Published: 19 June 2023
By Suzanne Evans, Director, Political Insight
The Labour Party will today drive home its intention to ban all new North Sea oil and gas exploration if it wins the next General Election via a speech by Labour leader Keir Starmer in Edinburgh. Starmer will also pledge to scrap planning rules which effectively ban new onshore wind farm developments, and vow to "cut bills, create jobs and provide energy security”. Other proposals include plans to launch “GB Energy,” a publicly-owned green energy company that will be based in Scotland, and which he will claim could provide up to £600m per year to local councils to invest in green infrastructure, plus a further £400m annually in low interest loans for community projects. Starmer is keen to win over environmental campaigners, having been criticised for rowing back on a pledge to invest £28bn a year in green industries, but his policies are not welcomed by the North sea oil and gas industry which, according to trade body Offshore Energies UK, supports 200,000 UK jobs, including 90,000 in Scotland. Offshore Energy UK's CEO David Whitehouse told the BBC that Labour's plans "would create a cliff edge" deterring investment and risk energy shortages as production would "plummet" and "the UK and its skilled workforce will be exposed". Sharon Graham, general secretary of the trade union Unite, also slammed Labour’s proposals on Twitter, calling them “simply not acceptable," having a "total lack of detail", and saying they will “cost jobs". The Scottish Conservatives' energy spokesman Liam Kerr described Labour's plans as "ruinous" for the UK's oil and gas industry, while a Scottish government spokesperson said it was committed to "a planned and fair transition" away from fossil fuels that did not imperil jobs. "Simply stopping all future activity overnight is wrong (as) it could threaten energy security while destroying the very skills we need to transition to the new low-carbon economy," they said. However, the policy has been welcomed by Greenpeace UK and Friends of the Earth.
Parliament’s Public Accounts Committee has revealed that 1.7m people were left waiting months for help due to the government’s “lack of bandwidth” to ensure all groups – including those who were vulnerable – received support at the same time. The committee, which is chaired by Labour MP Dame Meg Hillier, has called on the government to clarify how they will protect consumers from future price rises “as a matter of urgency.” The report was welcomed by Monica Collings, CEO of So Energy, who also urging the Government to provide targeted support for up to 10m households ahead of winter. She said: “Despite the price cap coming down in July, due to the removal of government support schemes that were in place last winter, households will be paying more for energy this winter, plunging millions more into fuel poverty. Citizens Advice, the Institute of Economic Affairs, and British Gas owner Centrica have already pushed for a social tariff to be brought in to ease household bills, a concept is currently being considered by Ofgem.
A City A.M. exclusive report says farmers will gain fresh access to public funds to invest in restoring wildlife and nature, to recovery Britain’s lost natural habitats. The newspaper says Environment secretary Therese Coffey will announce an additional round of the Natural Environment Investment Readiness Fund (NEIRF) at 10 Downing Street later today, and that it will be the first time funding has focused specifically on the farming sector. The date and size of the funding round have not yet been disclosed, but it is expected to take place later this year. So far, 86 projects across England have received development grants of up to £100,000 through two competitive rounds of the £10m NEIRF in 2021 and 2022.
Britain's rail regulator, The Office of Rail and Road (ORR), has launched a probe into railway station catering, saying there is evidence passengers are paying more for food and drink while travelling than at high street shops. It will also investigate barriers to new market entrants due to old lease laws - which provide a statutory right to have tenancies renewed on expiry - and issues around underinvestment in catering outlets at stations. "We have noted a high degree of concentration and low degree of churn amongst catering outlets at stations and simultaneously of difficulties for new companies to enter the market. Prices for food and beverages sold at stations are often higher than their high street counterparts," the ORR said.The main operators in the railway food retail market include Caffè Nero, Pret a Manger, McDonald's, Costa Coffee, Burger King and SSP, which operates brands including Upper Crust, Camden Food Co and Ritazza. The ORR suggests annual passenger spending on food and drink is well in excess of £1bn. It said in a statement: "The cost of living crisis puts pressure on consumers, including passengers. As consumers across the country are affected by the rising cost of living, we want to ensure that passengers are getting affordable food and beverages when using station facilities."
