News stories from Saturday 24 February, 2018
A logistics problem left the firm’s UK supplies sat in a warehouse. What went wrong and how will KFC and DHL recover?
At lunchtime on Friday, George Cheah, or George Junior as he is known, doesn’t really have the time to talk. “Honestly we are so busy, it’s gone absolutely mad. People have gone chicken crazy,” he says over the phone, while people shout orders in the background. Cheah’s family-run fried chicken joint, Chicken George in Luton, won best takeaway at the British Takeaway Awards in 2016 so they are never short of custom, but since the great fried chicken crisis of 2018 began more than a week ago they have been inundated.
“I reckon our business has doubled in the past week,” said Cheah. “We’ve been really, really busy, like packed. With KFC being shut, lots of people are tagging us on social media saying they’d rather have a George anyway.”
Will pricey brands such as Dyson really pick up the dirt, or should I stick with a conventional one?
Every week a Guardian Money reader submits a question, and it’s up to you to help him or her out – a selection of the best answers will appear in next Saturday’s paper.
This week’s question:Continue reading...
His business empire spans everything from low-cost flights, hotels and buses to coffee shops, dog-walking and groceries. Now Sir Stelios Haji-Ioannou is moving into the world of savings and investment with an Isa paying a headline-grabbing 4.05%. But this is far from a risk-free investment.
The billionaire founder of easyJet is launching (or rather, relaunching) a financial services arm called – what else? – easyMoney, and the Isa being unveiled on Saturday is the first of many planned products.Continue reading...
Cash Isas are falling out of favour – but there are deals to be found if you can lock money away
It’s tough for savers: the best-paying easy-access cash Isas – from Virgin Money and Leeds building society – pay just 1.21% interest. Meanwhile, official data earlier this month showed that inflation remained high at 3% in January – meaning savers are losing money in real terms.
That may help explain why cash Isas have collapsed in popularity, with government data showing a £20bn fall in the amount invested in the space of 12 months.Continue reading...
Congratulations to Lloyds Bank for launching a timely mental health awareness campaign this month. In the Channel 4 adverts, famous people (including Jeremy Paxman and Victoria Pendleton) and members of the public, wear sticky notes on their heads featuring words and phrases such as bipolar disorder, agoraphobia, depression and anxiety. The voiceover tells us: “Mental health problems affect one in four of our customers, of our staff, of everyone. Let’s get it out in the open. Lloyds Bank – by your side.”
Of course we should get it out in the open. So let’s start with Lloyds Bank, and how it has contributed to my mental health problems by relying too heavily on algorithms and too little on human staff.Continue reading...
Metro bank is one of the fastest-expanding new banks in Britain, aiming for 100 branches. But what if your account falls victim to fraud? One customer says he is outraged after Metro refused to refund £20,000 stolen from his account, despite accepting he did not authorise the payments.
Paul Graham*, a Kent-based businessman, lost £20,000 after fraudsters were able to go into the Brixton, south London branch of mobile phone company EE and take over his phone account, which they used to set up a series of new online payments, that subsequently emptied his Metro account.Continue reading...
Former recruitment consultant Rob Anderson on how he organises his finances – and why he isn’t keen on bucket lists
I live in the East End of London and own my flat. I have a brain tumour. I’m dying – it’s inoperable, and I’m halfway through my third round of chemo.
I try to live my life to the full, in four-week sprints, with a round of chemo coming up every month.Continue reading...
News stories from Friday 23 February, 2018
Ministers and airline boss Alan Joyce talk up the need for cuts. But if corporate profits keep rising while wages stagnate, voters will know who to blame
Having just managed to rid itself of one Joyce, the government has been keen to embrace another member of the clan. At Sydney airport on Friday, Mathias Cormann, the acting prime minister, and treasurer Scott Morrison enlisted Qantas chief executive Alan Joyce to promote their plan to cut corporate tax rates from 30% to 25%.
What better embodiment of Australian corporate success than the airline’s boss? After plumbing the depths four years ago with losses of $2.8bn, the national carrier is now soaring into the wide blue yonder of profitability this week with half-yearly earnings of $976m.Continue reading...
He finally gave up a small fraction of his ‘preposterous’ bonus but too late in the game
Jeff Fairburn didn’t buckle when his chairman, as well as the head of Persimmon’s remuneration committee, resigned in December over his insistence on taking his £100m bonus in full.
Nor did he waver in the media storm that followed. He’d make a donation to charity, he eventually conceded, but never got round to defining what he meant by a “very meaningful” sum.Continue reading...
Troubled retailer has been struggling to find a buyer before £15m VAT bill falls due
Toys R Us is expected to tumble into administration next week after last ditch talks to find a buyer faltered.
The move will put 3,200 jobs at risk and follows the recent decision by its bankrupt American parent to try to sell the loss-making UK business as well its other European stores.Continue reading...
He says he is broke and can’t pay, after court rules he failed to give information to regulator
The former owner of BHS, Dominic Chappell, has been ordered to pay a £50,000 fine and £37,000 court costs for failing to disclose vital details to the pensions watchdog as part of its investigation into the collapse of the high street chain.
The fine – which Chappell said he could not pay because he had “no funds” – comes on top of a demand from the Pensions Regulator (TPR) for £10m to help plug the hole in BHS’s pension fund.Continue reading...
Philip Day is the opposite of the brash entrepreneur, yet he’s quietly showing his retail rivals the way
The turnover of shops on Britain’s high streets chart the rise and fall of retail empires as once popular brands and their owners fall out of fashion.
The 2016 collapse of BHS shocked the foundations of Sir Philip Green’s retail empire and the mooted sale of his Topshop to Burton group Arcadia would bring the final curtain down on a near 20-year reign as king of the high street. But as one billionaire Philip fades into the background, another is hoving into view.Continue reading...
Analysis for the Guardian shows most companies charging customers the same after switching them to ‘cheaper’ tariffs
The UK’s big six energy companies have been accused of dirty tricks after analysis for the Guardian revealed that they are routinely charging customers almost exactly the same amount after switching them off controversial default tariffs.
In the face of Theresa May’s plans to impose a price cap on standard variable tariffs (SVTs), which more than half of energy customers are on despite their steep prices, companies such as British Gas, E.ON and SSE have pledged to phase out such tariffs and shift billpayers onto better value fixed deals.Continue reading...
Boss of taxpayer-owned bank hails profit as ‘symbolic moment’ despite looming litigation
Royal Bank of Scotland has posted its first annual profit in a decade, but admitted it is braced for a multibillion-pound hit from US regulators.
The bank, which is still 71%-owned by the government, made a profit of £752m in 2017, following a £7bn loss in 2016. Its chief executive, Ross McEwan, declared it a symbolic moment and an indication RBS had moved on. The bank, however, would still have been in the red if a long-anticipated fine from the US Department of Justice (DoJ) had arrived during the financial year.Continue reading...
If the roots of its liberal and creative image are a mystery, its appeal is obvious
What’s going for it? Nobody knows why Hebden Bridge became “Hebden Bridge”, officially the quirkiest/kookiest/koolest/most LGBTQ-friendly/least chain-store-y etc small town in the universe. I have asked. I asked the people in the herb shop on the narrowboat, at the market, on the towpath, at the Trades Club. I asked Urban Boffins in the university faculty I teach in. Nobody knows. It looks like other northern, post-industrial former mill towns: canal, steep valley, Methodist chapels, chimneys... It feels, though, utterly different, a little rain-soaked paradise. You’d never have guessed it from Hebden Bridge’s starring role in Happy Valley’s grimfest; nor from local boy Ted Hughes’ poem Stubbing Wharfe: “the hopeless old stone trap”. Two decades after he wrote that in the 1950s, though, others saw what he couldn’t – artists, hippies and conservationists doing up its cheap, knackered buildings. Today the town feels festive even on a wet winter Tuesday: all co-ops, carrot cake and bunting – blunt Yorkshire wit, though, perfectly tempering the earnestness.
The case against… Such is the demand to live here, and such is the shortage of space, you’ll pay a premium to move in. Floods: though how well it bounced back from the last, in 2016. Cosmopolitan it may be, but it’s still a very small town. Occasionally tends towards over-kookiness.Continue reading...
Show your true colours with these visually stunning properties, from Devon to NorfolkContinue reading...
Airlines back cheaper rival bid, warning projected spend could increase passenger costs
The chances of a smooth take off for Heathrow’s expansion plans were always slim, but an unexpected obstacle has arisen in the path of a third runway. Some of Britain’s biggest airlines have lent their voices to a rival proposal to develop Heathrow for some £5bn less than the airport itself declares necessary, fuelling a row over costs and throwing fresh uncertainty on the scheme.
A crucial vote on the government’s approval to expand the London hub is due this summer, but MPs were left confused after being told by the airport’s main customers this week not to trust Heathrow with its £14.3bn budget for a new runway. Airline executives warned the cost estimate could prove “grossly off target” and make the airport unaffordable as the overspends are passed on to carriers – and then passengers – via higher landing charges.Continue reading...
