LONDON – Figures from the Office for National Statistics reveal that the UK government’s budget deficit in 2005 surpassed the limit imposed by the Maastricht treaty on Stability and Growth.
The budget deficit for the year 2005 was £43.7 billion or 3.6 percent of the total output.

This is more than the 3 percent guideline imposed by the EU regulations. The UK was in the red in 2004 as well when the budget deficit was pegged at £37.6 billion or 3.2 percent of the GDP. According to the EU guidelines, member nations are to restrict the budget deficit to under 3 percent of the GDP in the fiscal year.

Reacting to these figures, the Treasury said, “As set out in the Budget last week, the UK treaty deficit is forecast to fall to 3% in the coming fiscal year, and will reach 1.6% by 2010/11. The UK continues to have the lowest average debts and deficits of any major European economy with the public finances sustainable and increases in public investment fully affordable.”

The ONS said that the last time the budget deficit was contained to under 3 percent was in 2003. These figures for the current year are for the calendar year and the fiscal year figures are not available, but it is expected that they are in the red as well.

The budget deficit for February was also larger than expected and there is not increased pressure on Chancellor of the Exchequer Gordon Brown to increase taxes. The International Monetary Fund has said that the Chancellor is facing a mega-deficit and could have to raise taxes for as much as £6 billion.

EDINBURGH: Hall of Broxburn, one of Scotland’s largest food farms, is axing 150 workers at its West Lothian plant with immediate effect. This is a sequel to the planned industrial action by Unison, representing workers engaged in public services, over pension dispute. The strike is likely to impact pig production in Scotland as there will be no inspectors to certify the processing.

The owners of Hall of Broxburn, Grampian Country Foods, warned the proposed five-day strike, which is part of the industrial action, will lead to 1000 more job losses.

However, Unison has now agreed that there will be inspectors to certify meat at the plant next week, though the strike by the meat hygiene workers will be on.

In the light of the threatened strike, the firm had said it would not be able to accept pigs at Broxburn for processing next week.

Grampian Country Foods’ managing director Cameron Davidson had warned that the strike could have threatened the survival of Halls. He said the employees understand their colleagues genuine concerns over pensions but they are “mystified as to how nine people on strike can jeopardise 1,000 jobs at Hall’s and the future of the pig industry across Scotland”.

The plant processes up to 12,000 pigs each week.

The Grampian Country Foods Group has already closed down the only other large pig processing plant in Scotland at Buckie 12 months ago. If Halls too closes down, Scottish pig producers will have to find other outlets in England for their processing needs.

The Scottish pig herd, once known as the most technically efficient in the European Union, has been facing sharp decline in recent years because of higher welfare standards. Producers have to either invest in new equipment and facilities or quit the industry. Many have opted to leave it.

The pension dispute had seen some 200,000 government workers striking work in Scotland Tuesday last.

The Meat Hygiene Service employs 184 staff in Scotland, including 155 inspectors. Of these, 160 are Unison members. Hall’s uses nine Meat Hygiene Service members as meat inspectors at the Broxburn plant.

LONDON: More than half the government’s flagship city academies are listed among the worst schools in the country in the new league tables. Seven of the 13 semi-independent academies, which are open long enough to provide data on results of the compulsory tests taken by 14-year-olds in English, mathematics and science, appear in the list of the worst 200 state schools in England.

Nine of the 11 academies reporting results were in the table last year, which shows results for the key stage three tests.

It has come to light that at the Manchester academy in Moss Side, students aged 14 had failed to reach even standards of 11-year-olds in primary schools. The academy scored average points of 26.8. In all English state schools, the average was 34.5.

Among the other academies — state schools backed by private sponsors — showing low average results are the Capital City academy in Brent, north London, Unity in Middlesbrough and City academy, Bristol. The results for Capital and Bristol both improved on the previous year, while Unity’s results remained the same.

