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Britain's Finance Ministry Announces Bankers' Bonus Tax Policy

Aired December 9, 2009 - 14:00:00   ET


RICHARD QUEST, CNN INT'L. ANCHOR, QUEST MEANS BUSINESS: Spending cuts, tax rises and a slap on the wrist for bankers. The U.K. government is getting tough on the economy.

Negative feedback: Spain is told to put its financial house in order.

And wedding bells are ringing, QUEST MEANS BUSINESS goes lovey-dovey. It is part of our world at work in the festive season.

I'm Richard Quest. Tonight, I mean business.

Good evening. Forget tax and spend, tonight it is all about tax and mend. Britain's finance minister is setting out his plans to fix the economy, as his government faces an uphill struggle to win the next election.

Alistair Darling had to set out how the government would deal with the country's huge budget deficit and the thorny issues of bankers bonuses. There are a variety of issues, of course, which come to grips. I made notes of them as Mr. Darling was giving his budget address.

Let's go through some of them. This is what the British chancellor talked about. Now, he admitted that the U.K. economy's recession was worse than had been originally thought. IT was 4.75 percent contraction this time, versus at 3.5 percent contraction that was predicted early in May, at the budget. So, that gives, already, a 1.25 percent differential between the two, the public finances.

So, clearly the U.K. economy has suffered perhaps more than expected. The public finances are deeper in debt. Back in April the chancellor said that it would be a deficit of around 175 billion pounds. Now he says it will be a 178 billion pounds in 2009. But looking forward into 2010, `11 and '12, he sees the deficit remaining at high levels. Over 170 billion, then it drops down, and drops down a bit more. He's still maintains, the chancellor still maintains that he can get the deficit down by 50 percent in just four years. That is a key commitment the British government has made.

But the big talking point tonight, of course, has been the levy on bank bonuses. This is a one-time fee that will be paid by the banks, not the bankers, on anybody or any bank that has actually paid bonuses in excess of 25,000 pounds, about $40,000 U.S.

So, let's be clear. We are talking big money here. Bonuses, it is the so-called discretionary number. A payment, perhaps individuals will not be affected, it will be the banks that will make the massive payments, 550 million sterling is expected to be raised.

Jim Boulden now, on the U.K. finance ministers plans and the reaction.


UNIDENTIFIED MALE: Order, statement, the Chancellor of the Exchequer.

JIM BOULDEN, CNN INT'L. CORRESPONDENT (voice over): After 30 minutes detailing tax rises and budget cuts, British Finance Minister Alistair Darling finally go around to what everyone wanted to hear. How the government was going to go after bank bonuses.

ALISTAIR DARLING, BRITISH FINANCE MINISTER: If they insist on paying substantial rewards I'm determined to claw at money back for the taxpayer. So, I've decided to introduce, from today, a special one-off levy of 50 percent on any individual discretionary bonus above 25, 000 pounds.

BOULDEN: Accountancy firm Deloitte says that 50 percent is more like 68 percent, when you add in other taxes. Still, this populous move will be paid by the bank, not by the individual banker. And to repeat, it is only once.

Darling said it should raise around $800 million, money to be used to help fight unemployment. It also continues the debate of whether Britain is slowly killing its golden goose, its financial capital.

ANGELA KNIGHT, BRITISH BANKERS ASSOCIATION: I sincerely hope that we have now come to an end of those moves, which while it is important the British people do have certain political and populist element to them, because that doesn't really send a terribly good message to, out from the U.K. to the rest of the world.

BOULDEN: And believe it or not, pollster YouGov says, bankers do garner some sympathy.

PETER KELLNER, POLLSTER, YOUGOV: If, for example, after today all of the bankers leave Britain, and there are fewer bank jobs, the public won't like that. And they will turn against the government.

BOULDEN: It didn't take long Wednesday for the opposition to savage the budget plans.

GEORGE OSBORNE, SHADOW FINANCE MINISTER: We were promised a pre- budget report and what we got was a pre-election report.


BOULDEN: While bonuses were certainly the headlines, how the U.K. tackles its massive budget deficit will be watch closely. Some observers say Darling was short on detail.

