Marketing Newscast

(Edited 22 November 2024)

Employment Minister Alison McGovern was warned by business leaders yesterday that the Government’s changes to employer National Insurance contributions (NICs) raid will undermine the fight against worklessness by harming job creation. In a private call with employers’ lobby groups, she was told Labour’s pledge to get Britain’s employment rate to an unprecedented 80% would be held back by the Government’s tax raid. “Normally, we would be sitting here ready, willing and able to help the 80% employment target but the message [on the call] was that recruitment is now much more challenging with a National Insurance regime that penalises hiring,” one source told The Telegraph. “The Government is pulling in two directions. The extra National Insurance means I can’t employ two part-time apprentices next year,” the source added. The number of young people who are not in employment, education or training (Neets) climbed to 946,000 in the three months to September, according to the Office for National Statistics (ONS). Business leaders on the call are also said to have urged McGovern to reform job centres to ensure they “look at careers rather than just pushing people into any job”.

Meanwhile, The UK Statistics Authority (UKSA) has been criticised by MPs for making repeated errors in its national labour force survey, the key source of data on unemployment, thereby hindering the UK’s ability to set monetary and fiscal policy.  Labour MP Meg Hillier, who chairs the influential Treasury Select Committee, has written to the head of the –UKSA, Professor Sir Ian David Diamond, to say her committee had “major concerns” about the data, which is produced by the ONS, for which the UKSA has oversight. The Governor of the Bank of England, Andrew Bailey, has also questioned the data, saying last week at the Mansion House annual dinner for City bigwigs that the troubles of the survey were “well known” and repeated errors in the data were a “big problem”. “The Bank, alongside other users, including the Treasury, continue to engage with the ONS on efforts to tackle these problems and improve the quality of UK labour market data,” he said. Yesterday, a report from the Resolution Foundation also concluded that the ONS labour force survey had “misrepresented” what had happened in the jobs market in a recent report and given policymakers “an overly pessimistic picture”. The think tank found the labour survey may have been undershooting growth in the workforce by some 930,000 people. Hillier’s letter demanded “an outline of the problems with the LFS”; details on “what steps the ONS is taking to fix those issues” and the “impact of the steps taken to date”. She also called for a progress update on the ONS’s March 2022 pledge to “vastly increase the number of those who complete the survey and make it more representative of the population as a whole”.

Retail sales slumped by 0.7% in October, the ONS says, after rising 0.1% in September. The fall, worse than analysts’ 0.3% estimates, was attributed by ONS senior statistician Hannah Finselbach to “a notably poor month for clothing stores,” and reports from retailers that “consumers held back on spending ahead of the Budget.” In response to the news, the British Retail Consortium’s director of insight Kris Hamer warned that retailers face over £7bn of additional costs in 2025 alone, because of Rachel reeves’ Budget tax hikes, the increase in minimum wage, and new packaging taxes. “These changes will pile pressure onto an industry that already pays far more than its fair share in business taxes, and will make job losses and store closures inevitable,” he said, adding: To avoid a cliff edge of costs in April 2025, Government must reconsider the existing timelines for the new packaging levy, while ensuring any changes to business rates offer a meaningful reduction for all retailers as early as possible.”

Ofgem has confirmed another rise in household energy bills from January, when the energy price cap will rise to £1,738 from 1^st January, a 1.2% or £21 increase. The increase comes as some 10m pensioners lose their Winter Fuel Allowance payments. Earlier this week, the government admitted that removing the benefit force 100,000 pensioners in England and Wales into relative fuel poverty this year. Citizens Advice CEO Dame Clare Moriarty told the BBC Radio 4 Today programme this morning that the bureau was seeing more people than ever because of energy debt problems. “Energy debt is now the most common type of debt that we deal with, and it’s not just the numbers of people, it’s also the levels of debt that people are in that are rising,” she said, adding: “So for bills to remain at this high level, so it’s two-thirds higher than it was before the start of the energy crisis, and with an expectation that they’ll remain at that level for the foreseeable future, we’re just expecting to see people continuing to be really squeezed, particularly families with children, particularly disabled people, and for that, to be facing impossible choices”. “There needs to be targeted support from the Government for people who are on low incomes, with high energy needs, who are in the most desperate circumstances,” she concluded. The January price cap does, however, leave prices 10% (£190) lower than the same time last year, when the price cap – the average cost to households for duel fuel - was £1,928.

Rents will rise by £200 a month over the next five years, Savills predicts, blaming the hike on Government policies that are driving landlords out of the buy-to-let market. The average UK rent will rise from £1,122 today to £1,320 in 2029, the estate agent says, while private tenants in London will find themselves paying £1,919 per month on average, up from £1,680 today. The tightening of supply combined with “elevated demand” will push up prices, Savills said, linking diminished supply to Savills a “challenging” tax and regulatory environment that includes an increased 5% stamp duty surcharge for second home owners and the upcoming Renters’ Reform Bill.  

The Government has set out its timetable for reform of what it calls the "feudal" leasehold system in England and Wales.  Housing Minister Matthew Pennycook said that commonhold - where people own their homes without an expiring lease - will become the default tenure before the next election, and that some elements of the Leasehold and Freehold Reform Bill, passed by the former Conservative government, will be implemented before then. From January, a "two-year rule" preventing leaseholders from extending their lease or buy their freehold for the first 24 months will be scrapped, and from spring next year, the government will enable more leaseholders in mixed-use buildings to take over management from their freeholders, and no longer have to pay their freeholder’s costs if they make a claim against them. By the second half of next year, how new leaseholds will be banned will be laid out, following a consultation. There will also be a consultation on how leaseholders can challenge unreasonable service charges, and require landlords to get court approval before passing their legal costs on to leaseholders; and look at how existing flats can be converted to commonhold.