The Competition and Markets Authority has given the green light for Amazon's planned $1.7bn acquisition of iRobot, the maker of the Roomba vacuum cleaner, saying it has concluded the deal would not lead to competition concerns in the UK.
Breathe, an electric vehicle company backed by Sadiq Khan has collapsed into administration potentially leaving London taxpayers facing millions of pounds in losses. Sky News says the London Mayor’s Energy Efficiency Fund (MEEF) injected more than £3m into Breathe, which provides EVs to private-hire drivers, just 15 months ago. Insolvency practitioners from Begbies Traynor were appointed as administrators to Breathe earlier this week, Sky says, noting the reasons for its collapse were not immediately clear. MEEF was set up by the Greater London Assembly in 2018 to provide debt and equity to small business-owners. The fund is managed by Amber Fund Management, a major infrastructure investor.
Average London rents now cost 78% of residents' average monthly pay, Yahoo Finance reports. The calculation has been made using data published by Statista, which puts the average London salary at £41,000, which after tax comes out to around £2,600 a month, and new research by Homelet showing London rents now average £2,039 per calendar month. Rents have also risen outside the capital, with average UK prices now hitting £1,213, a 1.2% increase on last month’s average of £1,199.
Manufacturing trade body Make UK says it now expects factory output to fall 0.3% this year. Three months ago it said it expected a 3.3% contraction. Its forecast for 0.8% growth in 2024 is unchanged. "Manufacturers are seeing a gradually improving picture, but the word 'gradually' is doing a lot of heavy lifting," James Brougham, senior economist at Make UK said.
The Financial Conduct Authority (FCA) has restricted the movement of cash and assets from Odey Asset Management in an attempt to restore order at the firm after its founder Crispin Odey was removed over allegations of sexual misconduct, the Financial Times said yesterday. The FCA will publish the details of voluntary restrictions agreed with Odey Asset Management later today, the FT report said.
The London Metal Exchange (LME) says a lawsuit alleging its handling of last year's nickel price surge was “unlawful” has “no merit”. The 146-year-old exchange is being sued by trading firms Elliott Associates and Jane Street Global Trading, who claim the LME breached its own policies, favoured some traders and violated their right to “peaceful enjoyment” of possessions when it cancelled nickel trades and suspended trading on 8th March 2022 when the price of nickel more than doubled to over $100,000 per ton. The LME said it acted to restore calm and avoid several clearing houses going into default, which would have caused “significant and systemic damage” to metal markets. The lawsuit was based on “a fundamental misunderstanding” and all decisions made were “lawful and in the interest of the market,” the LME said. The court hearing starts tomorrow.
STRIKES: Teachers in England will strike on 5th and 7th July, the National Education Union (NEU) said on Saturday. NEU members have already walked out for at least six days so far this year, having rejected a 4.5% pay rise, plus a £1,000 one-off payment in April. The union is now holding another ballot on more strikes for this Autumn. Meanwhile, train drivers on the Avanti West Coast rail network, the line which connects London, northwest England and Scotland, will strike on 2nd July.
Mike Ashley's Frasers Group has increased its stake in AO World, the UK’s biggest seller of large domestic appliances in the UK founded in 2000 as Appliances Only by John Roberts. The owner of Sports Direct, House of Fraser, and Evans cycles among others now owns 20.4% of AO, having bought a 19% stake for £75m last Monday. Both stakes were bought largely from scandal-hit Odey Asset Management. Both AO and Frasers Group say they have planned to work closely together for quite some time: "The investment is the culmination of productive talks over the last two years about establishing a strategic partnership," AO World said in a statement on Friday, while Frasers’ CEO Michael Murray said this morning: "Frasers has long admired what John and the AO team have built, and we are delighted to have the opportunity to form a supportive, strategic partnership". Ashley's group is now the second-largest shareholder in AO after Camelot Capital Partners. Roberts is the third largest shareholder with 18.3% of the firm, while Odey Asset Management still has a 5.2% holding.