- Royal Bank of Scotland is back in the black, but litigation problems remain
- Perismmon bosses cut share awards after controversy
- British Airways owner IAG shares fall but Pearson gains ground
- Eurozone inflation slips in January
Royal Bank of Scotland has moved back into profit after nine years of losses, prompting chief executive Ross McEwan to hail “a symbolic moment”. But the bank has not included provisions for potential fines from the US Department of Justice, which are likely to knock results in the coming months.
In other big UK results, there were positive reactions to Pearson but less so for British Airways owner International Airlines.
US markets have followed up Thursday’s gains with a strong opening on the last trading day of the week.
The Dow Jones Industrial Average is currently up 186 points or 0.75%, while the S&P 500 opened up 0.57% and the Nasdaq Composite is 0.7% better. A dip in bond yields, which eased from recent highs after Federal Reserve member James Bullard seemed to warn against too many interest rate rises this year, helped lift share prices.Continue reading...
In-house yoga, comfy sofas, film nights: is a new breed of women-only members’ clubs the way to get ahead at work?
It’s a drizzly, cold evening in January. The steps outside 11 Rathbone Place, a five-storey Georgian townhouse just off London’s Oxford Street, are covered in brick dust and the door – nondescript, black, chipped – has electrical tape stuck to it. A slogan plastered across the huge front windows paraphrases Virginia Woolf: “A woman must have money and a room of her own.” I press the bell, which looks broken; there’s silence followed by laughter and a clatter. The door flies open, and there stands Debbie Wosskow clad head to toe in red sequins. “Come in!” she grins, a human glitterball in the midst of a building site. “And welcome to the AllBright Club!” This “hard hat tour” is obviously a far more glamorous affair than I’ve dressed for.
Wosskow (a 42-year-old entrepreneur who sold her company, Love Home Swap, last summer for £40m) and her business partner Anna Jones (41-year-old ex-CEO of the magazine publisher Hearst) have been furiously busy since late last year, when they announced plans to open a women-only private members’ club. Tonight they will host a party for 150 of the 400 founder members – Wosskow calls them women “of all ages and all stages” – who were chosen by a panel to ensure a diversity of professions, ages, ethnicities and experience. Seventy per cent of applicants said their reason for wanting to join was “building their network of other women”. The AllBright has already attracted actors Naomie Harris and Ruth Wilson, Mobo awards founder Kanya King, Martha Lane Fox, Sarah Brown and women from business, politics, media, business and fashion; Wosskow and Jones’s goal is a total membership of 1,000, paying £50 a month.Continue reading...
Housebuilder cuts controversial bonuses to top trio following public outcry
Persimmon is reducing bonus payouts to three top executives by £51m, including a £25m cut for its chief executive, after the UK’s second largest housebuilder was strongly criticised over its huge payout plans.
The FTSE 100 firm said a bonus of £100m for its chief executive, Jeff Fairburn, would be cut to £75m under the company’s long-term incentive bonus plan.Continue reading...
Two former members of Bank of England’s interest rate-setting committee discuss the outlook consumers are squeezed by inflation
Senior economic adviser at the PwC consultancy and member of the Bank of England’s monetary policy committee from October 2006 to May 2011Continue reading...
Centrica’s Iain Conn issued regrets on many fronts but probably saved his job – for now
The Centrica chief executive, Iain Conn, avoided the indignity of cutting the dividend for a second time in three years and has probably saved his job as a result, at least for now. It will be 4,000 colleagues who lose theirs as the company embarks on another round of cost-cutting in search of stability.
Conn found himself issuing regrets on many fronts – to the affected workers and to investors for “a very poor shareholder experience”. You bet: he inherited a share price of 279p at the start of 2015 and it’s now just 142p, even with Thursday’s 7% relief bounce.Continue reading...
Retail giant outpaces Coles in food sales in what its chief executive called an early sign of the group’s transformation
Woolworths has increased its first-half profit by 37.6% to $969m as it continued its recovery from a costly exit from the home improvement sector.
The retail giant saw a 4.9% rise year on year in comparable food sales, far outpacing that of rival Coles, which on Wednesday recorded comparable food and liquor sales growth of 0.9% for the half.Continue reading...
News stories from Thursday 22 February, 2018
Anonymous buyer picks up right to collect soaring ground rents on Blythe Court flats from freeholder MPs described as crook
The freehold to a block of flats in Birmingham regarded as the worst example of leasehold abuse in the country has been snapped up by an anonymous buyer for £180,000.
The deal leaves buyers of the small one-bedroom flats – who thought they would be paying just £250 a year in ground rent – locked into bills of up to £8,000 a year and ultimately spiralling to £8m a year over the life of the lease.Continue reading...
Chancellor expected to levy tax on digital businesses’ UK revenues rather than profits
The Treasury is threatening digital companies such as Facebook and Google with a new tax, as it pushes for global agreement on a fairer system for ensuring digital businesses pay their way.
The chancellor, Philip Hammond, is expected to use next month’s spring statement to announce the results of a consultation launched by the Treasury in November, on how to update the tax system to reflect the nature of online businesses.Continue reading...
UK growth during 2017 has been revised down to 1.7%.
- UK lagging behind major rivals in 2017
- BREAKING: UK growth in Q4 revised down to 0.4%
- Business investment was stagnant. Household spending weak
- Shares slide in Europe after Asian selloff
- Introduction: US Federal Reserve hints that rate hikes are coming
And finally, Britain’s stock market clawed back some of its losses to end the day down 29 points, or 0.4%, at 7272 points.
That’s partly thanks to a pick-up on Wall Street, where traders welcomed today’s strong weekly jobless figures.
UK GDP was revised downwards to 0.4% quarter on quarter, missing expectations of 0.5%. Britain grew just 1.4% year on year making it the slowest growing major economy, lagging behind Italy and Japan, as Brexit uncertainties continue to impact on data.
Whilst this isn’t a huge downwards revision, it was sufficient to knock investor confidence over whether the BoE will be able to hike rates as soon as May. The question arises once again as to whether the UK economy is strong enough to sustain a rate rise in the Spring, with so many Brexit uncertainties still unresolved.
Here’s our full story on today’s growth figures, by my colleague Angela Monaghan:
Britain’s economy grew at a slower rate than first thought in the final three months of 2017, leaving the UK lagging further behind other major economies as it prepares to leave the EU.
The Office for National Statistics revised down its estimate for UK growth in the fourth quarter to 0.4%, following an earlier estimate of 0.5% and missing economists’ forecasts that the rate would be unchanged.Continue reading...
International division’s median hourly pay gap was 43.5% with 73% gap for bonuses, report says
Men working for Barclays’ international division got paid bonuses that were more than double those of their female colleagues last year, with far fewer women occupying senior roles.Continue reading...
Technical issues with a reservation system appear to be behind two-day delay that prevented rail customers from booking tickets for the new route, which is due to start in April
Tickets for Eurostar’s new direct high-speed rail service from London to Amsterdam went on sale on Thursday, after a last-minute IT glitch delayed plans for the original launch on Tuesday afternoon.
The eagerly anticipated new route starts running on Wednesday 4 April, with fares from London to Rotterdam and Amsterdam starting at £35 each way. Tickets were due to go on sale on 20 February and on the same day as a special high-profile inaugural service to the city. But in a tweet that evening the company said it had delayed the launch.Continue reading...
MPs to look into accusations 10 senior officials accepted bribes from Swiss pharmaceutical firm
The Greek parliament is to investigate ten of the country’s top politicians over accusations they accepted bribes from the Swiss pharmaceutical firm Novartis in return for patronage that resulted in huge losses for the nation.
After a raucous 20-hour debate, MPs voted early on Thursday to form a parliamentary committee tasked solely with investigating two former prime ministers and eight other ministers in connection with the allegations.Continue reading...
John Holland-Kaye says airport is not looking to protect the self-interest of British Airways
Heathrow has hit back at airlines’ claims that its expansion plans would blow the £14.3bn budget and drive up charges, saying it was looking out for passengers and the local community and not to “protect the self-interest” of British Airways.
Airline executives, led by Willie Walsh of BA’s parent company, IAG, told MPs on the transport select committee this week that they should not trust Heathrow and warned that a “grossly off-target” budget could make the airport unaffordable.Continue reading...
Lure of video-sharing site’s 1.3bn users finally has club ready to play catchup with football rivals
Manchester United is to launch an official YouTube channel after a 13-year absence as it looks to build its brand and commercial income in a deal with the world’s biggest video-sharing site.
Manchester United is the only Premier League team, and the only one of the world’s biggest clubs, not to create an official channel since YouTube launched in 2005.
Several charities pour cold water on fast-food chain’s stated aim to donate surplus poultry
KFC is struggling to find charities to which it can donate thousands of tonnes of surplus chicken that has been stored in an unregistered depot during a supply crisis that has closed more than 200 stores for almost a week, inquiries by the Guardian suggest.
