(qlmbusinessnews.com via news.sky.com– Mon, 7th Jan 2019) London, Uk – –
Plummeting diesel sales, new emissions rules, and a Brexit-linked hit to consumer confidence were all blamed for the downturn.
New car sales fell by nearly 7% last year in the biggest annual drop since 2008, according to industry figures.
A slump in demand for diesel, stricter emissions rules, and falling consumer confidence ahead of Brexit were blamed for the decline.
Figures from the Society of Motor Manufacturers and Traders (SMMT) showed 2.37 million new cars were sold in 2018, down more than 174,000 on the previous year.
The 6.8% fall was the second year in a row of decline and the largest drop since demand fell by 11.3% during the financial crisis a decade ago.
SMMT chief executive Mike Hawes described the challenges facing the industry as a “perfect storm”. The trade body is forecasting a further 2% decline in 2019.
Mr Hawes said: “A second year of substantial decline is a major concern, as falling consumer confidence, confusing fiscal and policy messages and shortages due to regulatory changes have combined to create a highly turbulent market.
“The industry is facing ever tougher environmental targets against a backdrop of political and economic uncertainty that is weakening demand so these figures should act as a wake-up call for policy makers.”
The key factor in the decline for last year was a 29.6% drop in diesel sales – with the SMMT blaming a “lingering sense of uncertainty” over how diesel cars will be taxed and treated after the Volkswagen emissions cheating scandal in 2015.
Petrol car sales were up by 8.7% while alternatively-fuelled vehicles such as plug-in hybrids or electric cars were up 20.9%.
Another factor affecting car sales was the implementation of a new EU emissions testing procedure which came into force in September and was blamed for a supply shortage in the autumn.
Mr Hawes said it would be unfair to attribute too much significance to concerns over Brexit when explaining the fall in new car sales.
But he said that falling consumer confidence had reduced consumers' appetite for a “big ticket purchase”.
The SMMT, like other business bodies, is calling for MPs to back Theresa May's Brexit agreement and avoid a no-deal scenario.
It says that crashing out of the EU without an agreement risked destroying the car manufacturing industry, which employs more than 850,000 people in the UK.
(qlmbusinessnews.com via bbc.co.uk – – Mon, 7th Jan 2019) London, Uk – –
US and Chinese officials will begin talks on Monday aimed at resolving their damaging trade dispute.
Last year, both countries imposed billions of dollars of tariffs on one another's goods.
The two-day talks mark the first formal meeting since the pair agreed to refrain from any further tariffs for 90 days.
The meeting comes amid rising concern about the impact of trade tensions on the global economy.
The US delegation will be led by Deputy US Trade Representative Jeffrey Gerrish.
While the temporary truce has provided some relief, there is scepticism over the possibility of a breakthrough at the meeting in Beijing.
“There are concerns about how far apart the two sides still are,” Julian Evans-Pritchard, economist at Capital Economics said.
“The main sticking point is going to be on industrial policy and intellectual property rights.”
Officials from China and the US were expected to cover a range of thorny issues.
The White House said in December the two sides would negotiate “structural changes with respect to forced technology transfer, intellectual property protection, non-tariff barriers, cyber intrusions and cyber theft.”
The US says China's “unfair” trade practices have contributed to a lofty trade deficit and accuses China of intellectual property theft.
Like other countries in the West, it is also concerned about the risks thatChinese companies may pose to national security.
Many increasingly see the trade war as a battle for global leadership between the world's two largest economies.
The stakes are high – failure to achieve a deal could see both countries resume taxing one another's goods.
US President Donald Trump said last year that tariffs on another $267bn(£209bn) of Chinese goods were “ready to go”.
What has happened in the trade war?
The US has hit $250bn of Chinese goods with tariffs since last July, covering a wide range of consumer and industrial items.
China has accused the US of starting “the largest trade war in economic history” and has retaliated by imposing duties on $110bn of US products.
The trade war has unnerved financial markets, risks raising costs for American companies and is adding pressure to a Chinese economy which isalready showing signs of strain.
Ahead of the meeting in Beijing, President Trump said that weakness could help negotiations.
“I think China wants to get it resolved. Their economy's not doing well,” he told reporters on Sunday.
“I think that gives them a great incentive to negotiate.”
