Published: 03 May 2023
By Suzanne Evans, Director, Political Insight
The Government has announced that all unsolicited calls offering financial products will be banned, with a view to stopping fraudsters offering sham insurance products or cryptocurrency schemes. There will also be a new fraud squad set up with 500 investigators. Fraud is now the most common crime in the UK, with one in 15 people falling victim. Prime Minister Rishi Sunak said that the new rules will tackle "cold-hearted" scammers who "ruin lives in seconds." Consumer group Which? welcomed the strategy but also criticised the government for not acting sooner.
The Labour Party is clamouring for higher windfall taxes on North Sea oil and gas operators after BP reported healthy first quarter profits of around £4bn yesterday. Labour’s shadow energy secretary Ed Miliband said the firm was enjoying the “unearned windfalls of war”, despite the price of natural gas being lower now than it was when Russia invaded Ukraine says. The Energy Price Levy, introduced by then-Chancellor Rishi Sunak, meant BP had to pay around £500m in UK taxes in the first three months of the year, with just shy of half of that due to the additional tax. Labour’s call led Scottish Conservatives leader Douglas Ross to accuse them of “playing to the gallery,” while Tory MP Sir John Redwood said the windfall levy had become a “further rise in general business taxation”. His fellow backbencher Sir Robert Syms is calling for a price floor in the levy to “safeguard investment,” which has already been threatened by the tax, with Harbour Energy, Enquest and Total all sounding the alarm on projects. Harbour CEO Linda Z Cook told City A.M. last night that the existing levy had “all but wiped out our profit for the year” and driven the firm “to reduce our UK investment and staffing levels”. Michael Hewson, chief markets analyst at CMC Markets, told the newspaper “politicians across our divide are completely out of ideas when it comes to dealing with the challenges facing the UK economy”.
Lib Dem leader Ed Davey also joined in criticism of BP, saying their profits were a “kick in the teeth” to Brits struggling with the cost of living. He and his party are also asking the Competition and Markets Authority (CMA) to probe whether profiteering has taken place among big supermarkets and food multinationals as food inflation has reached a record high of 15.7% in April. Party leader Sir Ed Davey called for the competition watchdog to start an investigation into whether food retailers have put up the price of goods by more than was necessary to cover the cost of rocketing inflation. Analysis by the party suggests a typical weekly family food shop has increased by £12 as a result of price hikes, leading to a higher annual bill of more than £600 for the average household, while big supermarket chains had, he said, made billions of pounds in profits over the past year. Tesco and Sainsbury’s — who account for nearly half the UK’s grocery market - saw their combined profits rise to £1.5bn in 2022, a rise of more than 50% on last year, he said.
A report from MPs on the Public Accounts Committee (PAC) has concluded that HMRC is prosecuting around 1,000 fewer people for tax evasion than before the covid pandemic. In 2020–21 and 2021–22, it concluded just 163 and 236 prosecutions respectively, compared with around 700 a year in the two years previously. While court backlogs impacted its ability to wrap up cases, HMRC told the committee that it was already reducing the number of prosecutions it brings, and it was not planning to restore the number of prosecutions back to pre-pandemic levels, telling the committee that this was “because it considered that its criminal prosecution powers were best used to tackle the most serious and complex cases, rather than large volumes of smaller cases,” according to the report. The report also found the number of non-compliance cases opened by the UK’s tax authority fell by 32 percent to 1,114,000 for 2020-21. But Dame Meg Hillier, PAC chairman, said HMRC was “simply not doing enough to deter and punish cheats, even at very high levels.” “We cannot and must not arrive at a situation in the UK where it is easier to cheat the tax system than it is to comply with it,” she added.