On Wednesday, the fast-food chain admitted that it would have to destroy at least some of the chicken at a cold storage facility in Rugby. It is run by DHL, the company in charge of a troubled supply contract with 900 KFC outlets.Continue reading...
Cracks are starting to appear in UK economic resilience, with unemployment rising and growth slowing
The British economy is showing signs of deteriorating just as the government attempts to reassert its vision for Brexit, according to a Guardian analysis of economic news over the past month that highlights the country’s increasingly fragile position on the world stage.
Cracks are beginning to appear in the picture of economic resilience built up during the final months of 2017, when a sustained upswing in global growth helped to lift economic output in Britain. Fresh figures this week also showed the economy grew more slowly than first thought in the final three months of 2017, with GDP growth having been revised down to 0.4% from 0.5% – putting the UK at the bottom of the G7 league table.Continue reading...
Each month we look at key indicators to see what effect the Brexit process has on growth, prosperity and trade in the UKContinue reading...
G7 rivals outpace UK as consumers rein in spending amid Brexit-fuelled price inflation
Britain’s economy grew at a slower rate than first thought in the final three months of 2017, leaving the UK lagging further behind other major economies as it prepares to leave the EU.
The Office for National Statistics revised down its estimate for UK growth in the fourth quarter to 0.4%, following an earlier estimate of 0.5% and missing economists’ forecasts that the rate would be unchanged.Continue reading...
Regulators heavily criticised amid claim firm’s ex-finance chief called pensions ‘a waste of money’
Carillion’s former finance director described pension payments as a “waste of money”, MPs conducting a parliamentary inquiry into the collapse of the government contractor have said.
MPs referred to the alleged comment during a sometimes savage evidence session that involved heavy criticism of The Pensions Regulator over its grasp of key facts.Continue reading...
Prosecutors refuse to open criminal investigation into four majors as it ‘would not succeed’
Dutch public prosecutors have refused to open a formal criminal investigation into four major international tobacco companies on charges of attempted murder or manslaughter, saying there is too little chance of a conviction.
Anne Marie van Veen, a Dutch lung cancer patient, and an Amsterdam lawyer, Bénédicte Ficq, filed a criminal complaint in 2016 accusing the tobacco majors of intentionally aiming to turn smokers into addicts and of causing “deliberate damage to public health”.Continue reading...
‘Three basket approach’ would breach agreement to prevent cherry-picking, says Brussels
The EU has ruled out the UK government’s preferred approach to a future trade deal, describing it as a risk to the European project, just as Theresa May is seeking to strike an agreement on the way forward within her cabinet.
The inner cabinet is meeting at Chequers on Thursday to try to find an agreement among warring cabinet members on an approach sketched out to ministers by the prime minister’s Brexit adviser, Olly Robbins.Continue reading...
£8,000 a year ground rent bill for buyers already and rising towards £8m – as watchdog warns time’s up for leasehold
The freehold to a 1960s block of flats near Birmingham regarded as the worst example of leasehold abuse in Britain will be auctioned on Thursday, as a new report warns that the leasehold system is on borrowed time.Continue reading...
A £900m charge for US tax changes, litigation bills, cost of exiting Africa and Carillion collapse all blamed
Hefty charges related to Donald Trump’s corporate tax changes, the cost of exiting Africa, the collapse of Carillion and legal battles pushed Barclays nearly £2bn into the red last year.
Chief executive Jes Staley, who hailed a year of “considerable strategic progress”, collected a pay package of £3.9m, down from £4.2m, with his annual bonus cut to £1.07m from £1.3m and benefits also down, while his salary stayed at £2.4m.Continue reading...
Profits fall nearly a fifth at Centrica as parent company expands cost-cutting drive
British Gas owner Centrica will shed a further 4,000 jobs as part of a £1.2bn-a-year cost-cutting programme, which it blamed on the government’s price cap and fierce competition in the energy market.
The job cuts came as Britain’s largest energy company reported operating profits down nearly a fifth to £1.25bn in 2017, due to poor performance in its business energy supply and North America divisions.Continue reading...
Octopus Energy offers a tariff that will charge customers according to demand
A small energy company has launched a new tariff that will potentially pay customers to use its electricity when demand is low.
Octopus Energy’s new Agile tariff tracks wholesale electricity prices, allowing customers to take advantage if there is an excess of supply and the electricity price “goes negative”.Continue reading...
Barclays bank summarily closed my personal and business accounts four years ago and has still not returned £19,221 that was in them.Continue reading...
Resolution Foundation warns of rising inequality amid cuts to working-age benefits
Britain is at risk of the first sustained rise in inequality since the late 1980s as poorer families face three years of stagnating incomes, according to the Resolution Foundation.
The thinktank warned that government cuts to working-age benefits were damaging prospects for 8 million low and middle-income households, as the rollout of £14bn of welfare reductions offsets the gains from policies such as the “national living wage”.Continue reading...
Scrutiny is needed to examine risks for investors, says Treasury committee chair Nicky Morgan
A powerful committee of MPs is launching an inquiry into bitcoin and other digital currencies over fears that cryptocurrencies could lead to increased “market volatility, money laundering and cybercrime”.
The Treasury select committee said the inquiry would “examine the potential impact of distributed ledger technology – such as blockchain – on financial institutions, including the central bank, and financial infrastructure”.Continue reading...
Since the collapse of the construction giant Carillion last month, the focus has been on its directors and senior employees, particularly those whose pay packets seemed proportional to the scale of the company’s failure. But today the focus will turn to its auditors at KPMG, as they give evidence to the Commons business select committee. And about time too. In the words of Rachel Reeves, its chair: “Carillion’s annual reports were worthless as a guide to the true financial health of the company.” Those reports were signed off by KPMG.
Accountancy is an industry in serious need of reform. The collapse of huge companies such as Carillion and BHS, the 2008 banking crash and rampant tax avoidance are all symptoms of a dysfunctional relationship between accountants and the state. With 350,000 professionally qualified accountants, the UK has the highest number per capita in the world: in fact, 12% of the global total, even though our share of the global economy is just 3.5%. Another 165,000 students are registered with UK professional bodies. What do we get for that? Certainly not freedom from frauds and fiddles, the production of meaningful company accounts, safe pension schemes, the absence of tax dodging or an abundance of good corporate governance.Continue reading...
The list of chains closing sites and restructuring is growing by the day. How did the world of mid-market restaurants overstretch itself so badly?
In the summer of 2015, restaurant owner David Fox was made an offer he couldn’t refuse. One that today – with financially troubled chains such as Byron and Jamie’s Italian desperately restructuring and closing sites in order to stay afloat – seems to encapsulate the great UK casual dining bubble that has finally, spectacularly, burst.
Fox then had branches of his east Asian restaurant brand, Tampopo, in two huge shopping centres: Oracle in Reading and Cabot Circus in Bristol. He was facing a painful rent increase in Reading but, remarkably, the owners of the centres offered him £1.3m to vacate both sites – such was the clamour, presumably, among the biggest restaurant players to snap up any empty space at top-of-the-market prices.Continue reading...
Federal court set to announce whether Stuttgart and Düsseldorf can use vehicle bans to try to improve air quality
One of Germany’s top courts will rule on Thursday whether heavily polluting vehicles can be banned from the urban centres of Stuttgart and Düsseldorf, a landmark ruling which could cause traffic chaos and dramatically hit the value of diesel cars on the country’s roads.Continue reading...
Elizabeth Gaines’ lower salary follows trend at corporate giants Wesfarmers and Commonwealth Bank which also cut CEO salaries
The CEO of Fortescue Metals Group, Elizabeth Gaines, will be paid $500,000 less than her predecessor.
Gaines, who was previously Fortescue’s chief financial officer, started in the role this week, taking over from Nev Power who held the position for seven years. Julie Shuttleworth was appointed as her deputy.Continue reading...
While employment prospects are good, wages and other areas of the economy aren’t expected to grow at the rate the treasury hopes
The latest review of Australia’s economy by the International Monetary Fund has a much less rosy outlook for the next few years than does the government’s budget papers. And in light of the latest release of wages price data showing continued weak wages growth, the IMF crucially predicts much lower wages growth than does the budget – a factor which creates a major risk to the government’s hopes for a return to surplus by 2021.Continue reading...
Former executive says directors were ‘placating the City’; nobody wanted to give ‘bad news’
Carillion was in serious financial difficulty by the middle of 2016 but directors were “placating the City” by failing to disclose major problems, according to a former executive at the collapsed government contractor.
Speaking on condition of anonymity, an executive who spent more than 20 years with the company lifted the lid on a corporate culture in which “nobody wanted to give bad news”.Continue reading...
Customs department revives allegations that cash was siphoned from firm to family
India’s customs department has revived allegations of a US$600m financial fraud against the Adani Group, challenging an order clearing the mining giant last year as “erroneous, illegal and improper”.
Adani has been fighting allegations for the past four years that it used a shell company in Dubai to siphon hundreds of millions of dollars from the company’s books into Adani family tax havens overseas.
