Labour apathy over T&N pensioners

TURNER & Newall may sound like a pint of bitter, but as regular readers of Financial Mail on Sunday will know, it is a motor parts company with 40,000 former and current workers who are unlikely to raise a glass to it in retirement.

Their golden days have been tarnished by the prospect of a future either without a pension or with a substantially reduced one.

But what angers these workers almost more than the shambolic way they have been treated by American owner Federal-Mogul is the almost complete apathy to their plight shown by their local MPs and the Government.

So they are less than thrilled by the news from actuaries Watson Wyatt that the Government's liability for public sector pensions has surged by more than 50% to almost £600bn over the past two years.

Unlike T&N workers, who carefully saved for their old age, some public sector workers need not put away a penny for their retirement. Their pensions are paid out of taxes.

Watson Wyatt estimates that the public sector pension bill is rising by £46bn a year. Unless the Government starts cutting spending, it will need an extra 14p on income tax to pay its workers' pensions.

Worryingly, the actuaries even admit their figures might be too low because they have counted only people working in the public sector in 2002 - and, as everyone knows, the Government has been busy filling essential posts such as teenage pregnancy co-ordinators.

T&N staff have learned the hard way that a pension promised is not a pension guaranteed. Public sector workers and MPs who blithely ignore the plight of constituents will never suffer this disappointment. It is simply not fair.

Votes will count at Abbey

THE usual complaint about company annual meetings is that the biscuits run out too quickly. It is hardly surprising. Only small investors generally turn up to harangue the chairman about his salary while major institutional shareholders vote from the comfort of their offices.

The efforts of small investors are usually in vain because their shareholdings are outweighed by institutional investors. But when shareholders gather next month for Abbey National's extraordinary meeting to vote on its takeover by Spain's Banco Santander, they will discover that their view counts just as much as institutional investors.

Abbey's takeover is being achieved by a structure known as a scheme of arrangement and shareholders will be asked to vote twice. In the first ballot - to approve the takeover - the vote of a small shareholder with 100 shares carries the same weight as one with ten million.

Abbey needs the approval of more than 50% of all shareholders for this first vote to succeed. With about 1.7m small investors, it must win the support of more than 850,000 shareholders.

If this hurdle is not oversome, then theoretically it cannot proceed with the second vote. Santander will probably claim that only Big Brother is able to motivate 850,000 people to vote and that it is unrealistic to expect that many to do so.

But when Abbey converted from a building society to a bank in 1989, four million customers cast their votes. It is rare for small shareholders to assume so much importance in a takeover battle. It would be wrong to waste the opportunity.

Dyno-Rod unplugged

THE £62m flotation of Dyno-Rod was deep in the sort of stuff that the company dredges from the blocked drains of distressed householders even before the decision was taken to pull it.

The company claims it was just £1m short of its target but, at a time when investors have less appetite than Victoria Beckham, that would have had the sweet smell of success. And Dyno-Rod would have closed the deal faster than its high-pressure jets pump water.

The reality is that investors baulked at the call-out charge for founder Jim Zockoll. The former airline pilot set up the business in 1963 after a stay in a London hotel that was due to be closed for some time for the drains to be cleaned. Zockoll offered to do the job for £5,000, flew back to New York to pick up a machine and cleared the drains in two hours.

But he would have cleared his desk just as quickly with £50m in the bank if this deal had gone ahead, making way for a new management. They had never done the job before, so it is understandable that investors worried that they might not know their sewers from their culverts.

Dyno-Rod has almost saturated the marketplace. Though it has diversified into companies like Dyno-Plumbing and Dyno-Locksmiths, these have enjoyed limited success, so the proposed flotation price, valuing the company at 14.5 times earnings, always looked ambitious.

Investors admit they may have considered buying shares in Dyno-Rod if it had dropped the price it was willing to accept, but who ever heard of a tradesman cutting his quote? No matter how unrealistic.