Conservative members of the London Assembly say more than one million drivers who commute into the capital city could be hit by Mayor Sadiq Khan’s expansion of the ultra-low emission zone (ULEZ). Petrol and diesel cars that don’t meet emissions standards will face a £12.50 daily charge to enter the zone from 29th August, with a £180 fine if they fail to pay. A total of 1,226,586 non-compliant vehicles in the commuter belt, including 373,288 petrol cars and 853,298 powered by diesel, will be hit by the change, the Conservatives found, citing DVLA data obtained by a Freedom of Information request. The worst hit areas by the ULEZ expansion will include Reading, Guildford and Tunbridge Wells, which have over 135,000, 131,000, and 124,000 non-compliant cars respectively, the party said. “Londoners and commuters shouldn’t have to foot the bill for another one of Mayor Khan’s half-baked ideas,” Greg Hands, Conservative party chairman, said. “Cleaning up air quality in the city is important, but hard-working people, businesses and local services shouldn’t be penalised in the process.”
The Financial Conduct Authority (FCA) is proposing making the biggest change in the financial rule book since the 1980s, by abolishing the distinction between ‘standard’ and ‘premium’ listings when companies launch on the London Stock Exchange. At the moment, ‘premium’ listings are subject to more stringent tests, and are the only firms allowed to enter the FTSE 100 and FTSE 250. so abolishing the distinction would clear the way for more to join them. The obligation for shareholders to approve big takeover deals would also be removed, and further leeway for companies with dual-class share structures allowing founders to exercise greater voting rights than other investors. The FCA hopes the new rules will be in place by the end of this year or early in 2024. Lord Hill, author of The UK Listings Review which was commissioned by the then Chancellor in 2020, said that, if implemented, they would enable London ‘to stand toe to toe with our international competitors’.
British factory output and new orders contracted at the start of the second quarter of 2023, but manufacturers were more optimistic and input costs rose at the weakest rate since May 2020, a closely-watched industry survey showed yesterday. The latest S&P Global/CIPS UK manufacturing Purchasing Managers' Index (PMI) fell to a three-month low of 47.8 in April from 47.9 in March, still below the 50 threshold for growth. However, 61% of factories now expect output to rise in the coming year.
Over one million NHS staff in England are getting a pay rise after unions representing a majority of healthcare workers voted to accept a deal yesterday which includes a one-off payment equivalent to 2% of salaries in the 2022/23 financial year - meaning staff such as ambulance workers, nurses, physios and porters will receive one-off lump sums of at least £1,655 - and an across-the-board 5% pay rise for 2023/24. 14 health unions representing all NHS staff apart from doctors and dentists signed off on the deal with the Government, however, Unite and the Royal College of Nursing rejected the offer and so their members are planning to continue with further strike action, despite benefitting from the raise. Health Secretary Steve Barclay said it was the final offer and that the decision by the majority to accept it showed they believed it was "fair and reasonable". "Where some unions may choose to remain in dispute, we hope their members will recognise this as a fair outcome that carries the support of their colleagues and decide it is time to bring industrial action to an end," he said.
The BBC says ferry operator CalMac has run up a £1.6m bill for crewing costs for the Glen Sannox ferry, despite the fact it is still being built at Ferguson shipyard. CalMac began hiring officers and engineers in February 2022, six months ahead of expected delivery of the ship, the newscaster says, but the following month the delivery date was put back to May 2023, and it has since slipped again to the autumn. Yet CalMac has hired 14 staff to date, including three masters, and is asking the government to cover the cost. The £1.6m in crew costs includes salary, travel, subsistence, pension and national insurance contributions but not training.
Age UK has called on banks to open more shared banking hubs to help those such as older or vulnerable people who feel uncomfortable managing their finances online. Only four hubs have opened so far, despite an average of 54 UK branches closing each month since January 2015, the charity says, adding that its research suggests 27% of over-65s and 58% of over-85s rely on face-to-face banking.
British luxury car maker Aston Martin Lagonda lost just over half a billion pounds last year, reporting an operating loss of £50.9m, which it put down to weakened sterling, amortisation, and an increase in depreciation costs, but said customer demand was strong, and that revenue had increased by 27%.
Vacuum cleaner and battery maker Dyson is planning to invest £100million in creating a technology centre in Bristol to house “hundreds of software and AI engineers” as well as the company’s commercial and ecommerce teams for Britain and Ireland. Staff at the site will be working on a pipeline of products that stretch 10 years into the future, the company added. Dyson already employs more than 3,500 people in research and development across three sites nationwide.
