Published: 19 October 2021
Location: London, UK
By Suzanne Evans, Director, Political Insight
Prime Minister Boris Johnson is set to announce 18 new foreign investment deals worth £9.7bn when he opens the Global Investment Summit today. The deals, in low-carbon sectors, will create about 30,000 jobs, the government says. They include investments in sectors such as wind and hydrogen energy, sustainable homes and carbon capture and include investments from companies such as Spanish energy firm Iberdrola, logistics firm Prologis and grocery service Getir.
Some large businesses will have to start disclosing their environmental impact under new rules set to be brought in by the Treasury, the BBC reports. The requirements will also apply to investment products and pension schemes. The Treasury said the new sustainability disclosure requirements mean an investment product will now have to set out the environmental impact of the activities it finances. In addition, a company's sustainability claims will have to be justified "clearly", and net zero transition plans properly set out to combat "greenwashing", where firms make misleading claims about their environmental commitments. Prime Minister Boris Johnson has pledged to cut emissions by 78% by 2035 compared with 1990 levels but is not on target to meet this goal.
The Heat and Building Strategy, a blueprint to reduce Britain's carbon emissions to put the country on the path to be net zero by 2050, will be released by government later today. However, an advance copy of the document, unveiled by Sky News, has sparked an outcry as it reveals mortgage companies are to be incentivised to focus their lending on properties that have higher energy ratings. The fear is some home buyers will then struggle to find a mortgage. UK Finance, which represents banks and other mortgage lenders, says the "unintended consequences” of the proposals “might trap some homeowners in negative equity if properties could not be cost-effectively improved" and "create a two-tier market where borrowers pay more but have less choice". Mortgage brokers are also warning the policy will push up the cost of moving house.
Business Secretary Kwasi Kwarteng has intervened in the planned £6.3bn takeover of Meggitt by US firm Parker Hannifin. His decision to issue a public interest intervention notice into deal last night comes after increased concern from MPs that the Meggitt takeover will put national security at risk because the company makes brakes used on more than 70,000 civil and military aircraft. Tobias Ellwood, chairman of the Commons defence select committee, had urged the Government to take "golden shares" in companies such as Meggitt to protect them from foreign takeovers. Kwarteng’s intervention means the Competition and Markets Authority (CMA) will now have until March to investigate whether the sale does indeed put national security at risk and, if so, then the Business Secretary could be able to block the deal using powers under the Enterprise Act. A few months ago, Kwarteng made a similar intervention in the takeover of another defence company, Ultra Electronics, by Cobham, a British defence company owned by US firm Advent International. Ultra supplies equipment such as sonar kit to the Royal Navy and the CMA is probing the £2.6bn deal.
The Competition and Markets Authority (CMA) has launched court action against Teletext Holidays over inadequate progress on refunds to package holiday customers affected by the pandemic. In May, Truly Holdings, the operator of Teletext Holiday, and sister company Alpharooms.com agreed to refund package holiday customers for trips cancelled during the pandemic. However, after reviewing progress on repayments, the CMA has concluded that not enough has been done enough to provide refunds to customers, nor to comply with the law that refunds due must be paid within 14 days. CMA chief executive Andrea Coscelli said: "Companies must abide by consumer protection law and treat their customers fairly…we are now requesting a court order to make sure that the company immediately pays back the money it still owes to customers and refunds people within 14 days, going forward”.
The £750 million sale of Asda’s petrol forecourt business by EG Group,arranged to appease concerns raised by the Competition and Markets Authority in its probe of the brothers' £6.8bn purchase of the supermarket chain towards the end of 2020, is off. Both Asda and EG are owned by Zuber and Mohsin Issa and backed by private equity outfit TDR Capital. A statement released by the two firms said changes in the financials of the proposed deal were revealed when new information came to light when competition law restrictions were lifted in June. "As a result, EG and Asda have decided they will no longer proceed with the transaction, and it was terminated as of October 18, 2021," the two firms said in a statement.
Goto Energy has become the 13th energy firm to cease trading since September, amid surging wholesale gas prices, regulator Ofgem has said. The company's 22,000 gas and electricity customers will be transferred to a new supplier and funds that they have paid into their accounts will be protected.
Britain's energy market regulator, Ofgem, has appointed Royal Dutch Shell'spower retail business Shell Energy to take on customers of Pure Planet Limited, Daligas Limited and Colorado Energy Limited. The three firms had a combined total of around 252,000 domestic and 600 non-domestic customers before they ceased trading last week.
Amazon is offering joining bonuses of up to £3,000 in areas experiencing labour shortages, to attract 20,000 workers ahead of the Christmas rush. Recruits in Peterborough and Southampton areas are likely to get the highest ‘golden hellos’ of £3,000. Those able to work in Northampton, Leicester and Weybridge, Surrey are being offered £2,000, while signing-up bonuses of £1,500 are available for seasonal warehouse operative positions in Bristol, Swindon, Doncaster, Edinburgh, and Amazon's biggest UK warehouse in Dunfermline in Fife, Scotland. Other sites are offering bonuses from £1,000 upwards.
