The lack of fresh sellers and the large price fall indicate that the current negative economic outlook has caused the seasonal slowdown to come early this year. This lead indicator of consumer inactivity from the housing market will raise concerns in other sectors of the economy that are reliant on consumer spending. All regions are showing monthly price falls, the first time this has happened for over three years. However, with lower levels of new listings, especially in higher price brackets, there is some volatility at a regional level. The overall theme of a more buoyant market in the south and a harder-hit north remains, though there is nationwide consensus that the balance of power tips further still against sellers. Findings from the Rightmove  Consumer Confidence Survey for the fourth quarter show that 70% of home movers feel that it is currently a bad time to sell. Interestingly, they also hold the view that sellers’ travails give buyers much improved negotiating power, with 61% stating they felt it was a currently good time to buy. Shipside said: “While most home movers will have seen some foreign prime ministers losing their jobs, they will be much more keenly aware of the unsettled outlook for their own employment locally. When you are busy looking over your shoulder, you are unlikely to think it is a good market for selling. However, that does mean there are opportunities for those who are able to buy, especially as the earlier than usual seasonal slowdown will leave sellers who have to sell in an even weaker negotiating position. Those who are looking to trade up should not lose heart however, as while you may have to accept a lower price for your own property, you should be able to negotiate a good deal on whatever you are buying.” Those who are highly motivated to sell will have to prepare for a longer period of subdued buyer activity before the market traditionally picks up in the new year, especially in locations where there is an oversupply of property for sale. Average unsold property per estate agency branch has fallen from 78 properties to 75 in the past month, with properties coming off the market as buyers move in before Christmas. Rightmove said it would have expected it to fall more rapidly given the low level of new listings coming to market, and it is further evidence of the subdued number of sales. Some winter buying opportunities in areas of oversupply will be available for bargain hunters, and interestingly many agents report that buying activity is on the increase from investors. Buy-to-let investors looking to raise finance for new purchases are benefiting from increased lender competition, resulting in higher loan-to-value ratios and lower interest rates. With over half of tenants expecting rents to be higher in 12 months’ time, according to a recent Rightmove survey, investors will be feeling more confident about improving yields too. They have the benefit of greater access to finance than first-time buyers, with whom they are often competing when buying, and the ability to pay down the mortgage more quickly due to the prospect of improving rental returns. Shipside said: “Reports suggest that buy-to-let mortgage approvals are at their highest for nearly three years. With good prospects for long-term tenant demand from those that cannot buy and consequently solid rental returns, investors will be looking forward to seeing sellers suffer a longer than usual buyer slowdown this winter.”

Thomas Cook is running low on cash and has begun talks with its banks

Thomas Cook
Thomas Cook planes parked at Munich airport last year. Photograph: Alexander Hassenstein/Getty Images

Thomas Cook is running low on cash and has begun talks with its banks, in an effort to increase its borrowings to tide it over the slow Christmas season.

Shares in the tour operator fell by more than three quarters on Tuesday morning after it admitted that trading has "deteriorated" in recent months. It is now seeking to borrow more in the short term, and has postponed the publication of its financial results until the talks are concluded.

Shares in the company, which abruptly lost its chief executive three months ago, tumbled by more than 75% to 9.3p at one stage.

Tour operators tend to run low on cash in the slower winter months, but even so, the news stunned the City. Only last month, Thomas Cook said it had agreed a further £100m in short-term funding from its banks explicitly for the winter lull.

A spokeswoman said that discussions with banks were merely a "prudent" and "pro-active" move. Thomas Cook still has cash in the bank, she said, but wants to be prepared for any unexpected shocks over Christmas. All customer orders are protected by the ATOL protection scheme and equivalent programmes, she added. "Thomas Cook still has cash on the balance sheet, but because conditions have deteriorated further [since October], particularly around trading, some of that extra funding has been used up. Thomas Cook feels it needs more headroom to be prudent," she said.

Interim CEO Sam Weihagen added: "It's business as usual. We are trading within all out business, and financial, covenants, we have all the protection in place like any other travel company, and customers should not worry at all."

The company is seeking roughly £100m more in its latest talks. It made the decision to renew talks with banks on financing after realising the scale of the recent downturn in an internal trading update meeting yesterday.

