Marketing Newscast

Prime Minister Sir Keir Starmer refused yesterday to rule out further tax rises or more borrowing when he was challenged by opposition leader Kemi Badenoch at Prime Minister’s Questions in the House of Commons to repeat the pledge Chancellor Rachel Reeves made to business leaders at the CBI conference on Monday. Badenoch reminded Starmer that Reeves had said: “I’m clear, I’m not coming back with more borrowing or more taxes”. “I know that telling the truth to this House is important to the Prime Minister, so will he repeat his Chancellor’s pledge now?” Badenoch asked. But Starmer only said: “We set out our position at the Budget, which was just set out. We’re fixing the foundations. We’re dealing with the £22bn black hole that they left.” He continued: “I’m not going to write the next five years of Budgets here at this despatch box, but we said we wouldn’t hit the payslips of working people. We’ve passed the Budget. We’ve invested in the future, and we’ve kept that promise.” Badenoch then suggested Reeves’ pledge was “as worthless” as Labour’s manifesto, saying the “whole House would have heard him refuse to repeat the Chancellor’s pledge”. “If he is fixing foundations, why is it that the PMI (purchasing managers’ index) index shows that business confidence has crashed since the Budget?” she continued, to which Starmer replied: “I notice that having come here criticising the national insurance rises over and over again, on Monday, she admitted that she wouldn’t reverse the position that was set out.”

Businesses and households are fast losing confidence in the economy, according to data from two surveys released this morning. First, The Confederation of British Industry (CBI) index of confidence among consumer services businesses plunged to -55 in November, from -19 in August. The index for business and professional services also plummeted, from +9 to -29. Meanwhile, the British Retail Consortium (BRC)-Opinium tracker of consumer confidence showed expectations about the economy worsened between October and November, with the proportion of those feeling positive for the next three months down from 21% to 19%. 38% of those surveyed said they thought the economy would get worse in the next three months, while 36% said it would stay the same. BRC CEO Helen Dickinson said the data was a sign “many were worried about the economy in the lead up to Christmas”.

The number of cars produced in Britain has fallen for the eighth consecutive month, the Society of Motor Manufacturers and Traders (SMMT) says. UK factories made 15.3% fewer cars in October this year than last, producing only 670,346 units between January and October 2024, 10.8% lower than during the same period in 2023. The SMMT attributed the fall mainly to “weak” exports - although the number of cars produced for domestic use rose 5.3%, exports fell by 14.8% in the first 10 months of 2024, equivalent to 89,095 fewer cars being shipped overseas. The trade association added that a around a third of the cars made in Britain in October this year were battery electric, plug-in hybrid and hybrid electric.

Meanwhile, Ford UK’s MD Lisa Brankin has called publicly for the Government to introduce “incentives” such as tax breaks on electric vehicles (EVs) to boost sales. On Tuesday, Business Secretary Jonathan Reynolds promised a review of the Government’s zero emission vehicle (ZEV) mandate, which imposes quotas for EV manufacturing and large fines for quota breaches but Brankin told the BBC Radio 4 Today Programme earlier: “The real issue that we’re facing is that customer demand isn’t at the same level as the government mandate. The thing that we really need is government-backed incentives to urgently boost the uptake of electric vehicles”. “Company car drivers are making the switch to electric well ahead of the trajectory, but the rest of the market, which is the majority, is not.” She added, arguing that if the Government isn’t willing to offer incentives, “the only alternative is to scrap or delay the targets”. Ford has invested “significantly” in the production and development of EVs, with “well over” £350million invested around electrification in the UK, she continued, so “we kind of need to make it work”. EV sales accounted for less than 17% of the UK market in new cars in the first half of this year, but the EV mandate requires 22% at the moment, rising to 80% by 2030. Reynolds nevertheless backed Labour’s decision to reinstate the 2030 ban after the previous Conservative Government delayed it to 2035, insisting the industry backs the “destination” of zero emissions. Ineos Automotive CEO Lynn Calder has since disagreed, however, telling The Sun: “We’re definitely not behind the 2030 ban. There’s no plan to get there, no infrastructure and no idea where the energy or grid upgrades are going to come from. It’s not realistic.”

Sky News has obtained a copy of a draft letter from Airports UK to Chancellor Rachel Reeves, in which the trade body claims Business Rates revaluations will result in the industry being forced to pay more than £1bn from April 2026, a fivefold increase from the current level, and equivalent to doubling Corporation Tax on the sector. The letter describes the impact of the change as "catastrophic," arguing it will trigger the cancellation of routes to and from the UK and higher costs and less choice for passengers. The increase in Business Rates will also “destroy” business confidence and private sector investment, and “cause huge damage to the economy," the draft says, adding: "Airports cannot be expected to sustain increases of this magnitude without having to scale back investment or to cut routes. These increases are punitive against all sizes of airports and threaten the very viability of several airports, without which critical regional connectivity would be lost.” The letter concludes: “This would imperil your growth mission before it even gets started, and we request an urgent meeting in December to resolve this matter." Airports UK represents more than 50 airports across the country.

The Financial Conduct Authority (FCA) is pressing ahead with its controversial ‘name and shame’ policy, but will allow the subjects of its investigations 48 hours to assess the contents of FCA announcements before they are made public, Sky News has learnt. The FCA wants to name companies under investigation, to act as an effective regulatory deterrent, but the move has been criticised by many, including the former Chancellor Jeremy Hunt, as doing so could cause major difficulties for City firms which may later be found to have done nothing wrong.

Direct Line has rejected a £3.3bn takeover bid from Aviva. The bid of 250p per share, represents a 59.7% premium to Direct Line’s share price on 18^th November, the day before the proposal was submitted, but Direct Line dismissed it as "highly opportunistic" and "substantially undervalued the company". The board rejected it unanimously. In a separate statement, Aviva said Direct Line had "declined to engage further" since rejecting the offer. Direct Line also rejected a £31.bn offer from Ageas in February.

Royal Mail’s sale to Czech billionaire Daniel Kretinsky's EP Group is close to being finalised, the BBC reports, citing sources close to the deal as saying Kretinsky has agreed to make additional concessions which should allow the takeover to proceed. EP Group has been meeting with The Communication Workers Union (CWU) this week, and talks are said to have been "constructive". Kretinsky has already pledged to maintain the "one price goes anywhere" universal service; not to raid the pension surplus; keep the brand name, Royal Mail's headquarters, and tax residency in the UK for the next five years; and respect union demands for no compulsory redundancies before next year. The board of International Distribution Services (IDS), which owns Royal Mail, has recommended Kretinsky’s £3.6bn offer price to its shareholders. Even if they vote in favour however, as is expected, the deal will still have to be approved by Ministers under the National Security and Investment Act.

Marc Allera is stepping down as CEO of BT Group’s consumer division on 31^st March next year. Claire Gillies will take over as CEO-designate on 10^th December, kicking off a transition process.