Published: 26 April 2024
By Suzanne Evans, Director, Political Insight
The Labour Party has promised to renationalise the railways within five years of forming a government, claiming the move will save taxpayers £2.2bn every year. Speaking yesterday at the headquarters of Trainline, Shadow Transport Secretary Louise Haigh said: “Obviously, we are in a very constrained public spending environment. There is no doubt about that... The taxpayer can’t afford to continue with the current and broken model, that is throwing good money after bad and wasting very stretched taxpayer money.” However, Haigh did not set out any evidence for her claims, nor any plans to make train fares more affordable. “I can’t today set out that we will lower fares, not least because they are incredibly complex and regulation needs reform as well,” she said in answer to questions, adding: “But we have said that we will simplify them, that we will make them more accessible, more transparent and more trustworthy for passengers.” Asked whether Labour would also renationalise the water industry, she said this was not “immediately the right priority” because of the cost of nationalisation to the taxpayer, whereas reform of the railway system was doable because “we won’t have to pay compensation when the railway operations contracts expire”. Current Rail Minister Huw Merriman said: “Labour have confirmed they would push forward with their pointless, unfunded rail nationalisation that will do nothing to improve train reliability or affordability for passengers”. Shares in Trainline and Firstgroup fell after Haigh’s announcement. Trainline closed almost 12% down yesterday while Firstgroup dipped by more than 4%.
Marriage Allowance: “More than 100,000 married couples face shock bills this year because of the Government’s ‘stealth tax’ freeze on thresholds,” the Telegraph claims this morning. Around 2.3m spouses claim the marriage allowance, which lets a higher-earning spouse transfer £1,260 of their personal allowance to a partner earning less than the personal allowance, currently £12,570. However, the higher earner must be only a basic rate tax payer (earning between £12,571 and £50,270) and an estimated 127,680 will lose the perk because they will be dragged into higher tax bands in 2024-25. Nearly 3m people will be pulled into the higher rate tax bracket over the coming years, according to official figures, because Chancellor Jeremy Hunt has frozen income tax thresholds until 2028-29.
Mortgages are rising again, according to analyst Moneyfacts, which says the number of mortgages with rates over 6% has increased by 10% since the start of March. Major lenders including TSB, Halifax and HSBC have increased prices on a selection of their mortgages over the past two weeks as swap rates – the main pricing mechanism for home loans – have continued to rise. First-time buyers are likely to be the worst affected as it is loans for those with the lowest amount of equity – 5% and 10% – which have the highest rates. Separate data from Rightmove shows the average two-year fixed rate for buyers or owners with 5% is now 6.02%, up from 5.98% a week ago, the Telegraph says.
Consumer confidence improved in April, rising +2 points, according to GfK’s consumer confidence survey, although it remains firmly in negative territory. The reading stood at -19 point during the month, an improvement on the -21 recorded in February and March.
Global inflation: High energy and commodity prices could drive global inflation higher, the World Bank warned yesterday, saying the decline in commodity prices over the last two years had likely come to an end at the hands of heightened geopolitical tensions and demand for energy transition metals. Indermit Gill, the World Bank’s chief economist, said: “Global inflation remains undefeated, a key force for disinflation – falling commodity prices – has essentially hit a wall. That means interest rates could remain higher than currently expected this year and next and the world is at a vulnerable moment: a major energy shock could undermine much of the progress in reducing inflation over the past two years”.
