Today in the press

Wednesday 11 June 2014 14.28
A look at some of today's business stories in the newspapers
A look at some of today's business stories in the newspapers

WORK PAYS BETTER THAN WELFARE FOR MOST UNEMPLOYED, ESRI FINDS - Getting a job pays more than staying on welfare for the vast majority of people even when in-work costs like childcare and travel are taken into account, according to a study by the Economic and Social Research Institute (ESRI). The finding appears to debunk the myth that Ireland’s relatively generous social welfare system gives no incentive for people to work, says the Irish Times. The research, which will be presented today at the ESRI’s annual Budget Perspectives seminar in Dublin, found close to six out of seven people would be financially better off in work than on welfare. Among those people in employment or unemployed facing a situation where work pays less than welfare, more than 70% chose work rather than welfare. The findings have important implications for policymakers as it suggests initiatives to improve the reward from work are worthwhile, but will have only a limited impact on overall unemployment. “More substantial reductions in unemployment will require a revival of international and national demand, and activation measures providing skills and training in areas where new jobs will arise,” it said. The ESRI based its analysis on Switch, the ESRI tax-benefit model, which provides a picture of the financial incentive to work faced by unemployed people and by employees in Ireland, and data from the Central Statistic Office’s Survey on Income and Living Conditions.

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END OF IRISH DREAM TO BUILD TALLEST BLOCK OF FLATS IN EUROPE - An Irishman's plan to build the tallest residential building in Europe has collapsed amid recriminations that apparently forced the resignation of a top London banker, writes the Irish Independent. Last November, it emerged that little-known developer Tom Ryan had agreed terms to buy a site in London's Canary Wharf and planned to build a 74-storey apartment block on the site. The project, which appeared on the front page of the 'Financial Times', would have cost about €1 billion to complete. Almost as soon as the deal was publicised, though, questions were raised as to whether the 'Hertsmere Tower', as it was called, would be built. Mr Ryan was almost unknown in UK and Irish property circles and had almost no track record in major construction. Now, the deal has fallen apart. Mr Ryan's firm, Ryan Investments Limited, never closed the deal to buy the site and it was ultimately purchased by a Chinese firm. Credit Suisse, which had been helping Mr Ryan raise funds for the development, may face legal action over the deal and one of the bank's top private wealth specialists, Hans Olaf Eldring, has left the firm. A number of investors who helped fund the original purchase of the site may take legal action against Credit Suisse for the return of their funds. A spokesman for Mr Ryan confirmed that "the deposit monies (to buy the Hertsmere site) were supplied by Mr Ryan's investment company".

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EX BANK OF IRELAND DIRECTOR PLANS OTHER INVESTMENTS - US investor Wilbur Ross has ruled out a future investment in AIB, although he is looking at other possible investments in Ireland. “We would be interested in other Irish investments but given my familiarity with Bank of Ireland’s plans I think it would be inappropriate to become involved with a competitor,” Mr Ross told the Irish Examiner. Mr Ross was a director of Bank of Ireland from 2011 until Monday night when he announced that he would sell his remaining 5.5% stake in the bank. Deutsche Bank placed his shareholding on the market yesterday with an offer price of 26.5 cent, which generated €477m for the US investor - a threefold increase on his original punt. Mr Ross was one of three investors to pay €1.1 billion for a 35% stake in the bank in 2011. Last March, he sold 2 billion shares in the bank, along with fellow investor Fairfax, for €656m. They originally bought the shares for 10 cents. In what is seen as good news for the Government, Bank of Ireland shares remained much more resilient than had been expected following yesterday’s sale. The shares fell 3.2% on the day. 

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BP LANDS BREAKTHROUGH DEAL TO OPERATE COMMERCIAL DRONES IN US - Amazon’s dream of delivering millions of parcels using mini-helicopters may still be some way from coming true, but the unmanned aircraft industry has scored a breakthrough after winning the first approval to operate commercial drones over US land. The Financial Times says that following a landmark decision by the US Federal Aviation Administration this week, BP, the oil major, will start inspecting the pipelines at its remote Prudhoe Bay field in Alaska using drones manufactured by Nasdaq-listed AeroVironment. The 4ft 7in-long drones, which resemble model aircraft, are a far cry from the futuristic designs often associated with the nascent unmanned aircraft industry, and will be launched by hand as if they were paper planes. Their approval follows trials by BP and ConocoPhillips, another oil producer, in offshore oilfields in Alaska’s Arctic. The FAA’s decision is a breakthrough for Alaska’s oil and gas industry, which faces a significant challenge in monitoring pipelines and wells in a huge region where average temperatures reach as low as -17F (-27C). The first overland flight took place on Sunday. BP said unmanned flights had the potential to improve the safety, efficiency and reliability of its Alaska North Slope infrastructure and maintenance programmes.