Schools minister Lord Adonis said the academies would be “among the very best schools” in future years. He said these institutes cannot be criticised for not being at the top of the performance table as they started in the game way behind. “But they are getting there, as today’s results show.”

There are critics of the scheme. Steve Sinnott, general secretary of the National Union of Teachers, asked the minister to call of the 5-billion-pound academies programme.

The academies programme has been mooted by the government with a view to transform failing comprehensives in poor areas with backing from wealthy private sponsors. Teachers’ representatives have described the scheme as back-door privatisation of state schools, while some of the MPs have called for halting the programme, which aims to build 200 academies by 2010.

EDINBURGH: A ban on smoking has come into effect in Scotland Sunday, making it the first part of Britain where pubs, restaurants and workplaces are to remain no-smoking zones.

Health experts hope the ban will have a clear impact on the people’s health and result in a big drop in the number of deaths due to passive smoking, which is estimated around 1,000 a year in the region with a population of five million. They expect that Scotland, which is considered the “sick man of Europe” because of a life style marked by heaving drinking and smoking, unhealthy diets and sedentary way of life, will see a major change in the life style because of the ban.

A major promotion of the ban is being undertaken at various levels. On the first day of the ban, at the Edinburgh airport, volunteers were seen handing out leaflets explaining the ban. There are banners put up in the city declaring, “Welcome to a smoke free Scotland.”

First minister Jack McConnell, head of Scotland government said, “We have an unhealthy reputation and we are going to change that. We have a record as a country that has too much heart disease, too much cancer, too many stroke victims.”

He said in the years ahead, people will look back on today as the day that Scotland took the largest single step to improve its health for generations.

The new law makes smoking inside an enclosed public place an offence, attracting an on-the-spot fine of 50 pounds.

Ireland is the first country, which had imposed a nation-wide ban on smoking in 2004. Several other countries have since followed suit banning smoking in public places. England, Wales and Northern Ireland are expected to impose ban on smoking early next year.

Scotland has carried out several surveys, which have shown that more than 60 per cent of its people support the ban.

About 30 per cent of the Scottish people are known to smoke, a higher rate than the rest of Britain. They also enjoy a lower life expectancy.

There are people who oppose the ban. They describe it as an attack on individual freedom and intrusion into the life of working class people. Pub and restaurant owners are also concerned about the ban as they expect it would affect their businesses.

Pro-smoking group Forest said the smokers were being victimised and told them to stand up to the “bullying tactics of health fanatics”.

As the ban was a few hours away, pubs, clubs and restaurants across the country had thousands of smokers assembled, puffing on their final cigarettes, with some venues holding special events to mark the occasion.

As the ban came into force, anti-smoking enforcement officers, mostly from environmental health departments, were seen in pubs across the country to ensure that no one was breaking the new law.

There are fears that as the ban becomes effective, smokers could make regular trips to England across the border to have a puff. The Scottish Licensed Trade Association said there will be “smoke commuters” travelling to England to have a cigarette. The association said the ban could be devastating for pubs in the Borders.

LONDON: A study by online money transfer site PayPal shows that music downloads will go up ten fold in Britain by 2010. The Digital Content Report by PayPal says this increase will account for nearly 15 per cent of all music sold in the country.

According to estimates projected in the report, an average music enthusiast would download 25 songs at a cost of 15 pounds, which will be totally worth over 379 million pounds by 2010. Even downloads on to cellphones will go up and will be worth around 200 million pounds.

In addition to music downloads, other services like movie clips and mobile TV can push the market for mobile phone downloads 380 million pounds in 2005 to 1.14 billion pounds by 2010, the report has predicted.

Availability of an increasing range of music and the average price in the range of 60 pence a download could boost legal downloads, the report said.

PayPal also said download of movies on to computers is another segment that is poised for growth. From a nil figure today, this sector could have a value as high as 109 million pounds by 2010.

