Eight Conservative MPs will fight it out to succeed Boris Johnson

By Suzanne Evans, Director, Political Insight

Eight Conservative MPs will fight it out to succeed Boris Johnson as Conservative party leader and Prime Minister after winning enough nominations from their colleagues to go through to the first round of voting on Wednesday. The candidates who managed to receive the backing of at least 20 of their fellow MPs are Kemi Badenoch, Suella Braverman, Jeremy Hunt, Penny Mordaunt, Rishi Sunak, Tom Tugendhat, Liz Truss and Nadhim Zahawi.
 
The candidates to be the UK's next prime minister should focus on growth and an overhaul of the tax system over quick cuts, Confederation of British Industry Director General Tony Danker has said in an open letter. Promises of tax reductions feature heavily in the leadership campaigns, but these could fuel inflation further, he wrote, calling instead for "serious, credible and bold plans for growth". "Growth that relies on only government or household consumption is doomed to fail, especially at a time of rising inflation and high debt," he added, saying: "Sustainable economic growth must be at the heart of your manifestos...Without it, leadership ambitions cannot be met nor those of the British people and businesses."  Danker also said that while the corporation tax hike should be "revisited" given the wider weakening economy, leadership candidates should look at the UK's entire business tax regime as a whole.
 
Britain's economy grew 0.5% in May, up from April when GDP declined 0.3%. The bounce back was seen across all sectors according to the Office for National Statistics (ONS), although health and social work activity was the main contributor to growth – seeing a 2.1% leap – mostly because of a "large rise in GP appointments,” which offset the scaling down of the NHS test and trace and COVID vaccination programmes, it said. Construction grew by 1.5% in the month, following a 0.4% decline in April. Production rose 0.9%, driven by growth of 1.4% in manufacturing and 0.3% in electricity, gas, steam and air conditioning supply. Economists had predicted the economy to stagnate. However, the ONS also cited price increases in nickel, cobalt, aluminium, steel, paper, fish and cooking oil, as well as increases in fuel and electricitycosts, which had forced businesses to push up prices. Chancellor Nadhim Zahawi said in a statement it was "great" to see the economy growing but added that he knew people were "concerned" by rising prices. "We're working alongside the Bank of England to bear down on inflation and I am confident we can create a stronger economy for everyone across the UK," he said.
 
The Bank of England (BoE) will bring inflation back down to its 2% target, Governor Andrew Bailey said yesterday in a speech hosted by OMFIF, a central banking think tank. “The [Monetary Policy] Committee (MPC) will be particularly alert to indications of more persistent inflationary pressures, and will, if necessary, act forcefully in response. Bringing inflation back down to the 2% target sustainably is our job, no ifs or buts”, he said Inflation, which hit a 40-year high of 9.1% in May, is expected to hit 11% this autumn. The BoE has increased interest rates for a record fifth time in a row in seven months and is expected to do so again at the next MPC meeting. However, Bailey also suggested that low interest rates will return once the effects of Covid and the war in Ukraine fade.
 
A report from the Resolution Foundation (RF) claims families in the UK are £8,800 poorer because of Britain's low growth and high inequality. The "toxic combination" has had "disastrous consequences for low-and middle-income households," it says. The Stagnation Nation report, funded by the Nuffield Foundation, makes the claim based on a comparison with the economies of Australia, Canada, France, Germany and the Netherlands. Having almost caught up with the economies of France and Germany from the 1990s to the mid-2000s, the UK’s productivity gap with these countries has nearly tripled since 2008 from 6% to 16%, the RF says, the equivalent to an extra £3,700 in lost output per person. According to report if the UK, compared to Australia, Canada, France, Germany and the Netherlands, had the average income and inequality levels of these countries, typical household incomes in Britain would be a third higher – equivalent to £8,800 per household – and those of the poorest households 40% greater.
 
