Published: 02 March 2021
By Suzanne Evans, Director, Political Insight
MPs on the Treasury Select Committee have warned the Chancellor not to raise taxes in the Budget tomorrow, given the perilous state of the economy. “With our public finances on an unsustainable long-term trajectory, our clear message is that Budget 2021 is not the time for tax rises or fiscal consolidation, which could undermine the economic recovery," committee chair Mel Stride MP said in a statement. "But we will probably need to see significant fiscal measures, including revenue raising, in the future."
Manufacturing activity in the UK continued to climb faster than expected in February. The IHS Markit/CIPS Purchasing Managers’ Index rose to 55.1 last month, up from 54.1 in January. A reading above 50 designates growth.
Unemployment rates are higher around major UK airports than across the UK, according to analysis by a group of MPs with an interest in aviation. The number of people claiming unemployment benefits overall went up 112% across the UK between January 2020 and January 2021, but around the UK's top 20 airports, it rose 145% on average. The areas around Heathrow, Gatwick and Stanstead were especially hard hit, with unemployment up 221%, 224% and 228% respectively.
The BBC says passengers are waiting up to seven-hours at border control at Heathrow Airport in conditions that are "not humane". "The staff didn't offer any chairs, there was no social distancing, and only about three or four people were checking documents," said one passenger, who also said mothers were having to feed their babies sitting on the floor. ISU, the union for Borders and Immigration, said the queues were caused by Covid restrictions imposed by Border Force, which is part of the Home Office. Heathrow Airport said the government needed to make sure there were enough staff to cope with demand.
Britain’s state-owned business bank has stripped Greensill Capital of a government guarantee on loans to the metals tycoon Sanjeev Gupta’s empire, after deciding it had breached the terms of pandemic lending programmes. Sky News reports that the British Business Bank has informed Greensill it is removing a taxpayer guarantee following an investigation into the UK-based fintech company's compliance with the rules of the Coronavirus Large Business Interruption Loan Scheme.
Credit checking company Experian could face a bill for £34bn in damages, if a legal claim against the company is successful. Experian is accused of mis-selling data and building potentially inaccurate profiles that can affect ability to borrow, according to the Mail on Sunday. A claim for £750 has been lodged at the High Court by a representative claimant which, if successful, could open the door to each of Experian's 46 million UK customers claiming the same amount.
Halfords has announced that it will repay the £10.7m it received through the government's furlough scheme after announcing it expects full-year pre-tax profit to be between £90m and £100m, up from £52.6m a year earlier.
As restaurant chain Wagamama says it is burning through £5.5m in cash every four weeks because of the current coronavirus lockdowns, its parent company The Restaurant Group has said it has secured a new £500m lifeline in order to stay afloat. The group , which also owns Frankie & Benny’s, Chiquito, and dozens of pubs, said £380m of the new long-term loans, alongside a drawing of the revolving credit facility, would be used to repay and refinance all of the company’s existing debt facilities, including the government’s coronavirus large business interruption loan scheme.
Tools and equipment hire firm Speedy Hire said yesterday that pre-tax profit for the year to the end of March 2021 is set to be "well ahead" of current market expectations following better-than-expected trading since last September. Last month, core hire revenue in the UK and Ireland was about 2% higher than the previous year, it said, while utilisation for the period from 1 October 2020 to date was 58.7% versus 56.2% Speedy said that underlying overhead costs remain "tightly controlled" and that it has not used government furlough or loan schemes in the second half of the year.
Online consumer review website Trustpilot said yesterday it is mulling an initial public offering to float at least 25% of the company on the London Stock Exchange, to raise $50m to support growth plans and pay down debt. As of December 31, 2020, Trustpilot had more than 19,500 paying customers, with an average contract value of approximately $5,600, and annual recurring revenue of approximately $119m.
Volvo Cars has announced it will only sell electric vehicles by 2030, committing to phasing out all car models with internal combustion engines by then, including hybrids.
Zoom boss Eric Yuan says working from home is here to stay, and that he expects his video conferencing company sales’ to rise more than 40% this year, reaching more than $3.7bn (£2.66bn).
A row is brewing over the appointment of Megan Butler to the role of executive director of transformation at the Financial Conduct Authority (FCA). Butler was involved in and singled out for blame in the failure to properly regulate London Capital & Finance, the consumer investment company that collapsed in 2019 after raising £237m from more than 11,000 UK investors, most of them small time savers and pensioners. The collapse is being investigated the Serious Fraud Office. Butler is now in charge of overhauling the FCA and improving standards across the organisation.
BT Group said yesterday that Chairman Jan du Plessis plans to retire. Du Plessis joined the company as a non-executive director in June 2017 and was appointed chairman in November of the same year. BT said it will now initiate the process to appoint a successor led by the senior independent director.
Britain's nine biggest banks are expected to unveil proposals for a not-for-profit company to oversee the industry's attempt to bolster competition through a system known as 'open banking' this morning. Open banking is designed to make it easier for customers to securely compare the deal they get from their bank with rival services by aggregating third-party data on a single platform. The lenders will pay for the service.
43% of UK financial services firms have moved or plan to move some of their operations or staff to Europe, taking the total number of Brexit-related job shifts to almost 7,600, up from 7.500 in October 2020, according to new figures from EY’s Financial Services Brexit Tracker. The tracker monitors public statements made by 222 of the largest financial services. Since the 2016 EU referendum, 24 financial services firms have declared they will transfer almost £1.3trn of UK assets to the EU.
Despite 22% of them saying they are at significant risk of closure following the economic fallout of the government’s response to the pandemic, small and medium-sized businesses (SMBs) played a pivotal role in supporting communities in 2020, contributing an estimated £18bn through community initiatives such as volunteering or cash donations. The new SMB Mutuality Report from Intuit QuickBooks and Oxford Economics, also found that, on average in 2020, each SMB gave nine hours per month in staff volunteering; £679 in cash donations; and £372 in product or service donations.
The majority of homebuyers in the UK have said that they would like to see stamp duty cut for good, according to a survey by Estate agents Ascend Properties, which found 79% of buyers would like to see stamp duty holiday extension, while 71% would like it scrapped altogether.
Yahoo Finance UK reports that the ongoing COVID-19 crisis has pushed 35% of UK households into debt, the highest level since the period following the financial crisis, it has been revealed. According to the report by Pro Bono Economics for Citizens Advice, the number of households experiencing problem debt could rise to 1.5 million by the middle of the year, and an increase of between 370,000 and 480,000 since the start of the pandemic.
Brussels has banned the city’s 2,000-plus Uber drivers from using their smartphones to accept rides, thereby effectively preventing the app-based service from being used at all. Any driver caught continuing to use their phone now faces a fine, a temporary suspension, permanent withdrawal of their licence, or the confiscation of their vehicle. Uber blames the city’s outdated taxi legislation, dating back to 1995, before the advent of the smartphone. The Constitutional Court is said to be assessing the situation, but a resolution could take a year or more.
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