Andrea Leadsom orders investigation into £4bn Cobham defence takeover by US private equity group

The Government has ordered an investigation into the £4bn takeover of UK defence group Cobham by US private equity group Advent international on grounds of national security.

Business Secretary Andrea Leadsom has written to the Competition and Markets Authority (CMA) to instruct them to investigate the deal and prepare a report on the national security aspects of the takeover. The CMA has until midnight at the end of 29 October to submit its report to Ms Leadsom.

Under the Enterprise Act 2002, the Secretary of State for Business, Energy and Industrial Strategy has the power to intervene in mergers on public interest grounds relating to national security.

Ms Leadsom said: “Following careful consideration of the proposed takeover of Cobham, I have issued an intervention notice on the grounds of national security.

“As part of the statutory process, the CMA will now investigate and carry out a review on the national security implications of the transaction.”

Founder’s family against the deal

On Monday, Cobham’s shareholders overwhelmingly backed the takeover, with 93.22 per cent of shareholders who voted approving the 165p-a-share deal, with only 6.78 per cent voting against.

The family of the group’s founder Sir Alan Cobham had been against the deal and had urged the government to look at it on national security grounds. the founding family owns 1.5 per cent of the business and was joined by Sanderson Asset Management, a 2.4 per cent shareholder, in opposing the deal.

Lady Nadine Cobham, the widow of the son of founder Sir Alan Cobham, has said the deal undervalues the recovery underway and is against the national interest. Lady Cobham appealed to Ms Leadsom to investigate the deal following the approval of shareholders.

“It is a tragedy that institutional shareholders have chosen to join Cobham’s directors in running up the white flag over the company,” she said following Monday’s vote.

Talks with government

David Lockwood, chief executive of Cobham, said that the sale “was always going to be emotional” but “there really was only one decision”.

“We didn’t say it was fantastic; we said it was fair,” he said of the price that Cobham had agreed.

Both Advent and Cobham has already held talks with the government about giving possible undertakings on Cobham, but Ms Leadsom has taken the decision to intervene despite the reassurance offered from the firms.

Cobham was founded by Sir Alan 85 years ago and employs about 10,000 staff around the world, of which almost 1,800 are in the UK. Its largest contract is to provide its air-to-air refuelling technology to the US Air Force.

More Business

The post Andrea Leadsom orders investigation into £4bn Cobham defence takeover by US private equity group appeared first on

Read More

Why Apple is fighting a €13bn tax bill in Ireland and how it could affect other nations

Why on earth would a government not wish to be paid tax it is owed?

The Irish economy has benefited hugely from investment by multinational companies attracted by low tax rates. Losing this seemingly beneficial demand from the EU for Apple to pay more tax in Ireland could put global conglomerates off setting up European bases in the country.

Why should we care about whether or not Apple pays its taxes in Ireland?

The case could make or break European Competition Commissioner Margrethe Vestager’s campaign which has also led to action against Starbucks, Fiat, Engie, Amazon and others. If she loses the battle that could have implications for other nations, including the UK, when it comes what taxes global companies pay in tax.

Why does Apple claim is doesn’t owe the tax?

Apple’s lawyer claimed “the Commission contends that essentially all of Apple’s profits from all of its sales outside the Americas must be attributed to two branches in Ireland”, adding the fact the iPhone, the iPad, the App Store, other Apple products and services and key intellectual property rights were developed in the United States, and not in Ireland, showed the flaws in the Commission’s case.

Why is Ms Vestager claiming Apple does owe the tax?

She claims the tech giant benefited from illegal state aid due to two Irish tax rulings which artificially reduced its tax burden for over two decades.  Commission lawyer Richard Lyal said Apple’s argument that all its intellectual property-related activities take place in the United States was inconsequential.

“To a large extent that is perfectly correct and perfectly irrelevant,” he said, adding that Ireland was taxing Apple’s Irish subsidiaries, not the group nor Apple,” said Lyal adding  Ireland had failed to examine the functions performed by Apple’s Irish units, the risks assumed and the assets used by the subsidiaries.

Read More:

Apple bets big on photography to revitalise iPhone sales

He said: “They simply accepted an arbitrary method proposed by the Apple Ireland subsidiaries. That in itself gives rise to a presumption of a special deal, exceptionally advantageous treatment. It is clear that the tax authorities made no assessment in 1991.”

Paying an average global tax rate of 26 per cent, Apple claims to be the largest taxpayer worldwide and is now paying around €20bn in US taxes on the same profits that the Commission said should have been taxed in Ireland.

What does the Irish Government say?

Ireland said it had been the subject of entirely unjustified criticism and that the Apple tax case was due to a mismatch between the Irish and US tax systems.

“The Commission’s decision is fundamentally flawed,” its lawyer Paul Gallagher told the court.

How long before we get a result in this case?

Don’t hold your breath. The court is expected to rule in the coming months, with the losing party likely to appeal to the EU Court of Justice, meaning a final judgment could take several years.

More Business

The post Why Apple is fighting a €13bn tax bill in Ireland and how it could affect other nations appeared first on

Read More

Shoppers spent £1.3bn on food over August Bank Holiday in boost for supermarkets

Sainsbury’s was the best-performing of Britain’s biggest supermarkets during the past three months, but the big four lost more ground to discounters Aldi and Lidl.

In the 12 weeks ending 8 September, sales at Sainsbury’s slipped 0.1 per cent, its best performance since October 2018. Fellow members of the big four saw bigger declines, with Tesco down 1 per cent, Asda down 1.4 per cent and Morrisons sliding 2 per cent.

Overall the grocery market returned to growth, growing 0.5 per cent according to Kantar Worldpanel data.

Sunshine over the August Bank Holiday provided a welcome boost for food retailers, with shoppers spending £1.3 billion over the weekend.

Threat from the challengers

Aldi is opening more stores in London (Photo: Ralph Orlowski/Getty Images)
Aldi is opening more stores in London (Photo: Ralph Orlowski/Getty)

Lidl surpassed 6 per cent market share for the first time, having attracted an additional 618,000 shoppers since last year.

Aldi’s sales rose 6.3 per cent, with especially strong sales growth in the South of England.  

Earlier this week the supermarket doubled down on its plans to expand in London, where it has a relatively small share of 3.3 per cent.

As Britain approaches the deadline for its departure from the European Union, Kantar said there was little sign of any stockpiling activity with households purchasing 0.9 per cent fewer items in the past 12 weeks than they did last year.

Ocado revs up

Ocado is forming a new joint venture with M&S, but is still currently selling Waitrose products (Photo: Ocado)
Ocado is forming a new joint venture with M&S, but is still currently selling Waitrose products (Photo: Ocado)

Ocado continued to be the fastest-growing retailer, with sales up 12.7 per cent driven by ice cream, cheese and sparkling wine.

The figures came on the same day that the online grocer released trading update for its retail business, which showed revenue was up 11.4 per cent to £386.3 million in the 13 weeks to 1 September.

It is the first update since the company finalised its joint venture with Marks & Spencer, but in current trading it is still selling Waitrose goods under a partnership which is due to end in September.

Graham Spooner, investment research analyst at The Share Centre, said:This first set of results show what the group’s chief executive has described as ‘resilience’; but time will show the true resilience of the group with what could be an uncertain period ahead; Waitrose customers may leave when the M&S deal starts and the precise level of profitability from the new retailer agreements is uncertain”.

Waitrose recently said it would run its online operations itself following the Ocado split after ditching a replacement partnership with Today Development Partners.

Kantar’s figures showed the supermarket’s sales had declined by 1.3 per cent, taking its market share to 5 per cent.

More Business

The post Shoppers spent £1.3bn on food over August Bank Holiday in boost for supermarkets appeared first on

Read More

PizzaExpress named UK’s favourite casual restaurant brand in poll, but times are still tough

PizzaExpress has been named the UK’s number one casual dining brand in a recent YouGov poll.

Despite the rise of Neapolitan brands such as Franco Manca and Pizza Pilgrims, PizzaExpress remains the most recognisable, and, apparently, the most popular on the high street.

The chain, which has sold Roman-style pizzas to British diners since 1965 and has almost 500 branches in the UK, is clearly pleased to have been voted number one in the ranking.

Marketing director Amanda Royston said: “We’re thrilled to be the number one casual dining brand to represent the restaurant industry within YouGov’s recent announcement.

Still popular

Sales rose at PizzaExpress in the first half of 2019, but earnings took a hit due to economic pressures
Sales rose at PizzaExpress in the first half of 2019, but earnings took a hit due to economic pressures (Photo: Jack Taylor/Getty)

“We’ve been providing ‘good times, together’ across our UK pizzerias for just under 54-year’s and so it’s fantastic to receive this independent recognition.”

The company was given top billing in the polling group’s recent “Brand Health Rankings in the Fast Food and Pubs” category. Included in the report were 1,500 brands, with other mid-tier restaurants such as Wagamama and Nando’s also listed.

PizzaExpress has been a little canny with its self-congratulation. In fact, when considering every food retailer, it was placed second, behind Greggs. But Greggs is a bakery, not a casual restaurant, so there’s also nothing false with the announcement.

Financial pressures

PizzaExpress might need all the accolades it can get at the moment. While its financial team have said to i more than once its financial position remains stable, there’s no doubt it’s been hit by the quandaries of the dining sector.

In June, the pizzeria said its £55.8m loss for 2018 was 40 per cent bigger than the £31.6m loss it suffered the year before. The full-year figure emerged despite the company reporting a rise in sales and turnover at the end of April.

Net debt stood at £607.7m at the end of 2018, or at £1.12bn if a loan from its parent company, the private equity investor Hony Capital, was included.

The company’s latest strategy to combat a volatile market is the launch of ZA, its new cafe, pizza-by-the-slice concept. A number of sites are planned for London in the coming months.

