Published: 15 March 2024
By Suzanne Evans, Director, Political Insight
The Daily Telegraph: Culture Minister Lord Parkinson will today announce a ban on foreign governments buying British newspapers, Sky News reports. The news comes as Abu Dhabi-backed fund Redbird IMI attempts to buy The Telegraph Media Group (TMG), which includes The Daily and Sunday Telegraph newspapers and the Spectator magazine. The ban would prohibit any foreign state ownership, influence, or control over newspapers and news magazines operating within the country, and will be made law via an amendment to the Digital Markets Bill, which is currently undergoing parliamentary scrutiny. The Competition and Markets Authority will also be given more powers to scrutinise future such deals affecting British national media assets. Redbird-IMI is owned primarily by Sheikh Mansour, vice president of the United Arab Emirates.
The Office for Budget Responsibility (OBR) should be scrapped, David Davis MP writes in today’s Telegraph, arguing that it is shackling Government economic policy. “The trouble is that the OBR’s forecasts are alarmingly inaccurate,” his article says. “In 2022 the OBR’s UK borrowing forecast was over £100bn off the mark. A report on the OBR by the Conservative Way Forward campaign group has recently suggested that, since 2010, the combined total of the OBR’s errors in growth forecasts aggregates to a figure of over £500bn, and the OBR’s errors in forecasting public sector net borrowing accumulate to over £600bn”. Further exacerbating this issue is the fact that the OBR and Bank of England themselves work off different assumptions and forecasts,” he continues. “Not only have their forecasts been wrong, but they are wrong in distinct ways. What sort of organisation can operate on two separate and entirely incompatible sets of assumptions? If a listed company ran its production arm off one set of assumptions and its marketing arm off another, shareholders would rightly revolt”. He concludes: “We should go back to the period in our history when forecasters were greeted with healthy scepticism rather than a final sign-off on the direction of our government’s economic policy”. The OBR was created formally in May 2010 by then Chancellor George Osborne to provide independent economic forecasts and independent analysis of the public finances. The Labour Party says it would make Ministers legally bound to consult the Office for Budget Responsibility (OBR) before making spending decisions, and bring forward legislation to ensure the watchdog has the power to independently publish its own impact assessments.
HM Revenue and Customs (HMRC) spent more than £82m on remote working devices for its workers, City A.M. reveals. The taxman purchased over 175,000 laptops, tablet computers, phones, and desktops at a total cost of £82,609,759 over the last three years, according to data obtained in a Freedom of Information Request (FOI). “HMRC cannot continue to splash our hard-earned cash to fuel this absurd remote working binge,” said Patrick Sullivan, chairman of the Parliament Street think tank, which filed the FOI. “It’s time to put an end to this couch potato culture, with staff ordered back into the office as a mandatory part of their job description,” he added. An HMRC spokesperson said: “The equipment is required for staff to work in the office and elsewhere.” Recently, the Telegraph recently revealed that last year, around 95% of staff at HMRC staff work remotely at least one day in the working week, up from 92% during the first national Covid lockdown.
Chain stores closed at a rate of 14 each day last year, according to data from the Local Data Company crunched by accountants PwC. High profile failures at Wilko, Lloyds pharmacy, the Slug and Lettuce pub chain, Clintons stationery chains, fashion store M&Co, and Paperchase contributed to a net decrease of 5,000 in stores across the UK, despite 9,138 new openings. Meanwhile, out-of-town retail parks were boosted mostly by new food outlets, and showed a slight overall rise in sites operating. The roll out of electric vehicle charging stations also meant there was a net gain of 48 petrol stations. Charity shops experienced a net closure rate of 39.
