Published: 05 April 2024
By Suzanne Evans, Director, Political Insight
National Insurance (NI) payments will be cut from tomorrow, as it falls from 10% to 8% for 27 million employees. For the self-employed, NI contributions on all earnings between £12,570 and £50,270 are being cut from a rate of 9% to 6%. Chancellor Jeremy Hunt says he cut is worth about £450 a year to an employee on an average salary of £35,000. However, the freeze in income tax thresholds will still leave most people with a higher overall tax bill. The State Pension is also set to increase by 8.5%.
Strikes by senior doctors in England have been called off after members of the British Medical Association trade union voted to accept a pay and conditions offer. 83% of the consultants voting accepted a pay deal with includes changes to the doctors’ pay review body and a 2.85% uplift for those who have been senior doctors for between four and seven years. Prime Minister Rishi Sunak has hailed the end to a year-long round of strikes as “excellent news” for patients. The long-running pay dispute with junior doctors continues.
London Underground strikes that were due to start on Monday have been called off after a series of meetings at ACAS which train drivers’ union Aslef said had resulted in “a proposal that resolves the key issues in our dispute”. However, walk-outs at 16 major rail operators across April and May, and bans on overtime working, began as planned today. The first in the series of rolling strikes are on the Avanti West Coast, CrossCountry, East Midlands Railway, London Northwestern Railway services. The five companies have said they will not be running any services today and have warned that services tomorrow could also be affected. Meanwhile, an overtime ban by the union for all operators, began yesterday and will run until tomorrow.
The Federation of Small Businesses (FSB) has written to Sheldon Mills, the executive director responsible for competition at The Financial Conduct Authority (FCA) to complain about its approach to a so-called 'super-complaint' about lenders' demands for personal guarantees. The 'super-complaint' filed by the FSB - the first since it was granted the power to do so a decade ago - was lodged amid concerns that small business-owners were being deterred from applying for bank loans by personal guarantee demands. This could, it is argued, have an impact on the wider UK economy by impeding the growth of businesses by diminishing demand for credit. Sky News has obtained a copy of the letter, from FSB Chair Martin McTague, in which he says that: "Personal guarantees, where used properly, undoubtedly have a legitimate role in enabling business lending," but that the FCA risks "losing the confidence of small businesses" by focusing too narrowly in its analysis of the issue”. The FCA's "decision to limit the scope of your evidence-gathering fundamentally, and I'm afraid deliberately, excludes the more than one million limited company directors in the UK that run their small businesses by being incorporated," he added. Craig Beaumont, chief of external affairs at the FSB, also told Sky: "The FCA's decision to side-step the core issue - the banks' increasingly blanket use of personal guarantees for UK small companies - is disappointing. It is not dissimilar to historic banking scandals where each regulator in this area acknowledges there's a problem, but quietly retreats and leaves a large group of small business owners exposed”. "It's a 'not me, Guv' approach to regulating; a missed opportunity to improve the lending market,” he added. "Small businesses deserve better and we are seeing what other options are available to us now the FCA has said it's walking off the pitch”.
The UK construction sector returned to growth in March, according to the latest S&P Global construction purchasing managers' index. The index rose to 50.2 from 49.7 in February, marking the highest level since August 2023. A reading below 50.0 indicates contraction while a reading above signals expansion. Civil engineering was the best-performing segment in March, while housebuilding and commercial construction activity remained broadly unchanged.
Household debt: The number of households seeking help to deal with court action over their unpaid energy bills has doubled in the last year, according to Citizens Advice. The charity told The Guardian that suppliers were increasingly opting to take their customers to court to recover their debts, a trend it said appeared to have increased since industry regulator Ofgem introduced strict restrictions on the forced installation of prepayment meters. Citizens Advice offered advice to 349 households who received a CCJ over unpaid gas and electricity bills last year, up from 179 in 2022. Energy debts have reached a record high of £3.1bn. The charity notes the cases it sees will be but a fraction of the total number of CCJs issued to recover energy debts.
Thames Water’s parent company Kemble Water Finance (KWF) has had credit ratings cut on its debt by Fitch Ratings and S&P, sending the value of its bonds down sharply. KWF has a £190m loan that falls due on 30th April and said last week Kemble would be unable to repay the debt and would ask for an extension. Shareholders have refused to pay up to help stabilise its finances. Fitch cut KWF deeper into junk territory, saying some form of default was “probable”, “even if lenders agree to amend and extend the upcoming loan,” while S&P lowered its rating of the utility's class A and B debt and assigned it a negative outlook - usually a sign that a downgrade may materialise. Meanwhile, Sky News has learnt that ING is among the lenders due to be repaid the £190m by KWF at the end of April, and a large Chinese bank is also said to have a significant position in the loan facility, according to banking sources. The identity of the lenders has not previously been disclosed. ING declined to comment on Sky’s story yesterday.
Bet365 has been fined £582,120 by the Gambling Commission for anti-money laundering and social responsibility failures at its online business. Interactions with customers were frequently not tailored to "the specific customer journey or spectrum of harm" and therefore were not meaningful, the Commission said, adding that an early risk detection system was not demonstrably effective in understanding the impact of individual interactions on a customer's behaviour and whether further action was required. Regarding money laundering, the Commission said Bet365's enhanced customer due diligence and know your customer triggers were "ineffective" at managing risk. There was also a failure to undertake financial sanctions checks on new customers, plus an over-reliance on customers' self-verification of information such as identification documents. Kay Roberts, executive director of operations at the Gambling Commission said: "The policy and procedural failings may not have been as severe as those at other gambling businesses in recent years but they were failings nonetheless… This operator is very aware that a repeat of these failings will result is escalating regulatory action."