Eschewing consumer culture, Pete Adeney, also known as Mr. Money Mustache, practices an extreme frugality that allowed him to retire at age 30. Avoiding car use, DIYing and investing in stock market index funds are among the tactics he and his fellow F.I.R.E. (Financial Independence Retire Early) devotees espouse. Paul Solman reports from Colorado in this installment of “Making Sense.”
(qlmbusinessnews.com via bbc.co.uk – – Sat, 5th Jan 2019) London, Uk – –
Four years ago Joey Zwillinger was an executive at a “hot” biotech company and making good money.
So when he decided to leave to join a start-up making trainers out of wool, friends and family were bemused.
“They naturally said I was quite dumb,” he says. And that was among the more polite reactions.
Why would anyone want to go into an industry where giants like Nike and Adidas deploy vast marketing budgets and roll out thousands of designs a year?
But for Mr Zwillinger and his co-founder Tim Brown, the creation of Allbirds was not quite the crazy leap of faith that it seemed back in 2014.
The economics of making and selling trainers (or sneakers to many outside the UK) had been changing.
Making trainers is not as profitable as you might think.
Rahul Cee trained as a footwear designer and had a long career in the industry, working for Nike and Vans in India. He now runs his own website, Sole Review, which – as the name suggests – reviews running shoes.
Using publicly available data he estimated how the costs break down for a typical pair of trainers.
According to his calculations, the final sale price is made up of:
manufacturing costs: 22%
staff, warehousing, office rents and patents: 11%
marketing and advertising: 5%
freight and insurance: 5%
shoemaker's profit: 5%
retailer's share: 50%
Newcomers like Allbirds can skip the last part of the process.
“We decided early on that we were only going to do direct-to-consumer, not sell our shoes through the wholesale channel – through retailers,” says Mr Zwillinger. “We didn't quite realise how smart a move that was at the time.”
So Allbirds sold shoes online and has only recently opened its own stores.
“Other shoemakers are giving away so much margin to the stores that sell their shoes and they are not able to invest in quality material for their product.
“They're also on discount all the time. So then that forces them to go quick with speed and style changes.”
he big shoemakers are not blind to the cost of retailing their wares.
In 2017 Nike announced it was radically cutting back on the number of retailers it uses and set a target to generate 30% of its sales online by 2022.
It is not just the way shoes are sold that has changed. Customers are demanding different sorts of shoes.
“Shoes that are meant for performance, like running or basketball, are really out of fashion and people are buying shoes that are athletically inspired but not intended for a particular sport,” says Matt Powell, senior industry adviser for sports at the NPD group, a retail consultancy firm.
Mr Powell dates the emergence of so-called athleisure shoes to mid-2015.
“Now that we are in this athleisure phase, where we're not really requiring that the shoes have technology in them for cushioning or whatever, it's easier for smaller brands to break into the market.”
Allbirds, which has just opened a store in London's Covent Garden, has been one of the companies that has benefitted from that trend.
“The fact that no-one's tethered to a desk means that their wardrobes are not tethered to an office environment and that's driven a change in wardrobe that makes everyone less formal,” Joey Zwillinger says.
“Shoes need to aesthetically work for a number of different activities – when you're at work and also at dinner. They also need to be comfortable for a longer period of time.”
And that shift away from shoes used for sport to everyday activities has helped save money on marketing.
In 2015 Nike signed a lifetime endorsement deal with basketball superstar Lebron James, reported to be worth $1bn (£800m). But those big deals are becoming less important.
“Earlier, things like athletic endorsement were the focus – like signature shoe models based on basketball players,” says Rahul Cee.
“While that still exists today, this approach matters less to the consumers. Now marketing is more fragmented, targeting smaller segments of consumers more effectively. Brands now focus on data and also the consumer experience.”
If you are wearing trainers now, take a look at them. Are they made of several pieces of fabric stitched together? That's the traditional way of making the upper part of a shoe and it's labour-intensive.
Shoemakers have been introducing upper parts that can be knitted as one piece and then joined to the sole. Half of Allbirds' shoes are made this way.
The big shoemakers have also been moving in that direction. Nike introduced its Flyknit Racer in 2012 and has been automating more of its production.
And this year Adidas opened its second highly automated plant, in the US state of Georgia.
Despite the innovation, shoemakers should keep it simple, says Mr Cee.
His best-selling shoe while working in the Indian trainer business? A Nike-branded sandal.
