Published: 08 December 2022
By Suzanne Evans, Director, Political Insight
Prime Minister Rishi Sunak says he is working on "new tough laws" to combat strike disruption, telling MPs that if "union leaders continue to be unreasonable, then it is my duty to take action to protect the lives and livelihoods of the British public". Nurses, paramedics, firefighters, rail workers, driving test examiners, postal staff and workers at the Highways Agency are among those set to strike this winter. A forthcoming bill to ensure minimum service levels on transport networks during strikes has yet to be laid before parliament, and the indication is now that the legislation could extend to other services. However, Downing Street has not specified what these would be, and no timescale has been given. Asked by the BBC if he would consider banning strikes in emergency services, the prime minister said the "government is always going to be reasonable" but refused to rule it out. He said: "My priority is making sure that I keep people safe, and that I minimise the disruption on their lives, and I will do what is required to do that."
The Telegraph says that senior military figures have told ministers soldiers should not be made to give up Christmas to cover for striking workers who earn more than them. Earlier this week, the Government announced that 2,000 military personnel and volunteers were undergoing training to stand in to support a range of services, including Border Force officers at airports, and potentially to cover for ambulance drivers and firefighters as well. Senior members of the Armed Forces are understood to have also warned ministers that the plan risks weakening the “operational capability” of the military to respond to threats. One senior defence source said: "You've only got to look at a private soldier on £22,000 a year and whose pay scales have not kept up with inflation for the last decade having to give up Christmas, or come straight off operations, to cover for people who want 19% and are already paid in excess of what he or she would be, and it’s just not right.”
Border Force staff are the latest group to announce they will strike, for eight days over Christmas, at Birmingham, Cardiff, Glasgow, Gatwick, Heathrow (terminals 2, 3, 4 and 5) and Manchester airports, as well as at the port of Newhaven, the PCS union has announced. About 75% of passport control staff are PCS members, and the union’s general secretary Mark Serwotka said the strikes would "escalate" unless the government "put money on the table now". He said he has had talks with government ministers, but that they are refusing to increase a 2% pay rise.
The public is being warned not to travel by train next week unless absolutely necessary, even if planned rail strikes are called off at the last minute. Workers at the UK's biggest rail union, the RMT, are set to walk out on the 13th and 14th and the 16th and 17th December, leading Network Rail to say 50% of the railways will be shut down, regardless of whether the walkouts go ahead, and only 20% of services will operate between the hours of 07:30 and 18:30 GMT. Delays and cancellations will also occur on non-strike days because trains will be in the wrong places and staff shift patterns mean a staggered return to work.
Michael Gove, Secretary of State for Communities and Levelling Up, has approved the first new UK coal mine in 30 years, sparing an angry response from the Chairman of the government’s Climate Change Committee (UKCCC) and environmental organisations such as Friends of the Earth. The Woodhouse Colliery, to be developed by West Cumbria Mining in northwest England, seeks to extract coking coal which is used in the steel industry rather than for electricity generation, and was initially approved by the local council in 2020. However, it was then suspended in early 2021, ahead of the COP26 climate conference in Glasgow, before planning authorities reviewed the original decision and sent a report to the Secretary of State to make a final judgement. In a letter outlining the decision, Gove said he agreed with the planning inspector's recommendation to approve the mine as he was "satisfied that there is currently a UK and European market for the coal". The secretary of state agrees with the assessment that the effects of the development on carbon emissions "would be relatively neutral and not significant", the letter said. However, Lord Deben, chairman of the UKCCC, branded the proposal "absolutely indefensible" and said its approval would damage the UK's leadership on climate change. Opposition parties and environmental groups also condemned the decision as harmful for the climate and the UK's transition to a greener economy, and pointed out that most of the coal would be exported. Labour's shadow climate secretary Ed Miliband said it was "no solution to the energy crisis" and "does not offer secure, long-term jobs". The Green Party suggested the decision had been "cynically delayed" until after the UK's presidency of COP ended and had left the government's environmental credentials "in tatters". Senior Conservative MPs - including the former chancellor Kwasi Kwarteng and COP President Alok Sharma also argued the mine would conflict with the UK's climate targets. In contrast, former Conservative Party chairman Jake Berry said the decision was "good news for the North and for common sense". The mine is expected to create about 500 jobs until at least 2049.
Banks should live up to their responsibilities and support mortgage borrowers who are struggling to make payments in the cost of living crisis, Chancellor Jeremy Hunt said yesterday, after he met with executives from Britain's biggest high street banks including NatWest, Lloyds, HSBC and Barclays, as well as the chairman of regulator the Financial Conduct Authority and consumer champion Martin Lewis. The banks agreed at the meeting to offer support to customers, Hunt said in a statement, such as switching to cheaper fixed rates without a new affordability test, extending a loan or lowering monthly payments. "We expect every lender to live up to their responsibilities and support any mortgage borrowers who are finding it tough right now," it added.
