Marketing Newscast

MPs say Prime Minister Sir Keir Starmer’s Office for Value for Money (OVfM) might be a waste of money. The newly-established unit is supposed to improve government competitiveness and crackdown on wasteful spending, but the Treasury Select Committee says in having only 12 staff it lacks resources, and risks repeating work being done elsewhere in government, citing seven other examples of organisations, teams and processes across Whitehall supposed to ensure value for money. Also, the OVfM chairman David Goldstone – who is also a non-executive director of HS1 and was CEO of parliament’s restoration and renewal project – is only contracted into the post for a year, leading MPs to further question its benefit to the taxpayer, being so time-limited. Chair Dame Meg Hillier said the committee had “concluded the OVfM is an understaffed, poorly defined organisation which has been set up with a vague remit and no clear plan to measure its effectiveness”. “All of which leads me to feel this initiative may be something of a red herring,” she added. “The Treasury needs to share far more information about what this small team will actually achieve for the taxpayer which cannot be done elsewhere. It must also be transparent about how it will operate and how it will assess its effectiveness.” Goldstone is paid £950 a day in his job to find ways to cut public spending.

Alastair King, the new Lord Mayor of London, has criticised Chancellor Rachel Reeves for not abolishing stamp duty on UK shares, highlighting the anomaly which means investors pay more to invest in their home-listed companies than in US giants. “There is no stamp duty in relation to investing into New York-listed assets. There is stamp duty when investing in London assets. So effectively you’re starting further behind because your costs of investment are increased,” he said. A 0.5% levy is due on UK shares, which it is forecast will raise £4.2bn for the Treasury in 2024-25. While acknowledging that money is tight, King called Reeves to at least reduce the tax to boost investment and liquidity, adding that the City is crucial to reviving growth. He is also calling for regulatory reform: “We used to have a really excellent regulatory environment, King said. “Markets have moved on, and the regulatory environment has not kept pace. That’s meant effectively the erosion of the stock exchange and complacency in relation to our position.” King has led several investment firms and founded boutique asset manager, Naisbitt King, after previously working as a solicitor for Baker McKenzie. King also said that mandating pension funds to invest in British assets, as the Chancellor proposes, is not the solution to the issues faced by the declining London stock market, which has seen as exodus of stocks not matched by new listings.

Millionaires have quit Britain in record numbers since the new Labour Government came to power, The Times has reported. 10,800 millionaires emigrated last year, a 157% increase on 2023 and more than any other country bar China, according to global analytics firm New World Wealth (NWW), however the newspaper says the actual number leaving the UK could be even higher, as this is a net figure that takes into account millionaires arriving here. The data also suggests some 78 centi-millionaires and 12 billionaires left the country last year, the majority of them leaving for other European countries, notably Italy and Switzerland, and the United Arab Emirates (UAE). It also shows the rate of departure speeding up since last year’s general election was called, with one dollar millionaire leaving Britain every 45 minutes. In April, Labour will abolish the current non-dom regime which allows foreign nationals resident in the UK to not pay tax on their overseas income, in favour of a new residence-based regime that will also make all non-doms’ overseas assets subject to UK inheritance tax (IHT). Tax experts warned repeatedly before this policy was announced that it would lead to considerable number of high net worth individuals departing. “We are committed to tax reforms that are progressive and underpinned by fairness,” a Treasury spokesperson said in a statement to the Times. “It is right that those who can afford to, contribute their fair share to fix the foundations to provide stability and fund public services to drive growth.”

Former Conservative leader Sir Iain Duncan Smith has told the Government it should get on and enforce a ban on foreign state ownership of newspapers and force the sale of The Telegraph. The newspaper’s Abu Dhabi-based owners, RedBird IMI, have still not cemented a sale, despite putting it on the market nearly nine months ago when forced to do so after parliament passed the Digital Markets, Competition and Consumers Act 2024, which bans the “ownership, influence or control” of newspapers and news magazines by foreign states. However, the Act is not yet being enforced because it still requires secondary legislation that will set out limited exceptions for publicly traded companies. This process, according to Duncan Smith, is deliberate “foot-dragging” by Ministers because “they don’t want to upset the UAE.” In a written parliamentary question, he demanded an explanation of when the Government intends to commence the Act4, and must be given a reply today. Prime Minister Sir Keir Starmer travelled to Abu Dhabi in December to seek investment in major UK infrastructure projects, and Rachel Reeves is expected to lobby for UAE cash at the World Economic Forum this week in Davos, Switzerland. The Department for Culture, which closed a consultation on the secondary legislation in July, told The Telegraph: “We have not made any final decisions yet on the level of exception for ‘State Owned Investors’ from the new foreign state newspapers regime. We are still considering the consultation responses and will make an announcement in due course.”

