Mid-earners 25 to 34-year-olds ‘locked out of Home-ownership’

(qlmbusinessnews.com via bbc.co.uk – – Fri, 16 Feb, 2018) London, Uk – –

The extent to which young people are locked out of the British housing market has been revealed in new figures from economists.

The biggest decline in home ownership in the last 20 years has been among middle-income 25 to 34-year-olds, the Institute for Fiscal Studies said.

In 1995-96, 65% of this group owned a home, but just 27% do in 2015-16, with the biggest drop in south-east England.

Middle earners are defined as having take-home pay of £22,200 to £30,600.

This can be either as an individual or as a couple.

A third of them are university graduates, while 30% left school at 16. Three-quarters of them live with a partner, and around 60% have children.

The proportion of these middle earners owning a home (27%) has moved closer to the likelihood of those with a low income (8%) than those on a high income (64%).

‘Money down the drain’

Tom Bourlet pays £535 per month to rent a room in a flat in central Brighton.

“I’ve been renting it for two-and-a-half years. It really is money down the drain,” the 30-year-old says.

“I don’t really see much for it – it’s not the biggest room.”

The location is handy for work, and is close to the railway station, but Mr Bourlet would prefer to have somewhere “to be proud of, and build up myself”, he adds.

However, buying somewhere is “completely beyond budget at the moment”.

“It’s absolute Mission Impossible,” he says.

“From rent, to paying for trains… all the utility bills keep shooting up. I mean, I’m nowhere near, I’m not even slightly close. I’m saving every month, but the deposit is so high that it just seems beyond reach at the moment.”

Andrew Hood, a senior research economist at the IFS, said: “Home ownership among young adults has collapsed over the past 20 years, particularly for those on middle incomes.

“The reason for this is that house prices have risen around seven times faster in real terms than the incomes of young adults over the last two decades.”

Property price rises were significant in the South East of England. As a result, the region has seen the proportion of homeowners among 25 to 34-year-olds fall from 64% to 32% in two decades.

Every region of Britain had seen a 10 percentage point drop over the same period, the IFS said. This will lead to some tough decisions for today’s 20 to 30-somethings, according to Iona Bain, founder of the Young Money blog.

“It is really hard to see how we can make this better when we are still seeing a huge demand for housing and that housing demand is not being met with the right number of houses,” she said.

“Individuals are having to decide for themselves: do I want to rent and have the flexibility but pay more for it, or do I want make a lot of difficult decisions to get on the property ladder sooner and potentially stay put for many, many years to come?”

Housing minister Dominic Raab said that schemes such as Help to Buy and the removal of stamp duty for most first-time buyers had helped people to buy their first home.

He also said that £45m would be invested into community projects that would help kick-start the building of thousands of new homes.

 

UK shares fell on Friday morning amid market volatility

(qlmbusinessnews.com via bbc.co.uk – – Fri, 9 Feb 2018) London, Uk – –

UK shares fell on Friday morning, but the declines were not as big as those seen in Asia and the US.

The benchmark FTSE 100 index dropped 30.22 points, or 0.4%, to 7,140.47.

Asian markets saw hefty falls overnight, while in the US on Thursday the Dow Jones fell by more than 1,000 points for the second time this week.

The big sell-offs around the world this week have been pinned partly on concerns over the prospect of higher interest rates.

In Asia on Friday, Japan’s Nikkei 225 shares index closed down 2.3% while China’s Shanghai Composite slumped 4.1%.

In the US, the Dow Jones ended Thursday’s trading session 4.2% lower at 23,860, and the wider S&P 500 index closed down 3.8%.

Thursday’s declines mean the Dow and S&P 500 have now fallen by more than 10% from the record highs set in January, a threshold that analysts call a correction.

However, the falls seen in Europe on Friday were not as steep. Germany’s Dax share index and France’s Cac 40 index were both down 0.4%.

Bank of England deputy governor Ben Broadbent told the BBC that markets might have underestimated the prospect of a pick-up in inflation.

“If you look at what happened last year, particularly in the United States but also other equity markets, there was extremely strong growth – big rises in prices – as people gradually realised how strong the global economy was,” he said.

“If markets are responding understandably to that growth, it’s possible they weren’t pricing in the risk that that same growth would produce some inflation and some rises in interest rates, and I think what you’re seeing now is the effect of that realisation.”

Sue Noffke, UK equities fund manager at Schroders, told the BBC that given how well stock markets have been doing for the past few years, the sell-off this week was not that unusual.

“In the context of the rises we’ve seen, certainly this kind of pull-back of 5-10% is quite normal for markets – it just hasn’t been normal for the last couple of years where we’ve seen very low levels of volatility and very small levels of weekly or monthly moves.

“The [economic] fundamentals haven’t changed, they haven’t deteriorated. What’s happened is a bit of steam has come out from what was quite a heated situation at the beginning of the year.”

Why are markets falling?

The global sell-off began last week after a solid US jobs report fuelled expectations that the Federal Reserve would need to raise interest rates faster than expected, because of the strength of the economy.

That concern has prompted the pullback from stocks.

On Thursday, the Bank of England seemed to offer support for the view that rates in general are on an upward path.

The Bank left interest rates at 0.5% at its meeting, but said a strengthening economy meant interest rates were likely to rise sooner than the markets were expecting.

Also worrying investors was a government budget proposal announced by US lawmakers, which raises spending caps and could fan inflation.

Bond yields in the US have also risen in recent weeks, typically a signal of higher rates.

Higher interest rates push up borrowing costs for companies and individuals, which can hurt corporate profits and curb economic activity.

At the same time, higher interest rates can make investment alternatives to stocks, such as bonds, more attractive.

 

 

Tesco gender pay claim could cost supermarket up to £4bn

 

(qlmbusinessnews.com via bbc.co.uk – – Wed, 7 Feb 2018) London, Uk – –

Tesco is facing Britain’s largest ever equal pay claim and a possible bill running to £4bn.

Thousands of women who work in Tesco stores could receive back pay totalling £20,000 if the legal challenge demanding parity with men who work in the company’s warehouses is successful.