(qlmbusinessnews.com via uk.businessinsider.com – – Sat, 5th Jan 2019) London, UK – –
The world's longest zipline has opened in UAE. The “Jebel Jais Flight” measures over 1.7 miles long, beating the previous record holder “The Monster” which measures 1.5 miles. To put the length of the zipline into perspective, it's longer than the Golden Gate Bridge and the same length as 29 Big Bens stacked on top of each other. The zipline will send users at travel speeds of up to 90 mph, making it the ultimate thrill seeker experience.
(qlmbusinessnews.com via telegraph.co.uk – – Fri, 4th Jan 2019) London, Uk – –
Sophia Genetics has raised $77m (£61m) in a round led by Al Gore's Generation Investment Management, just days after Mike Lynch stepped down from his role on the biotech startup's board.
According to The Financial Times, as part of Generation Investment Management's investment and before Mr Lynch's indictment, the fund had “agreed with Sophia that Mr Lynch would step down from the board”.
“There was obviously noise around Invoke and the Autonomy investigation long ago, and we just thought it could prove a distraction for the company and that it would be in their best interest if he stepped down,” Lilly Wollman, of Generation Investment Management, said.
Last month, Mr Lynch agreed to step down from a number of his board positions, including his post at cyber security company Darktrace and on the Council of Science and Technology.
It came after the US Department of Justice filed an indictment charging him on 14 counts of fraud – the latest twist in a six-year legal battle over the sale of Mr Lynch's software company Autonomy to Hewlett-Packard.
The DoJ claims that Mr Lynch, together with a former finance executive, artificially inflated revenues and misled auditors and analysts ahead of the 2011 $11.7bn tie-up. The year after HP bought Autonomy, it was forced to take a $8.8bn writedown on the deal.
Lawyers for Mr Lynch had responded at the timesaying the indictment was a “travesty of justice”, and that the “stale allegations are meritless and we reject them emphatically”.
However, a spokesman for Mr Lynch's investment fund Invoke had said he had “decided to step away from some of his public facing roles whilst he focuses on clearing his name”, including giving up his post at Sophia Genetics.
Invoke will retain its board seat.
The latest funding round, announced on Friday by the Switzerland-based company, takes the total raised by Sophia Genetics to $140m, and also included investments from Balderton Capital and Idinvest Partners.
Jurgi Camblong, Sophia's co-founder and chief executive, said: “We want to be ready in the next two years to afford an IPO and raise a substantial amount of capital because we believe there will be a health-tech player that will dominate this market.”
(qlmbusinessnews.com via bbc.co.uk – – Fri, 4th Jan 2019) London, Uk – –
UK house prices grew at an annual pace of 0.5% in December, the Nationwide building society has said, the slowest annual rate since February 2013.
The lender says uncertainty over the economic outlook appears to be undermining confidence in the market.
London and surrounding areas saw a small fall in house prices in 2018.
Northern Ireland saw the biggest house price rises, up 5.8%. Prices in Wales climbed 4%, in Scotland they were up 0.9% and in England they rose 0.7%.
December's growth rate, based on its own mortgage data, was a marked slowdown from the annual pace of 1.9% recorded by the Nationwide in November.
The Nationwide's chief economist, Robert Gardner, told the BBC the severity of the slowdown was unexpected: “It is a little bit surprising that house price growth has slowed as much as it has in the last month or so.
“It seems to be the uncertain economic outlook that is really weighing on buyer sentiment. I think once that lifts then things should start to pick up to normal levels of about 2%.”
He said a lot of it “depends on how we get through this Brexit uncertainty”.
Chief UK economist at Pantheon Macroeconomics, Samuel Tombs, said the slowdown was striking, but the overall outlook for the market was relatively benign: “The hefty month-to-month fall in house prices in December [of 0.7%] – the biggest Nationwide has reported since August 2011 – brings an end to a weak year for the housing market.
“While the supply of homes for sale also has dwindled, the balance of demand and supply has shifted in buyers' favour. That said, we continue to doubt that a sustained period of falling house prices is likely.”
He said that assuming MPs back some form of Brexit deal, with a subsequent recovery in consumers' confidence, prices were likely to pick up to grow by 2% this year.
Nicholas Finn, executive director of Garrington Property Finders, said: “At one extreme we are seeing a surge in the numbers of opportunistic, frequently cash, buyers emerging to snap up homes at large discounts.”
“Meanwhile thousands of would-be sellers are instead hunkering down and waiting until things improve before putting their home on the market.”
