The week’s news included; Sunak unveils Spring Statement, P&O CEO admits breaking the law in sacking 800 staff without notice, EU agrees new big tech competition laws, CVC invests €1.5 billion in France’s Ligue 1’s.
Below are our top 10 stories that you need to know about. Be sure to check our twitter page, Facebook page and Instagram 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:
- City A.M. – Sunak wants to be a low-tax Tory but instead he’s following the US and picking winners
- Retail Gazette – TM Lewin collapse: Does WFH mean RIP for the suit?
- City A.M – The public shaming of P&O won’t help us give up the habit of exploitation for good
1. SPRING STATEMENT
UK Chancellor Rishi Sunak unveiled the Spring Statement last week. With the cost of living crisis expected to cause a significant decline in living standards, many were hoping for relief. Here are the key points;
- The National Insurance hike of 1.25% will still go ahead but the threshold from which workers begin paying national insurance will rise from £9600 to £12570.
- Fuel duty will be cut by 5p a litre until March 2023.
- Income tax will be cut from 20% to 19% in 2024.
- Local authorities will receive an additional £500m for the Household Support Fund. This forms part of a £1 billion fund designed to help vulnerable households with the cost of living.
Despite the attempts to mitigate the impact of the rising cost of living, April still looks to be the beginning of a challenging era. Inflation could reach 8% by Q4 of 2022 as household energy bills are expected to rise by over 50% from April; national insurance is still increasing and petrol prices will also increase. Consequently, we are expected to see the biggest fall in living standards since records began, according to the Office for Budget Responsibility.
Check out our article exploring the implications of the Spring Statement.
2. P&O SACKINGS
CEO of P&O Ferries, Peter Hebblethwaite, has admitted to MPs that the company broke the law when it sacked 800 staff without notice. Staff were made redundant via a pre-recorded video call and staff who were onboard ferries and protested were forcibly removed. All of this was done without prior consultation with unions, staff or the government. P&O now seeks to replace workers with cheaper foreign agency workers.
Audaciously, when Hebblethwaite was questioned by MPs he admitted there was “absolutely no doubt” that P&O broke the law. Furthermore, he said they did not consult with unions because no union would accept the terms and it was cheaper to fire staff and compensate them. Shockingly, he also said he would do it again if given the opportunity. Staff will receive a total of £36.5 million in severance packages, with some staff receiving up to £100,000 but due to this egregious breach of the law, many have called for Mr Hebblethwaite’s resignation and punishment for P&O.
Unfortunately for staff seeking justice, P&O will not be taken to court by the government. There are no powers available to the government to injunct P&O, due to looser redundancy laws in the UK. Workers can still take action against P&O via an industrial tribunal. Given the flagrant breach of the law by P&O however, many would be hoping for significant legal retribution against the firm from all sides. This has led to urgent calls for the law to be changed to prevent future cases like these.
3. EU BIG TECH LAWS AGREED
The Digital Markets Act (DMA) has been agreed by the EU. This will see new restrictions on Big Tech firms in an attempt to limit their dominance. Companies like Google and Apple will be forced to open up their platforms to other firms. For example, Google and Apple must offer smartphone users alternative search engines and browsers to their own native options. New laws will also apply to platforms like WhatsApp and Facebook Messenger to give people more control over how they send messages.
The DMA will apply to firms with over 45 million users, valued over €75 billion and €7.5 billion in annual sales. Margrethe Vestager, the EU’s Commissioner for Competition, has been keen to introduce new restrictions on Big Tech firms to curb their “monopolistic behaviour”. The law will now go to the European Parliament where member state ministers will vote on the deal. Whether the law will have the intended effect remains to be seen.
4. US AND EU AGREE GAS SUPPLY DEAL
The US and EU have agreed a landmark gas supply deal in an attempt to reduce reliance on Russian gas. Europe will receive 15bn cubic metres of liquefied natural gas (LNG) by the end of 2022. This will begin to help replace the 50bn cubic metres of LNG Russia currently supplies to Europe. The EU is keen to cut off all gas from Moscow although this would have severe implications for the bloc’s economy. Russia supplies nearly 35% of mainland Europe’s gas. To cut off Russian gas completely would require a significant increase on reliance on renewables. How quickly Europe will be able to end its dependency on Russian gas remains to be seen.