Lawyers say hourly-paid female store staff earn less than men even though the value of the work is comparable.

Tesco said it worked hard to ensure all staff were paid “fairly and equally”.

Paula Lee, of Leigh Day solicitors told the BBC it was time for Tesco to tackle the problem of equal pay for work of equal worth.

Her firm has been contacted by more than 1,000 Tesco staff and will this week take the initial legal steps for 100 of them.

The most common rate for women is £8 an hour whereas for men the hourly rate can be as high as £11 an hour, she added.

She said it was a problem that had been “hiding in plain sight” for years.

“We believe an inherent bias has allowed store workers to be underpaid over many years,” she said.

“In terms of equal worth to the company there really should be no argument that workers in stores, compared to those working in the depots, contribute at least equal value to the vast profits made by Tesco.

“The law has been there since 1984 – you can compare with a different job.

“That’s 34 years to put your house in order; that’s 34 years of having the advantage of paying unequally, 34 years of you making pay decisions and making financial decisions and 34 years hiding what is in open sight.”

Significant bill?

Leigh Day said that up to 200,000 supermarket workers could be affected, the majority of them women.

Initial claims have been lodged with the conciliation service, ACAS – the first stage in what is likely to be a lengthy legal process through the employment tribunal system which could last several years.

If even a small proportion of the women are successful, the bill for Tesco would be significant.

Birmingham City Council is now liable for over £1bn pounds in payments after settling an equal pay claim from women employed as cleaners, cooks and carers.

Their pay was below men in comparable jobs such as bin collectors and road workers.

Tesco said that all their staff could progress equally and were paid fairly, whatever their gender or background.

“We are unable to comment on a claim that we have not received,” a spokeswoman said.

“Tesco has always been a place for people to get on in their career, regardless of their gender, background or education, and we work hard to make sure all our colleagues are paid fairly and equally for the jobs they do.”

‘Discrepancies’

Two workers for Tesco told the BBC they wanted fair treatment, arguing that their jobs in the stores were as demanding as warehouse jobs.

Pam Jenkins has been working for Tesco for 26 years.

“I think that we should be brought up to their [the men’s] level,” she told me.

“Obviously the jobs are slightly different but to put it bluntly they are of equal value.

“We deal with customers, they [the men] don’t have to. We load, we take the stock and we load the stock, they take it off the lorry and we load it onto the shelves.

“Women have been fighting for equal rights and their voice to be heard for 100 years, we are not just doing it for us, there are many people out there.

“We are just trying to put things right and it’s a shame we are still having to fight in this day and age.”

Kim Element has been working for Tesco for 23 years.

“Although we think we have equal rights, there are times where there are discrepancies and you can’t explain them,” she said.

“And I think Tesco’s are one of many companies that aren’t addressing the fact that women seem to still be paid less.”

Ms Lee said that Tesco was a good employer, signing up to a number of gender equality projects over a number of years.

But she said the company – along with many others – was still failing to reward people equally.

By Kamal Ahmed

 

 

 

Five million households protected under new energy safeguard tariff to save £115 a year

(qlmbusinessnews.com via telegraph.co.uk – – Wed, 7 Feb 2018) London, Uk – –

Energy watchdog Ofgem said it had extended its safeguard tariff to almost one million vulnerable customers, taking the total number of households protected on the tariff to more than five million.

The regulator said these households will initially save around £115 on average a year under the tariff, which stops suppliers from charging customers too much and ensures any price increase is justified by rises in underlying costs.

But it said the savings will fall to £66 a year from April when the level of the safeguard will drop due to rising gas and electricity costs.

Ofgem insisted that customers on the safeguard tariff would still be better off despite the price hike.

Dermot Nolan, chief executive of the watchdog, said: “Protecting vulnerable customers is a priority for Ofgem.

“That’s why we have extended the prepayment safeguard tariff to almost one million vulnerable households, which will help deliver a fairer, smarter and more competitive market for all consumers.

“Even when energy costs rise, people on the worst deals are better off under the safeguard tariff as they can be sure that they are not overpaying for their energy and any rise is justified.”

 

FTSE fell to its lowest in two months over inflation and rising bond worries

(qlmbusinessnews.com via uk.reuters.com — Mon, 5 Feb 2018) London, UK —

MILAN (Reuters) – The UK’s top share index fell to its lowest level in around two months on Monday as worries over inflation and rising bond yields took their toll on global equity markets.

The FTSE .FTSE fell 1.1 percent by 0929 GMT, while the mid-cap index .FTMC declined 1.3 percent. The FTSE is down more than 4 percent year to date, partly weighed down by a continued recovery in the pound from its post-Brexit lows.

On Monday the FTSE was on track for its fifth consecutive day of losses, its longest losing streak since November, in a broad-based sell-off where only a handful of stocks were trading in positive territory.

“Equity nervousness seems to be about repricing for higher yields and tighter Fed policy and the fear that the bond market has broken out of its three-decade bull market,” said Neil Wilson, analyst at ETX Capital in London.

Asian shares fell the most in over a year on Monday as fears of resurgent inflation battered bonds toppled Wall Street from record highs and sparked speculation that central banks globally might be forced to tighten policy more aggressively.

Shares in miners Anglo American (AAL.L) and Glencore (GLEN.L) rose 1 and 0.3 percent respectively as the sector found support in a rebound in metal prices.

Randgold (RRS.L) rose in early trading after the African gold miner reported 2017 profit up 14 percent thanks to increased production and said it would double its annual dividend.

Its shares however succumbed to the broader weakness, turning 1 percent lower.

An outperformer was Kingfisher (KGF.L), which rose 1.9 percent to the top of the FTSE.

Traders said the stock was supported by hopes for an easing of competition after rival Wesfarmers (WES.AX) wrote off British hardware chain Homebase for more than its purchase price, saying it had made a series of mistakes

Tesco fell 0.6 percent, outperforming the broader market.

Britain’s biggest retailer forecast profit for the full 2017-18 year slightly ahead of analysts’ expectations and confirmed it would pay a final dividend.