Separate figures from the Bank of England showed that mortgage approvals for house purchases fell in November, and are now at half the level of 15 years ago.
The Nationwide said that house prices in London and the surrounding areas, such as Berkshire, had fallen by 0.8% and 1.4% in the past year.
However, outside these areas, each nation and English region – based on Nationwide's local mortgage data – recorded annual house price growth.
In addition to steady price growth in Northern Ireland and Wales, the East Midlands also saw prices increase by 4%.
“With prices in both inner and outer London falling, the capital bears a share of responsibility for dragging down the national pace of growth,” Mr Finn said.
(qlmbusinessnews.com via theguardian.com – – Thur, 3rd Jan, 2019) London, Uk – –
Brexit blamed as 81% of manufacturers and 70% of service sector firms report difficulties finding skilled staff
Britain’s manufacturers are facing the biggest shortage of skilled workers since 1989 amid record levels of UK employment and falling numbers of EU27 nationals coming to the country to work since the Brexit vote.
The British Chambers of Commerce (BCC) said more than four-fifths of manufacturers struggled to hire the right staff in the final months of 2018.
In a survey of more than 6,000 employers across the country, the lobby group found 81% of manufacturers and 70% of service sector firms reported difficulties with finding staff with the right qualifications and experience.
Adam Marshall, the director general of the BCC, said the government urgently needed to recognise the magnitude of the recruitment difficulties firms faced as ministers prepared to introduce restrictions on EU nationalsworking in the UK after Brexit.
Sajid Javid, the home secretary, is looking to cut immigration from the EU by 80% after Britain leaves, including through the extension of a £30,000-a-year minimum salary threshold already applied to non-EU workers.
Marshall said: “Business concerns about the government’s recent blueprint for future immigration rules must be taken seriously – and companies must be able to access skills at all levels without heavy costs or bureaucracy.”
The recruitment difficulties come as the UK employment rate stands at the highest level since 1971, while unemployment is at its lowest since 1975, making it harder for companies to hire new workers without offering higher wages.
Net migration from the rest of EU to the UK has also slumped to a six-year low. The weaker pound has made it less attractive for foreign nationals to come to Britain to work, while Brexit has also raised the prospect of tougher immigration rules in future.
The BCC said the economy also appeared to be “stuck in a weak holding pattern” at the start of the year owing to Brexit uncertainty, with companies reporting stagnant levels of growth and faltering business confidence.
While manufacturers are coming under pressure from labour shortages, the service sector, which includes banks, hotels and restaurants, and accounts for about four-fifths of the economy, reported weaker domestic sales.
Production in the manufacturing sector hit its fastest pace of growth in six months in December as firms stockpiled in preparation for potential border holdups in the event of a no-deal Brexit.
The IHS Markit/Cips manufacturing purchasing managers’ index rose from 53.6 in November to 54.2 last month, beating all forecasts in a Reuters poll of economists. Above 50 indicates economic growth.
The latest snapshot raises the prospect that Brexit uncertainty may perversely benefit the economy in the short-term by prompting companies to raise their activity levels in preparation for potential disruption from the UK leaving the EU on 29 March without a deal.
The Bank of England has previously said that the majority of businesses in Britain have done little to prepare for a no-deal scenario, while the government has started to tell more companies to make preparations as it steps up its plans.
Economists, however, said the growth in activity was likely to be temporary. Disruption after 29 March could curtail activity, while any removal of Brexit risks could lead businesses to run down their stockpiled goods rather than placing new orders.
(qlmbusinessnews.com via news.sky.com– Thur, 3rd Jan 2019) London, Uk – –
Shares in Next, which fell 10% last year, rose more than 6% as Christmas trading offers cheer the high street.
Fashion chain Next lowered its profit forecasts but said sales over the crucial Christmas trading period rose.
The retailer downgraded its full-year profit forecast to £723m, from the £727m previously expected.
It blamed the lowered guidance on the sale of seasonal products, such as personalised gifts and beauty products, which bring in lower profits than clothing.
Next also said it faced higher costs associated with selling products online.
But it said full-price sales for the festive period were in line with expectations, up 1.5% between 28 October and 29 December.
Sales at its 500 stores slumped 9.2% over the Christmas trading period, but this was offset by a 15.2% surge online.
Next's trading update will come as a relief to the high street, which has been decimated with consumers tightening their wallets and switching their spending online.
There had been fears Next could join other retailers in starting to discount products before Christmas to bring people through the doors.
