Published: 22 September 2022
Location: London, UK
The government confirmed yesterday that business energy bills will be halved in a bid to prevent firms collapsing over the winter period. Business secretary Jacob Rees-Mogg said the level of price reduction for each business as part of the new Energy Bill Relief Scheme will vary depending on their contract type and circumstances, but the government will set a Supported Wholesale Price which is expected to be £211 per MWh for electricity and £75 per MWh for gas. The scheme, due to come into effect on 1 October until 31 March 2023 (with a review in January 2023) also removes green levies and will apply to charities and public-sector organisations such as schools and hospitals, the Department for Business, Energy and Industry (BEIS) said. Equivalent support will be provided for non-domestic consumers who use heating oil or alternative fuels, with further details on this to be announced. Rees-Mogg said the package would ultimately help support economic growth by "preventing unnecessary insolvencies and protecting jobs" while helping keep a lid on inflation at the same time. He put no cost on the measures, saying: "The difficulty with giving you a cost figure is that this will depend on where the price of energy goes over the winter. And that's very difficult to forecast. So, I can't give you an absolute cost, but we are talking about many billions of pounds. Tens of billions, it will be in the tens of billions. Unquestionably."Matthew Fell, chief policy director at the Confederation of British Industry (CBI), said: "The package will ease worries about otherwise viable businesses shutting up shop, and small companies especially will benefit from the discounted rate. However, he also cautioned that “businesses will also want to know more about the exit strategy and what happens when the six month cap runs out".
Prime Minister Liz Truss has picked a former EDF Energy executive to spearhead Downing Street's business engagement strategy as she seeks to position her administration on a pro-enterprise footing, Sky News says. The broadcaster has learnt that Michael Stott, who has also worked as a Conservative Party press officer and public affairs’ firms including Lansons, Luther Pendragon and Hill & Knowlton, has been recruited as Number 10’s head of business liaison. He replaces Alex Hickman, who held the role under Boris Johnson. Stott is understood to have begun meeting private sector executives in his new role in the past week, Sky says. Downing Street declined to comment.
The pound fell to a 37-year low against the dollar yesterday after Office for National Statistics (ONS) figures showed that the cost of servicing UK government debt last month hit a record high, with interest payments of £8.2bn, £1.5bn more than a year earlier and the highest August figure since monthly records began in 1997. Sterling has since fallen further to $1.1244, at the time of writing.
The US Federal Reserve lifted its interest rate by 75 basis points for the third time yesterday, taking it to a 3.00-3.25% range. In his press conference, Chair Jerome Powell said US central bank officials are "strongly resolved" to bring down inflation from the highest levels in four decades and "will keep at it until the job is done," a process he repeated would not come without pain. The Bank of England’s Monetary Policy Committee is expected to raise rates here shortly, with financial markets betting there is a 75% chance that rates will be increased to 2.5% this week, up from 1.75% at present, Yahoo Finance UK says. That would be the biggest rate hike since 1989, when inflation was climbing rapidly after a consumer boom. The UK central bank has already hiked interest rates six times consecutively this year in an attempt to reduce inflation, which is almost five times above the Bank’s 2% target at 9.9%.
Despite interest rate rises, property transactions in the UK continued to rise last month, new figures from the HM Land Registry show. The number of residential transactions in August stood at 114,440, a 4.4% month-on-month rise from July, and 9.7% higher than levels seen a year earlier in August last year. The number also represents an elevated position when compared to pre-pandemic levels – transactions in August 2022 were up 2.5% compared to the 111,600 seen in the same month in 2019.
Construction firm Galliford Try, which focuses on the education, health and water sectors as well as highways, has posted a £19.1m pre-tax profit for the year to 30 June 2022. This is up 68% on the year before and well ahead of the City consensus forecast of £17.7m. Galliford also announced a "one-off payment" totalling £1m to support 1,800 workers this autumn amid the cost of living crisis.
Marks & Spencer is giving store staff their second pay rise this year to help ease the cost-of-living crisis. From 1st October, more than 40,000 staff members will hourly pay increased to a minimum of £10.20 an hour, which follows an initial pay increase to £10.00 from £9.50 in April, which is above both the national and real living wage. This represents an annual increase of 7.4% and means a full-time customer assistant will earn more than £100 more each month compared to October last year. M&S will also give its 4,500 salaried colleagues at pre-management levels a one-off £250 voucher.
Paypal is under fire after closing down without warning and within minutes of each other, the accounts of The Free Speech Union and the Daily Sceptic, both run by Spectator associate editor Toby Young. Paypal also closed his personal account without specifying the reason, hence the closures appear to be a blatant case of censorship. When Young went public with the news, it transpired the online payments service had also closed the accounts of Law or Fiction, which questioned the legality of lockdown measures, and Us For Them, which campaigned to keep schools open during covid lockdowns. The latter said on Twitter that PayPal was refusing to transfer its account balance for 180 days. The move led (Lord) David Frost, the government’s former chief trade negotiator and special advisor to Boris Johnson, to tweet that no one should “leave a balance in your PayPal account, as we now know it can just be confiscated,” and that the Financial Conduct Authority should investigate.
Jaguar Land Rover (JLR) is reportedly set to invest millions of pounds converting its Halewood plant in Liverpool to build the first all-electric Land Rover by 2024. The move, revealed by a source at the factory to Autocar, is part of the group’s Reimagine transformation plans announced in 2021 by CEO Thierry Bolloré, ends several years of uncertainty about the future of the plant for its 3,700 employees. Earlier this year, JLR also submitted planning requests to extend Halewood’s body shop “to increase its production capacity for new model lines”, according to documents lodged with the local Knowsley council. The new two-storey building would expand the additional body shop, where the car’s metal bodies are joined together, by around 32,000 square metres. By 2030, JLR is aiming for 60% of its global sales to be fully electric, with 10% plug-in hybrid and 30% to be mild or standard hybrid. It is aiming for all global sales to be zero-emission vehicles by 2036, it has said previously.
UK based City Pub Group has called on the government to issue more 2-3 year work visas to foreign nationals to alleviate labour shortages. The company said in a trading statement that it had returned to pre-covid levels "albeit with a rising cost burden" with revenues for the six months to June 26th rising to £26.1m from £8.9m a year earlier. The London-listed company also urged the government to reform the business rates system quickly "to prevent further shrinkage and reduction of the number of retail outlets." "The pub remains an important hub of any community and has been continually overtaxed. If the status quo continues there will be fewer and fewer pubs in this country as the lack of profitability of many will force closure," it said.
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