£7.15 Billion Profit for Royal Bank
The Royal Bank of Scotland pleased the stock market and shareholders (and the tax man) by posting a record operating profit of £7.15 billion (over US$13 billion at current exchange rates), the largest-ever of any UK bank and 11% up on last year. Unions, small business organisations and the media immediately launched an attack on "excessive profits" but the bank's chief executive, Fred Goodwin, pointed out that 13% of the profit is retained to increase reserves and provide capital and 31% goes to the Treasury in taxation. Staff will also get a 10% profit-sharing bonus. Goodwin suggested that if more companies were as efficient as the Royal Bank and matched its profitability, pension funds would be in a much healthier state. The corporate banking and financial markets produced the largest share of the bank's profits. The Royal Bank has expanded rapidly in recent years, following its take-over of London-based National Westminster Bank and there has been solid expansion of Citizens Financial, its banking insurance and credit card arm in the eastern seaboard of the US. The bank's head office (pictured here) is still very much in Edinburgh, unlike so many large Scottish companies that have drifted south. Following the announcement of the increased profits, the bank's shares rose significantly - and so did the overall stock market.
Parliament Building Costs Soar to £420 Million
The Fraser enquiry is dragging on into the background of the cost over-runs and completion delays on the construction of the new Scottish Parliament Building at Holyrood in Edinburgh. There have been accusations flying between the paid officials and the Members of the Scottish Parliament, with each group blaming the other for various shortcomings and cover-ups. The overall impression being gained by the general public is that both were probably highly incompetent and lacking in experience to manage such a project. This week it was revealed that, as far back as last August, it was estimated that the cost would break through the £420 million level - with senior civil servants accused of ignoring advice from cost consultants, not for the first time. The current "official" estimate is £401 million.
Pressure Mounts to Scrap Local Council Tax
While around 80% of the expenditure by local authorities is provided from overall central taxation, the remainder is paid for by local residents via a tax which is levied on property - with those in more expensive houses paying more than those in lower-valued homes. But that can lead to anomalies with a widow in an expensive house paying a large amount while a large family with many bread-winners but living in a cheaper property pay far less. The recent increases in locally raised tax has led to an outcry by those who feel that they are being dealt with unfairly. Of course, everybody feels that they are paying too much tax but a system based on "ability to pay" sounds better to many. Pressure to revise the system is not just rising in Scotland - local council taxes rose by 13% this year in England and Wales. That was even faster than in Scotland where increases averaged around 5%. There is speculation that consideration is being given to raising local council finance by a mixture of property and earnings-based taxation. Of course, any change will mean winners and losers - support for change could dwindle if too many people think they will finish paying more tax.
9,000 Government Staff Walk Out
A 48-hour strike by around 9,000 government employees took place this week, leading to the closure of offices dealing with unemployment, pensions and the child support agency. Driving tests across the country had to be cancelled as a result of the industrial action in support of a pay claim. The Public and Commercial Service Union says that many of the staff employed by the Department for Work and Pensions are so poorly paid that they have to rely on the same top-up benefits that they administer to claimants. Figures published by the government show that 81% of staff in the Department for Work and Pensions earn less than the UK average for non-manual workers (£24,000) and 25% earn less than £13,750 a year.
Historic Edinburgh Brewery Closing
Scottish & Newcastle have announced that they are to close their brewery at Fountainbridge which has been producing beer for over 100 years. Previously regarded as a Scottish Company, making McEwan's Export and McEwan's Lager, this is their last production plant in Scotland, although the beer will continue to be made in Scotland. The company has arranged for the Caledonian Brewery, only a mile away from Fountainbridge, to take over production. But the closure of the brewery will result in 170 redundancies. The company claims that the facility has been running at 50% capacity at times. It produces around 190 million litres of its various brands each year. The Scottish & Newcastle head office is still in Edinburgh and the company denies it has any plans to move this away.
Edinburgh City Centre Blacked Out
A major electricity supply failure in the centre of Edinburgh on Tuesday plunged shops, offices, hotels, restaurants and traffic lights into darkness. The fault first arose at 10am but some areas were still without power during the following night as engineers struggled to repair the fault. Over 6,000 premises were affected although many had been reconnected by the late afternoon.