Meanwhile, Hunt is due to meet leaders of North Sea oil and gas producers tomorrow to discuss the government's windfall tax, three industry sources told Reuters. Last month, he announced plans to raise the Energy Profits Levy (EPL) on oil and gas companies from 25% to 35%, bringing the total taxes on the sector to 75%, one of the highest rates in the world. The meeting, which will be held in either Aberdeen or Edinburgh, will be attended by senior representatives from more than a dozen North Sea producers including BP and Shell as well as industry bodies, according to a list seen by the news agency. A Treasury source confirmed the meeting and said senior officials from the Department for Business, Energy and Industrial Strategy (BEIS) would also attend. Industry executives have warned previously that the new tax risked a flight of capital from the ageing basin at a time when the government is trying to increase Britain's energy security.
A long fought-for compensation scheme for subpostmasters affected by the Post Office accounting software scandal was announced yesterday. Although 555 subpostmasters who took the first legal action against the then state-owned company Post Office Limited over the Horizon scandal received £43m plus legal costs in a settlement in 2019, much of that money was taken up by the associated costs of funding their case, and they were ineligible for the Historical Shortfall Scheme (HSS) that was subsequently launched to compensate others affected by the failure. The Department for Business, Energy and Industrial Strategy (BEIS) has now recognised their "unique position" and the new scheme will enable them to receive similar remuneration to their peers. Business secretary Grant Shapps has also confirmed the government will pay £900 per claimant as part of "reasonable legal fees" to prepare their fresh claims. He is also setting up an independent advisory board of "respected parliamentarians and academics", including Kevan Jones MP and Lord Arbuthnot, who had campaigned for wronged subpostmasters, to ensure it runs smoothly. A large number of subpostmasters were wrongfully prosecuted and even imprisoned for fraud, before it emerged that Horizon’s software was to blame for financial inconsistencies.
The labour market cooled noticeably last month, with demand for staff and pay growth easing, and staff shortages became less acute, according to the monthly index of demand for staff from the Recruitment and Employment Confederation (REC) trade body and accountants KPMG. The index fell in November to 54.1 from 56.7 in October, the lowest reading since February 2021. The survey's gauges of starting salaries and pay rates for permanent and temporary workers also fell to their lowest levels in around a year and a half. Hiring of permanent staff declined for a second month running.
The Competition and Markets Authority (CMA) has dropped a probe into outsourcer Mitie over a procurement process for immigration removal centre contracts run by the Home Office, the company said yesterday. The competition regulator launched an investigation in March into "suspected anticompetitive conduct" related to the process to find firms to operate certain services at the Heathrow and Derwentside immigration removal centres.
There is yet more trouble ahead for social housing landlord Home REIT. Law firm Harcus Parker yesterday said it is seeking redress for shareholders in relation to significant losses on their investments - Home REIT shares have fallen by more than 50% in the year to date - over claims they have been misled by information they were provided by the company and its associates. Last month, shares in Home REIT tumbled after Delaware-based short-seller Viceroy Research said that an investigation into the group's investments and tenants had suggested "significant downside". The stock came under further pressure earlier this week, when activist investor The Boatman Capital Research published an open letter calling for members of the board to resign. Harcus Parker says it has carried out extensive research into the company's behaviours, transactions, assets and business model over several months, and now plans to pursue a case on the grounds that Home REIT has used investors' money in a way which runs contrary to what they were told; that investors paid more for their shares than they were actually worth; and that Home REIT has not invested the proceeds from its fundraising rounds in accordance with its stated investment objective and policy. It will also argue that Home REIT's property portfolio is "significantly overvalued".
A major shareholder in tile specialist Topps Tiles is looking to remove the company's chairman, Sharecast News reports. The company said in a statement that it has received requisition notices from Lynchwood Nominees on behalf of MSG, a European tile producer with a 29.9% stake in the business. The notices propose that non-executive chairman Darren Shapland be removed with immediate effect, and that two of MGS's representatives - Lidia Wolfinger and Michael Bartusiak - be appointed as non-executive directors. Topps Tiles rejected the proposal, issuing a statement which said: “The board believes that the proposed appointment of MSG's non-executive directors has the primary objective of aligning Topps' business and its strategy to MSG's commercial objectives as owner of Cersanit and is therefore not in the best interests of the company and its shareholders as a whole."
Shares in British pharma GSK rallied yesterday after a US District Judge dismissed some 50,000 claims that its heartburn drug Zantac caused cancer, on the basis they were not backed by sound science. GSK has repeatedly rejected the claim. However, the ruling can still be appealed, and the decision does not directly affect tens of thousands of similar cases pending in state courts around the country. In a statement, GSK said it would continue to defend itself vigorously.