Instead of a sitdown meal, ZA will provide slices on the go and piadine Roman flatbread sandwiches throughout the day – catering to a market closer to that of Pret a Manger than Pizza Express.

While PizzaExpress is confident that it is weathering the high street downturn, some of its rivals haven’t had the same luck: Jamie Oliver’s restaurant chain went bust in May, with around 1,000 redundancies.

More food and drink

The post PizzaExpress named UK’s favourite casual restaurant brand in poll, but times are still tough appeared first on

Read More

WeWork shelves multi-billion dollar listing as investors get the jitters

Flexible office group WeWork has shelved its plans for a multi-billion dollar listing on the New York Stock Exchange after a cool reaction to investors for its plans.

The hotly anticipated initial public offering (IPO) could be delayed until the end of this year.

We Company, the parent company of WeWork, was due to begin its investor roadshow this week, with the flotation expected to launch later this month. However, the group’s attempt to raise between $3bn and $4bn from investors failed, with potential backers voicing concern over the power founder Adam Neumann would still hold over the listed company and its increasing losses scared investors away.

The anticipated valuation of the group had already been slashed to between $15bn and $20bn, far below the $47bn valuation given to WeWork when SoftBank invested $2bn in the business earlier this year.

Founder’s tight grip on power

In an attempt to shore up investor interest, the We Company agreed to governance changes that reduced Neumann’s control, which included the power to choose his own successor. However, investors said the governance tweaks did not go far enough and that their primary concerns were over WeWork’s fundamental business model of releasing properties owned by other landlords.

While WeWork has doubled its revenue every year since 2016 as a result of its aggressive expansion, it has made losses of more than $4bn.

More from Business

The post WeWork shelves multi-billion dollar listing as investors get the jitters appeared first on

Read More

Plumber James Anderson fixes pipes and boilers for vulnerable customers free of charge

Can he fix it? Yes he can. But Mr Anderson is a plumber with a difference: he fixes pipes and boilers for vulnerable customers free of charge.

That really is special. 

Mr Anderson, 52, a father-of-six from Burnley shut down his private firm and launched his not-for-profit company Depher after seeing an elderly man poorly treated by another engineer.

The company works across Lancashire and has been offering free or lower-cost plumbing to those in need since 2017.

How did this good news story get out?

His acts of kindness went viral after a picture of his bill for £0 sent to a 91-year-old woman with acute leukemia was posted online.

The receipt for the boiler repair was accompanied by a note reading: “No charge for this lady under any circumstances. We will be available 24 hours to help her and keep her as comfortable as possible.”

Speaking about the positive public reaction, Mr Anderson told the PA news agency: “We didn’t expect it. It’s been everywhere.”

How does he fund Depher?

He works hard to raise funds using crowdfunding and donations, however his switch to not-for-profit work has seen him accrue debts of around £8000. He insists the shortfall is under control. He also some paid work to survive. “A lot of people close to me ask: why are you getting yourself in to debt? Why are you doing this?

“To me, debt is debt… I would rather owe some money to somebody and another person be alive and happy and safe. It’s an ethos that’s in my heart and it will always stay there.”

If only more people were like him.

True. But failing that, Mr Anderson, who is originally from Liverpool, is hoping to roll out the service across the country. “I’ve spoken to quite a few engineers around the country and they’re all for it… it’s just getting the funding,” he said.

He sounds determined.

He is.”I don’t want any person who is elderly and disabled in this country, in this day and age, to die or suffer because of a cold home or a lack of funding to repair the boiler,” he said.

“It shouldn’t be happening – that number should be down to zero. Simple as that.”

More People

The post Plumber James Anderson fixes pipes and boilers for vulnerable customers free of charge appeared first on

Read More

Eddie Stobart announces review into performance as profits plunge below expectations

The troubled transport business Eddie Stobart Logistics has warned annual profits will be “significantly below” expectations after a poor first half of the year.

The distributor said that “adverse performance” combined with an ambitious budget, as well as delays on a major project, cut into the company’s earnings. On the back of the profit warning, Eddie Stobart said its leadership team has started a review into its operations and financial performance.

The group expects revenue for the six months to the end of May to be around £450m and underlying earnings to be between £10m to £11m for period. It said the second half of the year was expected to be stronger than the first, but that the board continues to expect the underlying earning for 2019 to be significantly below the board’s expectations.

The trucking firm made the announcement in a delayed update, after it admitted a £2m accounting error that led to its shares being suspended at 70p last month. It said its shares remain suspended.

Takeover rumours

Last week, the company also confirmed it is being lined up for a possible takeover, following an expression of interest from DBAY Advisors. DBAY, which owns 10 per cent of the firm, has put forward an “expression of interest” to take full control and the possible suitors now have until 7 October to table a bid or walk away.

In today’s update, the company said its management team is prioritising cash generation and has already taken action to “improve cash collection”.

Read More:

Fruit shortages will hit UK if no-deal Brexit goes ahead, warns Sainsbury’s boss

In a statement to the London Stock Exchange, the company said: “The group’s senior management team has commenced a review of the group’s operations with a view to improving operating margins and its overall financial performance.

“The management team is focused on continuing to deliver excellent customer service and commitment, whilst simultaneously prioritising cash generation within the business. Actions to strengthen internal processes are under way and steps to improve cash collection have been taken.”

Eddie Stobart said the fall in earnings is weighing down on its balance sheet, meaning it is relying more on its available debt facilities. The warning by the firm is also another frustration for embattled fund manager Neil Woodford, whose fund owns 23 per cent of the business.

More Business

The post Eddie Stobart announces review into performance as profits plunge below expectations appeared first on

Read More

Angling Direct results: why fishing is big business during Brexit uncertainty

Fishing retailers are increasingly big business. Norfolk-based firm Angling Direct, for example, has just reported a 13.3 per cent rise in in-store sales over the summer. Overall the three-month period was up 31 per cent on last year.

In January, Go Outdoors also got in on the action, buying Angling Direct’s rival Fishing Republic.

Why the rapid growth?

Hobbies often experience a spike in popularity during times of economic uncertainty and it’s no different for anglers who are still splashing out on their favourite pastime. Meanwhile social media has boosted the sport among young enthusiasts who post their catch on Instagram, and in June the Environment Agency launched a new strategy to encourage a broader range of people to take up fishing.

What’s driving people to the stores?

Angling Direct boss Darren Bailey has attributed his group’s success to the ability of shop-floor staff to offer expert advice in a specialist field. Fishing stores also tend to be out of town, close to prime angling spots, making it easy for customers to pop in.

But what about online shopping?

As well as improving stores, fishing shops are carving out space on the internet. Angling Direct reported a 26.7 per cent jump in its online sales over the summer months, with a 40 per cent rise in August alone.

How big are these businesses?

Until recently, fishing supplies were a very fractured industry made up of mostly independent stores. But as owners retire, chains are snapping up more sites.

Angling Direct is the largest and has just opened its 30th UK store in Milton Keynes, with more to come according to Mr Bailey.

“As we seek to cater for all anglers across the UK with a new and modern retail offering, we are continuing to strategically expand our store footprint, as well as enhance our online offering in terms of products, experience and education in order to help raise the profile of angling,” he said.

More Business

The post Angling Direct results: why fishing is big business during Brexit uncertainty appeared first on

Read More

Aldi is opening more stores in UK cities — but its profits have taken a hit after investment plans

Aldi’s UK profits slumped last year after the German discounter pushed ahead with its aggressive expansion plans.

Pre-tax profits for the UK and Ireland were down 18 per cent in 2018, despite an 11 per cent uplift in sales to £11.3bn.

Profitability was impacted by a series of investments, primarily the grocer’s ambition to have 1,200 stores in the UK by the end of 2025.

Last year its efforts racked up a bill of £531m for new openings, upgrades and additional distribution centres. Another £1bn is pencilled in for the continuing rollout over the next two years.

Smaller stores

The plans include a new “local” store format designed to be half the size of a typical Aldi store, which will allow it to expand in more densely populated areas including London.

The number of Aldi branches inside the M25 is expected to increase from 45 to 100 as part of the overall expansion plan, with branches in Sydenham, Blackheath and Watford opening soon.

Read More:

Aldi to introduce compostable or paper bags across all stores

Chief executive Giles Hurley said:  “London shoppers regularly tell us they would switch to Aldi if there was one nearby, so there is clearly a significant growth opportunity for us in the capital.”

The chain has also invested £300m into widening the range of fresh, chilled and food-to-go options available in-store.

All the additional spending undercut margins, which fell from 2.6 per cent to 1.75 per cent, the lowest level since 2010.

Continued growth

But Mr Hurley insisted that the ambitious plans would help it to reach more shoppers.

“Today, more than half of Britain’s households shop with Aldi,” he said. “Now we’ll be bringing our winning combination of outstanding quality at the lowest prices to millions more households in the South East as well as the rest of the UK.”

It marks another step in Aldi’s charge against the so-called big four supermarkets: Asda, Morrisons, Sainsbury’s and Tesco.

Along with fellow discounter Lidl, it has been gaining on the top players for years, with the latest figures from Kantar showing that both are still increasing their slices of the market.

More Business

The post Aldi is opening more stores in UK cities — but its profits have taken a hit after investment plans appeared first on

Read More

Petrol prices: British motorists face higher costs after drone attacks cripple Saudi production

Motorists are set to be punished at the pumps in the coming weeks as the fallout from the drone attacks on two oil plants in Saudi Arabia look likely to lead to a rise in fuel prices.

The two drone strikes took 5 per cent of the global crude supply off the market, and led to oil prices experiencing their sharpest single-day rise in history.

Ten drones attacked an oil processing facility at Abqaiq and the nearby Khurais oil field on Saturday, causing a loss of 5.7 million barrels of crude production a day or 50 per cent of the kingdom’s oil output. 

While there is no official assessment of how long the attacks will disrupt production for, sources have told news agency Reuters that it could take months for the plants to return to normal levels of production.