Despite the fact shareholders are likely to be wiped out when Cineworld expects to emerge from Chapter 11 bankruptcy proceedings next month, the boss of the British cinema chain and his top management team will be paid up to £27m combined when they leave the firm. Lenders have committed to pay Mooky Greidinger, his brother and deputy chief Israel Greidinger, CFO Nisan Cohen and chief commercial officer Renana Teperberg between £23m and £27m in cash within a year of their exit, according to the Financial Times.
McDonald’s boss Alastair Macrow said that the fast-food chain is seeing three year delays to open new fast-food restaurants, due to excessive bureaucracy and failing planning processes. “The planning timeline in this country for us has on average increased by 55 weeks since Covid,” Macrow told the Daily Telegraph, mostly, he said, because of circumstances beyond the firm’s control. The Telegraph says over 100,000 planning decisions took longer than the target eight weeks to reach a verdict in 2022. Macrow has also highlighted the problem of food inflation, which led McDonald’s to increase the price of its signature Big Mac cheeseburger for the first time in 14 years. He said: “Back in my days as UK marketing director, I was really excited about launching our saver menu – January 2nd, 2009, I still remember the date. We launched the Mayo Chicken, that was our new ‘hero product’, 99p. It was still 99p at the start of this year… we’ve had to move that now to £1.19.” “Inflation is inflation. We can’t change that,” he said.
Former-Tesco and Barratt Developments boss John Allan has told Sky news’ Sophie Ridge there was “absolutely no substance” to the misconduct allegations against him, saying he felt the two the companies “felt they had to be seen to do something, and the easiest and simplest thing was to propel me under the nearest bus”. There needs to be more fairness for people who are accused of misconduct, he said, aadding: “I don’t think I was particularly fairly treated”. “I think it’s important because there are cases where people are inappropriately treated and I don’t think we should overlook that, but also fair to people who are accused, that there is some form of due process, some form of investigation, before judgments are made about them,” he said. “Having crawled out from two successive buses and still standing, I’m going to plan over the next few months to talk to a lot of people who know a lot more about this than me to sort of see if we can devise a better way so the next person who is subject to this sort of allegation is more fairly treated,” he continued. Allan, who was also chair of the Confederation of British Industry (CBI), stands accused of four different accounts of inappropriate or unprofessional behaviour. The accusations were first reported in the Guardian. Allan denies three of the allegations against him, including that he touched a woman’s bottom, and has “unreservedly apologised” for the fourth, which was commenting on a woman’s figure. Tesco has said it found no evidence of wrongdoing.
John Lewis property director Chris Harris has resigned after five-years in the post, the Sunday Times said yesterday. Harris played a key role in the retailer’s plans to expand into rental housing, and was the architect of a major £500m deal with investment firm Abrdn to build 1,000 residential rental homes in the first step of its target of constructing 10,000 new homes over the next decade. His planned departure has piled further pressure on the struggling retailer’s chair Dame Sharon White, who has come under heavy criticism during her tenure, not least for considering ending John Lewis’ famous employee ownership model by allowing outside investment to raise funds. White marginally won a vote of confidence in her leadership last month after the company posted annual losses of £234m in March.
Italy has blocked a Chinese state-owned company from taking control of Pirelli to protect the tyre making giant’s independence. Beijing-controlled chemical giant Sinochem is Pirelli's biggest shareholder, holding a 37% stake in the 151-year-old Milan-based firm, but in a statement to investors, Pirelli said the Italian government had ruled that only Camfin - a company controlled by Pirelli's boss Marco Tronchetti Provera - could nominate candidates to be its CEO. Pirelli also said the government had decided that any changes to the company's corporate governance should be subject to official scrutiny, after Sinochem told the Italian government it planned to renew and update an existing shareholder pact. The agreement was examined by Italian Prime Minister Giorgia Meloni's administration under the so-called "Golden Power Procedure" rules, which are aimed at protecting businesses viewed as strategically important to the nation. Pirelli was sold in 2015 for €7.1bn (£6.1bn) to a group of investors including ChemChina and Camfin, then ChemChina merged with state-owned Sinochem six years later, the BBC reports, noting that the Chinese government's Silk Road investment fund also owns a 9% stake in Pirelli.
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