LIONEL BARBER, EDITOR, "THE FINANCIAL TIMES": We did not have enough clarity on spending cuts from the chancellor. There were clues and promises and aspirations. Markets are looking for clarity and in the absence of clarity they may decide to attack the currency, or the ratings agencies may respond and downgrade our rating.

BOULDEN: Specific budget cuts and more tax rises are expected in the coming year, to cut in half by 2014 Britain's deficit. Jim Boulden, CNN, London.


QUEST: The chairman of the House of Commons Treasury Committee John McFall joins me now live from central London.

Mr. McFall the issue seems -let's start with bankers' bonuses first of all. There seems to be a common view that this was a political move designed to assuage worries about and fears, rather than an economic move? That is fair enough isn't it?

JOHN MCFALL, HOUSE OF COMMONS, CHAIRMAN, TREASURY CMTE. No, I don't think it is actually. I think what you have got to do is you have got to consider both economic and the social.

There is a lot of anger at the banking community. And it is quite simple. This is a banking crisis which has promoted an economic crisis, which has political overtones and which has social consequences. And there is an issue here of fairness -

QUEST: So this is punishment? So this is punishment.

MCFALL: No, no, no.

QUEST: for basically getting people into the mess and still getting bonuses afterwards?

MCFALL: Well, actually the banking community is gaining from the cheap money that is available through government distributing it. Both from the early liquidity scheme, which the Bank of England gave, and from quantities of easing, so the are making on the back of taxpayers' money. And I think that has to be acknowledged and therefore there is penalty to be paid for this. And taxation that has been accrued from this is very, very important.

QUEST: Now if we look at the economic situation in Britain. The deficit numbers are horrific and they remain large for the foreseeable future. Economists I've been speaking to say there is not credible realistic opportunity for getting that deficit down by 50 percent in four years.

MCFALL: Well, the deficit is not much different from any other country's. It is less than France and Germany, and America. Why is that? Because of the global recession. So, I think there is an issue here and we have to calm down on this issue, because there is talk about defaulting on the money markets. We will default if we are out of line with other countries. But we are not out of line with other countries. And the simple reason for that is that there has been a global recession.

QUEST: The other major criticism of today's pre-budget report is that lots of talk about potential spending cuts, or measures to be taken in the future. But when you have deficits of 12.6 percent of GDP, shouldn't there have been more detail about what will be cut and when?

MCFALL: Well, for example, the government has stated that in terms of efficiency savings there is 38 billion pounds in the pipeline. It is also said that there is an increase of 0.5 percent on national insurance. It is also said that public pay for 2011, 2012 will be capped at 1 percent. I have heard people squealing about that. I've heard the union saying that this is not fair. I've heard the British Chamber of Commerce saying that whilst they welcome measures (ph) in cooperation tax and the HMRC arrangements for companies deferring their tax, there is other aspects that they don't like.

So there is a bit of screaming going on today as a result of this. And, yes, there will be difficult decisions. Yes, there will be pain. And I think the government has laid that out quite clearly today.

QUEST: Mr. McFall, as always we thank you for joining us, putting the position. Many thanks, indeed.

MCFALL: Thank you.

QUEST: Look forward to having you on the program again.

Now, that was of course the major news in the U.K. today, what happened with the pre-budget report. But elsewhere there was much news being made and Fionnuala Sweeney has the details at the CNN News Desk.


QUEST: When we come back, Spain became the latest country to feel the wrath of the rating agencies. First Greece, then Spain, who will be next?


QUEST: Welcome back. Now we know Britain's finance minister, what he plans to do, or at least we have an insight into the plans to put the country back on the road to recovery.

The finance sector is not happy with those plans. Especially, of course, the one-off levy of 50 percent on bonuses in excess of $40,000 U.S. I spoke to David Buik of BGC Partners. And of course, clearly, Mr. Darling had made more enemies than friends in the city of London today.


DAVID BUIK, BGC PARTNERS: I don't think it is a question, Richard, of making enemies in the city of London. I think it is making enemies for the United Kingdom, Great Britain and Northern Ireland, for temporary political expediency. This is a vituperative, visceral, nasty, spiteful, piece of legislation for very early gain, which brings absolutely nothing to the U.K. party.

