Published: 11 October 2023
By Suzanne Evans, Director, Political Insight
Sir Keir Starmer made his Leader’s speech to Labour Party Conference yesterday, and pledged to “hold out the hand of partnership to business” and “champion the need for a competitive tax regime”. In possibly his last speech as an opposition leader to the party faithful before an election expected next year, he also said he and Labour recognises that “private enterprise is the only way this country pays its way in the world”. He promised to launch a National Wealth Fund to “get on” and deliver investment and “work hand in glove with the private sector to rebuild this country,” saying a public and private partnership would “build a bridge from the jobs we must protect today to the opportunities we have to win tomorrow”. In 1997, Labour rebuilt the public realm; in 1964, it modernised the economy; and in 1945, it built a new country “out of the trauma of collective sacrifice”, he said, but that in 2024 “it will have to be all three”. Starmer also confirmed he would restore a ban on new petrol and diesel cars by 2030 (which at Conservative Party Conference last week Prime Minister Rish Sunak delayed by five years) saying: “I say speed ahead.” Earlier, shadow business secretary Jonathan Reynolds had addressed FTSE100 CEOs and SME entrepreneurs at a breakfast forum, saying he knew that “Business is ready to join us in this endeavour.” “I can’t tell you how many conversations I’ve had with leading CEOs who tell me it’s the chopping and changing. The sticking plaster politics. The chaos. That is holding back investment in our country,” he said, in reference to the current Conservative Government. Other initiatives Starmer announced in his speech included:
· Ending the so-called ‘non-dom’ tax loophole to boost NHS capacity and get “clearing the backlog seven days a week”
· “Bulldozing” the “restrictive” planning system to construct 1.5m new homes
· Building “the next generation of Labour new towns” while protecting the green belt, building on what he called “grey belt” areas such as “disused car parks”
· “Rewiring” Britain by getting the National Grid “moving a lot faster”
The Prime Minister must call a general election by January 2025 at the very latest.
Luton Airport has suspended all flights until at least 3pm today after a car fire triggered a wider blaze that led to a partial collapse of one of its multi-storey car parks. Various media photographs show huge flames sweeping through the structure, a short distance from the airport terminal. Luton is Britain's fifth busiest airport after Heathrow, Gatwick, Stansted and Manchester, and it handled 13.3 million passengers in 2022, according to the Civil Aviation Authority.
The International Monetary Fund (IMF) has downgraded its forecasts for the British economy again, but without factoring in recent revisions to UK GDP data. Some two weeks’ ago, the Office for National Statistics (ONS) updated its GDP estimates to show the economy was larger than previously thought in 2020 and 2021, and had indeed performed better than France and Germany, rather than worse, as had been thought previously. The ONS also improved its estimate for the economy in the first three months of the year, suggesting GDP increased during that time by 0.3% compared to earlier estimates of just 0.1%. However, the IMF said yesterday it believed the UK would be the weakest performing advanced G7 economy in 2024, as it cut growth expectation back to 0.6%, down from an earlier prediction of 1% growth over the year. The IMF prediction is also at odds with the Organisation for Economic Co-operation and Development (OECD) forecasts which has predicted Germany will experience the heaviest blow from a slowdown in the world economy driven by higher interest rates and weaker global trade.
The Organization of the Petroleum Exporting Countries (OPEC), the cartel of 13-oil producing nations that make up an estimated 30% of global oil production, has warned climate action to reach net zero undermines investment in the oil sector and jeopardises global energy security. General secretary Haitham al-Ghais took aim at forecasters predicting a drop-off in oil demand this decade, and slammed calls by the International Energy Agency to stop new fossil fuel investments in order to reach net zero emissions by 2050, Reuters reports. At the launch of OPEC’s latest annual oil outlook report in Riyadh, Saudi Arabia, he said: “Calls to stop investments in new oil projects are misguided and could lead to energy and economic chaos.” Expectations outlined in last year’s report, that oil demand would reach a plateau after 2035, have also been ditched: now OPEC anticipates its total share of the oil market to rise from 34% to 40% by 2045, with demand led by China, India, other Asian nations, and Africa and the Middle East.