Scottish Shoppers Still Spending
The latest figures from the Scottish Retail Consortium, representing the major shops in the country, suggest that Scottish shoppers are still spending at a faster rate than in the rest of the UK. Like-for-like sales in Scotland in the last month grew by 5.2% compared to just 3.8% in the rest of the UK. This was, however, down on December, when Scottish sales rose by 6% on a similar basis. In January 2003, the increase on a like-for-like basis was just 3.4%. But with consumer debt at record levels and interest rates likely to rise, it is thought that such high levels of growth in retail sales cannot continue for long.
Positive Report from Smaller Manufacturers
The Confederation of British Industries and the banking giant Lloyds TSB both published reports this week which suggested that smaller manufacturers have experienced more positive results in the most recent quarter. A three-year decline in orders and output has been arrested and confidence is on the rise for the first time in two years. Lloyds' figures for Scotland broadly reflect the nationwide picture. The CBI report showed that orders were flat which contrasted with a decline which began in April 2001. The report also saw a halt in the seven-year decline in export orders experienced by small and medium-sized companies. In Scotland, the Lloyds TSB report found that 41% of companies reported increased export orders compared with 28% reporting a decline.
Refugees from Fees Flood Scottish Universities
Although universities in England and Wales will not be introducing "top-up" fees until 2006, the prospect has swollen the number of applicants to Scottish universities from south of the border and Europe by 4,000 (15%). Normally applications from outside Scotland do not vary by more than about 3%. It appears that applicants believe that they will save money in the final years of study as the new charges could cost over £3,000 a year, compared to a total of just over £2,000 for an entire degree course in Scotland. The increase in non-Scottish applicants has led to fears that, as universities select students on merit, some Scottish students who might otherwise have been accepted, will be squeezed out. One factor which students have to take into account, however, is that an honours degree takes three years of study at English universities and four years in Scotland.
Future Cloudy for Caithness Glass
A famous Scottish maker of glass products has gone into receivership in the face of stiff competition from Eastern Europe, the rising value of the pound and a failure to modernise its designs. Caithness Glass is well known for its paperweights and engraved glass trophies - such as those awarded at the annual Scottish tourism awards ceremonies. The company was founded in 1961 but was taken over by Royal Worcester and Spode in July 2001. Glass-making and ceramics have been going through a difficult trading period since then and the parent company has decided to concentrate on its core business, rather than make the investment necessary to ensure the future of Caithness Glass. It is hoped that the company can be sold as a going concern. The company is a major employer in Wick, Caithness, where unemployment is currently running above the Scottish average at around 7%.
Poet of Scotland
Edwin Morgan, who has already been appointed poet laureate of Glasgow and is one of Scotland's greatest living writers, was recognised this week by Jack McConnell, the First Minister, as the "official poet of Scotland". But Morgan is never averse to speaking his mind and he was immediately at odds with his official title of "Scots Makar" (an old Scots word from the 15th century for a maker of poetry). He said the term was old-fashioned and out-dated and he much preferred to be known as the national poet of Scotland. Morgan, who is now aged 83, received the honour from the First Minister at a nursing home in Bearsden, near Glasgow, where he has been living for the past four months. Unlike the UK poet laureate, who is required to write poems for national occasions, there are no formal requirements for the post. But Morgan says that if something remarkable happens, he will try to write a poem about it.
Grandstand Order for Dubai
A company in Wishaw, North Lanarkshire, was this week shipping out thousands of tonnes of steel to the Middle East country of United Arab Emirates to create the centrepiece of a new Formula 1 racing circuit. The Bone Steel Group won the £3.5 million contract to design, supply and build the grandstand, marketing offices and a retail complex for the sporting arena in Dubai. 2,500 tonnes of steel girders were shipped out from Glasgow this week to form part of a 5km circuit which will cater for a wide range of motorsports. Bone is the largest structural steel company in Scotland and the third biggest in the UK.
Air Services to Inverness Threatened?
