Published: 11 January 2024
By Suzanne Evans, Director, Political Insight
Post Office Scandal Latest: Sir Ed Davey, one of the Ministers responsible during the period when Fujitsu’s faulty Horizon accounting software landed hundreds of post office managers in jail when they were wrongfully prosecuted and convicted on fraud and theft charges, is refusing to hand back his Knighthood. Former Post Office CEO Paul Vennells has, however, handed back her CBE following mounting public pressure and a petition that achieved over 1.2m signatures. Meanwhile, the Government is saying Fujitsu will be "held accountable" if it is found to have been culpable in the prosecutions of over 700 innocent postmasters. Its executives will have to face MPs at a parliamentary committee hearing next week, as well as at the ongoing public inquiry. Calls are also growing for the Japanese firm to explain itself and pay compensation to victims, and questions are being asked as to why Fujitsu is still being allowed to bid for and win government contracts given the scandal, and the fact previous IT failures by the firm ended up costing taxpayers hundreds of millions of pounds. Since 2013, Fujitsu has landed 191 British Government contracts worth more than £6.5bn, according to procurement analysts Tussell. Although officials removed Fujitsu from the list of preferred suppliers in 2022, it is still participating in procurement processes and was recently awarded a near £20m contract with the Environment Agency. Fujitsu said it was fully committed to supporting the inquiry to learn from the events, saying it recognises the “devastating impact on postmasters' lives and that of their families,” and that it has “apologised for its role in their suffering". “The scandal, which ran for some 20-years and is one of the biggest miscarriages of justice in British history, has received renewed attention since a TV drama showing how it disrupted the lives of hundreds of sub-postmasters aired last week,” Reuters says.
Chancellor Jeremy Hunt and City Minister Bim Afolami held a breakfast meeting with several major City players yesterday to review existing plans to “make the UK the global capital for capital” and attract more listings to the London Stock Exchange. Among those in attendance were the CEOs of Abrdn, Schroders, HSBC, Phoenix Group and Peel Hunt, the latter of which has called for some British firms to be banned from listing on overseas stock markets,or be forced to have a secondary London listing. “The Chancellor spoke about how Mansion House Reforms [1] will unlock £75bn in equity funding to help high-growth businesses scale and grow and support better outcomes for savers,” the Treasury said after the meeting. “The economic secretary also spoke about the importance of delivering the Edinburgh Reforms [2] which will turbocharge growth in the UK’s capital markets, streamlining the listings process and cementing the UK’s status as a leading global capital markets destination.” Hunt is also expected to announce further reforms to boost the competitiveness of UK equity markets in his forthcoming March budget including, it has been suggested, a UK ISA to support investment into London-listed companies.
It has emerged that Rozina Breen, a former BBC executive and an ethnic minority woman was blocked by Ministers from joining the board of the state-owned broadcaster, Channel 4. A row broke yesterday when the channel’s Chair, Sir Ian Cheshire, criticised the appointment of four white directors. Although Ofcom put Breen forward as a preferred candidate for a non-executive director position, she was rejected by Culture Secretary Lucy Frazer. No reason has been given for Frazer’s decision, except an insistance by the Department for Culture, Media and Sport (DCMS) that the appointments were made on merit and that the candidates chosen were the best ones for the job. In an interview with TV industry magazine Deadline, Breen, currently the editor-in-chief and CEO of the Bureau of Investigative Journalism, said: “There were clear criteria and a process for application. If one is put forward by Ofcom as one of the recommended candidates and then seemingly rejected by DCMS that feels opaque and also problematic. Who is making the appointment?” She added: “Representation is essential and the all-too-live reality is that women of colour, especially, face multiple barriers. We need to jump higher, run faster, work harder, fit in. More diverse senior decision-makers are essential if broadcasting is to become a genuinely inclusive industry”. Shadow Culture Secretary Thangam Debbonaire is accusing Frazer of “failing Channel 4 and its viewers”.
Ethical funds haemorrhaged investments in 2023 with a net £2.4bn pulled from funds focused on environmental, social and governance issues (ESG), data from global funds network Calastone show. This makes such withdrawals the highest since at least 2015 when records began, and marks a stark decline from 2021 when net inflows surged to £11.2bn. Half of investors polled by the Association of Investment Companies (AIC) in October said they were unconvinced by ESG claims made by asset managers, the Telegraph reports, probably an indication of how awareness of so-called ‘greenwashing’ by firms has bgained traction. The AIC suggested that the energy crisis and global political upheaval has also triggered a resurgence in demand for oil and gas and defence stocks.
The X account of US financial regulator the Securities and Exchange Commission (SEC) was hacked yesterday by criminals who made a post claiming it had approved the first-ever U.S. spot bitcoin exchange-traded funds (ETFs). The SEC promptly clarified the account had been compromised and that the post was unauthorised and inaccurate but, meanwhile, the price of Bitcoin surged to nearly $48,000. It then plummeted to below $45,000 when the post was deleted and disowned by the SEC.
