Published: 02 July 2021
Location: London, UK
By Suzanne Evans, Director, Political Insight
The government announced yesterday that foreign business leaders will no longer need to quarantine when arriving in England if their trip is likely to have a significant economic benefit to the UK. The statement sparked fury from MPs and small business leaders. The Department for Business (BEIS) says the exemption will only be for arrivals from amber-list countries, and given in exceptional circumstances, but Labour's Angela Rayner MP and Manchester's Labour Mayor, Andy Burnham, said it smacked of “one rule for the rich and one for the rest”. Craig Beaumont, for the Federation of Small Business, said: "Small business owners and the self-employed often travel for their business, and it is wrong to declare this activity as of no significant economic benefit - and so outside of the government's plans. "There should not be a fast lane of easements for big business while small firms are left behind."
British consumers borrowed more than they paid off in May for the first month since March 2020, a sign of the pressure the easing of lockdowns has put on the economy and personal finances. Data released yesterday by the Bank of England (BoE) revealed net consumer borrowing of £300m. The increase reflected an additional £400m of non-credit card borrowing, such as car dealership finance and personal loans. Credit card lending remained weak compared to pre-February 2020 levels, with net repayments of £100m.
UK house prices rose 13.4% in the year to June, the fastest pace since November 2004, the Nationwide building society has said. The average house price increased to £245,432 from £216,403 in June 2020. Nationwide chief economist Robert Gardner said prices were "close to a record high" in relation to average incomes, which he added "makes it even harder" for first-time buyers. He told the BBC the pandemic had "stimulated" the housing market. While all parts of the UK saw a rise in house prices in the second quarter of 2021, Northern Ireland and Wales experienced the largest year-on-year increases of 14% and 13.1% respectively. The slowest rate of price growth was in Scotland, where property values increased by 7.1%. London was England's weakest performing region, with prices rising 7.3%. Nationwide’s statistics are based on its own mortgage data.
UK mortgage approvals surged 827% year-on-year in May as house prices soared and the stamp duty holiday deadline loomed. The latest figures from the Bank of England shows mortgage approvals in May 2021 were 87,545, up from 9,444 a year ago. Net mortgage borrowing rebounded to £6.6bn in May from £3bn in April but remained below the record £11.4bn in March. From tomorrow, stamp duty kicks back in above £250,000 and is set to revert back to normal rates from 1st October.
The Public Accounts Committee is calling on the Treasury to set out new transparency guidance for government support in the next six months, repeating earlier warnings that fraud and error in government Covid schemes may have cost taxpayers billions of pounds, and that data issued so far had "insufficient detail to allow for public scrutiny". Specifically, the Committee wants firms benefitting from furlough cash to have their names published, to give an opportunity for whistle-blowers to report fraud. HM Revenue and Customs (HMRC) says it will not have a statistically valid estimate of how much fraud and error there was in the furlough scheme until December this year, 22 months after the scheme began. The Department for Business has said the Bounce Back Loan Scheme could cost the taxpayer £27bn in fraud or credit losses, estimating that between 35% and 60% of loans might not be repaid.
The Home Affairs Committee is asking the government to consult on a standalone law that would make it a criminal offence to assault retail workers in England and Wales. The report from MPs cites a survey of shop workers conducted by the Association of Convenience Stores, which found that only one in five who reported incidents "were satisfied with the response from the police". "When the police fail to attend or follow-up serious incidents, it undermines trust and confidence in them, discourages reporting, and weakens the deterrent for repeat offenders," the report said.
Shop prices fell in the first week of June according to the British Retail Consortium (BRC)-NielsenIQ shop price index, with fresh food prices falling for the seventh consecutive month in a row. However, Helen Dickinson, BRC CEO, said the fall in food prices would not last as retailers’ costs were continuing to mount. She cited global food price increases, Brexit red-tape, Covid-19 related supply chain disruption, raw commodity shortages and increased shipping and petrol costs as the reasons.