Let me explain why. The fact remains is, like it or not, banking the financial services has been a massive contributor to the United Kingdom's treasury coffers; 80 billion pounds in the last 12 years.

QUEST: Right.

BUIK: And the fact, whether we like it or not, the government can do what it likes, I profoundly disagree with the Royal Bank of Scotland and Lloyd's because it owns 84 and 42 percent. But to be honest with you it has more front than Brighten Pier, interfering with the likes of Goldman Sachs, JP Morgan Chase, UBS, Credit Suisse, Deutsche Bank, ING, how dare they?

QUEST: David, calm your self. David, calm yourself.

We also heard today that the U.K.'s recession was deeper than thought. The borrowing numbers to use your phrase before, are eye-watering for the year's end. Do you have any confidence that the deficit will be down by half in four years.

BUIK: So long as night follows day, not a chance. What worries me is that there was no meat fleshed out on the bone at all. To just say that you are going to get borrowing requirement down from 178 billion, which will be at its height (UNINTELLIGIBLE) next year, by half by 2013 and '14, but you are not going deal anything with health, you are not going to hurt education, you are not going to hurt the police, where are you going to get it from? Particularly, since the economy is going to take some time to grow, therefore, there is no guarantee in the level of income. And also the banks have been battered. We should provide most of it in recent years.

QUEST: David, I'm putting my tongue firmly in cheek here, but you have forgotten the old efficiency savings! You have forgotten the ol', you know, the old rubric of government, we'll find it under the mattress!

BUIK: My dear Richard, I have so much respect for you, your tongue is straightly through your cheek. For the simple reason that is just dicing with the corners of the problem; a billion here, a billion there, 3 billion, here. Let's get serious. We need to get the ink down. Where are these cuts coming from? And before a general election neither the government, or the opposition parties, frankly have the political guts to tell us.

QUEST: Let's talk about one other area. Just come with me, if you will, please, to Greece and to Spain, potentially to Ireland. The downgrades that we have seen in Greece, and the warnings on debt for Spain. Now this is serious stuff, isn't it? Because we could be looking at contagion in the bond market on sovereign debt, of European countries?

BUIK: I don't think you can leave it at European debt, Richard, to be honest with you. I think the United States has got a huge problem. It is a massive borrowing requirement. The dollar is very weak. We are now living in a low cycle of interest rates. And even if interest rates did go up towards the end of next year, it will be a pithily amount and they will have to attract money.

We have picked on Greece, Spain, because they are the two weakest, with Ireland following closely behind. But I fear that the appetite for bonds at the current level will dwindle quite quickly. And that will have to drive interest rates up in order to attract money. This is a very serious problem and more so, in my opinion, than growth.

QUEST: Tonight, David, I've got my traffic lights in the studio. The question is, global economy, tonight, red, amber, or green?

BUIK: Very, very amber.

QUEST: You got an amber there. Thank you, David Buik, many thanks for joining us.

Amber from Mr. Buik, which of course, is exactly what we might expect. And David was in particularly strong and robust form tonight.

The last areas that we were talking about, with David, was the question of down grading of government debt. Now, last night on this program we told you all about Greece and how it had been downgraded below A to triple B plus. More on that in a second.

Across the continent of Europe countries are seeing their finance in tatters. For instance, today, Spain, Standard & Poor's lowered -changed the debt outlook. It didn't change the debt grade, it changed it from stable to negative. Standard & Poor's says there is now a risk of sovereign down debt-sovereign debt downgrade. Basically, it is on watch, negative outlook for Spain now. What this means is a short rise, a small rise in the cost of borrowing, but it certainly puts the government in Madrid on notice that it needs to deal with the deficit, the unemployment questions and all these other things if it is not to be downgraded.

Greece is already now feeling the wrath. Yesterday it was downgraded by the Fitch rating agency to triple B plus. The interesting thing is S& P has now warned that there could be a downgrade. The finance minister said on this program, tonight of course, that there would be no default. But the Greek prime minister said -did say today, that this was a sovereignty question. And there were serious issues. And there are rumors, of course. Rumors and rumors alone, that the EU might be coming in, in some way, to help sort things out.

