Marketing Newscast

(Edited 19 November 2024)

Business Secretary Jonathan Reynolds has suggested that Britain would side with the European Union over the US if President Elect Donald Trump sparked a trade war with China after taking office, because the scale of the UK’s trading with the bloc meant the Government would be required to “weigh the consequences” of any action that would create an “adverse relationship” with Brussels. While appearing before the House of Lords International Agreements Committee yesterday, he said: “To state the obvious, tariffs on UK goods entering the US would be a difficult thing for us to have to contend with. The US is a major and important trading partner for the UK, £300bn of bilateral trade. But compared to the EU with over £800bn of bilateral trade, clearly if there are things that we are offered or asked to do that would result in an adverse relationship on the European side, we’d have to weigh the consequences of that.” Reynolds further warned that we stand at a “significant moment for global trade” encompassing a “difficult conversation” with the US, because of Trump’s threats to impose trade tariffs of up to 20% on imports from the UK.[1] However, Reynolds also warned the UK should avoid “speculating on how we should respond before there is something to respond to”, as it would not be in the national interest to do so. While he would “love” to see closer UK-US cooperation on trade, services, new technologies, and the energy transition, Reynolds said, he cautioned that there were unresolved issues on US asks on agriculture, including hormone treated beef and chlorine washed chicken. The Centre for Economics and Business Research (CEBR) has suggested 20% tariffs on goods entering the US could cost the UK £20bn, unless reciprocity was applied by the UK, but that was something that “might be a much more painful proposition for the UK than it might first appear,” Reynolds said.

A row over whether or not Chancellor Rachel Reeves lied on her CV and exaggerated her experience as an economist to boost her credentials as the Second Lord of the Treasury, is gathering pace. Downing Street is insisting Reeves has been “straight with the public” and “restored financial stability” to Britain since it was revealed by online news site Guido Fawkes that her public comments about her career did not tally with her LinkedIn profile, which she has since amended. In her Mansion House speech last week, Reeves claimed: “Before entering politics, I worked as an economist at the Bank of England (BoE). And then in financial services.” She has made numerous other references to being a former BoE economist, including in an interview for the Mail on Sunday’s Stylist magazine in 2021, when she said she spent a decade working at BoE and “loved it”, but her LinkedIn page records only a six-year tenure from September 2000 to December 2006, The Telegraph notes, adding that Reeves also spent 18 months of that time on secondment at the British Embassy in Washington DC, working as the second secretary in the economic division. In contrast to her ‘economist’ title, a tweet she posted in 2012 referred to part of her time there as “the very junior Japan analyst”. Guido Fawkes, meanwhile, has highlighted how Reeves’ LinkedIn profile said originally that she worked as an economist at the Bank of Scotland between December 2006 and December 2009, but this was later changed to say she worked only in retail banking at the Halifax during that period. Guido further reported that the latter job involved working in a “small complaints team,” a “mundane support department at the bank, according to multiple former colleagues,” which “looked after admin, IT, small projects and planning”. No. 10 has not answered the question of whether lying on your CV is a breach of the ministerial code.

Farmers are protesting in Westminster about changes to the way family farms are taxed today. Thousands of tractors and farmers, and tens of thousands of their supporters, are descending on the capital as the Government refuses to back down on the 20% Inheritance Tax (IHT) it is levying on farms worth over £1m, despite warnings the tax will threaten food security, end the tradition of family farms, and create a mental health crisis in the farming sector. Ministers claim the move will only affect the wealthiest 500 estates each year but figures from The Department for Environment, Food and Rural Affairs (Defra), the National Farmers Union (NFU), and the Country Land and Business Association (CLA) suggest otherwise. The latter estimates up to 70,000 farms could be affected. The NFU has accused the government of "betrayal," as Prime Minister Sir Keir Starmer promised to protect British farming before the General election, and the change was not mentioned in Labour’s election manifesto. NFU President Tom Bradshaw told the BBC last night the measures are "completely unjust". Environment Secretary Steve Reed, however, said "It's only right to ask the very wealthiest farmers and those wealthy individuals who have been buying up agricultural land to avoid their own inheritance tax liability, to pay their fair share".

Pensions’ Minister Emma Reynolds has said in an interview with the Financial Times that pension funds could still be forced to invest in British stocks and infrastructure projects unless they do so voluntarily.  Such a mandate, which has been mooted by Labour and the previous Conservative government for some time, was not mentioned in Chancellor Rachel Reeves’ Mansion House speech last week (several other new pension policies were) but Reynolds said this did not mean forcing funds to invest in Britain was off the table. “We’re not talking about it for now, but let’s see where we get to,” she told the FT. “Investment in pensions is, as you know, very generously provided for in terms of tax relief.” British pension funds allocate only some 4% of their total assets to UK stocks, a dramatic fall from over half 25 years ago. However, 11 of the top UK funds agreed to commit 5% of assets to unlisted start-ups by 2030 under Conservative rule. Reynolds hinted that if these current proposals fail to yield a significant rise in UK investment, further action could be taken.

