Marketing Newscast

City Minister Tulip Siddiq resigned yesterday. Last week, Siddiq, who had anti-corruption responsibilities, referred herself to the Government’s Standards watchdog because of allegations she is embroiled in an embezzlement scandal involving her wider family in Bangladesh, and that she took at least one UK property for free from a person linked to the political party of her aunt, the ousted former Bangladeshi Prime Minister Sheikh Hasina, who has been accused of multiple human rights and corruption abuses. In her letter of resignation to the Prime Minister, she said that although Sir Laurie Magnus had cleared her of any breach of the Ministerial Code, “continuing in my role as economic secretary to the Treasury is likely to be a distraction from the work of the government”. Magnus, however, had nudged her towards resignation in his letter to the PM, saying it was “regrettable” that Siddiq had not been “more alert” to the “potential reputational risk” and that she ought to “consider her ongoing responsibilities in the light of this”. She has been replaced by Emma Reynolds, who moves from her pensions and Treasury brief, which has in turn been filled by Torsten Bell. “As a former City lobbyist and known face around the Square Mile, Emma Reynolds was seen by many as the favoured pick for City minister when Labour swept to power in July,” City AM’s City Editor Charlie Conchie writes this morning. “Standing in the way, however, was Tulip Siddiq. The Prime Minister’s constituency neighbour and long-time ally had held the role on the opposition benches since 2021 despite no experience of working in the City… Now, six months and a scandal later, Reynolds has found herself in the place where scores in the City had wanted her to begin with”.

UPDATE: City AM has also reported this morning that the Bangladeshi authorities have filed a criminal case against Tulip Siddiq, alleging that she has misused her position as a member of parliament to gain undue influence. She is also accused - along with Sheikh Hasina - of having illegally obtained desirable plots of land.

Chancellor Rachel Reeves is back from China and is pledging to go "further and faster" to improve economic growth, after UK Government borrowing costs hit their highest level for 16 years. Reeves said she was "under no illusion" about the scale of the challenge she faces on the economy, but accused her Conservative opposition of ignoring "global volatility" behind rising borrowing costs in other countries such as the US, Germany and France. "The economic headwinds that we face are a reminder that we should, indeed we must, go further and faster in our plan to kick-start economic growth that plunged under the last government," she told MPs in the House of Commons. She also promised to set out new economic policies after next week's meeting of the World Economic Forum in Davos, and, the BBC says, will “fast-track” the industrial strategy promised in Labour's manifesto in a bid to help bolster growth. [1] Reeves also said agreements reached during her visit to China would be worth £600m to the UK over the next five years, but Shadow Chancellor Mel Stride said the current higher level of debt interest costs would be "100 times what she says she has brought back from Beijing". Liberal Democrat Treasury spokesperson Daisy Cooper pointed out that the benefits from the new China deal are the equivalent to "just five hours of NHS spending".

Two thirds of CFOs representing 52 major retailers who responded to a survey by the British Retail Consortium (BRC) said their business will be forced to raise prices as a result of higher wage bills as a consequence of hikes to employer national insurance contributions (NICs) and the minimum wage introduced in Chancellor Rachel Reeves’ first Budget. Around 70% of respondents also said they were “pessimistic” or “very pessimistic” about trading conditions over the coming 12 months, with almost half (46%) saying they expected to trim headcount in shops, and majority of 56% planning to reduce hours and pare back overtime. 31% of retailers also plan to invest more in automation, with staff being replaced by more self-checkouts. BRC CEO Helen Dickinson said changes to NICs have a “disproportionate impact” on retailers and their supply chains, who together employ 5.7m people across the country.

Hiring by companies outside London fell sharply after Reeves’s tax raid, recruitment firm Robert Walters has noted, reporting a 45% drop in fee income from its operations outside London in the final quarter of 2024. Income in London, however, rose by 3%. Robert Walters’ CEO Toby Fowlston said: “There’s no denying the increase in National Insurance contributions in particular has been a dent to employers, and obviously that cost is needing to be absorbed.”

Business confidence overall has plunged to its lowest level since the wake of the 2022 ‘mini-Budget’, according to a survey from the Institute of Chartered Accountants in England and Wales (ICAEW). The mounting tax burden was cited by 41% of businesses as their biggest challenge, a record high in the survey’s history.

Inflation fell to 2.5% in December, the latest figures from the Office for National Statistics (ONS) show, down from 2.6% in November, but still well above the Bank of England’s 2% target. Services inflation fell to 4.4% from 5% previously. Core inflation, which strips out food and energy, came in at 3.2%, down from 3.5% the month before. The fall in the headline rate of inflation was driven by lower hotel prices, and a slower increase in the price of tobacco, the ONS said, offset by the rising cost of fuel and second-hand cars.

A ban on the import of pigs, sheep and cattle into the UK from Germany has been introduced following a case of foot-and-mouth disease in the country. The government says that from today it will no longer approve health certificates for animals, fresh meat and animal products susceptible to the disease to prevent its spread to this country, where there are currently no confirmed cases.

Former ITV chair Sir Peter Bazalgette, ex-head of the defence staff Gen Sir Nick Carter and FA chair Debbie Hewitt are among members of the Government's new Soft Power Council, which is being chaired by foreign secretary David Lammy and culture secretary Lisa Nandy, Sky News says.

Sir Tim Martin, founder and chairman of JD Wetherspoon, has told The Telegraph he believes Angela Rayner’s workers’ rights reforms risk imposing “Big Brother thought control which would be a bureaucratic nightmare to enforce.” The Equality and Human Rights Commission (EHRC) says the new proposals introduced in Labour’s Employment Rights Bill to force employers to protect staff from “third parties” could apply to “overheard conversations” among customers. A spokesman for the British Beer and Pub Association said: “No one should be subject to harassment from third parties whilst undertaking their job, and we support steps to prevent that. However, any new legalisation must be carefully drafted to make sure it does not have unintended consequences, such as pub workers expected to decide whether private conversations between customers constitute a violation of law.”

Layoffs at asset manager Brooks Macdonald have been labelled “pretty brutal” by former employees, City AM reports. A number of staff were made redundant in the months before Christmas, the newspaper says, including the firm’s global head of distribution, its global head of marketing, and its head of public relations, in a bid to save costs following a series of acquisitions. Brooks Macdonald has bought financial planning firms CST Wealth Management and Lucas Fettes Financial Planning, and independent financial advisor LIFT, in deals worth up to £45m. The firm’s COO was let go in August. “It seemed to me that they were keeping it below the 10% threshold, and doing it over a staggered period of time, so they didn’t have to enter into a consultation,” said one former employee, who also noted there would have been significant cross-over in responsibilities with staff in newly-acquired firms.

The Government has further reduced its ownership of NatWest Group, cutting its stake yesterday to 8.9% from 9.99%. What was then the Royal Bank of Scotland Group was bailed out by the Treasury during the financial crisis of 2008 and 2009, with the state initially taking an 84% stake.

[1] This includes the establishment of an Industrial Strategy Council to provide expert advice. “We will ensure a pro-business environment, with a competition and regulatory framework, that supports innovation, investment, and high-quality jobs. Procurement and trade policy will also be aligned with our industrial strategy priorities,” the manifesto said.