Dubai, continuing the issues: Ever since Abu Dhabi and the Dubai government said they would not bail out Dubai World, six other entities, they are known as government controlled entities, Emaar Properties, the UAE's bigger development, six other ones have had their debt downgraded in the past week or so.

In Dubai, it was another torrid day on the exchanges, where stocks plunged for a third straight day, wiping out all of this year's gains. Now, the Dubai financial markets, look at the stock exchange. It has dropped more than 6 percent at the close. We have seen now three extremely serious and deep reductions. Dubai has now wiped out all the gains since the beginning of the year. And it all relates to the uncertainty of the debt crisis, the restructuring of the assets, and ultimately, how it is likely to be paid for and sorted out.

Putting it into the European markets and worries over those debt problems, whether it was Greece, Spain, Dubai, all the region's main markets ended the day lower. Take a look at the numbers. European banks were amongst the biggest losers. Barclays was near the bottom of the board. Shares of Standard Chartered gained 1.7 percent. The bank says its exposure to Dubai is not significant. Frankfurt, the Deutsche and Commerzbank heavy loses. Insurance giant, Axiom took the biggest hit, losing nearly 4 percent.

If you go to New York this is what you will see at the moment. Practically flat. I mean, I suspect a bit of a push and we will be over 10,300 before the day is out. Choppy session, but really very little movement on the New York market.

When we come back in just a second, if you wanted a poster child for bad deals of previous decades, look no further than AOL and Time Warner. The two came together, they destroyed shareholder value, and now it is time to say, goodbye.



RICHARD PARSONS, FORMER CEO, TIME WARNER: This is really the first major merger, as far as I know it is the first merger announced in the 21st century. And I think when we look back on it, in time, we'll see that this is going to be the defining merger. This new company is going to define what we called in our press release, the Internet century.


QUEST: Well, the former chief executive was right in one way. It was a defining moment. It was a defining deal. Unfortunately, for Dick Parsons it wasn't it didn't quite define in the way that he had intended. And on Wednesday it marks the end of an ill-fated era; AOL and Time Warner finally going their separate ways.

I need to, of course, express complete openness here. Time Warner is the parent company of this network. In other words, it is my boss who pays the wages. But without fear or favor, on we go. So let's look and see exactly how we were, what happened and where it is all going now.

And anyone who is a student of hubris will probably be more than familiar with exactly, I suppose, fiasco is probably the right word, of the deal.

AOL and Time Warner did a deal. It cost $111 billion, the merger. AOL the supposed - I mean, it was billed as a merger, but AOL used its high value paper, in those days, in 2001, to actually complete the deal. AOL now is worth roughly $3 billion. The last time AOL was a stand alone company it was at the height of the boom. The shares traded above $100.

Now AOL was, of course, the way in which most of us, myself included, "You've got mail!" It was the way in which most of us got into the Internet right at the very beginning. It became know as the AOL walled garden. Unfortunately 24 million people, paying monthly subscriptions, now dwindled to just several million on a dialup line.

The new share of AOL which is restructuring itself as a portal and taking advantage of broadband and an advertising based model, the new shares will start at just $25.

Maggie Lake is in New York. No shaden froyed (ph), Maggie, but the reality is this was another poster child, this time for deals that shouldn't have been done.

MAGGIE LAKE, CNN FINANCIAL CORRESPONDENT No, it certainly was, Richard. And we all remember so vividly the enthusiasm on that day and the disbelief that an Internet company could buy a brick and mortar company like Time Warner, or AOL pull off a deal. As you say, they called it a merger.

And it certainly is going to be studied in business school classes as the example of what not to do. And a lot of people are going to say, listen, this was the representation of the Internet bust, a lot of other people are going to say it is the model of you know, bigger is better, that sort of one-stop supermarket model that a lot of sectors engaged in, including financials.

But you know, we talked to a media analyst to try to figure out, OK, 10 years on, what can we learn from all of this. He actually said that this is a lot more elementary and that it is a case of management not doing its due diligence.


PORTER BIBB, MEDIATECH CAPITAL PARTNERS: The lesson is if you are going to put two entities together, you had better know how to integrate them. And that was clearly something that was never thought out prior to putting AOL and Time Warner together. They were more interested in the stock market value of the combined entity and the allure of tapping into the richness of the Internet, which was unproven, undetermined, and certainly unavailable to AOL Time Warner.


