Published: 08 March 2024
By Suzanne Evans, Director, Political Insight
Chancellor Jeremy Hunt said yesterday he wants to abolish National Insurance but admitted that “won’t happen any time soon”. Speaking to Sky News, Hunt suggested the Government could potentially “merge” national insurance and income tax, saying he wanted to “end the unfairness” of the system of double taxation on work. “It's something we will only do when it's possible to bring down taxes without increasing borrowing while also prioritising public services,” he said, adding: “If we are going to succeed as a country, we need to make work pay." However, talking to Times Radio, he admitted that it would a difficult task. “That’s a huge job… I don’t think it’s realistic to say that’s going to happen any time soon,” he said.
“I’ll tell you what, if I had an egg in my pocket, I would have thrown it at him,” the CEO of challenger stock exchange Aquis said of the Chancellor after his Budget speech. Alasdair Haynes told City AM he was “bloody livid” when Hunt said he wanted to turn the London Stock Exchange into the “Nasdaq of Europe,” condemning the line as “anti-competitive” and damaging to Aquis.“It seems to me that we have a Conservative party that promotes competition, and in this one case is turning around and inhibiting competition. They want a monopoly,” Haynes said. “It’s something to turn around and say we’re going to support the London Stock Exchange and make it the Nasdaq – it is hurtful and anti-competitive. And I think that’s really bad coming from the Chancellor.” While City minister Bim Afolami and Financial Conduct Authority boss Nikhil Rathi have been supportive of his exchange and were “pro-competition”, Haynes said, the Chancellor was behaving as if he wanted a non-executive director role at the exchange after the election. “Because I mean, what the hell is the reason he’s saying these things about the London Stock Exchange?” he asked.
MPs on the Treasury Committee have called for a legislative ban on the use of non-disclosure agreements (NDAs) in harassment cases, to prevent them being misused to silence victims of sexual harassment and abuse. Such "gagging orders" shield serial perpetrators, cover-up discrimination, prompt women to resign and embed corrosive workplace cultures, says the Committee’s Sexism in the City report, released today, International Women's Day. "It is shocking to hear how prevalent sexual harassment and bullying, up to and including serious sexual assault and rape, still are in financial services, and how poorly firms handle allegations of such behaviours," Committee Chair Harriett Baldwin said. Progress in tackling sexism and misogyny in financial markets had moved at "snail's pace" since a similar investigation in 2018, she added. Last year, the use of NDAs to silence complaints about sexual misconduct, bullying and harassment were banned in higher education institutions.
MPs on the Business and Trade Committee (BRC) say the Post Office is an “abject failure” when it comes to delivering compensation payments to the hundreds of sub-postmasters wrongly convicted in the Fujitsu Horizon Scandal and that being “not fit for purpose” it should be relieved of the job. The BRC has issued a report calling instead for an independent intermediary offering legal and accounting services to ensure victims secure fair redress and compensation. Chairman Liam Byrne said delays issuing compensation were a “national disgrace”. Justice delayed is justice denied,” he said, adding: “It’s high time for the circus of recent weeks to end and for cheques to start landing on the doormats of innocent victims.” The MP’s report also calls for a cap on legal expenses for sub-postmasters to be removed and a standardised set of tariffs to help victims to better estimate what they are entitled to. A Government spokesperson said the report, and its recommendations, would be considered carefully. Just 20% of funds earmarked for compensation payments have been paid out to the more than 900 sub-postmasters who between 1999 and 2015 were wrongly prosecuted due to faulty software which made it appear as if they had been stealing.
A new rail service between London and Stirling has been given the green light by The Office of Rail and Road (ORR). Grand Union trains will run four new return services per day from London Euston and Stirling stations, calling at Milton Keynes Central, Nuneaton, Crewe, Preston, Carlisle, Lockerbie, Motherwell, Whifflet, Greenfaulds and Larbert. The service will also be the first ‘open access’ operator to run on the West Coast Mainline. This is a model that allows companies to take the full commercial risk of running the service, so there are no taxpayer subsides, but the company thereby avoids hefty franchising fees. The idea is that the model provides traditional train operating firms with extra competition, which should bring down rail fares and encourage passengers to use rail rather than cars or flights.
The average UK house price is just £1,800 off the peak recorded in June 2022 according to Halifax, which says prices increased by 0.4% in February, the fifth monthly rise in a row. Property prices grew by 1.7% on an annual basis, compared with 2.3% the previous month, the building society said, taking the average UK house price to £291,699 last month, about £1,000 more than in January.
There is more bad news from FTSE 250 outsourcing giant Capita. An email seen by The Telegraph confirms the BBC Licence Fee collector has frozen pay for thousands of workers across the UK, delaying April’s planned pay rises until October. New CEO Adolfo Hernandez said in his note to staff that the “difficult decisions when it comes to pay” had to be made because of the company’s poor financial performance. “Simply put, the great work we do is not showing in the numbers. This is not the position I wish we were in, and one I hope to not be in again,” he said. Executive bonuses will also not be paid out for the last financial year either. On Wednesday, Capita told investors it planned to save £60m this year, and a further £100m by 2025, as it reported a full year loss of £106.6m.
