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Britain has signed an energy partnership with the US

   News / 07 Dec 2022

Published: 07 December 2022

By Suzanne Evans, Director, Political Insight

Britain has signed an energy partnership with the US to sustain this year’s increased import of 9-10 billion cubic metres (bcm) of liquefied natural gas (LNG) over next year.  Only 4 million bcm were imported in 2021. "This partnership will bring down prices for British consumers and help end Europe's dependence on Russian energy," Prime Minister Rishi Sunak said in a statement. The UK-US Energy Security and Affordability Partnership will also aim to drive investment in clean energy and exchange ideas on energy efficiency and reducing demand for gas. The US became the world's largest LNG exporter in the first half of 2022, U.S. Energy Information Administration data showed, as the country rapidly increased its export capacity and as high prices, particularly in Europe, led to higher exports.

The government has been forced to make another climbdown, this time pledging to relax restrictions on building onshore wind farms in England after a threatened rebellion from over 30 backbench Conservative MPs including former Prime Ministers Boris Johnson and Liz Truss. A rule requiring new turbines to be built on pre-designated land will be rewritten, the levelling up department said, and new wind farms would still be subject to local approval. The precise method of measuring local opinion will be part of a wider consultation which will conclude by next April, the BBC says.

The parliamentary Labour Party won a vote yesterday to force the government to release documents on Covid-19 contracts awarded to a firm with links to a Conservative member of the House of Lords. Labour won the vote after Conservative MPs were told by their party they could abstain on the opposition motion which sought to force the publication of documents relating to a £200m contract for personal protective equipment contracts given to PPE MedPro. Peer Michelle Mone had brought MedPro to the attention of ministers, and has been accused of profiting personally from the business, charges her lawyers have denied. She did not respond to a request for comment from Reuters, but PA Media reported she was taking a leave of absence from the House.

The average cost of a home fell by 2.3% in November to £285,579, according to the Halifax. The annual rate of house price growth slowed to 4.7%, from 8.2% in October.

It has been announced that ambulance staff, paramedics, and control room staff across most of England and Wales will go on strike on 21st December in a dispute over pay. The coordinated walkout by the three main ambulance unions - Unison, GMB and Unite - will affect non-life threatening calls only. Members of GMB, which represents nearly a third of the 50,000-strong workforce, will then walk out again on 28th December. Exactly how many workers will strike is unclear: Unison, the largest union in the sector, only has a strike mandate for half of England's 10 regional services for the 21st December walkout. The start times and lengths of the walkouts will also vary between unions and services, but all will last between 12 hours and 24 hours, the BBC says. The only service which will be completely unaffected is the East of England.

The Competition and Markets Authority (CMA) has said there is evidence that "rocket and feather" fuel pricing happened in March and April this year, i.e. fuel prices rose quickly as wholesale costs rose, but fell far more slowly when costs come down. The CMA said it would look into whether this drove greater profits for retailers.

The CMA also says the £98m merger of two hearing implant firms "could lead to higher prices for the NHS". It said Australia-based Cochlear’s proposed purchase of Oticon Medical, the hearing division of Danish firm Demant, could also reduce quality and slow innovation for patients in the UK. Both firms supply cochlear implants and bone conduction technology, which are surgically implanted hearing devices, and during an initial phase 1 investigation, the CMA found the merger would result in the new operation controlling between 90% and 100% of the bone conduction solutions market in the UK. Sorcha O’Carroll, CMA Senior Director of Mergers, said: “Healthy competition in the medical technology sector is central to continued innovation, more choice and improvements in patient treatments”. The two firms have until 13th December to offer potential undertakings to allay these concerns.

CityFibre has filed a complaint to the CMA and Ofcom against BT's Openreach, claiming the nationwide network operator is exploiting the dependency of its ISP customers with an aggressive pricing strategy that deterred them from placing orders with alternative fibre providers. CityFibre CEO Greg Mesch said: "We welcome fair competition, but BT Openreach's behaviour is straight out of the playbook of a dominant operator using its market power and advantages to maintain its dominance. If left unchecked, BT Openreach will strangle competition and threaten the pace of the UK's full fibre roll out – all at the same time as BT Consumer is imposing broadband price rises on millions of households far above the rate of inflation." Openreach, which is building Britain's biggest fibre-to-the-premise network, has offered ISPs discounts in return for meeting targets to connect a majority of new lines to its network where it is available. Alternative fibre providers challenged Openreach's offer, called Equinox, but the regulator, Ofcom, decided not to intervene. CityFibre, whose backers include Antin Infrastructure Partners and Goldman Sachs, unsuccessfully appealed the decision. Openreach CEO Clive Selley said the company had not yet seen the details of CityFibre's complaints, but rejected any suggestion that Openreach wasn't competing fairly and said the company would defend that position strongly.

Stocks in engine maker Rolls-Royce were among the few on the FTSE to rally yesterday, after the US awarded its Future Long-Range Assault Aircraft, FLRAA, to Textron's V-280 Valor project. The programme is meant to replace the Black Hawk utility helicopters (2,000 aircraft) and Apache attack helicopters (1,200 aircraft), and first delivery is expected in 2030. Rolls-Royce provides two AE 1107F engines to power the V-280 Valor, and in its 2021 annual report said a win from Textron would secure a market of over 5,000 engines for Rolls-Royce, with decades of production," Jefferies said. "We estimate that the total value of the V-280 program for Rolls-Royce could reach up to $5-6bn in production and $6-7bn in services assuming 5,000 installed engines are delivered," the financial services company added.