LAKE: They got caught up in the moment but didn't really have a long-term strategy, as we now know. And you have seen the results of that. And Porter Bibb did mention, though, there are other media mergers that went a lot better. So, you know, it certainly had to do with the Internet. It certainly had to do with all of that, but in the end it was just a case of them not really thinking it all the way through.

QUEST: Ah, but you see, I was in that room when that deal was announced, not working elsewhere. And I attended that press conference. The thing I most remember from that, 10 years ago, was a feeling that we were - those of us that couldn't see the sense of the deal were somehow stupid. Those of us that didn't realize that the dawn of a new era -and if I'm not mistaken, you weren't far away from that room on that day, either. And we were all made to feel like we were somehow innocents.

LAKE: That's right. And that -and they were right in the respect that we were on the verge of a massive change. That the Internet was ushering in something really important, but they just didn't know what it was going to be and they failed to capitalize on it. And you know, Richard, this sort of goes to the question of what is going to happen to AOL now that it is a stand alone? And there are some people who do point out that it is an incredibly well known brand, but there are a lot of others who are pessimistic about its ability to, you know, to make it on its own.

QUEST: Maggie Lake, in New York. Both of us -well, I won't say both, me, more years than I care to remember covering this. All right, Maggie Lake, I think I have just dug a very deep hole. Let's say good night to Maggie for the moment.

A populist move that doesn't go far enough. When we return Steve Forbes of "Forbes" magazine, he gives me his impression on Britain's bonus tax policy. And needless to say, he believes taxes should be coming down.


QUEST: Good evening.


This is CNN.

British banks may now be forced to think again when giving the bonuses at the end of the year. The finance minister in the U.K. has slapped a one time levy on those energy discretionary bonuses in excess of $40,000. The banks will have to pay the 50 percent levy. (INAUDIBLE) budget speech to parliament.

Later, I spoke to Steve Forbes, the editor-in-chief of the business magazine, "Forbes," obviously.

Now, he had some strong views on many subjects. When it comes to restoring economic growth, clearly, taxing bonuses doesn't seem like a good idea.


STEVE FORBES, EDITOR-IN-CHIEF, "FORBES" MAGAZINE: A good policy, no. It's -- it's an election manifesto. Bankers are unpopular, not without some reason. And so hitting them in their pay packets, yes, that's a popular thing to do. That will show they're on the side of the people.

But I think at the end of the day, people are really interested in what are you doing to get this economy go back on track?

It's certainly the question we face in the United States, hitting bankers, that only gets you so far. We've got to get substantive measures done.

QUEST: But aren't -- we'll talk about those substantive issues. But as the chancellor said today, there is a fairness question, isn't there?

There's an issue of what is right, what is proportionate?

FORBES: Well, if the government owns a bank and if the golden rule operates, the golden rule is he who has the gold makes the rules. And so you can do anything you want. But if you want institutions to get back on your feet -- on their feet, you've got to have talent to do it. And so gratuitously punishing people who are doing what they're supposed to do, if you want trading profits, well, by golly, you're going to have to have traders.

QUEST: But the way in which this has been done, by putting the onus on the bank, not the banker, basically he said the -- they have a choice. They can either plow the money back into the balance sheet or they can plow it into your...

FORBES: Oh, come on. If you want them to rejigger the balance sheet, you can have incentives to do that, positive incentives, like having a stable currency. That -- that would do wonders for balance sheets. Having a lower tax rate, so you get the economy moving again.

QUEST: Isn't it inevitable on both sides of the Atlantic that higher tax rates are coming?

I mean we know in the U.K. the 50 percent rate for those over $150,000. The U.S. is going to have to do exactly the same to breach that budget deficit gap.

FORBES: The only way you get really rid of a budget deficit, or more fundamentally, get an economy growing again, where the asset side of the balance sheet can grow again, is having an environment where entrepreneurs can create new businesses, where people can have a chance of getting better jobs.