Pub operator Greene King has reported a record hike in revenue of 62.2% for the 52 weeks ending 1st January 2023. The group, which has over 2,000 sites across the UK, said revenues totalled £2.17bn, up from £1.34bn, as the easing of Covid-19 restrictions and sporting events such as the FIFA World Cup saw drinkers flocking back to its pubs. Operating profits reached £192.6m for the year, up from £18.6m year on year. Greene King is also predicting a boom in sales for next weekend’s Coronation, estimating that 1.8 million pints will be pulled across its portfolio during the celebrations.
Waitrose says its sales of Duchy Organic products are soaring ahead of King Charles III’s Coronation this coming Saturday. The King set up Duchy Organic in 1990, originally conceived as an outlet for the organic food grown on the then Prince of Wales’ Highgrove House estate, and the brand was expanded in partnership with Waitrose in 2010. A spokesman for the supermarket said. “Our customers particularly like products which can be kept as a souvenir like the Duchy shortbread tin”. “Searches for Duchy banana and raisin tea loaf are up 42% on the same week last year and searches for Duchy Golden Ale and dark chocolate cake are up 127%,” they added.
Ocado shareholders gave it a “bloody nose” over its CEO’s £2million pay packet yesterday, the Daily Mail says. 30.14% of shareholders voted against Tim Steiner’s remuneration package at the AGM yesterday, clearly furious at the level of his salary at a time when the supermarket delivery service has endured ballooning losses and seen some 45% wiped off its share price in the past year. However, Steiner’s £755,000 salary, plus annual bonus of £1.19million was far short of the £59million he was paid in 2019, including benefits. Ocado reported a loss of £500.8m for 2022.
Ryanair said strike action by French air traffic controllers forced the Irish budget carrier to ground 650 flights last month, affecting 118,000 passengers. The airline also said yesterday that passenger numbers in April rose by 13% year-on-year to 16 million and reported a rolling 12 month total of 170.3 million passengers, up 55% year on year. French workers have staged several strikes since the beginning of the year in protest at President Macron’s plans to raise the retirement age to 64 from 62.
Arvind Krishna, the CEO of International Business Machines Corporation (IBM) told Bloomberg earlier in the week that Artificial Intelligence could replace 7,800 jobs at the technology giant. Referring to the company’s 26,000 non-consumer facing roles, he said: “I could easily see 30% of that getting replaced by AI and automation over a five-year period”. Some 44% of C-suite executives think AI could perform tasks to a similar or better quality than humans, according to a recent YouGov poll of more than 1,000 business decisionmakers; and three quarters of over 800 companies surveyed by the World Economic Forum for its Future of Jobs report plan on adopting technologies including cloud computing and AI within the next five years.42% of business tasks would be automated by 2027, respondents said. Yesterday, British scientist Geoffrey Hinton quit his job at Google over concerns about the dangers of AI, including its potentially ability to spread misinformation and overhaul the jobs market. Having joined Google a decade ago to build on what was then the foundation of AI technology, Hinton told the New York Times he now believes the technology could be used to create images and text so that people will “not be able to know what is true anymore” and that AI could be a risk to some jobs as it could become smarter than humans. Meanwhile, shares in FTSE 100 education publisher Pearson slid almost 15% yesterday after US firm Chegg, which provides online guidance for students preparing tests, warned over the impact of AI chatbots on its homework-help services. Since March, it had seen "a significant spike" in student interest in ChatGPT, Chegg said, admitting that was “having an impact on our new customer growth rate". Chegg shares slid more that 48% on the US stock exchange.
The Gym Group has appointed Will Orr, the former managing director for Times Media Limited, publisher of the Times and Sunday Times as CEO. Orr previously spent eight years at British Gas.
Florida governor Ron DeSantis yesterday signed a law banning state officials from investing public money to promote environmental, social and governance goals (ESG), and prohibiting ESG bond sales. DeSantis, a likely presidential candidate, believes many executives and investors have lost their focus on returns as they take growing account of issues like climate change and workforce diversity. Just before signing the Bill at a webcast event, he said: "We want (public officials) to act as fiduciaries. We do not want them engaged on these ideological joyrides”.
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