Published: 27 February 2023
By Suzanne Evans, Director, Political Insight
It is widely anticipated that an announcement about a deal between Britain and the European Union on post-Brexit trading arrangements for Northern Ireland will be made today. Prime Minister Rishi Sunak is set to meet Ursula von der Leyen, President of the European Commission, in Downing Street, at lunchtime today. The Times’ front page suggests Sunak is briefing big concessions from the EU, however the report also says that the European Court of Justice (ECJ) will remain the final arbiter when it comes to single market rules applying in Northern Ireland, meaning the DUP is unlikely to accept the deal.
Former home secretary Priti Patel has urged Chancellor Jeremy Hunt to use his Budget next month (15th March) to halt the planned corporation tax rise. Corporation tax is due to rise from 19 to 25% in April. Speaking to the Daily Telegraph, Patel said: “It is not too late for the Chancellor to back business and end the current political obsession of regulation, high taxes and interference with business...The Chancellor must send a positive signal to business in the Budget which supports jobs and economic growth. Now is not the time for an increase in corporation tax”. She also called on Hunt to pull out of an international agreement preventing corporation tax from falling below 15%. Britain was signed-up to the deal by Prime Minister Rishi Sunak when he was Chancellor, in a move brokered by the Organisation for Economic Co-operation and Development (OECD) and heralded by the US.
The Labour Party claimed yesterday that the UK economy could fall behind that of Poland by the end of the decade, and eventually Hungary and Romania. The claim was based on World Bank data on economic output per head based on trends witnessed since 2010: GDP per capita in Britain stood at $44,979 in 2021 and $34,915 in Poland. The party said that, based on average 0.5% annual growth between 2010 and 2021 in Britain, that figure would fall behind Poland's per capita GDP by 2030 if Poland kept up its 3.6% average annual growth. Using the same analysis, the party said Britain on its current trajectory would by 2040 fall $12,000 per person behind Romania and $8,000 per person behind Hungary, providing they also remained on the same trajectory. The analysis will form the basis of an appeal today by Labour Leader Keir Starmer for voters to back his party at the next General Election expected next year. "We need to be frank about the path of decline the Tories have set our country on. The British people are falling behind while our European neighbours get richer," advance extracts of his speech show he is expected to say, adding that if Labour wins, he will ensure Britain has the fastest growing economy among the G7 on a sustained basis.
Job centre staff are set to be paid a bonus of up to £250 if they get people into work under new government plans. The proposal is for a job centre league table that rewards those who get the most people into work, and will be piloted at 60 job centres in a bid to get more Universal Credit claimants into employment. Staff at the top performing job centres each month will receive £250. The next best performing will get £125 each. The pilot will also make it compulsory for Universal Credit claimants who have been on the benefit for thirteen weeks, to visit a job centre every weekday for a fortnight for "intensive support," with failure to attend leading to sanctions.
Railway workers have accepted a two year pay deal from train operators providing a 5% increase, or a minimum of £1,750, in the first year, and a further 4% increase in the second year. The TSSA union said the agreement covered pay, job security, and conditions, and was supported by a significant majority of members in an online ballot. The agreement also included a commitment to no compulsory redundancies for employees within the grades directly affected by workforce changes until the end of 2024, and a voluntary redundancy scheme offering the terms set out under the RIRG Enabling Framework Agreement in 2021. Despite the acceptance of the offers, TSSA said it was continuing to oppose the proposed closures of ticket offices. The train companies involved in the agreement included Avanti West Coast; C2C; Chiltern Railways; CrossCountry; East Midlands Railway; Govia Thameslink Railway, including Southern, Thameslink, Great Northern and Gatwick Express; Greater Anglia, GWR; LNER; Northern Trains; South Eastern; South Western Railway; TransPennine Express; and West Midlands Trains.
Public sector workers are becoming “burnt out” and quitting their jobs after putting in millions of hours of unpaid overtime last year, according to a report by the TUC. The trade union body is now urging everyone to work their proper hours as part of its annual campaign against excessive unpaid overtime. The union organisation estimated that employers claimed £26bn of free labour last year, as 3.5m people worked unpaid overtime in 2022, down from five million in 2018, putting in an average of 7.4 unpaid hours a week.
The National Farmers’ Union (NFU) has warned that shortages of some fruit and vegetables in UK supermarkets could be “the tip of the iceberg”. NFU deputy president Tom Bradshaw told Times Radio on Saturday: “We’ve been warning about this moment for the past year. A reliance on imports has left the UK vulnerable to “shock weather events,” he said, and soaring energy bills exacerbated by the war in Ukraine have put off some UK vegetable growers. “There’s a lack of confidence from the growers that they’re going to get the returns that justify planting their glasshouses, and at the moment we’ve got a lot of glasshouses that would be growing the tomatoes, peppers, cucumbers, aubergine that are sitting there empty because they simply couldn’t take the risk to plant them with the crops, not thinking they’d get the returns from the marketplace,” he said.
The British Retail Consortium (BRC) will write to the Government this week urging it to scrap its waste strategy policy, or risk forcing prices up for consumers already facing a cost of living crisis, Sky News reports. The letter is said to outline industry concerns about the costs associated with new packaging and bottle recycling measures, and urges a redesign of a deposit return scheme that is close to being introduced in Scotland and would subsequently be extended south of the border. It involves people paying a 20p deposit when they buy a drink that comes in a single-use container made of PET plastic, steel and aluminium, or glass. They get the money back if they return the empty container to a recycling point.
Property wealth held by homeowners has ticked past £7tn, according to data from Savills. The value of residential homes in Britain last year was £8.7tn, offset by mortgage debts of £1.7trillion, the estate agent said, meaning property wealth has nearly doubled in a decade, almost half of which is owned by mortgage-free homeowners who hold a £3.3tn stake. Around £425billion was added to the total value of Britain's properties last year – a 5% rise.
