Automation to effect one in five job across the UK according to new research

(qlmbusinessnews.com via theguardian.com – – Tue, 17 Oct 2017) London, Uk – –

Workers in shadow chancellor John McDonnell’s constituency face highest risk of being replaced by robots, says research

Workers in the constituency of shadow chancellor John McDonnell are at the highest risk of seeing their jobs automated in the looming workplace revolution that will affect at least one in five employees in all parliamentary seats, according to new research.

The thinktank Future Advocacy – which specialises in looking at the big 21st century policy changes – said at least one-fifth of jobs in all 650 constituencies were at high risk of being automated, rising to almost 40% in McDonnell’s west London seat of Hayes and Harlington.

The thinktank’s report also found that the public was largely untroubled by the risk that their job might be at threat. Only 2% of a sample of more than 2,000 people were very worried that they might be replaced by a machine, with a further 5% fairly worried.

Future Advocacy’s report has been based on a PWC study earlier this year showing that more than 10 million workers were at risk of being replaced by automation and represents the first attempt to show the impact at local level.

The thinktank said McDonnell’s seat would be affected because it contains Heathrow airport, which has a large number of warehousing jobs that could be automated. Of the 92,150 employees in Hayes and Harlington in 2015, 36,170 (39.3%) were at high risk of having their jobs automated by the early 2030s. Crawley – the seat that includes Gatwick airport – was seen as the second most vulnerable constituency.

Future Advocacy said its report was an “attempt to encourage a geographically more sophisticated understanding of, and response to, the future of work, and also an attempt to encourage MPs to pay more attention to this critical issue”.

Opinion is divided on the likely impact of the artificial intelligence revolution on jobs. Optimists have said that the lesson from history is that technological change leads to more jobs being created than destroyed, while pessimists have argued that AI is different because the new machines will be able to do intellectual as well as routine physical tasks.

“One thing that almost all economists agree on is that change is coming and that its scale and scope will be unprecedented. Automation will impact different geographies, genders, and socioeconomic classes differently,” the report noted.

It added that “the highest levels of future automation are predicted in Britain’s former industrial heartlands in the Midlands and the north of England, as well as the industrial centres of Scotland. These are areas which have already suffered from deindustrialisation and many of them are unemployment hot spots.”

Olly Buston, one of the report’s authors, said it was vital that lessons were learned from the 1980s. “Let’s not have a repeat of the collapse of the coal-mining industry,” he said. “Instead, we should have a smarter strategy.”

Noting that there would be a political pay off for the party that came up with the best strategy for coping with the robot age, the report makes a number of recommendations for the government.

They include: publishing a white paper on adapting the education system so that it focuses on creativity and interpersonal skills in addition to the stem subjects of science, technology, engineering and maths; developing a post-Brexit migration policy that allows UK-based AI companies and universities to attract the best talent; exploring ways to ensure the benefits of the AI revolution are spread through research into alternative income and taxation models, including investigation of a universal basic income; and conducting further detailed research to assess which employees were most at risk of losing their jobs.

The report said that it was “arguably automation – rather than globalisation – that has created the economic and social conditions that led to political shockwaves such as the election of Donald Trump and the vote for Brexit.

The report found that the leaders of the four main Westminster parties represented seats where more than 25% of jobs were at high risk of being automated, while the constituency with the lowest proportion of high-risk jobs was Labour-held Edinburgh South.

High-risk constituencies typically contained large numbers of people working in transport or manufacturing, while lower-risk constituencies – including Edinburgh South, Wirral West and Oxford East – had high concentrations of workers employed in education and health.

By Larry Elliott

Financial Conduct Authority chief exec warns of a “pronounced” build up of debt among young people

(qlmbusinessnews.com via bbc.co.uk – – Mon, 16 Oct 2017) London, Uk – –

The chief executive of the Financial Conduct Authority has warned of a “pronounced” build up of debt among young people.

In an interview with the BBC, Andrew Bailey said the young were having to borrow for basic living costs.

The regulator also said he “did not like” some high-cost lending schemes.

He said consumers, and institutions that lend to them, should be aware that interest rates may rise in the future and that credit should be “affordable”.

The head of the FCA was talking to the BBC as part of its ‘Money Matters’ coverage, looking at the issues of credit and debt in the UK.

Mr Bailey said action was being taken to curb long-term credit card debt and high-cost pay-day loans.

The regulator is also looking at charges in the rent-to-own sector which can leave people paying high levels of interest for buying white goods such as washing machines, he added.

“There is a pronounced build up of indebtedness amongst the younger age group,” Mr Bailey said.

“We should not think this is reckless borrowing, this is directed at essential living costs. It is not credit in the classic sense, it is [about] the affordability of basic living in many cases.”

‘Generational shift’

Although Mr Bailey said that high levels of consumer debt was not a crisis “in the macro-economic sense”, it did matter to struggling individuals whose stories he had listened to during visits to debt management charities.

“There are particular concentrations [of debt] in society, and those concentrations are particularly exposed to some of the forms and practices of high cost debt which we are currently looking at very closely because there are things in there that we don’t like,” Mr Bailey said.

“There has been a clear shift in the generational pattern of wealth and income, and that translates into a greater indebtedness at a younger age.

“That reflects lower levels of real income, lower levels of asset ownership. There are quite different generational experiences,” he said.

Mr Bailey was speaking as research shows young people in particular are concerned about the amount of debt they are carrying and their ability to repay that debt

He said the high price of renting and lack of income growth meant that more people had to use credit to make ends meet.

Gig economy

Recent Bank of England figures show that consumer debt, excluding mortgages, now totals over £200bn and is approaching levels not seen since the financial crisis.

The increase in what is known as “unsecured lending” on credit cards, car loan schemes, personal loans and overdrafts is running at 10% a year.

People are also saving less as ultra low interest rates eat into returns.

“Obviously we all question how long this can that go on for,” Mr Bailey said. “But in aggregate it isn’t on its own something that we should be describing as a crisis.”

He added: “I am not of the school of thought that credit should not be available to this section of society because credit should be there to smooth income in the classic sense, and we know there are more people with erratic income flows, that is one of the features of the so-called gig-economy.”

Mr Bailey said that “sustainable credit is a necessary part of society”.

By Kamal Ahmed


 

UK lenders to set biggest reduction in consumer lending since late 2008

(qlmbusinessnews.com via uk.reuters.com — Thur, 12 Oct 2017) London, UK —

LONDON (Reuters) – British lenders are planning the biggest reduction in the availability of consumer lending since late 2008, when the economy was in the depths of its worst post-war recession, a Bank of England survey showed on Thursday.