Post Office Horizon Scandal Inquiry: Former Post Office executive Angela van den Bogerd told the inquiry yesterday that she "must have missed" emails referring to the possibility of remote access to the Horizon IT system used by sub-postmasters. She didn't "actually remember" getting an email forwarded to her from Lynn Hobbs, the organisation's general manager of network support in December 2010 saying that she had "found out that Fujitsu can actually put an entry into a branch account remotely," she said. In her witness statement to the inquiry, she claimed not to be aware of remote access to accounts until 2011, but told the High Court in March 2019 that she first knew about remote access "in the last year or so". She denied there was any "cover up" or that she had been attempting to suppress information, saying she "would never knowingly do anything wrong". She also told Jason Beer, lead counsel to the inquiry, than Fujitsu had not been "transparent" with her and the Post Office and that executives had been trying to control the narrative by using the words "exception or anomaly" to describe bugs or defects in the Horizon system. For more on this see https://www.bbc.co.uk/news/
Darktrace, the London-listed cyber security specialist has struck a $5.3bn (£4.3bn) cash deal to be bought by American private equity firm Thoma Bravo. The boards of directors of both companies have endorsed the deal but shareholders will have to approve it. Shares in the FTSE 250-listed firm soared over 19% immediately following the news. Under the terms of the acquisition, each shareholder of Darktrace will receive $7.75 (620p) for every share they hold, marking a 44.3% premium on Darktrace’s three-month average share price prior to the announcement.
Everest, the double-glazing supplier, has gone into administration. Sky News has learnt that Everest, which has been owned by the prominent financier Jon Moulton's investment firm Better Capital for more than a decade, has called in ReSolve to handle the process. ReSolve is now engaged in an attempt to find a buyer for Everest in order to save as many of the company's roughly 350 employees' jobs as possible.
Anglo American has rejected a £31.1bn buyout offer from BHP Group, as reported yesterday, saying it undervalues its future prospects. After news of the bid broke, South African minister Gwede Mantashe told the Financial Times he did not back it as BHP’s 2001 merger with South Africa’s Billiton “never did much for South Africa.”
London Stock Exchange Group boss David Schwimmer will see his pay more than double to £13.2m this year after 89% of investors backed his pay rise.
Boris Becker is to be discharged from bankruptcy in Britain, having agreed a settlement with some of his creditors. The 56-year-old six-times Grand Slam tennis champion was declared bankrupt in 2017 with total debts of around £50m, and was subsequently found guilty in 2022 of hiding £2.5m worth of assets and loans to avoid paying back debts. He was jailed for 2½ years. Earlier that same year, he had been found guilty of tax evasion in his native Germany, having pleaded guilty to evading about €1.7m in taxes by claiming to live in the "offshore" haven of Monte Carlo at a time when his main residence was really in Munich. For that offence he was given a two-year prison sentence suspended for three years, and a €500,000 (£315,000) fine. Becker, a German national who won the Men’s Singles’ Championships at Wimbledon three times in 1985, 1986 and 1989, was deported from the UK after serving his prison sentence at Wandsworth and Huntercombe prisons, and is banned from returning here until June 2025.
The US opioid crisis: Consultancy firm McKinsey, which advised OxyContin maker Purdue Pharma and other drugmakers, has been placed under criminal investigation in the US, the Wall Street Journal reports. The inquiry focuses on whether McKinsey engaged in a criminal conspiracy when advising Purdue and other manufacturers on marketing strategies to boost sales of prescription painkillers. Purdue filed for bankruptcy in 2019, admitting it could not withstand lawsuits against it, after being exposed as one of the biggest culprits in the US opioid epidemic which is estimated to have killed nearly 400,000 people between 1999 and 2017. The newspaper also claims the US Justice Department is investigating whether McKinsey conspired to commit healthcare fraud. McKinsey has already reached a $600m settlement with 49 State Attorneys Generals, five territories and the District of Columbia for its role in the Opioid crisis, and committed in 2019 to not advise clients on any opioid-related business anywhere in the world. Previously, McKinsey has said it believes its past work was lawful and has denied allegations to the contrary. The consulting firm and the US Justice Department declined to comment on this latest news.
TikTok's Chinese parent company ByteDance says it has no intention of selling the business after the US passed a law to force it to sell the hugely popular video app or be banned in America, the BBC reports. "ByteDance doesn't have any plans to sell TikTok," the company posted on its official account on Toutiao, a social media platform it owns. Earlier this week, TikTok said it would challenge in court the "unconstitutional" law.
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