Published: 23 January 2023
By Suzanne Evans, Director, Political Insight
Conservative Party Chairman and former Chancellor Nadhim Zahawi has come under repeated political fire over the weekend because of controversy over his tax affairs. The multi-millionaire co-founder of polling firm YouGov finally confirmed he paid a penalty to HMRC after an error he said the tax authorities have accepted was “careless not deliberate.” The exact figures Zahawi had misreported, and the amount he has had to repay, including the fine, has not been confirmed, however The Guardian has said Zahawi has paid a total of around £4.8m in back tax and a 30% penalty on the amount overdue. The Labour Party is calling for Zahawi to be fired, saying his position is “untenable,” given that questions were being asked about his tax affairs at the time he was appointed as Chancellor in the dying days of Boris Johnson’s government. Prime Minister Rishi Sunak is so far backing Zahawi, however the Tory chairman he has faced opposition from within his own party in the past 24 hours: former party leader and Cabinet minister Iain Duncan Smith agreed his position had become “untenable” and called on him to release full details of his tax affairs; while Foreign Secretary James Cleverley refused to back Zahawi after being asked whether he had confidence in him as party chairman, saying only that it was a decision for the Prime Minister.
Meanwhile, the position of the current BBC Chairman Richard Sharp is under scrutiny, since it emerged he helped facilitate an £800,000 loan for Boris Johnson, just weeks before the former Prime Minister appointed him to his position. Sharp, Johnson, and the Government, all deny there was a conflict of interest, but Labour has asked the parliamentary standards watchdog for an inquiry, suggesting that Johnson could have breached the code of conduct for MPs "through failing to appropriately declare the arrangement" on his Parliamentary register of interests.
As if all this wasn’t headache enough for PM Rishi Sunak, yesterday he was also given a Fixed Penalty Notice incurring a £100 fine by Lancashire Police for not wearing a seatbelt while filming a social media video in the back of a moving car. Sunak apologised on Thursday for the "brief error of judgement".
Following a campaign by charity Citizen’s Advice, the Government has told energy suppliers to stop forcing vulnerable households on to prepayment meters. Business Secretary Grant Shapps has warned he would "name and shame" suppliers who were doing "nowhere near enough" for vulnerable customers who are left without heat or light when they are unable to afford meter top-ups. Citizen’s Advice is continuing its campaign for a total ban on forced remote switching, however the government is resisting this amid concerns about a subsequent increase in bailiff action.
Sky News says it has learnt that the Treasury is close to agreeing a £300m aid package for British Steel, the UK's second-largest steel producer. Chancellor Jeremy Hunt has been advised by officials to approve a request for the public money following an intervention by Business Secretary Grant Shapps and Michael Gove, the levelling-up secretary, the broadcaster says. The funding would be "directly linked" to a project to replace British Steel's blast furnaces at its Scunthorpe site with a greener electric arc furnace, according to one person close to the situation. Jingye Group, British Steel's Chinese owner, would also be obliged to invest at least £1bn in the business by 2030 and make commitments relating to job retention, the person added. If those conditions are not met, the Treasury could still decide not to proceed with the funding. Apparently, Shapps and Gove have warned that British Steel's demise could cost the government up to £1bn in decommissioning and other liabilities, if it fails. Jingye Group bought the business out of insolvency in 2020, but has since said it will not maintain its operations without taxpayer funding.
Ambulance staff belonging to three unions - GMB, Unison and Unite - are on strike again today in their ongoing dispute over pay. The advice remains to call 999 in an emergency.
Junior doctors in England have also voted for strike action in a dispute over pay, the hospital doctors union HCSA said on Friday. HCSA said it will agree the timing and shape of strike action "in coordination with other health unions."
Consumer goods giants have been accused of “greedflation,” of using the cost-of-living crisis as a cover for hiking prices more than necessary, and therefore profiteering and raking in bumper profits. An investigation by yesterday’s Mail on Sunday gave examples including: Heinz tomato soup, which went up 73% from 98p a can to £1.70 in a year; Heinz baked beans increasing 35% from £1 to £1.35; Unilever’sHellmann’s mayonnaise going up 42% from £1.75 to £2.49; and Procter & Gamble’s Head & Shoulders shampoo rising 21% from £2.33 to £2.83. Yet the newspaper says seven of the biggest consumer businesses are about to unveil combined profits of £50 billion for 2022 – £2 billion more than the previous year. The report led former Pensions Minister Baroness Ros Altmann to comment: ‘To any normal consumer, this looks like greed and it needs an explanation. It feels like they are charging however much they can get away with. ‘There should be a Competition and Markets Authority investigation into what is going on. If we want to control inflation, there is going to have to be an investigation into prices”. Food prices rose 16.8% in the year to December, according to the Office for National Statistics.