Some experts have predicted the attacks could lead to the oil price hitting $100 (£80) per barrel if the company cannot return to full production quickly.

“This is a big deal,” said Andrew Lipow, president of Lipow Oil Associates, adding this could translate to pump prices rising 5p per litre in the coming weeks.

Petrol station owners buy fuel weeks in advance, so any price rises are unlikely to have an immediate impact, but if the damage does take months to repair motorists are expected to see sharp price rises in the coming weeks.

Trump blames Iran

Satellite image shows thick black smoke rising from Saudi Aramco's Abqaiq oil processing facility in Buqyaq, (Source: Planet Labs Inc via AP)
Satellite image shows thick black smoke rising from Saudi Aramco’s Abqaiq oil processing facility in Buqyaq, (Source: Planet Labs Inc via AP)

Immediately after the attacks, the Brent crude price per barrel rocketed 20 per cent, but later fell after US President Trump said the US would release some of its reserves to ease supply.

Mr Trump has blamed Iran for the attacks, and Yeman’s Iran-backed Houthi rebels, who have been engaged in a long running conflict with the Saudi-backed Yemeni government, have claimed responsibility.

“If Abqaiq kills talks of easing sanctions [in Yeman] and the discussion turns to retaliation and escalation, I think oil could easily trade higher by $10 or more,” said Bob McNally, president at Rapidan Energy Group.”

Foreign Secretary Dominic Raab has called the attacks “despicable”,  but was cautious about whether the UK could take part in any military response.

He told Sky News: “The attack on the Aramco installations was a wanton violation of international law. It’s despicable. We stand firmly in support of our Saudi partners and the other international players and countries in the region.

Raab says it was “not entirely clear who is responsible”, but he hopes to get a “very clear picture” shortly.

Global economic downturn

There have also been warnings that the attacks could spark a global economic downturn.

Foreign Secretary Dominic Raab
Foreign Secretary Dominic Raab (Photo by Chris J Ratcliffe/Getty Images)

Ranko Berich, head of market analysis at Monex Europe, said: “The weekend’s attacks in Saudi Arabia will have two consequences for financial markets and the global economy: the immediate oil price shock, which has already hit, and the longer-term costs of increased tensions or even a possible outbreak of conflict in the Persian Gulf.

“The size of the initial shock to oil prices was immense. Spot prices have surged by amounts unprecedented since the 1990 Iraq invasion of Kuwait, while Brent crude oil futures recorded their largest intraday surge since trading began in 1988, although since then the initial knee jerk surge has been pared back.”

Craig Erlam, senior market analyst at trading firm OANDA, added: “The attack was as severe as it was unexpected but that’s not the worst thing about it. Saudi Arabia believes a significant proportion of the outages can be back online in a few days while Trump also approved release of supplies from the Strategic Petroleum Reserve to ensure the market remains well surprised.

“None of this should make us feel relaxed about the potential for further attacks though and the longer-term implications on the oil market. Spikes in oil prices when the global economy is already flirting with the idea of recession is not ideal and, if repeated and sustained, could ultimately be what tips us over the edge.”

The attacks also hit shares on the London Stock Exchange this morning. The FTSE 100 was down 21 points at 7,346 in early trading, even though the shares in oil companies BP and Shell are up more than 3 per cent. Among the fallers were companies dependent on oil such as British Airways-owner IAG and cruise operator Carnival.


The post Petrol prices: British motorists face higher costs after drone attacks cripple Saudi production appeared first on

Read More

Saudi drone strike: Oil prices see biggest surge since 1991 after attack takes out 5% of world’s supply

Oil prices have surged in the wake of a drone attack on Saudi Arabia that halted the output of more than half of the kingdom’s daily exports and cut five per cent of global supplies.

On Monday, oil prices surged by nearly 20 per cent, with Brent crude, the international benchmark used by oil traders, rising to almost $12 as trading started, Bloomberg reported.

The two attacks on Saudia Araba’s Aramco facility is the single worst sudden disruption to happen to the oil markets, highlighting the country’s vulnerability as the world’s main exporter, while the intraday jump was the biggest since the 1991 Iraqi invasion of Kuwait that prompted the Gulf War.

Prices eased after President Trump announced that he would release US emergency supplies, and producers around the globe said there were enough stocks stored up to make up for any shortfalls from the loss of 5.7 million barrels of crude processing capacity a day.

‘Locked and loaded’

Image shows the damage to the infrastructure at Saudi Aramco’s Abaqaiq oil processing facility in Buqyaq, Saudi Arabia (Photo: PA Wires)

It remains unclear how King Salman and his assertive son, Crown Prince Mohammed bin Salman, will respond to the attack on the Abqaiq plant and the Khurais oil – the heart of the Saudi oil industry.

President Donald Trump said the US is “locked and loaded” to respond to the drone attack, adding that he is waiting to hear from the Saudis as to who they believe was behind it and “under what terms we would proceed!”.

Mr Trump’s tweets followed a National Security Council meeting at the White House that included Vice President Mike Pence, Secretary of State Mike Pompeo and Defense Secretary Mark Esper.

A US official speaking on condition of anonymity said all options, including a military response, were on the table, but added that no decisions had been made.

Washington has also released new evidence to back up its allegation that Iran was responsible for the assault amid heightened tensions over Tehran’s collapsing nuclear deal.

Hours earlier, senior US officials said satellite imagery and other intelligence showed the strike was inconsistent with one launched from Yemen, where Iranian-backed Houthi rebels had claimed responsibility.

Officials said the photos show impacts consistent with the attack coming from the direction of Iran or Iraq, rather than from Yemen to the south.


Saudi Arabia raced to restart operations at oil plants hit by drone attacks which slashed its production by half, as Iran dismissed US claims it was behind the assault (Photo: Getty)

Iran, meanwhile, called Washington’s claims “maximum lies,” while a commander in its paramilitary Revolutionary Guard reiterated its forces could strike US military bases across the Middle East with their arsenal of ballistic missiles.

While Iran has denied blame for the attacks, its Yemeni allies have promised more strikes to come. Houthi military spokesman Yahya Sarea said the group carried out Saturday’s pre-dawn attack with drones, including some powered by jet engines.

“We assure the Saudi regime that our long arm can reach any place we choose and at the time of our choosing,” Sarea tweeted. “We warn companies and foreigners against being near the plants that we struck because they are still in our sights and could be hit at any moment.”

Two sources briefed on the operations of state oil company Saudi Aramco told Reuters it may take months for Saudi oil production to return to normal. Earlier estimates had suggested it could take weeks.

Earlier, Mr Trump said he had approved the release of US strategic petroleum reserves “if needed” to stabilise energy markets after the attack on Saudi Arabian facilities.

The US president tweeted that the attacks could have an impact on oil prices and the final amount of the release, if any, would be “sufficient to keep the markets well-supplied”.

The federally owned petroleum reserve of hundreds of millions of barrels of crude oil has only been tapped three times, most recently in 2011 amid unrest in Libya.

Additional reporting by agencies

More on Saudi Arabia:

The post Saudi drone strike: Oil prices see biggest surge since 1991 after attack takes out 5% of world’s supply appeared first on

Read More

Thomas Cook races to secure £1.1bn rescue deal

Thomas Cook is expected to request a delay on Monday to a bondholder meeting to approve its takeover by Chinese firm Fosun, as it scrambles to secure the £1.1bn rescue package which will keep it afloat.

The meeting was scheduled for Wednesday, but reports over the weekend suggested the travel firm was seeking an extension in order to give it more time to negotiate.

“We announced on 28 August we have reached substantial agreement with Fosun and our creditors regarding key commercial terms of the recapitalisation of Thomas Cook.

“We remain focused on completing the transaction,” the travel firm said in a statement. The aviation watchdog, the Civil Aviation Authority refused to comment directly on Thomas Cook.

“We are in regular contact with all large Atol holders and constantly monitor company performance. We do not comment on the financial situation of the individual businesses we regulate,” it said in a statement.

Takeover approach

The travel firm revealed in June it had received a takeover approach for its tour business from its largest shareholder Fosun. Last month, it said the deal had been agreed.

The Sunday Times reported Thomas Cook has lined up the insolvency experts from AlixPartners to be on standby should rescue talks fail.

The ailing company is seeking to cement a rescue bid
The ailing company is seeking to cement a rescue bid (Photo: REUTERS/Paul Hanna/File Photo)

The Fosun offer came amid fears over Thomas Cook’s financial strength. It has blamed a series of problems for its profit warnings, including political unrest in holiday destinations such as Turkey, last summer’s prolonged heatwave and customers delaying booking holidays due to Brexit.

But it has also suffered from competition from online travel agents and low-cost airlines.

Store closures

In March, the ailing company announced it would close 21 high street stores, effectively cutting 320 jobs.

Read more:

Thomas Cook says summer heatwave and Brexit contributed to a £1.5bn loss

The move was part of plans to “streamline” its UK retail network in an efficiency programme, says the travel giant.

The firm’s shares were hammered at the end of last year following its third profit warning of 2018 and stinging full-year losses.

More Business

The post Thomas Cook races to secure £1.1bn rescue deal appeared first on

Read More

Why women on boards are good for business

Evidence is growing that having women on a company’s board can make the business more successful, with the latest figures indicating that those with mixed leadership teams are less likely to go bust.

But what is behind the trend and should business leaders be paying attention?

What do the figures say?

Data from more than a million small or medium sized companies analysed by insolvency practitioners KSA Group indicated that those with a mix of both men and women on their boards were the least likely to fail.

In fact, the insolvency rate is 49% higher for firms only male directors than mixed boards.

But balance appears to be key, with all-female boards also experiencing a higher rate of failure than mixed leadership teams.

Is it important?

KSA’s findings are the latest piece of evidence suggesting there are business benefits to having female directors.