Entain, the sports betting and gambling group has announced that chair Barry Gibson will also step down later this year following a four-year tenure. Stella David, the non-executive director who stepped in as interim CEO, has been named as Gibson's successor. Meanwhile, the Ladbrokes, Sportingbet and Foxy Bingo owner remains without a CEO; Nygaard-Anderson resigned in December in the wake of an HMRC probe into historic activities of its Turkish business, which resulted in a £585m settlement.
Space NK owner Manzanita is planning to sell the 20-year old High Street beauty business, seeking offers in the region of £400m, Sky News says.
CAB Payments shares rose more than 7.5% yesterday after its Dutch subsidiary secured a payment service provider licence with De Nederlandsche Bank N.V. (DNB). The fintech firm said it was confident that being able to provide services across the European Economic Area will bring "significant" opportunity for the business and for the clients and the markets it serves. The Dutch licensed firm will be based in The Netherlands and will operate under the name of CAB Payments Europe.
DS Smith, the packaging group at the centre of a bidding war between UK-listed Mondi and US firm International Paper, has extended the so-called 'put up or shut up' deadline for the former to make a firm offer to 23rd April, Sharecast News reports. DS Smith and Mondi had reached an in-principle agreement on the key financial terms of a possible takeover on 7th March, valuing DS Smith at £5.14bn, but then received a £5.72bn offer from International Paper. Meanwhile, International Paper, which also has until 23rd April to make a firm offer, said yesterday that it had made "significant progress" in reciprocal due diligence with regards to the potential takeover, and that it could seek a secondary listing in London if a deal goes ahead.
Restaurant tips: London restaurant chain Ping Pong has banned customers from paying a tip by card and introduced a “brand” fee instead, just three months before new legislation makes it compulsory to give all tips to staff. The Guardian says that Ping Pong, which operates five dim sum outlets in the capital, said the new optional 15% charge would go towards “franchise fees and other brand-related expenditure”, and will replace a 12.5% service charge, 90% of which went to staff. The company said the idea was being tested as an alternative to increasing menu prices and it would be “reviewing all constructive feedback before making a final decision” in June before deciding whether to make the fee compulsory, increase product prices or implement a mixture of both. The chain’s parent company, AJT Dimsum, also said it had increased staff wages by 19% from £10.42 to a minimum of £12.44 an hour – £1 above the new legal minimum – which it said would “match earnings they would have received with service charge distribution”. Bryan Simpson, the lead organiser for hospitality at the Unite union, said that offering just £1 above the minimum wage to replace “a healthy per hour tip rate” was “a complete slap in the face” for workers, and that is was a “cynical” attempt to “circumvent the new fair tips legislation”. It is “one of the most blatant examples of tips theft that we’ve come across as the union for restaurant and bar workers,” he said. The union said it was planning a national campaign for fair tips ahead of July to ensure restaurants did not replace the service charge with “outrageous policies”.
Kiss, the rock ban fronted by “I wear more make up than your mommy does” Gene Simmons has sold its brand, likeness, intellectual property and back catalogue of songs to a Swedish music investor Pophouse Entertainment for a figure thought to be upwards of £237m, the BBC says, although no details have actually been revealed. Kiss has now retired from live performances on their End of the Road World Tour.
British billionaire Joe Lewis, whose family trust owns the Tottenham Hotspur football club, will not spend be jailed after pleading guilty to insider trading and conspiracy charges in New York. Lewis had shared secrets about listed companies he had learnt after making large investments in them that he then shared with his personal staff, other employees, friends, family, and sexual partners. Judge G.L. Clarke cited his decision to face charges, and his failing health, along with a lifetime of good works, in ruling that he will face three years on probation and a $5m fine instead. “Your honour, I’m here today because I made a terrible mistake. I’m ashamed,” he said to the Judge, adding that he hoped “to make amends and to rebuild the trust that I have squandered” during the rest of his life. Lewis is one of the world’s 500 richest people, worth approximately $6.2bn. He has homes in several countries, a $250m yacht, private planes valued at $90m and an art collection worth $100m, prosecutors said.
Boeing has paid $160m (£126m) to Alaska Air to make up for losses it has suffered so far following the dramatic mid-air door blowout in January. Alaska said the money would address profits lost in the first three months of the year. It expects further payouts in the future. Nearly 200 Boeing 737 Max 9 planes were grounded after the incident and thousands of flights cancelled. Boeing is also facing a criminal investigation into the incident and legal action from passengers onboard.
Ford Motor Co. is to delay rolling out new electric pickup trucks for a year, and a new large electric SUV with three rows of seats, for two years, because of slowing US EV sales, The Guardian reports. US EV sales growth slowed to 2.7% in the first quarter of the year, far below the 47% increase that fuelled record sales and a 7.6% market share last year, the newspaper says. Sales of new vehicles overall grew nearly 5%, and the EV market share declined to 7.1%. Hybrid sales, however, grew 45% from January through March, while plug-in hybrids, which can go a short distance on battery power before a gas-electric system kicks in, grew 34% according to Motorintelligence.com.
McDonald's is buying back all its Israeli restaurants following a boycott of the brand in response to the Israel-Hamas war. The fast-food chain has reached an agreement with franchisee Alonyal for the return of 225 outlets across the country employing 5,000 people. Terms of the sale were not revealed. McDonald's was criticised after Alonyal gave gave away thousands of free meals to Israeli soldiers, sparking the boycott and worldwide protests. In January, McDonald’s said the boycott had "meaningfully impacted" its performance in the Middle East, France, Indonesia and Malaysia. The company missed its first quarterly sales target in nearly four years.
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