Published: 10 June 2021
By Suzanne Evans, Director, Political Insight
The EU is threatening a trade war if the UK continues to fail to implement checks on goods entering Northern Ireland under the Brexit agreement. Britain's Brexit minister David Frost and European Commission vice-president Maros Sefcovic failed to break an impasse between the two sides after discussions in London yesterday. At a subsequent press conference, Sefcovic said the relationship between the pair was at a "crossroads" and that the bloc’s patience was wearing "very thin". "The EU will not be shy in acting swiftly, firmly and resolutely to ensure the UK abides by its international obligations," he warned. “What the EU is insisting on is we should operate the protocol in an extremely purist way," Frost said. "The reality is that it’s a very balanced document that’s designed to support the peace process and deal with the very sensitive politics in Northern Ireland". The Brexit minister did not rule out the UK triggering Article 16 of the Northern Ireland Protocol, the ‘last resort’ clause which allows either side to take unilateral action if the application of the protocol raises unexpected “serious economic, societal or environmental issues” that are "liable to persist”. Sterling, which had been trading up earlier on Wednesday, fell 0.4% against the euro to €1.15. It also dropped 0.3% to trade at $1.41 against the dollar, after hitting $1.42.
Chancellor Rishi Sunak is said to be pushing to exclude the City of London from the new G7 corporation tax agreement struck over the weekend, according to the Financial Times. The agreement is intended to make big tech companies pay tax more equitably around the world and heralds a global corporation tax rate of 15%. Sunak, who chaired the G7 talks, called the agreement "truly historic" and the reforms "seismic", but is now reported to be leading a group of European leaders calling for an exemption for banks, apparently on the basis that banks already face large amounts of regulation and are forced to properly capitalise their subsidiaries around the world, hence they already face high tax burdens in every market they operate in. A spokesperson for the UK Treasury declined to comment. An exemption for banks is likely to face resistance from the US.
Three Cornish towns will receive £65m in funding from the government’s Towns Fund to create a "fitting legacy" of the G7 summit in Cornwall, Prime Minister Boris Johnson has announced. The cash is for building and restoration work in some of Cornwall's most deprived areas. Environmental projects to improve biodiversity and reduce carbon emissions were also announced. Penzance will receive £21.5m, St Ives £19.9m and Camborne £23.7m, as a result of their applications to the fund in 2019.
The Beis Select Committee has accused the government of "dragging its feet" in taking action against UK companies linked to the use of forced labour in China's Xinjiang region. In March, the Business department vowed to sanction firms unable to prove they had no ties with Xinjiang and agreed to amend and strengthen the Modern Slavery Act 2015, but the committee says it has refused to commit to "clear timeframes and substantive actions". It also said ministers had rejected most of the recommendations it had made to improve oversight in an earlier report which included a call for fines and blacklisting of companies that failed to change. "The fact that the government has rejected the majority of the recommendations is disheartening in the extreme," said MP Nusrat Ghani, the Beis committee lead on forced labour. "Given the horrifying evidence of abuses, it beggars belief the government is dragging its feet in bringing forward the tough action needed to help to tackle the exploitation of forced labour in Xinjiang."
The International Labour Organization says the Covid pandemic has affected under-30s the most when it comes to the global Labour market. It estimates more than 600 million people aged 15-24 are out of work, with young women most affected, partly because women are more likely than men to work in some of the hardest-hit industries, and they are more likely to have had to stay at home when schools closed.
The British Chambers of Commerce (BCC) predicts the UK could see GDP growth of 6.8% in 2021 but only if the government’s roadmap out of lockdown restrictions proceeds as planned and boosts consumer spending. If the BCC predictions are correct, it would make this year the strongest the country has seen since official records began in 1949. By the first quarter of 2022, the BCC expects the UK economy is expected to return to its pre-pandemic level, with growth of 5.1% projected.
This morning’s announcement that an ‘Atlantic Charter’ taskforce will be set up to make recommendations on travel between the US and the UK has receved a lukewarm reception from the travel industry. Virgin Atlantic CEO Shai Weiss said it "falls short" as the lack of a specific time frame means airlines, businesses and passengers face a lack of certainty. He urged US President Joe Biden and PM Boris Johnson to allow trans-Atlantic travel no later than 4 July. Clive Wratten, chief executive of the Business Travel Association, also called for a firm commitment on a date. “This is the latest in a long line of travel taskforces which so far have only wreaked further devastation on our industry. Jobs won't be saved, nor livelihoods protected, until we are given a certainty on dates for the resumption of international travel," he said. A spokeswoman for the Association of British Travel Agents said: "Consideration should also be given to capitalising on the success of the UK vaccine rollout by relaxing rules for fully vaccinated individuals when travelling between low-risk areas, as the US, and many other countries, are already doing." The taskforce will be overseen in the UK by Transport Secretary Grant Shapps and will be chaired by senior officials in the US and UK. In a letter calling for trans-Atlantic travel to reopen on Monday, airline bosses and Heathrow Airport estimated that UK businesses are losing £23m each day that the route remains closed.
Ryanair CEO Michael O’Leary has also taken aim at the government for flip-flopping on European travel: "Boris Johnson is trying to lock up the British public for no good reason", he told Sky News. “This stop go stop go approach to travel is bonkers…the government is just making this stuff up as they go along". He said Portugal, Spain, Greece and Italy should be added to the green travel list in July and August and called on the government to "stick to their 21 June date and get on with it".
