Financial help for the poor and vulnerable needs to be "updated"

By Suzanne Evans, Director, Political Insight

Financial help for the poor and vulnerable needs to be "updated" by the government to reflect higher than predicted energy bills in October, a report issued this morning by the Business, Energy and Industrial Strategy (BEIS) committee concludes. Millions of low-income households on benefits have already received the first £326 instalment of payments to assist with the rising cost of living, ahead of further payments later in the year, which will include extra support for pensioners and people with disabilities, and a £400 discount on everyone's domestic energy bill. However, the BEIS Committee now says this is not enough, given that energy regulator Ofgem now believes its prediction that bills will rise by £800 was a significant underestimate. "The impact of the energy price crisis on households is likely to cause an unacceptable rise in fuel poverty and hardship this winter," the report said. "The government must immediately update its support, targeting this at customers who are on low incomes, fuel poor, and in vulnerable circumstances, and develop a scheme to support vulnerable customers to accelerate the repayment of energy debt resulting from this crisis." In the report, MPs on the committee also questioned the future of the energy price cap and argued the government should consider a social tariff instead for the most vulnerable (these were phased out by suppliers some ten years ago), and then a relative tariff for everyone else. They also called for an "urgent, far-reaching, and long-term" insulation programme for UK homes. The report was also highly critical of Ofgem. "Ofgem has proved incompetent as the regulatory authority of the energy retail market over the last decade," it said. "It allowed suppliers to enter the market without ensuring they had access to sufficient capital, acceptable business plans, and were run by individuals with relevant expertise." A response by Ofgem admitted that its regime had not been robust enough and that the body was “working hard to reform the entire market, as well as closely scrutinising and holding individual energy suppliers to account, to further strengthen the regulatory regime". The Department for Business, Energy and Industrial Strategy issued a statement saying: "No national government can control global inflationary pressures; however, we have introduced an extraordinary package of support to help households."
 
The government "doesn't know" if its Covid travel restrictions worked, nor if the cost "was worth the disruption caused," MPs on the Public Accounts Committee have concluded. Britain’s “traffic light” system, which required travellers from 'red' countries pay thousands of pounds to stay in quarantine hotels, caused "confusion and disruption", they say. The rules, which the government said "bought vital time" to manage new variants, cost the taxpayer £329m and changed 10 times between February 2021 and January 2022. Dame Meg Hillier, who chairs the committee, said: "We can be clear on one thing - the cost to the taxpayer in subsidising expensive quarantine hotels, and more millions of taxpayers' money blown on measures with no apparent plan or reasoning and precious few checks or proof that it was working to protect public health." A Covid-19 Inquiry chaired by Baroness Heather Hallett, a former Court of Appeal judge, was opened on 21st July. It wll examine the UK's response to the pandemic.
 
There is to be another rail strike tomorrow. Around 40,000 members of the RMT union working at Network Rail and 14 train operators will walk out after talks over pay, jobs and terms and conditions failed again, following the biggest rail strikes in 30 years over three days in June. Network Rail said only 20% of services will run; some places will have no trains at all on Wednesday; and trains will only operate between 7am and 6.30pm. Although only 14 train operators are actively striking, all - including Transport for London - will be affected because Network Rail controls signalling nationwide. The knock-on effects of the disruption are expected to continue until Thursday, Network Rail said. Further RMT strikes are also planned for 18 and 20 August.
 
Glasgow Subway workers have voted to strike on four days next month, when Rangers is playing at home. Members of the Unite union will walk out on Saturday 6 August, then on Tuesday 9, Saturday 13 and Saturday 27. The dispute centres on a row with Subway operator Strathclyde Partnership for Transport (SPT) over changes to duty schedules. Unite say members are increasingly being called in to work shifts at short notice, "leading to significant work-life pressures".
 