Residential mortgage and commercial lending drive ‘challenger bank’ to a pre-tax £20.8m profit in 2017
Metro Bank has reported its first annual profit, driven by a boom in residential mortgages and strong commercial lending.
The so-called challenger bank, which listed on the London Stock Exchange in 2016, said it had made a pre-tax profit of £20.8m during 2017 compared with a £11.7m loss a year earlier.Continue reading...
News stories from Wednesday 21 February, 2018
Raj Nair, automaker’s North America president, apologizes after investigation but company provides few details
A top Ford Motor Company executive was fired on Wednesday after an internal investigation found his behavior was “inconsistent with the company’s code of conduct”.
In an announcement, the company said Raj Nair, a longtime Ford executive who was president for North America, was leaving the company immediately.Continue reading...
BoE governor says workers were already suffering as pay failed to keep up with inflation
The Bank of England has warned that economic uncertainty caused by the Brexit vote will knock 5% off UK wage growth by the year end.
Mark Carney, the bank’s governor, said British workers had already suffered a cut in earnings of 3.5% after inflation is taken into account, and would see that loss swell to 5% by the end of the year as wages growth remained below inflation.Continue reading...
Is it the Labour leader’s kind of bank or is it one that he would prefer to break up?
Lloyds Banking Group’s profits are back at pre-crisis level, there’s a new, digital-heavy three-year plan and enough surplus cash to spend £1bn buying back shares. Very good, but the chief executive, António Horta Osório, has a more interesting boast. Lloyds, he said, is “completely aligned” with Jeremy Corbyn’s vision that banks should serve the “real economy”.
You can see what Horta Osório means, of course. Since the crisis, Lloyds has jettisoned almost all its overseas operations and presents itself these days as a patriotic servant of “the people, businesses and communities in the UK”. Its logo is a stylised union jack in green. It parades its flattering statistics at every opportunity: £47bn lent to first-time buyers in the last four years, support for 440,000 startups and the No 1 spot among UK corporate taxpayers.Continue reading...
Melrose’s £7bn offer raises fears for future of UK engineering base and national security
MPs are stepping up their scrutiny of the proposed £6.7bn bid for the engineering business GKN by the turnaround specialist Melrose.
The business, energy and industrial strategy committee will hold a session on 6 March to hear from the two companies, as well as the Unite union, which is campaigning against the takeover. Ministers are also assessing whether the bid should be blocked on national security grounds.Continue reading...
Charles Randell’s appointment given green light despite his £114,000 ‘error of judgment’
The incoming chairman of the Financial Conduct Authority, who admitted to an “error of judgment” after investing in a controversial tax avoidance scheme, has been given the go-ahead by MPs to take up his new role at the City regulator.Continue reading...
Mark Carney has told MPs that household incomes will be 5% lower because of Brexit, as he clashes with his own chief economist about the merits of devaluation
- LATEST: Carney says Brexit hurt growth and household income
- Bank of England governor Mark Carney is being questioned by MPs
- Haldane and Carney split over merits of weak pound
- Young women bear brunt of unemployment rise
- Real wages have shrunk for 10 months
- Breaking: UK unemployment rate rises to 4.4% - first rise since 2016
Time for a recap.
It’s uncertainty about what’s the relationship going to be with our biggest trading partner...Why wouldn’t you hold back if that’s going to be materially affected?
A combination of the weaker pound, and a stronger global economy, has worked its magic.
Depreciations don’t work. The have an economic effect, but they’re not a good economic strategy.
They may be an outcome of various things... but it’s how you make yourself poorer.
Historically the thing that has really killed jobs has been central banks stepping on the brakes too late.
The session ends with Nicky Morgan MP congratulating Andy Haldane on his recent school visits.
I hope it will help with our pipeline of economists in the future, she signs off.Continue reading...
An intermittent rumbling similar to a case investigated on The X-Files has been driving some residents berserk for years – with similar noises heard around the world. The truth is out there ...
Name: The Windsor Hum.
Age: About seven years old.Continue reading...
António Horta Osório, chief executive of Britain’s largest bank, gets bumper £6.4m payout
Lloyds Banking Group is to hand more than £3bn in dividends and surplus capital to shareholders and has awarded its chief executive a bumper £6.4m payout just nine months after returning to full private ownership following its taxpayer bailout in 2008.
The group, the largest bank in Britain with 27 million customers, posted a 24% jump in pre-tax profits to £5.3bn. In a bonanza for shareholders, Lloyds hiked its dividend by 20% and announced a buyback programme worth an extra £1bn.Continue reading...
We asked you about the UK’s declining cash usage and the difference it makes to your lives. Here’s what some of you said
What do barber shops, buses, street markets, shisha bars and grandchildren at Christmas all have in common?
They are some of the last hold-outs of the cash economy, small pockets of activity that still deal in notes and coins despite the surge in digital payment systems that threaten to drive cash out of business altogether.Continue reading...
BGI merger with Nottingham’s National Videogame Arcade creates ‘centre of gravity’ for the UK’s £1bn-plus games industry – but it’s still seeking government support
The recently formed British Games Institute, which aims to become a video game equivalent of the BFI, is merging with the National Videogame Foundation to create a new body dedicated to supporting and promoting game development and culture in Britain.
The British Games Institute will be housed at the NVA’s National Videogame Arcade building in Nottingham, where a games museum as well as cultural and educational programmes have been in operation since 2016.Continue reading...
DHL has been storing all KFC chicken at a single unregistered cold storage facility in Rugby
The storage depot at the centre of KFC chicken crisis had not been registered or inspected until an emergency visit on Tuesday, a local council has revealed.
Hundreds of KFC outlets remain closed as the fast food chain tries to recover from a disastrous start to a new delivery contract. Last night KFC said delivery drivers had been working around the clock in a bid to ensure that all stores could reopen by the end of the week.Continue reading...
Bank promises life-like experience with artificial intelligence system
NatWest is testing an artificial intelligence-powered “digital human” called Cora that will converse with customers in branches – raising fears that bank tellers could be replaced by avatars.
Cora, described by the bank as “highly lifelike”, is the result of a link-up with a New Zealand tech company whose co-founder was involved with creating digital characters in the blockbuster films Avatar, King Kong and Spider-Man 2.Continue reading...
We hear it again and again - politicians boasting about “more people in work than ever before”. At the same time we hear about a woman having a baby in the Sports Direct toilet because of a culture of fear at the company, BHS workers losing their pensions, Carillion construction workers left without work and even a DPD parcel delivery driver, Don Lane, collapsing and dying after being fined £125 for going to a doctors appointment.
The gig economy has become synonymous with worker exploitation. Cases are lining up – from Pimlico Plumbers to university lecturers – the news is not one of jubilance but of desperation. So what does the headline employment statistic published this week, telling us that employment remains at near record levels, really indicate? Is it a sign that the economy is indeed doing well?Continue reading...
Without regulations that scrutinise food standards and trade deals, we cannot trust the safety of the food on our plates
It should come as no surprise that the global meat industry is a major source of disease and crime. We are talking about a substance of animal origin, inherently alive with risky micro-organisms, necessitating expensive traceability and investment to make it safe, and worth hundreds of billions of dollars in global trade.
But in the UK, regulation is increasingly underfunded. Meat inspection services have been slashed over the past decade in favour of greater industry self-regulation, favouring private assurance schemes and meat companies being given fewer inspection if they can show general compliance. This might sound sensible until you look back over recent history and realise that it has been some highly reputable companies that have been the source of bad meat news, and that it was a spot-check random inspection that uncovered the Russell Hume case. Without robust regulation and independent checks, food scandals are too often the result. And the picture is the same all over the world, as the global demand for meat increases rapidly as wealth increases, government seeks to reduce ‘red tape’ and more people adopt western, meat-heavy diets.
Profits and shareholder payouts fall as breakdown firm undergoes strategic £45m overhaul
Shares in the AA plunged by almost a quarter after the roadside repair firm warned profits would be lower than expected and slashed dividend payouts to shareholders.
Revealing a new strategy, the company said plans to invest £45m on improving the business would weigh on profits for the year ending January 2019. It expects profits over the period to be in the range of £335m to £345m, below City expectations of £387m.Continue reading...
It’s an upset that far outstrips the Nando’s shortage of 2014, and at a scale that makes last year’s dip in hummus supply seem small fry: KFC is out of chicken. The $23bn (£16.5bn) company that has one job – to sell us fried chicken – is unable to fulfil its culinary duties, citing issues in its outsourced distribution … wings. This has resulted in the temporary closure of more than two-thirds of its branches (that’s 646 of its 900 stores), while outlets that have remained open have struggled to keep up with demand. It’s left many customers feeling peckish.Continue reading...
Official figures reveal 1.47 million out of work as young people struggle to find jobs
The number of people out of work in Britain rose at the fastest rate in almost five years, official figures showed on Wednesday, fuelled by an increase in unemployment among young people under the age of 24.