Raising tax rates destroys capital, it forces capital either to flee the country or stay on the side. So, yes, it's a good populist thing -- we'll hit those rich people -- but it's not good economics. And, by the way, they should cut taxes and my country should do the same -- tax rates across the board.

QUEST: How are you going to fund that deficit, then, because the only way to do it then is to cut spending. And I think everybody agrees at the moment, now is not the time to be cutting spending. Or maybe you think we should cut spending.

FORBES: Yes, whether it's -- cutting spending is not a bad thing, because what the stimulus packages, by the way, do, is the equivalent of being in a pool of water and taking a bucket from one end of the pool and pouring that bucket into the other end with a little of a loss of water in between. That may stir up the pool, but it doesn't increase the amount of water in the pool. The Japanese have shown that. They've had a dozen stimulus packages. None of them have done a much bit of -- much good at all.

And the United -- again, what tax rates are all about is incentive. You raise tax rates, you have less incentive. Lower the tax rates, you reward risk taking, productive work, success. That's what you want right now.

QUEST: Except what do you do about the cost of -- you know, the poor, the unemployed?

I understand in the long-term that reducing taxes and creating economic stimulus does create new jobs. But in the short-term, you've got deficits of 10 and 12 percent.

FORBES: Well, all the more reason why you want some restraint on spending growth. That -- that would go a long ways. And you're not going to help the poor and the benighted by having an economy that's stagnant. You want an economy that's creating jobs, not destroying them.


QUEST: Steve Forbes talking to me on the question of bankers' bonuses.

And tomorrow, you'll hear from Mr. Forbes on issues of the dollar and exports and why he thinks it's such a mistake that he believes the U.S. now has a cheap dollar policy. That's on tomorrow's QUEST MEANS BUSINESS.

The climate change controversy that's dogging the climate conference. First, hacking accusations.

What's behind the scenes?

Is it important?

Climategate with Paula Newton, in a minute.


QUEST: So the hunt is on to find the person who leaked e-mails which are at the center of a massive controversy in Copenhagen. Some claim the e-mails, which were stolen from the University of East Anglia, provide evidence that scientists manipulated data on climate change. Just weeks before the conference opened in Copenhagen, the e-mails were posted on the Internet.

That question is, by whom?

Who has the motive?

The fossil fuel industry, for sure.

Who has the capacity?

That's a very difficult thing. This was a -- a really sophisticated hack. This was not the act of an inadvertent 18-year-old who just happened to do it. Somebody -- somebody with real sophistication and the motive to sift through 13 years of e-mails, obviously was at work.


QUEST: Somebody knew what they were looking for -- or at least if they didn't, they were on a -- a major fishing expedition.

Paula Newton, CNN's international security correspondent, joins me now.


It's called Climategate, so-called. It's like Watergate. It started with a break-in.

What did they break into?

The e-mails.

Who did it?

Probably hackers for hire, with the help of naive insider, a malicious insider or maybe just an absolute targeted attack.

QUEST: But why did they know to go there to look for this?

Or was it an un -- was it just a fishing expedition?

NEWTON: It was a fishing expedition at the climate research unit. They knew what they were looking for. The most interesting thing I hear from I.T. experts is that, look, we had more attacks in 2008 than we had the entire previous 17 years.

What does that mean?

We have the World Cup coming up, Richard. We have the Olympics coming up. They're telling me get ready, these events will be targeted.

What are people looking for?

Things that they may find innocuous. It's not like trying to steal bank details. It's stuff you and I may think is innocent, but is not and will give people the advantage.

QUEST: Right.

So do you believe this was a climate attack or a hacker attack on a climate issue?

NEWTON: This was a climate attack. These -- these hackers for hire - - and I'm going by what the experts tell me...


NEWTON: ...they'll do this -- these jobs. They do them quite easily and quite quickly.

QUEST: Should we be worried about it?

NEWTON: Absolutely.

QUEST: No. Well, no, you say that, Paula, but, you know, if you have the correct protocols, then you can prevent them and we're all a little bit careful.

NEWTON: The protocols continue to be vulnerable day after day after day. If we shouldn't be worried about it, then I don't think NATO and Interpol would start monitoring it. Remember, we had an attack on a country -- Estonia. That happened a couple years ago. Since then, people have really started to open their eyes.