Neil Sorahan, Ryanair’s CFO, has criticised airports for not recruiting enough staff to cater for the rebound in travellers, saying they had "had one job to do to". “Various governments" and airports needed to be held to account for "not staffing up appropriately," he said. In contrast, he highlighted how Ryanair was "fully staffed" and operating more than 3,000 flights a day since lockdown restrictions were lifted. "We managed to staff up for 73 additional aircrafts well in advance and it's incumbent on the airports to get their planning better next year," he explained.
 
The CBI/Accenture Quarterly Industrial Trends Survey published yesterday shows that investment intentions in manufacturing have generally improved, and employment within the sector has continued to grow at a robust +18%. However, a second report  [1] – this time from the Confederation of British Industry (CBI) - has also shown that Industrial output growth in UK factories grew at the slowest rate since April last year.  Anna Leach, deputy chief economist from the Confederation of British Industry (CBI) said: "The manufacturing sector has been an economic bright spot in recent months, but output and orders have softened amid ongoing cost pressures, supply challenges and a generalised weakening in economic conditions both in the UK and globally".
 
The Low Pay Commission (LPC) says workers fear violence or being labelled a "snitch" if they report their employers for failing to pay the minimum wage. The LPC report was based on the garment industry in Leicester, which has a history of underpaying workers, but it said the findings apply to all efforts to improve the conditions of low-paid workers across the UK. LPC chair Bryan Sanderson said: "The evidence we heard from workers in Leicester was striking”. Meanwhile, a separate inquiry by the Equality and Human Rights Commission (EHRC) has found that lower-paid ethnic minority health and social care workers are particularly fearful of raising concerns in the workplace, out of fear that they may lose their jobs.
 
KPMG has been given Britain’s largest-ever fine for providing "false and misleading" information to The Financial Reporting Council (FRC) during inspections of its audits of collapsed outsourcer Carillion, and British IT firmRegenersis, later renamed Blancco Technology Group. The £14.4m fine plus almost £4m in costs was reduced from £20m after KPMG admitted wrongdoing. Four former KPMG auditors have also been fined and banned from the profession. Carillion audit partner Peter Meehan was fined £250,000 and banned from membership of the Institute of Chartered Accountants in England and Wales for 10 years. Audit senior managers Alistair Wright and Adam Bennett were fined £45,000 and £40,000 respectively and given eight-year bans; while Richard Kitchen was fined £30,000 and banned for seven years. Another auditor, Stuart Smith, was fined £150,000 and banned for three years under a settlement with the FRC before the tribunal started. Carillion collapsed in 2018.
 
The Insolvency Service has written to Lex Greensill, the founder of Greensill Capital (GC) as it intensifies a probe that could trigger formal proceedings to disqualify him as a company director, Sky News reports. Greenshill’s former colleagues Maurice Thompson, GC's former chairman, who sits on the board of WH Smith, and Neil Garrod, the former finance director, are also under investigation. Under the Company Director Disqualification Act, company directors can face bans lasting between two and 15 years where misconduct has been identified. The Insolvency Service's investigation is one of several regulatory inquiries taking place in relation to the collapsed firm, which caused political scandal when it emerged that former Prime Minister David Cameron were among those who attempted to facilitate access to government lending schemes for Greenshill at the start of the pandemic. Lord Heywood, the late cabinet secretary, was also singled out for facilitating Mr Greensill's access to the heart of Whitehall. The unwinding of Greensill's corporate empire remains ongoing, Sky says, with creditors continuing to await news of potential financial recoveries from liquidators. Accountancy firm Grant Thornton is overseeing the insolvency process.
 
The Competition and Markets Authority has launched an investigation into US-based Viasat's £6bn takeover of Inmarsat to consider whether the deal could result in a lessening of competition in the UK’s satellite telecommunications market.
 
Premier Foods, the owner of the Oxo and Mr Kipling brands, among others, has agreed to buy Asian curry kit company The Spice Tailor for an initial £43.8m in cash.
 
Building products supplier SIG has agreed to buy Miers Construction Products for up to £36.5m.
 