Bank transfers could be delayed for up to four days to combat so-called push payment fraud which cost victims £485m in 2022, according to lobbying group UK Finance. At present, banks have only 24 hours to spot and investigate potentially fraudulent payments before being required to process them. The Government said it would “minimise any impact on legitimate payments” from the new rules, by requiring a “two stage test” in order to investigate and delay payments. Firstly, banks must have reasonable grounds to suspect fraud or dishonesty, and secondly they should require more than 24 hours to contact a customer and/or law enforcement agencies about a suspicious payment. Bim Afolami, economic secretary to the Treasury, said: “Fraudsters spin whole webs of lies and fabricate all sorts of things to convince people to send them money – this legislation will give banks, other payment service providers and law enforcement more time to get in touch with victims and break the fraudster’s spell before money is sent”.
Welsh Water is to pay £39.4m in redress to its customers after an investigation found the UK water utility misled customers and regulators on its performance on leakage and consumption data, Ofwat said this morning. The water regulator for England and Wales said its investigation that started in May 2023 found evidence of a "significant failure of governance and management oversight" that led to the water company misreporting its leakage and performance figures. Welsh Water said in a statement to Reuters that it had made changes to its processes and operational structures to address the issues identified. "We are very sorry that this happened," Welsh Water CEO Pete Perry said.
A new rail line for the Midlands? French train company Alstom is bidding to set up a Wrexham, Shropshire and Midlands Railway, promising a three hour direct train from Wrexham to London by running on the Sutton Park Line, a little-used freight route that would open up new connections from Shropshire to Warwickshire. Alstom has applied to rail regulator the Office for Rail and Road (ORR) for five trains per day in each direction running from Monday to Saturday, and four running on Sundays. The service run on an “open-access” meaning no Government funding would be required, and that it would operate outside the major train operating contracts set by the Department for Transport. .” A similar open-access plan was approved last week by the ORR for Grand Union Trains to start a new train service between London and Stirling in Scotland from June 2025. Peter Broadley, Alstom’s UK services managing director, said: “There’s a real momentum about Wrexham obviously with the Hollywood connection with the football club. But with all open access you need to find opportunities to serve communities which aren’t currently [served] by rail. Wrexham, Shrewsbury and that part of the West Midlands are really underserved by rail services. And the current focus on Wrexham is a nice boost to what we’re trying to do
Halifax is imposing a new 70-year age limit on thousands of homebuyers, The Telegraph reports, by reducing the maximum age at which it will allow many borrowers to say they intend to retire from 75 to 70. The move risks forcing thousands of borrowers to reduce the length of their terms in future, increasing their monthly mortgage payments as a result, the newspaper says. Darryl Dhoffer, an adviser at The Mortgage Expert, said: “Halifax appears to be tightening the screws on the very borrowers who need them the most.” He added: “High mortgage rates and shorter terms are a recipe for disaster, pushing even more borrowers into debt and hardship. They only recently extended the term to 75, so to now reduce it back down to 70 seems a bit odd”. A Halifax spokesman said: “These changes have been made as part of a regular review of our lending criteria and will ensure we can continue to lend responsibly to a broad range of customers. For all other applications we will continue to use a maximum working age at application of 75.”
Shell is reportedly cutting at least 20% of jobs in its deals team. People with knowledge of the matter have told Bloomberg that staff in the division were told that there would be a significant reduction in headcount, with further details to be communicated in April. The British oil giant has already made cuts in its low-carbon solutions, chemicals and IT units. Shell employed 93,000 people in 2022, up from 83,000 a year earlier, according to last year's annual report. Meanwhile, it is also widely reported this morning that Shell CEO Wael Sawan received pay of £7.9m in in 2023 (circa $10m), including £5.3million in bonuses. Sawan replaced Ben van Beurden in the top job at the beginning of last year. He received total remuneration of £9.7m pounds in 2022.
Virgin Group is reportedly cutting 8% of its 425-strong London-based jobs after deciding to combine Virgin Management, its brand and licensing arm, and loyalty programme Virgin Red. According to Sky News, the redundancies are designed to remove "duplication and streamline operations".
