Published: 12 June 2023
By Suzanne Evans, Director, Political Insight
It has been a tumultuous few days in politics: Boris Johnson, Nadine Dorries, and Nigel Adams have all announced they will step down as MPs immediately, thereby triggering three byelections. The news comes in the wake of reports that eight peerages nominated by Johnson in his resignation Honours list were blocked by the Lords’ committee responsible precisely to avoid triggering byelections, one of those blocked being Nadine Dorries. Both Dorries and Adams served as Ministers in Johnson’s Cabinet when he was Prime Minister. Johnson quit in protest against an investigation into his conduct as prime minister during covid lockdowns, saying there was “not a shred” of evidence against him. Journalists were quick to note that among those awarded honours by the former PM were former aides involved in “partygate” allegations relating to illegal gatherings in government buildings. Then, yesterday, former SNP leader Nicola Sturgeon was arrested and held for more than seven hours by police as part of an investigation into what happened to more than £600,000 raised by Scottish independence campaigners in 2017. Sturgeon declared her innocence on Twitter, saying: "To find myself in the situation I did today when I am certain I have committed no offence is both a shock and deeply distressing...I would never do anything to harm either the SNP or the country". Meanwhile, the Labour Party said it would return a £100,000 donation to party funds made by Algebris Group founder and CEO Davide Serra. A London employment tribunal last month awarded a former Algebris employee about £32,000 in a sex harassment claim against the asset management company.
The Labour Party has also rowed back on its pledge to spend £28bn every year until 2030 building up green industries, saying high interest rates mean the target would have to be met more gradually. Shadow Chancellor Rachel Reeves wrote in The Times: "Since I first made the commitment to this plan, interest rates have gone up 12 times, and we’ve seen the Conservatives crash the economy in their disastrous mini-budget". The Conservatives had criticised the original plans as being "a huge tax raid on hardworking Brits".
Industry body Offshore Energies UK (OEUK) has warned the Government it needs to do more than it did last week to ease the windfall tax on North Sea oil and gas companies if it wants to see future investment and protect future production. While CEO David Whitehouse welcomed the Treasury’s decision to introduce a price floor into the Energy Profits Levy (EPL), he said it was only fair that “when the windfall conditions go, the windfall tax should go.” The price floor is “a step in the right direction,” he said, “but many more will need to be taken to restore confidence to our sector”. Last week, the Treasury unveiled the Energy Security Investment Mechanism (ESIM), which establishes a price floor at $71.40 per barrel and 54p per therm. At this point, the windfall tax would not apply, but only if prices stay below that level for a period of six months. Based on forecasts from the Office for Budget Responsibly, the ESIM will not be triggered before the proposed end date of the EPL in March 2028, City A.M. says. Total, Enquest and Harbour Energy have all withdrawn from key projects, saying the levy makes them unviable, and the undeveloped Rosebank oil and gas field faces an uncertain future as minority stakeholder Ithaca Energy has not yet decided whether to invest in the project.
London Mayor Sadiq Khan claimed on Friday that workers in London are £50,000 worse off since 2010 due to “scandalous” annual wage growth which has not seen salaries keep pace with inflation. Had annual growth kept pace with the previous decade, the average pay for workers in the capital would have been £47,600 in April this year, the Mayor’s office said, but research by economists from the Greater London Authority put it only at £36,700, hence the cumulative impact year-on-year being almost £50,000. “This has been a lost decade of wage growth,” Khan said. “The Government needs to take immediate action to buck the trend and help put more money in the pockets of hard-working people”. He called for on the Government to increase the supply of affordable housing in London as well as spending on research and development, transport and infrastructure.
James Mayer, who runs food firm Danone in the UK and Irish Republic., has called for higher taxes on salty, fatty and sugary foods because food producers had not "shown enough appetite to change", he said. Danone is a French firm best known for its yoghurt brands. It also owns bottled water brands Evian and Volvic. Mayer said only 10% of Danone's own products would be affected by such so-called ‘sin taxes’.
Crispin Odey of Odey Asset Management is leaving the firm following sexual harassment allegations which, according to the Financial Times, have been reported by 13 women as taking place over the course of 25 years. Odey strenuously denies the claims, telling the paper they were "rubbish" and that "none of the allegations have been stood up in a courtroom or an investigation". Odey has been at the helm of the hedge fund he founded in 1991 - at its peak the firm managed more than £10bn worth of investments.
Meanwhile, Mike Ashley’s Frasers Group has taken an 18.9% stake in the online electricals retailer AO World in a £75m deal by buying out shares held by Odey Asset Management. The Bolton-based AO World, which was founded in 2000 as Appliances Only by John Roberts, is the biggest seller of large domestic appliances in the UK.
BAE Systems has been awarded a 10-year contract worth £270m by the Ministry of Defence (MoD) to provide maintenance and upgrade support to the Royal Navy’s three main radar systems, which were designed and built by the FTSE 100 defence firm, and operate on every major Royal Navy ship. The contract replaces a number of existing contracts, the MoD said.
US multi-national investment company Blackrock is buying London-based venture debt specialist Kreos Capital. The world’s largest asset manager said the deal would see it acquire full control of Kreos, which specialises in growth and venture debt financing for tech and healthcare companies. The transaction is expected to complete in the Autumn. No financial details have yet been disclosed.
Waitrose said this morning it has reduced the price of more than 200 products as part of a £100m plan announced earlier this year to retain customers struggling with high inflation. Lowered prices include butter, tomato ketchup and golden caster sugar, as well as salads and ice cream, with half of the products now at least 10% cheaper, Charlotte Di Cello, Waitrose's commercial director said, adding: "We’ll still react to any drops in food inflation and pass on savings to our customers as soon as the prices we pay begin to fall".
US venture capital firm Andreessen Horowitz has revealed plans to open its first international office in London later this year. It said the new office would operate under its crypto division, which manages some $7.6bn (£6.05bn) of committed capital. The firm is also launching a Crypto Startup School to work alongside UK universities to nurture tech talent and start-ups, City A.M. says.
FTSE 100 pharma firm AstraZeneca has signed a £68m deal with London-based start-up Quell Therapeutics to create treatments for diabetes and other autoimmune diseases.
UBS has confirmed via an open letter published in the NZZ newspaper that it has “finalised the legal takeover of Credit Suisse.” CEO Sergio Ermotti and Chair Colm Kelleher said: “this is the start of a new chapter – for UBS, Switzerland as a financial centre and the global financial industry,” adding that the “collective expertise, scale and wealth management leadership of both UBS and Credit Suisse (will) create an even stronger combined firm”. It is also reported by the Financial Times that UBS executives has drawn up a list of “red lines” for former Credit Suisse bankers, including a ban on clients from high-risk countries, such as Libya, Sudan and Russia, and launching complex financial products.
Facebook owner Meta Platforms is planning a social media network to rival Twitter, according to multiple reports on Friday. Meta also owns Instagram and WhatsApp.
US billionaire George Soros has handed over the running of his $25bn (£19.9bn) financial and charitable empire to his son Alex. The Hungarian-born financier said his son had "earned it", in an interview with the Wall Street Journal. George Soros is one of the largest donors to the US Democratic Party, and his 37-year-old history graduate son, the second-youngest of his five children, told the newspaper he is "more political" than his father and confirmed he would campaign against Donald Trump's attempt to run for a second term as US president. He is the only family member sitting on the investment committee for Soros Fund Management, the vehicle managing the $25bn for the Soros family and its charitable foundation.
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