Marketing Newscast

(Edited 26 November 2024)

The Government will today unveil what it claims will be the “biggest employment reforms in a generation”, releasing a white paper called Get Britain Working. In the report, Prime Minister Sir Keir Starmer says his Government inherited a country that "isn't working" and that he wants to reduce the current employment rate to 80% from its current level of around 75%, which means getting another 2m or so people into work. Work and Pensions Secretary Liz Kendall will make a statement on the white paper in the House of Commons later, and announce additional funding to cut waiting lists at the 20 NHS trusts with the highest levels of economic inactivity, in a bid to get more people off sick back to work. Other measures to be announced include:

• Every 18 to 21-year-old in England will get access to an apprenticeship, training or education opportunities or help to find a job as part of a new "Youth Guarantee" project

• Job centres to be rebranded as the National Jobs and Careers Service

• An independent review of what UK employers are doing to promote health and inclusive workplaces

• Additional funding for the North East, South Yorkshire and West Yorkshire will get more cash to stop people falling out of work because of ill health

There will also be measure stipulating that young people must take up offers of a job or training, or lose their benefits, but it is not yet clear how these sanctions will work or when they will come into force; a review of sickness benefits will not begin until next year, the BBC says. Unemployment stands currently at 1.5m, while the number of people classed as economically inactive - not employed or actively looking for work - has surged to more than 9m since Covid lockdowns.

James Reed, the boss of Reed Recruitment, told the BBC Radio 4 Today Programme this morning that part of the reason so many young people are out of work is because they have been left to languish on benefits. A broken welfare system has given them “permission to withdraw,” he said, adding he believed many young people are being signed off work too readily by GPs, meaning they then get stuck on sickness benefits because they get more money and people “leave them alone”. This, he argued, makes tackling the worklessness crisis harder. “It’s deeply concerning. I think something’s happened in our society in a way in which we’ve given permission to young people, almost to withdraw. It seems to me that in the old days it was sort of, get up, get on, get out and get going. Now, people have withdrawn from sort of working life in large numbers, and I think it’s important that we reconnect with those people,” he said, otherwise “the danger is they then roll along and they’re on those benefits for a long time and that’s not a good life for them and it’s not good for their future and it’s not good for the economy.” Reed also criticised Labour’s tax hikes, minimum wage increases, and granting workers stronger rights was a “triple whammy” on business that would also hinder attempts to tackle worklessness. “This is a combination that has made companies nervous, and I suppose it will make them think more carefully about hiring more young people,” he warned.

Chancellor Rachel Reeves’ promised there would be no more tax hikes on businesses when she appeared at the Confederation of British Industry’s (CBI) annual conference yesterday, saying: “We have now drawn a line under the fiction peddled by the previous government. We’ve put our public finances back on a firm footing, and we’ve now set the budgets for public services for the duration of this Parliament. Public services now need to live within their means because I’m really clear, I’m not coming back with more borrowing or more taxes.” She went on to insist that her maiden Budget will prove, ultimately, to be “good for jobs and good for growth”.  While admitting she had had “lots of feedback on the budget”, “what I haven’t heard is any credible alternatives to what I did to put our public finances on that firm footing,” she claimed. However, CBI Chairman Rupert Soames suggested businesses are being “milked as the cash cow” by the Budget. He argued the Government’s plans to get people back into work were “directly in conflict” with policies that make hiring people “much more expensive,” and that the forthcoming Employment Rights Bill also makes taking on new staff “much more risky”. He added: “It’s hardly surprising that business people are scratching their heads and asking themselves: ‘What really is the government trying to achieve, and how do these policies hang together?’” Salman Amin, CEO of Pladis, the company behind biscuit giants McVitie’s, Jacobs and Carr’s also highlighted his opinion that the UK has become a less attractive place to invest. In his CBI speech, he said: “Historically we’ve been super bullish on the UK. In fact, by far, the greatest investment across all of our countries over the last decade or so has come to the UK … so we’ve been a very major investor in the UK”. But he went on caution: “We would like to continue to be a major investor going forward. It’s becoming harder to understand what the case for investment is.” CBI CEO Rain Newton-Smith also raised the spectre of a dip in investment in the UK in her speech. “What really defines growth is the decisions made in boardrooms up and down the country. It’s CFOs asking, can we afford to invest? To expand? Take a chance on people?” Since the Budget, “the answer we’re hearing from so many firms is not yet,” she warned. Everyone in the room wants the economy to get growing again, she added, and so her message to “the government and to all parties is to work with us to get there”. “From now on, we need to shift from consultation to co-design. Tax rises like this must never again be simply done to business. That’s the road to unintended consequences.”

