This week’s news includes; Brexit draft agreement, Addison Lee employment rights legal case, Amazon’s New HQ’s and Debenhams share price drops 21%
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. Get all the important stories and insights straight into your inbox by subscribing to our mailing list here.
Opinion articles of the week:
- Legal Cheek Is blockchain the future of solving human rights issues?
- BBC News Will superfast 5G mobile be worth it?
- Business Insider Big Oil claims it’s doing its part to combat climate change. A new study finds it’s not even close.
1. BREXIT
Last week, Theresa May brought forward a draft withdrawal agreement with the EU. This was a significant step in the Brexit process. A five hour meeting then took place where Cabinet members deliberated and eventually agreed to support the proposals. A total of nine Cabinet ministers however, spoke out against the deal. Shortly after the approval however, two cabinet ministers, Dominic Raab and Work and Pensions secretary Esther McVey both resigned. They have since been replaced by Steve Barclay and Amber Rudd. Leading Brexiter, Jacob-Rees Mogg also initiated the process to remove Theresa May as Prime Minster as a vote of no-confidence. The agreement has drawn criticism from all sides of the debate, but what was agreed?
The key terms are;
Transition Period: The UK will officially leave the EU but retain regulatory alignment. In practice, the idea is to give businesses time to prepare while the future trade arrangements are negotiated. The UK will still have to abide by EU laws & remain under EU court jurisdiction but it will no longer be a member of the EU. The period lasts from March 29 2019 until December 31 2020. This period can be extended by mutual agreement but this can only happen once.
The Irish Backstop: The backstop prevents a hard border between the Republic and Northern Ireland if the UK and the EU do not reach a long term trade deal. Northern Ireland then falls back and essentially forms a temporary customs union with the EU. The customs union will remove tariffs and border checks between NI and the Republic, on all goods except fishery.
Freedom of Movement: Free movement in its current form will come to an end after a final deal on the future relationship has been reached.
Citizen Rights: UK citizens living in EU countries and vice versa, will retain their residency and social security rights. Citizens who become resident in another EU country during the transition period will be granted the right to stay after it.
Divorce bill: The UK will pay the EU to settle outstanding financial obligations. The figure is not listed but it is expected to exceed £39 billion. Members agree to make financial contributions for a fixed number of years. The divorce bill meets these obligations. This figure will include our de facto “membership” during the transition period.
Financial Services: UK financial services will be treated as entities located outside the Union. The exact relationship is not clear but the UK is likely to be treated as an “equivalent” jurisdiction. This would grant the UK the same access rights as US or Japanese financial service firms. This still come
For more on the draft agreement check out our insight article
2. ADDISON LEE
The UK employment appeal tribunal has ruled Addison Lee drivers should be classed as employee not self-employed workers. This ruling could significantly affect the gig economy. Gig economy companies operate by connecting workers with customers, where workers have complete freedom to choose their hours. The court has ruled however, that drivers were not running their own businesses as Addison Lee purported. The terms and conditions agreed to by drivers did not reflect the true relationship between Addison Lee and their drivers.
This ruling only applies to the three former workers who are complaining compensation. It is likely that other workers are likely to launch their own proceedings. Addison Lee may now appeal to the Court of Appeal. Across the whole sector, workers are fighting back against their self-employed statuses. Uber and Hermes are currently also embroiled in employment rights battles. (The Independent)
3. SUPERMARKET CASH MACHINE CASE
Supermarkets have won a significant lawsuit over business rates on cash machines. Since 2010, supermarkets have been liable to pay business rates on the cash machines outside their stores. The appeal court has now ruled that the machines were not nor are business rateable property.
Supermarkets will have to be refunded a total of £300 million for the rates. This money will come from government and local authorities who collected the tax. While this will undoubtedly benefit small businesses, affected local governments will struggle to find this money from other sources. It Is estimated that this ruling will cost £44.5 million. The Appeal Court also rejected a bid to make supermarkets pay business rates on cash machines inside the store. The court also stated that the UK Valuations Office, should not be allowed to appeal to the Supreme Court. The Valuations Office will however, still be entitled to petition to the UK’s highest court. (Yahoo)
4. NETWORK PROVIDERS FINED FOR OVERCHARGING
Ofcom has fined EE and Virgin Media for overcharging half a million customers. The network providers were fined a total of £13 million for collecting early exit fees from customers. This breached consumer protection law as it was not made clear to customers. EE overcharged 400,000 customers more than £4 million. Virgin Media overcharged 82,000 customers £2.3 million. Both network providers have now agreed to change their terms. EE fully accepts the findings whereas Virgin has announced that it will appeal.