Ryanair (RYA.L) fell more than 3 percent.

The airline posted a 12 percent rise in fourth-quarter profit but warned of possible further disruption by pilots and said it was not optimistic about average fares in European short-haul in the summer.

Financials and consumer staple stocks were the biggest weight to the FTSE, taking a combined of 26 points off the blue chip index.

By  Danilo Masoni

 

Automation to put most Jobs at risk in cities that voted ‘most strongly for Brexit,’ think tank claims

Wikimedia commons

(qlmbusinessnews.com via telegraph.co.uk – – Mon, 29 Jan 2018) London, Uk – –

One in five jobs in Britain will be displaced by 2030 as a result of automation, deepening economic and political divisions across the country, a new report claims.

Around 3.6 million jobs will be taken over by robots and artificial intelligence – with northern and Midlands cities more exposed to job losses than cities in the south.

A report published by the think tank Centre for Cities claims that retail occupations, customer service roles and warehouse jobs are among those most at threat, and national and local leaders “should act now to prepare people and places for the changes ahead”.

The report found that cities in the north and in the Midlands are more at risk of job losses, where around 23pc of jobs are under threat, compared to wealthier cities in the south where 18pc of jobs are in jeopardy.

The report raises concerns that automation will magnify the political dissatisfaction and divisions highlighted by the outcome of the EU referendum in 2016 – with many of the cities most at risk of losing jobs also among those which voted most strongly for Brexit.

Mansfield, for example, is home to the highest share of jobs likely to decline of any UK city, and also had the largest proportion of residents who voted in favour of leaving the EU.

By comparison, the cities with the lowest share of jobs at risk are predominantly affluent places in the south of England, which mostly voted in favour of remaining in the European Union.

Andrew Carter, chief executive of Centre for Cities, said that while automation and globalisation will bring huge opportunities to increase prosperity and jobs, “there is also a real risk that many people and places will lose out”.

He said: “In an ever more divided country, it’s increasingly clear that a one-size-fits-all approach from central government is inadequate to address the myriad issues that different places face. The Government needs to give cities more powers and resources to tackle the issues that automation and globalisation will present, and to make the most of the benefits they will bring.”

Mr Carter said that city leaders should be given powers and a direct democratic mandate to tackle the specific challenges in their place.

The report is one of many published out warning of the risks of automation. In November, a study from consultancy McKinsey said as many as 700 million people worldwide could be displaced from their jobs by robots by 2030, particularly if advanced economies switch to new technology rapidly.

If the pace is more modest – as the analysts expect – then around 375m people, or 14pc of all workers, would have to move jobs and retrain.

Research from PwC last year estimated that robots could take up to 30 per cent of UK jobs as soon as 2030 while the Bank of England has estimated that 15 million jobs may be at risk.

A report from the World Economic Forum last week said that those displaced by automation could “easily” be re-employed after retraining and get paid more.

By Sophie Christie

 

 

Amazon UK new fulfilment centre in Rugby to create 400 jobs

(qlmbusinessnews.com via uk.reuters.com — Mon, 29 Jan 2018) London, UK —

LONDON (Reuters) – Amazon UK (AMZN.O) said on Monday it would open a new fulfilment centre in Rugby, central England, increasing its 2,500-strong workforce in the Midlands by another 400 people.

Rugby will be the fourth Amazon fulfilment centre in the region, and joins centres in Coalville and Daventry, which opened in 2016, and Rugeley, which opened in 2011, the U.S. company said.

 

 

Uk Mortgage approvals fell to their lowest level for almost five years last month

 

(qlmbusinessnews.com via news.sky.com– Fri, 26 Jan, 2018) London, Uk – –

Experts blame a squeeze on consumer incomes as new data reveals a sharp decline in the number of home loans in December.

Mortgage approvals by British banks fell to their lowest level for almost five years last month, industry figures show.

Lenders approved 36,115 home loans in December, the weakest level since April 2013.

The figure was 19% down on the same month a year before and also weaker than the 39,007 level seen in November, UK Finance said.

Meanwhile, annual growth in consumer credit slowed, from 0.8% to 0.7%.

It comes as households grapple with falling real-terms wages – as pay growth fails to keep pace with a rise in the cost of living – and also digest the impact of November’s Bank of England interest rate hike, the first in a decade.

Lenders have reported a slowdown in national house price growth in 2017, dragged down by falling prices in London.

Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said the latest data showed mortgage approvals “falling off a cliff”.

He said: “The deterioration in consumers’ confidence, driven by the squeeze on real incomes and the November interest rate hike, has taken a heavy toll on the mortgage market.”

Mr Tombs suggested that the Bank of England had “seriously misjudged the ability of the housing market to withstand even modest increases in interest rates”.

Howard Archer, chief economic adviser to the EY ITEM Club, said 2018 looked likely to be a “challenging year for the housing market”.

He said activity was “likely to be lacklustre as the squeeze on consumer purchasing power only gradually eases, confidence remains fragile and caution persists over engaging in major transactions”.

The figures come as housing industry data shows the number of new home starts in the UK rose to its highest level in a decade last year.

A total of 160,606 homes were registered in 2017, up 6% on the year before and the highest since before the financial crisis in 2007, when the figure stood at 198,929, the National House Building Council (NHBC) said.

New home completions were also up, climbing 4% to 147,278, the highest level since 2008.

The report also sounded a positive outlook for building this year.

Theresa May is targeting an increase in the construction of new homes to 300,000 a year to address Britain’s shortage of housing.

By John-Paul Ford Rojas

 

 

Britain’s growth forecast likely to be upgraded could ‘dwarf’ Brexit hit

(qlmbusinessnews.com via bbc.co.uk – – Mon, 22 Jan 2018) London, Uk – –

Britain should prepare for a much more economically optimistic 2018 because global growth is better than predicted.

That’s the argument of Lord Jim O’Neill, the former Conservative Treasury minister and Remain supporter.

He said Britain’s growth forecasts are likely to be upgraded as China, the US and Europe show increased activity.