The BoE’s net balance of lenders’ expectations for the availability of unsecured lending over the next three months fell to -28.6 from -16.2, signalling the steepest contraction since the fourth quarter of 2008.

Lenders said they expected the availability of mortgages and loans to businesses to remain broadly steady over the next three months.

However, they expected demand for loans for capital investment in businesses to fall at the fastest rate since the third quarter of 2011.

By Andy Bruce

CEO of UK wealth management firm warns bond markets creating the biggest financial crisis of our life time

(qlmbusinessnews.com via cnbc.com – – Wed, 11 Oct 2017) London, Uk – –

The CEO of a U.K.-based wealth management firm has warned that an unruly end to monetary stimulus from global central banks could lead to pensioners and retail customers suffering the biggest financial crisis of their lifetimes.

Brian Raven, group chief executive at Tavistock Investments, believes that bond markets will be the source of the problem and are primed for a sharp reversal.

“This is the biggest financial crisis of our lifetime, because it affects the average person,” Raven told CNBC over the phone. Tavistock is focused on the U.K. but Raven said the problem could be felt more broadly around the world. He argued that bond markets are in a state “never seen before” which could soon trigger a financial shock bigger than in 2008.

Bonds — pieces of paper that companies, governments and banks sell to raise money — have seen three decades of price gains and are perceived to be a safe haven in times of economic stress. They also traditionally perform poorly in times of rising inflation. In the last 10 years, central banks have been busy buying up bonds in an effort to boost the global economy and increase lending. This has further accentuated the move higher for bond prices and many economists now believe the market has become distorted.

With central banks preparing to put an end to ultra-loose monetary stimulus, and with inflation recently seeing a pickup, there are concerns that bonds could lose value quickly in a market that is not very liquid. There are also concerns that bondholders aren’t fully aware of the risks.

“The more conservative central banks ( e.g. Bundesbank ) that have been skeptical of quantitative easing have long warned that long periods of low interest rates can sow the seeds of the next crisis by smothering relative prices in the financial markets — but it is difficult to tell where ahead of time because of the ‘fog’ created,” Jan Randolph, director of sovereign risk at IHS Markit, told CNBC via email.

“There is a risk of a sharp rebound in prices as monetary policies tighten and liquidity problems if investors stampede out these more risky markets when risks start to crystallize,” he added.

While there’s been many gloomy forecasts for the bond market, not everyone agrees that they’ll definitely see significant losses as central banks reduce their bond-buying programs. Mike Bell, a global market strategist at JPMorgan Asset Management, told CNBC Monday that this monetary tightening creates a risk but believes that the recent economic recovery should be enough to offset the impacts of lower bond prices.

“Eventually tighter monetary policy could tip the U.S. economy into recession, but we believe that the economy and equity markets can withstand at least the next year’s worth of monetary policy tightening,” he said.

“We certainly don’t expect the next bear (negative) market to be as bad as the financial crisis in 2008 as banks are much better capitalized than they were in 2008. We therefore expect the next bear market to be a more classic recession rather than a full-blown financial crisis,” he added.

Central banks are unlikely to change their strategy and so investors will be likely face higher interest rates and higher inflation. Therefore, Tavistock’s Raven told CNBC that investors should adapt and diversify their investments. Bonds with short durations, high-yielding bonds and emerging market bonds are all potential options for investors, according to Raven.

By Silvia Amaro

Tourism booming in the UK with nearly 40 million overseas visitors

(qlmbusinessnews.com via bbc.co.uk – – Tue,10 Oct 2017) London, Uk – –

Tourism is booming in the UK with nearly 40 million overseas people expected to have visited the country during 2017 – a record figure.

Tourist promotion agency VisitBritain forecasts overseas trips to the UK will increase 6% to 39.7 million with spending up 14% to £25.7bn this year.

Britons are also holidaying at home in record numbers.

British Tourist Authority chairman Steve Ridgway said tourism was worth £127bn annually to the economy.

He called the sector an “economic powerhouse” and a “job creator right across Britain”.

“Two-and-a-half times bigger than the automotive industry, employing three million, tourism is one of our most successful exports and needs no trade deals to compete globally.”

The UK has become a cheaper place to visit for tourists from overseas following the fall in the value of the pound since the Brexit vote last year.

But Mr Ridgway said: “Tourism is a fiercely competitive global industry and you cannot just build a strong, resilient industry on a weaker currency.

“We must continue to invest in developing world-class tourism products, getting Britain on the wish-list of international and domestic travellers and we must make it easy for visitors to make that trip.”

Tourism Minister John Glen said: “Tourism contributes billions to the UK economy and supports millions of jobs.”

He added that the record figures for overseas and domestic holidaymakers were “testament to our world-class attractions and the innovation of our tourism industry”.

During the first six months of the year there were a record 23.1 million overseas visits to the UK – up 8% on the same period in 2016 – and the figures for July topped four million for the first time, with only a slightly smaller number of visits made during August.

Britain’s beaches and attractions have also attracted more domestic users with “staycations” on the rise.

From January to June this year, domestic overnight holidays in England rose 7% to a record 20.4 million with visitors spending £4.6bn – a rise of 17% and another record.

On Monday, figures from trade body UK Finance showed UK tourists’ debit card spending when abroad was down sharply compared with last summer, providing more evidence of the trend towards holidaying at home.

Spending on UK debit cards overseas was down nearly 13% in August compared with the same month in 2016.

 

Productivity of UK workers lags behind world’s biggest economies

Tim Tabor/flickr

(qlmbusinessnews.com via theguardian.com – – Fri, 6 Oct 2017) London, Uk – –

The productivity of UK workers fell in the three months to June, as new figures rank Britain well behind the world’s biggest economies.

Despite increasing numbers of hours put in by workers, labour productivity as measured by output per hour fell by 0.1% in the three months to June, up from a fall of 0.5% in the three months to April, according to the Office for National Statistics. The gap between British labour productivity and that of the rest of the G7 slightly improved from from 16.1% in 2015 to 15.4% last year.

Philip Wales of the ONS said: “UK labour productivity continued to lag behind our international partners in 2016. New, innovative analysis suggests that this lower level of productivity was evident across all industries, although the size of the gap varies considerably.”

Next week the Office for Budget Responsibility is expected to admit that its forecasts for improving productivity growth have proved to be consistently optimistic. The government’s independent forecaster will say that the trend for lower productivity growth since the 2008 crash is likely to persist for several more years, warranting a downgrade from its March forecast.

Without an improvement in productivity, the UK economy is expected to miss out on expected increases in wages and living standards, putting further pressure on the welfare system and depressing tax receipts.