Mitchells & Butlers Plc has posted a 53% jump in annual profit. However, the British pub and restaurant group also flagged challenges arising from surging energy and labour costs. "The trading environment remains highly challenging, with cost inflation continuing to put pressure on margins and we are ever mindful of the pressures that the UK consumer is facing," CEO Phil Urban said in a statement. In the 10 weeks since the end of its fiscal year on 24th September, Mitchells said sales climbed 6.5% on a like-for-like basis from the year-ago period and 9.2% over the corresponding phase in the pre-pandemic fiscal year 2019. The owner of the Toby Carvery, Harvester and All Bar One brands said annual operating profit grew to £124m, while pre-tax profit came in at £8m, compared to a loss of £42m a year earlier.

Travel food outlet operator SSP Group has swung to a full year profit as passenger numbers recover from Covid restrictions. The owner of the Upper Crust baguette chain reported a pre-tax profit of £25.2m compared with a £411.2m loss the year before. Underlying core profits were £142m for the year to 30th September, compared to a loss of £108.3m last year.

Asda says it plans to create 10,000 new jobs as part of its plan to open 300 convenience stores by the end of 2026.

Sharecast News reports that social housing landlord Home REIT is under pressure again: this time, activist investor The Boatman Capital Research has published an open letter calling for members of the board to resign, starting with the chair and the head of the audit committee. In the letter, addressed to senior independent director Simon Moore, Boatman expressed concern that the board had been "over-optimistic" in its assumptions and that the value of the company's property portfolio may be "significantly inflated". It also pointed to a series of other concerns, such as a lack of due diligence on some of its tenants and failure to highlight significant accounting issues to shareholders. Last month, Home REIT shares tumbled after Delaware-based short seller Viceroy Research said than an investigation into the group's investments and tenants had suggested "significant downside" and raised numerous allegations which Home REIT said were "baseless" and "misleading".

Jaguar Land Rover has announced plans to recruit 300 apprentices across the UK. In total, more than 800 young people will join JLR's 2023 early careers programmes - a new record intake for Britain's biggest carmaker.

EasyJet has averted a strike by its French cabin crew after agreeing to raise base pay by 7.5% and  paying an additional €3,000 (£2580) bonus to staff.

The European Union has agreed a new law that would ban the import of products linked to deforestation. The BBC reports that goods such as palm oil, cattle, soy, coffee, chocolaterubber and timber, will have to pass strict checks to ensure forests weren't damaged to create them. The rules also cover anything derived from these products, such as beef, or furniture, the European Commission said in a press release. Companies selling their products into the EU will have to prove their goods are not linked to deforestation, or face fines of up to 4% of their annual EU turnover. An impact assessment from the Commission estimated the new law would protect at least 71,920 hectares (278 square miles) of forest annually - around 100,000 football pitches – and reduce annual global carbon emissions by 31.9 million metric tons per year, roughly the same as the carbon emissions of Denmark in 2021, according to World Bank data. The European Council - where member states agree policy - and the European Parliament are yet to ratify the agreement.

The Trump Organization, former US President Donald Trump's family real estate company, has been found guilty of tax crimes. The company was convicted on all counts yesterday, after enriching its top executives with off-the books benefits such as luxury cars and private school fees for more than a decade, making up for lower salaries which therefore reduced the amount of tax the business was required to pay. It is expected to face a fine of around $1.6m (£1.3m). Neither Donald Trump nor his family members were personally on trial. He has, however, criticised it as politically motivated, and condemned his long-serving former chief financial executive Allen Weisselberg after he pleaded guilty in August and testified against the business. A lawyer for the company said it would appeal the conviction.

Elon Musk's medical device company, Neuralink Corp, is reportedly being investigated for alleged animal welfare violations following complaints from staff, Reuters reports, citing sources familiar with the investigation who claim animal testing is being rushed and is causing needless suffering and deaths. They report the company has killed about 1,500 animals since 2018 including pigs, sheep and monkeys, more than necessary because some failed tests had to be repeated after pressure from Musk to accelerate research. The company is developing a brain implant, which Musk says could potentially help paralysed people walk again and address other neurological diseases. The San Francisco-based company, launched in 2016, has already missed several of Musk's deadlines to win regulatory approval and begin human clinical trials, Reuters’ sources say.

A US agency tasked with overseeing the audits of public companies yesterday said it imposed $7.7m (£6.31m) in fines and sanctioned three firms across KPMG's global network for violations of professional auditing standards, quality control standards and other rules. KPMG Colombia, KPMG UK, and KPMG India each agreed to pay the civil penalties to settle a swathe of violations from 2016-2021, from signing off on blank work papers to improper answer sharing on internal training tests, the Public Company Accounting Oversight Board (PCAOB) statement said.

Apple is being sued by two women who say its AirTags, small trackers are designed to be placed on wallets or keys to prevent them from being lost, were used by their former partners to stalk them. They also argue that AirTags have been linked to murders this year of women in Akron, Ohio and Indianapolis. "If you create an item which is useful for tracking stolen items, then you have also created a perfect tool for stalking," Eva Galperin, Director of Cyber Security at the Electronic Frontier Foundation, told the BBC earlier this year.

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