The gloomy predictions of the possible effects of Brexit are likely to be “dwarfed” by the more positive figures, Lord O’Neill added.

But he argued that far from “changing his mind” on the economic effects of Brexit, the question now for the UK was how much better the country could be doing without the uncertainty over its relationship with the European Union.

“I certainly wouldn’t have thought the UK economy would be as robust as it currently seems,” Lord O’Neill, who is on the board of the Northern Powerhouse Partnership, told me.

“That is because some parts of the country, led by the North West [of England], are actually doing way better than people seem to realise or appreciate.

“As well as this crucial fact, the rest of the world is also doing way better than many people would have thought a year ago, so it makes it easier for the UK.”

A recent assessment by Cambridge Econometrics for the Mayor of London suggested that growth across the UK could be on average 3% lower by 2030 than it would have been if Britain remained within the EU’s single market and customs union.

“If that’s the worst that Brexit will deliver, then I wouldn’t worry about it,” Lord O’Neill said ahead of the World Economic Forum in Davos, Switzerland, where there are likely to be a number of positive growth upgrades published for the global economy.

“Now, my own view is if we go for a really hard Brexit or a no-deal Brexit, we’ll probably suffer more than that 3%.

“But if it is only 3%, what’s going on with the rest of the world – helping us – and with productivity improving, that will easily dwarf a 3% hit over 13 years, easily.”

Lord O’Neill said it was ironic that Britain was leaving the EU at just the time growth was increasing across the continent, given that one of the arguments for leaving was unshackling the UK from a number of “sclerotic” European economies.

Better global growth helps UK exports – an important driver of the British economy.

I asked him whether his optimistic forecasts now revealed that he, and many economists, had simply been too pessimistic about the effects of a Brexit vote.

“I’m almost embarrassed to accept that it might sound like that,” Lord O’Neill replied.

“Because of course, in principle, I share the views of many that Brexit is a really weird thing for the UK to impose on itself from an economic perspective.

“And maybe this [better global growth] means the country’s going to be able to cope with Brexit better than certainly somebody like me might have thought some time ago.

“But I would quickly add at the same time, I have felt for a good couple of years, as important as Brexit is, it isn’t the most important thing facing Britain’s future.”

He said that global growth, better productivity and rebalancing government policies to support the north of England and other regions beyond London was much more important.

There was some evidence, Lord O’Neill argued, that was now happening.

He said that the “Brexiteers are going to be like the cat with the cream. They’re like ‘there you go, told you so’, which of course is ridiculous”.

Lord O’Neill said that major sectors of the economy that are closely linked to the EU, such as car manufacturing and pharmaceuticals, were still facing significant threats because of the government’s proposals to leave the customs union and the single market.

Over the past six months economic forecasts have become more bullish on world growth. China, the US and Germany have all published strong economic data and last autumn the International Monetary Fund upgraded its global predictions.

“I’m guessing world GDP growth of at least 4%, so a good half percent higher than the consensus is currently saying – and signs of it actually accelerating,” Lord O’Neill said.

“Virtually every major place I can think of, [with the] possible exception of us, are all sharing in it at the same time. World trade – just when everybody’s trying to write it off – has actually risen sharply.”

He said that President Donald Trump’s reforms of the tax system and plans to loosen regulatory controls would boost the US economy.

“The secular stagnation that the likes of Larry Summers [the former US Treasury Secretary] have talked about for a few years looks suspiciously dodgy. I would imagine that the idea is going to be back tracked pretty quickly now.”

By Kamal Ahmed

 

PFI deals to cost taxpayers billions claims watchdog

(qlmbusinessnews.com via bbc.co.uk – – Thur, 18 Jan 2018) London, Uk —

Financing projects like schools and hospitals privately costs taxpayers billions of pounds more than public sector alternatives, parliament’s spending watchdog says.

A report suggests a group of schools cost 40% more to build and a hospital 70% more to construct than if they were financed by government borrowing.

That is according to a report from the National Audit Office (NOA).

The Treasury said PFI contracts ensured risk was borne by the private sector.

The NAO found 716 public projects were active under PFI and its successor PF2, with annual costs amounting to £10.3bn in 2016/17.

PFI projects will cost the taxpayer a further £199bn by the 2040s, it said.

The government said both PFI and PF2 improved public services.

The report was written before the collapse of Carillion, which held numerous public contracts, including those under PFI, from building schools to maintaining prisons and highways.

PFI contracts were first introduced under John Major’s Conservative government.

Under such deals private consortiums build facilities like schools, hospitals and roads, in return for regular payments over as many as 30 years.

Their use proliferated under Tony Blair’s Labour government, but PFIs fell out of favour after the 2008 financial crisis, as the cost of private finance increased and as questions were raised over the costs of using this model.

Since then the Departments for Health and Education have used the new PF2s which the Treasury argues is more transparent and “better value for money”.

“Taxpayer money is protected… as the risks of construction and long-term maintenance of a project are transferred to the private sector,” a Treasury spokesperson said.

However, the NAO said there had never been a “robust evaluation” of the benefits.

It said the expected spend on one group of schools financed by PF2 were around 40% higher than the costs of a similar project financed by government borrowing.

It also said Treasury Committee analysis from 2011 estimated the cost of a privately financed hospital was 70% higher than a comparative project in the public sector.

The watchdog identified “additional costs compared to publicly financed procurement” incurred using PFIs.

For example, it said the capital raised through PFI cost 2% to 3.75% more compared to state borrowing.

“Small changes to the cost of capital can have a significant impact on costs,” the report said.

“Paying off a debt of £100m over 30 years with interest of 2% costs £34m in interest. At 4% this more than doubles to £73m.”

In the past PFI deals have been accused of leading to huge cost overruns and indebting NHS trusts.

The union UNISON called the report “a scathing indictment of all that is wrong with PFI”.

Meg Hillier MP, chair of the Public Accounts Committee, said the NAO had found “little evidence” that PFI’s benefits offset its costs.

“Many local bodies are now shackled to inflexible PFI contracts that are exorbitantly expensive to change,” she said.