Barclays bank has outlined plans to buy back up to $17.6bn in securities that it sold by mistake after exceeding registered amounts under US regulations. Buyers of the 3,015 affected securities have the right of rescission, meaning they can make the bank buy them back at their original purchase price plus interest. Barclays is expected to set aside £979m in litigation and conduct charges for the second quarter, mainly to cover costs arising from the error, Sharecast News reports. Barclays CEO C.S. Venkatakrishnan said the incident had been "entirely avoidable".
 
JCB has announced that 200 agency staff are to be handed permanent contracts. The firm has created more than 1,500 jobs since January 2021.
 
German discount supermarket Aldi is to give its UK staff a second pay rise since the start of the year. It said yesterday that 26,000 store assistants across all its 970 British stores would see minimum pay increase to £10.50 an hour, or to £11.95 for workers in Greater London. The move also means Aldi will become the highest-paying supermarket in the UK once again, after Morrisons confirmed an increase in pay for workers outside London to £10.20 an hour from October.
 
The Southern Co-Op supermarket chain is facing a legal challenge to its use of facial recognition technology in 35 stores to cut crime. Privacy campaign Big Brother Watch has lodged a complaint with the Information Commissioner's Office (ICO) about biometric cameras at its shops, which it says breach data protection laws and potentially put people unknowingly on watch-lists. Cameras capture shoppers’ faces; the images are analysed; and then compared with a database of people the co-operative says have stolen from its shops, or been violent. A spokeswoman for the Co-op said the watch-list was not a list of people with criminal convictions, but of people for which the business had evidence of criminal or anti-social behaviour. Big Brother Watch says the biometric scans are "Orwellian in the extreme". "The supermarket is adding customers to secret watch-lists with no due process, meaning shoppers can be spied on, blacklisted across multiple stores and denied food shopping despite being entirely innocent," said Big Brother Watch's director Silkie Carlo. "This is a deeply unethical and a frankly chilling way for any business to behave." The Southern Co-op group says it is only using the Facewatchsystem in shops with a history of crime, to protect its staff.
 
Barclays is taking a stake in Copper, one of the most prominent names in the fast-evolving cryptocurrency sector, Sky News says. The broadcaster has learnt that the UK-based bank is among a crop of new investors joining a funding round for Copper, which counts former chancellor Lord (Philip) Hammond among its advisers. City sources said Barclays was expected to invest “a relatively modest sum” in the millions of dollars. Copper provides custody, prime broking and settlement services to institutional investors deploying money into crypto assets. It was founded by Dmitry Tokarev in 2018. Barclays and Copper declined to comment.
 
Every city centre hotel room in Sheffield has been booked ahead of England's sold out UEFA Women's Euro 2022 semi-final, Sheffield Business Improvement District (BID) said yesterday. The Lionesses face Sweden later today in the match at Bramall Lane, which has a capacity of just over 30,000. BID estimates that being a host city may have brought in more than £7.6m.
 
Amazon is increasing the price of its Prime service by £1 for UK customers. From September, monthly subscriptions will go up £1 to £8.99 and annual membership will increase from £79 to £95. Amazon said the price rise was its first in the UK since 2014 and was due to "increased inflation and operating costs".
 
State-owned Russian energy giant Gazprom is to halve the current level of gas supplies to the EU again, claiming more maintenance work is required to the Nord Stream 1 pipeline, which pumps gas from Russian to Germany. The pipeline has been running well under capacity for weeks, and was completely shut down for a 10-day maintenance break earlier this month. Last year, Russia supplied the EU with 40% of its gas last year. The European Commission has accused Russian President Putin of using energy as a weapon, and urged countries to cut gas use by 15% over the next seven months after Russia warned it could curb or halt supplies altogether. The German government said there was no technical reason for Russia to limit gas supply, while the Kremlin is blaming Western sanctions for the disruption. Gazprom says the delayed return - because of sanctions - of equipment serviced in Canada is forcing it to keep the gas flow through Nord Stream 1 to just 40% of capacity.

Footnote [1]: The latest S&P Global's Purchasing Managers' Index PMI, reported here yesterday, reached the same conclusion.

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