Sunday 20 November 2011

shiny Audis and BMWs that still line the narrow streets of Benalup are a reminder that this Andalucían country town once boasted the greatest number of luxury cars per head in the south-western province of Cádiz.

Benalup Street Andalucia Spain
 Photograph: Tracey Fahy /Alamy

The shiny Audis and BMWs that still line the narrow streets of Benalup are a reminder that this Andalucían country town once boasted the greatest number of luxury cars per head in the south-western province of Cádiz.

These days this charming place, set bull-rearing countryside inland from Gibraltar, holds a different kind of record: not only the worst unemployment rate in the country, but the worst in Europe.

"I don't know whether they can fix this," said 19-year-old Juan Carlos Gutiérrez, one of hundreds of young people who dropped out of school and now drift between part-time work, training courses and the dole queue. "I've picked asparagus and worked in a packing factory, but the jobs never last. The future is screwed."

"Everyone our age is out of work," agreed Nora Pérez, 22, as she waited for the hearse bringing her grandmother to her funeral in the picturesque square of Our Lady of Perpetual Help. "My father went to Germany when he was young. Our generation may emigrate as well. Some of my friends have already left."

A grey-bearded, bespectacled man grins from a campaign poster overlooking the tiny ornamental gardens and bandstand on San Juan Street and calls on the people of Benalup to "sign up to change". He is Mariano Rajoy, the conservative People's party (PP) leader set to become Spain's prime minister at the general election on Sunday.

Rajoy will inherit a country in crisis. Growth is zero and unemployment has hit 23%. In Cádiz province, one in three is jobless. In Benalup 1,500 adults are without work. In a country where 46% of the under-25s cannot find employment, Benalup's unqualified youngsters are getting desperate.

"Many got into debt when times were good, buying houses and cars and starting families," says Ricardo Jiménez, who runs the local branch of the Catholic charity Caritas. "Families are very close and help one another out, but we already help 80 families and more come every month. Some are asking for help to feed their babies," he said. That means almost 5% of the town needs church handouts.

Others are handed money by the town hall or given whatever jobs local politicians can invent. "If we have to dig a ditch we do it by hand, rather than with a digger, because that way we employ more people," said councillor Manuel Moguel.

When Luis Moreno, 23, left school five years ago there was no need to worry about finding a job. All you had to do was walk on to a building site. "It was very simple," he says.

Now he receives €526 (£450) a month to attend a training course designed to turn a dozen locals into graphic designers, though design jobs are not plentiful in Benalup. "We have to learn new skills," he says. He is one of the lucky ones. Courses like this are heavily oversubscribed.

As markets demand ever higher interest payments for lending Spain money, and the European Union instructs its politicians to slash its deficit, public money is drying up. Yields on Spanish debt have now overtaken Italy's and soared to the same levels at which Greece and Portugal needed to be bailed out. And if Spain – a much larger economy – fails, then it may bring down the euro.

Spain's biggest problem remains the money owed to banks for property or land bought during a decade-long boom fuelled by cheap credit. The rows of unsold new homes in Benalup are evidence of Spain's housing bubble, which burst in 2008, leaving 700,000 unsold new houses on the market.

By 2004, more than 80% of Benalup's labour force worked in construction, building homes or holiday apartments along the nearby Mediterranean coast.

"Kids left school at 16 because they could earn €3,000 a month working a three-and-a-half-day week," says Moguel. "I had university-trained engineers working in my company who were earning less than that."

As money poured into people's pockets, the number of banks in town doubled. La Caixa, a newly arrived savings bank, started a local lending war – its manager winning awards. "Kids were buying houses and cars with the loans. And those who already had a house bought another one," says Moguel.

Now the town is plastered with "For Sale" signs from Servihabitat, the real estate branch of La Caixa, which is repossessing properties – though owners must still pay off their full debt after homes have been taken away. "That's unfair. You can't have a bank saying your home is worth €180,000, lending you the money and then repossessing it at half that price," says Moguel, a Socialist. He is uncomfortably aware that Spain's torrid affair with speculative capitalism happened largely on the watch of the Socialist government led by outgoing prime minister José Luis Rodríguez Zapatero.