John Lewis has told staff it will not be paying them a bonus for the third time in four years, despite swinging back into profit. Profits before tax hit £56m for the year compared to a loss of £234m the prior year.
Gym Group has reported an 18% increase in revenue in its full-year results, posting revenue of £204m and EBITA (earnings before interest, tax, depreciation, and amortisation) less adjusted normalised rent of £38.5m. The bottom line showed a pre-tax loss of £5.5m. Membership numbers at the low-cost gym have also risen by 8% in the year, to top 900k, and the group says it is looking to open around 50 more gyms in the next three years.
Artificial Intelligence (AI): Legal and General Investment Management (LGIM) says it will vote against Apple’s decision to keep the way it uses AI secret at its upcoming AGM. LGIM, Britain’s biggest investor, will also call for Apple to produce a transparency report on its use of AI, saying in a statement: “The company discloses very little about its approach to managing AI-related risks, nor any principles or guidelines to inform how the company uses AI, putting the company behind its peers and increasing exposure potential regulatory and other risks”. Such other risks include data privacy and security, regulatory compliance, workforce transitions, and the erosion of societal trust in AI, it added.
Chocolate: LGIM is also demanding that Nestlé sells fewer chocolate bars, having thrown its not inconsiderable weight behind a campaign led by activist group ShareAction to urging the Nestlé board to set new targets for sales of healthier products and warning over the potential public health impact of unhealthy foods. Together with fellow asset managers Candriam and La Francaise, LGIM has filed a resolution ahead of Nestlé’s AGM in April to heap pressure on the Kit Kat, Aero and Smarties maker, The Telegraph reports. Maria Larsson Ortino, senior global environmental, social and governance (ESG) manager at LGIM, said the move follows a break down in talks between the investment fund and Nestlé on healthy food. She said: “We feel they’ve come to an impasse in the sense that we’re not getting any further when it specifically comes to the target setting with Nestlé, hence we felt that we need to use another tool in our shareholders toolbox.”
Boeing: A good read in City AM this morning: Boeing’s terrible year keeps getting worse https://www.cityam.com/
Tik Tok: The US House of Representatives yesterday voted 352-65 to demand the Chinese owners of the TikTok video app sell it within six months, or be banned in the country. The Bill will now go to the Senate, where it will or will not become law. The fear is that TikTok owner ByteDance’s links to Beijing raise national security risks. President Joe Biden has said he would approve the sale if it resolved national security concerns, but if it did not, then the app would be banned.
Libor scandal: Two former jailed over the manipulation of London interbank offered rate (Libor) for profit are having their cases heard at the Court of Appeal this week, City AM reports. Former UBS and Citigroup trader Tom Hayes was sentenced in 2015 to 11 years in prison, but was released on licence, in January 2021 after five-and-a-half years in mostly high security prisons. He was the first person to be charged and stand trial in the UK over Libor fixing. Carlo Palombo meanwhile, a former Barclays vice president of Euro Rates, was convicted of rigging the Euro interbank offered rate (Eibor) and sentenced to four years in prison in 2019, as well as being ordered to pay prosecution costs of £725,000. Hayes maintains that he was wrongfully convicted while the barrister that acted for Palombo called the system “flawed”. Since then, there have been calls for a review of all of the convictions in the rigging scandal including from Conservative MP David Davis last May after new evidence came to light in a Rigged, a book by BBC journalist Andy Verity. Hayes’ and Palombo’s cases have been referred to the Court of Appeal by the Criminal Case Review Commission on the grounds there is a possibility the convictions are unsafe.
Go Woke Go Broke? The maker of Marlboro cigarettes, Altria Group, is selling more than $2.2bn (£1.7bn) worth of shares in AB InBev, the owner of the Bud Light and Stella Artois beer brands. The tobacco giant currently owns a stake of around 10% in the world's biggest brewer, worth about $12.7bn. Bud Light sales have been hit after a US boycott over its work with transgender influencer Dylan Mulvaney.
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