Published: 01 February 2023
By Suzanne Evans, Director, Political Insight
Teachers, train and bus drivers, civil servants and university staff are all on strike today. The teachers’ strike alone will lead to some 23,000 schools being closed. “A general strike in all but name, it is expected to cost the economy £200million and amount to a 'mini-lockdown', with 500,000 workers in total walking off the job and millions of people forced to work from home,” the Daily Mail says this morning. Thousands of UNISONand Prospect trade union members working at The Environment Agency have also announced they will strike for second time on 8thFebruary in their ongoing a dispute over pay - staff working in river inspection, flood forecasting, coastal risk management and pollution control will strike for 12-hours starting at 7am, UNISON said. They first walked out 18th January. Ambulance workers in England say they plan fresh strike action on 10th February, UNISON said yesterday.
The Telegraph reports Health Secretary Steve Barclay as saying that The Treasury has held up submissions to next year’s pay review bodies, despite Ministers suggesting repeatedly that efforts are being made to speed up the process so that the current deadlock with trade unions may be broken. There was an 11th January deadline for submitting evidence on next year's pay award, but Barclay said responses with recommendations for next year’s deal have been delayed by attempts to form a “co-ordinated” approach across departments. “Once we completed ours, some time ago, there's been a need to wait for other departments to also have those discussions,” he said. “That is, across government, a process coordinated by the Treasury. And once the Treasury is happy for the department to submit this, we are ready to do so." The Treasury already made its own submission almost a month ago, cautioning against rises beyond 3.5%. The chairman of the House of Commons health select committee said he was “astonished” by the three-week delay, and Philippa Hird, Chairman of the NHS Pay Review Body, told MPs that she had written to the minister to express her concerns about the deadline.
Britain and the European Union have struck a customs deal that could help end post-Brexit wrangling over Northern Ireland, The Timesreported yesterday, saying that Brussels has accepted a plan that would avoid the need for routine checks on products going into Northern Ireland. The newspaper also claimed the EU has made a key concession on the role of the European Court of Justice (ECJ), agreeing that the ECJ could rule on Northern Ireland issues only if a case was referred by courts in the province. However, the ECJ's exact role was not yet settled, it said. The Times quoted a senior British government source as saying the parameters of an overall deal were in place and it was up to Prime Minister Rishi Sunak to decide whether to sign it off, however Reuters was told that no agreement had yet been reached and discussions were ongoing.
The Treasury has unveiled 'world-first' plans to regulate crypto and digital assets, announcing yesterday that “robust" measures will ensure transparent and fair standards, consistent with the approach to traditional finance, to mitigate the most significant risks in the sector. The Financial Services Minister Andrew Griffith said in a statement yesterday that: "We remain steadfast in our commitment to grow the economy and enable technological change and innovation…to make Britain a global hub for crypto-asset technology". "These proposals will place responsibility on crypto trading venues for defining the detailed content requirements for admission and disclosure documents - ensuring crypto exchanges have fair and robust standards," the statement added. It also stressed that the planned regulatory framework is not fashioned to curtail ambitions, but to "enable a new and exciting sector to safely flourish and grow, boosting jobs and investment". There will be a three-month public consultation on the new plans, followed by proposals for detailed rules from the Financial Conduct Authority (FCA) to be set for financial intermediaries, which facilitate transactions, and custodians, which store customer assets. Firms already authorised by the FCA would be temporarily allowed to issue their own promotions, while the new regulatory regime is being introduced, the Treasury said.
Chancellor Jeremy Hunt has opened the door to freezing fuel duty for another year after a private grilling on tax cuts by backbench Conservative MPs, the Telegraph reports. Drivers are currently facing the prospect of a 12p per litre rise in fuel duty come March. The duty is supposed to increase in line with inflation, but this has been repeatedly cancelled by ministers to spare motorists from higher costs. Jonathan Gullis, the MP for Stoke-on-Trent North, said he quizzed the Chancellor on the matter at a meeting yesterday, and was told: “We’d have to wait and see what the finances are at the time.” Former minister Sir Edward Leigh said he also urged Mr Hunt to cut taxes in the Spring Budget, but the Chancellor said "nothing" in response, he said, adding: "He can't, to be fair to him. But he got the message," he said. "My view is you can't wait till the general election. People are depressed. You've got to give them hope, you've got to say we've made the right decisions since September, therefore that's given me room in this Budget to cut taxes, whether it's corporation, personal, fuel ... that was my point anyway." David Simmonds, the MP for Ruislip, Northwood and Pinner, said Hunt also spoke about “the big reduction in business rates that’s coming in April and the impact that will have on small businesses”.
