Apparently, he was worried about the demise of British manufacturing industry and the dangers of recession. How could we survive with sterling at this incredibly uncompetitive level?And, if this unlikely story turns out to be true, Gazza was absolutely right to be upset. I heard that Gazza had picked up a copy of the Financial Times that morning and realised that the British economy was heading south rapidly Why? Because sterling was fast approaching $2. Last month, one in three shareholders rebelled against Ms Swann’s £2m package, which included a £220,000 guaranteed bonus to compensate her for loss of share options at her previous job as head of Argos..

We are not pulling out.”Changes to WH Smith’s pension arrangements come after criticism of executive pay and bonus schemes. Although these have been under intense competitive pressure since supermarkets began selling chart albums and DVDs at knock-down prices, a WH Smith spokeswoman said: “Entertainment accounts for 25 per cent of our business It is a driver of sales and it is a driver of footfall. At the moment, after an employee’s promotion to a better-paid job, the company backdates its new, higher entitlements to when the staff member joined the group.The pension funding talks come at a tough time for the group, which issued a profit warning in January after failing to record any sales gains during its crucial Christmas trading period. Its new chief executive, Kate Swann, is conducting a review of the company, which is expected to lead to job losses across its retail chain, and will report back to the City in April.This week, the company will tell record labels that it will no longer sell singles after a collapse in demand from youngsters, many of whom now prefer music downloads and ringtones.However, the company attempted yesterday to quash suggestions that it was considering a dramatic reduction in selling space for entertainment products. All entitlements already accrued would be protected.Other proposals put to staff include a plan to stop backdating entitlements for those who are promoted. Employees will be asked to pay in between 4 and 8 per cent, depending on how much they earn. If they cannot afford to do so, they will be switched to the group’s alternative money purchase scheme, set up in April 1995.WH Smith’s final-salary scheme, which has 26,000 members and ranks as one of the sector’s most generous, costs the company £3.5m a month, or £42m a year.

It is seeking to slash its costs by one-fifth.A company spokeswoman said: “The proposals were put forward last week. We have begun a consultation process with employees and their unions. After that we will make an assessment.”The company says it will reduce the part of an employee’s pension that is attributable to the years of service between now and retirement. Penalties increase the earlier the retirement age, and for the first time employees signalling they wish to retire at 60 will have 25 per cent docked from the pension attributable to their remaining service. The company admitted last August that the scheme faced a £199m funding gap.In a series of assaults on pension costs outlined to staff last week, the group also plans to ask staff to contribute up to 8 per cent of their salaries in order to continue in the scheme, which was closed to new members in 1995. The company has been resisting pressure to merge with its compatriot Novartis, which has a 33 per cent stake in Roche.. WH Smith has told staff that they will be penalised for seeking early retirement, as the ailing retailer moves to cut its pensions burden.

Sales grew 4 per cent at constant currencies last year, despite falling sales of anti-smoking gums and patches.Roche returned to profit in 2003 after suffering legal costs and other exceptional charges the previous year, but it is now keen to concentrate on higher margin prescription pharmaceuticals and diagnostic tests. It is coming to the end of the cost savings squeezed from the integration of Block Drug, the US maker of Sensodyne toothpaste, which it bought for £832m in 2001.GSK has ruled out any mega-mergers, despite moves to consolidate the European pharmaceuticals industry, but observers believe bolt-on acquisitions in this vein could be attractive in the face of one or two difficult years for sales and profit growth. Dr Garnier has already signalled that 2004 will be a “year of transition” as GSK loses sales of several blockbuster drugs, which have lost patent protection and face cheap copycat competition.The UK company is likely to face opposition in the bidding war from Bayer of Germany and perhaps some of the US pharmaceuticals giants, such as Pfizer. GSK owns Aquafresh toothpaste, Lucozade energy drinks and Nicorette anti-smoking patches.Roche’s consumer division had sales of 1.77bn Swiss francs (£750m) in 2003, but Franz Humer, the Roche chief executive, said earlier this month that it was sub-scale and its future was being reviewed. Private equity bidders including Candover, Permira and Kohlberg Kravis Roberts are also thought to be interested, attracted by the stable cash flows.Jean-Pierre Garnier, the chief executive of GSK, earlier this month reaffirmed his commitment to the consumer healthcare part of the business where, although margins are thinner, the risks are lower. He promised to make a decision on the future of the division within months.Analysts installed GSK as favourite to win control of the business, since the British group would be able to realise substantial synergies in manufacturing, marketing and distribution. He is hoping to raise up to £1.5bn from any disposal, although the company is also considering putting it into a joint venture or boosting the business through acquisitions.