This week’s news includes; Theresa May survives heavy defeat, McDonalds loses Big Mac trademark, Snap loses its CFO, Netflix results disappoint despite Bandersnatch and Flybe shareholders rebel against acquisition.
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:
- BBC News Can pubs stand many more Dry Januarys?
- City A.M : Are falling house prices in London a good thing?
- Legal Cheek “The best law firms for quality of work 2019 edition”
1. THERESA MAY SURVIVES HEAVY DEFEAT
It has been a wild week in politics. The meaningful vote on Theresa May’s Brexit deal was held and to call it a disaster is an understatement. Theresa May’s deal was rejected by 432 to 202. This is the largest parliamentary defeat suffered by a government in history. While a defeat was expected, the scale of the defeat was not.
Jeremy Corbyn immediately launched a motion of no – confidence in the government but this failed. Theresa May won by 19 votes, 325-306 and she remains in power. Confidence votes tabled by opposition leaders tend to fail. The government usually has a majority in Parliament and it would need a rebellion within the governments for a motion to be successful. This vote was more interesting as Theresa May’s only has a working majority through a supply and confidence deal with the DUP. It is worth noting that the DUP’s 10 MP’s essentially kept the PM in power in this motion.
Following this, Theresa May invited opposition party leaders to discuss ways forward. She must bring a “plan B” to Parliament next week but it is not clear what this will be.
The Brexit process is on a knife edge. There are so many different possibilities with none more likely to happen than the other. Opposition parties and some conservatives are united in wanting to rule out a no-deal. Many MP’s want Brexit stopped either through a second referendum or through revocation of Article 50. Theresa May has stated that a failure to deliver Brexit would be a betrayal of the referendum. The Conservative Party itself is deeply divided, with the right advocating a no-deal, and others a second referendum, leaving Theresa May’s support relatively sparse.
We are in unprecedented times and the future of Brexit and whether it will happen at all is wholly unclear.
Check out our article Brexit: Breaking the Deadlock
2. MCDONALDS LOSES BIG MAC TRADEMARK
The ECJ has ruled that McDonalds’ “Big Mac” cannot be trademarked, after a legal battle with an Irish restaurant. The restaurant group wanted to trademark the name Supermac across the EU but McDonald’s filed an objection. McDonald’s claimed this was too similar to its big Mac.
In 2017, Supermacs launched proceedings to strip McDonald’s of the trademark of “Mc” And “Big Mac”. Despite, evidence provided by McDonald’s lawyers, the EUIPO deemed it insufficient to warrant a trademark across the EU. McDonald’s was ordered to pay costs of £965. McDonald’s can still however, appeal the decision.
For more on the decision check out The Independent’s report.
3. WELSH NUCLEAR REACTOR CONSTRUCTION HALTED
Hitachi has announced that it will stop work on its £20 billion nuclear reactor in Wales. This comes after it failed to agree an electricity production price as the energy market changes. The costs of nuclear energy are now significantly higher than other renewables causing price disputes. Hitachi will now write off its £2.1 billion investment and pull out of the project. The suspension of the project could lead to a loss of 400 existing jobs and 9000 jobs which were expected to be created. The plant would have supplied roughly 6% of the UK’s energy needs.
Nuclear energy has been touted as a means for the UK to shift from reliance on gas and coal. Last year, Toshiba also scrapped plans for its nuclear site plans. Fortunately for the government, the Hinkley C power plant is on track to operation in 2025. The Independent asks whether renewables will plug the gap which nuclear was supposed to fill?
4. OXFORD DROPS HUAWEI DONATIONS
Oxford University has cancelled new donations and sponsorships due from Huawei. The Chinese telecommunications giant has come under significant scrutiny from Western countries due to concerns of Chinese government influence. Both Huawei and China both reject the accusations. Oxford University took the decision in light of these concerns. The university will continue to fulfil its two existing contracts where nearly £700,000 of Huawei funding has been committed.
