LUXURY GIFTS OUR GUIDE TO THE BEST OF THE VERY BEST THIS CHRISTMAS PAGE 23 BUSINESS WITH PERSONALITY Issue 1,529 Friday 9 December 2011 www.cityam.com FREE Fight Tobin CAMERON’SEURO tax in court, say banks ▲ EXCLUSIVE BY JULIET SAMUEL MAKE OR BREAK BANKERS are urging top-level British ▲ EUROZONE diplomats in Brussels to threaten the BY JULIET SAMUEL EU with a legal challenge if it tries to introduce a Tobin tax. PRIME Minister David Cameron was City A.M. understands that Prime under growing pressure to deliver on Minister David Cameron’s negotiating his promise to repatriate powers from team has solicited ideas from senior Brussels last night as Eurozone leaders City figures on what powers could and argued over the terms of their bailout should be brought back to the UK. fund. In response, the government has Cameron has come under fire for been told to take a hard line against giving mealy-mouthed promises on even a Eurozone-only Tobin tax the powers he aims to return to because it could affect transactions Westminster. passing through London and could be He told reporters: “These are impor- legally dubious because it might con- tant talks and we need obviously to get travene key treaty articles. that stability in the Eurozone that’s Cameron’s team has also been good for European countries, good for warned that it should block EU rules Britain as well, but also we need to pro- that will make it harder for the City to tect Britain’s interests.” remain open to trading with non- Thirty backbench Conservative MPs European countries. and lords yesterday wrote an open let- The Prime Minister has struggled to ter warning that the EU’s regulatory put substance into his promise to initiatives “pose a grave threat to ensure that the UK has “safeguards” for Britain’s financial services industry… It the City in new treaty negotiations and is imperative that the government asked for help with the details. fights our corner”. Currently, the FSA is charge of decid- But Eurozone leaders are not inter- David Cameron is being pressured at home and abroad to help save the euro while protecting UK sovereignty Picture: REUTERS ing what countries the UK can do busi- ested in discussing what powers ness with and what standards apply. London can get back: they are focused ting aside entire pages to say the nervous of allowing the ESM to be against such measures. But Brussels wants its new internation- on solving the Eurozone’s debt crisis. United Kingdom will not do what all given a freer rein because it will main- But it is not clear whether today’s al bodies like the European Securities Eurogroup president Jean-Claude the others have to do.” ly be backed by German money. round of summit talks will also bring and Markets Authority to be in charge Juncker told Cameron not to ruin Last night, draft resolutions were Eurozone leaders are expected to a commitment to reform the of the process, which threatens the prospects of a deal: “I would like a said to contain a suggestion that the unveil a “new fiscal compact” today Eurozone’s less competitive openness of Britain’s economy. treaty deal that commits the 27 [EU region’s bailout fund, the European that will strengthen existing treaties economies to make the currency More generally, however, the City is states] but if it turned out that there Stability Mechanism (ESM), be given a that limit how much of a deficit a union more coherent. deeply divided on the EU. Many firms were countries among the 27 unwill- banking license so that it can lend and country can run up. Meanwhile, EU banks were told yes- would rather have a standardised set of ing to go along with us… we will do it borrow money more freely. It would impose automatic punish- terday that they need to raise €115bn rules across the region to simplify the with 17 [Eurozone states],” he said. “I But Berlin shot down that idea ments on countries that break the (£97.6bn) to shore up stability in the business environment and avoid gold- don’t want the United Kingdom set- speedily. Chancellor Angela Merkel is rules unless a qualified majority vote wake of recent stress tests. MORE: P3 plating. Marshall Wace hedgie stars collect £39m ▲ EXCLUSIVE The £4bn long-short equity fund, Marshall Wace’s $400m (£255m) Research. Yesterday it emerged that run by star traders Paul Marshall and Global Opportunities Fund is up by Louis Bacon’s Moore Global BY PETER EDWARDS Ian Wace, saw income from fees dip around 28 per cent for the year to 30 