Treasury officials are known to believe that the downgrade will wipe out about two-thirds of the government’s £26bn war chest, which the chancellor set aside in the last budget to spend in the event of a slowdown following a disorderly and damaging exit from the EU.

Philip Hammond was expected to use some of the money in the autumn budget on 22 November to boost public sector pay and alleviate a spending squeeze that is hitting schools, hospitals and the police service at a time when all three services are under strain.

But the loss of about £18bn over the next four years following a reduction in productivity growth will severly limit his room for maneouvre.

By Richard Partington and Phillip Inman

Possible fine for homeowners who sell draughty homes, a report has suggested

(qlmbusinessnews.com via bbc.co.uk – – Wed, 27 Sept 2017) London, Uk – –

Homeowners who sell draughty homes could be fined, a report has suggested.

Economic consultancy Frontier Economics says the money raised could underpin government funding for insulating the homes of the least wealthy homeowners.

It is the most radical idea in the report, which also urges interest-free loans and tax and stamp duty rebates for people to insulate their homes.

Frontier warns the government will miss its targets on cutting carbon emissions unless it stops energy waste in homes.

  • Households ‘need help to get warmer home’
  • ‘Abysmal’ take-up for Green Deal loans

The government said it is considering many options as part of its long-delayed Clean Growth Plan, which is expected soon.

Frontier’s report notes that government advisers say ageing housing stock is the biggest obstacle to meeting the UK’s climate change targets.

Improving homes also gives a boost to health and comfort and keeps bills down. But renovating homes is often an expensive hassle.

The report says that, following the collapse of the ill-fated Green Deal home loan scheme, ministers must find new ways of incentivising people to take on improvement work.

The Green Deal was criticised for offering loans at 7% interest.

The report suggests instead offering equity loans at lower than the standard mortgage rate, to be paid back when owners die or move house.

Another idea is to charge differential stamp duty depending on the level of insulation in the property.

Traditionally the Treasury has been unwilling to fund improvements that will increase the value of people’s homes, but it’s under pressure to be creative to solve the problem.

Infrastructure priority

The report also suggests that people should be tempted to invest in home improvements through a “salary sacrifice” scheme – where part of a person’s salary goes towards energy efficient renovation, and they then save on the associated income tax.

Frontier Economics’ report was funded by a coalition of groups concerned about housing stock – including the architects’ body Riba; the green thinktank e3g; the Institution of Civil Engineers and the electricity group Energy UK.

They all want housing treated as an infrastructure priority.

“It’s the package of measures that matters,” a spokesman, Ed Matthew, told BBC News.

“We want to stop the government’s incremental, short-termist, approach – and treat this like the major infrastructure programme it is… after all every home must be zero carbon within 30 years.”

By Roger Harrabin

Labour legislation to unveil plans to cut credit card debt

(qlmbusinessnews.com via bbc.co.uk – – Mon, 25 Sept 2017) London, Uk – –

Legislation limiting the amount of interest that can be charged on credit card debts is being promised by the Labour Party.

Under the changes, nobody would pay more in interest than they had originally borrowed.

Shadow chancellor John McDonnell says more than three million people are “trapped” by credit card debt.

He will unveil the planned change in the law in a speech at Labour’s conference in Brighton.

Labour said the changes would work in a similar way to measures on payday loans, which came into force in 2015.

The Financial Conduct Authority has called for new measures to help people in “persistent debt” as a result of credit cards.

  • Credit card interest ‘could be waived’ for long-term debt
  • Debt-laden targeted by credit card firms
  • Labour to offer some women earlier retirement option
  • Anger at Labour conference Brexit vote

The regulator says over three million people are in persistent debt, which it defines as having paid more in interest and charges than they have repaid of their borrowing over an 18-month period.

Labour said its “total cost cap” would help “tackle the persistent debt spiral”, claiming growing consumer debt was becoming a “threat to our economy”.

Unscrupulous lenders

Addressing delegates in Brighton, Mr McDonnell will say: “The Financial Conduct Authority has argued for action to be taken on credit card debt as on payday loans.

“I am calling upon the government to act now apply the same rules on payday loans to credit card debt.

“It means that no-one will ever pay more in interest than their original loan.

“If the Tories refuse to act, I can announce today that the next Labour government will amend the law.”

UK Finance, which represents the financial and banking industry, said it was committed to responsible lending and that consumer credit was important for economic growth.

It added that “the last thing the industry wants is to see those who are most vulnerable being pushed towards the hands of unscrupulous and unregulated lenders”.

When the FCA called for action in April, the UK Cards Association, which represents the major credit card providers, said the industry was “committed to helping the minority of cardholders who do not use a credit card in a way which is in their best interest”.

The Conservatives said action was already being taken to outlaw “rip-off credit card charges” and ensure companies help customers clear debt.

Brexit row

On day one of Labour’s conference, the party’s position on Brexit came under scrutiny as leader Jeremy Corbyn faced calls to keep the UK in the EU single market – and some MPs expressed anger as no motions on Brexit were selected for debate on the floor.

Brexit Secretary Keir Starmer will speak in the auditorium on Monday, when he is expected to say the Tory approach to negotiations on leaving the European Union reveals the “post-imperial delusions” of Theresa May’s party.

Instead, he will promise a promise a “democratically legitimate and economically sensible” approach.

Tata Steel merger with ThyssenKrupp creates Europe’s second largest steel group

(qlmbusinessnews.com via theguardian.com – – Wed,  20 Sept 2017) London, Uk – –

Creation of Europe’s second largest steel group likely to lead to about 4,000 job losses but helps safeguard Port Talbot site

India’s Tata Steel has paved the way for a merger of its European operations with the German steel manufacturer ThyssenKrupp, creating Europe’s second largest steel group after ArcelorMittal.

Tata said the two companies had signed a “memorandum of understanding” to create a 50/50 joint venture based in Amsterdam, with an annual turnover of about €15bn (£13.3bn), 48,000 employees, and annual shipments of about 21m tonnes of flat steel.

The two companies have been in talks to combine their European operations since Tata abandoned plans to sell its UK steel business last year, safeguarding the immediate future of the Port Talbot steelworks in south Wales.

The tie-up is expected to result in about 4,000 job losses, split between the two companies and affecting both administrative and manufacturing roles. Tata and ThyssenKrupp expect to make annual cost savings of between €400m and €600m by combining their sales and administrative functions, research and development, and procurement and logistics.

Roy Rickhuss, chairman of the coordinating committee representing the Unite, GMB and Community unions, said: “The steel trade unions cautiously welcome this news and recognise the industrial logic of such a partnership. This would create the second biggest steel business in Europe, which could deliver significant benefits for the UK.

