Published: 07 September 2023
By Suzanne Evans, Director, Political Insight
Energy bosses have called for the current ban on prepayment meters to be lifted, and for suppliers to have the power to impose installations on customers, when they appeared before MPs on the Energy Security and Net Zero Committee yesterday, saying vulnerable customers risked suffering increasingly high debts without some form of enforcement to contain energy usage. Centrica CEO
Chris O’Shea said: “I think we have to balance the effort between allowing people to run up bills they can’t repay and making customers retribute respectfully,” while Rachel Fletcher, group director of policy and regulation at Octopus said she believed prepayment meters could be permitted if they were installed “responsibly” with “smart prepayment meters only,” a position which was backed Eon UK’s CEO Chris Norbury. EDF’s managing director of customers Philippe Commaret and Simon Oscroft, co-founder of So Energy, also called for the prepayment meter ban to end. Last month, Centrica-owned British Gas said it had seen a £173m increase in bad debt in the previous six months. Ofgem has imposed an industry-wide moratorium on forced prepayment meter installations since January following an investigation by The Times in which debt collectors working for British Gas teamed up with locksmiths to force their way into the homes of vulnerable people behind on bills.
The Bank of England (BoE) is "much nearer" to ending its run of interest rates increases because there will be a “quite marked” fall in inflation by the end of the year, Governor Andrew Bailey suggested yesterday. However, he also told MPs on the Treasury Committee yesterday that borrowing costs might still have further to rise because of stubborn inflation pressures. “There was a period when it was clear rates needed to rise going forwards, and the question for us was how much and over what time frame. We’re not, I think, in that phase anymore,” he said, adding: “We’re much nearer the top of the cycle… on the basis of current evidence”. His comments prompted the pound to fall to a three month low, dropping 0.6% to trade below $1.25, as markets bet that the Bank might not lift rates as far as previously thought. Swati Dhingra, another member of the interest rate-setting Monetary Policy Committee (MPC) said there were “very promising signs” that inflation is falling. She pointed out that producer price inflation has fallen significantly and that “almost every item” in the consumer price index has turned negative. The BoE has raised interest rates at each of its last 14 meetings and is widely expected to do so again this month, taking base rate borrowing costs to 5.5%.
The UK will re-join the European Union's Horizon science research programme with a "bespoke" new agreement Prime Minister Rishi Sunak said this morning. Britain will not, however, be linked with the EU’s Euratom nuclear energy scheme, instead choosing to pursue a domestic fusion energy strategy. "We have worked with our EU partners to make sure that this is the right deal for the UK, unlocking unparalleled research opportunities, and also the right deal for British taxpayers," Sunak said. Science and technology minister Michelle Donelan told Times Radio Britain would not pay for the years where it had been frozen out of the scheme, and that there was a "clawback" mechanism which would effectively provide a rebate if Britain got less out of the association than it was putting in.
Hot on the heels of similar news released by Nationwide, the Halifax too now says house prices have fallen, although by not so far. Its figures suggest that in August 2023 prices were 4.6% lower than the same month a year earlier, making the dip the worst since 2009 and the financial crisis. The average home now costs £279k, the Halifax said, with £5,000 knocked off its value since July and £14,000 on the year. The mortgage lender added that London homes saw the most dramatic fall in price of any region in cash terms, tumbling 4.1% to an average £529k. Last week, Nationwide said prices are now 5.3% below their August 2022 peak, and that the average property value is now £259,153.
According to the latest What the world thinks about work study of 24 countries by the Policy Institute at King’s College London, Brits are the least likely to place importance on work or believe hard work brings a better life. Nearly one-fifth of those polled for the study said work was not important in their life, the highest proportion among the 24 countries, which included France, Sweden, the US, Nigeria, Japan and China. They were also among the least likely to say hard work would bring a better life in the long run, with just 39% agreeing with this statement, well below the US, where 55% of people agreed. Millennials, born in the early 1980s to mid-1990s, were the least likely to agree with this view: in 2009, 41% felt this way; by 2022, this had fallen to 14%.
