Beckett delays cap on P&O Channel prices
Saturday 28 February 1998
The surprise decision by Margaret Beckett, President of the Board of Trade, follows a lobbying campaign by Lord Sterling, P&O chairman, to treat the ferry firms more leniently. Mrs Beckett said in November that a price cap would be triggered by the end of duty free sales in 1999. But yesterday these requirements were watered down.
The price cap, which does not apply to freight, will only commence in March 2001 and the European Commission can extend this date if it wishes.
The cap depends on duty free sales being abolished in 1999 and on P&O/Stena and Eurotunnel controlling between them 90 per cent of the market. Currently the three companies have an 82 per cent stake.
P&O and Stena will remove three of the 14 vessels they operate on three major routes including Dover-Calais. At least 500, mainly seafaring, jobs will be lost in the restructuring. P&O estimates the two ferry companies will save pounds 75m but will take a pounds 38m restructuring charge in 1998.
Russ Peters, head of P&O European Ferries (UK), will be managing director of the new entity owned, which is 60 per cent by P&O and 40 per cent by Stena of Sweden. Joint chairmen Lord Sterling and Dan Sten Olssen welcomed the go-ahead which they have fought for since 1993.
They said in a joint statement: "This is excellent news. Any remaining uncertainty has now been removed."
The City gave the go-ahead a warm welcome, pushing up P&O's share price 7p to 777p. Eurotunnel saw the development as a good opportunity to raise prices.
For P&O ,the joint venture is another step in a broader corporate restructuring that began in 1996. In a bid to bring return on capital up to 15 per cent, Lord Sterling has sold off property, floated off Bovis Homes, and established joint ventures for his bulk and container shipping arms.
- 1 Nigel Farage: Me vs Russell Brand on Question Time – he's got the chest hair but where are his ideas?
- 2 Harry Potter fans can apply to the Hogwarts-inspired College of Wizardry
- 3 Jessica Chambers: 19-year-old woman 'doused with lighter fluid and burned alive' in the US
- 4 Russell Brand calls Nigel Farage 'poundshop Enoch Powell' in BBC Question Time debate
- 5 Orange Wednesdays are no more
Weather bomb in pictures: Storms cuts power for tens of thousands – and snow is on the way
Jessica Chambers: 19-year-old woman 'doused with lighter fluid and burned alive' in the US
Russell Brand calls Nigel Farage 'poundshop Enoch Powell' in BBC Question Time debate
Russell Brand was rendered speechless on Question Time by this man
Fury at Airbus after it hints the super-jumbo may be mothballed
Disgruntled RBS worker writes hilarious open letter to Russell Brand after anti-capitalist publicity stunt leaves him hungry
Nigel Farage defends Kerry Smith 'ch***y' comment: 'If you are going for a Chinese, what do you say you’re going for?'
Nigel Farage's approval rating hits 'record low' as popularity suffers in wake of Ukip sex scandal
Pakistan school attack live: Taliban kill at least 132 children in 'horrifying' massacre
Sony hack: Angelina Jolie branded 'seriously out of her mind' in further embarrassing leaked email saga
Panic Saturday: 13 million Britons spend £1.2bn – while 13 million others across the country live in poverty unable to afford food
iJobs Money & Business
£20000 - £25000 per annum + OTE £40,000 + Car + Pension: SThree: SThree are a ...
£20000 - £25000 per annum + OTE £35K: SThree: We consistently strive to be the...
£20000 - £25000 per annum + OTE £35000: SThree: SThree are a global FTSE 250 b...
£20000 - £25000 per annum + OTE £35K - £45K: SThree: SThree Group have been we...