Even in Benalup, where the Socialists once won 90% of the vote and which still remembers the bloody suppression of an uprising by local anarchists in the 1930s, the vote is now sliding to the right. "It used to be tough in this town to be from the People's party, but we won 43% of the vote at municipal elections in May," says Vicente Peña, a 40-year-old veterinarian who heads the party's local branch.

Peña delivers the same diagnosis of Benalup's ills as his Socialist opponents. "Too many people dropped out of school to become bricklayers. They can't even write a sentence properly."

Vicente Ruiz, owner of the El Buyí bar, will vote for Rajoy. "When Caritas is the biggest employer in town, things are really bad," he says. "It is shameful to have to ask for charity. What we need is a Mrs Thatcher."

Public money is being spent on silly projects, clients in his bar agree. "I've had 60-year-old women coming to bricklaying courses," says one, Nicolás. "It is ridiculous, but they each get their own overalls and hammer."

Peña says that, among other things, people will have to go back to the land. But even there things are going badly. Local horses, bred at stud farms set up as a trophy hobby by nouveau riche local builders, are now being sacrificed for meat and exported to dinner tables in northern Spain.

Pura Raza Española ponies are going for €150. Even fighting bulls are on the decline. "Town halls subsidised many bullfights," says rancher Salvador Gaviria. "But now they have no money, so the market is sinking." The number of bullfights across Spain has fallen by a third as a result.

Benalup is too far inland from the beach to attract tourists. A golf resort set up by a Belgian company, Fairplay, is said to be struggling. The Hotel Utopia, a boutique-style establishment that opened recently, was almost empty this week.

Spaniards hope Rajoy, who has been deliberately ambiguous about his austerity programme and liberal reform plans, can fix their problems. "If changing to Rajoy is going to solve everything, then why haven't the markets – which know he is going to win — shown they trust him?" asks Moguel.

Rajoy will come under immediate pressure to reveal how he plans to square a budget that needs some €41bn of savings next year. Those must come on top of austerity measures already imposed by Zapatero, who cut civil service pay and froze pensions.

Alberto Ruíz Gallardón, PP mayor of Madrid and a probable minister, has called on the socialists to hand over power quickly. "It could be dangerous to prolong the caretaker period," he says.

But parliament does not meet again until 13 December and it may take another fortnight to appoint Rajoy formally. Even if he takes over immediately, jobs are unlikely to reappear in Benalup.

Fortunately it retains the Cádiz tradition of laughing at adversity. Benalup's carnival musical groups are already practising the typicalchirigota songs that parody the powerful. Rajoy, Angela Merkel and the European Central Bank can all expect to feature in them by the time carnival comes around in February.

British bonds win 'safe haven' tag in eurozone debt storm

 

British government bonds are attracting strong support, in sharp contrast to their troubled eurozone peers as investors seek a safehaven from a debt crisis now spreading to Italy, Spain and even France. British government bonds, or gilts as they are known, are in huge demand largely because the Bank of England is buying them up with newly-created money that it hopes can in turn be used to stimulate an anaemic economic recovery, analysts say. But investors are also reassured by the British coalition government's determined efforts to slash state debt and avoid the severe troubles that have snared the crisis-hit eurozone trio of Greece, Ireland and Portugal.

Saturday 19 November 2011

Saif al-Islam Gaddafi after his capture, his fingers wrapped in bandages and his legs covered with a blanket

Saif al-Islam gaddafi captured
. Photograph: Reuters Tv/Reuters

Saif al-Islam Gaddafi, the fugitive son of Libya's deceased former dictator, has been arrested in southern Libya, according to officials from the country's new government.

Libyan state TV reported that Saif has arrived in captivity and unhurt at an army base in the town of Zintan, 90 miles south-west of Tripoli.

Muammar Gaddafi's second and highest-profile son was captured along with several bodyguards by fighters near the town of Obari in Libya's southern desert, said the interim justice minister and other officials.

Saif was said to be in good health, according to the justice minister Mohammed al-Alagi.

"We have arrested Saif al-Islam Gaddafi in [the] Obari area," the minister told Reuters.