“As always, the devil will be in the detail and we are seeking further assurances on jobs, investment and future production across the UK operations. As a priority, we will be pressing Tata to demonstrate their long-term commitment to steelmaking in the UK by confirming they will invest in the reline of Port Talbot’s Blast Furnace No 5.”

The business secretary, Greg Clark, said it was an “important step” for the future of Port Talbot.

“The government has been working hard with the unions to secure a sustainable future for Tata Steel in the UK, its 4,000 employees at the Port Talbot site and its supply chain.

“Today’s agreement between Tata Steel and ThyssenKrupp is an important next step in establishing their shared ambition for Port Talbot as a world-class steel manufacturer, with a focus on quality, technology and innovation.”

The joint venture will be named ThyssenKrupp Tata Steel and is expected to be up and running in late 2018, following further negotiations, due diligence, and subject to approval from relevant authorities and shareholders.

“Under the planned joint venture, we are giving the European steel activities of ThyssenKrupp and Tata a lasting future. We are tackling the structural challenges of the European steel industry and creating a strong No 2,” said Heinrich Hiesinger, chief executive of ThyssenKrupp.

ThyssenKrupp said the combined companies would start to review its production network in 2020, to identify further savings and integration opportunities. The German company added that the outcome of the Brexit negotiations would have a bearing on decisions. “The scope for optimisation also depends on numerous external factors such as the outcome of the Brexit negotiations and the implications that follow,” it said.

By Angela Monaghan

Entrepreneurs looking to exit at a rate not seen in years

(qlmbusinessnews.com via bbc.co.uk – – Wed, 20 Sept 2017) London, Uk – –

Entrepreneurs are looking to downsize, sell or close their firms at a rate not seen in years, a survey has suggested.

The Federation of Small Business (FSB) found that 13% of respondents were looking for ways out of their business, the highest percentage since it began measuring in 2012.

The survey also indicated that optimism among small firms had tumbled.

The FSB blamed the fall in optimism on rising costs and a weaker UK economy.

“A record proportion of business owners currently expect to downsize, sell or shut up shop, while rent and taxation are frequently mentioned as causes of increased costs. We need to see more support in this space – that includes ending enforcement of the ridiculous ‘staircase tax’,” said Mike Cherry, FSB National Chairman.

The term “staircase tax” emerged when some firms found they were paying extra business rates because they had an office divided by a staircase.

The FSB’s Small Business Index is based on a survey of 1,230 of its members and was last conducted in July – the responses were used to create a weighted index.

In July, the confidence index fell to 1 from 15 in the previous quarter. The lowest levels of confidence were seen in retail and entertainment firms, according to the FSB.

Exporting happiness

However, the FSB noted that confidence has been rising among exporters, with 40% reporting an increase in overseas sales.

Exporters have been boosted by the weakened pound, which helps make their products more competitively priced overseas.

The report also indicated that, overall, small firms are looking to increase their workforce.

“Employment intentions are up, but so too are labour costs. This is causing significant problems in a number of sectors, not least hospitality and retail,” Mr Cherry said.

“With conference season and the Autumn Budget approaching, policymakers have an opportunity to restore optimism.”

London suffer the highest level of business fraud in Britain

Michael Duxbury/flickr.com

(qlmbusinessnews.com via cityam.com – – Mon, 18 Sept 2017) London, Uk – –

British businesses lost at least £40m last year from frauds perpetrated by their own employees, with London accounting for the largest chunk by far, new data published today has revealed.

Losses from employee fraud were highest in the Greater London area covered by the Metropolitan Police, at £7m in 2016/17, according to government figures obtained by accountants RSM.

City of London businesses suffered the second-largest losses, at £4.7m, meaning London as a whole accounted for 29 per cent of the total losses from employee fraud reported to ActionFraud, the UK’s national fraud and cyber-crime reporting centre.

Meanwhile the average size of the frauds reported in the City of London was the second-highest in the UK, at £338,380, with only Gloucestershire experiencing a higher rate of losses.

Essex businesses were hit by the third-highest losses, at £4.4m.

The number of cases of fraud has risen steadily over the last decade, according to Cifas, a fraud prevention body.

Staff simply stealing cash from their company is the most common reported internal fraud, accounting for more than a fifth of fraud cases. The second most common employee fraud is the manipulation of third-party accounts held by friends or families, Cifas reported earlier this year.

The true extent of losses is thought to be significantly higher: the Office for National Statistics reports that crime surveys of England and Wales show a “substantially higher” incidence of fraud than official reporting.

Akhlaq Ahmed, forensic partner at RSM, said: “The levels of reported employee fraud and the resulting losses are already high, but this is likely to be the tip of the iceberg. Sadly, a great deal of employee fraud goes unnoticed and unreported, and businesses are simply not doing enough to prevent losses.”

He added: “In our experience, fraud is often carried out by employees who may have been in post for some time and who know where the weak points are. They can often be motivated by greed, lifestyle aspirations, debts or addictions.”

By Jasper Jolly

BoE governor Mark Carney unveils the new plastic £10 note at Winchester Cathedral

 

The new plastic £10 note has been unveiled by Bank of England governor Mark Carney at Winchester Cathedral.

The note, which follows the polymer £5, will be issued on 14 September and has a portrait of Jane Austen on the 200th anniversary of the author’s death.

It is also the first Bank of England note to include a tactile feature to help visually impaired people.

Meanwhile, a limited supply of a new £2 coin honouring Jane Austen has been put into circulation by the Royal Mint.

The coin will initially only be available in tills at key locations in the Winchester and Basingstoke areas that have connections with Austen, including Winchester Cathedral and the Jane Austen House Museum.
It will be circulated more widely across the UK later this year.

UK’s high street banks are an accident waiting to happen according think tank Adam Smith Institute

(qlmbusinessnews.com via theguardian.com – – Wed, 13 Sept, 2017) London, Uk – –

Bank of England’s stress tests are not gruelling enough, says report to mark 10 years since run on Northern Rock

The UK’s high street banks are an accident waiting to happen and could struggle in another financial crisis, according to a report published on Wednesday to mark the 10th anniversary of the run on Northern Rock.

The report criticises the annual health checks – stress tests – that have been conducted by the Bank of England since the crisis and concludes that the methodology used by Threadneedle Street is flawed and the tests not gruelling enough.

Queues started to form outside Northern Rock branches across the UK on 14 September 2007 after the BBC reported that the Newcastle-based lender had received emergency funding from the Bank of England. It was the first run on a high street bank in the UK since Overend & Gurney in the 1860s and after attempts to find a buyer failed, the bank was nationalised in February 2008.

