Published: 16 February 2023
By Suzanne Evans, Director, Political Insight
Scotland’s First Minister Nicola Sturgeon resigned yesterday after eight years in the job, saying she had “had enough,” despite saying just last month, in the wake of the resignation of the then New Zealand Prime Minister Jacinda Ardern, that she had “plenty left in the tank” and didn't feel “anywhere near” the point of stepping down. A month is clearly a long time in politics however: yesterday she claimed she had been wrestling with the decision for “weeks”. “Giving absolutely everything of yourself to this job is the only way to do it, but in truth, that can only be done by anyone for so long. For me it is now in danger of becoming too long," she told a press conference called to make the announcement. She denied her decision came as a result of short-term pressure, such as that following an interview given in the wake of legislation on gender recognition being passed by the Scottish Parliament but blocked by Westminster - she tied herself in knots when questioned about whether a male double-rapist who identified as a women should be allowed to serve their time in a woman’s prison. There can be no doubt, however, that Sturgeon has faced significant political pressures of late. Holyrood recently lost a Supreme Court case it brought to argue for a second referendum on Scottish Independence, that too having been rejected by the Government. And, as ITV Border's Political Editor Peter McMahon points out in a blog post this morning, her administration has also faced “a health service struggling to cope with post pandemic pressures, teachers on strike, a failure to build new ferries for CalMac, the promise to close the attainment gap in schools unmet, councils crying foul over funding, pledges on road building jettisoned, questions over SNP funding, the [bottle and can] deposit return scheme in doubt”. Sturgeon confirmed she would stay in office until a replacement had been chosen and indicated she will continue on the backbenches as an MSP.
Chancellor Jeremy Hunt was yesterday urged to reform the banking ringfencing regime “as quickly as possible” by industry body UK Finance, and then told to exercise caution by Bank of England governor Andrew Bailey. UK Finance said: “the current ringfencing regime puts the UK at a disadvantage internationally, as well as trapping liquidity and inhibiting competition in the banking sector.” Ringfencing applies to banks with more that £25bn in deposits, and keeps a bank’s investment banking division separate from its retail banking. It was introduced in the wake of the 2008 financial crisis to protecting retail divisions from shocks originating elsewhere. The Government proposes to lift the threshold at which ringfencing applies to £35bn. Bailey, however, warned that plans to rewrite the financial services rulebook may be premature, saying he “would…caution that the notion we’re past the financial crisis, and we therefore don’t need the regulations that we had post the financial crisis, I would not go along with that view.” He appeared to be responding to remarks by City minister Andrew Griffith who said in an interview with City A.M. last week that the world had “moved on” from the financial crisis. “Banks have much more capital today, lending practices are much tighter, there’s none of that excess mortgage lending that we saw prior to 2008 and the Bank of England has a resolution regime that means if banks get into difficulty there’s a way out of that,” Bailey said. The so-called Edinburgh Reforms are believed by the Chancellor to be potentially transformative for the country’s vital financial services sector.
A group of top tech investors and entrepreneurs are piling pressure on Michelle Donelan, Secretary of State for Science, Innovation and Technology (DSIT) to address “urgent issues” choking off growth in the UK’s innovation sectors, City A.M. reports. In a letter seen by the newspaper, 26 tech figures including Prof. Dylan Jones-Evans, founder of the Fast Growth 50; Seb Wallace, investment chief of venture capital firm Triple Point; and Roderick Beer, boss of UK Business Angels Association, said the potential of the sector was being restricted. They want the newly-appointed Donelan to address five key issues facing the sectors, including providing support to so-called university ‘spin-outs;’ allowing locked up pension cash to flow into start-ups via venture capital firms; and creating “innovation hubs” outside of the “golden triangle” of London, Oxford and Cambridge to deliver on any promise of creating the “next Silicon Valley” in the UK. A robust intellectual property strategy and ensuring tech workers can access visas to the UK were also key issues facing the sector, they wrote. “Ignoring these issues will not only result in irrelevance for the department at a time when it should be playing a key role in our economic recovery, but also represent a failure of the innovators it is supposed to support,” the letter said.
The Office for National Statistics (ONS) said this morning that the average UK house price was £294,000 in December 2022, down from £296,000 in November 2022, but still £26,000 higher than the same period a year ago. “Annual house price inflation, measured using final transaction prices, slowed again in December across the majority of the nations and regions," ONS assistant deputy director of prices, Chris Jenkins, said.
British Gas owner Centrica has posted record £3.3bn profits for 2022, more than triple the £948m it made in 2021. The surge in profits is attributable mostly to the increased success of Centrica’s North Sea oil and gas division, which has seen record high prices for wholesale gas since Russian gas supplies to Europe shrank following Putin’s invasion of Ukraine. However, the British Gas division itself slipped back last year, making £72m in profit, down 29% on the previous year, reflecting tight margins in the markets for energy suppliers. Centrica said it would extend its share buyback programme by £300m given the increased revenue. Inevitably, the firm is being widely criticised for the huge profit increase, given the considerable uptick in energy bill prices since Russia’s invasion. Centrica CEO Chris O'Shea said he recognised that cost-of-living pressures had created a challenging environment for customers, adding that the company had invested £75m supporting customers last year.
Barclays said yesterday that it is tightening lending criteria for coal power and would stop financing oil sands exploration and production, but did not announce new restrictions on oil and gas lending as some rivals have, Reuters reports. The FTSE 100 British bank said it would extend its plan to phase out financing for UK and EU clients involved in coal-fired power generation by 2030, to include other countries in the Organisation for Economic Cooperation and Development (OECD).
Babcock, Britain’s second-largest defence contractor, has landed a £400m contract to operate the Ministry of Defence’s military satellite communications system. The six-year deal will see Babcock manage the Skynet 6 programme, which involves running and overseeing military satellites, ground stations and user terminals. Skynet 6 supports more than 400 jobs in south-west England.
Iranian-American billionaire Jahm Najafi, chair of MSP Sports Capital, is set to launch a £3bn takeover bid for Premier League soccer club Tottenham Hotspur, a source familiar with the matter told Reuters yesterday. Tottenham declined to comment when contacted by the news agency.
The Big Four accounting firms – EY, Deloitte, KPMG, and PwC – are capturing an ever-larger share of the global market for legal services, Reuters reports. Having made their first forays into the market in the 1990s, their legal businesses have expanded rapidly, boosting their own sales and taking work away from traditional firms, research from the Said Business School shows. They now generate $1.5bn (£1.25bn) in combined revenues from their legal segments, up from just $900m (£748m) in 2015 and $1.2bn (£1bn) in 2017.
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