Published: 24 November 2022
By Suzanne Evans, Director, Political Insight
Energy regulator Ofgem has raised the energy price cap to £4,279 a year. It will come into effect from January 2023 and last until at least the end of March. However, households will not pay such a high price for fuel because of government support capping average bills at £2,500 pounds a year over the same period. Last week, the Office for Budget Responsibility estimated government would spend £43bn on business and consumer energy subsidies in this financial year, and at least £13bn in 2023-24. Meanwhile, Chancellor Jeremy Hunt appeared before the House of Commons’ Treasury committee yesterday and said he would announce plans to reform Britain’s energy market "very soon". MPs on the committee blamed poorly designed regulation for some of the soaring cost of energy, given the number of energy suppliers which have collapsed in the past year. Hunt said he sympathised with this view, and with those MPs who were critical of delays in approving new electricity generation and power lines. "The solution is to move faster on nuclear and renewables to encourage energy efficiency, but also - and this is all going to be set out by the business secretary very soon - to look at the fundamental reforms that we need in the energy market ... because it hasn't been operating as it needs to," Hunt said.
The Supreme Court has ruled that the Scottish government cannot hold a second referendum on Scottish independence without approval from the British parliament. The British government has repeatedly refused to allow another plebiscite, saying it should be a once-in-a-generation event, hence Scottish First Minister Nicola Sturgeon took the matter to the Supreme Court, asking whether the Scottish government could pass legislation paving the way for an advisory second referendum without the approval of the UK parliament. The unanimous verdict of the five judges on the bench was that it could not. In the 2014 referendum, Scots rejected ending the 1707 Act of Union with England by 55% to 45%.
The Treasury announced yesterday that it would not be giving itself the right of veto over decisions taken by financial regulators, after the Bank of England (BoE) warned such powers would undermine its independence and backfire on the financial sector’s competitiveness. Treasury Minister Andrew Griffith had said he would propose an "intervention power" allowing the ministry to require the BoE or the Financial Conduct Authority (FCA) to scrap or change a rule if it was believed to be in the public interest to do so. However, the sector asked Griffith not to "politicise" rulemaking in the Financial Services and Markets Bill currently making its way through parliament. "Having consulted further, we are of the view that the existing provisions in the Bill are currently sufficient and will already allow us to seize the opportunities of Brexit by tailoring financial services regulation to UK markets to bolster our competitiveness," Griffith said. "We remain committed to the operational independence of the financial services regulators."
Royal Mail's "best and final offer" to striking workers was rejected yesterday, hence hundreds of thousands of postal workers are walking out today and tomorrow. Royal Mail’s owner, the FTSE 250 company International Distribution Services, says the recent series of industrial action in recent weeks had cost it £100m so far, and that it had upped its pay rise offer to up to 9% over 18 months; developed a profit sharing scheme for employees; and improved its voluntary redundancy offer terms. The company also said it would commit to making no compulsory redundancies for at least the next three months and introduce voluntary Sunday working. It’s proposed introduction of later start and finish times would be staggered over three years. Royal Mail also amended its seasonal working proposals, meaning employees would work around two hours less each week in summer, and two hours more in winter. "Talks have lasted for seven months and we have made numerous improvements and two pay offers…alongside a host of other enhancements," said Royal Mail CEO Simon Thompson. "This is our best and final offer.
Home REIT plc, which funds the acquisition and creation of homes for homeless people, has hit back at a report issued by a firm specialising in short selling (meaning it profits from any falls in the company's share price) which suggested it had “significant downside.” The report referred to is believed to be one issued by Delaware-based Viceroy Research, which said of Home REIT: "Poor operating results are already reflected in Home REIT's financials, however management incentives are not aligned with 'fixing' these problems, but only rolling up more bad assets". Viceroy also claimed many of Home REIT's tenants cannot afford rent, have not been paying rent, are in administration, are run by bad actors, or simply do not provide social housing services. Shares in the FTSE 250 company fell almost 20% yesterday after what Home REIT called the “inaccurate and misleading” report was published. It was “based on mistaken assumptions, misinformed comments, and disputable allegations,” the company said, adding that it would “publish a full and detailed response demonstrating the factual inaccuracies and selective use of information” as soon as possible. On 1st November, Home REIT issued a press release saying 100% of its tenants had paid their rent due on 31st August, and that in the year to that date it had collected £53.9m in rent.
Both Halfords and Easyjet have announced they are looking to attract an older demographic to their staff base. This morning, Easyjet has launched a campaign to hire more people over the age of 45 to join its cabin crews, challenging an outdated image of the job to fill roles in the current tight labour market. The UK-based FTSE 250 airline said it had already seen a 27% rise it that age group for crew since 2018 and its new advertising campaign will feature recent recruits aged 48 to 63. Halfords meanwhile is aiming to recruit 1,000 new technicians over the next 12 months by attracting retirees and women to work in its car repair centres. The firm hopes to entice them by offering more flexible working, including part-time hours, apprenticeships, and by opening a training academy. "We need to be ambitious and creative in the way we go about meeting the demand for technicians," CEO Graham Stapleton said in a statement. "We want to give people the best possible route to return to work." In other news, Halfords shares dropped some 6% yesterday after interim profits for the first half almost halved on last year, a fall it attributed to the cost of living crisis and reduced consumer spending.
Newspaper acquisition company National World said yesterday it has no intention of making a firm offer for larger rival Reach. National World, which owns the Yorkshire Post and the Scotsman, announced earlier in November that it was in the early stages of exploring a possible offer for Reach, but that it has concluded that while there are considerable industrial and financial advantages to combining the newspaper portfolios of the two companies, "the circumstances are not aligned to proceed any further with the possible offer".
A 'Women on Boards' law has been approved by the European Parliament requiring that at least one-third of all company directors are women and women must make up at least 40% of non-executive board members at large companies in the European Union from mid-2026. The new law, first proposed a decade ago, also requires that at least a third of all company directors are women. Where two candidates for a post are equally qualified, priority must go to the under-represented sex, the rules say. Penalties for non-compliance can be a fine or annulment of the contested director's appointment.
HP Inc has said it expects to cut up to 6,000 jobs by the end of 2025, some 12% of its global workforce, at a time when sales of personal computers and laptops are sliding as shoppers tighten budgets. The company employs nearly 50,000 people.
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