Kevin Dowd, a professor of finance and economics at Durham University and a long-standing critic of the stress tests, said the Bank does not use the correct measures to assess the health of the banking system. Dowd is also a senior fellow at the Adam Smith Institute, a rightwing thinktank.

His analysis – which the Bank of England has previously rejected – focuses on the health check of the major lenders published last November . Those tests were based on a number of hypothetical scenarios including house prices falling and the global economy contracting by 1.9%. Royal Bank of Scotland failed the test and Barclays and Standard Chartered would both have struggled to cope.

Dowd argued that the scenarios were “hardly doomsday” and disputes the way banks’ capital strength is measured.

“The stress tests are about as useful as a cancer test that cannot detect cancer. They seek to demonstrate a financial resilience on the part of UK banks that simply isn’t there,” said Dowd in the report. “Our banking system is an accident waiting to happen.”

The Bank uses the value of assets as calculated by the banks rather than their value on the markets which, he argued, would give a more accurate assessment of their financial health.

The leverage of banks has fallen by about a third since 2006 on the first measure but, according to Dowd, has increased by a half on the second.

“It is disturbing that 10 years on from Northern Rock, the best measures of leverage – those based on market values – indicate that UK banks are even more leveraged than they were then,” said Dowd.

The Bank of England did not comment on the new report but the subject was the topic of a hearing of the Treasury select committee in January. Bank officials had said the amount of capital in the system in the crisis had been increased and defended the stress tests as being as tough as during the financial crisis. Some of Dowd’s calculations included double counting, officials said.

Dowd said he had met the Bank officials after that select committee meeting but did not disclose the details of their discussions.

By Jill Treanor

Inflation jump of 2.9% puts squeeze on UK households

(qlmbusinessnews.com via ibtimes.co.uk – – Tue, 12 Sept 2017) London, Uk – –

Inflation in Britain rose at the joint-fastest pace in four years in August, remaining above the Bank of England’s 2% target for the sixth consecutive month, after breaking through the threshold for the first time in three years in March.

According to data released by the Office for National Statistics (ONS) on Tuesday (12 September), inflation as measured by the Consumer Price Index (CPI) rose 2.9% year-on-year last month, compared with the 2.6% growth recorded in July, and above and analysts’ expectations for a 2.8% reading.

This is only the second time inflation has hit the 2.9% mark in four years, the first being in May 2017.

On a monthly basis, inflation climbed 0.6%, after slipping 0.1% in the previous month. Analysts had expected a 0.5% increase.

The ONS said that rising prices for clothing and fuel were the main contributors to the increase. Air fares also rose between July and August but the rise was smaller than between the same two months a year ago, which partly offset the increase in other categories.

Meanwhile, core inflation, which excludes volatile items such as energy prices, rose 2.7% year-on-year, higher than the 2.4% growth recorded in the previous month and beating expectations for a 2.5% reading. The figure was also the highest on record since 2011.

The latest report is in line with the forecast issued by the BoE last month, when the Bank said it expected CPI inflation to peak at 3% in October this year. Inflation is then forecast to fall to 2.6% in 2018, before settling at 2.2% in both 2019 and 2020 respectively.

However, economists suggested the latest figure has put fresh pressure on the BoE to change their stance towards the monetary policy.

“The number is simply a nightmare for the BoE,” said Naeem Aslam, chief market analyst at Think Markets UK. “The members of the policy makers are already split in their decision and now the market would expect more hawkish tone on Thursday. However, it is important to keep in mind that this kind of inflation which is not supported by higher wages is simply a bad inflation.”

Ben Brettell, senior economist at Hargreaves Lansdown, added: “It looks likely that inflation will fall back in the coming months, as the effect of Brexit-induced sterling weakness falls out of the year-on-year calculation.

“Indeed it’s possible that 2.9% will be the highest we see in the current cycle. Mark Carney will certainly be hoping so, as it will save him the trouble of writing to the chancellor to explain himself.

Beyond the currency effect there appear to be few underlying inflationary pressures.

The inflation data comes only a day before the release of the latest snapshot of Britain’s labour market, which is expected to show average weekly earnings excluding bonuses only grew 2.2% year-on-year in July.

Economists have previously warned the squeeze on households was being exacerbated by subdued wage growth.

By Dan Cancian

Uk orders fleet of warships to boost shipyard building

HMS Belfast

(qlmbusinessnews.com via theguardian.com – – Wed, 6 Sept 2017) London, Uk – –

A radical shake-up of how warships will be built for the Royal Navy that aims to spread the work around the country has been unveiled by the Ministry of Defence.

Proposals floated by industrialist Sir John Parker in his review of the sector last year have been backed by Defence Secretary Sir Michael Fallon in a move intended to deliver budget vessels to the British military that are also aimed at being attractive to foreign buyers.

Under the National Shipbuilding Strategy, Britain will buy five “Type 31e” general purpose frigates – a cut-price warship – to bolster the Royal Navy’s depleted fleet, with the first one intended to enter service in 2023.

Sir John recommended the new vessels be built at shipyards around the country, using the “modular” system employed to construct the huge Queen Elizabeth-class aircraft carriers.

This saw giant blocks fabricated at sites around the UK, before being towed to Rosyth in Scotland were they were integrated into the 65,000-tonne ships by the Aircraft Carrier Alliance, made up of BAE Systems, Babcock and Thales working with the MoD.

Backing his plans could threaten BAE’s near-monopoly on building vessels for the Navy, throwing it open to other entrants to the market, and raising concerns about jobs at the defence giant’s naval operations focused at its Clyde facilities in Glasgow.

Announcing the plan, the MoD said a £250m-per-ship price cap had been set for the vessels, which were revealed in the last defence review when the Government said it would purchase only eight of the more capable Type 26 frigates, with the Type 31 making up numbers.

“This new approach will lead to more cutting-edge ships for the growing Royal Navy that will be designed to maximise exports and be attractive to navies around the world,” the Defence Secretary said, adding the strategy would “help boost jobs, skills, and growth in shipyards and the supply chain across the UK”.

In July, the Government signed a £3.7bn contract with BAE for the first three Type 26s, underlining their relative expense.

A key focus of Sir John’s report was developing ships likely to be bought by foreign navies, helping create a secure foundation for Britain’s shipbuilders.

Responding to the announcement, Sir John – a trained naval architect who currently chairs Anglo American and has held senior jobs at companies including Babcock and Harland & Wolff – said he was “impressed by the Defence Secretary’s courage in adopting my recommendations, which were very extensive, and will change the shape of naval shipbuilding over the country”.

