Published: 05 May 2023
By Suzanne Evans, Director, Political Insight
At the time of writing this morning, 62 out of 230 Local Authorities have counted their local election results. The Conservatives have lost 228 seats; Labour have won 119; the Lib Dems are 61 seats up; and the Green party have taken 33. The Tories have lost control of ten local authorities, including commuter belt councils Maidenhead, Windsor and Hertsmere, which were taken by the Lib Dems, and Brentford, which is now in no overall control. Labour meanwhile, took Medway off the Tories and will now run the Kent council for the first time since 1998. Labour also gained Plymouth in a result branded “terrible” by minister and local MP Johnny Mercer. Stoke-on-trent has also gone red. About a quarter of the results are in so far. Some councils will not count their votes until this evening.
The Office for National Statistics (ONS) has published the latest results from its Business Insights and Conditions Survey (live from 17 to 30 Apr 2023) and concluded that while business conditions continue to remain challenging, there are small signs of positive improvement on some measures. 65% of trading businesses reported that they were able to get the materials, goods or services they needed from within the UK in March 2023, broadly in line with February 2023, the ONS said. 71% reported some form of concern for their business for May 2023 however, with the top two concerns being energy prices (18%) and inflation (16%). 31% of businesses with 10+ employees were also experiencing worker shortages in late April 2023. Of those 53% said their employees were working increased hours. Finally, 14% of businesses said their employees' hourly wages had increased in March 2023 compared with February 2023, rising to 23% for businesses with 10 or more employees.
The number of mortgages approved by British lenders jumped in March to its highest since October, but remained lower than before then-Prime Minister Liz Truss's September mini-budget triggered a lending crunch, Reuters reports. Lenders approved 52,011 mortgages for house purchase in March, up sharply from 44,126 in February. However, mortgage approvals are still running well below their average of around 70,000 before the mini-budget, and net mortgage lending - which usually reflects mortgage approvals from a month before - rose at the slowest pace since July 2021.
A survey by The Financial Conduct Authority (FCA) has led the regulator to conclude that whistleblowers believe they are not taken seriously or listened to, and that despite tougher rules designed to protect those who highlight potential corporate wrongdoing, they still risk being gagged and ending up unemployed and broke. The FCA pledged yesterday to share more information with whistleblowers on how it was dealing with their reports and improve how it used tip-offs in an effort to restore confidence in the agency. "We need the intelligence whistleblowers provide to identify and act on problems in the firms we regulate," said Therese Chambers, the FCA's head of enforcement and market oversight, in a statement released to Reuters. "We want to make sure we're capturing and using the information provided by whistleblowers as effectively as possible, and to give them as much information as the law allows on how we have acted on their concerns," she added. However, Georgina Halford-Hall, the CEO of WhistleblowersUK, a not-for-profit organisation, said the FCA's announcement was little more than a "sticking plaster". “Whistleblowers have almost no confidence in the FCA, borne out by the historical failure to manage the intake, communicate or provide protection to whistleblowers," she said.
Members of the RMT, Britain’s largest rail workers’ union have voted to renew their mandate to continue with strike action for the next six months. Unions are required by law to re-ballot members every six months in order to continue with industrial action. The RMT said that the average turnout on the ballot of workers at each of the 14 rail operators involved in the dispute over pay and conditions was nearly 70%, with over 90% of votes cast in favour of the extension. The next strike will take place on 13th May, the day of the Eurovision Song Contest final in Liverpool. RMT general secretary Mick Lynch said: “It is clear from these results that members are not prepared to accept a pay offer based on mass job cuts and major attacks on their terms and conditions,” adding that rail companies need to “negotiate in good faith for a better deal for rail workers.” A spokesperson for the Rail Delivery Group (RDG), which represents the train companies, said: “While the outcome of the ballot is disappointing, sadly it is also unsurprising during an on-going dispute such as this. The vote that really matters is for the deal on the table developed in conjunction with RMT negotiators but then subsequently rejected out of hand in unflattering terms by their executive committee, without giving their membership a single chance to have their say. The RMT membership would be forgiven for wondering why they are only ever offered a vote to extend this dispute and a never vote to end it”.
Meanwhile, the RMT is denying it is responsible for the fact hotels in Liverpool are not booked up for next week’s Eurovision Song Contest, the BBC reports. Hotels were booked out when the city was announced as the host for the event but, as it gets closer, rooms are becoming available, and the UK Hospitality industry group is suggesting people may have been forced to cancel because of the train strike now planned for that day. RMT Union leader Mick Lynch denied Eurovision was deliberately targeted, saying: “We don't pick out events in our union".
TSB Bank is demanding Meta-owned companies such as Facebook and Whatsapp take greater responsibility for fraud carried out on their platforms. In the three biggest categories of fraud – purchase scams, impersonation scams and investment scams – 80% took place through Meta-owned companies, TSB said. “Social media companies must urgently clean up their platforms to protect the countless innocent people who use their services every day,” Paul Davis, TSB’s director of fraud prevention, said.