Saif was captured near the southern city of Sabha with two aides trying to smuggle him out to neighbouring Niger, militia commander Bashir al-Tayeleb said.

Zintan, a base for forces in the Nafusa Mountains which played a key part in the storming of Tripoli in the summer, is reported to have crowds dancing in the streets and waving the Libyan flag.

There are reports that an angry mob tried to storm the plane on which Saif was taken to the western mountain town of Zintan, the home of one of the largest revolutionary brigades in Libya.

Gunfire is echoing across the capital, Tripoli, where large crowds have gathered in Martyrs' Square firing volleys of automatic fire in the air. "A great day, a great day," said Abdullah, a taxi driver, stuck in one of the traffic jams that built up around the square.

A Reuters reporter said a man who appeared to be Saif, but who refused to confirm his identity, was on a plane flown by militiamen to the town.

The man wore traditional robes with a scarf pulled over his face, but his features, visible despite a heavy black beard, as well as his rimless spectacles, conformed to pictures of the 39-year-old younger Gaddafi.

The man's thumb, index finger and another finger were heavily bandaged.

Libyan TV also showed him He is sitting by a bed and holding up three bandaged fingers as a guard looks on.

Friday 18 November 2011

An anti-British backlash gathered pace in Germany yesterday as David Cameron and Angela Merkel struggled to disguise the gulf between them on how to tackle the eurozone crisis.

 

An anti-British backlash gathered pace in Germany yesterday as David Cameron and Angela Merkel struggled to disguise the gulf between them on how to tackle the eurozone crisis. The Prime Minister returned from talks in Berlin with the German leader having made little progress in agreeing emergency action to stop the financial contagion spreading. Tensions were inflamed after a close ally of Ms Merkel predicted Britain would eventually adopt the euro. The German media joined the clamour, with the mass-circulation newspaper Bild questioning whether it might be better for Britain to leave the European Union altogether. Behind the leaders' smiles at a joint press conference yesterday, they acknowledged fundamental differences remained on three key issues: * New eurozone rules. Ms Merkel called for "limited" changes to European treaties to impose fiscal discipline on the single currency but stressed negotiations should only be for eurozone members. Mr Cameron wants Britain involved in the talks because of the potential impact of the decisions on the UK; * Whether the European Central Bank should intervene to support the eurozone. Ms Merkel – backed by the German public – is fiercely resisting the move, which she fears would fuel inflation. But Mr Cameron insisted that all the eurozone's institutions had to "do what is necessary to defend it"; * Taxing financial transactions within the EU. Ms Merkel supports the step but Mr Cameron fears it would disproportionately hit the City and said it would work only if applied globally. The Prime Minister said: "It is obvious we don't agree on every aspect of European policy, but I am clear we can address and accommodate and deal with those differences." He also stressed the two leaders were "very good friends" and "absolutely" in agreement on the importance of completing the single market, budget discipline and stopping EU spending from rising by more than inflation. But shortly before Ms Merkel also paid tribute to the "strong bonds of friendship" between the countries, her veteran Finance Minister used less diplomatic language in which he seemed to predict the end of sterling. Wolfgang Schäuble told the news agency DPA it was Britain's right to remain outside the eurozone "for the time being". But he said it was a matter of time before non-eurozone states became convinced of the euro's advantages. "One day the whole of Europe will have a single currency and perhaps it will happen more quickly than many people on the British island think," he said. Meanwhile, in an article headlined 'The Sick Empire', Der Spiegel magazine described Britain's plans to eradicate its budget deficit by 2015 as "utopian". It added: "The situation on the island is more dramatic than in parts of the continent. It's bad news nearly every day. "But the British government gets away with it by proclaiming carry-on-as-usual policies and by blaming its economic stagnation on the eurozone." The war of words between Berlin and London erupted on Tuesday after Volker Kauder, Ms Merkel's parliamentary party leader, lambasted Britain for being too self-centred on Europe. "Just looking for their own advantage and not being prepared to contribute – that cannot be the message we accept from the British," he told a congress of his ruling conservatives. The former Prime Minister, Sir John Major, weighed in behind Mr Cameron last night as he condemned the financial transaction tax as "a heat-seeking missile...aimed at the City of London". He also warned of an "undemocratic" move towards eurozone fiscal union. In an interview with Al Jazeera, he also predicted "one or two countries" would be forced to quit the euro.