At Prime Minister’s Questions on Wednesday, Labour leader Jeremy Corbyn urged the government to end the “costly racket” of private sector firms running public services.

The government said PFI and PF2 had funded vital infrastructure projects like roads, schools and hospitals and had helped the economy.

 

Iceland supermarket to go plastic free in five years with paper and pulp alternatives to its brands

 

Wikimedia

(qlmbusinessnews.com via news.sky.com– Tue, 16 Jan, 2018) London, Uk – –

The supermarket has developed paper and pulp alternatives for 1,000 of its lines and plans to remove plastic from its own brands.

A British supermarket believes it will be the first retailer in the world to  make its own-brand products plastic-free within five years.

Iceland, the frozen food specialist, says it has worked with environmental charities and experts to develop paper and pulp alternatives that are fully recyclable, affecting more than 1,000 lines.

“We’ve created a monster,” managing director Richard Walker told Sky News.

“Plastic does not degrade, it lasts for half a millennium. Every minute there’s a truckload of plastic waste entering the ocean.

“It’s ubiquitous, it’s in everything, it’s in up to 50% of what the average supermarket sells. The time to act is now.

“Take our ready meals. They are in a board carton sleeve which is good, made of paper, but the problem is the black plastic tray.

“We’re going to replace that with a wooden board tray, and the final piece of the jigsaw is the plastic film over the top: we’re looking at cellulose-based technologies which are made from paper pulp.”

Some within the plastics industry think it’s a step too far and are questioning how “green” the move really is.

“It’s a really surprising announcement”, Barry Turner from the British Plastics Federation said. “The reason a lot of supermarkets embraced plastics packaging is because it’s resource efficient.

He claimed: “If they move away from plastics in the way that they’ve declared, it will mean that the weight of the packaging they use will increase four times, the carbon emissions will increase by around three times, the amount of energy to make that packaging will increase two-fold.

“So, the net result is that the environmental footprint of the packaging that they’re including, will increase.”

According to Plastics Oceans Foundation an estimated eight million tonnes of plastic enters the world’s oceans every year, putting all forms of marine life at risk.

Campaigns like Sky Ocean Rescue are changing the way consumers are thinking about plastic.

Iceland said a survey of 5,000 shoppers found that 91% would be more likely to encourage friends and family to shop there if they pursued a plastic-free future.

The chain isn’t the biggest player within its industry – its market share is just 2%. But, it’s hoping customers buy into it, like they do at zero-waste food shop Hetu in Battersea, albeit on a much smaller scale.

“My business plan is to be out of business in five years,” said Laura Boyes who set up the store six weeks ago.

“I want a big organisation to do a shop like this, fully plastic-free, and do it on a large scale where you can pass savings on to the customers and know the supply chains, and do it from a wholesale point of view.”

While Iceland welcomes the Prime Minister’s call for “plastic-free aisles”, it points out that it has been working on this for a year, and it’s convinced it’s the way forward.

“By doing this we’re showing it can be done, it is possible,” added Mr Walker.

“I’m genuinely calling on all supermarkets to join us in this fight. It’s a time for collaboration. We want everyone to come up with similar pledges and share technologies to make it a reality.”

By Lisa Dowd

 

 

Carillion goes into liquidation threatening thousands of jobs

(qlmbusinessnews.com via bbc.co.uk – – Mon, 15 Jan 2018) London, Uk – –

Construction giant Carillion is to go into liquidation, threatening thousands of jobs.

The move came after talks between the firm, its lenders and the government failed to reach a deal to save the UK’s second biggest construction company.

Carillion ran into trouble after losing money on big contracts and running up huge debts.

Its failure means the government will have to provide funding to maintain the public services run by Carillion.

“All employees should keep coming to work, you will continue to get paid. Staff that are engaged on public sector contracts still have important work to do,” said government minister David Lidington.

Carillion is involved in major projects such as the HS2 high-speed rail line, as well as managing schools and prisons.

Carillion chairman Philip Green said it was a “very sad day” for the company’s workers, suppliers and customers.

The company has 43,000 staff worldwide – 20,000 in the UK. It is not clear yet how those staff will be affected.

Carillion also employs thousands of smaller firms, who will be keen to know how they are affected by its collapse.

Some of Carillion’s contracts will be taken on by other firms and some could be taken back into the public sector.

Damned if they did, damned if they didn’t?

The government refused to insure Carillion’s debts, so the banks pulled the plug. If it had offered guarantees to big banks on behalf of a private company it might have been accused of nationalising losses while privatising profits.

The whole point of having private companies do public work is that they shoulder some of the risk. The truth is the government has been helping out Carillion for a while. Awarding it contracts when it knew it was in trouble raised eyebrows last year.

The government constructed the HS2 contracts so that Carillion’s joint venture partners would take on the work if the company went bust – meanwhile it hoped the new contracts would be enough to make Carillion’s lenders feel reassured.

Industry sources tell me that if the company hadn’t been awarded new government work it would have been curtains for Carillion months ago.

Pension impact

Thousands of current and former staff have money in Carillion pension funds, which have deficit of almost £600m.

Those funds will now be managed by the Pension Protection Fund (PPF).

The PPF said it was aware news of the liquidation would “raise serious concerns for all people involved”.

“We want to reassure members of Carillion’s defined benefit pension schemes that their benefits are protected by the PPF.”

Shadow business secretary Rebecca Long-Bailey said Labour wanted a full investigation into the government’s dealings with Carillion: “This company issued three profit warnings in the last six months, yet despite those profit warnings the government continued to grant contracts to this company.”

She added that she did not want the government to take on the contracts that were loss-making, while selling the profitable ones to other private companies.

Carillion’s government projects

  • HS2 Building part of the high-speed rail line between London, Birmingham, Leeds and Manchester
  • MoD homes Maintains 50,000 homes for the Ministry of Defence
  • Schools Manages nearly 900 buildings nationwide
  • Network Rail Second largest supplier of maintenance services
  • Prisons Holds £200m in prison contracts
  • Contingency plans for the failure of Carillion are in operation:
    • Oxfordshire County Council has taken over services provided by Carillion including some school meals and cleaning. It said the fire service was on standby to deliver school meals if necessary.

