Published: 20 March 2023
By Suzanne Evans, Director, Political Insight
Kate Nicholls, CEO of UKHospitality, says the Government’s decision not to include restaurant and bar workers in its updated shortage occupation list as “disappointing”. Last week, the Migration Advisory Committee recommended allowing foreign bricklayers and carpenters to get work visas more easily in the UK, but not hospitality workers, despite a government report published on the same day showing that vacancies are higher in hospitality than construction. Meanwhile, Nicholls says ongoing labour shortages in the sector are “crippling” businesses and costing billions in lost trade as they are forced to cut opening hours. She said UKHospitality had provided “compelling evidence and data” to the Migration Advisory Committee’s consultation. She said: “With shortages in the sector two-thirds higher than pre-pandemic, it’s clear there aren’t enough active people in the economy to fill all the roles we need, despite the extensive work the sector is doing to recruit domestically, including the economically inactive.”
Water regulator Ofwat will be able to block the payment of dividends to shareholders by water suppliers if they risk the financial resilience of their companies or fail to link dividend payments to performance under new powers announced today. A new onus on water companies introduced through Ofwat’s licensing scheme includes them having to maintain a strong credit rating. The licence changes are also designed to both incentivise those companies experiencing financial health challenges to engage with Ofwat quickly, and to allow Ofwat to intervene when companies fail to take such steps themselves, it says. Ofwat CEO David Black says: “When deciding on dividend payments to investors, water companies need to take stock of their performance for customers, the environment, and the company’s overall financial health. Too often, this has not been the case. That is why we’re implementing changes that will allow us to better hold companies to account and take enforcement action when they get it wrong. “We hope the introduction of these new powers will focus minds around company board tables on the importance of responsible decision making and openness with customers and other stakeholders. And if that isn’t the case, we will act.”
The Swiss government has brokered a discount $3bn (£2.6bn) deal that will see UBS rescue Credit Suisse from bankruptcy to avoid “irreparable” damage to the global financial system. In an press conference last night, Swiss President Alain Berset said deposit outflows on Friday at Credit Suisse meant it was “no longer possible to restore the necessary confidence” in the bank and that a “stabilising” solution was required. “This solution is a takeover of Credit Suisse by UBS,” he said, adding that the historic bank’s failure would have had “unthinkable consequences for Switzerland and the international markets.” The deal, to be completed by the end of the year, will end a 176-year history at Credit Suisse. The lender suffered a dramatic share price collapse last week after its largest shareholder, the Saudi National Bank, said it would not inject any further capital into the bank, which lost around £7bn last year.
The Financial Conduct Authority said yesterday it was minded to approve Swiss bank UBS' takeover of Credit Suisse bank, both of which have operations in London, to support financial stability. "Earlier today, the Swiss authorities announced a wide range of actions to support financial stability. The FCA has been in contact with its Swiss counterparts and other UK regulatory authorities in advance of today’s announcements," the FCA said in a statement. It added: "The FCA continues to engage closely with UK and international regulatory partners to monitor market developments". The Bank of England, along with the Bank of Japan, Bank of Canada, the European Central Bank, US Federal Reserve and Swiss National Bank, have said the move by UBS to take over Credit Suisse is an "important backstop to ease strains in global funding markets" and take the pressure off banks.
Gold prices have reached record highs in the UK following the collapse of Silicon Valley Bank and the resulting banking crisis. Gold - typically seen as a safe haven asset in times of turmoil - showed its strongest weekly gain since mid-November last week, with prices reaching £1,634 per ounce on Friday, according to trading platform Bullion Vault.
The London Metal Exchange (LME) has had to postpone the resumption of nickel trading during Asian hours by a week to 27th March after finding about 54 tonnes of nickel that failed to meet contract specifications at an LME warehouse. The bags in question were at a warehouse owned by Access World in Rotterdam and contained stones instead of the nickel, Bloomberg reported, citing sources familiar with the matter. The move is another blow to the world’s oldest and biggest industrial metals market, which had been counting on a restart of Asian nickel trade after been forced to suspend trading after dramatic price spikes last March.
Rightmove claims that the average asking price of a home in the UK has risen by nearly £3,000 in March, or 0.8%, compared with a month earlier. However, overall asking prices for new sellers still remain £5,800 below their peak in October 2022, the property website said. Rightmove's Tim Bannister said: "The beginning of the spring season sees stability and confidence continuing to return to the market as it recovers from the turbulence at the end of 2022.
