This weeks news includes; Brexit bill gets royal assent, Intel makes $14 billion acquisition, Bitcoin is now worth more than gold and Toyota to invest £240m in UK plant.
Below are our top 10 stories that you need to know about. Be sure to check our twitter page and Facebook page for regular posts of important headlines. Click on the links for full stories.
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Opinion articles of the week:
- Business Insider claims the lack of mortgage defaults is masking a huge problem in the UK economy.
- City A.M claims the imminent triggering of Article 50 appears to be having no negative effect on UK mergers and acquisitions (M&A).
- The Independent asks “ Why should we care about leaving the EU single market?”
- CNN asks “Will the world’s largest economies bow to Trump on trade?”
1. BREXIT BILL GETS ROYAL ASSENT
The Queen has given Royal Assent to the Brexit bill, clearing the way for Theresa May to start talks to leave the European Union. The European Union (Notification of Withdrawal) Bill was passed by MPs and peers on Monday.
It allows the prime minister to notify Brussels that the UK is leaving the EU, with a two year process of exit negotiations to follow. Mrs May says she will trigger the process by the end of the month.
It is unlikely to happen next week to avoid a clash with an informal summit of EU countries. The meeting will mark the 60th anniversary of the Treaties of Rome, which established the European Economic Community, and in turn became the European Union.
Brexit Secretary David Davis said: “By the end of the month we will invoke Article 50, allowing us to start our negotiations to build a positive new partnership with our friends and neighbours in the European Union, as well as taking a step out into the world as a truly Global Britain.” (BBC News)
2. UK GOVERNMENT U-TURNS OVER NATIONAL INSURANCE HIKE
Plans to increase National Insurance rates for self-employed people – announced in the Budget last week – have been dropped. Chancellor Philip Hammond has said the government will not proceed with the increases which were criticised for breaking a 2015 manifesto pledge.
Mr Hammond had faced a backlash by Conservative backbenchers last week, who accused him of breaking a general election manifesto commitment not to put up National Insurance, income tax or VAT.
Explaining his change of heart to MPs, the chancellor said: “It is very important both to me and to the prime minister that we are compliant not just with the letter, but also the spirit of the commitments that were made.
“In the light of what has emerged as a clear view among colleagues and a significant section of the public, I have decided not to proceed with the Class 4 NIC measure set out in the Budget.”
Mr Hammond’s Budget announcement would have increased Class 4 NICs from 9% to 10% in April 2018, and to 11% in 2019, to bring it closer to the 12% currently paid by employees. He said “most commentators” believed the “sharp increase” in self-employment over the last few years had in part been “driven by differences in tax treatment”. He would use the Autumn Budget to set out further measures to “fund in full” the £2bn lost from NICs, he said. (BBC News)
3. INTEL ACQUIRES MOBILE EYE FOR $14 BILLION
Intel Corp agreed to buy Israeli autonomous vehicle technology firm Mobileye for $15.3 billion on Monday in a deal that could thrust the U.S. chipmaker into direct competition with rivals Nvidia Corp and Qualcomm Inc to develop driverless systems for global automakers.
The pricey acquisition of Mobileye could propel the world’s largest computer chipmaker into the front ranks of automotive suppliers at a time when Intel has been reaching for market beyond its core computer semiconductor business.
It also promises to escalate the arms race among the world’s carmakers and suppliers to acquire autonomous vehicle technology, and could fuel already-overheated valuations of self-driving start-ups.
The stakes are enormous. Last year, Goldman Sachs projected the market for advanced driver assistance systems and autonomous vehicles would grow from about $3 billion in 2015 to $96 billion in 2025 and $290 billion in 2035.
Skeptics have questioned whether auto companies and suppliers will be able to deploy fully self-driving cars safely in the next four years, as several have promised. Investment analysts on Monday raised concerns about the potential synergies between Intel and Mobileye, as well as the acquisition’s price.
Intel has not been a significant player in the sector, although it has invested in at least half a dozen start-up companies developing different components for self-driving systems, from robotics to sensors. Mobileye brings a broad portfolio that includes cameras, sensor chips, in-car networking, roadway mapping, machine learning, cloud software and data fusion and management. (Reuters)
Lloyds outsources 2000 jobs to IBM
Lloyds is about to outsource nearly 2,000 tech jobs to IBM, according to the union representing the bank’s workers, in a billion pound deal that will save cash in the long term.
The bank and the tech giant are on the verge of agreeing a seven year deal worth £1.3bn that would see 1,900 IT staff transferred to IBM. Lloyds’ chief information officer Morteza Mahjour is said to have confirmed the plans according to Lloyds Trade Union’s (LTU) update to 35,000 members and first reported by the FT.