Oil prices fell yesterday after the International Energy Agency (IEA) warned that the worst of the energy crisis is yet to come. IEA executive director Fatih Birol said countries were experiencing the first global energy crisis, warning "We might not have seen the worst of it yet". Brent crude fell 4.2% to trade at $102.59 (£86.67) a barrel, while West Texas Intermediate was 4.4% down to $99.50. US president Joe Biden is currently in Saudi Arabia to complement his lobbying of the Organisation of Petroleum Exporting Countries and its allies in an attempt to get them to pump out more oil in an effort to tame surging energy prices. Only two cartel members, Saudi Arabia and the United Arab Emirates, have the spare capacity to offset the potential market shortfall, Yahoo Finance reports. Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said: "Higher oil prices have boosted Gulf economies, with Saudi Arabia’s GDP surging by 9.9% in the first quarter. So there is likely to still be reticence about turning on the taps too freely, particularly given the country is already believed to be operating near the limits of its capacity.’’
 
Heathrow Airport has told airlines to stop selling summer tickets because it is going to limit the number of passengers who can depart each day over the peak summer months to 100,000, 4,000 fewer than currently scheduled. This cap on passenger numbers will be in place from now until 11 September, the BBC reports. Consumer group Which? urged Heathrow to clarify which flights would be cancelled as a result of this latest announcement. "While this cap may ease the unacceptable chaos passengers are facing at the UK's biggest airport, thousands of people will now be worrying about whether their flight or holiday plans are about to fall apart," said Guy Hobbs, acting editor of Which? Travel. "Heathrow must work with airlines to quickly provide clarity on which flights are being cut, and airlines need to be upfront with those passengers affected about their right to be rebooked at the earliest opportunity, including on services from other airlines." A Heathrow spokesperson said it would take "a couple of days" for airlines to work with the scheduling company, Airport Coordination Limited, to decide what changes would be needed.
 
Network Rail (NR) has made workers a fresh pay offer in an attempt to break the deadlock with unions in a row over pay, jobs, and conditions, which led to national strike action last month. NR said the offer was worth more than 5% but depended on workers accepting "modernising reforms". All union members were being offered more than 5%, and the lowest paid would be getting a more than 10% pay rise, a spokesman told the BBC. NR is also promising that there will be no compulsory redundancies for two years and employees and their immediate families would get 75% off rail travel. The RMT union, however, said the offer was a real terms pay cut and would mean cutting a third of front-line maintenance roles.
 
Sheffield Forgemasters (SF) has submitted a full planning application to Sheffield City Council which, if passed, will allow it to build a new large forging press at its site on Brightside Lane. SF wants to construct a new 144,000 sq ft structure that will include offices and a water pumping station, and a new 13,000-tonne forging press capable of pressing larger ingots. SF says that in the immediate term, the development will deliver significant investment in the local economy and secure over 600 skilled jobs while laying the foundation for future investment to further modernise SF’s facilities. The firm currently employs more than 600 staff in the city, including about 100 graduates and 60 apprentices. The company was acquired by the Ministry of Defence(MoD) last year.
 
London-listed outsourcer Serco has appointed Tom Watson as CEO of its North American division, succeeding Dave Dacquino, who will continue to serve as non-executive chair of the company's board of directors. Watson joined Serco in April 2018 and has more than 25 years of experience in providing services to the US Federal Government. Prior to joining Serco, he served as senior vice president and general manager of SAIC's Navy and Marine Corps Customer Group.
 
Property developer Countryside Partnerships said this morning that its Chairman John Martin had resigned from all his roles at the company with immediate effect. Senior independent director Douglas Hurt will take over as chairman, while Amanda Burton will replace Hurt, also effective immediately.
 
The French government is considering spending potentially up to €10bn to take energy giant Electricite de France (EDF) private, Reuters said yesterday. EDF is one of the UK's biggest energy suppliers. It has a portfolio of 36 wind farms in the UK and is developing the Hinkley Point and Sizewell nuclear sites.
 
North Sea specialist Serica Energy has rejected a £1bn takeover approach from smaller rival Kistos, an AIM-listed energy investor, it was confirmed yesterday.
 
United Utilities has agreed to sell its portfolio of renewable energy assets in a £100m deal. The blue chip utility is selling its dedicated renewable energy unit, United Utilities Renewable Energy, to SDCL Energy Efficiency Income Trust, a listed trust managed by investment firm Sustainable Development Capital.
 