He added: “The next challenge is to come up with a world-leading design that can satisfy the needs of the Royal Navy and the export market. I see no reason why industry will not rise to that challenge.”

Another recommendation was that the MoD replaces ships once they reach the end of their natural lives, rather than extending their time in service thorough costly refits, creating uncertainty about when contracts to build new ships will be placed.

The £250m price cap was implemented as it was seen as the optimum price to encourage export orders, and the Government said it wants shipyards vying for the contracts to get export customers involved to increase the Type 31e’s marketability.

The prospect of work being spread across the UK has raised anger in some areas, with the GMB union claiming it will take away contracts from its Scottish members who were pledged the work.

Gary Cook, Scotland organiser for the GMB, said: “Let’s be clear that the Type 31 contracts were originally promised to the Upper Clyde, so while shipbuilding communities across the UK would benefit from a work-share programme of the Type 31 work, this will be at the expense of the Upper Clyde despite its own future already[being] secured until the 2030s.”

Some defence commentators have questioned the usefulness of the budget vessels, and suggested that without the complex systems of their heavyweight sister ships they could be a liability in a war zone.

By  

EU enforce ban on noise pollution vacuum cleaners from today

 

Powerful vacuum cleaners are to be banned from today after the European Union introduced new rules which aim to improve energy efficiency across the continent. The new vacuum cleaners energy label rules will reduce the maximum wattage from 1,600W to 900W. It also introduces new restrictions on how noisy vacuum cleaners can be, limiting them to 80dB. In September 2014, the EU ordered the energy consumption of new vacuum cleaners to be limited to 1,600W as part of its Eco-design regulations

Currency rate at airports plummets to new low for Uk travellers

Flickr

(qlmbusinessnews.com via bbc.co.uk – – Thur, 31 Aug 2017) London, Uk – –

Travellers buying their currencies at UK airports are being offered as little as 86 euro cents to the pound.

Foreign exchange broker FairFx, which carried out a survey for the BBC, said this rate, from Moneycorp at Southampton airport, was the worst at any airport bureau de change.

The average euro rate across 16 big UK airports was higher, at 95 euro cents to the pound.

Ten months ago the average at these outlets stood at 99 euro cents.

James Hickman, chief commercial officer at FairFX, said the fact that airport rates are so low – much worse even than at High Street banks – shows that the bureaux de change firms are taking advantage.

“In reality they are ripping off the customer, who is effectively captive as they have nowhere else to buy their money at an airport,” he said.

“At most airports and terminals individual companies have a monopoly.

“They should be regulated as there is simply no justification for charging someone 14% [the average margin between the tourist and money market rates] to change their pounds to euros,” he added.

 

That margin is as high as 26% at Moneycorp’s Southampton airport outlet.

Pauline Maguire, Moneycorp’s retail director, said: “The reason for our higher airport rates is the significant cost associated with operating there – from ground rent and additional security, to the cost of staffing the bureaux for customers on early and late flights.”

“An easy and more cost-effective way for customers to buy travel money is to pre-order online and collect at the airport,” she said.

The best euro rate for tourists detected in the airport survey was 1.05 euros, from Travelex at Newcastle airport.

Wide variation

The average tourist rate for the pound against the US dollar is also very low.

Currently the average is $1.12 to the pound at UK airports, ranging from $1.05 at ICE at Norwich airport to $1.15 from Travelex at Heathrow Terminal 3.

Koko Sarkari, chief executive of ICE, which runs bureaux de change at Belfast, Birmingham, Heathrow and Luton airports, dismissed the idea his firm was exploiting a captive market.

“We work hard to keep our prices fair and competitive around the world,” he said.

“However, due to differences in distribution, costs of operation, regional competition and other factors such as ongoing volatility in the market, as we are experiencing now, online prices may not be the same as our ICE branch prices and prices may also vary between branches because of these factors.”

‘Brexit uncertainty’

One reason for the poor rates on offer to tourists is the continued decline of the pound on the foreign exchange markets, in the wake of last year’s Brexit vote.

The pound’s money market rate – the one at which banks buy and sell to each other – has dropped from $1.31 to $1.29 in the past 12 months.

Against the euro it has dropped much more in that time, from 1.18 euros to 1.08 euros.

Continuing Brexit uncertainty is feeding into sterling weakness, said Simon Derrick, a managing director at BNY Mellon.

Traders are looking to see what will happen over the next two months, with the attempted incorporation of EU law into UK legislation through the Great Repeal Bill, and EU negotiator Michel Barnier reporting back to the European Parliament on Brexit talks.

Sterling also hasn’t done that well in August after the Bank of England monetary policy committee voted to keep rates on hold – investors see no prospect of a rates rise any time soon, he said.

However, there are two sides to the story. The euro is also getting stronger because “the eurozone economy is really starting to show some signs of life,” Mr Derrick said.

Eurozone consumer confidence seems to be picking up, and investors think the ECB will start to tighten monetary policy as inflationary pressures build.

Uk Housing Market Shows Decline Amid Concerns over Cooling Economy

(qlmbusinessnews.com via theguardian.com – – Tue, 29 Aug 2017) London, Uk – –

UK house prices dipped this month, dragging down the annual growth rate, in further evidence of a cooling market.

The average price of a home fell 0.1% between July and August to £210,495, according to Nationwide, Britain’s biggest building society. Prices rose in July and June but fell between March and May, the first time this had happened since the financial crisis.

The latest monthly price drop took the annual growth rate back down to 2.1%, a level last seen in May, which was the lowest rate in four years, from 2.9% in July.

Robert Gardner, Nationwide’s chief economist, said: “The slowdown in house price growth to the 2-3% range in recent months from the 4-5% prevailing in 2016 is consistent with signs of cooling in the housing market and the wider economy.”

He noted that economic growth had halved from last year to about 0.3% per quarter in the first half of this year and that the number of mortgages approved for house purchase hit a nine-month low in June, while surveyors had reported softening in the number of new buyer inquiries.

He said in some respects the slowdown in the housing market was surprising, given the strength of the labour market, while mortgage rates have remained close to all-time lows.

Household finances are under mounting pressure, with the cost of living rising steadily as the weak pound bites, and wage growth stagnating.

Samuel Tombs, chief UK economist at the consultancy Pantheon Macroeconomics, said the slowdown in house price growth reflected the squeeze on real wages (adjusted for inflation) and the slowdown in the pace that mortgage rates are falling.

“Prices likely will continue to struggle to rise much, given that inflation still has further to rise, consumer confidence has deteriorated sharply since June and lenders intend to reduce the supply of unsecured credit.