I bet if they took your bank details, you'd be a little concerned.

QUEST: That's different. That's different. The point I'm getting at here is Al Gore -- let me -- we don't want to get into Climategate and whether this is -- the -- the science was good or bad.

NEWTON: Right.

QUEST: Al Gore says it was old information anyway and anyway, it wasn't particularly relevant.

The point I wanted to hear from you is, is this going to get worse in the future, to the extent that we can't cope?

You said 2010 and all those would be hacked, but to the extent that we can't cope?

NEWTON: No one has suggested to me that we won't be able to cope. Everyone has suggested people must start paying attention. And that includes corporations organizing these kinds of events or the U.N., anyone organizing a conference.

Hey, the next G20, you're going to be there, aren't you?

Look out for the leaked memos.

QUEST: How often do you change your passwords?

Don't answer that.

Paula Newton. That's why she's our security correspondent, if she doesn't change her password...

NEWTON: Let's not get into social networking. That's for another show.

QUEST: I'll...

NEWTON: I'll come on and talk about that.

QUEST: If we invite you.


QUEST: Thank you. Paula Newton.

She'll come on whether we invite her or not.

Now, look, I'm told by colleagues overseas that it's grim in New York. The weather is particularly unpleasant. We've had not too bad a day in the UK.

Guillermo is at the CNN World Weather Center.

GUILLERMO ARDUINO, CNN METEOROLOGIST: I think you're lucky this week. I think the word of the week is snow, because it's coming to Germany, too.

You know what, Richard?

I'm going to show you a video that I'm sure you would not want to be in there. It's in Wisconsin. It's a siscal (ph) truck among other trucks that got stuck there because of the drifting snow. Look at that. It's a highway.


Underneath all that pile of snow, it's a highway. And they had to call snow plows overnight because the snow was so bad. And people got stranded. So it's pretty bad. And it's in Cambria with an A, not in Cambria. It's in Wisconsin. Madison, Wisconsin actually set a record in terms of the snow that fell over there.

It's all because of this low, but it's going to continue to affect Chicago. So I was checking out the airport. I mean, the Northeast, you're right -- you're totally right, Richard. New York awful. We have delays two hours right now. Boston, the same thing.

Canada -- and I hear a little bit of a Canadian accent in Paula Newton -- Canada, especially here, Ontario, it's going to be awful. The snow is going to get there. It's going to be windy and very dangerous, indeed. This is for all Richard's viewers who are coming here to the United States and Canada. You know, I -- I don't know how much to emphasize on this, but bring clothes that are according to the weather, because it's rough. We have warnings in place. It's -- it's really, really nasty. And the -- the other areas, even though we think that it's going to be improving a little bit, we still have problems in Wisconsin here, into Michigan, Iowa and Minnesota, as well. So get ready. Big airports there, look at the temps - - Winnipeg, minus 16; Montreal, 0; minus 11 in Chicago. I mean that's awful. Look, the snow will continue to fall. Atlanta also with bad weather. The temps are going to go down tonight. Freezing point or even less, like minus five degrees Celsius in Atlanta. Denver with snow.

Well, let's talk about England. And Richard said it's not that bad. Temperature wise, we're not doing that bad either. The showers are moving away. We're going to have a dry spell here for a while in Britain. But then the snow is moving into Germany, into Austria, Switzerland and Northern Italy. So great for skiers, of course, but not for everybody else.

London, no complaints. It's going to be chilly, but it's not going to be that bad. That's the dry weather that will prevail. Windy in Dublin. London is going to get better, as I said. Zurich, those areas, Vienna in Austria, the Alpine Region, the Balkan Peninsula, the word is bad.

Well, after the break, I think that if we're lucky, we'll get Richard to sing a song.


QUEST: All right. Now, welcome back, QUEST MEANS BUSINESS.

We are getting into the festive mood. The seasonal version of our World At Work series, as we follow the 12 days of Christmas.

Now, it doesn't really matter what you're celebrating, the 12 days of the festive season.

For those of you who are unfamiliar with that traditional song, "The 12 Days," you need to remember, here's a snippet.


QUEST: By jingo, you can't beat the Bach Choir when they've got their voices up.