Packaging giant Mondi is set to buy its smaller rival DS Smith for £5.1bn. The potential takeover will see Mondi shareholders owning 54% of the company, and DS Smith shareholders 46%. The deal represents a 33% premium to DS Smith’s closing share price on 7th February, when the offer period began.
Mike Ashley’s Frasers Group is putting Matchesfashion into administration following weaker trading and the departure of a number of brands, Sky News reports. Frasers only bought the luxury online clothing platform ten weeks’ ago, in December, for £52m.
Ladbrokes owner Entain has warned of a potential £40m hit to annual profits amid the Government’s crackdown on gambling. Last month, Ministers said they intended to introduce a £5 stake limit for adults betting online, and a £2 limit for people aged between 18 and 25. The company’s online gambling revenue have already fallen by 6%, in 2023, a dip interim CEO Stella David blamed on the “imposition of cumulative safer gambling measures”. “While we expect these changes to be a positive for Entain in the long run, we may see continued player disruption over the short term, and with leading brands we may see opportunities for us to invest in marketing to grow market share,” the firm added.
FTSE 100 Insurance giants Beazley, Admiral Group and Aviva have all announced significant uplift in their annual profits. Lloyds' of London insurer Beazley said pre-tax profits had surged 115% in the year to December, to a record $1.25bn (£980m). Insurance written premiums (IWP) rose 7% to $5.6bn (£4.38bn), while net IWP were 24% higher at $4.7bn (£3.67bn). Admiral Group, meanwhile, reported a group profit before tax of £442.8m yesterday, an increase of 23% from the year prior. Admiral also recorded a 31% upswing in group turnover, reaching £4.18bn, with insurance revenue contributing £3.49bn, an 18% increase. The company's customer base expanded to 9.73m, up 6%, with both UK and international insurance customers seeing growth of 6% and 4%, respectively. Aviva has posted a better-than-expected 9% rise in full-year earnings on a strong increase in general insurance premiums. Operating profit increase to £1.47bn, compared with forecasts of £1.43bn. General Insurance premiums were up 13% to £10.8bn.
Rentokil shares surged 14% in London yesterday after the pest control firm reported a 57% jump in annual profits to £571m.
Engineering firm Melrose Industries has also reported above-forecast annual results after the aerospace specialist benefited from an upturn in the aviation sector, Sharecast News reports. A 17% jump in revenues in the year to December brought in £3.35bn, while aerospace operating profits more than doubled, rising to £420m from £186m, also above guidance. Pre-tax profits were £331m, up from £62m a year previously, while statuary group losses narrowed to £8m from £328m.
London-listed Funding Circle, which specialises in lending to small businesses and start-ups, said yesterday it was looking to offload its US division in the hope of stemming losses and boosting its flagging share price. Losses at the group widened to £33.2m in 2023, up from a pre-tax loss of £12.9m the previous year, after a push into the US and investment into its lend-now-pay-later offer Flexipay. The firm has been expanding into the US in recent years but said it will now double down on its profitable UK business and mull a sale of the US arm, City AM said.
The Insolvency Service has filed a director disqualification claim on behalf of the Secretary of State for Business and Trade against the founder of Greensill Capital, Lex Greensill. Greensill, a financial services company providing supply chain financing in the UK and Australia, went bust in March 2021, whereupon it emerged that former Prime Minister and now Foreign Secretary David Cameron, a senior adviser for the finance outfit, and former Cabinet Secretary Lord Heywood, had orchestrated “extraordinarily privileged” access to the highest ranks of Government for the firm. In 2020, Cameron also lobbied the now Prime Minister and then Chancellor of the Exchequer Rishi Sunak to change rules to allow Greensill to join the Covid Corporate Financing Facility, a Government loan scheme that was initiated to support companies during the pandemic-related economic recession. However, official inquiries into the affair found no rules had been broken.
Yesterday’s announcement that the Nationwide is buying Virgin Money puts Sir Richard Branson in line for a £4140m payday, The Telegraph says. Branson originally set the bank up from the remains of Northern Rock, for £2.9bn, and owns a 14.5% stake.
The European Central Bank (ECB) has left interest rates on hold for the fourth consecutive meeting, keeping them at their highest level in more than two decades. The eurozone’s key interest rate remains at 4%, the main refinancing rate at 4.50% and the marginal lending facility at 4.75%. The ECB noted that inflation has “declined further” since its meeting in January, but warned “domestic price pressures remain high, in part owing to strong growth in wages”.
Jerome Powell, Chairman of the US Federal Reserve, has indicated that interest rates are close to being cut in America. He told a congressional hearing that policymakers are “not far” from having the confidence to cut interest rates, an announcement that saw US stocks climb to fresh records on Thursday.
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