Shell has confirmed it will pay just under £400m in windfall taxes relating to its UK operations this year, after unveiling bumper first quarter profits of £7.6bn. The oil giant’s first quarter earnings came in just shy of the £7.9bn profits it posted in the fourth quarter of 2022 – when it revealed a record year of £32.2bn profit – but came in above the £7.2bn profits posted 12 months ago, when Russia’s invasion of Ukraine saw oil and gas prices soar to near-record highs.
British Airways-owner IAG has posted its first first-quarter profit since covid lockdowns and other pandemic-related restrictions which saw its operations hammered. IAG achieved an operating profit of €9m in the first quarter, having gained the benefit of a fall in fuel prices as well as a rebound in air travel. Leisure demand is particularly strong, while business travel continues to recover more slowly, the FTSE 100-listed firm said. IAG, which also owns Iberia, Vueling and a host of other airlines, said it would up its guidance for the year for operating profit from €1.8bn to €2.3bn.
Virgin Media O2 has accused rival mobile operators of not doing enough to help customers move onto cheaper monthly tariffs, alleging they are "swindling" people out of £530m each year by keeping them on rates that cover the cost of a handset, even when they have finished paying for the phone and their contract ends. Virgin says a survey conducted on its behalf, which spoke to more than 5,000 adults in the UK, found 3.9% of all UK mobile customers were still on contracts with EE, Vodafone and Three that been rolled over beyond their initial time plan, and says it thinks all providers should ensure customers do not keep paying the higher price once they have bought the phone. However, EE owner BT called Virgin Media O2's claims "misleading," saying it already offers a contract called Flexpay which automatically reduces once people have paid for their handset. Vodafone said it was disappointed to see Virgin Media O2 "confusing consumers with incorrect information". "Like Virgin Media O2, Vodafone customers on split contracts with Vodafone EVO will not see any further handset charges once their 0% finance deal ends and will therefore never overpay for a phone. All handset customers on legacy contracts are contacted repeatedly when their contract comes to an end, and after three months - if they haven't moved onto a new contract already - we automatically apply a monthly £5 discount," Vodafone said. A Three spokesperson said: "Three already offers split contracts where customers can take out a loan to pay for their device, which is separate to their monthly airtime payments. The customer owns their device from when they purchase it and once their device loan is paid off, the customer isn't required to make any further payments towards the cost of their device."
Mothercare shares tumbled 22.44% yesterday after the London-listed parent and child retailer said it was in refinancing talks with its lender as it might require waivers to future periods' covenant tests. Mothercare pointed to higher interest rates and the fact it may take a while to return to pre-pandemic retail sales, particularly in the Middle East, as the reason. "Additionally we are looking at various financing alternatives (including equity and equity linked structures) to give us both additional flexibility and reduced cash financing costs," the company said. However, Mothercare insisted it does not require and is not seeking additional liquidity. The firm also issued an update showing that unaudited net worldwide retail sales by franchise partners is expected to come in at £322m, up 8% on the previous year. Adjusted earnings before interest, tax, depreciation and amortisation are set to be between £6.5m and £7m, ahead of analysts' expectations.
Online fashion store Boohoo has settled a $197m (£156m) US court case after being accused of faking discounts for customers. The AIM 100-listed retailer, which owns brands Pretty Little Thing and Nasty Gal, was said by the plaintiffs in court papers to have engaged in a “deceptive pricing scheme” in which it would falsely raise the full price of its clothing to “give customers the false impression that they were getting a deal or bargain”. Boohoo continues to deny the allegations, saying it agreed to settle the lawsuit to avoid the “uncertainties” and “expenses” associated with ongoing litigation. The deal includes a $10 gift card and free shipping for customers involved in the class action lawsuit. In September last year, Boohoo and its sister brands faced an almost identical case in California, where the brand came to a $4.75m (£3.78m) case settlement.
Keith Barr, group CEO of Holiday Inn owner International Continental Hotels (IHG) is stepping down after six years in the job, during which time he oversaw the opening of more than 6,000 hotels worldwide. Barr will be succeeded by Elie Maalouf, who currently heads up operations for IHG’s American division.
European Central Bank (ECB) President Christine Lagarde said yesterday that the bank is "not pausing" its current cycle of interest rate hikes as "the inflation outlook continues to be too high". She was speaking at a press conference after the ECB’s decision to raise interest rates by 25 basis points to 3.25%. Lagarde also suggested that further increases could be on the way, saying: “We have more ground to cover and we are not pausing. That’s extremely clear”. The ECB has raised interest rates by the most in its 25-year history over the past two years.
Adidas has said that ending its collaboration with Kanye West is "hurting" the business, particularly in North America. The sportswear giant cut its ties with the designer and rapper, known as Ye, late last year after he posted anti-Semitic comments on social media. West designed trainers under the Yeezy brand and Adidas said the loss of the business cut sales by €400m (£350m) in the first quarter of the year. Overall, total revenue fell by 1%.
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