The Competition and Markets Authority (CMA) has launched a review of veterinary services in the UK amid concerns that pet owners could be paying too much. The CMA has been working with consumer group Which? which claims pet owners often did not know the price of treatments until after their appointment, leading them to foot "eye-watering" bills. The CMA has also expressed concerns about changes in the ownership of vet practices; independent practices accounted for 89% of the UK veterinary industry in 2013, but that had fallen to about 45% by 2021. “In some cases, a single company may own hundreds of practices and it may be unclear to people whether their vet is part of a large group", the CMA said. "This could impact pet owners' choices and reduce the incentives of local vet practices to compete". The industry is worth £2bn, and has benefitted recently from the fact that pet ownership rose to encompass two-thirds of UK households during covid restrictions.
Oil and gas producer Enquest has posted losses of £16.8m for the six months to June, having made a profit of £162.1m in the same period last year, and it blames the windfall tax imposed by the Government last year, when Rishi Sunak when he was Chancellor after global energy prices spiked, and then raised when Jeremy Hunt took over at the Treasury. The Energy Profits Levy imposes a 35% surcharge on profits, taking energy firms’ total corporation tax rate to 75%, a rate that is set to remain in place until at least 2028. Enquest said it paid £61m in tax in the six months to June due to the levy – sending its AIM-listed shares down 12.1 per cent yesterday.
WH Smith has seen turnover increase by 28% in the 12 months ending August, suggesting the high street and travel hub business is picking up since its dearth during covid lockdowns and other travel restrictions. The firm said sales at its UK travel hubs climbed by more than a third, adding that revenue was boosted by rising airport trade but also a strong performance by its hospital-based outlets. Demand also remained resilient at its rail channel despite footfall being impacted by railway workers staging a series of strikes over pay and conditions, WH Smith said. Travel sales at the FTSE 250 firm also grew by 31% in North America, where the group boosted its market share and opened another 43 shops.
Virgin Media O2 (VM02) has bought British broadband provider Upp, but plans to sell it on to Liberty Global-owned Nexfibre, a UK fibre broadband build firm. Meanwhile, VMO2 will “carry out integration work” to pave the way for the handover, via which Nexfibre hopes to expand its reach to 175,000 sites in the East of England. Late last year, the Government ordered the Russian oligarch-backed investment company Letterone to sell Upp, saying the ownership was a national security risk.
The value of the deal remains undisclosed but according to sources cited by the Financial Times is in the “high tens of millions of pounds”.
Transport for London (TfL) has banned adverts for cheese – intended to be part of a campaign run by office provider Workspace - saying it is “too unhealthy”. The Times spoke to the founder of Cheese Geek, Edward Hancock, who said the ban was “crazy” and said he couldn’t understand why fizzy drink ads were allowed on the network but not artisan cheeses. Cheese “has been shown in numerous recent studies to be beneficial for health,” Hancock said. TfL banned high fat advertising in 2019 and said the cheese ads could not run because TfL uses “the Food Standards Agency’s model to define foods that are high in fat, sugar and salt.”
Lingerie and sex toy retailer Ann Summers says its turnover reached over £100m in the year to June 2022, and has revealed plans to open more five more stores across the UK. It currently has 88 outlets across the UK and Ireland. Retail sales in the year were up 7.6% compared to 2020 and 5.4% above pre-covid lockdown levels. The results are the first posted by the firm since former boss Jacqueline Gold died in March this year.
NatWest Group has confirmed Rick Haythornthwaite will become its new chairman – Sky News says the appointment has cleared regulatory and Treasury approval - succeeding Sir Howard Davies who was forced to resign because of the bank's decision to close Nigel Farage’s Coutts account. He will join the board as an independent non-executive director on 8th January and, following a handover period, take over as chair on 15th April next year when Howard stands down. Among his immediate responsibilities will be identifying a permanent successor to Dame Alison Rose, who was also forced to resign because of the de-banking scandal. Haythornthwaite currently chairs Ocado and the AA and has previously led Centrica, Network Rail, and MasterCard International.
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