A ruling by the European Commission in Brussels means that airlines are now banned from receiving subsidies from publicly-owned airports. This has raised a question-mark over the future of three services using Inverness airport as the hub is state-owned and receives finance from central government. The airport subsides the charges to easyJet which runs a service to London (Gatwick) airport and Bmi and Snowflake which are due to launch services to London (Heathrow) and Stockholm next month. 80% of the inbound passengers from London are travelling for leisure and give a significant boost to the local tourism industry. The Scottish Executive route development fund supports 17 air links to Scotland but all the other airports involved are privately owned and so do contravene European rules. However, Highlands and Islands Airports Ltd, who run Inverness airport, say they are confident that the ruling will not affect them as the discounts are open to all airlines. The subsidy is 75% in the first year, 50% in year two and 25% in year three and clearly assists airlines in the early years when they are trying to build up passenger numbers.
Salmon Sales Down 20%
The publicity given to a controversial American report which claimed that salmon farmed in Scotland were among the most toxic in the world has caused a slump in demand averaging 20%. The report, financed by a campaign group which is against fish farming on environmental grounds, painted a lurid picture which has been rejected by the Scottish Quality Salmon organisation. The UK's Food Standards Agency has encouraged consumers to keep eating salmon with its known health benefits. The agency points out that the levels of dioxins found in Scottish farmed salmon by the US study are well within the safety levels set by the World Health Organisation and the European Commission.
Scotland's First No-Smoking Pub
A bar in Queen Street Station (that's the station shown here) is to become the first in Scotland since 1987 which will ban smoking on the premises. There has been recent controversy over no-smoking areas in pubs and restaurants with advocates pointing to the dangers of passive smoking by staff in particular. Smoking is not allowed on train services - which results in smokers lighting up as they wait for trains or immediately after their train arrive at the platform. So the ban in the Hogshead bar in the station is a surprising move. The manager of pub says that it will be a "challenge" to make it a success. The Pizza Hut restaurant chain introduced a ban on smoking in their restaurants three months ago.
Reindeer Arrive From Lapland
Presumably Santa has enough reindeer in Lapland for his Christmas deliveries, so a batch of 19 of these animals arrived in Scotland this week from the chilly north of Sweden. They took five days to travel from beyond the Arctic Circle to the slightly warmer climate of a farm owned by the Reindeer Company Ltd at Tomintoul in Moray. The company manages a herd of 140 reindeer and the latest arrivals will boost the gene pool of their herd.
Pensioner Too Slow for the Fast Lane
A 69-year-old woman driver was fined £100 and had four penalty points imposed on her driving licence at Perth Sheriff Court this week. Usually such convictions are for driving too fast. But in this case the lady was stopped by the police because she was driving in the outside lane of a 70mph dual carriageway at 20mph. And she drove for over a mile without noticing a police car behind her with its blue lights flashing. She had apparently missed her turning on a trip with some friends and claimed that she had tried to get into the inside lane - but the early evening rush hour traffic kept flashing past her on the inside. But she created severe traffic congestion as cars tailed back behind her.
Aberdeen Football Fan Scores
An ardent supporter of Aberdeen Football (Soccer) Club scored a winner when he proposed to his girlfriend on one knee on the hallowed turf at the Pittodrie ground last Saturday - St Valentine's Day. He popped the question at half-time - with a microphone transmitting his question and the startled "yes" to the 15,000 crowd attending the match against Glasgow Rangers. The roar from both the Aberdeen and Rangers supporters sounded as if he had scored a winning goal. Aberdeen were in fact ahead at that stage - but the game ended in a 1-1 draw.
Weather in Scotland This Week
Temperatures dipped to 5C (41F) in Glasgow on Monday but recovered slightly to 9/10F (48/50F) in the middle of the week, only to fall back again on Friday. The crisp temperatures were being caused by clear skies which at least provided some welcome sunshine. In particular, Glasgow and Edinburgh in the central belt, had good long spells of sunshine. The outlook for the next few days is for continued chilly but bright weather.
This week's illustrations of current flowers in Scotland shows a group of snowdrops growing in Luss on the shores of Loch Lomond and (below) a carpet of golden crocus in Balloch, also near Loch Lomond.
|