5. AMAZON NEW HQ
Amazon has announced that it will build its HQ’s in New York City and Northern Virginia. These new sites are in addition to Amazon’s existing Seattle headquarters. Workers in Seattle will be given the option to relocate to the other HQ’s. The project will cost $5 billion and will create a up to 50,000 new jobs. Amazon as it share price broke the $1 trillion market but has fallen beneath the market. Jeff Bezos announced that “Amazon is not too big to fail…in fact; I predict one day Amazon will fail. Amazon will go bankrupt.” His message was to ensure his staff don’t get complacent and the company’s focus remains on customer needs.
6. CROSSRAIL FAIL
The delays to the completion of the Crossrail project will cost Transport for London (TfL) at least £200 million. The project was scheduled to open on December 9th 2018 but has been pushed back even further. TfL initially predicted losses of £30 million in lost passenger fares and advertising revenues between 2019 and 2020. The new figures show the true cost will be at least £200 million. The total project costs roughly £15.4 billion. TfL is operating with a £1 billion deficit and fare freezes introduced by Mayor Sadiq Khan have contributed to these. The fare freeze cost TfL £640 million. Despite this, TfL promises to break even by 2022. (City A.M)
7. TK MAXX AND AMAZON FAUX FRAUD
TK Maxx and Amazon have been found to be selling faux fur products which were in fact made from real animals. A BBC investigation found faux fur clothes and bags were made from rabbit, fox and racoon dog fur. TK Maxx claimed that it was not aware the products were made from real fur. It has since removed the products and offered refunds to anyone affected.
Real animal fur was also mis-sold as faux fur on eBay. Although eBay has a no-fur policy, it does not test and simply expects sellers to describe products accurately. Fur farming is banned in the UK although it is not illegal to import fur from abroad. Sales of real fur products has declined significantly in recent years over concerns about animal cruelty. Many fraudulent sellers seek to gain sellers by fraudulently claiming the products are faux.
BBC News looks closer at the issue.
8. REDBULL LEGAL BATTLE
The UK high court ruled in favour of Big Horn in a trademark dispute with Red Bull. Red Bull claimed that Big Horn breached its trademark with “clear visual and conceptual similarities”. Big Horn claims their images of bulls represent the animals in their natural environment. Red Bulls however, show “domestic” bulls. The High Court accepted Big Horn’s argument and stated that there were enough dissimilarities between the two trademarks and the brand names. Big Horn is distributed by the Bulgarian company, Voltino Eood. Red Bull is expected to appeal the case. (City A.M)
9. DEBENHAMS SHARES DROP
Debenhams share price fell by 21% last week after poor sales figures. This is largest one-day fall in over a decade. Debenhams announced last month that it would close over 50 stores. Debenhams share value has fallen by over 95% in just five year, leaving the store valued at just £65 million. The company is just another victim of the declining retail sector. These struggles have no end in sight. In 2018, we have already seen the collapse of Toys R Us, Maplins and Poundworld.
Check out our video on why retailers are struggling:
10. COCA COLA SCALES BACK CHRISTMAS PLANS
Coca-Cola has announced that it will limit the scale of its UK Christmas truck tour. The tour involves the provision of free drinks and has been criticised by local authorities and health organisations. The world’s largest beverage manufacturer has had to adjust its plans. It has significantly reduced the number of stops on council-owned land. Over 50% of its stops will be at supermarkets. The tour will only visit 24 towns and cities, 14 fewer than last year. The tour has been running since 1995 and two lorries travel across the country playing jingles and handing out free 150ml cans of Coca-Cola. Coca-Cola has stated that 90% of sample drinks handed out are zero sugar. (The Guardian)
