Equitable on a knife edge

IT IS crunch time for Equitable Life. New chairman Vanni Treves will tomorrow have his final chance to convince policyholders to vote for his compromise scheme, designed to draw a line under the insurer's difficulties, at a meeting at Wembley Conference Centre.

Several hundred Equitable members are expected to attend the meeting, and thousands more have already sent postal votes.

Treves, a lawyer, has devoted his considerable skills of persuasion to winning over disgruntled policyholders. The speculation is that he will win comfortably. But he is unlikely to be feeling too complacent as he takes the stage at Wembley.

The poll is far from a foregone conclusion. The plan must leap high hurdles before it can be carried, with 50% of those who vote backing Treves. He also needs the support of 75% of the votes measured by value of investments.

This is no mean task, especially as holders of guaranteed annuity rate policies are being asked to give up possibly valuable entitlements for the benefit of the membership as a whole.

Treves, who has come under fire from some critics for spending Equitable's money on advertising linked to the vote, has made apocalyptic claims that all policyholders would lose out in the event of a rejection.

He has argued that the fund's investment performance will be curtailed because it will have to put more into low-risk bonds. In fact, because of poor stock market conditions, Equitable's heavy weighting in bonds is likely to make it one of the better performing pension funds last year.

So who knows whether the guarantee-holders will believe him, and feel public spirited enough to make a potential sacrifice for the greater good of Equitable.

Which ever way the decision goes, Equitable faces a highly uncertain future. A 'yes' vote would bring a degree of financial stability, and trigger a £250m payment from the Halifax, which bought the operating assets last year.

Equitable will remain an extremely weak life company even if the scheme goes through.

It is also likely to face an exodus of policyholders whatever happens. Many are only hanging around in the hope of a boost to their pensions from the compromise. Either way, they plan to quit after the poll.

A 'no' vote would mean no Halifax cash, no ceiling on liabilities, and the almost certain departure of would-be saviour Treves, who has hitched a great deal of personal credibility to the success of the scheme.

One thing is certain: there will be very few people queuing up to replace him.

Stop shopping
RETAIL shares have had a storming run - but the tills will soon be ringing a less cheerful note.

The willingness of Britons to shop until they drop has helped the general retail sector to outperform the All-Share Index by nearly 40% in 12 months.

The atrocities of September 11 were expected to usher in a new austerity. It didn't happen that way. Shares in High Street store groups have soared one third from their low point immediately after the attacks in the US.

Fashion chain Arcadia has seen its shares treble in a year. Marks & Spencer has risen 90% on hopes that it will rehabilitate itself from its status as the High Street pariah.

It was not a universally happy Christmas. Dixons sales, held back by lower demand for mobile phones and PCs, were disappointing. Laura Ashley, still trying to reinvent itself as a sleek fashion retailer instead of a frumpy frock seller, suffered a 13% fall in sales of women's clothing over the festive period.

Nonetheless, shoppers have been induced to spend, spend, spend by a combination of low interest rates, high employment and plenty of tempting bargains.

The party cannot go on forever. The retail boom and the strength of the housing market make a rate cut by the Bank of England's Monetary Policy Committee today less likely, and increase the probability of rate rises later in the year.

Friends like these
I AM sure that Danny Bernstein, the boss of Monarch Airlines, is a wonderful chap. Likewise Dinesh Dhamija of ebookers, Andreas Kark, who runs DaimlerChrysler UK Holdings Ltd, and the other executives who lent their names to a pro- euro letter from campaign group Britain in Europe.

Unfortunately for the europhiles, the missive gives the impression that the only business people prepared to come out in favour of the currency are those no one has ever heard of.