Online fashion group ASOS fuelled a Christmas crisis when it issued a profitwarning in the run-up to the holidays – raising fears the high street malaise had spread online.
Paul Hickman, analyst at Edison Investment Research, said: “What these results from Next show is that a closely managed business with an appropriate strategy to migrate online, can limit risk to relatively small proportions.
“Arguably, that strategy is moving even faster than expected, and the company appears to be building share in the online market, where the pre-Christmas warning from ASOS had fuelled concerns.”
The latest updates come as HMV appointed administrators and follows on from the demise of Poundworld, Maplin and Toys R Us last year.
A last-minute rush to buy gifts on Christmas Eve helped sales at JohnLewisto rise 4.5% in the week to 29 December, the department store said on Wednesday. It plans to report a “more meaningful picture” of trading on 10 January.
Shares in Next, which fell 10% last year, rose more than 6% at the start of trade.
Marks & Spencer and Associated British Foods, which owns Primark, saw their stocks rise more than 2% on Next's trading update.
(qlmbusinessnews.com via theguardian.com – – Wed, 2nd Jan 2019) London, Uk – –
Demonstrations held at more than 20 stations as fares rise by above-inflation average of 3.1%
Campaigners have staged demonstrations at railway stations across the country as the transport secretary, Chris Grayling, blamed trade unions for ticket price hikes.
Protests were held at about two dozen railway stations as fares rose by an above-inflation average of 3.1% on Wednesday morning.
The cost of many rail season tickets has risen by more than £100, while punctuality is at a 13-year low.
At Manchester Piccadilly station, union officials and Labour councillors handed out flyers titled “Cut fares not staff” as commuters began returning to work after the Christmas holiday.
One passenger, Lorraine Southon, 57, said all three of her daily trains were usually late and that she had been forced to change her route to work due to the introduction of new timetables, which caused months of disruption last year.
“In my experience it’s a very poor service,” she said outside Manchester Piccadilly station. “I don’t mind [fares] going up if they would improve the service, but they don’t improve the service – the service continues to be poor.”
Southon, a BT worker, added: “I can’t comprehend how the management continue to get these huge bonuses when the service is just so poor. Why are the bonuses not performance-based? Chris Grayling should be responsible.”
Another commuter, Phillip Shields, 32, added: “I’m definitely not happy with the rise. There’s no justification really for it at the moment.
“They keep promising every year that they’re going to improve services but it never seems to materialise. It’s the same statements they repeat over and over again, every year.”
The 3.1% average fare increase outpaces the 2.6% rise in the average wage in 2018 and will add hundreds of pounds to the cost of season tickets for some rail passengers.Advertisement
Costs will come down for 16- and 17-year-olds, who are to be given half-price travel on all trains from September – benefiting up to 1.2 million people – according to an announcement by the government in November, at the same time as the wider fare increase was revealed.
But the vast majority of passengers are to pay more despite poor service, prompting renewed calls from Labour and the Trades Union Congress for UK railways to be nationalised.
Speaking on BBC Radio 4’s Today programme on Wednesday morning, Grayling defended the fare rise by saying trade unions were to blame.
He said: “The reality is the fare increases are higher than they should be because the unions demand – with threats of national strikes, but they don’t get them – higher pay rises than anybody else.
“Typical pay rises are more than 3% and that’s what drives the increases. These are the same unions that fund that Labour party.”
The Labour leader, Jeremy Corbyn, joined protesters outside King’s Cross station in London as he described the rail fare increases as a “disgrace” that was driving people away from public transport.
Responding to Grayling’s insistence that the rise was needed to fund the upkeep of the network, Corbyn said Britain must “invest in our railways as a public investment”. He added: “If we don’t invest then people will have to suffer in their journeys, and we end up with more people using their cars and that’s far more dangerous for our environment than rail travel.”
Pressed whether it was fair to ask taxpayers to subsidise commuters, he replied: “All public transport is subsidised in one form or another, and there is a public good from it. No other country in the world has a transport system that sits completely alone.”
Outside Manchester Piccadilly, Michelle Rodgers, the RMT national president, said the fare increase followed an “abysmal” year for rail passengers.
She added: “We’ve had an absolutely fantastic response this morning. They’re all really angry and disgusted about the fare increase, especially in this region where we have seen the worst [service] in many, many years. I’ve been around 20 years and I’ve never seen it as bad as in the last 12 months.”
