Marketing Newscast

In a letter to Business Secretary Jonathan Reynolds, executives from more than a dozen of the UK’s largest recruitment firms have warned that Angela Rayner’s employment rights overhaul will inflict permanent damage on Britain’s near-one million agency workers and the economy. Bosses from companies including Adecco, Hays, Manpower and Randstad are urging the Government to reconsider sweeping changes to rules covering agency work, including a ban on “exploitative” zero-hours contracts which Rayner wants to ban, a ban the recruiters say risks backfiring in a “significant and negative way”. “Growth is the Government’s priority,” the letter reads, “yet the approach taken in the current consultation delivers the opposite of this. If applied, it would undermine both the temporary and permanent jobs markets, slowing job search by reducing opportunities and potentially exposing workers to poorer treatment and false self-employment.” It goes on to warn that that applying the new rules proposed to agency workers would put £34bn of economic activity at risk. “Developments in the last few weeks have worried us significantly,” they say in the letter, citing Budget changes to employer National Insurance thresholds and plans to force employment agencies and companies to make sure self-employed and agency workers pay the right amount of tax. “Both create the risk of slower hiring and more work being pushed into less formal and less well-regulated formats,” they add. The letter also demands a meeting with Reynolds. The Government’s own assessment warns Rayner’s plans will cost UK employers around £5bn in additional costs annually. A government spokesman told The Telegraph: “We’re committed to ending one-sided flexibility for agency workers and others, to ensure workers have more predictability to better plan their lives and finances. We will consider all responses to the consultation once it closes and we continue to engage with trade unions and key stakeholders to ensure any changes work for both businesses and workers.”

Meanwhile, celebrity chef Tom Kerridge is warning that the Government’s Budget tax hikes will have a “catastrophic” impact on many hospitality firms in the new year. Kerridge, who was among the 120 business leaders who signed a letter in support of Labour ahead of the General Election, said there was now a lot of “business frustration” with the government because of the Budget. “There will be a huge amount of closures,” he warned on Sky News last night. “We’ve already got high-profile names and Michelin-star restaurants that have decided to shut their doors. And when that starts to happen, it does begin to filter down,” he warned. He estimated that businesses will have to pay out an extra £800-850 more per employee per year due to the hike to employers’ national insurance, which he said was “an awful lot of money” for many smaller firms.

Spending in supermarkets fell by 1.8% last month according to Barclays, while spending on all essentials, including groceries and fuel, were down 3.1%, marking the steepest drop since 2019 when Barclays first started collecting the data. The bank claimed two thirds of people are looking for ways to reduce the cost of their weekly shop, citing growing concerns among shoppers about the state of the UK economy. Spending on debit and credit cards was down by 0.%c in November compared to last year. Jack Meaning, chief UK economist at Barclays, said: “Understandably, a number of factors weighed on consumer spending in November, notably easing consumer confidence post-summer, and expectations that post-Budget, inflation and interest rates will stay higher in the coming months.”

A mixed message on UK manufacturing emerged yesterday. According to the latest S&P purchasing managers’ index (PMI), which gauges activity across the industry on a monthly basis, British manufacturing fell to a nine-month low in November, dropping to 48.0, down from 49.9 in October, below the 50-mark which separates growth from contraction. Rob Dobson, director at S&P Global Market Intelligence, said manufacturing was struggling due to a combination of high costs, weak demand and concerns over the economic outlook. The rate of job losses in November was also the fastest since February, with cuts linked to concerns over higher cost pressures. Dobson said the tax hikes facing businesses as a consequence of the Budget are also likely to “raise costs further in 2025”. However, a separate PMI from The Institute for Supply Management (ISM) saw an increase to 48.4 in November from 46.5 in October, ahead of forecasts of 47.5. New orders increased for the first month in seven in November, while price pressures eased and production, employment and inventories contracted less than in previous months, the ISM said. However, Timothy Fiore of the ISM did warn: "Demand remains weak, as companies prepare plans for 2025 with the benefit of the election cycle ending. Production execution eased in November, consistent with demand sluggishness and weak backlogs. Suppliers continue to have capacity, with lead times improving but some product shortages reappearing".

Nearly half of UK mortgage holders – some 4.4m householders - will see their payments rise over the next three years, the Bank of England (BoE) says. 420,000 of them will see increases of £500 or more per month. A further 1-1.5m will also see a second interest rate increase, having already fixed their mortgages at higher prices since interest rates began to rise in the second half of 2021. About 31% of all mortgage holders, or approximately 2.7 million people, are predicted to refinance at rates higher than 3% for the first time before the final quarter of 2027, the central bank says. However, about 27% of mortgage holders, some 2.4m people, will see their monthly payments decrease by the end of 2027, after already experiencing interest rate hikes.

Lawyers acting for British motorists who were charged inflated prices to ship vehicles to the UK are about to agree settlements worth £38m after a years-long battle alleging that they were ripped off by a cartel of shipping firms, Sky News reports. Mark McLaren, the class representative who brought the claim, and Scott+Scott, the US-based dispute resolution law firm, are reported to have reached in-principle agreements with two shipping companies which transport many of the world's cars: WWL/EUKOR and K Line. McLaren - a former executive at the consumer group Which? – has agreed a £24.5m settlement with WWL/EUKOR and a £13.25m deal with K Line, according to the claimant's representatives, who have spoken to Sky’s City Editor Mark Kleinman. The settlements are subject to approval by the Competition Appeal Tribunal later this week, and follow a £1.5m settlement with another shipping firm, CSAV, which was approved in December last year. If approved, it will leave outstanding claims worth an estimated £100m against two other defendants, MOL and NYK, with a trial due to begin next month, Sky says. Previously, the European Commission fined the companies more than £300m in 2019 after finding that they colluded to fix rates and reductions of capacity, as well as exchanging commercially sensitive information in order to maintain or force up the price of vehicle shipping.