The FTSE 100 hit a new all-time high on Friday of 8,514.79, fuelled by heightened chances of an interest rate cut by the Bank of England next month, as the economy was shown by the Office for National Statistics (ONS) to have flatlined over the final quarter of 2024, and better-than-expected inflation data. The FTSE 100’s previous all-time high was on 15^th May 2024, when it reached 8,474.71.

Workers across Britain have suffered from stagnant or falling wages in real terms since 2008, according to research by the Centre for Cities, whose CEO Andrew Carter said raising economic growth is “the only sustainable route to higher wages”, and urged Rachel Reeves to take immediate action. “The stark nature of [the] findings shows an incremental approach is not going to be enough. Boldness, urgency and scale are crucial,” he said.

Working from home is not “proper work" according to Lord (Stuart) Rose, the former boss of Marks and Spencer and Asda, who told the BBC Panorama programme that it was part of the UK economy's "general decline" and causing employee productivity to suffer. "We have regressed in this country in terms of working practices, productivity and in terms of the country's wellbeing, I think, by 20 years in the last four," he said. In a December 2024 UK snapshot survey by the ONS, 26% of people said they had been hybrid-working in the prior seven days, with some days in the office and some days at home - while 13% had been fully remote and 41% had been fully office-based (the remainder were not working at the time).

Spanish banking giant Santander is said by the Financial Times to be considering leaving Britain because of excessive red tape, and potentially seeking a buyer for its UK operations. Sources told the newspaper that costly UK rules introduced in the wake of the 2008 financial crisis – notably “ringfencing” measures which require banks to separate their retail banking from other riskier investments and international activities - have led to lower returns here than in other markets. The bank has also been forced to put aside £295m to cover potential costs from the motor finance scandal in which test cases are making their way through the courts. Santander employs around 20,000 people and has some 14m customers in the UK. It took up retail banking in Britain after buying former building society the Abbey National, in 2004. A spokesman for Santander UK said: “The UK is a core market for Santander and this has not changed.”

Asda is said to be risking a multimillion-pound penalty charge from former owner Walmart if it fails to complete a crucial £800m IT upgrade on time. According to The Telegraph, Asda has been attempting to untangle a web of tech systems used by Walmart and, unless it gets the job done by next month, will have to pay to continue to use Walmart’s technology, with sources telling the paper charges could quickly rise to millions of pounds. Asda has faced a succession of problems with the Project Future upgrade. In March last year, a botched software update meant tens of thousands of workers were paid incorrectly, then a second IT meltdown weeks later meant shoppers who had paid online for goods from Asda’s George clothing range did not receive their orders. An Asda spokesman said: “We continue to make good progress delivering Project Future and have successfully migrated large parts of our business to brand-new systems. We will continue to take a pragmatic approach when delivering the remainder of the programme and Walmart continues to be incredibly supportive in every way in helping with the implementation.”

Sky News reports that the Warsaw-listed owner of Poundland, which employs about 18,000 people in the UK, has drafted in consultants AlixPartners to advise on options to arrest a slump in sales, with a radical restructuring being among the measures being considered.

Jacob Corlett, the entrepreneur who took over parcel courier Yodel, has been criticised for leaving behind a trail of debts worth millions of pounds following the collapse of one of his other delivery businesses, Shift Trading. The Telegraph reports that Shift, which lists Corlett as a director, collapsed in July last year with more than £8m owed to more than 100 creditors, including £2.2m to HMRC. Others include smaller logistics companies across the UK, some of which are owed more than £130,000. One supplier, who claims to be owed tens of thousands of pounds from Shift, said the missing payments have had a “devastating impact” on their business. The Telegraph understands that a large group of creditors have now banded together to explore ways of retrieving their cash. Corlett bought Yodel from the Barclay family for just £1, but the deal fell apart in June 2024 after just five months; Corlett resigned from Yodel’s board and sold his stake to CEO Mike Hancox, who has since accused him of extracting millions of pounds from the business under the cover of “spurious invoices”. Hancox also claims Corlett tried to evade tax by funnelling money into an offshore company. Corlett has rejected the claims and accuses Hancox of forcing him into selling his stake, launching a counter-claim alleging Hancox rowed back on an agreement to hand over lucrative shares.