Moonpig shares fell sharply yesterday, down as much as 18%, after it cut its sales forecast for the year because of Royal Mail postal strikes and a cost of living crisis reining in consumer spending. The only greeting card company said the industrial action hit last-minute UK card orders around each strike day in September and October, and that it now expects revenues of £320m for the current financial year as compared to the previous guidance of around £350m.
Emirates Telecommunications has lifted its stake in Vodafone to 11% from 9.8%. The company, formerly known as Etisalat Group, has no intention of making an offer for Vodafone it said, only to “gain significant exposure to a world leader in connectivity and digital service at an attractive valuation".
UK-based chemical and energy group INEOS has agreed to acquire a 50% stake in a petrochemical project in north China owned by China's Sinopec Corp. The Tianjin Nangang Ethylene Project is currently building a 1.2 million tonne per year ethane cracker - a plant that performs the first step in transforming ethane gas into plastics products - which is expected to come onstream at the end of 2023, according to company statements. Reuters says no investment value was provided.
The 130-year old Fenwick department store on London’s Bond Street is to close in 2024, having been sold - along with the adjoining property - to Lazari Investments. In a statement, the company said it was selling the site to fund "significant investment" in its online business and its other eight stores around the country. Simon Calver, Fenwick's chairman, said the sale had "been a difficult decision for the Fenwick family".
British manufacturer Brompton has built the one millionth bicycle at its factory in Greenford, London, 47 years after the iconic folding, portable model er was invented in 1975. Earlier this year, the firm announced plans to build a new £100 million factory in Ashford, Kent.
A BrewDog advert has been banned for jokingly suggesting that its fruit-flavoured beers counted as "one of your five-a-day". he Advertising Standards Authority said it risked misleading consumers, as “many would not have known for sure” that government guidelines recommending people eat five portions of fruit and vegetables a day does not include alcoholic drinks, even if they have a high fruit content, when BrewDog sent them a marketing email in July.
US President Joe Biden’s administration yesterday added 24 organisations to an export blacklist for supporting Russia’s military or defense industrial base, Pakistan's nuclear activities, or for supplying an Iranian electronics company. The entities, based in Latvia, Pakistan, Russia, Singapore and Switzerland, were added over US national security and foreign policy concerns, the Commerce Department said.
China's exports and imports shrank at their steepest pace in at least 2 ½ years in November because of feeble global and domestic demand, Covid-led production disruptions and a property slump in the world's second-largest economy. Exports contracted 8.7% in November from a year earlier, a sharper fall from a 0.3% loss in October and the worst performance since February 2020. Analysts had expected only a 3.5% decline.
Vanguard Group Inc., the world's biggest mutual fund manager is pulling out of the Net Zero Asset Managers (NZAM) initiative to tackle climate change, saying it wants to demonstrate independence and clarify its views for investors. The initiative, launched in late 2020 to encourage fund firms to reach net zero emission targets by 2050, counted 291 signatories representing some $66 trillion in assets under management as of 9th November this year. Vanguard, which manages some $7 trillion in assets, insists its exit from the scheme "will not affect our commitment to helping our investors navigate the risks that climate change can pose to their long-term returns."
Italian insurer Generali SpA is planning to sell roughly €20bn (£17.23bn) of its Italian life insurance portfolio, Bloomberg News reported yesterday, citing people familiar with the matter who added the company may start a sale process as soon as January. Generali declined to comment. The firm is the largest of its kind in Italy and among the top ten largest insurance companies in the world by net premiums and assets.
Former Wirecard CEO Markus Braun, who has been in custody since his arrest in 2020, and two other managers go on trial today facing charges including fraud and market manipulation. Braun steered the company through its rise from a payment processor for pornography and online gambling to a $28bn showpiece tech company displacing Commerzbank in Germany's DAX blue-chip index, and then through its dramatic collapse two years ago. Wirecard’s demise embarrassed the Germany establishment, placing politicians who backed the company and regulators who took years to investigate it under scrutiny. Braun has denied embezzling money from Wirecard and accused others of running a shadow operation without his knowledge. All on trial could be jailed for up to 15 years if convicted.
Twitter owner and Tesla boss Elon Musk briefly lost his title as the world's richest person yesterday, according to Forbes, following a steep drop in the value of his stake in the electric-car maker. Bernard Arnault, CEO of luxury brand Louis Vuitton's parent company LVMH and his family briefly took the title as the world's richest, but were soon back at No. 2 with a personal wealth of $185.3bn (£151.97bn). Musk has held the top spot on the Forbes Rich list since September 2021, with a net worth of $185.7bn (£152.29bn). He took the title from Amazon.com founder Jeff Bezos. Tesla shares have lost more than 47% in value since Musk made his $44bn (£36bn) offer to buy Twitter earlier this year.
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