Ministers must do more to stop the “exodus” of cash from the London Stock Exchange’s (LSE) UK equity funds after 41 consecutive months of outflows, the boss of Peel Hunt has warned. In an interview with City AM, Steven Fine, who heads the AIM-listed broking house, said the speed of money leaving the market was “alarming” and ministers and regulators were not doing enough to stop it. “If you were considering listing – and I don’t think there’s any shortage of interesting companies that would choose the UK to list – who’s going to buy and where is the demand going to come from?” he queried. Fine called for more generous tax breaks to encourage a “home market bias” among domestic investors, and “strongly worded” guidelines for “what pension funds should be doing in the home market”. The LSE is on course to attract its lowest level of IPOs on record this year; just 14 firms have floated on its main market and the junior AIM exchange. The new Lord Mayor of London, Alastair King, has also urged the Government to go faster with efforts to boost investment into London-listed firms, claiming the government’s current plans are not going “far enough”. In his first major speech since last month, he suggested scrapping the 0.5% stamp duty that is levied on investments in UK companies. “It cannot be logically correct that, as it stands, we do not pay tax on purchases of international vehicles such as Tesla, but we are taxed for investing in a British brand like Aston Martin,” King said. Changing this “misalignment” would provide a “shot in the arm for homegrown companies looking to scale-up”.

Castle Water, which was co-founded by Conservative Party treasurer Graham Edwards, is preparing to table a £4bn offer to take control of Thames Water, The Telegraph reports. Castle is the UK’s largest privately-owned independent water group and has around 450,000 corporate customers across the UK. It is backed financially by the billionaire Pears family, which owns £6bn of property in London through the William Pears Group. If Castle were to take control of the utility giant, its aim would be to relist the business on the London stock market and return Thames to public ownership for the first time in decades, sources told the newspaper. Thames, which has 16m customers in London and the south east, has been running an auction process for would-be acquirers since March. It is struggling under an £16bn debt pile, and its current shareholders are refusing to put up any more cash. Neither Castle nor Thames Water would comment on the story. Meanwhile, Thames has confirmed it has appointed Julian Gething, a partner at restructuring experts Alix Partners, to oversee its debt restructuring efforts.

Observer staff who do not want to stay with the world’s oldest Sunday newspaper when it is sold to Tortoise Media will be offered access to “a time-limited voluntary redundancy scheme”, Sky News reports. The broadcaster has obtained a memo sent to Guardian Media Group employees yesterday by Anna Bateson, the company's CEO, outlining a revised package aimed at placating journalists, many of whom are angered at the sale and beginning a series two-day strikes on Wednesday in protest. Meanwhile, the Telegraph reveals that The Guardian is offering to conceal the identity of journalists who cross the picket line, saying they do not need to put their names on if they choose to work during this week’s walkout. As the newspaper has a hybrid working policy, allowing journalists to work from home part-time, those who do not strike may not have to walk past a physical picket line.

Upper Crust and Ritazza owner SSP has reported a jump in full-year profit and revenue, with good performance in the UK and North America offsetting a disappointing performance in Continental Europe. Pre-tax profit rose 35% to £119m in the year to 30^th September, while earnings before interest, tax, depreciation and amortisation grew 23% to £343m. Revenue was up 17% at £3.4bn, with like-for-like revenue 9% higher.

St James’s Place is making around 500 redundancies in its non-financial adviser workforce next year as part of a £200m cost-cutting plan, according to reports. The investment manager is aiming to double its underlying cash profits by 2030, with a strategy including cutting £100m from its cost base annually for the next two years to reach cumulative cuts of around £500m within that timescale.

Two members of the House of Lords, the former Chancellor Philip Hammond and Iain McNicol, a previous general secretary of the Labour Party, have joined the board of directors at tax consultancy RCK Partners. Hammond was previously a senior adviser to the firm.

Elon Musk has lost a second legal bid to reinstate his huge $56bn pay deal at Tesla, despite shareholders backing the deal by an overwhelming margin in a vote. Judge Kathaleen McCormick in Delaware yesterday denied a request by Musk’s lawyers and Tesla’s directors to set aside her earlier judgment made in January. Musk’s record pay award was promised in 2018 if Musk took Tesla’s valuation beyond $650bn. At the time of the deal, Tesla was worth just $50bn but is now worth $1.1tn. However, McCormick ruled that Musk engineered the landmark pay package in sham negotiations with directors who were not independent, the Telegraph explains. She said that the money involved was “an unfathomable sum” that was unfair to shareholders, and that the argument saying shareholders agreed to the payment was “fatally flawed”. Musk can appeal to the Delaware Supreme Court.

And finally… The French Government looks to be on the verge of collapse after Prime Minister Michel Barnier, who was appointed by President Emmanuel Macron after July’s inconclusive parliamentary election, invoked Article 49.3 of the French Constitution to force his unpopular Budget through the National Assembly, France’s lower house, without a vote. Barnier’s budget demands €40bn of spending cuts and €20bn in tax increases, which he argues is necessary to address the dire state of public finances: Government debt stands at around 110% of GDP and the budget deficit is set to rise to 7% next year. Opposition parties have now brought a no-confidence vote against him tomorrow, which he is almost certain to lose, after last-minute concessions were not enough to win over Marine Le Pen’s National Rally party, which Barnier’s minority government is relying on for support for its survival.