“From February, new lending also will not generate borrowing allowances from the Bank’s term funding scheme, raising the costs of credit significantly. Accordingly, we still think that prices will be up just 1.5% year-over-year in December.”

A shortage in the number of homes on the market is underpinning house price growth, with the number of properties on estate agents’ books close to 30-year lows. Nationwide expects prices to rise by 2% over 2017 as a whole. It says house prices across the country are still 12% above their 2007 peak.

After increases in stamp duty in spring 2016, revenues from the tax have reached all-time high highs, rising to £12.8bn in the 12 months to June, well above the £10.6bn peak recorded in late 2007.

By Julia Kollewe

Home Grown Produce Threatened by Brexit Workforce Shortage

(qlmbusinessnews.com via bbc.co.uk – – Thur, 24 Aug 2017) London, Uk – –

The UK food industry has warned that a Brexit workforce shortage could leave a third of its businesses unviable.

The Food and Drink Federation said: “Our sector faces a rapidly approaching workforce shortage and skills gap.”

Its survey of the “farm-to-fork” supply chain said 31% of businesses had already seen EU workers leave the UK.

The FDA’s survey was conducted across a wide range of respected trade bodies, including the British Retail Consortium and the National Famers Union.

It added that almost half of those businesses surveyed said EU nationals working in the UK were considering leaving.

Big net migration fall since Brexit vote, latest estimates show

The federation is calling on the government to guarantee the rights of nationals from across the European Economic Area.

Ian Wright, its director-general, said: “It is only a matter of time before the uncertainty reported by businesses results in an irreversible exit of EU workers from these shores.

“Without our dedicated and valued workforce we would be unable to feed the nation.”

In April a report by the Commons Environment Food and Rural Affairs Committee said: “Evidence… suggests the current problem is in danger of becoming a crisis if urgent measures are not taken to fill the gaps in labour supply.”

A government spokesperson said: “In June we published our offer to protect the rights of EU citizens in the UK, confirming no-one living here lawfully will be asked to leave when we exit the EU and they will have a grace period to regularise their status.”

The federation said it had welcomed the government’s announcement. However, of the businesses it surveyed:

47% said EU nationals were considering leaving the UK
36% said they would become unviable if they had no access to EU workers
31% reported EU nationals leaving since the referendum
17% said they may relocate overseas if they had no access to EU nationals
The federation is calling on the government to ensure there is no abrupt reduction in the number of EU workers in the UK the day the country leaves the EU.

Mr Wright told the BBC: “What we don’t want is a sudden switch-off of the availability of EU workers who are part of the lifeblood of our industry.”

He added that there were a lot of practicalities in the government’s plans for EU workers “that we don’t know yet”.

“We don’t know how much it’s going to cost. We don’t know how dependents will be treated,” he told BBC Radio 4’s Today Programme.

“And crucially, in order to believe the scheme is going to work, you have to believe the Home Office can register two and a half million Europeans in a year. That defies some level of belief.”

Last month the National Farmers Union deputy president Minette Batters said: “The NFU cannot emphasise enough the urgent need for clarity and certainty on access to a competent and reliable workforce and all other issues relating to Brexit.

“The industry needs commitments that there will be sufficient numbers of permanent and seasonal workers from outside the UK post-Brexit.”

Immigration

The government said in a statement: “After we leave the EU we must have an immigration system which works in the best interests of the UK.

“Crucial to the development of this will be the views from a range of businesses, including the agricultural, food, drink and manufacturing sectors.

“We will be setting out our initial proposals for this system in the autumn but we have already been clear there will be an implementation period after we leave the EU to avoid a cliff edge for businesses.”

In the longer term, the federation accepts it will have to adjust to the reduction in the number of EU workers.

“Over time [training local workers] is something that will have to happen as a result of the Brexit vote. We recognise that immigration was a big factor in the Brexit vote,” Mr Wright said.

To deal with fewer foreign workers, the federation will have a strong emphasis on building skills through apprenticeships and investment in technology to support automation, it said.

The survey was co-ordinated by the FDA, and as well as the BRC and the NFU, it gathered results from trade bodies the Association of Labour Providers, the British Beer and Pub Association, the British Hospitality Association, the Food and Drink Federation, and the Fresh Produce Consortium.

It said that across the various workforce surveys there were 627 responses, collectively representing almost a quarter of the food chain’s total employment of four million people.

Duty Free Booze Cruise Looks Set to Return

(qlmbusinessnews.com via Irishtimes.com – – Fri, 18 Aug, 2017) London, Uk – –

It could happen in March 2019 when the UK leaves the customs union. Or it could be two or three years later if the proposed transitionary period is adopted. Nobody knows until it is settled at the Brexit talks. But the return of duty-free shopping on travel to and from the UK appears to be only a matter of time. After two decades docked in port, the booze cruise is set for a comeback.

The abolition of intra-European Union duty free on July 1st, 1999, was a landmark for the single market. It was one of those tangible moments that punctured the pall of Brussels bureaucracy for citizens, reaching into their everyday lives. No more cheap Superkings on the ferry back from Holyhead.

The abolition was originally pencilled in for 1993, when the single market was established, but European governments gave duty free a six-year reprieve after howls of protest from airports and airlines, ferry operators and the trade unions whose members staffed their duty-free shops.

Intra-EU duty free was an estimated €5 billion market back then, when the bloc had just 15 members. In the current age of high-frequency, low-cost air travel, who knows what the pot might reach this time on travel in and out of Britain?

Ireland-UK air passenger traffic is now approaching 12.8 million annually, with another 2.2 million on ferries. For Irish and British travel companies, that’s a new, 15 million-strong retail market that will soon be ripe for tapping.

But when? As soon as possible, if the industry gets its way.

‘Potential benefit’
Kevin Toland, the outgoing chief executive of airport operator DAA, told an Oireachtas committee in June that duty free on UK flights should commence “immediately” upon Brexit in 2019, “regardless of any transitional arrangements”.
The DAA said this week that, overall, “Brexit is a negative” but the potential reintroduction of duty free is “clearly a potential benefit” for Dublin and Cork airports.

“The exact relationship between the UK and the European Union post Brexit still remains unclear, but our hope would be that duty-free sales on travel between EU states and the UK would resume as soon as the UK leaves the EU rather than having to wait for the end of any transitional period,” it said.

The UK Chamber of Shipping, whose members include Irish Ferries, P&O and Stena, also wants the British government to push for the “automatic” reintroduction of duty free in 2019. Politicians on both sides have so far remained coy.