The Financial Reporting Council (FRC) has ended its probe into Grant Thornton's audit of sporting goods retailer Sports Direct for the year ended 24 April 2016. The probe was prompted by reports of an undisclosed arrangement between Sports Direct and Barlin Delivery, the company owned by SDI founder Mike Ashley's elder brother, however the FRC has now decided that “the test for bringing enforcement action is not met" and so “the case has been closed”. “Sports Direct was not the subject of the FRC's investigation," it added.
Security staff at London's Heathrow Airport have voted to strike for 10 days. The walkout will involve over 1,400 staff and take place from 31st March until 9th April (Easter Sunday), Unite General Secretary Sharon Graham said. She said the airport's offer of a 10% pay increase could not make up for years of pay freezes and cuts.
FirstGroup says the Government has extended its current contract for its West Coast rail contract to 15th October. The contract comprises the operation of Avanti West Coast and acting as shadow operator to the HS2 programme. Discussions are ongoing with the Department for Transport regarding the longer-term National Rail Contract for the West Coast Partnership. Avanti West Coast has come under severe criticism over the unreliability of its service, with about a quarter of its trains cancelled in the first two months of 2023.
Retailer John Lewis, which is 100% owned by its staff, is considering diluting its partnership structure, The Sunday Times reported yesterday. The newspaper said the company would consider selling only a minority stake and its priority would be to maintain majority employee ownership. Chair Sharon White is in the early stages of exploring a plan to change the retailer's mutual structure so it can try to raise between £1bn and £2bn of new investment, the report said. Last Friday, the company, which runs John Lewis department stores and grocer Waitrose, said it would have to cut staff numbers and scrap bonuses again this year.
Sky News claims that private equity suitors are eyeing up tinned food company Princes Foods. Valeo Foods, majority-owned by buyout firm Bain Capital, and corporate carve-out specialist Aurelius Group, are among the bidders interested in buying Princes, the broadcaster says. Princes, which traces its roots back to 1900, has been owned by the Japanese conglomerate Mitsubishi Corporation since 1989. Sky understands investment bank Houlihan Lokey has been appointed to handle the sale, which industry sources said could be valued at £400m or more, depending upon the competitiveness of the auction.
The Competition and Markets Authority has raised competition concerns regarding the proposed £1.24bn acquisition of healthcare software developer EMIS Group by UnitedHealth. The CMA said an initial investigation into the deal in January concluded competition could be “substantially reduced,” leading to worse outcomes for the NHS, patients and UK taxpayers. Sorcha O'Carroll, senior mergers director at the CMA, said: "This deal could see the NHS lose out on the benefits of competition, including innovation in these products and services and getting better value for money. UnitedHealth has the opportunity to address our concerns, otherwise it will progress to a more in-depth investigation."
Westminster City Council has called for a “stronger” Economic Crime Bill and reform of business rates to halt the opening of American candy and souvenir stores along Oxford Street, which it says are “eyesores” selling fake and dangerous goods. In the last 15 months, the council has recovered £1m worth of items deemed suspect including disposable vape pens which “contained excessive levels of nicotine”. It there are some 29 such ‘candy stores’ still in operation between Tottenham Court Road and Marble Arch. The Council claims it is more difficult to register for a library card that to register a company at Companies House, and that many of the stores are sophisticated operations “skilled at exploiting UK legal loopholes”. Cllr Adam Hug, leader of Westminster City Council, told City A.M: “Westminster City Council has energetically pursued unscrupulous traders who sell unsafe or fake goods and fail to pay business rates, but we have always maintained this is a whack-a-mole activity”. He is also calling for business rates reform to allow more frequent revaluations, with stronger information requirements to reduce the level of appeals made by these shops. “High streets are the hearts of our communities, and should be supported, not penalised – yet the current system does exactly this and drives the wrong behaviours,” Hug added.
Jacqueline Gold, the boss of lingerie and adult store Ann Summers died of cancer aged 62 on Thursday evening. Gold first began working with the brand in the 1980s when she joined her father David Gold in the family-run business. She was honoured with a CBE in the 2016 New Year Honours for her achievements in entrepreneurship and social enterprise.
Executives at Walt Disney are said by the Daily Mail to be planning to cut 4,000 jobs in the next two weeks - much sooner than expected - as CEO Bob Iger works to save the company some $5.5bn. One report indicates managers are currently working to identify 4,000 employees who are 'redundant and disposable' and will be required to turn in their lists in the coming weeks with the first big hit to occur in April, the news agency says.
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