The Bank of England (BoE) has expressed concern over the fact Britons are increasingly turning to credit cards to make ends meet, and that more mortgage-holders are extending the period over which they pay back their loans because they are struggling to make their monthly payments, potentially storing up longer-term financial problems for themselves. The share of new mortgage lending on terms of at least 35 years has risen from 4% in the first quarter of 2021 to 12% in the three months to the end of June this year, the central bank said, a period during which it hiked the base rate from 0.1% to 5% per cent. Interest rates have since been increased to 5.25%, meaning even further hikes on interest rates charged by mortgage, loan and credit card companies.
Ryanair has warned passengers will bear the brunt of higher prices because of an “unfair” Government clampdown on carbon emissions, City AM reports. Free carbon allowances, effectively permission slips from the government allowing emissions by energy intensive sectors such as aviation, manufacturing and power and regulated as part of the Government’s Emissions Trading Scheme (ETS), are being phased out from Thursday, when a 12.4% cut comes into force, meaning airlines will be forced to pay more for each tonne of carbon they emit, with the money going into the public purse. The Government is targeting a 45% cut in emission by 2027 and an over 80% decline by the end of the decade. The additional costs are “an unfair burden for UK consumers who have no alternative means of connectivity,” a spokesperson said, adding: “While Ryanair supports the goal of net zero emissions, achieving this poses unique challenges for the UK whose citizens and economy are dependent on air connectivity with the EU”. Ryanair also argues that short-haul passengers are being treated unfairly, because long-haul airlines are currently exempt from the scheme. Airlines UK, the trade body representing the country’s carriers, estimates carriers will be forced to plough an additional £4bn into the UK ETS by the end of the decade, while Karen Dee, CEO of industry trade body the Airport Operators Association, called for income from the scheme to be reinvested back into the sector. “That way we work to transform aviation, not just reduce people’s access to it,” she said. “We must not make the UK an uncompetitive place to invest and do business” while aiming for net zero emissions, she added.
Eurostar has said it is not confident it will be able to prevent the closure of its popular London to Amsterdam route for up to 11 months next year because of major engineering works at Amsterdam Central station, which will restrict space for passenger checks. The high speed rail group has been holding talks with Dutch ministers and industry figures in a bid to keep the route open, or reduce the length of time it is shut for. Speaking to City A.M., chief commercial officer François Le Doze said: “There is a solution that is workable. So if common sense wins, then we don’t have a gap,” but, he added, although Eurostar was optimistic, “We’re not confident.” Eurostar runs four daily trains between London and Amsterdam, all of which would be halted from June 2024 unless an alternative solution is found.
City AM runs an article this morning outlining how demand for UK film and TV production is set to spike just as a new ‘studio tax’ cause venues to fear going out of business. The 30% hike in taxes, which came into force from April this year, has been caused by a re-evaluation of studios’ rateable values by the Valuation Office Agency (VOA), based on the figure a property would rent for it if they were available on the open market. These figures have been used to calculate new business rates. So, for example, Pinewood Studios’ rateable value is set to increase from £3.95m to £16.2m, with an associated significant hike in business rates payments due. The tax is currently being investigated by the British Film Commission (BFC) which is due to meet with the VOA to express its concerns. Oliver Royds, CEO of Troubadour Theatres told the newspaper Britain’s status in international filming is being put in “serious jeopardy” by the new taxes. “The film and TV industry contributes over £5bn a year in tax revenue for central government alone, not to mention the hundreds of thousands of jobs that it creates. The recent hike puts all of that in serious jeopardy as it simply makes it too expensive to film here in the UK,” he said. In the summer, Sunset Studios Waltham Cross, a £700m project in Hertfordshire, was paused due to ongoing uncertainty with property taxes. An HM Treasury spokesperson said: “We recognise this is a challenging time in the film and TV industry. That is why we have backed studios with sector specific tax reliefs that have supported over 6000 film and TV productions and provided almost £1.4bn of support last year.” London has developed a reputation as a global filmmaking hub in recent years, making £97bn in revenue in 2022 as Europe’s most-used destination.
FTSE 100 pharmaceutical giant GSK said today it has reached confidential out of court settlements involving several lawsuits filed in California over its discontinued heartburn drug Zantac, which is said by the claimants to have caused cancer. In 2020, the US Food and Drug Administration pulled Zantac off shelves, triggering thousands of lawsuits. GSK revealed it paid a £45m legal bill last year in dealing with the various claims, although it denies any liability in the settlements and said it will continue to “vigorously defend” itself against all other Zantac cases.
