Published: 14 October 2021
Location: London, UK
Brexit: The EU has finally acknowledged that the Northern Ireland Protocol, which keeps Northern Ireland in the EU's single market for goods but means products arriving from Britain face checks and controls, has caused difficulties for Northern Ireland businesses. It has proposed "a different model" which it says would remove about 80% of spot checks and cut customs paperwork by 50%. The BBC says the key changes include:
- Most food products will not need to be physically checked when arriving into Northern Ireland from Great Britain.
- A cut to the required administration for Northern Ireland importers.
- Expanded trusted trader arrangements meaning more products and companies are exempt from customs tariffs.
- Change to current laws to ensure no disruption to moving medicines across the Irish Sea.
- Improved engagement with stakeholders in Northern Ireland including politicians and business groups.
The move follows a speech by Brexit Minister David Frost in Lisbon, Portugal, on Tuesday, in which he outlined fresh proposals and warned the UK was still prepared to trigger Article 16 - which allows either side to effectively override large parts of the agreement - if the EU and UK could not agree on changes. The government said it is studying the detail of the EU's proposals. (Political Insight Founding Director Stewart Jackson has written on this subject for the Telegraph. See:
The NHS Covid Pass, used to show a person's vaccine status for travel and events, stopped working for three hours yesterday, leaving some travellers stranded at airports. They were unable to fly as they could not prove their vaccination status and, because of new rules introduced on October 4th, had not taken a PCR test, which is still required of unvaccinated people, to get on board. Journalist Caroline Frost was among those affected, tweeting that “it was going to be an interesting afternoon at Heathrow.” Later she tweeted that she was "kindly offered a later flight for £250 and an express PCR test at Heathrow for £119 - not happening."
Two more energy suppliers announced they had ceased trading last night. Ofgem later confirmed that Pure Planet and Colorado Energy would be allocated a new supplier in the coming days. BP-backed Pure Planet, which has 235,000 households on its books, ran into difficulty when the energy giant refused additional funding. Colorado Energy had 15,000 customers. Their demise means 14 small suppliers have collapsed this year, 11 of them in the past six weeks, as the sector is hit by surging wholesale gas prices, which hit record highs last week and remain several times above typical levels. Sky News Business reporter James Sillars said of the collapsed firms: “They have been hurt by business models that expose them to near-term delivery contracts for raw energy, which have shot up - by more than 500% at one stage this year - because of a range of pressures on supply Europe-wide.”
CNG group, a commercial energy supplier backed by Glencore, the FTSE-100commodities trading giant, is seeking offers for the arm of its operations which directly supplies more than 40,000 small and medium-sized businesses by the end of the week. News of the bid deadline comes as CNG prepares to withdraw from the gas wholesale market, having told its commercial customers on Wednesday that it would no longer facilitate the supply of gas to them. Sources told Sky News that CNG was working with legal and accounting advisers to prepare the wholesale business for an insolvency process.
The energy crisis has led Centrica, the owner of the UK’s largest energy supplier, British Gas, to postpone a key investor event. The FTSE 250 energy group had been due to hold a capital markets day - an event when managers can meet shareholders and analysts and set out strategy - on 16 November, but the firm cancelled, citing the "unprecedented commodity price environment".
Supermarket chain Asda has told the BBC it has not had any petrol supply issues for a week. Morrisons said it had "good levels of supply".
The Bank of England’s (BoE) deputy governor for financial systems, Jon Cunliffe, said yesterday that the bank has "growing concerns" about investor protection, law enforcement and market integrity in relation to the burgeoning use of crypto assets in the UK, concluding that regulation of digital assets needs to be "pursued as a matter of urgency". Speaking at SWIFT's SIBOS 2021 conference, he said: "Risks in these areas are not the direct responsibility of financial stability authorities and do not normally pose risks to the financial system as a whole, but they can be a trigger for destabilising market corrections," which could lead to a damaging loss of confidence in the financial system as a whole. Crypto assets have grown by roughly 200% in 2021, from just under $800bn to $2.3tn today. They were worth just $16bn five years ago. The global financial system is worth $250tn. "As the financial crisis showed us, you don’t have to account for a large proportion of the financial sector to trigger financial stability problems — sub-prime was valued at around $1.2tn in 2008," said Cunliffe. At the same event, the BoE fintech lead Tom Mutton stressed the bank was keeping an "open mind" on the rollout of a digital pound as it explores a central bank digital currency (CBDC), but that hasty implementation could lead to "bad outcomes".