Banks have been ordered by The Financial Ombudsman Service (FOS) forced to repay thousands of pounds to customers who have gone on spending sprees while under the influence of drugs or alcohol, the Telegraph reports, after clubs and bars refused to give them their money back. In one case, Barclays was ordered to repay a customer, identified only as “Mr M”, nearly £6,000 and pay him an extra £200 in compensation, the newspaper says. While in Poland in January 2020, Mr M went to a strip club with a group of friends where he believes his drink was spiked, He then spent nearly £6,500 in six transactions between 11:23pm and 1:10am, using Apple Pay. The bank should have realised there was something wrong, he said, as typically, he only spent £12,00 a month. He added that friends with him had similar payments blocked by their own banks due to suspicious activity. Images from the CCTV at the strip club showed Mr M in the company of a naked dancer, and the ombudsman said he should be refunded for all the expenditure except the first transaction on the basis he had not consented to the payments, which were ostensibly for flowers, champagne, and “artistic shows”.

Defence electronics firm Thales, which generates over £1.1bn in UK revenue by making sonar for the Royal Navy and missiles supplied by Britain to Ukraine, is being investigated over “serious allegations” of bribery and corruption, the Serious Fraud Office (SFO) said yesterday. The French contractor, which employs more than 7,000 UK staff, had its offices searched by French police in June over suspicions of corruption linked to arms sales abroad, according to reports. It won a fresh £1.8bn UK defence contract in February to help maintain the Royal Navy’s fleet of ships and submarines for the next 15 years, and in 2020 renewed a £330m contract to provide sonar navigation technology on Britain’s nuclear deterrent for 50 years. In September, the Government placed a £162m order with Thales to build 650 so-called lightweight multi-role missiles to supply to Ukraine. A Thales spokesman said: “Thales is co-operating with the PNF in France and the SFO in the UK. The group complies with all national and international regulations. As the investigation is ongoing, Thales will not comment further.” Nick Ephgrave, director of the SFO, said: “Working collaboratively with our international partners…  We will together rigorously pursue every avenue in our investigation into these serious allegations.”

Hospitality businesses in Scotland have branded as “insane” plans by the Labour and Independent run Highland Council to levy a “tourist tax” that could add £100 to the cost of a family holiday if given the green light. The Council, which has in its patch tourist hotspots such as Ben Nevis, Loch Ness and John o’ Groats, wants to add 5% plus VAT to hotel fees to raise £10m a year to fund infrastructure such as roads and public toilets, with no exceptions made for local people or reasons such as hospital visits. Tony Story, owner of Kingsmills Hotel and Ness Walk Hotel in Inverness, said: “It’s insane. Normally, these taxes are introduced when you’re trying to deter tourists coming, not the other way around. The Telegraph outlines the impact of the tax on a family of four holidaying in Inverness in August would pay £1,473 for a seven-night Premier Inn stay.  A 5% levy with VAT on top would add an extra £88. The Scottish Parliament granted local authorities powers to introduce levies based on a fixed percentage of the cost of accommodation booking earlier this year.

The US Department of Justice (DoJ) has ruled Google’s parent company Alphabet should dispose of its Chrome browser arm to end the group’s online search monopoly. District Judge Amit Mehta has also forced Alphabet to stop entering into contracts with the likes of Apple and Samsung to make its search engine the default platform on their smartphones and browsers. The proposed remedies stem from an anti-competition ruling back in August, when Mehta found Google had illegally supressed its competition in the online search market. Google said the DoJ had chosen to "push a radical interventionist agenda" that would harm both "Americans and America's global technology leadership". "DOJ's wildly overbroad proposal goes miles beyond the Court's decision," Kent Walker, president of global affairs at Google said. "It would break a range of Google products - even beyond Search - that people love and find helpful in their everyday lives."

Dozens of partners at PricewaterhouseCoopers (PwC), Britain's largest accountancy firm, will take early retirement next month Sky News has learnt. PwC's 1,030 UK partners were notified earlier this week that a larger-than-usual round of partner retirements would take place at the end of the year. Sources told Sky the round would involve several dozen partners - who command average pay packages of about £1m - leaving the firm.

PayPal experienced a brief worldwide outage on Thursday after a "systems issue". Paypal’s withdrawal system, express checkout, cryptocurrency services, its peer-to-peer payments app, Venmo, and its foreign-currency division, Xoom, were all affected.

And finally… he came into office wielding a literal chainsaw, promising to take the axe to government waste, and slashed 3,000 regulations within 6 months. Now, Argentina’s President Milei Javier’s reforms seem to be paying off. JP Morgan has increased its estimate of Argentina’s GPD growth rate in that previous quarter to 8.5%, one of the highest in the world, citing optimism around Javier’s reforms as the reason for such rapid growth. When Javier came into office, annual inflation in Argentina was running at 25.5% per month, 289.4% annually, but has plummeted 2.7% per month or 193% year-on-year in October, meaning Javier achieved a pledge many thought was impossible – reducing inflation to less than 3% before the end of the year.