     

Carillion has a big international business, including a huge construction project in Qatar related to the 2022 FIFA World Cup.

It is also a big supplier of construction services to the Canadian government.

Network Rail says rail services will run as normal because Carillion’s work does not involve day-to-day running.

‘Public service’

Bernard Jenkin, the Conservative chairman of the House of Commons Public Administration Committee, said Carillion’s collapse “really shakes public confidence in the ability of the private sector to deliver public services and infrastructure”.

He said there needed to be a change of “mindset” at companies that do a lot of work for the taxpayer.

“You’ve got to treat yourself much more as a branch of the public service, not as a private company just there to enrich the shareholders and the directors,” he said.

“Ironically, Whitehall tends to do contracts with companies that it always does contracts with, because that’s the safe thing to do – that’s the perception. A great many small and medium-sized companies feel excluded.”

Mick Cash, the general secretary of the Rail, Maritime and Transport (RMT) union, said: “This is disastrous news for the workforce and disastrous news for transport and public services in Britain.

“RMT will be demanding urgent meetings with Network Rail and the train companies today with the objective of protecting our members jobs and pensions.”

Rehana Azam, national officer of the GMB union, said: “What’s happening with Carillion yet again shows the perils of allowing privatisation to run rampant in our schools, our hospitals and our prisons.”

 

 

 

Britain’s steel industry brace for Donald Trump’s import decision

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(qlmbusinessnews.com via telegraph.co.uk – – Fri, 12 Jan, 2018) London, Uk – –

Britain’s steel industry is bracing to discover if it will be blocked from exporting to the US as President Donald Trump’s “America First” policy gains momentum.

The US Department of Commerce on Thursday presented Mr Trump with a report on steel imports after he triggered an investigation into foreign steel’s impact on American industry. The President has 90 days after the submission to decide on any potential action based on the findings of the investigation, the US Government department said.

The President has pledged to “fight for American workers and American-made steel”, and last year ordered Commerce Secretary Wilbur Ross to begin a probe into the matter.

Known as a “Section 232” investigation, the study is a prelude to trade sanctions, such as a block on imports or huge levies. It examines whether imports could be putting US national security at risk because they are driving domestic producers out of business, making the country reliant on foreign suppliers who are often state-subsidised, allow them to “dump” products abroad.

Once the report is issued, the president has 90 days to decide if he agrees with it and then 15 days to act upon its findings, with measures such as trade bans, quotas or tariffs.

However, Britain’s steel makers fear they could be cut out of a crucial export market if the investigation leads to a wide-ranging controls.

America is a crucial market for Britain’s steel industry, with UK companies exporting about 250,000 tonnes there annually – about 7pc of total exports – and worth about £330m a year.

Gareth Stace, director of  trade body UK Steel, said: “The publication of these recommendations will be a critical event for the UK steel industry. Any that come down strongly on steel products across the board would have a particularly harsh impact.”

He said British steelmakers – who were driven to their knees two years ago by a flood of subsidised steel imports from China – “shared the US government’s concern” about dumping.

Mr Stace said UK steelmakers are “hoping for a balanced and measured response” which only affects subsidised companies.

“Using a sledgehammer to crack a nut is not the answer here,” he added.

By  

 

Brexit: London Mayor warns £50bn investment could be lost over 12 years with ‘no deal’

Wikimedia commons/Mayor of London

(qlmbusinessnews.com via uk.reuters.com — Thur, 11 Jan 2018) London, UK —

LONDON (Reuters) – Britain could lose almost 500,000 jobs and 50 billion pounds investment over the next 12 years if it fails to agree a trade deal with the European Union, according to a report commissioned by London Mayor Sadiq Khan.

Cambridge Econometrics, an economics consultancy, looked at five different Brexit scenarios, from the hardest to the softest form of Brexit, and broke down the economic impact on nine industries, from construction to finance.

The study said that in a no-deal scenario, the industry that fares the worst will be financial and professional services, with as many as 119,000 fewer jobs nationwide.

“If the Government continue to mishandle the negotiations we could be heading for a lost decade of lower growth and lower employment,” Khan said. “Ministers are fast running out of time to turn the negotiations around.”

Britain and the EU will soon begin the much harder task of defining their future trading relationship, after settling the broad terms of their divorce settlement last month.

A stand-off between Britain and the EU over the future access to single market for London’s vast financial services industry is shaping up to be one of the key Brexit battlegrounds before Britain is due to leave the bloc in March 2019.

Reporting By Andrew Mac

 

International students worth £20bn to the UK economy report claims

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(qlmbusinessnews.com via bbc.co.uk – – Thur, 11 Jan 2018) London, Uk – –

International students are worth £20bn to the UK economy, says a report from the Higher Education Policy Institute.

The analysis says on top of tuition fees, their spending has become a major factor in supporting local economies.

London alone gains £4.6bn – with Sheffield the biggest beneficiary in proportion to its economy.

The think tank’s director, Nick Hillman, says the figures support calls to remove students from immigration targets.

There are about 230,000 students arriving each year for university courses in the UK – most of them postgraduates, with China the most common country of origin.

Spending power

The analysis, carried out by London Economics, calculated the financial contribution of overseas students, such as spending on tuition and living expenses, and balanced that against costs, including the extra pressure on local services and non-repayment of loans.

Mr Hillman says the report provides comprehensive evidence that overseas students are a significant benefit and that students from outside the European Union, who pay higher fees, are worth £102,000 each to the UK economy.

“International students bring economic benefits to the UK that are worth 10 times the costs of hosting them,” says Mr Hillman.

“Fewer international students would mean a lot fewer jobs in all areas of the UK, because international students spend money in their universities, in their local economies,” he says.

“It is literally the sandwich shops, the bike shops, the taxi firms; it is the night clubs, it’s the bookshops.

“Without international students, some of the local companies might go bust. Some of the local resident population would lose their jobs,” says Mr Hillman.