Research released by Morgan Stanley earlier this year suggested that firms with more gender-equal boards have outperformed their peers by an average of 2.8 per cent every year for almost a decade. 

Robert Moore, marketing manager for KSA Group, said: “Whilst it is not possible to prove that women are better at running businesses than men, the body of evidence is growing that companies which have women on the board do reap benefits in terms of increased profitability and less corporate failures.”

What are the possible reasons?

Despite the new data, the reasons behind the correlation are still unclear.

KSA Group said it was possible the findings reflect that some industries which typically have more male-dominated boards – such as construction – also have higher insolvency rates.

But this is not the case for all higher-risk sectors, with mixed boards more common in the administration and services sector, which also has a high insolvency rate.

Over the weekend, an article published in the Harvard Business Review suggested an alternative explanation: the presence of women on boards tempers overconfidence in male CEOs, leading to overall better decision-making.

Research in the area is also hampered by the fact that female-only boards are much rarer than male-only or mixed leadership teams, making it more difficult to fully analyse the trend.

More from business

The post Why women on boards are good for business appeared first on

Read More

Fruit shortages will hit UK if no-deal Brexit goes ahead, warns Sainsbury’s boss

Oranges, lemons and other favourites could be hit by shortages if the UK goes ahead with a no-deal Brexit, after Sainsbury’s warned that supplies of fruit from southern Europe will be disrupted by a chaotic exit.

Chief executive Mike Coupe said it would be impossible to fully mitigate the impact of a sudden departure on 31 October, as fears that hold-ups at the border would leave products from the likes of Spain and Italy to rot. The timing of the current Brexit deadline means British alternatives to off-season products such as strawberries will be less readily available.

Speaking to Sky News, Mr Coupe said: “It’s the time we move from the UK growing season into the growing season in Southern Europe. And of course in the run-up to Christmas, […] October 31st isn’t particularly helpful because our distribution centres are already creaking at the seams.

“So whilst there are lots of things that we can do and will do to mitigate the potential impacts, there are a lot of things that we don’t know about and there will be knock-on effects.”

Chief executive Mike Coupe said it would be impossible to fully mitigate the impact of a sudden departure on 31 October
Chief executive Mike Coupe said it would be impossible to fully mitigate the impact of a sudden departure on 31 October (Photo: REUTERS/Peter Nicholls)

No-deal Brexit warning

Supermarket bosses have repeatedly warned that leaving the EU without a deal will create problems for their “just-in-time” supply chains since the referendum, but the issue has come to the fore this week with the publication of the government’s Yellowhammer document, which details the risks of a no-deal scenario.

Potential problems include shortages of key ingredients and price rises on some food items, which would likely hit low-income groups hardest.

Mr Coupe said the two-day long queues at the English border mentioned in the document would affect much of the grocer’s fresh food, which usually only has a shelf life of a couple of days.

Mr Coupe’s warnings also echo those made earlier this week by John Lewis Partnership chairman Sir Charlie Mayfield, who said it would not be possible to counter all the ramifications of a no-deal Brexit.

More Business

The post Fruit shortages will hit UK if no-deal Brexit goes ahead, warns Sainsbury’s boss appeared first on

Read More

Ovo buys SSE retail business to create home energy giant

Big Six energy provider SSE has agreed to sell its household supply arm to smaller rival Ovo Group in a £500m deal.

Ovo’s offer to take over SSE’s energy services business comprises of £400m in cash and £100m in loan notes and is expected to complete later this year or early next year. It will turn Ovo into the UK’s second largest domestic energy suppliers after British Gas, having been founded just 10 years ago.

SSE is the third largest supplier in the UK energy market, with around 3.5m household customers and 8,000 staff. Independent provider Ovo has around 1.5m customers and about 2,000 employees.

The deal comes after SSE was forced to scrap its merger with Big Six rival npower last December after the Government’s energy price cap sent shockwaves through the industry.

Energy price cap

Gas and electricity suppliers have come under intense pressure in the UK following this year’s introduction of the cap on standard variable tariffs, as well as increasing competition from a swathe of smaller players.

In May, SSE announced plans to offload its energy services segment after more than half a million households switched to a new supplier in the year ending March 2019. The Big Six company vowed to sell or float its energy services arm by the second half of 2020.

Stephen Fitzpatrick, founder and chief executive of Ovo, hailed the deal as a “significant moment for the energy industry”.

He said: “For the past three years Ovo has been investing heavily in scalable operating platforms, smart data capabilities and connected home services, ensuring we’re well positioned to grow and take advantage of new opportunities in a changing market. SSE and OVO are a great fit. They share our values on sustainability and serving customers. They’ve built an excellent team that I’m really looking forward to working with.”

Alistair Phillips-Davies, chief executive of SSE, said: “We have long believed that a dedicated, focused and independent retailer will ultimately best serve customers, employees and other stakeholders – and this is an excellent opportunity to make that happen. Ovo shares our relentless focus on customer service and has a bold vision for how technology can reshape the future of the industry.

“I’m confident that this is the best outcome for the SSE Energy Services business.”

SSE added that, should the deal with Ovo go through, it will do “all it can to ensure a smooth transition for customers and employees”.

Ovo will also retain the SSE brand under licence for a period and will ensure a phased and “carefully-managed” transfer.

Tough year for SSE

But it comes after a difficult 12 months for SSE, which admitted on reporting its annual results recently that its wider business “fell well short” of its hopes in 2018-19 and warned that 2019-20 earnings would also be hit. The group’s annual underlying pre-tax profits fell 38 per cent to £725.7m.

The figures came on the back of a tough year for SSE following the collapse of its npower merger. It was also fined £700,000 by industry watchdog Ofgem in April for missing last year’s target to install gas smart meters for customers.


The post Ovo buys SSE retail business to create home energy giant appeared first on

Read More

Government moves closer to blocking Hong Kong £32bn bid for LSE as Chancellor takes control

The Government’s intervention in the £32bn takeover bid for the London Stock Exchange (LSE) from its Hong Kong rival looked increasingly likely as the Chancellor Sajid Javid took control of the decision on whether or not to block the deal from Business Secretary Andrea Leadsom.

In the unusual move, Mr Javid will now rule if the Government will block the deal, a decision that would usually lie with Ms Leadsom’s Department for Business, Energy and Industrial Strategy (BEIS). It is understood Mr Javid is considering a public interest intervention to scupper the deal on the grounds of both national security and ensuring the stability of the UK financial system.

On Wednesday Hong Kong Exchanges and Clearing (HKEX) speculatively offered to pay around £83.61 per share, valuing LSE at around £29.6bn excluding its debt. Any deal was already dependent on the LSE abandoning its plans to complete a $27bn (£21.9bn) deal to buy data provider Refinitiv, which was agreed last month, and is now also reliant on the approval of the Government, which confirmed its concern over the deal.

A government spokesperson said: “The London Stock Exchange is a critically important part of the UK financial system, so as you would expect, the Government and the regulators will be looking at the details  closely.”

Mr Javid will now rule if the Government will block the deal, a decision that would usually lie with Ms Leadsom’s Department for Business, Energy and Industrial Strategy
Mr Javid will now rule if the Government will block the deal, a decision that would usually lie with Ms Leadsom’s Department for Business, Energy and Industrial Strategy

Public interest

Under the Enterprise Act 2002, in certain circumstances, the Government has the power to intervene in mergers on specified public interest grounds.

The decision on whether to intervene is quasi-judicial in nature, and the relevant Secretary of State, normally the business secretary, makes the decision except in media or telecoms mergers, where the culture secretary is handed control over any review.

A spokeswoman for BEIS said that because this deal involved the LSE the decision whether or not to block it had been handed to the Chancellor.

The last-gasp offer from HKEX could also spark a bidding war for the exchange if other suitors offer a more generous price. HKEX’s offer represents a 23 per cent premium on LSE’s closing share price on Tuesday. It comes after a long line of other exchanges’ failed deals to buy the LSE.

Chinese firms have made 15 large acquisitions in the UK this year, spending £6.75bn. Analysts point to the decline in the pound for making UK firms attractive to overseas buyers.

More Business

The post Government moves closer to blocking Hong Kong £32bn bid for LSE as Chancellor takes control appeared first on

Read More

European Central Bank launches financial stimulus to boost economies amid US-China trade conflict and Brexit uncertainty

The European Central Bank (ECB) has launched a new round of monetary stimulus to support economic growth in the face of uncertainties such as the US-China trade conflict and Brexit.

The central bank for the 19 Eurozone countries said it would cut the rate on deposits – a penalty rate that pushes banks to lend excess cash – from minus 0.5 per cent to minus 0.4 per cent in its latest quantitative easing efforts. It also said it would purchase €20bn (£17.7bn) a month in government and corporate bonds for as long as necessary. The purchases pump newly created money into the financial system to lower borrowing costs and raise inflation.

The bank also extended a promise to keep rates at record lows for as long as necessary and held interest rates at zero. Eurozone inflation remains well below its 2 per cent  target.

Marchel Alexandrovich, senior European economist at Jefferies, said: “What the monetary policy decision statement does not mention is how generous the tiering system is, the precise mix of assets the new QE programme will contain, and whether the ECB raised the issuer limit on its sovereign bond purchases.”

Germany set to fall into recession

Meanwhile, the Eurozone’s largest economy is expected to fall into recession in the third quarter. According to the Munich-based Institute for Economic Research (IFO), the German economy is set to shrink by 0.1 per cent in the third quarter, which would amount to a recession after a similar contraction in the April to June period.

“The outlook is weighed down by high uncertainties,” said IFO’s Timo Wollmershauser, pointing to possible risks to the economy from a no-deal Brexit and an escalation of US President Donald Trump’s trade wars.