After an almost two-year period of continuous declines in unemployment to the lowest levels since the mid 1970s, the number of people out of work rose by 46,000 to 1.47 million in the three months to December, according to the Office for National Statistics. The jobless rate rose to 4.4% against City forecasts for the level to remain unchanged at 4.3%.
FCA must find a way to bring to book those who orchestrated a systematic and endemic culture of screwing customers
Choose your own best illustration of the underhand and devious techniques employed by Royal Bank of Scotland’s Global Restructuring Group to gouge small business customers via fees, made-up penalties and punitive interest rates. There are dozens in the regulatory report that – finally – has been put on public display.
Here’s a contender from the infamous “Just Hit Budget” memo: “Be specific: avoid round number fees – £5,300 sounds as if you have thought about it, £5k sounds like you haven’t.”Continue reading...
Britain’s biggest housebuilder could make construction blocks domestically as Brexit looms
Britain’s biggest housebuilder Barratt Developments is considering moving production of blocks used in construction from Germany to Britain, an example of steps some businesses are taking to mitigate against any risk from Brexit.
London and Brussels hope to agree a deal this month which will protect free trade, including the movement of goods, between Britain and the European Union until 2020 but many firms are developing contingency plans.Continue reading...
From highways carved through thriving ‘ghettoes’ to walls segregating black and white areas, US city development has a long and divisive history
It’s a little after 3pm in Detroit’s 8 Mile neighbourhood, and the cicadas are buzzing loudly in the trees. Children weave down the pavements on bicycles, while a pickup basketball game gets under way in a nearby park. The sky is a deep blue with only a hint of an approaching thunderstorm – in other words, a muggy, typical summer Sunday in Michigan’s largest city.
“8 Mile”, as the locals call it, is far from the much-touted economic “renaissance” taking place in Detroit’s centre. Tax delinquency and debt are still major issues, as they are in most places in the city. Crime and blight exist side by side with carefully trimmed hedgerows and mowed lawns, a patchwork that changes from block to block. In many ways it resembles every other blighted neighbourhood in the city – but with one significant difference. Hidden behind the oak-lined streets is an insidious piece of history that most Detroiters, let alone Americans, don’t even know exists: a half mile-long, 5ft tall concrete barrier that locals simply call “the wall”.Continue reading...
We own a Hotpoint tumble dryer (bought February 2014 for £399) which was subject to the Whirlpool/Hotpoint recall/repair programme. Ours was repaired in 2016 and we believed this ensured there was no further fire risk. But in early February this year – a few seconds after switching it on – it caught fire. The cause was a build-up of fluff and lint on the heating element. We would consider ourselves reasonably diligent regarding cleaning and maintaining the filter, yet it clearly wasn’t sufficient.
I have been liaising with John Lewis, which provided the warranty, to get the device inspected. I have also written to my local MP, asking him to bring this to the attention of the business, energy and industrial strategy committee which took evidence on this matter, and a possible link between cuts to a Trading Standards budget and the agreed course of action for Hotpoint. Most worryingly, Trading Standards and Hotpoint claim the agreed modification makes the appliance safe.Continue reading...
The Bank of England’s chief cashier, Victoria Cleland, on why people still like cash
It is perhaps not entirely surprising to learn that the woman whose signature adorns Bank of England banknotes is a big fan of cash. She does not use contactless payment cards for personal spending – not least because she is yet to trust the technology completely.
Victoria Cleland, the Bank’s chief cashier, says she habitually reaches for notes and coins when she makes small purchases. But she may now be in a minority.
UK due to agree to repatriation of powers in areas such as farming, justice and food safety
The UK government believes it is on the brink of a deal to ends months of deadlock with the Scottish and Welsh governments over an alleged “power grab” after Brexit.
Ministers will offer to drop their controversial plans for Whitehall to take control over as many as 111 EU powers that Scottish and Welsh lawmakers insist should be handed over to them.Continue reading...
News stories from Tuesday 20 February, 2018
Bosses from British Airways, Virgin and easyJet urge MPs to secure pledge on cost before vote
The true cost of Heathrow expansion is likely to be “grossly” higher than the £14.3bn the airport has cited, airlines have told MPs, adding that transparency and guarantees should be supplied ahead of a crucial vote.
Willie Walsh, chief executive of IAG, British Airways’ parent company and the main operator at Heathrow, said parliament should not trust Heathrow and said he had “zero confidence” that a third runway would be delivered on time and budget.
Replacement of physical stores with internet sales is bad for people’s rights (Maplin seeks buyer, 20 February), because internet sales track people; they don’t allow privacy-respecting cash.It’s bad for the Treasury because the internet giants such as Amazon avoid taxes, and because jobs disappear. It is bad for society because it means fewer jobs. This suggests solving both problems with a substantial tax on internet sales.
President, Free Software Foundation, Cambridge, Massachusetts, USA
• Join the debate – email email@example.comContinue reading...
Charles Randell tells MPs he repaid HMRC more than £100,000 after Ingenious investment
The incoming chairman of the Financial Conduct Authority has admitted to an “error of judgment” after investing in a controversial tax avoidance scheme that resulted in him repaying more than £100,000 to the taxman.
Charles Randell, a former City lawyer and government adviser at the time of the financial crisis, told the Treasury select committee that he had failed to see a “warning signal” about Ingenious Film Partners 2 LLP, an investment product that promised members tax reliefs but was subsequently challenged by HM Revenue & Customs.Continue reading...
All the day’s economic and financial news, including the latest healthcheck on Britain’s manufacturing base
- Latest: Charles Randell invested in Ingenious film production scheme
- Incoming FCA chair repaid £114,000 plus interest to HMRC
- Treasury committee publishes GRG report
And finally, London’s stock market has closed for the day. The FTSE 100 is virtually unchanged, down o.89 of a point at 7246.77.
In New York the Dow is currently in the red. It’s down 108 points or 0.43%.
Here’s our full story into the Treasury Committee’s decision to release the official report into Royal Bank of Scotland’s treatment of small businesses.Continue reading...
GMB union says it expressed doubts about DHL’s ability to run operation from single warehouse
The fast food chain KFC was warned it would face delivery problems months ago, it has been claimed, as the company tries to grapple with a worsening chicken supply crisis that has forced most of its outlets to remain closed.
About 420 KFC stores are currently shut after the company switched deliveries to a cheaper service, amid mounting consumer anger. An updated list showed that the number of open outlets rose to 480 by 1pm on Tuesday after dropping to just 254 an hour before. And for a second day KFC gave no indication of when operations would be back to normal.Continue reading...
Treasury committee releases details of ‘widespread inappropriate treatment’ that City watchdog refused to make public
The Treasury committee has published the full unredacted report into Royal Bank of Scotland’s disgraceful” treatment of struggling small businesses that came to it for financial assistance in the wake of the banking crisis.
The influential group of MPs, chaired by Nicky Morgan, released the report after a long-running stand-off with City watchdog the Financial Conduct Authority, which had refused to publish it.Continue reading...
But oil giant expects demand for crude to grow and not peak until late 2030s
Bans around the world on single use plastic items such as carrier bags will dent growth in oil demand over the next two decades, according to BP.
However, the UK-headquartered oil and gas firm said it still expects the global hunger for crude to grow for years and not peak until the late 2030s.Continue reading...
There was further evidence this morning that the Gambling Commission takes at least some of its objectives seriously, when it issued a £6.2m fine to William Hill for breaches of regulations to prevent money laundering and ensure that “children and other vulnerable people”, such as problem gamblers, are “protected from being harmed or exploited by gambling”.
An investigation found that 10 customers of the firm had been allowed to deposit significant sums of money linked to criminal offences, including one customer who was stealing from their employer to fund a gambling problem and another who was defrauding elderly victims to do the same. Hills made £1.2m from its failure to ensure that its systems and staffing were adequate to respond to repeated alerts with regard to activity on the accounts, which will now be returned to the victims of the crimes where possible.Continue reading...
Tycoon makes offers to allay media monopoly fears and ease through 21st Century Fox deal
Rupert Murdoch has doubled the length of time he is willing to keep running Sky News to “at least” 10 years, as 21st Century Fox sweetens its offer to protect the news channel to gain clearance for the £11.7bn takeover of Sky.
The Competition and Markets Authority said last month that Murdoch’s bid raised media plurality concerns because the deal would give his family too much control over UK news media. The Murdoch family trust controls Fox and News Corp, publisher of the Sun and the Times.Continue reading...
Ruling in Pimlico Plumbers case will set precedent for other gig economy disputes such as Uber
The predicament of a plumber who claims he was dismissed because he wanted to go part time is being examined by the supreme court in a test case that could decide employment rights for all of those in the so-called “gig” economy.
Pimlico Plumbers, which has lost at every stage of the legal dispute, has appealed to the UK’s highest court to argue that those it sends out to repair leaking pipes and malfunctioning dishwashers are self-employed and not “workers”.Continue reading...