London-listed tool and equipment hire services firm Speedy Hire has announced the acquisition of sustainable power solutions specialist Green Power Hire Limited (GPH) for £20.2m. GPH owns and supplies Battery Storage Units to the UK rental market, mainly to the construction sector.
Electricals retailer Currys says it has received interest from several potential buyers for its Greek business, Kotsovolos, who have submitted non-binding offers currently being evaluated by the board and its advisers. "The strategic review remains ongoing, and Currys will provide a further update when appropriate," the FTSE 250 firm said, adding that there can be no certainty as to the outcome of the review.
Sky News understands that British PR firm Powerscourt Group, founded by former FT journalist Rory Godson in 2004, is on the brink of an agreement to be bought by Morrow Sodali, a US-based stakeholder advisory firm. City sources said the deal could ultimately be worth as much as £50m.
Safestyle, the London-listed window and door installation group, is said by Sky News to be exploring either an outright sale of the company or re-financing options, and working with Interpath Advisory to do so. The company has already warned the City of its financial challenges, telling investors earlier this month that it has "been engaging with its stakeholders to discuss ways to strengthen the balance sheet in order to support its recovery and help facilitate future growth". In its stock exchange announcement this month, it also said that it was likely to breach banking covenants if forecast losses materialise. Safestyle declined to comment on Interpath's involvement.
The trial of four people charged in connection with the collapse of Patisserie Valerie will begin at Southwark Crown Court on 7th November. Christopher Marsh, a former director and chief financial officer of Patisserie Holdings, the company behind Patisserie Valerie; his wife, accountant Louise Marsh,; former Financial controller Pritesh Mistry; and financial consultant Nileshkumar Lad all face charges of conspiracy to defraud. Christopher Marsh, Mistry and Lad also face five charges of fraud by false representation and one of making or supplying an article for use in fraud. Christopher Marsh also faces a charge of making false representations as a Patisserie Valerie company director. The case follows an investigation by the Serious Fraud Office (SFO) after the bakery and restaurant chain, which had 200 outlets, fell into administration in 2019 with a £94m hole in its accounts. The four defendants appeared in the dock at Westminster Magistrates’ Court yesterday, before District Judge Daniel Sternberg sent the case to the Crown Court. None of the defendants have yet entered any pleas.
Chinese property developer Country Garden has warned it cannot repay a HKD 470m (£49m) loan on time. Country Garden had previously been hailed as a model real estate company by Chinese authorities, having avoided defaults on debt while rivals such as China’s Evergrande, the world’s most heavily indebted property firm, defaulted in 2021 when the Chinese government put limits on borrowing by developers. The company’s Hong Kong-traded shares sank 10.7% yesterday. Its liquidity crisis suggests developers remain under pressure even after regulators lifted some controls on housing purchases to alleviate troubles in the industry, the Press Association says. Country Garden had more than $180bn (£147bn) in liabilities as of June, while Evergrande has more than $300bn (£245bn). Country Garden has also said its sales faced slumped nearly 44% in January to September from the same period a year earlier and, since there has not been an industry-wide improvement in property sales, it expects its liquidity position “to remain very tight in the short- to medium-term”. Last month, a former Chinese official estimated that even China’s 1.4bn population would not be able to fill all the vacant homes across the country.
And finally… more Brits believe there is a conspiracy to hide the existence of aliens than claim a 'good understanding' of the City's favourite acronym ‘ESG,’ according to a survey by City communications firm SEC Newgate. In its report on the survey, City AM says just 13% of the British public have a ‘good understanding’ of what environment, social and governance (ESG) is – up only 1% on last year – and fewer than a 2021 YouGov poll which revealed the numbers of Brits who claimed to have even been visited by aliens. The lack of understanding means “bosses may have failed to properly explain the term” it concludes. Despite ESG awareness being on the rise, “still under half of people have actually heard of the acronym, despite it dominating corporate lingo for the past five years,” the newspaper says, adding that the polling reflects a rising backlash to ESG. Blackrock boss Larry Fink, who led the charge on ESG until last year, has now ditched it completely, saying it has been “weaponised” by extreme political figures on the left and right. Figures from the Investment Association last week also showed that Investors had also bolted from responsible investment funds over the summer: some £448m was pulled by retail investors from ESG funds in August, the third consecutive month of outflows.
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