Asked by the BBC's Laura Kuenssberg if food producers were taking advantage of the poorest in society, Tesco Chairman John Allan said it was "entirely possible". While accepting that most price rises were legitimate, Tesco, which has a 27.5% share of the GB grocery market, had "fallen out" with "a number of suppliers" after "robust" discussions over price hikes that the supermarket had challenged, he said. In response, Minette Batters, president of the National Farmers' Union, said she was "slightly baffled", by Allan's comments. "It was almost like he was living in a parallel universe," she told the BBC Radio 4 Today programme this morning, noting farmers and growers were facing unprecedented hikes in production costs.
A report in the Daily Mail today claims that the value of 'gold-plated' pension plans – which guarantee a final salary pension scheme for some 10 million workers - fell by more than £400billion last year. Assets held by company pension funds dropped by a “whopping” 23% last year to £1.4 trillion, more than the stock market value of Shell, Unilever and HSBCcombined, the newspaper says, citing figures from The Pension Protection Fund (PPF). However, the gap between £1bn of promised payments and the assets funding them showed a surplus of £377bn, hence PPF Finance boss Lisa McCrory said: “We're in an excellent position to continue to safeguard the 9.6m defined benefit pension savers under our protection”.
Lloyds and Halifax have announced plans to close 40 branches between April and June, following a significant drop in footfall, meaning a total of 64 bank branch closures have been announced so far this year. Earlier this month TSB said it would be shutting nine sites, and Barclays has earmarked 15 for closure.
Geely, the Chinese owner of the London Electric Vehicle Company (LEVC) which makes a hybrid version of London's iconic black taxis, has announced plans for a major investment into a high-volume, all-electric brand with a range of commercial and passenger vehicles. Executives at the unit told Reuters that LEVC also aims to expand its suite of services, which include cars arranging their own maintenance and recognising their owner's interests to help them book activities. They also said the size of Geely's investment would be disclosed later. So far, the Chinese group, which took full control of LEVC in 2013, has invested £500m in it.
Supermarket chain Asda could be merged with petrol forecourts business EG Group under plans being explored by the owners of both companies, The Times reported on Saturday. The combination would create a retail giant worth between £11bn and £13bn with more than 581 supermarkets, 700 petrol forecourts and 100 convenience stores in Britain, the newspaper said. Brothers Zuber and Mohsin Issa and London-based private equity group TDR Capital have owned EG Group together since 2016, and later bought Asda. Talks over merging the two businesses come ahead of a refinancing of EG Group, which has £7bn in debt due in 2025, according to the report.
MGM Resorts is mulling another takeover bid for FTSE-100 gambling group Entain, owner of Ladbrokes, Coral and Gala Bingo, later this year, according to City sources who have spoken to the Daily Mail. The US casino giant previously offered £8.1bn for Entain, but it was rejected by CEO Jette Nygaard-Andersen, who said the price was too low. Analysts now believe the bid is likely to be revived once the Gambling Commissionhas published a long-delayed white paper into the industry, the recommendations of which may have a significant impact on the gambling industry.
Saga, the provider of products and services to the over 50s, has confirmed media reports it is in talks to potentially sell its Acromas Insurance Company Limited business with a view to reducing its debt pile. "Discussions are ongoing and there can be no certainty that any transaction will occur," Saga said.
Infrastructure group Balfour Beatty has been awarded a £1.2bn contract by National Highways to design and deliver more than 10 miles of new highway as part of the proposed Lower Thames Crossing project to build a new tunnel under the River Thames aimed at easing traffic congestion in the south of England.
Technology giant Apple has filed an appeal against an investigation by the Competition and Markets Authority (CMA) into the dominance of its mobile browsers in the cloud gaming market. The CMA launched its probe in November, amid concerns about restrictions by iPhone-maker Apple and Google. Lawyers representing Apple said in a notice filed with the Competition Appeal Tribunal on Friday that the CMA's investigation should be reviewed as the CMA had missed timing requirements linked to the launch of an investigation. "Apple seeks 1) an Order that the Market Investigation Reference (MIR) Decision is quashed. 2) a declaration that the MIR Decision and market investigation purportedly launched by reference to it are invalid and of no legal effect," the filing showed. In response, the CMA said it would defend its position and continue to progress its work in line with the statutory timetable.
Google parent company Alphabet Inc is cutting some 12,000 jobs, 6% of its workforce, it said in a staff memo on Friday. It said recession worries and plans to increase the use of artificial intelligence were the reasons behind the layoffs.
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