More Business

The post European Central Bank launches financial stimulus to boost economies amid US-China trade conflict and Brexit uncertainty appeared first on

Read More

John Lewis swings to loss as it warns of Brexit uncertainty

The John Lewis Partnership has warned over the “unprecedented” levels of uncertainty caused by Brexit, as it posted its first ever half-year loss.

The business, which also owns Waitrose, said it “will not be possible” to mitigate the effects of leaving the European Union without a deal.

Sir Charlie Mayfield, the partnership’s outgoing chairman, said: “In readiness, we have ensured our financial resilience and taken steps to increase our foreign currency hedging, to build stock where that is sensible, and to improve customs readiness.

“However, Brexit continues to weigh on consumer sentiment at a crucial time for the sector as we enter the peak trading period.”

Retailer hopes for strong end to the year

His stark warning came as the retailer said it had swung to a pre-tax loss of £25.9m for the half-year period ending 27 July, compared to a small profit of £800,000 last year.

The John Lewis department stores were particularly hard-hit, with like-for-like sales down 2.3% in the period while underlying operating losses reached £61.8m.

Waitrose fared better, reporting an increase in operating profits before exceptional items, though this was mostly due to property profits. Sales in the supermarket were down 0.4% on a like-for-like basis.

The partnership, which historically makes most of its profits in the second half of the year due to the Christmas rush, said it would push ahead with its plans to innovate. But Sir Charlie added that with the outcome of Brexit still “subject to unprecedented levels of uncertainty”, it was not possible to give a full picture of what lies ahead.

“An interim review cannot be expected to predict the unknowable factors or all possible future implications for a company and this is particularly the case in relation to Brexit,” he said.

Waitrose is preparing to handle its own online operations after pulling out of a deal with Ocado rival Today Development Partners. Photo: Matt Cardy/Getty Images
Waitrose is preparing to handle its own online operations after pulling out of a deal with Ocado rival Today Development Partners. Photo: Matt Cardy/Getty Images

New chairman on the way

This year will be Sir Charlie’s last in the chair, with Ofcom chief executive Sharon White due to take over in early 2020.

Alongside Brexit, the group is also dealing with the wider problems on the high street, with the lure of online shopping keeping consumers at home while high rents and costs put pressure on margins.

John Lewis is responding to the problem with a strategy of differentiation, relaunching several of its products and securing more exclusive lines from brands. Its efforts have started to pay off, with own-brand womenswear sales up 5.7% following the relaunch last year.

More options for delivery are also being added, with click & collect set to be extended to 50 Co-op shops by the end of October following a successful initial trial. Customers can also now return any John Lewis products to their Waitrose delivery drivers.

Taking online deliveries in house

Meanwhile, Waitrose is preparing to handle its own online operations as its partnership with Ocado comes to a close due to the online grocer’s new venture with Marks & Spencer.

In May it was announced that Waitrose would work with Today Development Partners (TDP), a rival to Ocado set up by one of its founders and a former Google executive. However, in this morning’s results the group said it had decided not to continue with TDP and would use its own expertise to strengthen its web presence instead.

More John Lewis

The post John Lewis swings to loss as it warns of Brexit uncertainty appeared first on

Read More

Philip Salter: Reviving the Post-Study Work visa is wise, and opens up new opportunities for our economy

Philip Salter is founder of The Entrepreneurs Network.

As Home Secretary and Prime Minister, Theresa May made immigration a big deal. Some of that was driven by public opinion, but paradoxically it felt like the tougher the government claimed to be getting, the more people felt it wasn’t being tackled. Talking heads kept claiming that the problem was that nobody was talking about immigration, but talked of little else.

The referendum result and Windrush scandal changed this. Even before the end of free movement, the claim to ‘take back control’ seems to have eased concerns. Meanwhile, the Windrush scandal stirred in the British public a patriotic and empathetic defence of British subjects. We’ve seen a sea change: in 2011, 64 per cent of Britons told Ipsos-Mori immigration had been bad for the UK, in 2019 this has dropped to 26 per cent. Britain is now one of the most positive countries about immigration – alongside the likes of Australia, the US and Sweden.

May scrapped the Post-Study Work visa as an overreaction to bogus colleges. It’s a shame that her victory in shutting them down morphed into a campaign against international students.

Yesterday’s decision by Boris Johnson to bring back the Post-Study Work visa is not just driven by concerns about popularity. Unlike Cameron and May, Boris has refused to get into the numbers game. And when Mayor of London, he called for the introduction of a ‘London visa’ in a bid to attract talent from around the world.

May’s experience of the Home Office was a deviation from the trend towards growing openness and a global battle for talent. As Stian Westlake argues, it went on to dominate her premiership and her economic thinking: ‘I’d argue that the main reason for the demise of Tory economic thinking is cultural and institutional. To be precise, it comes from the culture of one institution, the Home Office. The PM and many of her closest advisers spent many years working for the Home Office and are steeped in its particular culture and world-view.’

The Prime Minister’s brother deserves credit for this policy. Jo Johnson pushed hard for the return of the Post-Study Work visa for a while, working with Labour’s Paul Blomfield and others across the aisle. This will be a huge relief for our universities. Post-Brexit we will need to play to our exporting strengths, and the university sector will be critical in supporting the ambitions of of a global Britain.

The option to stay on to gain work experience is a significant pull factor for the best and brightest. It also gives those who want to stay after the two years the time to make the connections to meet the criteria to stay.

This is also good for entrepreneurship. When we surveyed international students in 2015, we found that 42 per cent intended to start up their own business following graduation. Immigrants are more entrepreneurial than the native population, but they need time to build networks before making the leap.

In the US, more than half of all foreign-born founders of high-growth technology and engineering companies moved to the US initially to study. In many cases, they needed time to settle down, build contacts, and identify an opportunity for disruption. We recently revealed that 49 per cent of the UK’s fastest-growing startups have at least one foreign-born founder, despite 14 per cent of UK residents being foreign-born. As in the US, many of the entrepreneurs came to the UK to study, stayed to work, and serendipitously ended up starting a business.

Boris has shown leadership in reinstating the Post-Study Work visa. The British public is unperturbed. In fact, they weren’t ever really concerned about students. As Bright Blue showed: “The most popular type of immigrant for Conservatives is an international student: 87 per cent of Conservatives would admit a Chinese student who wants to pay to come and study for three years at a UK university.”

Now he just needs to get a good deal on Brexit.

Read More

Hong Kong exchange bids for London Stock Exchange – what does it mean?

The company behind the Hong Kong stock exchange has made a £32bn bid to buy the London Stock Exchange (LSE), as it attempts to come between the British bourse and its deal with Refinitiv.

Hong Kong Exchanges and Clearing (HKEX) has speculatively offered to pay around £83.61 per share, valuing LSE at around £29.6bn excluding its debt.

But any deal will hinge on LSE abandoning its plans to sign a $27bn (£21.9bn) deal to buy data provider Refinitiv, agreed last month.

Chief executive Charlies Li said that the move was not hostile, and likened the two exchanges to “a corporate Romeo and Juliet”.

‘An open expression of admiration’

Charles Li has served as chief executive of HKEX since 2010 (Photo: Getty)

Mr Li explained: “We were slightly late, we have been admiring them for a long time and we have wanted to do this for a long time and they have now engaged with another person […] it’s difficult for their board.

“This is not a hostile transaction, but an open expression of our admiration for the City of London, for the LSE.”

James Fok, HKEX’s head of group strategy, said that the deal would bring the two exchanges together to allow investors in Hong Kong and in London to access companies listed on both markets. He added: “It’s about connecting the plumbing underlying the two markets. It’s about connecting what Hong Kong is now, the largest custody centre for investors with Chinese assets.”

HKEX said it has had “early engagement” with the LSE and plans to seek a recommendation from its board.

But a statement from the London bourse described HKEX’s bid as “unsolicited, preliminary and highly conditional”.

It added that LSE’s board would consider the proposal and “make a further announcement in due course”, but that it “remains committed to and continues to make good progress” on the proposed deal with Refinitiv.

Refinitiv declined to comment.

‘A non-starter’

The deal comes at a time when economic and political uncertainty has made British companies particularly attractive to foreign investors.

Last month, the UK’s largest chain of of pubs and brewers, Greene King, agreed a £2.7bn sale to Hong Kong conglomerate CKA.

The last-gasp offer could also spark a bidding war for the exchange if other suitors offer a more generous price. HKEX’s offer represents a 23 per cent premium on LSE’s closing share price on Tuesday.

Neil Wilson of said that political and regulatory considerations meant the deal was likely to be a “non-starter”.

“The UK government may not wish to see such a vital symbol of UK financial services strength, and indeed a strategic asset, to be owned by foreigners; effectively it would hand it over to the Chinese through the Hong Kong back door.”

He added that HKEX’s bid “Looks like a last-ditch throw of the dice”.

Business secretary Andrea Leadsom said the government “would have to look very carefully at anything that potentially had security implications” for the UK.

It comes after a long history of other exchanges’ failed deals to buy the LSE, following a mooted £21bn merger with German rival Deustche Borse which was blocked by the European Commission.

More business news

The post Hong Kong exchange bids for London Stock Exchange – what does it mean? appeared first on

Read More

New Look posts narrowing losses in glimmer of hope for high street as restructuring plans kick in

New Look’s losses have narrowed in a glimmer of hope for the high street, as the fashion chain said its recently completed restructuring had put it on solid footing for the future.

The retailer was one of a number of companies to use a Company Voluntary Arrangement (CVA) to cut costs last year, closing 60 stores and cutting almost 1,000 jobs.

Approval for the plans was gained last year and the process was concluded in May this year.

It comes as high street retailers are enduring a tough trading environment, with customer footfalls and spending both falling.

The starting line for growth

New Look has tried to trim down its exposure to the UK’s high streets and change its image (Photo: Getty)

CVAs have not always proved to be a successful method of saving a business – the mechanism was unsuccessfully used by the likes of Toys R Us and BHS prior to their collapses.