The Confederation of British Industry (CBI), together with 41 other trade associations including the British Retail Consortium, UKHospitality and the Society for Motor Manufacturers and Traders, has called on the chancellor to reform the current business rates system. A joint statement said action from Rishi Sunak at this month’s budget was “essential for green investment”. Up to 50% of business investment is potentially subject to business rates, meaning the current scheme actively dis-incentivises funding in decarbonisation and wider investments. “If a business invests in solar panels, or other plants & machinery to improve their property, this increases their rates bill,” the letter said. “As these investments take several years to yield a return, the immediate increase in rates often makes the investments unviable…if we as a country are to truly level up and meet our net zero commitments, leading by example in the year we host COP26, then unleashing a wave of business investment should be the focus”. The letter also called the business rates system “uncompetitive, unproductive and unfair”, saying UK property tax levels are four times higher than Germany’s, and 50% higher than the G7 average, as a proportion of GDP. Together, the groups signing the letter represent around 261,000 businesses and 9 million employees.
The Financial Reporting Council (FRC), the UK’s accounting watchdog, says accountancy firm KPMG guilty mounted an untruthful defence and withheld evidence from regulators as it tried to cut a fine for misconduct during the sale of bed maker Silentnight. In August, KPMG was fined £13m and ordered to pay more than £2.75m in costs after being found guilty of a conflict of interest after acting as adviser to both Silentnight and US private equity company HIG Capital which was trying to buy the British firm. Partner David Costley-Woodwas fined £500,000 and banned from working as an accountant or holding a solvency licence for 13 years. "For the first time, the tribunal has held that a respondent advanced an untruthful defence," the FRC said in a statement. KPMG chief executive Jon Holt said: "We no longer provide insolvency services and we have improved our broader controls and processes significantly since this work was performed in 2010. We will reflect on the tribunal's findings carefully and ensure that we learn lessons to reinforce our focus on building trust and delivering work of the highest quality." Meanwhile, KPMG is also being investigated by the FRC for its role in auditing collapsed builder Carillion.
Trading at pub group Marston’s has rebounded above levels seen before the onset of the covid pandemic, PA Media reports. The firm said like-for-like sales in the quarter from July 25 to October 2 were 2% higher than those seen in 2019 across its estate of around 1,500 pubs. However, Marston’s update for overall trading in the full year to October 2 revealed the impact of earlier lockdown closures, with total pub sales of £402 million down 22% on the previous year. Boss Andrew Andrea also said the chain was forced to take chicken pies off its menus last month after carbon dioxide shortages hit the meat industry. "There were a couple of days where we had an issue with chicken pie supply,” he said. “We had a bit of a shortage. We didn't run out of pies altogether, but we had to source alternatives and offer people alternatives." Poultry processors need CO2 shortages to stun birds before they are slaughtered.
Bath-based Horstman has secured a multi-million-pound export order for its Hydrostrut suspension units from a consortium that makes the German Army’s Puma infantry fighting vehicle
The value of British homes has gone up by £1.6tn over the past five years, according to online agency Zoopla. Almost 12 million homes increased in value by the national average of £49,000 or more in this time, but £550bn of the increase has been in the last 12 months alone, driven by soaring buyer demand and a pandemic-led "search for space". Zoopla’s report said the open market value of Britain’s homes now totals £9.2tn, four times the UK’s GDP, and more than four times the value of all companies listed in the FTSE 100. The majority of this, some £8bn, is held within 23.5 million privately-owned homes, while a further £1tn is held within five million social homes.
A report by Rightmove concludes that high demand for rental properties has led to rents outside London rising at the fastest rate ever recorded by the property website, up by 8.6% on a year ago. In Bristol, Nottingham and Glasgow, rents are now over 10% higher than pre-pandemic level and in London rents are up annually by 2.7% for the first time since the pandemic started. Richard Davies, head of lettings estate agent Chestertons told Yahoo Finance UK: "The race to find a rental property in the capital is set to become more competitive, putting landlords firmly in the driving seat of price negotiations. With demand outstripping supply, rents are now starting to increase and — if limited availability of rental properties continues — it won’t be long before rents return to 2019 levels.”
Troubled Chinese property developer Evergrande has missed another round of bond payments. The heavily-indebted group was due to make interest payments totalling $148m by midday in Hong Kong on Tuesday but according to multiple media reports, including the Financial Times and Reuters, a number of bondholders said they had not received any funds. Evergrande has so far not commented. Russ Mould, investment director at AJ Bell, said the failure to pay “knocked investor confidence once again, leading to a 1.7% drop in the Hang Seng Index in Hong Kong, with financials, technology and healthcare among the worst performing sectors."
Hollywood actor William Shatner has become the oldest person to go to space. The 90-year-old, who played Captain James T Kirk in the Star Trekfilms and TV series, blasted off aboard Amazon founder Jeff Bezos’ Blue Origin sub-orbital capsule. The trip lasted about 10 minutes and landed safely. "Everybody in the world needs to do this," the Canadian actor told Bezos after landing back on Earth. "It was unbelievable."
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