Brexit secretary’s speech plays down bonfire of EU red tape and echoes recent remarks by chancellor
David Davis has insisted that Brexit “will not change the kind of country Britain is” as he sought to reassure a European business audience that future regulations would stay broadly aligned with EU rules.
In a speech that went even further than excerpts had suggested to play down the prospect of slashing red tape after leaving, the UK Brexit secretary also emphasised the extent to which many EU rules had been created with British support and encouragement.Continue reading...
Farming union president Meurig Raymond takes veiled swipe at Liam Fox’s ‘cheap food policy’ at NFU conference
Trade with the EU after Brexit needs to be “frictionless” if the UK’s food and farming sectors are to survive the transition, the president of the National Farmers Union has said at the opening of the NFU’s conference.
Meurig Raymond, who farms a large acreage of mixed arable and livestock in Wales, said: “We must have frictionless trade with the EU. Everything else, including the final shape of any domestic agricultural policy, is dependent on that.”Continue reading...
Telecom hopes to track drones too small for radar just as air-traffic control tracks planes
Vodafone is testing technology to track and control drones to let authorities protect aircraft from accidents and terrorist attacks and stop incursions into “no-fly zones” such as prison and hospital airspace.
The trial comes amid mounting concern from the security services that terrorists could use drones adapted to carry small but lethal explosives to attack targets. Drones have been used for criminal purposes, such as smuggling and delivering contraband to prisoners.Continue reading...
Firm handed big fine over failure to spot problem gambling and prevent money laundering
Betting group William Hill has been fined £6.2m by the gambling industry regulator for failing to protect consumers and prevent money laundering.
The Gambling Commission said that over the two years to August 2016, the company failed to spot obvious signs of problem gambling, and in doing so breached anti-money laundering and social responsibility regulations.Continue reading...
Despite its image as a paradise of fairness, women earn less than men. Now firms who breach equal pay laws face daily fines
On the face of it, Iceland is a good place to be a woman. For nearly a decade, it has been rated the world’s most gender-equal country. It was the first to directly elect a female president, nearly half its MPs and company directors are women, and first-class daycare and parental leave help ensure almost four in five women have jobs.
So it came as a shock for Fríða Rós Valdimarsdóttir to learn, when she was managing a key team of 10 home carers at Reykjavik council a few years ago, that male colleagues in other departments, with far fewer responsibilities than her, were being paid a great deal more.Continue reading...
End of restructuring costs boosts performance but Trump tax writedown misses forecasts
HSBC Holdings’ pre-tax profit for 2017 has more than doubled to $17.2bn (£12.3bn), largely due to the absence of hefty restructuring costs, but the figure still lagged behind expectations as the bank took a writedown to take in US tax changes.
On the chief executive Stuart Gulliver’s last day on the job, Europe’s biggest lender by market capitalisation also announced plans to bolster its capital base by raising up to $7bn in the first half of 2018.Continue reading...
Labour leader’s speech a strong hint his party will accept close regulatory alignment with EU
Jeremy Corbyn is to attack the Conservatives’ “lack of clarity” on the future economic relationship with Europe in a speech a day after the Labour leader is said to have faced down lobbying from his own party to take a softer line on Brexit.
Corbyn will tell the conference of manufacturers’ organisation EEF on Tuesday that Labour is “insisting the economy must come first” in the Brexit negotiations, a strong hint that the party would accept close regulatory alignment.Continue reading...
Joint venture claims cheaper green power could save UK households £300 a year
Ikea is calling for households to join its latest joint venture – a collective energy switch that promises an exclusive 100% renewable electricity tariff.
The furniture retailer has joined forces with the “Big Clean Switch” campaign to use a collective switch to secure cheaper green power for the households that sign up.Continue reading...
My partner bought what he thought were 12 Angus beef sausages from Waitrose just before Christmas but when he opened the packet there were only six. He cooked four which I thought were a bit spicy but ok, and he said he would return the other two as they didn’t match the packet description. When I looked at the receipt it said six pork chorizo sausages and I was horrified as (for religious reasons) I don’t eat pork.
He took what was left – and the receipt – to Waitrose which kept the package (specifying no pork ingredients) and said they would investigate. They offered a replacement, which he declined, and a voucher for £10 or £20 from head office, also refused. Correspondence suggests they are not taking it very seriously. We have been loyal customers for many years and are shocked they are treating this so lightly.Continue reading...
Labor environment action network says ALP needs to take a stand on a project ‘that’s not in the national interest’
Labor’s influential internal environmental lobby group has called on the federal party to clarify its stance on the controversial Adani coalmine, a project it says is not in the national interest.
The national convener of the Labor environment action network, Felicity Wade, told Guardian Australia on Tuesday the party needed to make a decision.Continue reading...
MPs cast doubt on whether energy efficiency gains can keep offsetting rising power demand
A cross-party group of MPs has raised doubts over whether the growing energy demand from digital technology and the proliferation of internet-connected gadgets can continue to be offset by energy efficiency improvements.
More efficient smartphones, networking gear and data centres have so far largely staved off increased power demand from the internet and computing – which now accounts for about 6% of global electricity use.Continue reading...
Frank Field says evidence shows that directors were ‘contemptuous of their pensions obligations’
Carillion’s pension scheme trustees began urging the collapsed government contractor’s “contemptuous” directors to provide more money to plug a yawning deficit in 2010 but were repeatedly refused, it has been claimed.
Letters released by MPs conducting an inquiry into Carillion also reveal that trustees asked the Pensions Regulator (TPR) in vain to force the company’s directors to pump more money in.Continue reading...
A Labour government would seek to stop deals that threaten to ‘destroy our industrial base’
Jeremy Corbyn will promise in a speech that a future Labour government would “intervene to prevent hostile takeovers” like investment firm Melrose’s £7.4bn bid for British manufacturing company GKN.
The Labour leader will tell delegates at the EEF manufacturing conference in London that if the party wins the next election it will “broaden the scope of the public interest test” to allow the government to stop takeovers that threaten to “destroy our industrial base”.Continue reading...
Regulator had front-row seat but failed to use powers to intervene before firm went bust
Frank Field is right to castigate the directors of Carillion for being “contemptuous” of their obligations to the company’s pensioners. The picture of what happened in the pre-crash years is now reasonably clear: the directors, even as they were raising the dividend to shareholders year after year, made a corporate plea of poverty when talking to the pension trustees. The decision-making and the skewing of priorities were appalling.
The deeper scandal, however, may be the fact that the Pensions Regulator had a front-row seat at the developing debacle and didn’t once deploy its formal powers of intervention. The regulator’s officials attended meetings between the company and the pension trustees but were not shocked into formal action until Carillion went bust, by which time there was no money left.Continue reading...
News stories from Monday 19 February, 2018
Firm says it hopes to achieve ‘a solvent sale of the business’ this week
One of the UK’s biggest electronics retailers is racing to find a buyer in an effort to save the business from administration.
Maplin, which was founded in 1972 and has more than 200 stores nationwide, is in talks with several potential buyers and hopes to strike a deal this week.Continue reading...
Piccadilly site closes, with loss of 80 jobs, while St Paul’s outlet is bought at last minute by Oliver’s company
Jamie Oliver’s upmarket Barbecoa steakhouses in London have crashed into administration, with 80 staff losing their jobs at the group’s Piccadilly site.
The celebrity chef’s company scrambled together a last-minute deal to save the group’s other outlet – located near St Paul’s Cathedral – with a newly created subsidiary in Oliver’s business empire buying the City diner straight out of administration for an undisclosed sum.Continue reading...
Fast food chain blames contract with delivery firm DHL, with more than 600 outlets still shut
The fast food chain KFC has been forced to temporarily close most of its UK outlets after problems with a new delivery contract led to a chicken shortage.
A total of 562 KFC outlets remained shut as of Monday evening following a weekend of disruption that peaked on Sunday night at 646 closures.
Green says reports of talks to sell group, which includes Topshop and Miss Selfridge, to Chinese firm are ‘rumour-mongering’
Sir Philip Green has poured cold water on a report that he is in talks to sell his Arcadia retail empire, which includes Topshop and Miss Selfridge, to the Chinese firm Shandong Ruyi.
Green issued the denial as the work and pensions select committee chair, Frank Field, wrote to him demanding assurances that Arcadia’s pension schemes would not be “detached” from the tycoon’s family interests in the event of a sale.Continue reading...
All the day’s economic and financial news, as markets lose early gains
- Investors turn cautious after calm start for markets
- Carillion: more jobs lost - and saved
- Latvian central banker arrested
- Greece gets credit upgrade boost
After a fairly uneventful morning, European markets took another turn lower as investors turned cautious once more. With no guidance from Wall Street, closed for the President’s Day holiday, shares went into reverse as the day progressed. Connor Campbell, financial analyst at Spreadex, said:
It was hard to ascertain exactly what caused Monday’s late reversal. For the FTSE a copper-led decline in its mining stocks – which have a busy week of reporting ahead of them – certainly contributed, as did Reckitt Benckiser’s post-full year results 5.5% decline. The lack of news from the US likely didn’t help, with investors seemingly craving reassurances that the Dow Jones is willing to continue last week’s recovery before following suit.