5. UBER TO HOST NY YELLOW CABS
Uber will now host New York’s yellow cabs on its platform after agreeing a new deal. The ride hailing app is keen to replenish its depleted driver numbers after the pandemic saw drivers seek alternative jobs. Uber already has similar arrangements in other countries such as Spain, Germany, Austria and Turkey. This latest deal is seen as a big win-win situation for both Uber and yellow cab drivers. The deal will add up to 14,000 cars to Uber’s platform. Whereas yellow taxi drivers, who have also suffered from low passenger numbers during the pandemic, will find it easier to secure work. Despite this positive news, Uber is estimated to pay up to 15% less than taxis would earn on the metre, so there are potential pitfalls for drivers.
This marks a step forward from the historic conflict between Uber and traditional taxis. Uber took the taxi industry in New York by storm and put almost a thousand drivers out of business. Traditional taxi firms have always been staunch critics of Uber and its ilk. They claim ride hailing apps undercut traditional taxis by offering a less regulated and less secure service for customers and drivers. This deal will go some way to repairing relationships.
6. CVC INVESTS €1.5BN IN LIGUE 1
After its huge €2 billion investment in Spain’s football league, La Liga, CVC Capital has acquired a €1.5 billion stake in France’s Ligue 1’s media rights business. CVC will own a 13% stake in a new organisation that will market Ligue 1’s television and online broadcast rights. The €1.5 billion fee will be paid in instalments over the next 3 years. Part of the funds will be distributed to the clubs in the league. PSG will get the lion-share of the funds, receiving €200 million. Last year, Ligue 1 missed out on a €1.2 billion deal with Spanish firm Mediapro after the firm collapsed.
7. LLOYDS CLOSES BRANCHES
Lloyds Banking Group has revealed that 60 of its branches will close this year. The group has said the reason for this is declining footfall at branches. 24 Lloyds sites, 19 Bank of Scotland sites and 17 Halifax branches will close. 124 jobs will be lost although the bank will seek to relocate affected staff. Branches are closing at a rapid rate, with 736 closing in the UK last year. This is leading to concerns that communities will be left entirely without branches and vulnerable people will be unable to access key banking services. Lloyds will begin the closures in June and close all earmarked branches by the end of September.
8. CRYPTO FIRMS FACE UK EXPULSION
Crypto firms and service providers in the UK are facing expulsion from the UK if they do not obtain regulatory approval. Big names including Revolut and Copper currently offer crypto related services under the Financial Conduct Authority’s Temporary Permission regime. This regime expires on 31 March and firms are required to obtain full authorisation before this deadline or they will be forced to wind down their services. The FCA authorisation process can be lengthy and it requires a full assessment of the organisation and its management. Firms are required to have sufficient systems and controls to detect and prevent money laundering. Only 33 companies have successfully secured FCA authorisation, while over 100 firms either failed or withdrew their applications.
9. UBER GETS NEW LONDON LICENCE
Uber has been granted a 30 month licence to operate in London. After a longstanding saga with Transport for London which saw its licence application denied in 2019, Uber’s relationship with TFL is on the mend. The ride hailing giant saw its application denied initially due to passenger safety concerns and regulatory breaches. Uber appealed and after a hearing in September 2020 the judge found that the company had made efforts to address the problems highlighted in TFL’s initial decision. It was awarded a 18-month licence in this hearing which has since expired. It has now secured a new 30 month licence from TFL.
Uber is no stranger to legal battles. Last February, the Supreme Court ruled that Uber drivers were considered workers and therefore entitled to rights such as minimum wage and holiday pay.
10. UK ELECTRIC VEHICLE CHARGING
The UK government has unveiled plans to significantly increase the number of electric vehicle charging points. By 2030 the government plans to have 300,000 public charging points, up from just 30,000 currently. The majority of electric vehicle owners have off-street parking and many have home charging units. But with the ban on the sale of new petrol and diesel vehicles from 2030, many more public charging points will need to be built to deal with increased demand. Over £500 million will be spent to increase the number of charging points. Motoring groups however, have said the government’s plans do not go far enough in light of anticipated demand. Furthermore, around 30% of charging points are currently in London. A rapid rollout of charging points in suburban and rural areas will be crucial to ensure drivers are adequately covered.