Tuesday 15 November 2011

private jets waved through customs and immigration checks

Home Secretary Theresa May (Pic:PA)

Home Secretary Theresa May (Pic:PA)

THERESA May was fighting for her job last night after damning new documents fuelled the scandal of lax security at our borders.

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Leaked emails showed that thousands of private jet passengers were allowed into the UK without going through immigration or customs.

They also revealed the Home Secretary relaxed checks at airports on at least 2,500 occasions this summer.

And the Mirror can reveal passport applications are being secretly subjected to a controversial new “postcode lottery” trial scheme.

The High Risk Applications scheme is based on fraud statistics. Staff were given a list of postcodes to check against every new passport application or renewal. Applicants in areas deemed to be higher risk face several weeks additional delay in getting their passports.

In London, the only areas which get virtually no checks are postcodes that begin with WC and EC – the most central and prosperous areas. Meanwhile applications from women aged 50 and over are often waved through.

A source said: “It’s a classic Tory policy, and it discriminates against those they deem to be living in ‘poor’ areas.

“The whole thing smacks of elitism and snobbery. A lot of people are very unhappy with the process.”

These revelations come on the day ousted Border Agency official Brodie Clark gives evidence to MPs on how he was pushed out by Mrs May.

Brodie Clark (Pic: DM)

Borders boss Brodie Clark

Labour yesterday released the leaked emails showing UK Border Agency staff were told NOT to check passengers arriving in the UK by private jets – at the instruction of the Home Office.

From March 2, 2011, anyone on a private charter did not have to show their passports and could avoid customs. Figures show there are between 80,000 to 90,000 private flights each year, carrying two to three passengers.

The emails show an unnamed official at Durham Tees Valley Airport warned the UK Border Agency that the policy was putting the UK’s security at risk.

He said that staff “continue to feel uneasy about an instruction that is at odds with national policy and is creating an unnecessary gap in border security which, if exploited by the unscrupulous, could bring the Agency into disrepute”.

He also warned there was no way of checking if the number of people arriving in the country was the same as they had been advised.

His manager at the UK Border Agency’s Border Force said the “no checks policy” was part of a “new national strategy”.

In a further blow to Mrs May, other leaked documents showed how Britain’s borders were abandoned on hundreds of occasions over summer.

The Home Secretary ordered a pilot scheme, which ran from July to October this year, under which Border Agency staff could relax checks on passengers. It meant people arriving from the European Economic Area did not have the biometric chip in their passport checked, while children under 18 could be waved through.

These “level 2 checks” were used on at least 2,600 occasions. The relaxed regime was used to speed up queues at immigration control.

According to an email from a Border Agency Border Force official, the checks were relaxed 100 times in the first week of the trial and more than 260 times in the sixth week.

We revealed last week that officials warned Mrs May the easing of border checks could lead to a rise in child trafficking.

Mrs May admits to bringing in the pilot scheme without informing MPs. But she claims that Mr Clark went further by extending it to include passengers from outside Europe.

Mr Clark, who resigned last week, denies he acted without ministerial authority. His testimony to the Commons select committee could prove very damaging to Mrs May.

Shadow Home Secretary Yvette Cooper said last night: “This is startling new information about the scale of the borders fiasco.

“Ten days on there are even more questions than answers about what on earth was going on at our borders.

“Last week the Home Secretary told us no one had been waived through without checks. But these documents show passengers on private flights weren’t even seen.

"Last week the Home Office wouldn’t admit to having figures about how often checks were downgraded. Now we know those figures exist and that checks were downgraded 260 times in one week alone.

“The Home Secretary needs to show she is capable of sorting this fiasco out rather than making it worse.”

Last night, the Home Office refused to comment on the trial.

The UKBA said: “It is not true that we don’t carry out ­passport and warnings checks on private flight passengers and will deploy officers to airfields where we have concerns.”