Regardless, the fact that the markets have turned negative on a day almost completely devoid of anything interesting news-wise perhaps gives an indication where sentiment currently lies.
The worry is that the US will follow this pattern when it reopens tomorrow, which would accord with the historical norm; another test of the lows, and a possible new low, before the ‘ball held underwater’ springs higher once again, catching everyone off guard.
With Spain’s Luis de Guindos set to become vice president of the European Central Bank, there is a suggestion this could clear the way for Germany’s Jens Weidmann to take over as the head of the ECB. Reuters reports:
Euro zone finance ministers on Monday chose Spanish Economy Minister Luis de Guindos to succeed European Central Bank Vice President Vitor Constancio in May, a move likely to boost the chances of a German becoming head of the ECB next year.
The choice of a Southern European for vice president increases the likelihood that a northerner such as German Bundesbank governor Jens Weidmann could be elected to replace Mario Draghi as head of the ECB in 2019. This could influence the bank’s ultra-loose monetary policy.Continue reading...
Bank of Latvia governor faces allegations of asking for a bribe from bank accused of doing business with North Korea
The European Central Bank’s reputation is under the spotlight after one of its policymakers was detained over bribery allegation.
Ilmars Rimsevics, who represents Latvia on the ECB general council, was questioned on a charge of demanding a bribe from the country’s third largest bank, which has been caught in a separate money laundering probe.Continue reading...
For the RBA, it will be ‘a good outcome’ if debt growth no longer outstrips income growth
Whenever the governor of the Reserve Bank speaks, all ears are pricked for any signs that might indicate where interest rates are headed. On Friday, when Philip Lowe appeared before the House economics committee, he was very careful with his words. The markets barely moved, and yet amid his unsurprising talk on interest rates he made some interesting points about the level of household debt that suggest he desires some quite significant changes in our economy.Continue reading...
Houses in prime areas of capital fetching up to £18,000-a-week rent as demand rises
Six- and seven-bedroom houses in Notting Hill and Primrose Hill were among a record number of properties rented out at £5,000-plus a week in London last year.
Upmarket estate agent Knight Frank reported the number of its “super-prime” lettings rose 34% last year to 137, from 102 in 2016. The vast majority of properties are let furnished.Continue reading...
The model enabling ownership of the store chain by those working in it was the idea of one of its founder’s sons. On 23 February 1963 the Guardian published this obituary
Mr John Spedan Lewis, founder of the John Lewis Partnership, died on Thursday at his home, Longstock Park, Stockbridge, Hampshire. The elder son of the late John Lewis of Oxford Street, he was 77.
In 1920 Mr Lewis introduced his partnership scheme, the essence of which was that the workers “get the whole profit and the sharing is entirely among themselves.” Partnership benefit, as it was called, was distributed in the form of shares, which could be realised for cash.
Administration comes weeks after firm halted production due to food standards scare
More than 260 workers have lost their jobs at the meat supplier Russell Hume, which has collapsed into administration just weeks after production was suspended following a food standards scare.
Administrators announced 266 redundancies on Monday from the 302 employees at the company, which has its headquarters in Derby and operates from six production sites in Liverpool, Birmingham, London, Boroughbridge in North Yorkshire, Exeter and Fife.Continue reading...
Consumer goods group blames difficulties in developed markets and rising commodity costs
Reckitt Benckiser, the owner of brands including Durex and Nurofen, missed its 2017 profit expectations and said tough trading in developed markets and rising commodity costs were set to continue.
The consumer goods group reported higher sales in the last quarter on Monday, in line with expectations, and forecast an increase for this year as it looks to move on from a turbulent 2017.Continue reading...
Hospital considers retaining £530,000 it received from scandal-hit charity
Great Ormond Street hospital is reconsidering whether to return £530,000 it collected in donations from the controversial Presidents Club, after the scandal over its event at which hostesses were allegedly sexually harassed.
The London children’s hospital, which had vowed to return all of the money it received from Presidents Club events, said on Monday that it was now reconsidering the decision to ensure it had the maximum funds to support the hospital and its patients.Continue reading...
Number of redundancies reaches 1,141 with nearly 11,000 more yet to learn their fate
The number of Carillion workers who have lost their jobs as a result of the collapse of the construction giant has topped 1,000.
A further 152 former employees are being made redundant this week, taking the total to 1,141 since the company went into liquidation last month.Continue reading...
Notes and coins set to fall to just 21% of sales by 2026, raising questions for those who rely on the cash economy
Britain will move beyond “peak cash” this year, according to data gathered by the Guardian that suggests notes and coins are rapidly being supplanted as the favoured payment method, particularly in cities.
Debit cards are set to overtake cash as the most frequently used payment method in the UK later this year, according to UK Finance, which represents leading finance and banking firms.Continue reading...
As contactless payments spread, businesses, charities and social groups weigh up their options
As cash becomes less prominent in the UK, a range of businesses, charities and cash-dependent social groups are figuring out ways to adapt.Continue reading...
Resolution Foundation says young Britons have suffered biggest reversal in fortunes save for young Greeks
Britain’s millennial generation, born since 1981, have suffered a bigger reversal in financial fortunes than their counterparts in most other developed countries except Greece, according to a new study.
The report by the Resolution Foundation paints a gloomy picture for all young adults across the developed world – apart from the Nordic countries. It highlights how incomes are depressed, jobs scarce and home ownership is slumping for the millennial generation compared with the baby boomers that preceded them.Continue reading...
Director of Third Energy, which wants to frack in North Yorkshire, is Conservative donor
Campaigners have accused the Treasury of allowing the appearance of a conflict of interest over its examination of an energy company at the forefront of fracking in the UK.
Third Energy’s financial health is being looked at by a Treasury body, the Infrastructure and Projects Authority (IPA), whose findings will inform whether the government gives the firm a green light.Continue reading...
Calls for windfall tax as figures show PFI firms’ profits will equal 25% of extra £1.3bn funding for schools
Private finance initiative operators will be paid £4.8bn by schools by 2020, generating an estimated £270m of profits directly from taxpayer money, new analysis has revealed.
The study has bolstered calls for a windfall tax on the PFI companies which build and run schools, with the figures also showing that they have cashed £60m in corporation tax cuts.Continue reading...
Some analysts see the ‘petro’ as a desperate move to secure cash amid an economic meltdown brought about by President Nicolás Maduro’s policies
Is Venezuela’s new cryptocurrency an ingenious plan to evade U.S. sanctions? Or will it turn out to be a South American shitcoin?Continue reading...
Chains under pressure from rising costs and competition amid consumer spending squeeze
The number of UK restaurants going bust jumped by a fifth last year as major chains came under pressure from rising costs and competition amid a squeeze on consumer spending.
There were nearly 1,000 insolvencies across the restaurant industry in 2017 compared with 825 the year before, according to law firm Moore Stephens. Casualties included the Handmade Burger Co chain and Liverpool-based Viva Brazil Steakhouse which was later bought out in a rescue deal.Continue reading...
Last May, James Martin* decided to give up work and look after his mother full time after she was diagnosed with cancer. A few months later, his father suffered a stroke, leaving the 49-year-old as the main carer for both parents. With income support and carer’s allowance, he receives £108 a week, meaning that the chances of paying his mortgage every month is remote. There is some relief, in that he receives the Support for Mortgage Interest (SMI) benefit, a payment which has been in place for the last 70 years to help financially constrained homeowners with their repayments.
From April, however, it will stop and be replaced by a new “second mortgage” scheme where the government offers to loan people the money, which will then be repaid later.Continue reading...
I called into my local East of England Co-op branch (in Leiston, East Suffolk) in January just before 6pm. It was dark and I parked in the middle – not on the edge –of its car park and saw no signs (though I was later told by staff there were 30!) so I didn’t realise there was a new system. When I went through checkout no one mentioned having to tap the number of your car registration plate into a machine. Considering the parking is free, this is most unusual. The next thing I knew, a PCN (Parking Charge Notice) landed, which had been issued two days later. I filed an appeal online, including a copy of my bank statement showing my purchase of £20.17 at the Co-op, and received confirmation. To date I have heard nothing. To add insult to injury, it said that if the penalty is paid within 14 days the amount is reduced to £60, otherwise it is £100. So much for “free parking”.
RS, Leiston, SuffolkContinue reading...
Flying long haul would barely enter the thinking of many families planning their annual holiday, with the perceived cost ruling out many destinations before the search had even begun. However, this year a series of colliding events, including a weak dollar, greedy Spanish hoteliers and competition for tourists in the Middle East, means it can be cheaper to go to Florida, Dubai or Thailand than to spend a traditional two weeks on the Costa del Sol.
Research from price comparison site TravelSupermarket has shown that some long-haul destinations cost significantly less to fly to and stay in than Spain, where British tourists make up the largest number of foreign visitors every year.Continue reading...