House prices dropped by a bigger-than-expected 0.6% in January and are now 3.2% below their peak in August, following a surge in borrowing costs and broader inflation pressures, mortgage lender Nationwide Building Society said on Wednesday. The average sale price dropped to £258,297 in January, down from £262,068 in December, making it the fifth month in a row that prices have dropped.
Mortgage approvals in Britain slumped in December to levels last seen during the global financial crisis, according to data released yesterday by the Bank of England (BoE). The central bank said 35,612 mortgages were approved last month, compared with 46,186 in November. Excluding the Covid-19 pandemic, when lockdowns brought the housing market to a standstill, it was the lowest reading since January 2009, when Britain was mired in recession. The figures also showed lending to consumers increased in net terms by £493m, much less than the £1.05bn forecast by a Reuters poll of economists.
The Bank of England (BoE) is expected to add 0.5% to the base rate tomorrow, taking it to 4%. After that, most economists see just one rate rise more - to 4.25% in March - while financial markets price in the tightening cycle ending in the middle of this year at 4.5%, Reuters says.
Company insolvencies in England and Wales have hit a 13-year high. There were 22,109 insolvencies in 2022, the highest figure since 2009 and an increase of 57% from 2021, when 14,059 businesses went bust, according to data released yesterday by the Government's Insolvency Service. Most of the increase is attributable to a rise in the number of creditors' voluntary liquidations (CVLs), which rose last year to 18,821, the highest number since records began in 1960, and 21% higher than if they had risen in line with their pre-pandemic trend. Compulsory liquidations were back at their pre-pandemic level by the final quarter of 2022, after legal restrictions on forcibly winding companies up ended in March. Administrations, in which a struggling company has failed but can ultimately continue to trade as a going concern, rose by 54.6% to 1,231. The construction, retail, accommodation and food sectors were hit hardest.
Grocery price inflation hit a record 16.7% in January, according to Kantar, the highest it has been since the data analytics and brand consulting company started tracking the figure in 2008. The increase means that, on average, UK households now face an additional £788 on their annual shopping bills if they don't change their behaviour to cut costs. Prices in British shops generally in January were 8.0% higher than a year before, the biggest annual increase since at least 2006 when comparable records started, separate figures from the British Retail Consortium (BRC) showed earlier.
The Competition and Markets Authority (CMA) is to re-examine supermarket groups' so-called unit pricing, or how much a particular product costs by weight or volume, to ensure shoppers can easily compare like for like, after concerns were raised by stakeholders. In 2015, the CMA concluded that complexities and inconsistencies in food retailers' pricing and promotional practices, and with unit pricing could prevent people from spotting which deal gives them the best value. It will now consider whether the issues identified in 2015 remain; if retailers are complying with the law; as well as consumer awareness and use of unit pricing information.
Airlines operating at British airports will have to use 80% of their take-off and landing slots in order to keep them, the Government said yesterday. The so-called "use it or lose it" 80:20 rule was waived when covid travel restrictions were introduced, but now the Department for Transport says it is back to business as usual, as by October 2022, passenger numbers at UK airports had reached 85% of the equivalent 2019 levels. "Slots rules will return to normal this summer," Transport Secretary Mark Harper is due to say in a speech at the Airport Operators' Association's annual conference, according to advance extracts released by the Department. However, a safety net introduced during the pandemic will remain in place and allow carriers to hand back 5% of their slots before the start of the season, to help avoid last-minute cancellations. There will also be flexibility over when airlines are justified not to use their slots, such as where either end of a route is affected by coronavirus restrictions. Industry body Airlines UK said it welcomed this flexibility so that airlines aren't punished by travel restrictions. "Airlines recognise that as passenger demand returns and we approach another busy summer then the slot rules must follow suit. Global recovery is still bumpy though and we’re not yet fully back to normal," a spokesperson said.