The British Retail Consortium (BRC) is warning today that the tax-raising measures in the Budget are likely to fuel inflation. Although shop price annual growth last month came in at its lowest rate since September 2021, CEO Helen Dickinson said that “significant price pressures on the horizon” could mean November’s figures “may signal the end of falling inflation.” “Retail already operates on slim margins, so these new costs will inevitably lead to higher prices,” she added, because the retail industry faces £7bn of additional costs in 2025 because of changes to employers’ national insurance contributions (NICs), business rates, an increase to the minimum wage and a new packaging levy.

Halfords has urged the Chancellor to help soften the blow of her Budget tax hikes on businesses by overhauling the Apprenticeship Levy. The car and cycle parts chain warned its wage bill for its 12,000-strong workforce was set to soar by around £23m because of the tax hikes on businesses announced.

The Financial Conduct Authority (FCA) is “incompetent” and “defective” according to a damning report by the All-Party Parliamentary Group on Investment Fraud and Fairer Financial Services, a cross-party group of MPs. The report, which runs to over 350 pages and has been seen in advance of publication by various media organisations, criticises the City watchdog as an “opaque and unaccountable organisation” that is “slow to act and even slower to admit it has got things wrong and to change”. The APPG heard testimony from 175 whistleblowers, former employees, and its own staff over the course of the past three years to before producing the report, which suggests the regulator’s oversight of the finance sector has been “hamstrung by an overly close relationship with the City firms it regulates.  Whistleblowers have also suffered “tragic tales of regulatory failure” as a result, the report says. One former staff member is quoted as alleging that “FCA culture deters staff from challenging and there is a soft bullying culture to prevent challenges being raised”. Turnaround plans by current FCA CEO Nikhil Rathi are branded a “failure”. The FCA said in a statement: “We sympathise with those who have lost out as a result of wrongdoing in financial services, however we strongly reject the characterisation of the organisation.  We have learned from historic issues and transformed as an organisation so we can deliver for consumers, the market and the wider economy.” It quoted internal surveys showing an increase in staff satisfaction and how in 2024, a Trust Index and measure of engagement both rose by 3% to 64% and 68% respectively. 

Barclays Bank has been fined £40m by The Financial Conduct Authority over alleged “reckless” secret payments to Qatar that “lacked integrity” during the 2008 global financial crisis. The FCA ruled in 2022 that Barclays paid £322m to the Gulf state in exchange for a £4bn investment as part of a plan to raise £12bn to avoid a Government bailout, which might have seen it come under UK Government control. The FCA claimed the deal allowed Qatar to buy a stake in Barclays’ shares at a discount not offered to other investors. In its findings the FCA said the Barclays board was keen to avoid accepting the offer of government capital, because it would hinder the bank's ability to pay dividends and bonuses to its executives. In 2020 three former Barclays bankers accused of funnelling the fees to Qatar in exchange for emergency funding were found not guilty of fraud and, yesterday, Barclays said it still disagreed with the FCA's decision, but that it was now dropping plans to appeal the ruling, bringing the case to an end. The FCA said it welcomed that decision. The Qatar Investment Authority still owns 2.9% of the bank.

Virgin Atlantic CEO Shai Weiss wants to see Heathrow Airport broken up, and different companies running rival terminals in competition with one another, claiming this will revitalise Europe’s busiest aviation hub. “I’m calling on this Government, the Civil Aviation Authority (CAA) and the Competition and Markets Authority to exert their powers and look into how this monopoly player is governed,” he said in a speech at the Airlines 2024 conference. He added: “A monopoly is not the only way to run an airport. It’s not for me alone to determine this but more competition could be inserted into the Heathrow campus”. “I’m sure if we put our best minds to it, there’s a way of protecting the shareholders of Heathrow, UK Plc and consumers. The benefits would be reduced fees, reduced taxation and increased competition.” He cited the way in which New York’s John F. Kennedy International Airport works, with terminals operated by different companies, as a potential blueprint for Heathrow.

Gail’s is up for sale, with a £500m price tag being eyed for the upmarket bakery owned currently by Luke Johnson’s Risk Capital Partners and Bain Capital, Sky News reports. Gail’s has 130 outlets across the UK, up from 74 in late 2021, when Bain bought its stake for £200m.

US President elect Donald Trump yesterday made fresh commitments to putting trade tariffs of 25% on goods from Canada and Mexico from his first day in office, plus an extra 10% levied on goods imported into the USA from China until Beijing cracks down on fentanyl smuggling to the US. "Both Mexico and Canada have the absolute right and power to easily solve this long simmering problem," he wrote. "It is time for them to pay a very big price!" he said. The Canadian dollar subsequently hit a four-year low against the US dollar, and the Mexican peso fell to its weakest point since 2022. The value of the pound has also dropped back close to a six-month low in the wake of Trump’s announcement, and the FTSE 100 is down 33 points (0.39%) to 8,259 at the time of writing. Beijing said it remained “open to dialogue” with the US. Liu Pengyu, a spokesman for China’s embassy in the US said: “No one will win a trade war”.