Staff will transfer under TUPE agreements and will include permanent staff, contractors, third parties and offshore suppliers based in Copley and Edinburgh. However, after four years, the bulk of staff expected to be working on Lloyds business within IBM as a result of the transfer is expected to be reduced to just 193, with a further 993 IBM staff located outside of the UK. LTU claim staff being transferred will be made redundant after a year.
The transition is expected to save Lloyds at least £759m with further cost savings to follow, however, the union indicated concerns have been raised internally about the banks critical systems such as payments, treasury trading, settlements and its digital services being run by a third party and offshore. This is said to have delayed the deal which was expected to be agreed in January and the newsletter update also claims that HP had initially been lined up as a back up to IBM if the deal fell through. (City A.M)
Lloyds government stocks holding falls below 3%
The taxpayer is now just £800m pounds shy of recovering the money used to bail out Lloyds Banking Group during the financial crisis. While it remains a hefty sum, it is just a fraction of the £20.3bn in rescue funds that saved the bank from collapse in 2008.
The Treasury said £19.5bn had been returned to its coffers from share sales and dividend payments to date. UK Financial Investments (UKFI), which manages the stake in Lloyds, cut the holding by 1% to 2.95%. Lloyds’ recovery since the crash saw it announce its highest annual profits for a decade last month though shares are currently trading below the Government’s average purchase price of 73.6p – at 68p.
The recent weakness is attributable to the low interest rate environment in a sector still facing big costs for past mistakes. Lloyds has continued to make provisions to cover the cost of the PPI mis-selling scandal, despite trying to draw a line under its exposure last autumn. It has set aside £17.35bn to date. (Sky News )
5. FACEBOOK, TWITTER AND GOOGLE COULD FACE €50M FINES FOR FAKE NEWS AND HATE SPEECH
German lawmakers have slammed Facebook and Twitter for their failure to tackle content which breaks the law, hate speech posted on the sites, and so-called fake news that’s defamatory, warning of financial penalties for companies which do not tackle the problem.
Draft laws proposed today would bring in fines of up to €50m (£44m) for the companies failing to delete such content online flagged by users. Fresh tests of the platforms’ abilities to take down content that was reported as illegal, found too few posts were taken down and that the ones that were, were not taken down quickly enough, said justice minister Heiko Maas.
Google video site YouTube was commended for improving its performance, with a 90 per cent deletion rate of posts reported, 82 per cent of them within 24 hours. For Facebook, that stood at 33 per cent within the first 24 hours, seven percentage points lower than previous tests, while just one in 100 Tweets containing criminal content was erased and that did not happen within 24 hours.
In addition to fines for failure to comply, the draft law proposes that social networks make clear the means of reporting such content to users, that complaints be looked at immediately in the context of its legality and if breaking the law, be deleted within 24 hours, as well as informing users of the decision in regard to a complaint.
Facebook, Twitter and Google were among tech companies to sign up to an EU code of conduct last summer, designed tackle hate speech in light of terror attacks in Europe. But, they were warned in December by Brussels that they need to act faster, noting collectively that just 40 per cent of cases were dealt with in the 24 hour time frame they are aiming for. (City A.M)
6. ECJ RULES HEADSCARFS CAN BE BANNED AT WORKPLACES
Employers will be able to ban Muslim staff from wearing headscarves at work, the European Court of Justice has ruled. The court said that companies were able to ban “the visible wearing of any political, philosophical or religious sign”.
The ruling made clear that if the ban was only applied to Muslim members of staff it could still constitute discrimination.
Companies would need to already have a policy in place prohibiting the wearing of religious symbols and would not be able to ban staff from wearing headscarves on the “wishes of a customer”.
If only applied to Muslim members of staff it could still constitute discrimination
The judgment was sparked by the cases of two women – one living in France and one in Belgium – who were dismissed from work after refusing to remove their headscarves.
Samira Achbita, a receptionist for security company G4S, was dismissed after insisting on wearing her Islamic headscarf to work. The company told her there was an unwritten rule prohibiting employees from wearing visible signs of religion in the workplace.
Ms Achbita challenged the decision in the Belgian courts, claiming she was being discriminated against on grounds of her religion. (Sky News)
7. PRICE OF BITCOIN RISES ABOVE GOLD
For the first time in the history of the virtual currency, a single Bitcoin has become worth more than an ounce of gold.
As TechCrunch reports, the momentous, er, moment, happened following a good day for Bitcoin, and a slight slump in the price of gold in dollars. The price of one Bitcoin crept up to $1,238.11, compared to gold which was at $1,237.73, according to Bloomberg’s figures (via Engadget).