Handing out flyers branded “Tory rail rip off”, Adele Douglas, a Labour party councillor for the Piccadilly ward on Manchester city council, said the unreliable trains were “destroying people’s working lives”.
She added: “I’m not going to encourage anyone to civil disobedience that’s going to get them into serious trouble but I think there does come a line where the public will have to say: we don’t accept this – it’s too much money, too little in return and it’s not fair..”Topics
(qlmbusinessnews.com via uk.reuters.com — Wed, 2nd Jan, 2019) London, UK —
(Reuters) – UK shares were lower on Wednesday as investors returned from New Year celebrations to more disappointing data from China that deepened concerns about the health of the global economy and sparked a global sell-off.
London's blue-chip bourse .FTSE dropped 0.9 percent and the mid-cap index .FTMCdipped 0.3 percent by 1018 GMT.
Most sectors were still in the red, setting a bleak tone for 2019’s first trading day after both indexes recorded their worst yearly drop since the 2008 financial crisis last year.
Positive domestic PMI data due to Brexit-induced stockpiling provided some respite, but investors were focussed on Chinese data that showed manufacturing activity in the world’s second-largest economy contracted for the first time in 19 months.
It followed a poor official survey on factory output on Monday. Data also revealed that euro zone manufacturing activity barely expanded in December.
Continued concerns that the prospect of a global cyclical downturn will likely cap the upside of UK’s blue-chip shares, said CMC Markets analyst Margaret Yang.
“A string of missing PMIs from China’s official and private sector suggest that Asia’s largest economy is still cooling off due to weaker external demand and trade uncertainties,” Yang added.
“It is still too early to say markets have bottomed out yet.”
UK-listed companies with more exposure to the Asian market were the most hit with HSBC (HSBA.L) edging 1.8 percent lower and Standard Chartered (STAN.L) down 3 percent.
Fellow financial heavyweights Prudential (PRU.L), Lloyds (LLOY.L) and Royal Bank of Scotland (RBS.L) also fell over 3 percent.
Global miners were also weak with copper prices lower amid concerns over growth in top metals consumer China. Antofagasta (ANTO.L), BHP (BHPB.L), Anglo American (AAL.L), Rio Tinto (RIO.L) and Glencore (GLEN.L) were down between 3.2 percent and 4.3 percent.
Blue-chip medical products maker Smith & Nephew (SN.L) tumbled 2.5 percent, with traders citing a rating cut by brokerage JPMorgan.
Among the midcaps, Energean Oil & Gas (ENOG.L) added 5.1 percent to top the gainers after signing a gas supply agreement with independent power producer I.P.M. Beer Tuvia.
Elsewhere in corporate news, Ophir Energy (OPHR.L) shares outperformed the small-cap index .FTSC and soared over 33 percent after the oil and gas producer said it was in takeover talks.
Gambling software company Playtech (PTEC.L) gave up losses to turn positive. It said it would pay 28 million euros under a settlement with Israeli tax authorities following an audit of its annual accounts.
Real estate investment trust Hammerson (HMSO.L) was 3.9 percent lower as it said its share buyback programme will be paused ahead of the release of 2018 results.
Reporting by Muvija M and Shashwat Awasthi in Bengaluru
(qlmbusinessnews.com via bbc.co.uk – – Tue, 1st Jan 2019) London, Uk – –
A new energy price cap has now come into force – but householders can still get a better deal by shopping around, consumer groups say.
Regulator Ofgem has estimated that the new cap will save 11 million people an average of £76 a year.
Typically, the cap means that typical usage by a dual fuel customer paying by direct debit will cost no more than £1,137 a year.
Consumer organisations say that people could save more by switching suppliers.
“The introduction of this cap will put an end to suppliers exploiting loyal customers. However, while people on default tariffs should now be paying a fairer price for their energy, they will still be better off if they shop around,” said Gillian Guy, chief executive of Citizens Advice.
“People can also make longer-term savings by improving the energy efficiency of their homes. Simple steps, such as better insulation or heating controls, are a good place to start.”
How the cap works
Households in England, Scotland and Wales on default tariffs – such as standard variable tariffs – should be better off after the cap is introduced. Consumers in Northern Ireland have a separate energy regulator and already have a price cap. Those on a prepayment meter already have a price cap in place. Those who chose their tariff are ineligible.
Savings depend on how much energy is used in the household and how the bill is paid. The cap is per unit of energy, not on the total bill. So people who use more energy will still pay more than those who use less.