Now, that's really put us a bit into the mood. Well, we kicked off yesterday with that old partridge in the pear tree. If it's today, it must be day two. And that means my true love gave to me two turtle doves.

How can we find two turtle doves in the world of work?

We meet Cathy Anderson. Her World At Work is weddings. And the doves -- she releases rock doves as a symbolic gesture of the happy couple. Her passion is now flying high.


CATHY ANDERSON, TRUE DOVE WAYS: I keep rock doves and mainly as a hobby, but I've also started a business from it, releasing doves at weddings.

It will be all right. Let's have a look at you.

And -- and basically, we take them along to the wedding and the -- the bride and groom holds the doves. And they can have lovely photos taken for the album. And once they release the doves, they fly back home again.

Here you go.

I started off, I bought six rock doves and from there, it was actually bred. We've got about 50 doves now. And they're so lovely. I'm a bit addicted to them all.

(INAUDIBLE) fly in a minute.

I'm scarping out the pooh because we have to keep the lot clean. Otherwise, the pooh gets on their (INAUDIBLE) and it's really hard to get it off. The cleaner the lot, then the lovelier the birds are going to look.

I do about 30 weddings a year. And this is a wedding where (INAUDIBLE) and I worked the quiet lot, which is nice, because it's local for me. So I know my birds are going to get home from here. That's why I like working here.

It's said years ago that if -- if you saw two white doves on your wedding day, you'd have a long and happy marriage, because doves mate for life. Well, now you don't see many doves in the wild at all. So we take the doves to the wedding. And that's -- that's what it symbolizes -- two doves flying off together, starting a life together. It's just lovely. It's so romantic.

I seem to have a bit more -- I mean I don't use the same birds every time. I rotate them when I use them. But I can trust all of them to do a good job on the day. And that's because they feel safe.


And that was a lovely wedding. (INAUDIBLE) perfectly. Sometimes, you know, the bride and groom are having to get to let them go a bit early. But that was the perfect relation. The white, I think, was lovely.

People don't understand, but they are so clever. You know, they find their way home with their small brain. They get hungry for me, as well. I'm -- usually, I'm home and I look out in the loft and they're there already, which is nice because I can relax whenever they're home.


And I think literally, you get the birds all, you know, the weddings (INAUDIBLE). But now, even I decided to give the business up, I couldn't get rid of my birds. Never.


QUEST: You've got to admit, you didn't quite expect that when we talked about two turtle doves.

Well, in our next installment, day three of the 12 Days of Christmas, we're going to turn -- we're going to go for three French hens, two turtle doves and a par -- three French hens. See what we can do. See what sort of odd way my producer, Matt Percival, came up with to best show you the World At Work when involved with three French hens.

If you want to join in and have some guesses and have some comments, please, our Facebook page is open for business. We will be showing you pictures of the team -- well, we already do that -- how we do the program and your comments about 12 Days of Christmas.

Please, just search QUEST MEANS BUSINESS. That's the official QUEST MEANS BUSINESS site. And be -- become part of our discussion and part of the family on this program. We, also, of course, have Twitteratrichardquest, You can find it all on the Web site.

When I come back in just a moment, those bad bankers' bonuses. I'll have a Profitable Moment.


QUEST: Finally, tonight's Profitable Moment.

British bankers' bonuses beaten with a 50 percent levy if they're above $40,000. Just about everyone seems to think except -- there was no reason for it except for the Labor Party, which still believes there was. But most believe it was being done for political reasons -- appeasing those who are furious that banks are being offered big bonuses so soon after being bailed out.

It's tempting to go along with the populism that the bankers need to be punished. But sensible people need to temper it with the realism -- banks will inevitably pay bonuses that are eye-popping to the rest of us. Money is the stock in trade. Money is the way you attract and reward staff.

So at the first whiff of profits, business as normal. It's unlikely any banks will actually move, in the end. The truth -- the harsh truth tonight, the British finance minister's gambit has probably won. No one ever said life was fair.

And that's QUEST MEANS BUSINESS for tonight.

I'm Richard Quest in London.

Whatever you're up to in the hours ahead, I hope it's profitable.

Christiane is after the headlines from the I Desk.