Shares in Petropavlovsk were suspended on Tuesday after the indebted gold miner went into administration. The Russian firm, which is based in Moscow and listed in London, has appointed Opus Business Advisory Group as administrator, and will seek a hearing at the High Court "in the coming days," Sharecast News reports. Petropavlovsk was dealt a severe blow after the UK imposed sanctions on Gazprombank, its main lender, in response to Russia's invasion of Ukraine. The bank demanded the immediate repayment of a $201m loan in April, before assigning the rights to the debt to Russian metal producer UMMC-Invest. Petropavlovsk remains unable to repay the loan and said it was "very unlikely" that it would be able to refinance it in the short term "and has to date been unable to do so". It also has $304m of principal outstanding on a bond which is due in December. In a statement due to be filed with the High Court, the firm stated that as at 30 June, it had assets amounting to around $1.62bn and liabilities, including contingent and prospective liabilities, of $1.7bn.
 
Mercedes-Benz was in court yesterday, facing a class action lawsuit alleging that the German carmaker knowingly manipulated diesel-emissions tests by installing defeat devices. Reuters reports that Germany's largest consumer protection group, the VZBZ, accused the carmaker of installing devices in nearly 50,000 GLK and GLC SUV models that in tests made it appear the vehicles produced lower pollutant levels than they actually did in traffic. The lawsuit seeks to set a precedent that would enable owners of Mercedes GLC and GLK cars to gain compensation for software that was allegedly used to trick emissions tests. Mercedes-Benz says the claims are unfounded. Over 25,000 such claims have been brought before courts, 95% of which have failed, it said. The matter is part of the wider 'Dieselgate' emissions scandal that has cost rival Volkswagen billions of euros in vehicle refits, fines and legal costs.
 
Fashion firm Boohoo has become the latest retailer to charge shoppers who return items, the BBC reports. Customers must now pay £1.99 to return products, with the cost deducted from their refund. The move, first reported by Retail Week, came into effect on 4 July. Boohoo blamed the move on the rising cost of shipping. High Street firms such as Uniqlo, Next and Zara already charge for online returns and other retailers are likely to follow suit.
 
Danish toymaker Lego says it will stop operating in Russia indefinitely due to "continued extensive disruption". Lego stopped delivering products to Russia in March following the invasion of Ukraine, but its shops remained open as most rival retailers pulled out, the BBC says. The firm now says it is ending its partnership with Inventive Retail Group which runs 81 shops on Lego's behalf. Lego did not mention Russia's invasion of Ukraine for pulling out of Russia.
 
Qantas airline has removed the requirement for international passengers to be vaccinated against COVID-19 effective from next Tuesday. The move follows the Australian Government removing the proof of Covid vaccination requirement for international travellers coming to Australia. However, Qantas Group employees will “still need to be fully vaccinated against COVID-19 in line with Qantas Group policy,” the airlines statement said, and “masks will continue to be required where government regulations stipulate they must be worn, including on board domestic flights in Australia.”
 
As predicted, Twitter is suing billionaire Elon Musk to try to force him to buy the social media firm. The legal battle with the world's richest man comes after Musk announced he was walking away from his proposed $44bn takeover deal on Friday, saying Twitter had repeatedly failed to provide information about the number of fake and spam accounts on the platform. Now Twitter has asked a Delaware court to order Musk to complete the merger at the agreed $54.20 per Twitter share. "Having mounted a public spectacle to put Twitter in play and having proposed and then signed a seller-friendly merger agreement, Musk apparently believes that he - unlike every other party subject to Delaware contract law - is free to change his mind, trash the company, disrupt its operations, destroy stockholder value, and walk away," the lawsuit read. It goes on to accuse Musk of "a long list" of violations of the merger agreement that "have cast a pall over Twitter and its business" and accused Musk of reneging on the deal because it "no longer serves his personal interests" because the value of Tesla, his electric vehicle company, has fallen, depriving Musk of more than $100bn in personal wealth. This is why, the lawsuit alleges, that Musk “wants out," so “rather than bear the cost of the market downturn, as the merger agreement requires, Musk wants to shift it to Twitter's stockholders".

Why Media is an award-winning design, marketing, digital communications and PR agency offering tailored solutions to companies on a global scale. We have extensive experience in delivering design and marketing services to a spectrum of companies including professional services, property companies, financial institutions and shopping centres. We have offices in London UK, Hertford UK, Finestrat ES & Brescia IT.

Marketing Contact

Name:  Claire White
E-Mail:  claire@whymedia.com
Telephone:  01992 586 507