But New Look’s latest results for the 13 weeks to June 29 showed that pre-tax losses were just £2.7m in the period, compared to £15.5m this time last year.

Chief Operating Officer Nigel Oddy said the radical shakeup of the business had put it at the “starting line” for growth.

“I am confident the business has the right foundations in place and will continue to strengthen as we attack the future through delivering fantastic product to our customers, building brand equity and grasping new market opportunities,” he said.

Sales in the core business were down 10.1 per cent in the quarter, which the group blamed on “highly unseasonable weather” after a disappointing May and June deterred shoppers from the high street.

Improved performance

Total revenue fell 14 per cent to £258.3m, while underlying earnings also dipped to £25.3m.

However more recent trading data suggests that performance over the summer was improved, with like-for-like sales up 2.2 per cent in the eight weeks to August 24.

Mr Oddy said: “Following a challenging first quarter, we are now starting to see improvements in Q2 reflecting the operational changes we are making as we continue to recover the broad appeal of our product.”

The retailer’s executive chairman Alistair McGeorge said that its improved performance over the past two months was indicative that efforts to turn it around were starting to yield positive results.

“We maintained good control of our stock, cash position and costs. I am pleased our recent trading shows that we have delivered positive sales performance and we have outperformed the market according to the BRC (British Retail Consortium), which underlines our continued confidence,” he said.

The BRC reported that UK retail sales flatlined in August, with like-for-like sales dropping 0.5 per cent and total sales showing no change.

More Business

The post New Look posts narrowing losses in glimmer of hope for high street as restructuring plans kick in appeared first on

Read More

BMW warns a no-deal Brexit would mean Mini production cut in Oxford affecting UK jobs

Car manufacturer BMW has warned a no-deal Brexit would mean a cut in production of the Mini at its factory in Oxford.

The firm’s chief financial officer Nicolas Peter said manufacturing was likely to drop at the Cowley plant, which in turn would affect jobs.

“No-deal would mean that, most likely, [World Trade Organization] tariffs would be imposed from 1 November onwards,” Mr Peter told the BBC. “This would mean that we would most likely have to raise the prices of the products produced in the UK and shipped to other markets [in the EU].

“The increase of price means an impact on the volume you sell, and would eventually lead to a reduction of produced cars in Oxford.”

BMW warns it may cut Mini production in event of a no-deal Brexit
BMW warns it may cut Mini production in event of a no-deal Brexit (Photo: GEOFF CADDICK/AFP/Getty)

Mini makers no deal cut

Prime Minister Boris Johnson has made a “do or die” pledge to deliver Brexit on October 31 with or without a deal. BMW, which also has a Mini plant in The Netherlands, said it had no plans at present to shift production from the UK but would need to reduce output in the wake of a no-deal Brexit. Its Cowley plant will be closed on 31 October and 1 November.

Mr Peter was speaking at the Frankfurt Motor Show, where fellow car manufacturers expressed their own concerns about the prospect of a no-deal Brexit.

The PSA Group, which owns Peugeot, Citroen and Vauxhall, has stopped investment at its Vauxhall factories at Ellesmere Port and Luton during this period of Brexit uncertainty. And the group’s chief executive Carlos Tavares has described the prospect of a no-deal Brexit as an impending train crash.

He told motoring publication Autocar: “We should all say, as citizens of Europe or Britain, that we cannot accept no deal.

“In our industry, if there was a big dispute, everyone would say we need a better dialogue. These people were not elected to create a lose-lose situation.

“We must tell them: you have to find a deal. Setting two trains running towards one another at full speed – so each side can prove its strength – makes no sense at all.”

Train crash

In the event of no deal, he said PSA’s priority would be “protecting the company”.

“You cannot expect employees of one part of the company to pay for another”, he added.

While Jaguar Land Rover’s chief executive Dr Ralf Speth said stockpiling parts to avoid the disruption of a no-deal Brexit would not be possible.

‘Protecting the company’

He told Sky News: “You have to know that we need 20 to 25 million parts per day delivered on time at the assembly lines in order to produce a vehicle.

“Stockpiling 20 million parts a day for more days is not possible at all.

“Nobody has got the warehouses, not the IT systems, not the logistical devices to make these kinds of stockpiling happen.”

The Prime Minister has previously said the UK could continue tariff-free trade with the EU in the event of a no-deal Brexit under a provision of article 21 of the General Agreements on Tariffs and Trade (GATT).

More business news

The post BMW warns a no-deal Brexit would mean Mini production cut in Oxford affecting UK jobs appeared first on

Read More

Bake Off bump: Britain’s independent bakeries are booming

The Great British Bake Off  has inspired legions of Britons to roll up their sleeves and head to the kitchen since it was first broadcast in 2010. Now it seems the Channel 4 programme may be responsible for a flurry of new independent bakeries opening up across the country.

Over the past three years the number of independent bakeries in the UK has surged by nearly 48 per cent, with that figure increasing annually, according to analysis of thousands of insurance policies taken out over this period.

In 2016, 1,467 independent bakeries, cake makers and decorators, and tea and cake shops purchased cover with the small business insurance firm Simply Business, the provider said.

That number rose to 2,121 in 2017, and to 2,827 in 2018, representing year-on-year increases of 31 per cent and 25 per cent respectively.

The Bake Off crew 2019 pose for a new season photo (Photo: Bake Off/Channel 4)

Northern gingerbread house

The North West of England is home to the largest proportion of independent bakeries, the data indicates – there were 866 of these businesses in the region 2018, up 24 per cent from the previous year.

The North East of England is close behind with 858 and also enjoyed a 24 per cent increase on 2017.

There was a 34 per cent jump in the number of independent bakeries in South West England between 2017 and 2018 making it the fastest growing region – the figure stood at 575 last year.

Wales and Scotland have 318 and 413 independent bakeries respectively, the insurer said.

Bake Off inspiration

The Great British Bake Off is one of the most anticipated shows in the UK television calendar and it’s inspired thousands of bakers across the nation to…start their own independent business,” said Bea Montoya, chief operating officer at Simply Business.

“In every area we’re seeing a year-on-year increase in the number of cake makers, decorators and dough bakers, as more local pâtissiers are turning passions into professional businesses,” Ms Montoya continued.

“Small businesses are vital to the UK economy so the fact that so many aspiring bakers and pastry makers are making the leap is extremely encouraging,” she added.

‘When Bake Off knocked me back I set up my own business anyway’

Sam Boden-Wright (left) pictured with his husband Jon and their dog Phoebe, began trading in July (Photo: Sam Boden-Wright)
Sam Boden-Wright (left) pictured with his husband Jon and their dog Phoebe, began trading in July (Photo: Sam Boden-Wright)

Manchester-based Bake Off fan Sam Boden-Wright, 27, set up his baking business Sam’s Bakehouse in July after being knocked back when he applied to appear as a contestant on this year’s series.

“I’ve baked as a hobby from a young age and in recent years people have been telling me I should apply for Bake Off. I took the plunge and applied in January. When I didn’t hear back I was gutted. Some people said to try again next year but I decided to take matters into my own hands and thought ‘I’ll do it alone’.

“I began looking into setting up a business in about March and started trading in July. At the moment I’m still working in marketing five days a week – at the weekend I travel around food markets in Manchester and Cheshire with my stall with the help of my husband. I’ve also had orders come through social media. I’m struggling with sleep but it’s very rewarding.

“Doughnuts are my specialty. Kinder Bueno doughnuts go down really well, they always sell out. I’m hoping to build a name for myself in Manchester over the next year and to attract repeat customers.”


More on Bake Off

The post Bake Off bump: Britain’s independent bakeries are booming appeared first on

Read More

UK firms created fewer new jobs but pay growth was up to 4% in fastest rate of growth in a decade

The UK’s job market is in danger of “losing its shine” despite unemployment remaining at record lows and wages continuing to grow at their strongest rate since 2008, economists have warned.

Figures from the Office for National Statistics (ONS) show that firms hired fewer people in the three months to July.

Companies and public sector bodies brought on 31,000 more workers in three-month period, less than economists had predicted.

A consensus of analysts and commentators predicted that there would be 55,000 more people hired, following a reported increase of 115,000 last month.

Pay grows but jobs stall

The ONS said new job postings had fallen sharply in 2019 (Photo: ONS)

Economists reported that the fall in job vacancies was its fastest for more than eight years, despite wage growth figures suggesting there was more health in the UK jobs market.

Pay for workers – including bonuses – was up to 4 per cent in the three months between May and July, its fastest rate of growth since 2008. Excluding bonuses, average pay growth was up to 3.8 per cent.

Despite these recent increases, the average worker in the UK earns less than they did a decade ago, when allowing for inflation: an average pay packet today is worth £502 per week, compared to a peak of £525 recorded in February 2008.

Pay growth is watched closely by the Bank of England as an indicator of future inflation pressures, with the latest increases coming in higher than all forecasts in a Reuters poll of economists.

“Once adjusted for inflation, they have now gone above 2 per cent for the first time in nearly four years,” ONS statistician David Freeman said.

No vacancies

Meanwhile, the number of new job vacancies fell to 812,000, the lowest level since the end of 2017 and signalling that employers lacked the confidence to make hires.

The ONS said that the number of new job postings has fallen steadily since the beginning of the year, after a period of sustained growth starting in 2012. It added that small firms had been particularly cautious about adding new staff.

Economists had predicted the UK’s job market to continue performing strongly (Photo: Getty)

Unemployment fell back down to 3.8 per cent, which remains its lowest rate since the 1970s.

Samuel Tombs, chief UK economist for Pantheon Macroeconomics, said that the UK’s ‘jobs miracle’ had started to “lose its shine”.

He added: “The renewed fall in the unemployment rate distracts from an otherwise troubling labour market report.

“Employment was only 31,000 higher than in the previous three months, well below the 89,000 average increase seen since the Brexit vote in 2016.”

