Published: 26 October 2022
By Suzanne Evans, Director, Political Insight
Rishi Sunak became the UK’s 57th Prime Minister yesterday. In his first official speech in post outside 10 Downing Street, he vowed to “place economic stability and confidence at the heart of this government's agenda,” meaning there are “difficult decisions to come.” Of his predecessor Liz Truss, he said: “She was not wrong to want to improve growth in this country. It is a noble aim. And I admired her restlessness to create change. But some mistakes were made — not born of ill will, or bad intentions. Quite the opposite, in fact. But mistakes, nonetheless. And I have been elected as leader of my party and your prime minister, in part to fix them." While referencing Boris Johnson for “his incredible achievements as Prime Minister,” Sunak also pledged to make good on the promises contained within the 2019 Conservative Party Manifesto: “A stronger NHS, better schools, safer streets, control of our borders, protecting our environment, supporting our armed forces, levelling up, and building an economy that embraces the opportunities of Brexit where businesses invest, innovate and create jobs." He also pledged to reduce government debt, saying: “The government I lead will not leave the next generation —your children and grandchildren — with a debt to settle that we were too weak to pay ourselves."
Prime Minister Rishi Sunak has begun assembling his new Cabinet. Jeremy Hunt remains as Chancellor of the exchequer, and James Cleverly continues in his post as Foreign Secretary. Suella Braverman, who resigned as Home Secretary shortly before Liz Truss’s resignation over a security breach, has been re-appointed to the post. Kemi Badenoch remains as International Trade Secretary, and Ben Wallace as Defence Secretary. Michelle Donelan keeps Culture Secretary; Chris Heaton-Harris Secretary of State for Northern Ireland; and Alistair Jack Secretary of State for Scotland. Penny Mordant is still in place as Leader of the House of Commons.
Fresh major appointments include:
· Oliver Dowden, Chancellor of the Duchy of Lancaster
· Dominic Raab, Deputy Prime Minister and Justice Secretary
· Victoria Prentice, Attorney General
· John Glen, Chief Secretary to the Treasury
· Grant Shapps, Business Secretary
· Mel Stride, Work and Pensions Secretary
· Steve Barclay, Health Secretary
· Mark Harper, Transport Secretary
· Thérèse Coffey, Environment Secretary
· Gillian Keegan, Education Secretary
· David T.C. Davies, Secretary of State for Wales
· Michael Gove, Levelling Up, Housing and Communities and Minister for Intergovernmental Relations.
· Nadhim Zahawi, Minister without Portfolio
· Gavin Williamson, Minister without Portfolio in the Cabinet Office
The pound hit a six-week high as Rishi Sunak became PM. Sterling was up 1.8% against the US dollar at $1.147, having risen by 1.92% to $1.150 earlier in the day - the highest level since 15 September.
The Times says this morning that Rishi Sunak is considering delaying next week's planned fiscal statement. Sunak, himself a former Chancellor under Boris Johnson, will meet with his Chancellor Jeremy Hunt today to discuss his proposals for filling the £40bn hole in the UK's finances, which he is expected to do through a combination of tax increases and cuts to public spending. The statement could also be delayed by a couple of days but presented before 3rd November, when the Bank of England is meeting again to discuss likely further interest rate rises, or be pushed back again and turned into a full budget, the newspaper claims.
Another energy company is in trouble: So Energy, which supplies electricity to more than 300,000 British households has appointed advisers from Interpath to raise more than £50m to fund itself through next year, Sky News reports. The search for new capital comes a year after the Irish energy group ESB took a controlling stake in the business. Founded in 2015 by Simon Oscroft and Charlie Davies, former energy traders at the Australian bank Macquarie, So Energy is one of a large number of mid-sized utilities which have been squeezed by market turmoil over the past 18 months. Dozens of UK suppliers have collapsed due to huge rises in the cost of wholesale gas.