Kenny Jacobs, Ryanair’s chief marketing officer, says it is too early to speculate on the reintroduction of duty free on its flights to and from the UK. But the airline, ever alert for opportunities to boost ancillary revenues, has a plan.
“We have contingency plans in place for all eventualities,” Jacobs said.
For Irish travellers to the UK, a cursory examination indicates that the potential savings on alcohol and cigarettes – the most common duty-free fare – will be significant: up to 60 per cent on cigarettes and more on many spirits.

But given the fact that not even the most senior Brexit negotiators in London and Brussels have a clue what it will look like, we must make a few assumptions.

Let’s assume that, post Brexit, duty free returns at the pre-1999 allowances, which still exist for travel to all areas outside the EU. This means passengers returning to Ireland from the UK should each be able to bring in 200 cigarettes or 50 cigars, one litre of spirts, four litres of wine, 16 litres of beer, and €430 worth of other goods.

Duty free must be carried across a customs border under the rules. So Irish passengers flying to Britain from Dublin, for example, will not be able to use the airport’s intra-EU “shop and collect” service, which allows them buy goods on the way out and pick up on the way home. Irish shoppers will have to buy their inbound duty free aboard the ferry or aircraft home, or airside in a British airport.

Savings
World Duty Free is the biggest UK operator, operating at airports such as Heathrow. This week, it was advertising duty-free one-litre bottles of Jameson whiskey for £15.89 (€17.40). The same bottle was this week listed in Tesco Ireland for €36, and €47 in SuperValu, a saving of up to 62 per cent.
A one-litre bottle of Bombay Sapphire gin in Heathrow’s duty free currently costs €23.47. In Tesco Ireland, the same gin is priced at €42.85 per litre (based upon the €29.99 cost of a 70cl bottle), or 82 per cent more expensive.

One litre of Absolut Elyx top-shelf vodka is €51.56 at World of Duty Free in Heathrow, but currently €64 in SuperValu for 70cl (€91.42 a litre). That is a saving of 43 per cent on the Irish price. Another Cosmopolitan, please!

World of Duty Free doesn’t list cigarette prices online, but British Airways lists 200 Benson & Hedges on its “high-life” shop (where you purchase online and collect on the aircraft) for £41 (€45.04). It would cost €115 to buy 200 B&H in an Irish shop, a saving (for your wallet, if not your blackened lungs) of 60 per cent.Duty free means no VAT, customs or excise taxes. As excise is a volume-based tax, regardless of the product’s value, its effect is more pronounced on cheaper items. For example, excise adds the exact same cash cost to an €8 bottle of plonk as a €1,000 of the finest Bordeaux, but proportionally more.

Therefore, the savings can be less stark when buying high-end wines on duty free, and sometimes there is no saving at all. A bottle of 2011 Chateau Lynch-Bages, a fine Pauillac, is £165 (€180) at World of Duty Free in the UK. You can pick up the exact same wine in Le Caveau in Kilkenny for €119.

But overall, Irish travellers to the UK are in line for cheaper prices on booze and drink on the way home. The alcohol retail industry in Ireland is worried about the impact of the reintroduction of duty free on sales here, especially at peak times. The manufacturing industry should be broadly unaffected.
“It will be quite damaging at key holiday periods, such as Christmas,” said Evelyn Jones, public affairs director of off-licence lobby group Noffla and the owner of the Vintry in Rathgar, south Dublin.
“Lots of Irish emigrants would be travelling home at Christmas, and you can be sure they’d use their allowance to bring a bottle. It will have a particular impact on premium spirits.”
Noffla is signed up to the wider drink industry’s campaign for a budget cut in excise taxes, which in Ireland are among the highest in Europe. The industry wants an across-the-board cut of 15 per cent, which seems unlikely as it would cost the exchequer €223 million. Try selling the cost of that policy to the public when there’s an acute homelessness crisis.
But Jones says a cut would help offset the effects of a reintroduction of duty free to the UK: “Duty free will also encourage more illicit trade.”
Aviation industry
Britain’s departure from the EU is, overall, likely to be huge negative for the aviation industry. The possible reintroduction of duty free will not be enough of a silver lining to make the Brexit more bearable. Analysts have not built any potential boon into the forecasts for listed airlines, such as Ryanair.
“It might help airlines at the margins,” said Stephen Furlong of Davy stockbrokers. “This is probably something that will be bigger for the ferry operators, where onboard spending and the historical capture of duty-free sales was more material to their performance.”
Gerard Moore, an analyst with Investec, says Irish Continental Group, the stock-market owner of Irish Ferries, generated as much as “roughly half” its net profits from onboard duty-free sales in the late 1990s. That old rythmical clinkety-clink of the duty-free shop rolling on the waves was the sound of philharmonic profitability for ICG and its boss, Eamonn Rothwell.
“It would be a big silver lining once again for ICG,” said Moore. “The company’s view now is, if duty free came back, they’d do a much better job of retailing it this time round. But it might not make up such a significant slice of profits.”
He agrees that airlines would have less to gain, but “if anyone can do it, Ryanair can do it”.
Datalex, the stock market-listed travel software company backed by Dermot Desmond, helps airlines design digital systems to boost their ancillary earnings from activities such as retail.
Ornagh Hoban, its chief marketing officer, said Ireland-UK airlines could “invent a digital marketplace for duty free” by pushing sales on passengers at the booking stage or on the airline’s website, allowing travellers to pick up their goods at the airport or on the aircraft.
“Duty free as an opportunity could evolve to a greater stage. It might be an even bigger opportunity than before,” she says.
The return of duty free is often conflated with customs and the issue of Ireland’s border with the six counties of Northern Ireland, which upon Brexit will become the EU’s only supra-national frontier with the UK.

But there is unlikely to be any duty free between the North and the republic. Duty-free sales happen in transit or at ports of exit. There are currently no direct flights between the Republic and the North. Duty free is unlikely to be much of a factor, unless someone opens a drive-through facility on the M1.
There has always been smuggling across the Border, however. Here’s a potential scenario to finish up that might help illustrate the unintended consequences of the Brexit vote, and the spaghetti bowl of problems facing the negotiators.
This summer, a new car ferry began operating across Carlingford Lough from Co Louth to Co Down. Its owners have said the reintroduction of duty free to UK travel could create an opportunity for the business.
It is only a 15-minute crossing, however. That wouldn’t leave much time to ditch the car on the ferry and leg it up to duty free for a carton of Marlboro and a few bottles of Campo Viejo.
But let’s assume duty free is allowed on the short crossing. What will there be to stop some enterprising soul spending all day, every day, crossing over and back from each side of the lough on the ferry, maxing out their duty free allowance on each journey, and “gifting” the haul to accomplices on either bank?