Margaret Greenwood, the shadow work and pensions secretary, said: “The slowdown in job creation is a concern with the current uncertainty over Brexit, and average pay still has not returned to the level it was in 2008.

“For millions of people, the reality of work is one of low pay and insecurity.”

More Business

The post UK firms created fewer new jobs but pay growth was up to 4% in fastest rate of growth in a decade appeared first on

Read More

JD Sports defies high steet gloom with huge rise in sales

Sportswear retailer JD Sports has surprised investors with a huge rise in sales during the first half of the year, but said it would join its high street rivals in looking for better deals from landlords.

Revenue at the chain was up 47 per cent to more than £2.7bn in the 26 weeks to 3 August, driven by strong global like-for-like growth of 12 per cent.

Pre-tax profits jumped by 6.6 per cent to £129.9m.

The increase in sales surpassed market expectations and included a 10 per cent rise in the core UK business, despite dwindling footfall and sales in the wider high street.

‘Vibrant retail theatre’

Tie-ups with celebrities like Hailey Baldwin have helped push JD Sports’ athleisure range (Photo: Getty)

Executive chairman Peter Cowgill said the outperformance reflected “consumers’ increasingly positive reaction” to the business’ elevated multichannel proposition, in which the sports brands available in store are “presented in a vibrant retail theatre with innovative digital technology”.

But the retailer said it had been keeping an eye on the financial benefits gained by other companies that have recently cut back on their store numbers and secured rent cuts.

JD Sports said although it had no plans to follow the likes of Arcadia and Monsoon in shuttering stores, it was seeking “fairness and flexibility” across its portfolio.

The group also addressed the looming uncertainty over Brexit, saying it still expects profits for the current year to be ahead of expectations.

But it has moved on plans to open a European warehouse, which it had previously anticipated needing by 2021. A site in Belgium is now expected to be available for use by early next year.

US opportunities

Further afield, the group’s US operations have been hotting up following its acquisition of the Finish Line brand last year, which brought in a profit of £34.7m.

Investors have their eyes on the US, which could provide further opportunities for growth at JD.

The results are the first major update since the company acquired Footasylum for £86m in April.

However, the businesses are still trading separately due to an enforcement order from the Competition and Markets Authority (CMA) which has stopped them combining until it has reviewed the takeover.

The company’s acquisition spree in recent months has also included Pretty Green, the clothing brand founded by Oasis’s Liam Gallagher, which it bought out of administration earlier this year.

More Business news

The post JD Sports defies high steet gloom with huge rise in sales appeared first on

Read More

Fear of recession recedes after GDP grows in July

The UK economy grew more than expected in July, easing fears that Britain might slip into a recession

According to the Office for National Statistics (ONS), the UK economy grew by 0.3 per cent in July, compared with the previous month. This is better than the 0.1 expansion predicted by economists polled by Reuters.

The service sector helped to boost growth in July

Britain’s services sector, which accounts for about 80 per cent of the economy, increased by 0.3 per cent in July, providing the bulk of the growth.

The manufacturing and construction sectors also expanded with increases in output of 0.3 per and 0.5 per cent respectively.

However, while growth in the services sector helped to boost July’s stronger-than-expected growth figure, the ONS noted that in the three months to July the economy showed no growth.

The ONS head of GDP Rob Kent-Smith said: “GDP growth was flat in the latest three months, with falls in construction and manufacturing.

What is GDP and how is it measured?

Gross Domestic Product (GDP) is the total value of goods and services produced in the economy. The figure to focus on is the percentage change in the growth of the economy in real terms, which strips out the effect of rising prices or inflation.This is measured in three month quarters during the calendar year. If GDP is up on the previous three months, then the economy is growing and that means more wealth and more jobs. If the GDP figure is down on the previous quarter then the economy is contracted, leading to fewer jobs and less wealth.

GDP is based on three key measures:

Output measure: The total value of the goods and services produced by all sectors of the economy

Expenditure measure: The value of the goods and services bought by households and by government.

Income measure: The value of the income generated  via company profits and wages.

Fears have escalated that the UK could enter a recession this year after the economy contracted in the second quarter on the back of a sharp fall in manufacturing and construction output.

There was a 0.2 per cent fall in GDP in the second quarter of the year, and if there are two consecutive falling quarters the country is officially in a recession.

The pound rose in reaction to the figures, rising 0.6 per cent against the dollar to $1.2357. PA Wire

However, Monday’s latest statistics from the ONS only concern July – before the latest political uncertainty and data from around the world that shows economies slowing.

Howard Archer, chief economic adviser at the EY Item Club, said: “While GDP growth of 0.3 per cent month on month in July looks to go a long way towards guaranteeing that the economy will return to growth in the third quarter, disappointing survey evidence for August ­relating to manufacturing, construction and services activity, as well as retail sales, suggests that the economy is currently finding life challenging, as it is hampered by serious ­uncertainties relating to Brexit, the domestic political situation and the global economy.”

Additional reporting by PA

More Business news

The post Fear of recession recedes after GDP grows in July appeared first on

Read More

Neil O’Brien: Corbynomics – and why it means that your house, business and savings don’t really belong to you,

Neil O’Brien is MP for Market Harborough.

What is Corbynomics? It goes without saying that it’s a much more extreme economic programme than Labour have ever had before. And that government will spend, tax and borrow more. But Labour have a lot more damaging, half-baked and dangerous ideas.

No-one is thinking about them at the moment, but the scary thing is that within weeks these ideas could be affecting your house, your pension and your job.

For me, the most frustrating thing is that Labour have identified various important issues, but their proposed “solutions” would make matters worse. Let’s look at a couple of examples.

Seizing 10 per cent of all large companies’ shares

Lots of people, including me, worry that current corporate structures create pressures that make managers behave in a short-termist way, squeezing investment to hit short term profit targets and dragging down productivity growth. I’m concerned that publicly quoted firms are beholden to increasingly transient shareholders, interested in immediate returns. They certainly invest far less than privately owned firms who can take a longer-term view.

But my answer to this would be to change the tax treatment of investment, and increase capital allowances so that there’s no disincentive to invest.

Labour’s answer, in contrast, is to forcibly transfer 10 per cent of all companies shares to create a sort of employee-ownership-at-gunpoint.

This is a terrible idea, which would make investment into the UK dry up overnight. After all, if government can steal ten per cent of your shares, what’s to stop them coming back for the rest? Labour protest that the shares are not being stolen – just given to the workers. But that’s a lie, as they also propose that a Labour-run Treasury would take the great majority of the dividends that those shares attract. At the moment, these are owned by savings and pension funds – so the money is ultimately coming out of your pocket.

The total value of the shares stolen by government would be around £300 billion, according to the Financial Times. For comparison, raising the basic rate of tax by one per cent raises £4.5 billion a year, so you can see what a vast tax grab this would be.

Forcing people to sell their properties at a price set by government, and control rents

There are major issues about the balance of rented and owner-occupied property in Britain. We had a long period when the number of properties being moved into the rent-to-buy sector was outstripping the number built, meaning owner occupation fell dramatically. Between 1996 and 2016, the home ownership rate among middle income people aged 25-34 fell from 65 per cent to 27 per cent.

However, in 2015 the Conservative Government reformed the tax treatment of rent to buy and second homes, and in the years since we have seen homeownership rebounding upwards, with both ownership and the rented sector growing in a more balanced way. There are lots more things we could do to grow home ownership.

Corbynista Labour doesn’t really believe in home ownership. They are nostalgic for the world of the 1970s, where around two thirds of households in places like Islington lived in social housing. But they know ownership is popular.
So they have announced the “private sector right to buy”. This will give private tenants the right to make their landlords sell their properties to them at a discount.

In an interview last week, John McDonnell made it clear that government would set the price: “You’d want to establish what is a reasonable price, you can establish that and then that becomes the right to buy,” he said. “You (the government) set the criteria. I don’t think it’s complicated.”

It’s not complicated. But it is deeply unfair. It would be a retrospective raid on people’s assets. People, including some who are not so rich, have invested in property under certain rules, and would have their savings ripped off them, while other people who invested their money in other things would not. This is arbitrary and unreasonable and would I’m sure be challenged in the courts.

Labour would also set rental prices, promising in a recent document that “There should be a cap on annual permissible rent increases, at no more than the rate of wage inflation or consumer price inflation (whichever is lower).”

This is unworkable or will lead to under investment in rented properties. Why spend lots doing up a flat if you can’t charge more for an improved property? We would quickly be heading back to the 1970s, when there wasn’t enough rented accommodation to go round, and conditions were squalid because of rent controls.

Sectoral wage bargaining

With the National Living Wage, the Conservatives have introduced one of the highest minimum wages in the world. For the lowest paid, the National Living Wage plus the cuts in taxes for lower paid people mean that they take home £4,500 more than they did under the last Labour Government – while employment has soared to a record high. We should be really proud of our record.

However, the National Living Wage is still set by an independent body, and as percentage of average pay in the market, so there is a sensible link to what businesses can afford without sacking people.

In contrast, under Labour politicians would just set rates directly. Labour have also pledged to “roll out sectoral collective bargaining”. Labour said it would “fix the going rate” in each industry and “set fair conditions” for the sector. This would represent an end to the system whereby unions negotiate company by company and, instead, give them power effectively to set national standards on pay and conditions. A new government unit would work with unions to bring firms into line.

This means that if politicians or trade unions decide your business is part of a particular “sector” (a pretty subjective question) then you would be in line for a change in wages which your business might simply be unable to afford. The scope for union bullying and endless court cases and demarcation disputes is obvious. In the car industry, wages are high, so a sectoral wage would be high. If I make plastic bits for the car industry but also other industries, is my business in or out of the automotive sector?