The cap is on the unit price of energy, and the standing charge. So the cost of electricity – for those on default tariffs – is capped at 17p per kWh. Gas is capped at 4p per kWh.
Dual fuel users will pay no more than £177 a year for a standing charge; electricity-only users will pay no more than £83, and gas users £94.
Ofgem will review the tariff in February, and then adjust it in April and October each year. It has said that the level of the cap is likely to rise in April 2019, to reflect the higher cost of wholesale energy. As a result, the average annual saving in 2019 is likely to be lower than £76.
The regulator will then judge the effect on the energy market in 2020, and the secretary of state will then decide whether to extend it by another year, or whether to end it at that time.
“The energy price cap can only be a temporary fix – what is now needed is real reform to promote competition, innovation and improved customer service in the broken energy market,” said Alex Neill, from Which?.
What do the suppliers think?
Some have already changed the way they organise their tariffs.
Centrica – which owns the largest UK supplier, British Gas – has said that it will mount a legal challenge to the way the cap has been calculated.
It is applying for a judicial review against Ofgem, saying the regulator had set the threshold too low.
“Through this action Centrica has no intention to delay implementation of the cap, and does not expect the cap to be deferred in any way,” the company has said in a statement.
“As we have previously said, we do not believe that a price cap will benefit customers but we want to ensure that there is a transparent and rigorous regulatory process to deliver a price cap that allows suppliers, as a minimum, to continue to operate to meet the requirements of all customers.”
Will the cap lead to less switching?
Those who have argued against the introduction of a price cap have said it will be counter-productive, as it will lead to fewer people switching – where the potential savings are greater.
Which? has argued that some of the cheapest deals on the market have already disappeared, as suppliers needed to make up some of the money lost as a result of the cap.
It analysed deals priced at £1,000 a year or less for a medium energy user at the beginning of the year compared to now, and found there had been a sharp drop in availability.
(qlmbusinessnews.com via theguardian.com – – Tue, 1st Jan 2019) London, Uk – –
Regulations to ensure greater transparency come after string of shareholder revolts in 2018
Britain’s biggest listed companies will be forced to justify the pay gap between chief executives and their workforce as part of rules that come into force on New Year’s Day.
The pay-ratio regulations are part of government efforts to improve transparency around executive remuneration. They follow a string of investor revolts in 2018 over high pay for senior executives at companies including Royal Mail, Persimmonand Unilever.
Businesses will have to divulge and justify the difference between executive salaries and average annual pay for employees. They will also need to explain how directors take staff and other stakeholder interests into account when they decide on salaries and bonuses.
The regulations will make it a statutory requirement for companies listed on the London Stock Exchange with more than 250 staff to disclose the ratio of chief executives’ remuneration to the median pay of UK employees every year.
Pay for 2019 will be first under the microscope, which means the initial disclosures will be released in 2020.
Investors have been calling for more transparency around executive pay and how it aligns with salaries and bonuses across companies.
Persimmon, a housebuilder, ousted its chief executive, Jeff Fairburn, in November after a furore over his £75m bonus. That package was honoured despite a shareholder revolt in April in which nearly 64% voted against the company’s remuneration policy.
MPs also hit out at the company for failing to pay the living wage to its lowest-paid workers. Persimmon, however, said it has signed up to pay the £9 living wage starting in January 2019.
Royal Mail had one of the biggest shareholder revolts in UK corporate history in July. About 70% voted against its pay policy in light of an annual package for the chief executive, Rico Back, which was worth up to £2.7m. This was on top of a £6m “golden hello” for having left the company’s European subsidiary. Unilever, AA and Cineworld also experienced investor backlashes over director pay in 2018.
Luke Hildyard, the director of the High Pay Centre thinktank, said the rules were a step in the right direction. “Government policy is overwhelmingly focused on supporting business, on the basis that successful businesses benefit wider society,” he said.
“But too many companies lavish excessive pay awards on their top executives while holding down pay for low and middle-income earners, meaning that the full potential benefits of business success go unrealised.
“Putting information about pay ratios in the public domain won’t instantly eradicate injustice, but it will give investors, workers and other stakeholders a better insight into the fairness of company pay practices.”
The business secretary, Greg Clark, stressed that most companies in Britain act responsibly.
“We do, however, understand the frustration of workers and shareholders when executive pay is out of step with performance, and their concerns are not heard,” he said.