Sunday 13 November 2011

Ex-policeman jailed over VAT fraud

 

former police officer who admitted his part in a £365 million VAT fraud has been jailed for 10 years and three months. The conspiracy that Nigel Cranswick directed has taken the equivalent of 25 years of work to investigate, Judge Brian Forster said. The 47-year-old ex-South Yorkshire Police officer was a director of Ideas 2 Go, and, despite its modest base in a Sheffield business park, he claimed it bought and sold £2 billion worth of goods in just eight months. He has since admitted that the firm's trading, largely in mobile phones and computer software, was fictitious, and the aim was to generate paperwork from fake sales in order to claim back a fortune in VAT from HM Revenue and Customs. Judge Forster, sitting at Newcastle Crown Court, said: "This case concerned planned dishonesty resulting in the loss to the Revenue in the region of £365 million. "There were purported sales of billions of pounds. "The prosecution rightly described the case as an unprecedented attack on the Revenue. "The case has taken 25 man-years to investigate." Cranswick was recruited to play his role in the MTIC (missing Trader intra-community) fraud by others. Also known as carousel fraud, it involves importing goods from other EU states which are then sold through contrived business-to-business transactions. Cranswick, of Danby Road, Kiveton, Sheffield, admitted conspiracy to cheat HMRC at a hearing last month. After the sentencing, Exchequer Secretary David Gauke said: "This Government will not tolerate dishonest people stealing public money. "This sentence shows that those who try to commit fraud need to think again - HMRC will find you and the courts will punish you. "The additional £917m we have invested in HMRC will see more cases like this successfully prosecuted, sending a clear and powerful message." The judge said the sentencing exercise was to punish the offending and deter others. "The figures in this case are astonishing, they reveal the blatant nature of the fraud," he said. Between June 2005 and February 2006, I2G supposedly carried out almost 6,000 deals, with a turnover of £2.4 billion. Sentencing Cranswick, the judge said: "You were immediately before this fraud a serving police officer. Almost unbelievably you retired from the police force and became the organiser of this fraudulent operation. "You set up the company, you clearly accepted the direction of others - the organisers who are not before this court." Outside court, HMRC said Cranswick went "from rags to riches" soon after retiring, having been heavily in debt as a police officer. A spokeswoman said: "He made lavish improvements to his home, rented a luxury apartment in the Spanish town of Marbella and paid for private schooling and tennis lessons for his children. "Cranswick claimed that in the first six weeks of trading Ideas 2 Go had turned over more than £527 million. "The company had traded over £47 million before they even got round to opening a bank account for the business." HMRC assistant director for criminal investigation Paul Rooney said: "As a police officer Cranswick knew full well that he was breaking the law, yet, motivated by greed, he chose to overlook it for the opportunity of making what he wrongly assumed would be easy money. "He now has to pay a very high price for his poor judgment and lack of integrity. "This was a sophisticated fraud designed to steal hundreds of millions of pounds of tax, but it started to unravel when our investigations identified sales for more than 50,000 mobile phones, which the manufacturers hadn't even begun producing in their factories." Cranswick nodded as the judge passed sentence, and gestured to members of his family in the public gallery as he was led away. Also sentenced after admitting conspiracy to cheat the Revenue were Thomas Murphy, 27, of Dinnington, who was jailed for four and a half years; Cranswick's brother-in-law, Darren Smyth, 42, from Beech Road, Maltby, and Brian Olive, 56, from Buttermere Close, Doncaster, who were sentenced to three years and four months each; and former housing officer Andrew Marsh, 28, from Sheffield, who was jailed for two years and eight months. Cranswick's 44-year-old sister, Clare Reid, married to Smyth, was handed a nine-month sentence, suspended for 18 months, and ordered to carry out 150 hours of unpaid work after admitting two counts of false accounting. Cranswick styled himself as a singer-songwriter and can be seen on his website strumming a guitar to a song called Hit And Miss with the opening lines: "I'm in trouble, falling down a hole. How I got here, I won't ever know." He was lead singer with an indie band called Not The Police.