Rebecca Long Bailey has also said that “Labour will also legislate to reduce pay inequality by introducing an Excessive Pay Levy on companies with staff on very high pay.” There is no detail on what the rules will be, but the idea of having wages directly controlled by Jeremy Corbyn is likely to deter inward investment.

What do these ideas have in common?

When New Labour left office, a million people had been thrown on the dole, we’d had the deepest recession since the second world war and government was borrowing more than at any time in our whole peacetime history. In the final year alone, they borrowed £7,900 for every family in Britain.

And that was New Labour. Imaging what the country would look like after Corbyn and McDonnell.

Where Corbyn’s ideas really differ from previous Labour leaders is that he doesn’t really believe in the rule of law. Your house, your business, your savings: all these things don’t really belong to you, in Corbyn’s eyes: you have them only as long as the government suffers you to have them, and they can be retrospectively taken away if he sees fit. In the week Robert Mugabe died, we’ve seen underlined just how important the rule of law is. But under Corbynomics, it would be the first casualty.

Read More

Investment in UK AI companies hits all-time high

Investment in the UK’s artificial intelligence (AI) companies has reached record levels after the first six months of 2019 saw more investment than the entirety of last year.

Venture capitalists had ploughed $1.63bn (£1.32bn) into UK projects by June, surpassing the $1.21bn raised by the end of 2018 and marking a record year for AI funding growth, according to a report from industry body Tech Nation.

AI funding has grown for four consecutive years in the UK, placing it third in the world behind the US and China.

Artificial Intelligence is becoming more widespread in the NHS
Artificial Intelligence is becoming more widespread in the NHS (Photo: AFP/Getty)

The UK has played a key role in fostering many notable AI and machine learning companies, including DeepMind, the prolific research lab purchased by Google in 2014 which has partnered with the NHS and Moorfields Eye Hospital to develop diagnostic models.

The US has invested $9.7bn into AI thus far in 2019, compared to $8.6bn in 2018, while China is yet to surpass its 2018 total – backing $3.5bn to date compared to its $6.8bn spending last year.

China will overtake the US to become AI superpower, warns Eric Schmidt

The number of AI companies operating in the UK has also grown, from 820 last year to 839 currently. The vast majority – 89 per cent – are start-ups employing fewer than 50 people.

Comparatively, China has just 303 known AI companies (up from 299 in 2018), with just over half (53 per cent) employing more than 50 workers, while the US’s total has grown from 3,711 to 3,772.

Tech Nation runs an Applied AI growth programme, which is part of the government’s AI and Data Sector Deal, to support 29 up-and-coming AI companies in tackling the challenges of growing larger.

Facial recognition software is demonstrated at the Intel booth at CES 2019 consumer electronics show, January 10, 2019 at the Las Vegas Convention Center in Las Vegas, Nevada. (Photo by Robyn Beck / AFP) (Photo credit should read ROBYN BECK/AFP/Getty Images)
Civil rights groups in the UK oppose police use of AI facial recognition technology (Photo: ROBYN BECK/AFP/Getty Images)

“For the UK to maintain its authority in AI, we need to nurture scalable, globally-competitive, homegrown AI companies that solve real problems. Yet, the pool of AI-focused companies that achieve this beyond Series A remains slim, despite the hype, and the path to scale is uniquely challenging,” said Harry Davies, lead of the Applied AI project.

“That is why it is so important that we champion our most promising UK AI companies with the greatest potential for growth as they look to scale.”

The Royal Society warned in 2017 that UK was in danger of losing its position at the forefront of cutting-edge AI over a “substantial skill shortage”.

“As it considers its future approach to immigration policy, the UK must ensure that research and innovation systems continue to be able to access the skills they need,” the report’s authors wrote at the time.

“The UK’s approach to immigration should support the UK’s aim to be one of the best places in the world to research and innovate, and machine learning is an area of opportunity in support of this aim.”

More on Technology

The post Investment in UK AI companies hits all-time high appeared first on

Read More

Sadiq Khan tells organisers of world’s largest arms festival to ‘leave London and never come back’

Sadiq Khan has issued a staunch rebuke to organisers of the world’s largest arms festival, demanding that they leave London and never return.

The London mayor vowed to block the Defence and Security Equipment International (DSEI) arms festival from taking place in the capital again and said he “strongly opposes” its existence this year.

More than 100 people have been arrested so far as hundreds of protesters gathered outside the Excel centre, in east London, where the biennial DSEI mass weaponry festival is scheduled to take place next week.

Supported by the Ministry of Defence, traders will flaunt their weaponry to international buyers, including Saudi Arabia which will be in attendance following an invite from the UK Government, The Independent reported.

Saudi regime to attend

This is despite the Court of Appeal ruling in June that Britain’s arms sales to the Saudi regime were unlawful for their part in helping to fuel bombing campaigns in Yemen, creating one of the world’s worst refugee crises.

Ministers are expected to deliver speeches and attend dinners to explore new arms contracts at the four-day fair, and British armed forces personnel will boast rockets, tanks, grenades and more to visiting delegations.

Traders eye weapons at a previous edition of the DSEI (Photo: AFP)

But the London mayor came down strongly against the arms fair, writing to DSEI’s director to express his disapproval at the event and requesting they “reconsider hosting the fair in London in future”, The Independent said.

“I too strongly oppose this event taking place in London,” he wrote.

‘Not welcome here’

“London is a global city, which is home to individuals who have fled conflict and suffered as a consequence of arms and weapons like those exhibited at DSEI.

“In order to represent Londoners’ interests, I will take any opportunity available to prevent this event from taking place at the Royal Docks in future years.”

Mr Khan also urged DSEI to cover Metropolitan Police costs if they plan to return, as the bill for controlling protests in 2017 totalled almost £1 million.

Around 200 demonstrators blockaded a road near the venue on Sunday calling for an end to the festival – the seventh consecutive day of protests estimated to have involved about 2,000 people over the week.

Police have arrested 113 people for offences including aggravated trespass and highway obstruction.

Defending refugees

The arrival of this year’s festival comes at a sensitive time for London as knife crime in the city claimed its 100th life on Thursday after a 15 year-old boy died from stab wounds.

London mayor Sadiq Khan has condemned the arms festival as knife crime took its 100th victim of 2019 on Thursday (Photo: PA)

Rising levels of gun and knife violence resulted in 134 killings in the capital in 2018, the highest figure in a decade, and 2019 is following a similar path.

Sam Bjorn, from Lesbians and Gays Support the Migrants, one of the groups protesting on Sunday, said he felt compelled to campaign as the visiting traders are “selling the equipment that is killing people as they seek safety”.

He added: “We are here to defend the right of all people to seek sanctuary, or a better life, without fear of violence, detention and racist borders. We’re here to say that migrants and refugees are welcome, arms dealers and oppressive regimes are not.”

A police spokesperson said: “The Metropolitan Police Service (MPS) proportionately responds to any protest activity, balancing the rights of those protesting, with the rights of others to go about their normal business unaffected.

“While the MPS always aims to work with organisers to facilitate the right to protests, we also have a duty to minimise disruption so that other members of the public and local community can go about their day-to-day lives.”

More Sadiq Khan

The post Sadiq Khan tells organisers of world’s largest arms festival to ‘leave London and never come back’ appeared first on

Read More

‘Business planning with confidence is next to impossible’: Two in five firms are not prepared for the impact a no deal Brexit

A survey of more than 1,500 business leaders by the British Chambers of Commerce (BCC) has found that two in five businesses have not analysed the impact Brexit will have upon their firms.

The research by the BCC found that 41 per cent of UK firms have done no risk assessment on the impact Brexit will have on their business. Those which trade internationally are more likely to have carried out a risk assessment – 63 per cent have done so compared to 39 per cent of firms which only trade in the UK.

There has been a rise in the number of businesses that have carried out an assessment, from 35 per cent of firms last year, but there are still a large proportion of firms unaware of the impact on their business.

No deal scenario

British Chambers of Commerce President Director General Adam Marshall speaks at conference in London on 28 February 2017 (AFP/Getty Images)
British Chambers of Commerce President Director General Adam Marshall speaks at conference in London on 28 February 2017 (AFP/Getty Images)

Read more:

Business leaders say no-deal Brexit will leave funding plans in tatters

Internationally active businesses will face new customs procedures at the border in the event of a no deal Brexit, yet the research by the BCC shows that many among them are unaware of schemes to mantain continuity of trade. 63 per cent are not aware of Transitional Simplified Procedures, 62 per cent do not know of Authorised Economic Operator status, and 73 per cent are ignorant of Customs Comprehensive Guarantees.

While EORI numbers, which are critical for trading across borders, have been issued to all VAT-registered businesses, the BCC has called upon the government to automatically enrol or support businesses to access these important customs and borders schemes.


Read more:

House prices have ‘barely changed’ since March despite Brexit chaos

Dr Adam Marshall, Director General of the British Chambers of Commerce, said:

“Businesses do not want to see a messy and disorderly Brexit, but ongoing uncertainty means they must prepare for all possibilities as the October deadline looms.

“While more firms have taken basic steps to prepare for change than was the case last year, and government has stepped up communication to businesses, ongoing uncertainty makes business planning with confidence next to impossible. Companies are told to plan but are being presented with a moving target.

“Low levels of awareness around special customs and trade schemes are of particular concern, as this highlights the potential for disruption at borders in an unwanted no-deal situation. Companies should be automatically enrolled or supported to enrol in these schemes to increase trader readiness.

“Our evidence yet again reinforces the importance of averting a chaotic exit on 31 October.”

A spokesman for the Department of Business Energy and Industrial Strategy told the BBC it was a departmental priority to support businesses to “get ready for Brexit on 31 October, and take advantage of the opportunities of leaving the EU.

It was also added that the BEIS had also announced £108m in funding support.

More Business:

The post ‘Business planning with confidence is next to impossible’: Two in five firms are not prepared for the impact a no deal Brexit appeared first on

Read More