PayPal Europe’s general manager, U.K. merchant services Carl-Olav Scheible said consumers are going to shift more of their music purchasing to online services as devices change, digital storage becomes more prevalent and use of discs becomes less widespread.

The report also predicts that ebooks and online gaming will be other areas where substantial growth will be seen. Buying games could reach 9 million pounds by 2010 and ebooks around 8.9 million pounds.

The research for the report was conducted in the early parts of March by corporate data firm Datamonitor.

FRANKFURT: German pharmaceutical major Bayer AG is all set to annex rival Schering AG for 16.3 billion euros as another German firm, Merck KGaA, called off its plans to get to the top position in the German drug industry through the Schering acquisition.

Bayer came in as a white knight in the acquisition saga beating Merck’s 77-euro-a-share offer with its 86-euro-a-share offer. Merck said it is walking away because a higher price than it offered is not justified.

If Bayer wins Schering, it will create a unified entity with 15 million euros in sales. Bayer is yet to recover from the setback of its cholesterol drug Baycol, which had to be recalled in 2001. The acquisition will bring to its fold Schering’s top-selling oral birth control drug Yasmin and multiple sclerosis drug Betaseron.

The combined drugs business will be called Bayer-Schering Pharmaceuticals and will be based on Berlin.

Schering’s chief executive Hubertus Erlen said it is not possible for the company to maintain its independence given the attractive nature of the Bayer bid. He said he would recommend the offer to the shareholders.

Bayer’s chief executive Werner Wenning said Schering has a good network in the United States, which will help the merged company to market Bayer’s new cancer drug, Nexavar.

Bayer estimates that the merger could lead to some 6,000 job cuts as there are overlaps at production, research and development and sales levels.

The company will finance the deal through 3 million euros it has in cash resources and through new credit lines from Credit Suisse and Citigroup. The arrangement will be through a mix of equity, term debt, hybrid instruments and the proceeds from the sale of non-core assets of the company.

German insurance company Allianz is Schering’s single largest shareholder although its holdings are not strategic. It is not clear how it will act if the deal goes through.

Merck said its board felt that a higher price for Schering shares is not justified. The company’s chief executive Michael Roemer said he is still convinced that Merck-Schering combination would have been a good option for both companies.

The 338-year-old company will now need to find out other ways to consolidate and grow. It said it will continue to explore other options.

Schering shares were still up 1.5 per cent at 86.26 euros. The markets had earlier hoped that Merck would come back with a higher offer.

LONDON: Annual profits of Kesa Electricals Plc., owners of consumer electronics chain Comet and French market leader Darty, slumped 19 per cent as its sales were affected both in Britain and France. The company said its net income for the year ended 31 January stood at 94.2 million pounds against 115.7 million pounds a year earlier.

Annual sales grew 3.6 per cent to 4.1 billion pounds, it said.

Kesa Electricals had on 14 March rejected a takeover bid from an unnamed private equity fund for 1.72 billion pounds in cash. The company had been facing price deflation, and its Comet chain had been struggling to ward off competition from supermarkets and online retailers.

The company, however, maintained that overall trading since the end of 2005 has improved, through it is too early to predict whether the trend will continue.

Chief executive Jean-Noel Labroue said the sales have been led by increasing demand for new technologies, particularly flat screen televisions, MP3 players and DVD recorders, while sales of high-margin goods like refrigerators remained weak. The sales mix had a negative impact on profit, he said, in spite of cost control measures and margin management by category.

Profit at Comet saw a 21.4 per cent slump, while at Darty it fell 7.3 per cent and at the BUT furniture and electricals chain in France 17.6 per cent. BUT faced intense competition from rivals like Ikea and PPR SA’s Conforama unit.

During the fiscal, the company reduced its debt by 44.4 million pounds to 166.3 million pounds.

Kesa is raising its dividend by 10 per cent to 12.1 pence a share.

The company’s shares closed at 325 pence Tuesday valuing the company at 1.72 billion pounds.