Ryanair yesterday won its challenge against state aid granted to German charter airline Condor, a third victory in its fight against billions of euros in pandemic support granted to rivals. The Luxembourg-based General Court annulled regulators' decision approving the measure but said Condor would not be required to repay the aid for now due to the COVID-19 pandemic and pending a new decision by the European Commission.
Capita plc has announced this morning that it has renewed a customer management contract with Tesco Mobile which, the outsourcer says, will build on the “existing highly successful five-year partnership in which Tesco Mobile has been recognised for its market-leading service.” The contract renewal is worth £57.6m over three years, starting in September 2021.
UK rare stamp dealer Stanley Gibbons has purchased the world’s most valuable stamp, the British Guiana One-Cent Magenta created in 1856, for $8.3m (£5.9m). The stamp's previous owner was shoe designer Stuart Weitzman, who bought it for $9.5m at Sotheby’s New York in 2014. Stanley Gibbons bought the stamp from the same auction house and will display it for public viewing at its flagship store in Strand, London, but it also plans to "democratise the ownership of this unique item" going forward. "For the first time ever, you will be able to own your very own piece of the British Guiana 1c Magenta," the company said, but has not as yet provided more details.
Two weeks after a Dutch court ordered Royal Dutch Shell to cut its global carbon emissions by 45% by the end of 2030 compared with 2019 levels, the company has vowed to accelerate its strategy towards becoming a net zero emissions business. Shell’s chief executive, Ben van Beurden, promised to “rise to the challenge” in helping to create a low-carbon energy system, but came out fighting for the Anglo-Dutch oil company he runs, insisting it has been leading the industry in taking responsibility for its carbon emissions. In a statement on his LinkedIn page, Van Beurden said he was surprised by the court’s verdict and was “disappointed that Shell is being singled out by a ruling that I believe does not help reduce global CO2 emissions”.
Exclusive data shared with Yahoo Finance UK shows British consumers spent £110.3bn on home improvements during the coronavirus pandemic, an increase of nearly 30% year-on-year. 5 million Brits redecorated rooms in their homes, 1.5 million built an outhouse and over a million built home-gyms and extensions. The figures from Powered Now also highlight Brits have spent an average of £2,011 per person on home refurbishments, while the UK property market has witnessed a 10.9% rise in average property value. According to separate research by Checkatrade, the most common purposes for home renovations over the lockdown period were for shed offices, home cinemas and snugs.
Sales of halogen lightbulbs are to be banned in the UK from September, with fluorescent lights to follow, under government climate change plans. The move will cut 1.26 million tonnes of carbon emissions a year and deliver consumers savings, officials say. The UK began phasing out the sale of higher-energy halogen lightbulbs in 2018 under EU-wide rules. The aim is to help continue the shift to low-energy LED lightbulbs, which account for about two-thirds of lights now sold in Britain. LED lights last five times longer than traditional halogen bulbs and produce the same amount of light, but use up to 80% less power.
Swedish battery start-up Northvolt has raised $2.75bn (£1.9bn) to expand capacity at the factory it is building in northern Sweden as demand for electric cars increases. The company will expand its first gigafactory in the country to 60 gigawatt-hours a year from 40 GWh – enough to supply batteries for 1 million cars. Peter Carlsson, co-founder and CEO of Northvolt, worked previously at Tesla.
Bitcoin rallied on Wednesday afternoon as El Salvador became the first country to adopt it as a legal tender. The cryptocurrency was up roughly 6%, trading at $35,205 (£24,858), but still a far cry from its all-time high of $63,000. "Although, on the macro front, this is still a very small country that isn’t going to have any profound influence, the fact that bitcoin has become a legal currency in El Salvador is certainly a moment of celebration," Naeem Aslam, chief market analyst at Ava Trade, told Yahoo Finance UK.
The world's largest meat processing company has paid the equivalent of $11m (£7.8m) in ransom to put an end to a major cyber-attack. Computer networks at JBS were hacked last week, temporarily shutting down some operations in Australia, Canada and the US. The payment was reportedly made using Bitcoin after plants had come back online. JBS says it was necessary to pay to protect customers as the disruption threatened food supplies and risked higher food prices. Last month, fuel delivery in the southeast of the US was crippled for several days after a ransomware attack targeted the Colonial Pipeline, whose owners paid a ransom of $4.4m (£3.1m), although around two-thirds of that has since been recovered. Both attacks appear to be linked to a group with ties to Russia.
President Joe Biden is facing calls to introduce a wealth tax following a report alleging America's richest executives, including Elon Musk and Amazon's Jeff Bezos, avoided paying income tax - some over several years. ProPublica also calculated that the wealth of the 25 richest Americans collectively jumped by $401bn (£283bn) from 2014 to 2018. They paid, ProPublica said, $13.6bn (£9.6bn) in federal income taxes over those years - equal to just 3.4% of the increase in their overall fortunes.
Engine maker Rolls-Royce said on Wednesday that Anita Frew will succeed Sir Ian Davis as chair on 1 October. Frew, the first woman ever to chair the company, will join the board with effect from 1 July and Davis will retire at the end of September after nearly nine years as chairman. Frew is currently chair of science, technology and chemicals company Croda, and a non-executive director of mining group BHP. Until recently, she was the deputy chairman and senior independent director of Lloyds Banking Group and has also held chair and board roles in companies in industrial, engineering and utilities sectors.
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