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Labour leader Sir Keir Starmer has criticised Serco’s decision to resume dividend payouts for the first…

   NEWS / 26 Feb 2021

Published: 26 February 2021

By Suzanne Evans, Director, Political Insight


HMRC has written another 11,000 letters questioning claims for self-employment support grants. 24,000 similar letters were sent last year. A total of £18.5bn has been paid to those whose businesses have been affected, while an estimated three million other self-employed people have been excluded completely from access to the same financial support.
 
Labour leader Sir Keir Starmer has criticised Serco’s decision to resume dividend payouts for the first time since 2014, with a £17m distribution, after enjoying a bumper year boosted by its £350m NHS Covid-19 test-and-trace programme contract. Serco posted a 36% jump in annual profit to £163.1 million for 2020, an increase also fuelled by deals that expanded its U.S. operations and an increase in demand for immigration services. Serco's chief executive Rupert Soames has defended his company's work, saying "much of the criticism was wildly unfair and bore little relationship to the facts." The company has repaid the £2m in furlough benefits claimed from the government earlier in the pandemic. Serco has also paid frontline staff special one-off benefits totalling £5m to reflect their work.

Downing Street, City of Westminster, London 
Sky News reports that a group of Conservative MPs is calling for a reduction in beer duty in next week's Budget. They have written to Chancellor Rishi Sunak arguing this would support pubs struggling to survive. The MPs' letter, co-ordinated by Durham North West MP Richard Holden, warned that some pubs, many of them "long-standing community assets" could close without further help and that there would be a knock-on effect on breweries. However the charity Alcohol Change UK said the costs to society of drinking "far outweighs" the tax paid on it.
 
The Institute for Public Policy Research is urging the Chancellor to increase corporation tax and capital gains tax, and introduce a wealth tax and a land value tax in next week’s Budget, saying it would make a negligible impact on GDP growth but raise £55bn for the exchequer.
 
British Airways owner IAG has just posted a massive €7.4bn annual operating loss and pulled guidance for 2021, reflecting the impact of the Covid-19 crisis. The loss compares with a profit of €2.61m a year ago.
 
Property website Rightmove has reported a drop in full-year profit this morning, with revenue taking a hit after it gave discounts of between 40-70% to customers during the coronavirus pandemic. In the year to 31 December 2020, pre-tax profit fell to £134.8m from £213.6m the year before, while operating profit declined 37% to £135.1m. Revenue was down 29% to £205.7m.
 
The number of cars built in the UK fell by 27% last month, the worst January figure for over a decade. The Society of Motor Manufacturers and Traders said just over 86,000 cars were built, a fall of 32,262 compared with January last year. January marked the 17th consecutive month of decline in output.
 
The fate Vauxhall’s Ellesmere Port plant still remains in doubt after its parent company, Stellantis, confirmed it would not invest in building a new model at the site without secure government incentives for an electric model, as well as guarantees over the post-Brexit complexities of trading batteries. In January, chief executive Carlos Tavares described Boris Johnson's commitment to ban new internal combustion engine vehicles from 2030 as "brutal", saying it could destroy the plant's business model. Production at Ellesmere Port has been shut down since 16 March 2020.

The shift to zero-emission vehicles will lead to thousands of job losses at Daimler Trucks plants by 2033, chairman Martin Daum said yesterday. The company said that electric vehicles have far fewer moving parts than traditional combustion engine models. Therefore companies that comply with the European Union CO2 emission reduction targets are expected to employ far fewer people over time.
 
Luxury carmaker Aston Martin Lagonda says it will take the "first steps towards profitability" this year, despite reporting a £466m pre-tax loss yesterday, as sales to dealers fell by 42% on the back of factory and showroom closures.
 
British Gas has seen full-year earnings plunge to a record low, falling by more than a third to £80million, after losing almost a third of its customers. Falling energy use by businesses during the pandemic and a collapse in global commodity prices, also led to British Gas’ parent company, Centrica, posting a full-year pre-tax loss of £577m. Centrica is now launching its second turnaround programme in five years, having lost three-quarters of its market value after its share price plummeted from an all-time high of more than 400p in 2013 to a record low of just over 32p a share last year, forcing the company out of the FTSE 100. Last year the company said it would cut 5,000 jobs. Meanwhile, British Gas engineers are launching another four-day strike this morning in a deadlocked dispute over pay and conditions.  
 
Howden Joinery posted a fall in full-year profit and revenue yesterday, saying the Covid-19 pandemic had a "significant" impact on its business. Full-year pre-tax profit came in at £185.3m, down 28.9% on 2019, reflecting lower gross profit and a modest increase in operating costs, with group revenue 2.3% lower at £1.55bn.
 
Primark owner Associated British Foods warned on Thursday that Downing Street's nationwide lockdown measures would leave it without roughly £1.1bn-worth of sales in the first half of its financial year.
 
Asda has warned 3,000 workers in its stores that they are at risk of losing their jobs as the chain plans to ramp up investment in online sales. The UK's third-largest supermarket chain said the shake-up was driven by the shift in demand towards grocery deliveries, which charged forward for the sector as a whole because of the COVID-19 pandemic. Asda said it had begun consultations with 5,000 of its back office store workers, but hoped the plan would result in a net gain of 1500 people employed by the company, as it was seeking an additional 4,500 staff members to sustain online growth.
 
Sub-prime lender Amigo has warned it faces administration if a proposed scheme to settle thousands of outstanding complaints does not receive approval. The Financial Conduct Authority has not yet given the scheme its backing, and the courts will need to approve it. Following an initial period of high growth, Amigo’s net loan book has declined by 43% year-on-year in the nine months to 31 December; customer numbers have fallen 33%; and revenues declined 37% to £137.5m. All new lending has been paused in light of the outstanding complaints.
 
Cruise liners Carnival and Walt Disney have announced they are pushing their expected launch date for cruises back until June at the earliest. Norwegian Cruise Line Holdings has already announced a halt in sailings until after May. Royal Caribbean still has a tentative May re-launch date.


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