Pennon Water is buying Sutton and East Surrey Water from its Japanese holding company, Sumisho Osaka Gas Water UK, for £380m (£89m including net debt of £291m). The deal means Pennon will take on an additional 750,000 customers to Pennon’s group. CEO Susan Davy said the takeover would expand the company’s water supply across Southern England, “building on our successful similar acquisitions of Bournemouth Water and Bristol Water alongside the adoption of water supply in the Isles of Scilly”. A equity capital raise of up to £180m by Pennon will fund the acquisition.
The Property Franchise Group (TPFG) and Belvoir Group have announced agreement on an all-share merger which will create Britain’s largest property sales and lettings franchise with more than 930 franchise locations managing some 152,000 tenanted properties and selling around 28,000 properties each year. In the year to the end of December 2022, the two companies made over £60m in combined revenue. TPGF operates brands including EweMove, Hunter’s, Martin and Co. and Ellis & Co.
Heathrow is warning that fees and red tape set to be levied on visa-exempt travellers transiting via the hub risks diverting passengers to other European airports. The new Electronic Travel Authorisation (ETA) charge – mandatory by the end of 2024 - means passengers arriving in Britain will have to pay a £10 fee and wait up to three days for an online permit, even when just taking connecting flights. Only Irish travellers will be exempt. The rule has already been introduced for Qatari nationals. The Home Office says the policy will strengthen border security and improve customer experience, but a spokesperson for Heathrow told City A.M. that should the government not correct the “unnecessary bureaucracy,” passengers would “choose the easier option and use a European hub airport instead.” Karen Dee, chief executive of trade body the Airport Operators Association (AOA), told City A.M. also said that UK hubs would be placed at a “competitive disadvantage compared to our European rivals.”
Greggs has announced it plans to open up to 160 new shops this year, following booming fourth quarter sales. Revenue increased by 19.6% to £1.8bn in the three months to December, with the British bakery chain citing the success of its Festive Bakes, Christmas lunch baguettes, and Chocolate Orange Muffins as contributory factors. Full year sales were up 13.7%, attributed to late night trading and a partnership with Uber Eats, as well as cooling inflation. The chain currently has some 2,000 stores nationwide, most of which now open after 4pm.
Sainsbury's Christmas sales rose 8.6%, with record sales of sparkling wine, mince pies, premium cheeses and pigs in blankets. The supermarket also saw a 13% increase in sales of its Taste the Difference luxury own brand range, and is suggestinig that sales overall were “powered” by Nectar Prices (special discounts to its loyalty card holders) which helped shoppers save an average of £16 on an £80 Christmas shop. Overall, grocery sales were up 8.6% over the six weeks to 6th January, but clothing sales fell 6%, commensurate with data from the British Retail Consortium reported here yesterday. Sales were also down 4.2% in Sainsbury’s Argos outlets, retail researcher Kantar says.
Aldi was the cheapest supermarket throughout 2023, except in October, when it missed out to discount rival Lidl, consumer group Which? has concluded. Which? research found a basket of 43 groceries cost £74.83 at Aldi in December, ahead of all rivals, while Waitrose was the most expensive at nearly £20 more. Waitrose was also the most expensive supermarket throughout the year. Which? compared the cost of a larger trolley of more than 100 items, including special offer prices but not loyalty discounts or multi-buy products.
Online fashion retailer Boohoo is considering closing its first British manufacturing site, a possibility which follows a BBC Panorama investigation that found it had broken promises to make clothes ethically there. A reporter working undercover at the factory in Leicester saw evidence of staff pressuring suppliers to drive prices down, even after deals had been agreed. However, the broadcaster said the firm insisted closure plans were not related to the Panorama investigation but because of investments in other sites to which staff were being relocated. "We are now in a period of consultation and are working closely with all affected colleagues to ensure they are fully supported during this process," Boohoo said.
Osborne & Little (O&L), former Chancellor George Osborne’s family wallpaper and fabric business has seen a 98% collapse in pre-tax profits for the year to 31st March 2023. The firm is blaming double-digit inflation, energy price rises and interest rate hikes, all of which have dampened confidence in the property market upon which it relies. The group’s accounts also disclosed that after the year end, it breached a Coronavirus Business Interruption Loan financial covenant with HSBC, but has received a letter from the bank confirming that no action would be taken as a result, The Telegraph says. O&L made early repayments of the loan of £338,000 and was left with a debt of £742,000 at the end of the financial year. George Osborne is still a Director of the firm which is held privately (it delisted from the London Stock Exchange in 2003) and is run by his father, Sir Peter Osborne. It employs over 140 staff. Its highest-paid director received £770,000 during the year, the Telegraph notes.
Netflix released around 130 fewer films and TV shows in 2023 than the year before it has been revealed, a 16% decline, The US streaming service blamed Hollywood strikes for cutting back its spending for the first time: previously, the Netflix has increased original productions every year over the last decade.
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