Published: 04 May 2023
By Suzanne Evans, Director, Political Insight
Local elections are taking place in many areas of the country today. Voters will decide some 8,000 Council seats in 230 local government authorities across England, and four Mayoral posts. For the first time, voters will need to show photo ID in polling stations.
Chancellor Jeremy Hunt has told leaders of Britain’s creative industries that “the biggest opportunity for the UK going forward is to be the world’s next Silicon Valley,” City A.M. reports. Speaking at a Treasury Connect event, one in a series of government business conferences, Hunt said he believed “we have the ingredients to do something remarkable”. “We don’t just have the creativity, the entrepreneurs, the amazing businesses, but we have the world’s second largest financial sector to help those businesses grow and we have one of the world’s most respected higher education sector’s to provide the research and development heft to sit behind it,” he continued. “It’s a unique combination, it’s the combination Silicon Valley itself had. But there aren’t very many other places in the world that have that combination.” However, he stressed that the UK was still some way off achieving tech superpower status. “We are not there by a very long way but in the last 10 years we have become Europe’s largest tech centre, with the third largest sector in the world after the US and China,” he said. “[We’ve become] Europe’s largest life sciences sector, Europe’s second largest renewable sector and largest when it comes to offshore wind.” Prime Minister Rishi Sunak has previously unveiled his ambition for the UK to become a “science and technology superpower”.
Thirteen British trade unions representing around three million workers told London's High Court yesterday that the Government is breaching union rights by making it easier for businesses to use temporary staff during industrial action. They say the changes could worsen industrial disputes and endanger public safety if agency staff are required to fill safety-critical roles without being fully trained. Lawyers for the unions are arguing that unions were not consulted on the changes, instead relying on a 2015 consultation which pre-dated Brexit, Covid lockdowns and the cost of living crisis. The Government is arguing the new rules were "a modest amendment to the law" which does not interfere with unions' right to strike. The case continues today.
Julia Hoggett, head of the London Stock Exchange (LSE), has criticised the UK’s stricter approach to executive pay, saying that executives need to be paid more if an exodus of companies de-listing and listing overseas is to be stemmed. The number of listed companies on the LSE has fallen by 40% since 2008. The FT reports her comments that companies need to “compete for talent on a global basis” as she also took aim at proxy agencies and asset managers who vote against the executive pay policies of London-listed companies, while backing much higher pay in other jurisdictions, notably the USA. She called for a “constructive discussion” on the matter. 60% of FTSE 100 Unilever shareholders rejected the company’s renumeration report yesterday, and on Tuesday, some 30% of FTSE 250 Ocado shareholders voted against its CEO’s £2million pay packet. Separately, Reuters reports a new study which found the median pay of top US CEOs rose 7.7% last year, outpacing inflation. One of the biggest pay increases went to Jefferies CEO Richard Handler whose $56.9 million received last year was nearly double his total compensation in 2021. Hoggett also said changes to the listing system planned by the FInancial Conduct Authority (FCA), reported here yesterday, are “just one element” in arresting the capital’s decline, although she added they were a “meaningful step forward towards ensuring the UK remains a leading global capital market”. And, speaking with the BBC this morning, it seems FCA boss Nikhil Rathi agrees, as he stressed the rule changes would only go so far in reviving the appeal of London’s markets. “We [the FCA] are one part of this conversation. There’s a broad ecosystem here involving investors, firms that run market infrastructure advice and, of course, the government is looking at issues in relation to pension funds,” Rathi told the Today Programme. “All of the bits of the ecosystem need to be working together to make sure we’ve got the right balance between all those different factors to make sure companies can access the market and grow,” he added.
The Society of Motor Manufacturers and Traders (SMMT) said this morning that British new car registrations rose for the ninth consecutive month, and by more than 10% in April from a year earlier. The SMMT also raised its 2023 sales outlook, on the basis of easing supply chains, saying it now expects 1.83 million new car registrations this year, compared with its prior forecast of 1.79 million units. However, it softened the outlook for battery electric vehicles to about 18% of total sales in the year.
The Competition and Markets Authority (CMA) is looking into Adobe Inc's $20 billion buyout deal for cloud-based designer platform Figma to find if it could lead to "substantial lessening of competition" in the country. Figma’s web-based collaborative platform for designs and brainstorming is widely popular among tech firms including Zoom Video Communications, Airbnb Inc and Coinbase, Reuters says. Last week, the CMA blocked US software giant Microsoft's $69 billion acquisition of Call of Duty maker Activision Blizzard over concerns it would hinder cloud gaming. The US Department of Justice and EU regulators are also investigating the takeover bid.
