COMMENT : Trafs manages to find another sugar daddy

'If Trafalgar's chequered past is anything to go by, Kvaerner is going to need all the hallucinogenic powers of a Viking magic mushroom to sustain it on this particular voyage into the unknown'

What is it that makes Trafalgar House, that bombed out old shipping, construction and property company, so persistently attractive? Having already fleeced one rich sugar daddy, Henry Keswick of Jardine Mattheson, Trafalgar now seems to have attracted the attentions of another. Kvaerner of Norway is plainly not in the same league as the Keswicks, wealth wise, but beggars can't be choosers, and as the passion fades for Jardines the best course for Trafs is clearly to move on to pastures new.

If Trafalgar's chequered past is anything to go by, Kvaerner is going to need all the hallucinogenic powers of a Viking magic mushroom to sustain it on this particular voyage into the unknown. Virtually to script came the coincidental news yesterday that the aptly named Cunard cruiser, the Sagafjord was drifting aimlessly in the South Seas looking for a tow, her engines beyond repair. If ever there were a timely reminder of the perils of investing in Trafalgar House, this was it.

None the less, Kvaerner seems determined to go for the nuptials. By all accounts Hong Kong Land, the vehicle for the Keswicks' investment in Trafalgar House, has all but agreed terms, the courtship arranged by SBC Warburg, which has a relationship with both sides. All that remains is formal Trafalgar House board approval. Kvaerner presumably has some idea of what it is letting itself in for. By a strange twist of fate, Kvaerner actually built the Sagafjord some 31 years ago. As one of the world's largest cruise ship builders, it knows a thing or two about the business.

Clearly, however, it is the engineering and contracting side of Trafalgar that interests Kvaerner most; Kvaerner believes that once in the saddle, it can make as big a margin out of the Trafalgar engineering businesses as it does out of its own.

In other respects too, Trafalgar could work for Kvaerner where it failed for the Keswicks. For a likely cost of around pounds 800m, Kvaerner is getting a business which has had pounds 630m of new equity pumped into it since the Keswicks first became involved. Admittedly, there's still a fair chunk of debt, but essentially Kvaerner is buying a refinanced company at what could be a knock-down price. All told, therefore, it looks a better deal for Kvaerner than Amec would have been.

It might be said that if Trafalgar is so attractive to Kvaerner, why is Hong Kong Land getting out. Trafalgar has not been a happy experience for the Keswicks; they have lost well over pounds 100m on the adventure and there was a risk that for them that the pill would turn more bitter still. Other shareholders can only thank their lucky stars for the Keswicks' misfortune; without them, Trafalgar would long ago have sunk beneath the waves.

Doubts grow over Barclays

Is Martin Taylor, Barclays' youthful chief executive, a fraud or a genius? The query hung over the bank's results presentation yesterday, as Mr Taylor beamed at the impressive pounds 2bn-plus in pre-tax profits while deftly passing over the line that showed underlying profits down by 5 per cent. Barclays is doing well, but that is not quite the achievement it seems when all the banks are making money hand over fist in the most sustained period of profitability for decades. The fact is that Barclays' performance, compared with that of the other major rival clearers, is poor and has been so year after year.

For the proselytising Mr Taylor, this is clear proof that Barclays alone is treading the path of banking virtue, while its greedy rivals are heading for another painful period in the hellfire of recession. When he assumed command at Barclays a little over two years ago, Martin Taylor made plenty of impact with his talk of New Age banking, stuffing the culture of growth and profligacy into a recession-proof hairshirt of abstemiousness in which quality comes before quantity. Fine. But has the cultural revolution really happened? Barclays' profits increase is largely due to a sharp fall in its bad debt provisions. This hardly amounts to a secular change in the quality of the bank. In the meantime, Barclays drops further behind its competitors in underlying earnings, while its costs show little evidence of control. Lloyds bank's costs grew by 4.4 per cent last year, but this was accompanied by substantial expansion; Barclays' rose by 5 per cent but it is shrinking, not growing.

Martin Taylor may yet be proved a visionary, but we shall have to wait until the next recession to find out. Having joined Barclays at its nadir, his claims have yet to be tested. But as the market showed yesterday, the doubts are growing.

How much more can Clarke give away?

Post-Scott, the political endgame continues to favour an election delayed to the last possible moment, in May 1997. Already, the political and economic calculations are turning to the next Budget and just how much Kenneth Clarke can give away.

Last November, the buzz in the corridors at Westminster was that the Chancellor had kept his powder dry. The modest pounds 3bn cut in taxes was seen as an opening instalment for the real bonanza - a decisive 2p off the basic rate of income tax, providing the Tories with the springboard for an election-grabbing pledge of a 20p basic rate.

A recent calculation by the National Institute of Economic and Social Research seems to support this view, suggesting the Chancellor has more room for manoeuvre than is generally appreciated. Mr Clarke could cut income tax in one fell swoop to 20p and the Public Sector Borrowing Requirement would still be lower in 1997/8 than the pounds 30bn it looks set to reach in the present tax year, according to the National Institute.

Everyone forgets Maastricht, however, and for all its Euro-scepticism the Government is as keen as anyone to meet its onerous criteria. Figures out today and next month will show how Britain has been progressing towards the all-important target of a financial deficit of 3 per cent or less of GDP in 1997. The National Institute projects that even a modest pounds 4bn tax-cutting package will put Britain on a knife-edge, with a deficit/GDP ratio of 2.8 per cent in 1997. Another reason for not over-estimating the size of a giveaway Budget in November - always assuming the Government can survive that long.