The Higher Education Policy Institute, which carried out the study with education company Kaplan, argues that the UK should have a more positive approach to students from overseas – and separate them from the wider debate about immigration.

Regional winners

The institute quotes a recent report from India’s Hindustan Times that told its readers that the UK had many top universities, “but they also offer the most student-hostile government in the world”.

While the institute argues the students should be removed from the wider debate about reducing net migration, the Home Office said there were “no plans” for such a change to how migration targets were measured.

“There is no limit to the number of genuine international students that can come to the UK to study and we very much value the contribution that they make,” said a Home Office spokeswoman.

The Home Office says the Migration Advisory Committee is also carrying out an assessment of the economic impact which will provide evidence for shaping the “future migration system”.

The Higher Education Policy Institute analysis also carried out a regional breakdown of the economic impact of international students, calculating that each constituency on average gained £31.3m.

London has the biggest share of overseas students – but the study shows that in relative terms, smaller cities, with more than one university, can have a greater impact from their spending.

The study breaks down the financial impact of international students by parliamentary constituency.

Top 10 constituencies with biggest economic impact from international students

  1. Sheffield Central
  2. Newcastle upon Tyne
  3. Nottingham South
  4. Oxford East
  5. Manchester Central
  6. Holborn and St Pancras (London)
  7. Liverpool, Riverside
  8. Cambridge
  9. East Ham (London)
  10. Birmingham, Ladywood

By  Sean Coughlan

 

BCC warns shortage of skilled workers in the UK is reaching ‘critical levels’

(qlmbusinessnews.com via news.sky.com– Wed, 10 Jan, 2018) London, Uk – –

A business group warns the crisis is the biggest potential drag on firms in 2018, as “it is people that make businesses work”

The shortage of skilled workers in the UK is reaching “critical levels” and a large number of companies are struggling to recruit qualified staff, a business group has warned.

Research by the British Chambers of Commerce (BCC) showed 71% of businesses in the services sector are finding it difficult to hire the right workers – the highest figure on record.

Three-quarters of manufacturing firms that were hiring also had problems finding workers with the right skillset.

The findings coincide with fears that the economy is already suffering a brain drain amid uncertainty over immigration and trade rules after the UK leaves the European Union.

Official figures released in November showed a leap in the number of EU citizens leaving Britain in the 12 months to June.

But the BCC has suggested that the Brexit vote is only part of a wider issue, as employment levels remain historically high despite a slowdown in investment, recruitment and output.

Director general Dr Adam Marshall said: “While there are many business bright spots across the UK, the evidence from the biggest private business survey in the country shows that growth and confidence remain subdued overall as we enter a new year.

“Labour and skills shortages are set to be the biggest potential drag anchor on business in 2018, since ultimately it is people that make businesses work.

“Business itself must do more, by training and investing wherever possible in people, but Government must also give firms the confidence to put their livelihoods on the line and go for growth.

“This must be the year employers act rather than just complain on skills, and the year Government delivers clarity, leadership and investment in people and infrastructure. Kick-starting growth, and boosting wages and prosperity for all, depends on this.

“Other findings from the survey included cost pressures remaining a worry for demand in the economy – especially among consumer-facing firms such as retailers.

Suren Thiru, the BCC’s head of economics, said: “Looking forward, the UK economy is set to continue on an underwhelming growth trajectory over the near term with uncertainty over the impact of Brexit coupled with high inflation and weak productivity likely to dampen overall economic activity.”

The Government was yet to reply for a request for comment on the report.

By James Sillars

 

Persimmon housebuilder expect profits to beat forcast amid row over bonus payout


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(qlmbusinessnews.com via theguardian.com – – Tue, 9 Jan 2018) London, Uk – –

Housebuilder reports rising demand as row rages over scheme that could see its top 150 employees sharing £500m payout

Persimmon, the housebuilder which is paying its chief executive a £110m bonus, has said its 2017 profits will be higher than expected due to the government’s cut in stamp duty for first-time buyers.

The company, which has also massively benefited from the government’s help-to-buy scheme, handed its chief executive, Jeff Fairburn, £50m worth of shares on New Year’s Eve in the fist wave of what has been described as an “obscene” bonus.

Persimmon said it sold 16,043 homes last year for a total of £3.42bn, a 9% increase on 2016. As a result of the increase in sales, “we anticipate our pre-tax profits for the year will be modestly ahead of market consensus,” the company said.

Analysts already expect the company to post a 20% increase in full-year profits to about £957m, according to a poll by Thomson Reuters. The company will publish its full-year results on 27 February.

Persimmon did not mention the controversial bonus scheme – believed to be Britain’s most generous ever – in its brief trading update released to the stock exchange on Tuesday. The company’s top 150 employees are to share a £500m payout, linked to shareholder dividends.

The scale of Fairburn’s bonus has been widely criticised by politicians, charities and corporate governance experts, who have described it as “obscene”, “corporate looting” and a reward based on “taxpayer subsidies”. Persimmon is one of the biggest beneficiaries of the government’s help-to-buy programme, which has lifted sales and boosted house prices across the UK.

Nicholas Wrigley, a former banker, quit as Persimmon’s chairman last month, stating that he regretted not putting a cap on bonus scheme and was leaving “in recognition of this omission”. Wrigley is understood to have put pressure on Fairburn to donate some of his bonus to charity.

Fairburn, who grew up in York and went to the city’s Fulford comprehensive school, has repeatedly declined to comment about whether he intends to donate any of his bonus to charity. A spokesman for Persimmon said: “That is a private family matter for the individuals.”

The Guardian has calculated that just a fraction of Fairburn’s bonus could build enough homes to end homelessness in York. A donation of £4.6m – just 1/25th of Fairburn’s bonus – could provide a home for all of the 58 homeless families in the city.

By Rupert Neate

 

Mortgages in November the lowest for over a year

 

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(qlmbusinessnews.com via bbc.co.uk – – Thur, 28 Dec 2017) London, Uk – –

The number of households taking out new mortgages in November was the lowest for over a year, according to official figures.