How a Financial Pro Lost His House

 

ONE night a few years ago, when the value of our home had collapsed, our debt was out of control and my financial planning business was shaky, I went to take out the trash. He wrote a book based in part on lessons learned by losing his Las Vegas home in the housing crisis. There was this enormous window that looked right in on the kitchen table, and through it I could see my wife, Cori, and our four children eating dinner. It was dark outside, so they couldn’t see me, and I just stood there looking at them. After a while, I pulled up a bucket and I sat on it, just watching my children eat. I found myself wishing that I could get back there, connected to the simple ordinary stuff of my family’s life. And as I sat and watched, filled with longing and guilt, two questions kept arising: How did I get here? And how am I going to get out of this? There are many stories these days of people who lost their financial bearings during the housing boom and the crisis that followed, but my story is a bit different from most. I’m a financial adviser. I get paid to help people make smart financial choices, and I speak and write about personal finance issues for this publication and others. My first book comes out in January, “The Behavior Gap: Simple Ways to Stop Doing Dumb Things With Money” (Portfolio, a Penguin imprint). The thing that few people know, though, is that I learned a lot of this from experience. I made a bunch of mistakes, the very same ones that I now go around warning people to avoid. So this is the story of how I lost my home, the profound ethical questions that arose along the way, and what my wife and I learned from the mistakes that led us to that point. It made me better at what I do, but it wasn’t much fun getting there. Like most financial stories, this one is personal. It starts with me getting into the financial services industry more or less by accident. I answered an ad in 1995 that I thought was for a job related to “security” (as in security guard) but was in fact related to “securities.” That’s how little I knew about the stock market. A few months later I found myself working a phone at a Fidelity Investments call center. Things went well, and by 1999 I was a Merrill Lynch financial adviser and a certified financial planner. By then, we also owned a house in Salt Lake City. We’d bought it two years earlier, with a $25,000 down payment. A few years later, an opportunity arose to form a partnership with a successful Merrill adviser in Las Vegas. The place was on our top 10 list of never-move-to cities because we had always associated it with the Strip. But Cori and I were looking for an opportunity to have an experience somewhere else, and we met some great people when we visited the city. I took the job, and we moved down there. That was May 2003. Housing prices were already crazy, so we rented. But our neighborhood had zero character and lots of cookie-cutter houses. Within a few weeks, we were looking for a place to buy. I felt we could afford around $350,000. We called a real estate agent named Mitch, who had signs on all the bus stops: Talk to Mitch! He picked us up in a gold Jaguar, and suddenly we were looking at houses that listed at $500,000 or more. It felt a little crazy to be shopping for houses that cost half a million dollars, but my income was growing rapidly. Everywhere I looked, people were being rewarded for buying as much house as they could possibly afford, and then some. There was this excitement in the air, almost like static. I started to think that if I didn’t buy a house right then, I would never be able to afford one. At moments during our house hunt, I felt in my gut that something wasn’t right. We’d go to open houses for $400,000 homes and see lines of couples in their late 20s — younger than we were — waiting to get inside. I kept wondering where all the money was coming from. How did all these people make so much?

Top five most hated Airports

10. São Paulo-Guarulhos International, São Paulo, Brazil

 

Whether it's 9 a.m. or 9 p.m. this airport experiences round-the-clock rush hour.

Why is this place on our list after scoring third best airport in South America at the 2011 World Airport Awards

 

Because, shockingly enough, it turns out that corporate medal ceremonies aren’t always in sync with what people are thinking when they're standing in two-hour immigration lines, suffering routinely unannounced gate changes and paying through the teeth for a stale Brazilian cheese roll and beer inside an understaffed and over-aged aviation facility. 

In a country where flight delays (departing or arriving) are just part of the deal, some recent numbers would give pause to the most unflappable traveler at Brazil’s largest airport.

Just 41 percent of all flights leave on time. Only 59 percent of flights arrive on schedule, according to Forbes.  

São Paulo-Guarulhos has announced plans to add runways and terminals -- what airport hasn’t? -- but with nearly 30 million passengers traipsing through every year (the figure has reportedly doubled in under a decade) the urgency is palpable and, sadly enough, unsolved by upping prices at musty duty-free shops.

But does this really constitute bronze medal status? When the best unofficial advice for surviving Brazil’s pin-up airport is to try and learn a little Portuguese and not lose your temper, something’s gotta give. 