Meanwhile, British Gas says it has acquired the customers of the natural gas business of AvantiGas ON. AvantiGas ON is a Business-to-Business (B2B) supplier, and currently supplies natural gas to around 13,000 business meter points on the gas grid in Britain. The company is also one of Britain's leading suppliers of Liquefied Petroleum Gas (LPG), and a major natural gas shipper and supplier in a number of other countries, according to its website. British Gas owner Centrica did not disclose any financial details about the deal.
Shares in online furniture firm Made.com were suspended yesterday as the company revealed talks to secure a rescue sale have collapsed. Its market value has been almost completely wiped out since the retail group indicated it could be forced towards insolvency unless another potential suitor appears, or fresh funding is found. “The company is no longer in receipt of funding proposals or possible offers for the issued and to be issued share capital of the company," Made said in a statement. "If further funding cannot be raised, or a firm offer for the company is not received before the company's cash reserves are fully depleted, the board will take the appropriate steps to preserve value for creditors. There can be no certainty that the terms of any offer or investment received will be suitable." Made floated on the London Stock Exchange less than two years ago with a market cap of £775m. Shares are now worth only 0.5p, bringing its value down below £2m.
Heathrow Airport is unlikely to carry as many passengers as it did before the pandemic "for a number of years," and 25% fewer seats will be filled this year than in 2019, it says. Britain's largest airport said it expects to carry between 60 and 62 million passengers by the end of 2022, citing the cost of living crisis, the Ukraine war and impact of Covid travel restrictions hitting demand. Announcing that its 100,000 passengers per day cap introduced during the summer holiday travel chaos would end on 30th October, the airport nevertheless warned it could reinstate a cap in the run-up to Christmas "if needed" to avoid flight cancellations "due to resource pressures". Heathrow said it still had to recruit 25,000 staff across the airport. Heathrow announced it has returned a pre-tax profit of £643m in the nine months to the end of September: it suffered a £1.4 billion loss over the same period last year.
London Stansted Airport has accepted a council's "all in" offer of £2.1m to cover its legal costs following a High Court battle over expansion, the BBC reports. The airport won an appeal against Uttlesford District Council in 2021, which allowed it to increase capacity to 43 million passengers per year. The council was ordered to cover the airport's legal costs after an appeal and voted to offer £1.4m in June 2022, however this was rejected by Stanstead. The council then voted to make two new offers of £2.05m, including £50,000 interest, and a second "all in" offer of £2.1m – including £1m already paid - which is the offer accepted. The bill is expected to wipe out the council's strategic initiative fund, which had a balance of £1.65m before the £1m down payment was made. The balance will be paid from funds held as part of the council’s medium term financial strategy.
The Competition and Markets Authority (CMA) has cleared London Stock Exchange Group's (LSEG) takeover of Quantile Group after an in-depth investigation, saying the deal did not raise substantial competition concerns in Britain. LSEG agreed to buy Quantile last year for up to £274m to expand its range of post-trade risk management solutions for banks, hedge funds and financial institutions trading derivatives.
Bill Winters, the CEO of FTSE 100 international bank Standard Chartered, has said it is appropriate to be cautious in the current economic conditions, but that the current wave of economic pessimism was probably too much. "Of course there are difficult times ahead with inflation hitting full force, with interest rate impacts coming, with central banks organising a slowdown in growth - but there's plenty of signs for encouragement as well," he said while speaking at a conference in Riyadh. "So on balance, yeah I'd say it's appropriate to be cautious right now. But the gloom, arguably, is overdone," he added.
India has fined Alphabet Inc's Google $113m (£99m) for anti-competitive practices, saying it must not restrict app developers from using third-party billing or payment processing services in the country. The Competition Commission of India (CCI) said Google used its "dominant position" to force app developers to use its in-app payment system, noting the sale of in-app digital goods is a key means for developers to monetise their work. It is the second fine issued by the county against the US tech giant in a week: on Thursday, the CCI fined Google $162m (£141.23m) for anticompetitive practices related to its Android operating system, and was asked to change its approach to its Android platform. Reuters, which reports that the order would come as a major relief for Indian startups and smaller companies that have long objected to Google's policy of mandatorily imposing use of its own payments system on app developers. Google is able to appeal the orders in an Indian tribunal., however Google did not respond to a request for comment from the news agency.
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