Asda has announced plans to recruit 15,000 extra Christmas staff. Most will be based in-store, however the supermarket also needs 500 workers for its depots and 1,500 people for home delivery over the festive period. A spokesman for the supermarket said he was confident staff would be found as the number sought "is comparable with the figure we have recruited in prior years". He added the role would appeal to students and people with children, as many of the jobs offer flexible hours.
Tesco has announced a £500m share buyback scheme following positive financial results earlier this month, when the retailer said it could afford to start the scheme. At the time, Tesco's CEO said share buybacks were a way to fend off private equity advances that have become a feature of the supermarket sector. Citigroup will carry out the buyback on Tesco’s behalf.
Tesco is opening its first checkout-free store in central London today. The branch in High Holborn had been converted to allow customers to shop and pay without scanning a product or using a checkout. The new format, known as GetGo, follows similar stores opened by Amazon, the BBC says. Customers with the Tesco.com app can simply pick up the groceries they need and walk straight out again, as "a combination of cameras and weight sensors" tracks what customers have selected and then charges them through the app when they leave the supermarket. The technology is provided by Israeli tech start-up Trigo, which has similar partnerships with supermarkets in Germany and the Netherlands. Previously, some of Tesco's staff have been able to use the system in it Welwyn Garden City HQ store, but this is the first time it has been available to customers.
Morrison’s shareholders are expected to rubber-stamp a £7 billion takeover by US private equity firm Clayton, Dubilier & Rice (CD&R) today. CD&R, which has former Tesco boss Terry Leahy as a senior adviser, won an auction for Morrisons on Oct. 2, bidding a penny a share more than a consortium led by Softbank owned Fortress Investment Group. Investor approval for the deal will conclude the six-month battle to buy Britain's fourth-largest supermarket.
The Hut Group's (HG) founder and CEO Matthew Moulding has said he will give up his "golden" share of the company to help regain investor confidence. HG’s share price has plummeted in recent weeks amid questions around the company's profitability, share structure and valuation. The company's stock headed more than 15% higher by yesterday afternoon in London following the announcement. A golden share is when one person or entity has control of at least 51% of the voting rights. By giving up his up, Moulding also allows HG to become eligible for a FTSE 100 listing on the London Stock Exchange, which now looks likely in 2022.
Digital savings app Chip, which allows users to vote on changes and products they would like to see, has closed a record breaking £11.5 million crowdfunder which attracted 12,954 investors. It is the biggest equity crowdfund of the year so far, and the biggest equity crowdfund held on Crowdcube of all time. Chip raised its first £1m in under 10 minutes and hit £8.6 million in under 48 hours. "This is a huge validation of the strong position Chip is in, and our ambitions to build the next fintech unicorn," says founder and CEO Simon Rabin. Rabin wants to build a new app which acts as a global challenger bank, to capitalise on the huge untapped potential of people's savings. Chip currently offers banking services through a partnership with Clearbank and is the only non-bank that offers accounts protected by The Financial Services Compensation Scheme. Rabin also says that the next savings offerings could include cryptocurrency products, as interest in decentralised finance grows.
UK property prices jumped 1.8% in October, rising an average £5,983 more than the previous year.
According to Rightmove's monthly house price index, the price bump was the biggest rise at this time of year since October 2015. Tim Bannister, Rightmove’s director of property data, also called a ‘full house’ on the statistics, meaning there were price records broken in all regions of the UK and in all property market sectors (first-time buyer, second stepper and top of the ladder). “This ‘full house’ is an extremely rare event,” Bannister said.
As 30,000 people prepare to descent on Glasgow for the COP26 climate change conference, it has been revealed that a shortfall in the amount of accommodation required means some attendees may have to pay more than £30,000 to stay in the city for the duration of the event, which runs from October 21st to November 12th. The cost of a room in Glasgow has skyrocketed, prompting locals to open their homes and cash in. Nightly prices have risen to an average of more than £600 with some properties even listed for as much as £20,000 per night. Now the fervour has spread to Edinburgh, s 40 miles east of Glasgow, as summit attendees try to shield their wallets by going further afield. An examination of prices by the Telegraph reveals many will be left disappointed, however. On Monday the average price of an Edinburgh room on Airbnb was £315. Some hosts were charging more than £3,000 per night, or £36,000 for the whole conference.
Did Amazon executives, including founder Jeff Bezos, mislead or lie to the US Congress about the firm's business practices? Members of the House Judiciary Committee say they are considering referring the firm "for criminal investigation" following a Reuters investigation that claimed Amazon copied products and rigged its search results in India to boost sales of its own brands. If true, this could contradict the sworn testimony of Bezos ad other Amazon representations. Amazon strongly denies the allegations.
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