Meanwhile, the CMA was yesterday refused permission by The Competition Appeal Tribunal to appeal against a ruling by the same body that it had no power to open an investigation into Apple Inc's mobile browser and cloud gaming services. The CMA could appeal directly to the Court of Appeal however, and says it is considering doing so, as the ruling "risks substantially undermining the CMA's ability to efficiently and effectively investigate and intervene in markets".
The CMA has also announced a review of the artificial intelligence (AI) market, which will include investigating the models behind popular chatbots like ChatGPT. The AI industry has faced scrutiny recently because of the fast pace at which it is developing technology to mimic human behaviour. The watchdog will assess whether or not AI provides an unfair advantage to companies that are able to afford the technology. CMA CEO Sarah Cardell told the Financial Times it would be a "fact-finding mission" that would engage a range of experts including academics and businesses in an attempt to find out how best to protect consumers. Earlier this week, Geoffrey Hinton, who is widely seen as the godfather of AI, warned about growing dangers from developments in the field, telling the BBC that some AI chatbots were "quite scary", and that they could soon overtake the level of information that a human brain holds. "Right now, they're not more intelligent than us, as far as I can tell. But I think they soon may be." A recent study by FocalData suggested 1 in 4 workers already think AI could do a better job than them, and just under 1 in 2 believe AI will do their job better in the next decade.
British Gas says it will stop using contractors to fit prepayment meters under court warrant. Instead, such work will be done in-house, overseen by the company. The move follows a scandal in which third-party contractors working for British Gas took an extremely heavy-handed approach to forced meter installations in the homes of vulnerable people, exposed by undercover reporters working for The Times newspaper.
AIM 100 tech firm WANdisco is letting a third of its workforce go as it deals with the aftermath of an accounting scandal, Sharecast News reports. The company, which had 159 staff, according to its last annual report, said it would axe jobs across all regions and business areas, including its headquarters in Sheffield and San Francisco, as well as offices in Newcastle, Belfast, China, South Korea, Japan and Australia. In March, WANdisco revealed it had discovered potentially fraudulent sales, resulting in bookings being wildly overstated by in excess of £115m. The scandal led WANdisco to suspend its shares and CEO David Richards and CFO Erik Miller stepped down. WANdisco says the fraudulent accounts were the work of a single sales employee.
Environmental protesters disrupted banking giant Barclays’ AGM in central London yesterday, interrupting chairman Nigel Higgins a few minutes into the meeting with singing, which causing several minutes of disruption. One protester was carried out of the building for refusing to move, with his shouts drowned out by Barclays’ company secretary Hannah Ellwood, who continued to run through the meeting agenda.
Trainline has reported net ticket sales of £4.3bn in its final year results today, up 72% year on year and 16% higher than pre-Covid lockdowns. The London-based rail ticket agency saw revenues of £327m, having experienced surging ticket sales in the UK and internationally.
Accountant Begbies Traynor, best known for its insolvency work, has bought small property law firm Banks, Long and Co, it told markets this morning. The acquisition will add around 30 solicitors to the Begbies operation, City A.M. reports.
Pharmaceutical firm Norbrook is looking to cut 180 jobs, around 10% of its staff, citing global economic challenges and increased competition in the animal health sector. Norbrook produces veterinary medicines and has grown to become one of Northern Ireland's biggest exporters since it was established in 1969. It employs just under 2,000 people, of whom 1,600 work in Newry, the BBC says.
In an interview with the BBC’s Amul Rajan, Sir Richard Branson said he feared he was going to lose his entire business empire during the pandemic, saying: “There was a time when I thought we were going to lose everything". He therefore found a media backlash after Virgin Group asked the Government for a loan to save the company "painful". He personally lost around £1.5bn during the pandemic, he said, adding that the struggles to save his businesses left him "a little depressed" for a couple of months, something he’d never experienced before in his life. “We had 50, 60 planes all on the ground, and the health clubs all closed, the hotels all closed. And the worst [case] would have been 60,000 people out on the streets," he said. The Government refused his request for a reported £500m bailout for Virgin Atlantic, which was eventually rescued via a £200m injection of cash from Virgin Group and £1bn provided by investors and creditors.
The US central bank raised interest rates to the highest level in 16 years yesterday, increasing its key interest rate by 0.25 percentage points, its 10th hike in 14 months. However, the Federal Reserve signalled this raise could be the last. "We're no longer saying that we anticipate" additional interest rate increases, chair Jerome Powell said at a press conference after the announcement, calling it a "significant change". However, he refused to rule out further action, saying: "We'll be driven by incoming data."
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