Investments fund fell 2.6 per cent in SENIOR traders at Marshall Wace, one four per cent to £63.95m for the year November. It contrasts with some dire the year to 18 November while Fortress of the City’s top hedge funds, will to February, a period when some results elsewhere, with the average Investment Group’s flagship macro share a £38.58m profit – down 15 per investors racked up major losses. hedge fund down 4.37 per cent over fund was down 10 per cent by late Paul Marshall Picture: City A.M. cent on last year amid market turmoil. City A.M. understands, however, that the period, according to Hedge Fund November, one investor said. ▼ ▼ ▼ ▼ ▼ Certified Distribution FTSE 100 5,483.77 -63.14 DOW 11,997.93 -198.44 NASDAQ 2,596.38 -52.83 £/$ 1.56 -0.01 £/¤ 1.17 unc ¤/$ 1.33 -0.01 03/10/11 till 30/10/11 is 100,123 2 News CITYA.M. 9 DECEMBER 2011 Three myths that require a rebuttal NEWS | IN BRIEF New City flats on St Bart’s site Property group Helical Bar hopes to attract City staff to live closer to work back of a Tescopoly turned out to be been lots of job-destroying, stupid and business for ever-deeper EU integration with its latest development. The firm nonsense. Size isn’t always self-rein- unnecessary policies, punitive taxes has waned. Of course, they want free has released plans for 225 new flats and forcing, especially after a certain point, and a relentless stirring up of anti-City trade with the EU – but the old enthu- 230,000 square feet of offices on the St apart from in network industries (and sentiment. The British government siasm of yore has vanished, apart from Bartholemew’s Hospital site near Little even then entire networks can be has also tolerated or even embraced a at a few refusenik multinationals. Britain. The firm and its joint venture ditched in favour of new ones). Retail is tidal wave of EU rules, nearly of them It is time to readjust. There are costs partner Baupost hope to have formal more competitive than ever, and that flawed or disastrous. Hedge funds, pri- and benefits to EU membership – but plans ready to submit in February and can only be good for consumers. vate equity, insurers and now account- the massive benefits promised in the start work in two years, having bought EDITOR’S LETTER ancy firms have all been hammered; 1980s and 1990s have not materialised, the site from the NHS for £55m earlier Myth number two: the government has new pan-EU regulators have been cre- and the costs are now immense. this year. ALLISTER HEATH backed the City to the hilt and wants to save ated. The coalition’s original aim was Rather than spreading scare stories it from Brussels’ madness. Fact: the govern- to shrink the City; then to shrink it as a about the UK’s isolation or obsessing Ford brings back dividend Myth number one: Tesco is becoming larger ment spent its first 18 months attacking the share of GDP; now, with manufactur- about the supposed wonders of the sin- Ford has turned the ignition on its divi- and larger. Fact: it is (very) gradually losing City, and is now entirely schizophrenic in its ing in recession again, it has suddenly gle market, business groups and trade dend for the first time in five years, with market share in the UK grocery market, attitude towards it. realised that it must find growth and lobbies need to understand that there a quarterly payout of five cents a share according to Kantar. Of course, a revolution was required jobs wherever they are created. Fine – is little the UK can do to influence the that the number two US automaker said Its share peaked at 31.2 per cent in in the City after the mad bubble. Many but it shouldn’t pretend that it has EU. With 26 other member states, it could maintain during any future December 2007 and is now back at of the reforms since 2008 have been always been the City’s best friend. Britain simply doesn’t have enough downturn. The dividend, payable in 30.5 per cent, a market share last seen good, including getting banks to hold votes. It is time instead for a thorough March, will cost Ford about $760m in 2006. When it comes to UK gro- more capital, be more liquid and cut Myth number three: business uniformly rethink of our relationship with the (£485m) a year. The company last paid ceries, at least, it has been a case of five their leverage. Some have even been backs the EU. Fact: opinions have shifted EU – and for British business and its a quarterly dividend, also five cents a wasted years for Tesco, despite a huge excellent.