Read more on CNNGo: World's biggest airport planned

9. Perth Airport, Perth, Australia

 

worst airports
Kick a dog while it's down: The Qantas strike didn't help PER's reputation.

If there’s one thing Australians love, it’s hating their airports.

 

But while the big guns in Sydney, Melbourne and also-rans in Darwin, Cairns and Hobart get routinely lambasted for various inefficiencies and rip-off tactics, passengers in Western Australia have a special place in their spleens for Perth. 

“The only advantage over some other airports is the lack of nearby combat,” notes one of several miffed passengers on airportquality.com

With a reviled pair of domestic terminals (home of two-hour taxi-line queues, atrocious check-in lines, overpopulated gates and meager lounges) and a slightly more palatable international terminal five kilometers away, Perth’s brittle facilities can be overwhelmed just by a trio of aircraft arriving within 20 minutes of each other. 

Now that an ambitious “billion-dollar” redevelopment project has been significantly scaled back, who would ever want to leave Changi for this place? 

Read more on CNNGo: Transit hotels: How to get to sleep during your stopover

8. Tribhuvan International, Kathmandu, Nepal

 

Don't look the officers -- or the dogs -- in the eye.

For a small airport in a pretty country, Tribhuvan has it all: the interminable weather delays of Boston Logan, the shoddy restroom maintenance of a Glasgow sports bar, the departure board sparsity of McMurdo Airfield and the chronic chaos of a kids' soccer match. 

 

Some airport improvements have been underway for the Visit Nepal 2011 tourism campaign, including things most passengers don’t much care about (e.g., the new helicopter base). 

The most serious beefs with Nepal’s only international airport revolve around its primitive yet officious check-in procedure, starring a roulette wheel of underpaid security agents. 

“Departure is an endless game of body searches and silly questions,” notes one passenger.

“Those who didn’t have their e-tickets printed out had to argue their way in,” says another, who was checked seven times and scolded for not having a baggage tag on a carry-on before eventually boarding. 

Never mind. The city’s markets and surrounding mountains are lovely.

7. John F. Kennedy International, New York, United States

 

Fans flooded the airport to welcome the 1964 British Invasion, but it seems they never left.

You’d think it would be one of the greatest humiliations any major airport would never allow itself to live down -- getting routinely abandoned by fed-up folks opting to fly out of Newark (Newark!) instead, where at least the ground staff cop less attitude and fewer people outside are pretending to be cab drivers.  

 

But, nah, JFK really couldn’t really care less.

Every year, more than 21 million passengers stumble through worn, mid-century terminals that peaked when The Beatles arrived in the United States and rooftop parking was all the rage; JFK proudly remains the world’s busiest international air gateway.

So if you’re not into a dim, surly, unbearably congested airport reeking with attitude and unapologetically long immigration lines -- good riddance. 

“JFK had a piece of my luggage sitting in a little detention room for bags -- for over a year,” notes one passenger. “No one noticed it was there, until finally an observant Air France employee wondered what the dusty little green bag in the corner was.” 

Read more on CNNGo: Secret Report: Singapore's Chiangi Airport world's favorite 

6. Jomo Kenyatta International, Nairobi, Kenya

 

Can't be disappointed if you're not expecting much.

“As African airports go, it’s not that bad -- but as an international hub, it may be one of the worst out there.” 

 

This is the common refrain among travelers through JKIA, who either don’t have the heart or the expectations to give this dated aviation facility the kind of pounding reserved for the JFKs and Charles de Gaulles of the world. 

Saddled with a 1958 blueprint designed for 2.5 million passengers, JKIA receives close to twice that many. Hence the airport’s 2005, Three Phase, US$100 million expansion project which has seen long delays (something about the rain) and has been spinning its tires somewhere in Phase Two for the last few years. 

For now, that means business as usual: cramped spaces; long lines; inadequate seating; frequent power outages; tiny washrooms hiding up several flights of stairs; shabby duty free shops; overpriced food outlets; and business class lounges worthy of a shelter in mid-city Los Angeles.

Sure, it’s a breeze compared to Lagos. But it could be so much better. The confusing result: grateful disappointment?




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