Pension funds themselves, meanwhile, are warning ministers not to water down electric vehicle (EV) sales targets, saying doing so would damage investment in Britain. The Government is facing pressure from carmakers to soften the regime, which imposes fines of £15,000 per non-electric vehicle sold over certain quotas, because not enough people want to buy them. Fund managements, however, say rowing back on the zero emission vehicle (ZEV) mandate will undermine support for their investments in net zero and infrastructure projects such as wind and solar farms and carbon capture. James Alexander, CEO of the UK Sustainable Investment and Finance Association, said investments in projects such as battery factories were “highly sensitive to the policy environment … and can be easily jeopardised by sudden policy U-turns which move the goal posts”. “The ZEV mandate currently underpins billions of investment in the UK’s automotive sector. Multiple large pension funds have expressed their serious concern at the prospect of any rollback as investors need certainty, not shifting sands. We would urge the Department for Transport to protect investor confidence by holding firm.” The Telegraph says investment giants including Macquarie, M&G, Aviva and Schroders have all poured money into charging points in recent years on the basis that the mandate would h lp to drive EV take-up. Energy companies Ovo and Octopus, as well as electricity network giant SSE, and BT Openreach, a major buyer of electric vans, are also understood to have raised the issue with the Treasury and the transport and business departments, the Guardian reported.

Concern over the Budget rumbles on: it has emerged that UK retail bosses have written to the Chancellor warning of “inevitable” job losses and price rises. In a letter coordinated by the British Retail Consortium (BRC), 79 signatories, including retailers Tesco, Next, Asda, JD Sports and Greggs, said they had “significant concerns” about the impact of the Budget on the retail industry and its knock-on effect “for inflation, employment and investment”. The BRC estimates the sector will pay an extra £7bn in costs next year, with an additional £2.73bn spent on the minimum wage increase, £2bn on the packaging levy, and £2.33 on higher National Insurance Contributions (NICs). “We appreciate government’s focus on improving the fiscal situation and investing in public services; we also recognise the role businesses have in supporting this,” the letter said. “But, the sheer scale of new costs and the speed with which they occur create a cumulative burden that will make job losses inevitable, and higher prices a certainty.” Asked about the letter on the BBC Radio 4 Today programme, Nick Stowe, CEO of Monsoon and Accessorize, said retailers had been left with the choice of either protecting staff numbers of cancelling their investment plans. “It’s about making choices. None of those choices are a great path forward for us, none of them lead to growth,” he said. “These are forcing us to do things that seem to be entirely counter to the Government’s agenda in terms of growing the economy and growing sectors like ours.”

The Budget also poses an ‘existential threat’ to the future of seventh-generation pub and brewing giant JW Lees, its owner is warning. William Lees-Jones, who owns and runs the Manchester-based real ale producer, said in a LinkedIn post he is now “facing the very real prospect that we will never be able to hand on the running of my business to our children”. In the event of his death, he added, his family will “simply not have the cash or liquid assets available to cover an enormous inheritance tax bill,” meaning they would need to sell parts, or all of the business, “potentially to an overseas buyer who does not have any interest in our people, our community, local jobs, or growth”. Selling to a large international brewer or pub company means the chain is likely to be “very quickly be closed down” and “all of those jobs and the very existence of the brewery would be at threat,” he mused. He urged the Government to be a ‘good listener’ and change the policy, not least as Reeves’ changes to the Agricultural Property Relief and Business Property Relief (BPR) are only forecast to bring in an anticipated £500m per annum, which he pointed out was 1.21% of the total £41.170bn impact of the tax changes made in her Budget. He has written to his MP to explain that “for almost 50 years since it was introduced by Jim Callaghan in 1976 BPR has given us the confidence and certainty to invest our savings in the business, employ people, and reinvest our profits back into the business and our community”. “We do not inherit the business from our parents but borrow it from our children,” he said in his social media post, and that this is “the driver behind all great family businesses and something that has not been understood by the Government in its Budget”. JW Lees, founded in 1828, employs over 1,525 people. It operates 48 managed pubs, inns and hotels and also lets a further 100 pubs.

Meanwhile, France has launched an advertising blitz aiming to lure disillusioned businesses from the UK. Adverts saying: “Make It Iconic. Choose France” have appeared in UK newspapers in the weeks since Labour’s Budget, the Telegraph reports.  The advertising push was originally targeted at five countries – Germany, Canada, India, the US and the United Arab Emirates, but now “appears to have expanded into the UK after Labour drew criticism from businesses over its decision to raise taxes by £40bn in the Budget,” the newspaper’s Senior Business Reporter James Warrington writes.  

Gary Lineker’s TV production company has gone into liquidation, City AM reveals. Goalhanger Films, which is co-owned by Lineker and former ITV controller Tony Pastor, was founded in 2014 and has produced numerous documentaries featuring major sports stars. Previous projects include Football, Prince William and Our Mental Health; Hand of God; Mo Salah: A Football Fairytale and a Serena Williams documentary with Amazon Prime, the newspaper says. The news comes after thte revelation that Lineker will step down from hosting BBC One’s Match of the Day at the end of this season. The newspaper notes a company backed by fellow football personality Gary Neville also entered liquidation last week. The firm, which was behind a Michelin-starred restaurant The Man Behind The Curtain, located in Leeds and run by chef Michael O’Hare, closed last year owing almost £1m, documents filed with Companies House show.