Lord Bilimoria, the President of the CBI, said in a speech to the Recruitment and Employment Confederation yesterday that industries from haulage to hospitality are facing a "perfect storm" of issues creating staff shortages. He cited the departure of overseas workers during the pandemic who have not since returned as one of the factors causing headaches for employers, along with the success of the "lifeline" furlough scheme which, in continuing to pay temporarily laid-off workers, has reduced the pool of labour from which to recruit. Bilimoria said the government should update the "shortage occupation list" which makes it easier to hire skilled workers from overseas where roles are hard to fill from the UK workforce.
Collapsed London Capital & Finance plc (LCF) investors have submitted a new complaint about the Financial Conduct Authority (FCA) to the Independent Financial Regulators Complaints Commissioner. The complaint details alleged avoidance of compensation claims for victims of financial crime, according to Yahoo Finance UK. The pro-bono lawyers representing the 1000 or so investors, Shearman & Sterling, said the new complaint relates to the FCA’s refusal to offer compensation for its regulatory failures. The FCA received repeated warnings and tip-offs about LCF but failed to intervene. An independent judicial report into the demise of LCF criticised Andrew Bailey, now governor of the Bank of England for his slowness in acting to protect savers and a report released by the Treasury Committee last week called for sweeping culture changes at the FCA to prevent a repeat of the scandal.
Stellantis, the parent company of Vauxhall, Peugeot and Fiat has told Sky News that the government must back its commitment to electric vehicles with financial support for new battery gigafactories and manufacturers considering where to build the next generation of cars and vans. Stellantis is currently in talks with ministers over whether to commit to building a new electric vehicle at its Ellesmere Port plant and is seeking incentives to commit to replacing the current petrol and diesel Vauxhall Astra model with an electric vehicle, possibly its Vivaro-e model. Earlier this month, Business Secretary Kwasi Kwarteng described talks as "very positive" but Alison Jones, Stellantis' UK group managing director, told the broadcaster no decision had yet been made. She called on the government to make good on its rhetoric and back electric vehicle production in the UK, which lags behind competitors in Europe.
EasyJet boss Johan Lundgren is urging the government to further relax Covid restrictions on European travel. "Clearly with the successful rollout for the vaccination, we believe that much of European travel could be opening up in a safe way," he said. "This is not about approaching this from zero-Covid perspective, this is about managing a risk, not zero risk…We're frustrated about this because it's not justified when you look at it from a medical data, scientific approach. They are opening up the UK economy domestically with a different lens than they're looking at it from an international travel point of view."
JCB is looking to hire 500 new shop floor employees - on top of the 850 shop floor jobs already created so far in 2021 - at its 11 plants in Staffordshire, Derbyshire and Wrexham. The firm is also offering an additional 300 agency employees permanent JCB contracts to bring the total number of agency shop floor employees given permanent jobs this year to 1,000.
Workspace provider IWG has reportedly been in talks with New York-based private equity firm CC Capital about a possible £4bn takeover. According to Sky News, CC Capital has held talks with IWG about a prospective bid in the last month and has enlisted financial advisors to work on a prospective bid. IWG trades under the brands Regus, Spaces and The Clubhouse. The company declined to comment on the story.
UK-based space start-up OneWeb has received a cash injection of $500m (£361m) from Indian firm Bharti Global, meaning Bharti will now take a 39% stake and become the biggest shareholder in the satellite provider. The UK government is also a major shareholder after it and Bharti put in $1bn to buy OneWeb out of bankruptcy last year.
Collapsed London Capital & Finance plc (LCF) investors have submitted a new complaint about the Financial Conduct Authority (FCA) to the Independent Financial Regulators Complaints Commissioner. The complaint details alleged avoidance of compensation claims for victims of financial crime, according to Yahoo Finance UK. The pro-bono lawyers representing the 1000 or so investors, Shearman & Sterling, said the new complaint relates to the FCA’s refusal to offer compensation for its regulatory failures. The FCA received repeated warnings and tip-offs about LCF but failed to intervene. An independent judicial report into the demise of LCF criticised Andrew Bailey, now governor of the Bank of England for his slowness in acting to protect savers and a report released by the Treasury Committee last week called for sweeping culture changes at the FCA to prevent a repeat of the scandal.