News
The surrealist comedian at the Q Awards in 2010
people
News
Russell Brand arriving for the book launch in East London
peopleRussell Brand cancels his book launch debate due to concerns about the make-up of the panel
Sport
Christiano Ronaldo enjoys his opening goal
champions leagueLiverpool 0 Real Madrid 3: Ronaldo and Benzema run Reds ragged to avenge thrashing from their last visit to Anfield
Arts and Entertainment
Sir Nicholas Serota has been a feature in the Power 100 top ten since its 2002 launch
art
PROMOTED VIDEO
Arts and Entertainment
Awesome foursome: Sam Smith shows off his awards
music22-year-old confirms he is 2014’s breakout British music success
Life and Style
Six of the 76 Goats' cheese samples contained a significant amount of sheep's cheese
food + drink
Arts and Entertainment
Contestants during this summer's Celebrity Big Brother grand finale
tvBroadcaster attempts to change its image following sale to American media group
Extras
indybest
Arts and Entertainment
Sarah Dales attempts to sell British Breeze in the luxury scent task
tvReview: 'Apprentice' candidate on the verge of tears as they were ejected from the boardroom
News
Call me Superman: one of many unusual names chosen by Chinese students
newsChinese state TV offers advice for citizens picking a Western moniker
News
ebooksAn unforgettable anthology of contemporary reportage
News
Wilko Johnson is currently on his farewell tour
people
Voices
New look: Zellweger at Elle's Women in Hollywood awards on Monday
voicesRenée Zellweger's real crime has been to age in an industry that prizes women's youth over humanity, says Amanda Hess
News
Let’s pretend: KidZania in Tokyo
educationKidZania lets children try their hands at being a firefighter, doctor or factory worker for the day
Life and Style
CHARGE BOOSTER: Aeroplane mode doesn't sound very exciting, but it can be a (phone) hacker's friend. Turning on the option while charging your mobile will increase the speed at which your phone battery charges
techNew book reveals how to rid your inbox of spam, protect your passwords and amplify your iPhone
Arts and Entertainment
Julianne Moore and Ellen Page are starring together in civil rights drama Freeheld
film
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

IT Systems Business Analyst - Watford - £28k + bonus + benefits

£24000 - £28000 per annum + bonus & benefits: Ashdown Group: IT Business Syste...

Trainee Recruitment Consultant - Birmingham - Real Staffing

£18000 - £23000 per annum + Commission: SThree: The SThree group is a world le...

Trainee Recruitment Consultant Birmingham

£18000 - £23000 per annum + Comission: SThree: The SThree group is a world lea...

Trainee Recruitment Consultants

£20000 - £25000 per annum + OTE £Competitive: SThree: SThree Group and have be...

Day In a Page

How could three tourists have been battered within an inch of their lives by a burglar in a plush London hotel?

A crime that reveals London's dark heart

How could three tourists have been battered within an inch of their lives by a burglar in a plush London hotel?
Meet 'Porridge' and 'Vampire': Chinese state TV is offering advice for citizens picking a Western moniker

Lost in translation: Western monikers

Chinese state TV is offering advice for citizens picking a Western moniker. Simon Usborne, who met a 'Porridge' and a 'Vampire' while in China, can see the problem
Handy hacks that make life easier: New book reveals how to rid your inbox of spam, protect your passwords and amplify your iPhone

Handy hacks that make life easier

New book reveals how to rid your email inbox of spam, protect your passwords and amplify your iPhone with a loo-roll
KidZania lets children try their hands at being a firefighter, doctor or factory worker for the day

KidZania: It's a small world

The new 'educational entertainment experience' in London's Shepherd's Bush will allow children to try out the jobs that are usually undertaken by adults, including firefighter, doctor or factory worker
Renée Zellweger's real crime has been to age in an industry that prizes women's youth over humanity

'Renée Zellweger's real crime was to age'

The actress's altered appearance raised eyebrows at Elle's Women in Hollywood awards on Monday
From Cinderella to The Jungle Book, Disney plans live-action remakes of animated classics

Disney plans live-action remakes of animated classics

From Cinderella to The Jungle Book, Patrick Grafton-Green wonders if they can ever recapture the old magic
Thousands of teenagers to visit battlefields of the First World War in new Government scheme

Pupils to visit First World War battlefields

A new Government scheme aims to bring the the horrors of the conflict to life over the next five years
The 10 best smartphone accessories

Make the most of your mobile: 10 best smartphone accessories

Try these add-ons for everything from secret charging to making sure you never lose your keys again
Mario Balotelli substituted at half-time against Real Madrid: Was this shirt swapping the real reason?

Liverpool v Real Madrid

Mario Balotelli substituted at half-time. Was shirt swapping the real reason?
West Indies tour of India: Hurricane set to sweep Windies into the shadows

Hurricane set to sweep Windies into the shadows

Decision to pull out of India tour leaves the WICB fighting for its existence with an off-field storm building
Indiana serial killer? Man arrested for murdering teenage prostitute confesses to six other murders - and police fear there could be many more

A new American serial killer?

Police fear man arrested for murder of teen prostitute could be responsible for killing spree dating back 20 years
Sweetie, the fake 10-year-old girl designed to catch online predators, claims her first scalp

Sting to trap paedophiles may not carry weight in UK courts

Computer image of ‘Sweetie’ represented entrapment, experts say
Fukushima nuclear crisis: Evacuees still stuck in cramped emergency housing three years on - and may never return home

Return to Fukushima – a land they will never call home again

Evacuees still stuck in cramped emergency housing three years on from nuclear disaster
Wildlife Photographer of the Year: Intimate image of resting lions claims top prize

Wildlife Photographer of the Year

Intimate image of resting lions claims top prize
Online petitions: Sign here to change the world

Want to change the world? Just sign here

The proliferation of online petitions allows us to register our protests at the touch of a button. But do they change anything?