Published: 11 September 2023
By Suzanne Evans, Director, Political Insight
The UK has leapfrogged France to become the 8th largest manufacturer in the world. With an annual output of £224bn, the buoyant sector now supports 2.6m jobs according to new data released this morning by trade association Make UK.
Chancellor Jeremy Hunt is being urged by some of the country's largest retailers to stop a £400m business rates hike, on the basis going ahead with it risks undermining the fight against inflation. Bosses from Marks & Spencer, Greggs, Harvey Nichols, Tesco, Sainsbury's and B&Q are among 44 who have signed a letter coordinated by the British Retail Consortium (BRC) asking for rates to be frozen. The letter said firms had been battling to contain price rises despite costs soaring over the past 18 months and that their effort was 'starting to bear fruit'. Shop price inflation fell from a peak of 9% in May to 6.9% in August. “An inflationary increase to business rates would add over £400m to the industry's cost base next year, severely undermining this progress,” the letter added. “It would also have a much wider impact, threatening the viability of many shops and hindering the industry's capacity to invest.” A BRC member survey found that, for 59% of retailers, a rise in business rates would lead to “significant” upwards pressure on prices for customers.
The Trades Union Congress (TUC) says it is reporting the Government to the International Labour Organisation (ILO), a United Nations watchdog, over new laws on industrial action which require some employees to work during strikes or face being sacked. Once implemented, the Strikes (Minimum Service Levels) Act will apply to a wide range of workers, including those working in the rail industry, the emergency services, civil servants and teachers. As representatives from 48 unions gathered for the opening day of the TUC Congress in Liverpool yesterday, general secretary Paul Nowak said the laws are "unworkable" and “may be illegal”. A spokeswoman for the Government said: "The purpose of this legislation is to protect the lives and livelihoods of the general public and ensure they can continue to access vital public services during strikes… The legislation does not remove the ability to strike, but people expect the government to act in circumstances where their rights and freedoms are being disproportionately impacted, and that's what we are doing with this Bill." She pointed to research suggesting 600,000 medical appointments have been rescheduled over the past year, and £1.2bn in output has been lost, due to strikes.
House building is set to slump by a fifth this year, according to a report by PwC which suggests residential new-build activity will fall by 21.1% in 2023, a slump similar to that in 2020 covid lockdowns shrunk output in the sector by 20.8%. PwC blames higher mortgage costs as a result of rising interest rates, together with the broader cost of living squeeze which is weakening demand.
Network Rail has been fined nearly £7m for health and safety failings that led to the deaths of three people when the ScotRail Aberdeen to Glasgow service derailed at Carmont after hitting a landslide near Stonehaven following heavy rain in August 2020. The crash, the worst on Britain's railways in 18 years, killed three of the nine people on board: the train's driver, Brett McCullough, its conductor Donald Dinnie, and a passenger, Christopher Stuchbury. A proposed £10m fine was reduced when the rail operator pleaded guilty to a number of maintenance and inspection failures before the crash at the High Court in Aberdeen on Friday. Alex Hynes, managing director of Scotland's Railway said: "It is clear that our infrastructure was at fault for the accident, so it is right that Network Rail pled guilty. Since the accident we have been working hard to make our railway safer and to learn the lessons of Carmont. The events of 12th August 2020 and loss of three lives will be etched on the industry's mind forever, and make us determined to keep improving the safety of our network every day."
BMW is expected to announce plans to invest some £600m into its Mini factory near Oxford to build a new generation of electric cars from 2026. The move is expected to safeguard the future of the facility, as well as that of another factory in Swindon. The UK investment will be backed by funding from the Government's Automotive Transformation Fund, understood to be in the region of £75m. More than 4,000 people currently work across the two sites. Prime Minister Rishi Sunak said BMW's investment was "another shining example of how the UK is the best place to build cars of the future". Business and Trade Secretary Kemi Badenoch said it showed "the Government's plan for the automotive sector is working".
Supermarket chain Morrisons is said by Sky News to be in talks about a £2bn deal to offload its petrol forecourts to Motor Fuel Group (MFG). Both Morrisons and MFG are controlled by the private equity firm Clayton Dubilier & Rice (CD&R), and sources said the talks were focused on a transaction with an enterprise value of up to £2.5bn. Morrisons' fuel retailing operations encompass about 340 sites, with another 150 potentially being added as MFG targets the rapid expansion of its ultra-fast electric vehicle (EV) charging network. CD&R, Morrisons and MFG all declined to comment on Sky’s story.
The owner of Cafe Rouge has confirmed it has spent £7.5m buying Chiquito's and Frankie and Benny's from The Restaurant Group (TRG), the London-listed owner of Wagamama. The Big Table, which is backed by the private equity firm Epiris, now owns the 75 restaurant sites which, as part of TRG, were underperforming.
More than 21% of Currys shareholders voted to reject the electronics retailer's pay scheme for 2022 at last week's annual meeting. The pay awards handed CEO Alex Baldock £2.2m, around £1.2m of this was in the form of bonuses. Currys said it would speak to shareholders to find out why they objected to the scheme. Any revolt of more than 20% of votes sees the company automatically added to a list of rebellions kept by the Investment Association. The Daily Mail notes a slew of major firms have already clocked up rebellions this year, including Unilever, Pearson, Ocado and HSBC.
Further news has emerged about the scandal-hit business lobby group The Confederation of British Industry (CBI), which last week was reported to be attempting to merge with manufacturers’ trade body Make UK. Now, The Guardian suggests the CBI is on the brink of insolvency, hence the race against time to restructure its finances or secure a merger, but the newspaper also says the CBI’s pension scheme may be an obstacle to any deal. The pension scheme is in surplus but will have to be hived off, probably to an insurance company, according to the Financial Times, which first reported on the stumbling block. The CBI is understood to be yet to find an insurer willing to take on the scheme’s liabilities. “It’s not that there’s a problem with the regulator, it’s just that these things take time and the CBI doesn’t have time,” someone close to the talks told the FT.
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