Kim Kardashian West has announced her shapewear company Skims is the official designer of the underwear for female members of Team USA at the Olympics. In messages on social media, she said the company would design the team's underwear, pyjamas and loungewear. Earlier this year, the reality TV star was added to the Forbes billionaire list. She filed for divorce from rapper Kanye West in February.
A Shropshire man who won a Brewdog £15,000 "solid gold" beer can has complained to the advertising watchdog after being told it is in fact worth only £500. The Scottish brewery hid 10 gold cans in cases of its beer, each with the label: 'you've won a £15k 24 carat gold Hazy Jane can'. Sales manager Adam Dean said that once he’d got over the shock of winning, he sought to get the can covered on his house insurance, hence he approached a jewellery expert who said it wasn’t solid gold, but 24-carat gold plated brass. He said the ASA had told him it will "assess his concerns". A company spokesperson for Brewdog told the BBC the firm stands by the valuation, saying the use of the term "solid gold" was a mistake, but it stood by its £15,000 claim, saying the estimate was made up of more than just the metal used.
The boss of public relations firm Teneo has quit after being accused of drunken misbehaviour at a charity party. Declan Kelly said he was stepping down as chairman and chief executive after what he called "an inadvertent, public and embarrassing mistake" which is believed to have involved touching a number of women inappropriately without their consent. Teneo has appointed the firm's co-founder and chief operating officer, Paul Keary, as its new chief executive with immediate effect.
The European Commission has opened an investigation into International Airlines Group's (IAG) planned purchase of Spain's Air Europa amid concerns the takeover would negatively affect competition on domestic, short-haul and long-haul routes to and from Spain and lead to higher prices and reduced quality for travellers. The Commission said in a statement that although the financial situation of many airlines is still fragile, it was important recovery took place in a competitive environment which preserved choice. IAG, which owns British Airways and Iberia, agreed to buy Air Europa for €500m in January, after the pandemic cut the initial price in half and IAG struck a deal to defer payments for six years.
The US Food and Drug Administration (FDA) is forcing Johnson & Johnson to throw away 60 million doses of its covid-19 vaccine, in addition to the 15 million the pharma giant was obliged to ditch earlier in the year. A contamination issue at a production site in Baltimore back in April is the reason for the move: the FDA closed the plant following a highly critical report detailing many instances of potential contamination and poor practice. The FDA is allowing J&J to release 10 million doses of the vaccine but will not issue a guarantee they have not been contaminated.
Reuters reports anonymous sources within Royal Dutch Shell and Renault who claim the two companies are among those interested in taking a stake in electric vehicle (EV) charging group Ionity, whose owners include Volkswagen, Daimler, BMW and Ford. Final bids for a 20%-25% stake, in Ionity are due in July. Yahoo Finance reports that for Shell, a stake in Ionity would further its plans to establish itself as a major player in Europe's future EV charging network and pivot from its oil and gas business. In 2017, Shell and Ionity signed an agreement to build fast-charging points in 10 European countries. Shell also owns European EV charging provider NewMotion. None of the companies named in the reports would comment.
US carrier United Airlines has ordered 270 more planes, the largest combined order in its history, and expects to create around 25,000 new jobs as a result of the order by 2026. The airline has ordered 200 Boeing 737 Max and 70 Airbus A321 neo planes. Reuters estimates the value of the order to be around $30bn, although such large deals are normally heavily discounted. Under an expansion plan dubbed United Next, the Chicago-based airline also intends to retrofit all its remaining mainline, narrow-body fleet, to include more first-class and premium economy seats, along with improvements in in-seat entertainment and overhead storage.
The stock market value of Facebook has topped $1 trillion for the first time after the tech giant won a court victory against US regulators, the BBC reports. A federal court dismissed two lawsuits, from the Federal Trade Commission (FTC) and a coalition of states, sending Facebook shares up 4.2%, and making it the last of the "big five" tech firms to hit the milestone. Facebook stood accused of stifling competition but Judge James Boasberg ruled that the FTC's anti-trust complaint against the social networking giant was too vague. Another separate anti-competition lawsuit filed by a group of 46 states was thrown out because the alleged violations occurred too long ago.
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