Car production in Britain fell slightly in January, by 0.3% on February, but electric vehicles experienced a near 50% increase. The Society of Motor Manufacturers and Traders (SMMT) said 68,575 new vehicles were produced, a fall of 215 on December 2022.
Australian firm Recharge Industries has bought Britishvolt out of administration. Britishvolt, a start-up launched in 2019, had planned to build a £3.8bn plant near the Port of Blyth in Northumberland to make electric car batteries, but collapsed last month after failing to secure new investment and running out of money, with the loss of more than 200 jobs. The UK Government had offered £100m to the project, which planned to build Britain’s first battery Gigafactory, but the money never came through as contractual construction milestones were not met. The new owners will keep the Britishvolt brand name but will have a different focus – creating batteries for energy storage which it plans to roll off the production line at the end of 2025. Only then does it intend to produce car batteries – and just for high-performance sports cars. Recharge Industries says it hopes to create up to 8,000 jobs on site and in the supply chain. Last week, Levelling-Up Secretary Michael Gove spoke to the Northern Echo during a visit to Blyth and announced £20.7m in funding for the coastal town.
British Gas owner Centrica will be in court today, challenging the Government over its handling of the sale of collapsed energy supplier Bulb to rival Octopus Energy. Centrica argues Octopus was offered state support to fund the hedging of energy supplies for Bulb’s 1.6m customers – terms that were not offered to Centrica – meaning it had an unfair advantage and distorted the market. Octopus saw its customer base jump from 3.3m to 4.9m customers as a result. Octopus dismisses the claim. Centrica is one of three energy firms raising complaints as part of a judicial review of the process, alongside Big Six rivals EON UK and Scottish Power, who are also raising their own issues about the lack of transparency in the funding in the takeover deal. The hearing at the Royal Courts of Justice is expected to last three days, with a ruling expected in the Spring.
The crisis at social landlord Home REIT could saddle Scottish Widows with tens of millions of pounds of losses, the Daily Mail reported. The Edinburgh-based insurer, owned by Lloyds, granted Home REIT a £130 million loan in December 2021 which the company said would be 'instrumental' in supporting growth plans. But with Home REIT now in crisis, the risk of default is rising, which could leave Scottish Widows with few options to recover the funds. One possibility would be for the insurer to take possession of properties from Home REIT's vast portfolio up to the value of the loan, but this could be difficult if allegations, denied by Home REIT, that it massively overpaid for many of the houses on its books turn out to be true, the newspaper says. Another issue is the fact many of the properties are already housing vulnerable people, leaving Scottish Widows in a moral quandary about whether to sell the buildings and run the risk of the new owners turfing out the occupants. Trading in Home REIT shares has been suspended since the start of the year after the firm failed to publish results on time, and a forensic accountant has been brought in to investigate allegations of wrongdoing. Home REIT declined to comment.
Buy-now pay-later giant Klarna will begin penalising customers for late payments next month in a bid to curb loan defaults, as shoppers pour onto the platform amid a cost of living squeeze, City A.M. revealed exclusively on Friday. The Swedish bank and payments firm, which has been on a major cost cutting and profitability push in the past 12 months, will begin charging a £5 fee to customers that miss payments from the 16th March. Fees will be capped at 25% of the order value with no more than two fees per order, Klarna said. Nearly £1 in every £8 spent online last month was sourced from BNPL providers like Klarna, Clearpay and Laybuy, according to research by Adobe Analytics.
Digital bank Revolut is on track to receive formal recognition from regulators and win its UK banking licence in weeks, The Mail on Sunday reported yesterday. UK banking licences are signed off by the Prudential Regulation Authority, which sits within the Bank of England, and the Financial Conduct Authority. Securing a licence allows banks to lend money. Revolut is the UK’s largest fintech, valued at nearly £30bn. It initially started out by offering currency exchange cards, but now provides many typical banking services.
Meal-kit delivery service Gousto has reportedly slashed its workforce and taken an axe to its ambitious hiring plans. According to Sky News, the company has cut 14% of its headcount in recent months – fewer than 100 employees - and scaled back plans to recruit an additional 1,000 staff.
Telecoms giant Ericsson is to lay off 8,500 staff in a bid to slash costs, according to media reports on Friday. Ericsson has 105,500 staff worldwide, implying a cutback of around 8% of jobs. Around 1400 staff are based in the UK, Reuters says.
Citymapper, the urban transport app which ranks among Britain’s most prominent consumer technology companies, is in talks to be bought by Via Transportation, its multibillion dollar New York-based rival, Sky News reports. Any transaction would be likely to value Citymapper at a fraction of the $325m it was reported to have raised funding at in 2016, sources said. Citymapper claims to have 50m users around the world.
International distribution group Bunzl pre-tax profit for 2022 rose 11.6% to £634.6m. Tevenue grew 9.8% at constant exchange rates to £12bn. The FTSE 100 company has also bought Arbeitsschutz-Express, an online distributor of workwear and PPE in Germany, which generated €41m (£35 million) of revenue last year; and Capital Paper, a Canadian distributor of foodservice packaging and consumables, cleaning & hygiene supplies, and industrial packaging products.
Jaguar has failed in its bid to block a Cheshire campervan company from trademarking the word ‘Overlander’. Jaguar has asked a tribunal to block Warrington firm Car & Commercial Solutions Ltd from registering the word ‘Overlander’ as a trademark, due to it sharing similarities with its own ‘Lander’ brand. The tribunal ruled it is unlikely any potential customers might actually confuse Jaguar’s cars with the Cheshire firm’s campervans, despite the similarities in branding, according to court documents seen by City A.M.
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