Interestingly, stats from Coindesk show that this came close to happening at the start of 2017, but Bitcoin sank back down temporarily, before storming upwards again and finally beating out gold as of now. Bitcoin also hit a high close to this level way back towards the end of 2013, before a major fall from which it gradually recovered, gaining a lot of strength over the course of last year.
Of course, both gold and Bitcoin are seen as hedges against traditional currency (and indeed a doomsday-style meltdown by some). However, the cryptocurrency is considerably more volatile, while gold has been pretty much steady, generally speaking, over the last half-decade.
Bitcoins can be ‘mined’ by those with powerful enough computers, although last summer, it became more difficult to make money doing this mainly due to the so-called ‘halvening’. This is a built-in anti-inflation measure whereby the number of Bitcoins which can be found in any given time is halved (obviously making it harder to uncover them). (Tech Radar)
To find out more about what Bitcoin is and how it works, check out our insight article; Bitcoin What You Need To Know
8. PETA TO BUY CANADA GOOSE SHARES IN EFFORT TO STOP FIRM USING COYOTE FUR
Up-market coat retailer Canada Goose is set to go public on Thursday in a $240m (£195.5m) float, but animal rights activists are determined to spoil the party.
People for the Ethical Treatment of Animals (Peta) wants to be first in line to snap up enough shares so that it can be admitted to Canada Goose’s shareholder meetings. The group will then pressure Canada Goose to stop using coyote fur on their jackets, which it says is unethical.
Peta staged a protest in Knightsbridge on Tuesday where department stores Harvey Nichols and Harrods sell Canada Goose outerwear. Wearing a replica Canada Goose jacket, a Peta model stood in a “bloody” steel trap to illustrate the plight of the coyotes.
Buying stakes in companies to influence their policies is nothing new for Peta, which has a history of shareholder activism dating back to 1987.
More recently, after buying Seaworld stock when it went public in 2013, Peta brought in actress Jessica Biel to ask the company at its AGM when it would stop holding killer whales in captivity. The company has since changed its policy and is phasing out its killer whale show.
Peta has also bought shares in Hermès, Prada and, its most-recent purchase, LVMH, according to statements on its website. It has put the designer brands in the spotlight for their treatment of crocodiles and alligators, which are farmed for their skin to make expensive handbags, belts and shoes. A recent exposé showed the animals are confined to tiny pits and that they are sometimes cut into while still alive. (The Independent)
9. TOYOTA INVESTS IN UK PLANT
Toyota is to invest £240m in upgrading its UK factory that makes the Auris and Avensis models.
The Japanese carmaker’s investment in the Burnaston plant near Derby will allow production of vehicles using its new global manufacturing system. The factory employs about 2,500 people, while another 590 work at Toyota’s engine plant at Deeside, North Wales.
Burnaston made about 180,000 vehicles last year, most of which are exported to Europe and other markets. Industry trade body the SMMT said in January that uncertainty around Brexit and the UK’s future trading arrangements had hit investment in the car sector.
Investment commitments in the UK automotive sector last year totalled £1.66bn, down from £2.5bn in 2015. Business Secretary Greg Clark said Toyota’s investment “underlines the company’s faith in its employees and will help ensure the plant is well positioned for future Toyota models to be made in the UK”.
The government is providing £21.3m in funding for training, research and development, and improving the Burnaston plant’s environmental performance. Last year, rival carmaker Nissan said it would build both the new Qashqai and the X-Trail SUV at its Sunderland plant following government “support and assurances”. (BBC News)
10. VODAFONE TO CREATE 2100 JOBS
Mobile phone giant Vodafone says it will create 2,100 jobs across the UK. The company is expanding existing customer service centres, with 800 additional posts in Manchester, almost 150 in Newark, more than 150 in Stoke-on-Trent and about 100 in Glasgow.
Its third-party customer service partners will create another 600 jobs in Newcastle, nearly 200 roles in the west of Scotland, and 100 in Cardiff. It comes days after it announced hundreds of job cuts at its Newbury HQ.
The firm said the jobs would improve the quality of service for its 18 million UK customers and was part of a wider, three-year, £2bn investment programme in network and services.
Last October, regulator Ofcom fined Vodafone £4.6m for “serious” breaches of consumer protection rules, its largest fine for a telecoms operator. The regulator said Vodafone had misled pay-as-you-go customers, charging them for top-up credit but “providing nothing in return”. It also found Vodafone had broken the rules on handling customer complaints.
Vodafone said at the time it was “determined to put everything right”. At present Vodafone has around 12,500 members of staff in the UK. It has 3,700 workers in its UK customer care operation, with 2,450 of those in-house and 1,250 with other partners. (BBC News)