UK Finance said High Street banks approved 39,507 mortgages during the month, the lowest since August 2016.

The figure represents a 5% fall on the same month a year ago.

November was the month when the Bank of England announced its decision to increase base rates to 0.5%, the first rise in a decade.

Howard Archer, chief economic adviser to the EY Item Club, said housing market activity may have taken a dent as a result of the Bank of England move.

“While the increase was only 0.25%, and mortgage rates are still very low, there may have been a significant impact on potential buyers’ psychology,” he said.Many banks also increased the cost of fixed-rate mortgages before the announcement, which may have discouraged some buyers.

But mortgage rates remain at historically low levels.

Towards the end of November Stamp Duty was abolished for first-time buyers on properties worth up to £300,000.

So it is possible that the number of mortgage approvals may recover once December’s figures are published.

Mr Archer added that 2018 would be a very challenging year for the housing market, with activity likely to be “lacklustre” and house price rises limited to around 2%.

By Brian Milligan

 

 

One in three Britons expected to shop in today’s record-breaking Boxing Day sales

Alan Cleaver/Flickr

(qlmbusinessnews.com via telegraph.co.uk – – Tue, 26 Dec 2017) London, Uk – –

One in three Britons will shop in today’s record-breaking Boxing Day sales, as retailers reduce pieces so low that many are set to make a loss.

Analysts at Barclaycard said 34 per cent of Britons will go to the festive sales, up by nearly 50 per cent from 23 per cent last year.

Discounts seen in stores are expected to be up to 90 per cent of their original price, as desperate retailers attempt to convince consumers to part with their cash.

This is despite most large retailer’s profit margins sitting at 50 per cent or lower.

It comes after consumer appetite for the post-Christmas sales period fell last year after an extended period of discounting that began well before November’s Black Friday.

Barclaycard’s poll found months of “feeling the squeeze” this year is resulting in many consumers looking forward to the sales to ease their budgets.

VoucherCodes and the Centre for Retail Research also predict that the Boxing Day sales will attract more than a third of the UK’s population, expecting them to spend a record £4.3 billion – a 12 per cent rise on 2016.

Boxing Day discounts in some stores are expected to far exceed those offered on Black Friday. for example Debenhams cutting the price of a sequin cape sleeves dress by 84 per cent, down from £99 to £15.

In addition children’s toy shop the Entertainer is cutting prices by up to 80 per cent.  Fashion retailers including Topshop, River Island and Anthropologie are offering items with up to 70 per cent off.

Meanwhile premium brands like Le Creuset will offer record discounts of up to 40 per cent on Amazon.co.uk.

Bargain-hunters were expected to have queued for sales from midnight on Christmas Day night.

Sales start in stores at 6am at Next, 8am at Sainsbury’s and 9am at most retailers.

Security guards were on duty all night for queues, with in-store staff at work as early as 3am.

Paul Lockstone, managing director at Barclaycard, said: “Last year, Black Friday overshadowed Boxing Day sales as many retailers struggled to maintain consumer interest in what has become a month-long discounting event. “This year, however, value-seeking consumers appear to be more eager to buy cut-price items across both sales periods as they try to combat rising prices.”

Richard Perks, director of retail research at consumer analyst Mintel, said: “Boxing Day will be frantic, with almost all retailers on sale. That certainly brings out the shoppers.

“People may well spend all their budgets. Homewares and electronics will be popular.”

“Shops said Boxing Day last year was the best day ever – even better than forecast – and the day gets bigger and bigger every year.”

By  

 

 

HMS Queen Elizabeth the new 3.1bn aircraft carrier has a reported leak

 

(qlmbusinessnews.com via uk.reuters.com — Tue, 19 Dec 2017) London, UK —

LONDON (Reuters) – Britain’s biggest ever warship, the new 3.1 billion pound aircraft carrier HMS Queen Elizabeth, has a leak and needs repairs,  the Ministry of Defence (MoD) said on Tuesday.

The 65,000-tonne ship, hailed as Britain’s most advanced military vessel and which was only officially commissioned by the queen two weeks ago, has an issue with a shaft seal which was identified during sea trials, the MoD said.

“This is scheduled for repair while she is alongside at Portsmouth,” a Royal Navy spokesman said. “It does not prevent her from sailing again and her sea trials programme will not be affected.”

The Sun newspaper reported that the 280-metre (920-foot) warship, the nation’s future flagship vessel, was letting in 200 litres of water every hour and the fix would cost millions of pounds.

A defence source said the navy was aware the ship, which took eight years to build, had an issue when it was handed over by manufacturers and the Sun said the builders would have to foot the repair bill.

The Aircraft Carrier Alliance – a consortium including British engineering companies BAE Systems (BAES.L) and Babcock (BAB.L), and the UK division of France’s Thales (TCFP.PA) – built the Queen Elizabeth and its sister aircraft carrier, the HMS Prince of Wales, as apart of a 6.2 billion pound project.

“It’s normal practice for a volume of work and defect resolution to continue following vessel acceptance,” BAE Systems said in a statement. “This will be completed prior to the nation’s flagship re-commencing her programme at sea in 2018.”

Chris Parry, a former senior Royal Navy officer, said all ships took on water.

“That’s why you have pumps,” he told Sky News. “When you get a brand new car not everything’s perfect, you have to send it back to the garage to get a few things tweaked. This is exactly in that bracket.”

On Tuesday, parliament’s defence committee raised questions about the procurement of the F-35 fighter jets from a consortium led by Lockheed Martin (LMT.N) which will eventually operate from the Queen Elizabeth.

 The committee said there had been an “unacceptable lack of transparency” about the programme and the MoD had failed to provide details of the full cost of each aircraft which one newspaper had estimated could be as much as 155 million pounds.

“Our new aircraft carrier is the epitome of British design and dexterity, at the core of our efforts to build an Armed Forces fit for the future,” British Defence Secretary Gavin Williamson said at the Queen Elizabeth’s commissioning.

By Michael Holden, Paul Sandle and James Davey