The US, UK have all restricted Huawei in the development of 5G technology. In the UK, Huawei technology has been removed from BT’s network. Huawei is one of the largest telecoms companies in the world and employs 1,500 employees in the UK. It has already made significant 5G infrastructure investments in UK companies but as concerns mount, it could face a total ban in the UK’s infrastructure. (BBC News)
5. NETFLIX RESULTS
Netflix missed both sales and user growth last quarter, despite notable success in its own content. A Netflix original film, Birdbox, was huge hit, racking up over 45 million views in its first week. Despite this, in q4 Netflix posted revenue of $4.19 billion, $20 million shy of estimates. It also added 8.84 million new subscribers, but this fell 300,000 short of estimates. It did however, beat profit estimates posting $119 million before tax. This was not enough however, to stop its share price dipping 5% in response to the results.
Netflix revealed users watch over 100 million hours of content per day, accounting for 10% of all TV viewing in the US. Competition is set to increase significantly. US broadcasting giant NBC also revealed that it will launch a streaming service in 2020, while Apple, IMDB and Disney are also expected to launch their own services. Netflix had planned spending of $8 billion on original content in 2018. The streaming website posted revenue of $11.7 billion in 2017.
6. SNAP LOSES CFO
The CFO of Snap, Tim Stone is resigning after just 8 months. Stone is just another departure in the C-Suite exodus facing Snap. In the last four months alone, Snap has lost its chief strategy officer, it’s communications VP, sales head, investor relations VP and Head of HR.
The company confirmed that this was not due to Snap’s financial position nor over any dispute. Stone has reportedly resigned to pursue other opportunities. This did not stop Snap’s share price taking a hammering, falling 8% in response to the news. Snap’s stock has plummeted since it’s IPO and it shows no sign of recovery. Although in the last quarter it was able to improve revenue it has user growth has been falling.
Check out our company watch page for more on Snap.
7. HIGH STREET BATTLE BUSINESS RATES
Britain’s retailers are teaming up to fight rising business rates. Around 50 major high street retailers, led by River Island are seeking business rate relief from the government. The coordinated lobbying campaign is in response to government plans to further increase business rates from April 1st 2019.
Business rates are taxes based on the value of the stores property. Some London retailers, have seen their business rates triple in recent years. This move by the group follows news that retailers suffered their worst Christmas since 2009.
8. TESLA JOB CUTS
Tesla has announced that it will be shedding 7% of its workforce. CEO Elon Musk claims that this is to streamline the business and prepare it for “difficult times ahead”. Despite posting a profit, Musk recognised that his vehicles are too expensive to break into the mass market. The company is now seeking to make savings wherever it can to bring costs down. This move, shedding 3000 workers in addition to cuts last year forms part of this strategy.
This forms part of a wider slowdown in car sales. New car sales growth in China fell for the first time in nearly 2 decades. Automakers have traditionally relied on China to mitigate the financial hit from weak sales. The slowdown in China shows no signs of easing so carmakers are bracing for a challenging 2019.
Check out our company watch page for more on Tesla.
9. FLYBE SHAREHOLDER REBELLION
One of FlyBe’s largest shareholders has threatened legal action over its proposed takeover. Hosking Partners own 19% of FlyBe and objects to the £2.2 million acquisition by Connect Airways, lead by Virgin Atlantic. Under the deal, shareholders would receive just 1p per share, a far-cry from its IPO price of 295p in 2010. Hosking Partners does not believe the offer reflects FlyBe’s value and the deal prevented shareholders from reviewing rival offers. Hosking Partners is now exploring its legal options. It is potentially considering obtaining an injunction to block the deal going through. The deal would also see all trading assets sold to the consortium, rather than a traditional purchase of shares.
Sky News looks closer at shareholder concerns about the deal.
10. PHILIPS FACTORY CLOSURES
Electronics manufacturer Philips has announced that it will shut its Suffolk factory, putting 430 jobs at risk. The firm will be moving operations to the Netherlands. The firm confirmed however, that the decision was not directly related to Brexit. The firm did however, recognise that exports could be jeopardised once the UK leaves the single market. In 2018, it had previously warned that up to 500 jobs could be moved if the UK fails to secure a good deal with the EU. (The Guardian)