‘Big six’ companies left behind as Octopus Energy, Bulb and Utility Warehouse take first three places
Two small energy suppliers have left the “big six” trailing when it comes to customer satisfaction, according to the biggest survey of its kind.
The success of Octopus Energy and Bulb sends a message to larger, more established players such as British Gas and Npower that customers will look elsewhere if they do not feel they are being treated properly, said the price comparison and switching service uSwitch.com.
Major investor Kiltearn has sent evidence to committees holding inquiry into contractor’s collapse
A major investment firm that owned 10% of Carillion has told MPs it considered suing the the collapsed government contractor over suspicions that directors knew it was in difficulty earlier than they admitted in public.
Kiltearn Partners says it “considered participation in civil legal action against Carillion with a view to recovering a proportion of its clients’ crystallised losses” following its profits warning last summer.Continue reading...
Labor leader’s comments come during visit to Queensland and follow CFMEU’s warning that ALP’s blocking of Carmichael mine would open divisive debate
Bill Shorten has declared there is a role for coal in Australia, and characterised the controversial Adani coalmine as just “another project” as he digs in for several days visiting marginal coastal electorates in Queensland, trumpeting local infrastructure commitments.
The positive public signal from the Labor leader on the future of coal followed a warning last week by the CFMEU’s national president, Tony Maher, that any move by Labor to block Adani’s controversial Carmichael coalmine would expose Labor politically in Queensland, and open a divisive debate within the ALP about the future of coalmines in Australia.Continue reading...
Rightmove reports busiest ever month and optimistic pricing but property is taking longer to sell
The average price of a UK property coming on to the market has risen by more than £2,400 in a month to just over £300,000 amid evidence of “record” levels of house-hunting activity, according to Rightmove.
The website, which tracks 90% of the UK property market, said the national average asking price for a home had increased by 0.8% during the past month, following the 0.7% rise it reported in mid-January.
News stories from Sunday 18 February, 2018
Shandong Ruyi looks over books of retail group, thought likely to fetch half its £1bn valuation
Sir Philip Green is considering a sale of his Topshop-to-Burton empire Arcadia as a Chinese textiles giant reportedly looks over its books.
Green is thought to be seeking an exit from the Arcadia group as his ageing, poor-performing brands including Dorothy Perkins, Wallis and Evans come under attack from fast-expanding online players such as Boohoo and Missguided.Continue reading...
‘His excellency’ Calvin Ayre says project will be entirely funded from digital currency profits
Calvin Ayre, a gambling and bitcoin multi-millionaire who was once on the run from the US authorities, is building a $100m five-star resort on Antigua funded by profits from digital currencies.
Canadian-born Ayre, who has been appointed Antigua and Barbuda’s special economic envoy, said he had begun work on the upmarket tourist resort on Antigua’s Valley Church beach.Continue reading...
With woeful productivity in parts of the north and Wales, local authorities must decide how to spend replacement EU cash
Throughout the 1980s, a war raged between Westminster and the rest of the country that has had lasting effects. Fearing councils under the control of Michael Foot’s Labour opposition, Margaret Thatcher stripped power from town halls in a sweeping political land grab that still marks Britain today.
During the 1970s and much of the 1980s, London’s economy had more in common with the rest of the country than today, and even grew at a slower pace than many other regions. But the big bang deregulation of financial services in 1986 under Nigel Lawson, then chancellor, helped London’s economy to boom — aided by fat profits from investment banks in the City. At the same time, the north’s industrial base came under attack from Thatcher’s reforms, leading the country’s manufacturing’s share of national income to fall from a quarter to just over a 10th today.Continue reading...
On the face of it, the outcome of the latest battle for Premier League TV rights appears to be business as usual. Sky has taken the lion’s share of the best matches, extending its stranglehold on the biggest prize in British sports broadcasting to at least three decades, with BT slotting into second place.
But with Amazon in the running for at least one of the two remaining rights packages, Rupert Murdoch poised to take full control of Sky and then sell it to Disney, and BT calling time on its big spending on sports rights, it is a seminal moment.Continue reading...
This week should be a landmark for Royal Bank of Scotland. The publication of its annual results on Friday should mark the first time since the financial crisis that the taxpayer-backed bank has reported a profit for shareholders.
RBS’s dire run started in 2008, when it racked up a loss of £24.1bn – the biggest in UK corporate history. The bank almost collapsed that year under the weight of more than £8bn of bad debts and £16bn of write-offs from its disastrous takeover of ABN Amro.Continue reading...
Place has always been destiny in Britain, but never more so than in 2018. Pity the child born in Weymouth, Corby or Carlisle, locked into poor schools, a lacklustre economy and few decent jobs; if he or she had been lucky enough to be born in Tower Hamlets, Hackney or Westminster, their life chances might have been transformed. Where you are born in Britain, and England in particular, is becoming ever more a treacherous geographical lottery.
Nor is the divide any more just the well-known one between north and south. So relatively strong are the performances of Bristol and Manchester, with Liverpool hard on their heels, that overlaid on the old north-south split is the beginnings of a new one – an east-west divide. Parts of the north-west such as Trafford and North Cheshire are strong economic and social performers, while the towns along the M4 and Bristol itself are doing pretty well.Continue reading...
News stories from Saturday 17 February, 2018
Actors, performers and workers of the gig economy unite! An increasing number of Britons are living the precarious, job-to-job existence already familiar to performers.
In response to this widespread change to patterns of employment, Tracy Brabin, the actress-turned-Labour MP, is to introduce a bill on Wednesday to bring in shared parental pay for people living the kind of insecure working life she used to lead.Continue reading...
There’s a bit of smoke and mirrors involved when companies say tax concessions are needed to increase wages
The battle over company tax cuts is hotting up and the response by the government and the business sector to analysis by ABC’s Emma Alberici – on the impact of such tax cuts and evidence that one in five of the largest corporations in Australia paid no tax over the past three years – shows how worried they are that they are losing the fight.
On the same day Alberici’s article was published, the prime minister referred to it during question time as “one of the most confused and poorly researched articles I’ve seen on this topic on the ABC’s website”. Meanwhile, the Qantas chief executive, Alan Joyce, argued in the Australian that there were good reasons why the airline hadn’t paid tax in the past and that whether it did or not was irrelevant when it came to the issue of arguing for a lower tax rate.Continue reading...
At this stage of the Brexit talks there seem to be few barriers to the Tory party dominating the outcome. It’s not the string of opinion polls showing Theresa May either ahead, neck and neck or only marginally behind Labour, all of which are stunningly positive survey results for a government in such disarray.
Nor is it the way Boris Johnson and Anna Soubry slug it out with passion and alternative visions of Brexit, while Labour MPs merely lament the referendum result, stymied by a leadership that has so far preferred to play tactical games rather than put forward its preferred post-Brexit relationships.Continue reading...
“Who’d be a retailer now?” That was the comment from City economist Jeremy Cook when the latest set of grim retail sales data was released by the Office for National Statistics last Friday. “The average Brit,” he added, “has spent the past few years living by the mantra ‘When the going gets tough, the tough go shopping.’”
After a grim December, many had been hoping for a bounceback, but the figures showed that consumers were not as hardy as they once were, said Cook, and the retail sector was facing a long-term, continuing slowdown.Continue reading...
We pick short-term accounts and Isas that sould give you a return nearer the inflation rate
Interest rates on savings accounts are finally starting to creep upwards, but savers are still losing more to inflation than they are earning from interest, according to Moneyfacts.
The financial data analysts said this week that rates across the savings market have risen for 13 consecutive months, and are continuing to outweigh cuts.Continue reading...
The number of people who are self-employed has increased dramatically since 20001, jumping from 3.3 million to 4.8 million. Do their precarious earnings mean they can’t get mortgages? Will they be treated as second-class citizens by the lenders? Sadly that will be the case for many, especially those in the low-paid “gig economy”. But don’t give up all hope: those who have more dependable earnings, and, crucially, good records of their income, can still land a decent deal.
Firstly, let’s demolish the myth that there is a category of loans called the “self-employed” mortgage. People who work for themselves are able to get the same rates as everyone else; the problem is, they have more complex incomes and must be able to prove their earnings.Continue reading...
The chef’s chains are facing a crisis on the high street. Where did it all go wrong?
Jools Oliver, wife of the celebrity chef Jamie Oliver, set social media abuzz in December when she posted pictures of the couple’s £9m home. The seven-bedroom, Grade II-listed property in London’s rarefied Hampstead was as sumptuous as might be expected for a chef who has built a £150m fortune from a business spanning books, TV, endorsements and restaurants.
But as Jools’s followers admired the fruits of Oliver’s success, he was battling to save Jamie’s Italian, the centrepiece of his restaurant division. In December, Oliver pumped £3m of his own money into the business, and in January the chain said it would close 12 of its 37 UK branches, as part of a rescue deal with its creditors to keep trading.Continue reading...