Tesco is to implement a management shake-up by introducing about 1,800 "shift leader" roles while reducing the number of "lead" and "team managers" in its large stores. Britain's biggest supermarket group said the 1,750 workers affected will have the option of moving to shift leader vacancies or taking redundancy. Localised changes across the UK business will also impact a further 350 jobs. These include the closure of eight pharmacies; moving overnight roles to the daytime in 12 stores; reducing hours within some Post Offices; removing a small number of head office roles; and closing the Tesco Maintenance National Operating Centre in Milton Keynes. Tesco said it also planned to close the meat, fish and deli counters in the small number of stores that still have them from 26th February.
Stationery firm Paperchase collapsed into administration again yesterday morning, but by lunchtime had been bought by Tesco – or at least, some of it was. No sooner had joint administrators Begbies Traynor put out a statement saying: "Unfortunately, despite a comprehensive sales process, no viable offers were received for the company, or its business and assets,” than the supermarket giant confirmed it had bought the brand and related intellectual property. Jan Marchant, Managing Director of Home and Clothing at Tesco said: "Paperchase is a well-loved brand by so many, and we're proud to bring it to Tesco stores across the UK”. Paperchase’s 820 employees and 106 stores are not part of the Tesco deal.
British American Tobacco will merge its European and American divisions in April, reducing its operating regions from four to three, and slash the number of its business units from 16 to 12. The FTSE 100cigarette maker, which employs more than 52,000 people worldwide, said there may be job losses as a result of the restructure and that it is currently consulting with affected staff.
Sky News has learned that Jon and Susie Seaton, who established digital teaching resources firm Twinkl in 2010 in a bedroom in their Sheffield home, are in advanced talks with the private equity firm Vitruvian Partners about the sale of a minority stake. One source said the couple were negotiating the sale of a large minority shareholding in a transaction that would value Twinkl at approximately £500m. If they sold a 30% stake, that would hand the Seatons a pre-tax windfall of close to £170m. Twinkl supplies millions of educators around the world and, according to its website, had 4 million users globally by the year of its tenth anniversary.
PayPal is shedding around 2,000 jobs, or 7% of its workers, as it becomes the latest big tech firm to cut costs. The online payments company says it was forced to make the decision because of "the challenging macro-economic environment." Google's parent company Alphabet, Amazon and Microsoft have also announced major job cuts.
The White House yesterday expressed its anger at Exxon Mobil’s record net profit of $56 billion for 2022, a historic high not just for the company but for the entire Western oil industry. In a statement, the US administration said Exxon's profit margin was particularly galling as Americans paid record high prices at the pump, and criticised attempts by Republicans in the House of Representatives to push policies aimed at supporting the oil industry. "The latest earnings reports make clear that oil companies have everything they need, including record profits and thousands of unused but approved permits, to increase production, but they’re instead choosing to plow (sic) those profits into padding the pockets of executives and shareholders while House Republicans manufacture excuse after excuse to shield them from any accountability," the statement said.
US President Joe Biden has also stopped approving licenses for US companies to export most items to China's Huawei, Bloomberg and the Financial Times report. A Commerce Department spokesperson said officials "continually assess our policies and regulations" but do not comment on talks with specific companies, and Huawei and Qualcomm – which has previously received permission to sell 4G smartphone chips to Huawei - declined to comment when asked to do so by Reuters. However, Chinese foreign ministry spokesperson Mao Ning said that China opposes the United States abusing an overly broad notion of national security to suppress Chinese firms unreasonably. The move "goes against the principles of the market economy and rules of international trade and finance, hurts the confidence the international community has in the U.S business environment and is blatant technological hegemony," Mao said during a press conference in Beijing yesterday.
India's Gautam Adani lost his title of Asia's richest person yesterday as a rout in his conglomerate's stocks deepened to $74 billion after a short-seller report. Adani slipped to 10th on the Forbes’ rich list with an estimated $84.1 billion, just below rival Mukesh Ambani, the chairman of Reliance Industries Ltd who has an estimated $84.4 billion. Before the Hindenburg report – which Adani has denounced as baseless - Adani had ranked 3rd.
And finally….how strong is your coffee? An investigation by consumer group Which? measured the caffeine in cappuccino, espresso and filter coffee at Caffè Nero, Costa, Greggs, Pret a Manger and Starbucks and found significant variations in the amount of caffeine in each. Pret's single espresso, for example, had six times as much caffeine as Starbucks's. While a strong coffee might be just the boost you need, Which? said consumers should be alert to caffeine levels. "Our research shows you may be consuming significantly more, or less, caffeine than you bargained for," said Shefalee Loth, a nutritionist at Which?
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