“The regulations coming into force today will build on our reputation by increasing transparency and boosting accountability at the highest level – giving workers a stronger dialogue and voice in the boardroom and ensuring businesses are accountable for their executive pay.”
(qlmbusinessnews.com via news.sky.com– Mon, 31st Dec 2018) London, Uk – –
Politicians raise concerns after a lucrative contract to run extra ferries is handed to a company which has never operated a ship.
A shipping firm handed a £13.8m contract to run extra ferries in the event of a “no-deal” Brexit, has defended itself amid criticism it doesn't currently have any ships.
Questions were raised over the Government's preparations after it emerged Seaborne Freight was one of three companies awarded contracts totalling £108m last week to lay on additional freight crossings to ease the pressure on Dover.
Seaborne said it was on track to start twice-daily sailings by the end of March – when the UK is due to leave the EU – having initially planned to launch Ramsgate-Ostend crossings during February.
The company said in a statement that it had been working since 2017 on plans to reintroduce ferry sailings from Ramsgate starting in early 2019.
It said that a “development phase” included “locating suitable vessels, making arrangements with the ports of Ostend and Ramsgate, building the infrastructure, such as bunkering, as well as crewing the ferries once they start operating”.
The company plans to start with two ships in late March and increase to four by late summer, the statement added.
A Department for Transport spokesman said: “This contract was awarded in the full knowledge that Seaborne Freight is a new shipping provider, and that the extra capacity and vessels would be provided as part of its first services.
“As with all contracts, we carefully vetted the company's commercial, technical and financial position in detail before making the award.”
Seaborne said its difficulties included narrow berths at the Kent port.
Its statement also said: “It was intended to start the service in mid-February but this has now been delayed until late March for operational reasons.
“This coincides with the Department for Transport's Freight Capacity Purchase Agreement with Seaborne which is part of their preparations to increase ferry capacity in the unlikely event of a no-deal Brexit.”
Ministers faced questions over the contract from across the political divide.
Paul Messenger, a Conservative county councillor for Ramsgate, questioned in a BBC interview whether the government had carried out sufficient checks on the firm, saying: “It has no ships and no trading history so how can due diligence be done?”
Labour MP Tonia Antoniazzi, a campaigner for a second referendum, said: “We know our ports aren't ready for a no-deal disaster, but is hiring a firm that's never dealt with this kind of thing before really going to help?
“This idea should have been sunk before it saw the light of day”, she concluded.
Ramsgate has not had a cross-Channel service since operators TransEuropa collapsed in 2013.
(qlmbusinessnews.com via bbc.co.uk – – Mon, 31st Dec 2018) London, Uk – –
New EU rules on fishing quotas could have a “grave” impact on the UK's fishing industry, a House of Lords committee has said – just a day before the new policy is introduced.
Under previous rules, crews often discarded, into the sea, fish that took them over their quota for that species.
But under the new policy, fishers must bring the full haul back to shore. This change is to stop fish being wasted.
The legislation has been called “badly designed” by UK industry bodies.
The House of Lords EU Energy and Environment sub-committee heard evidence that the legislation could mean fishermen hitting their annual quotas much earlier in the year and have to stop fishing.
The committee was told this would be particularly problematic in “mixed fisheries” where it would be hard for boats to avoid catching a fish species for which they have a very low quota.
Once they reached their quota for a particular species, fishers would be forced to choose between halting operations for the rest of the year or breaking the law by continuing to fish for other species and discarding anything over quota.
The committee also said it had worries about how the rules – which come into effect in full after a four-year phasing-in period – would be enforced.
It said patrol vessels would only be able to cover a small percentage of boats, creating a temptation for fishers to break the rules.
Committee member Lord Krebs said: “It is deeply concerning that so many people – fishers, environmental groups, even the enforcement agencies themselves – do not think these new rules can be implemented from January 1.”
He added: “Most people we spoke to thought nothing would change – fishers will continue to discard, knowing the chances of being caught are slim to none and that to comply with the law could bankrupt them.”
Barrie Deas, the chief executive of the National Federation of Fishermen's Organisations, said the rules were “badly designed” and would result in boats having to stop fishing for long stretches after reaching quotas on specific species.
The Department for Environment, Food and Rural Affairs said it was working with the industry to address the challenges posed by the new sustainable fishing policy.
The committee is due to publish its report on the implementation and enforcement of the EU “landing obligation” in February.
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