The week’s news included; EU to ban petrol & diesel cars, Big Four post record legal service revenue, BNPL to come under new regulations, Allen & Overy brings in AI chatbot for lawyers.
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:
- BBC News – Is Disney’s magic spell wearing off?
- Retail Gazette – 3 ways retailers are looking to make supply chain savings.
- City A.M.- Shell’s court case for oil spills in Nigeria exposes our failure to deal with supply chain abuses
- Bloomberg – What Happens When a Company Sues Itself?
1. EU BANS PETROL & DIESEL CARS
The European Parliament has formally approved a plan to ban the sale of new petrol and diesel cars from 2035. This plan aims to speed up the adoption of electric cars across the bloc. The EU is keen to ensure that the bloc achieves net-zero by 2050. Car makers have already unveiled plans to phase out petrol and diesel cars. transition. Volkswagen will produce only EVs in Europe by 2033. Audi also said it would only produce electric and hybrid cars by 2033. Smaller car makers who produce fewer than 10,000 cars will have an extra year to phase out petrol cars. The UK has gone a step further than the EU. New petrol and diesel cars will be banned from 2030 while hybrid cars will be banned from 2035.
2. BIG FOUR POSTS RECORD LEGAL SERVICE REVENUE
The Big Four auditors are upping their encroachment into legal services after posting record revenues last year. EY, Deloitte, KPMG and PwC generated a huge $1.5 billion in revenue from their legal services sectors. The firms have been expanding into a wide range of legal practice areas, alongside their audit and consulting services. In the UK, the Big Four got their Alternative Business Structure (ABS) licences within the past few years, allowing them to provide legal services without being a law firm. Since then they have been going from strength to strength. PwC and KPMG have revealed plans to double the size of their legal service departments over the next four years.
13% of UK firms said they had lost business to one of the Big Four last year and this looks set to increase as they expand. Law firms will need to continue evolving to fend off the ever-growing threat of the Big Four and other ABS companies.
3. NEW BNPL REGULATION
The UK government has laid out its plans for Buy Now Pay Later (BNPL) regulations. All BNPL will be regulated by the Financial Conduct Authority and complaints can be referred to the Financial Ombudsman Service. Lenders will have more stringent affordability checks and reporting requirements. This is designed to give consumers better protection and ensure they are not lumbered with unaffordable dress without recourse. Around 10 million people in the UK currently use or have used BNPL services. Industry players, including BNPL service providers themselves, have welcomed the move.
4. QATARI BIDS FOR MANCHESTER UNITED
A Qatari banking boss has submitted a bid to take over Manchester United Football Club. Current owners, the Glazer Family, are looking to sell the club and issued a deadline for 10pm last Friday for all bids. Sheikh Jassim Bin Hamad Al Thani is chairman of the Qatar Islamic Bank and submitted an all cash bid for the club. There will be no debt involved in the purchase and new investment will be made in the club, stadium and infrastructure. Sheikh Jassim is the son of the former prime Minister of Qatar. As a long time fan of Manchester United, he says hopes to return the club to its former glories. Currently in the running to take over Manchester United alongside Sheikh Jassim are Sir Jim Radcliffe and two other bidders from the US and Saudi Arabia respectively.
5. ALLEN & OVERY BRINGS IN AI
Magic Circle law firm Allen & Overy is bringing an artificial intelligence (AI) chat bot to help lawyers improve efficiency. The chatbot named Harvey, is designed to help speed up tasks like contract drafting and analysis as well as due diligence. A&O’s 3500 lawyers will have access to the platform. Like most chatbots, Harvey learns on vast data sets to figure out how to produce answers in natural language and in any style or format requested by the user. Any output from the chatbot however, will be carefully reviewed by lawyers. Crucially, these chatbots can reduce a lot of the tedious leg work.
A&O said that Harvey will not replace any staff or billable hours. There is no doubt that tech and AI will revolutionise many sectors and the legal sector is no exemption. When such tools are optimised, certain roles at law firms may become obsolete or at least see their need minimised. To what extent this will be the case remains to be seen.
6. SUBWAY UP FOR SALE
Fast food franchise Subway has put itself up for sale. The family owned business has seen a decline in market share as competition in the sector remains strong. Subway peaked in 2012, reaching a huge $12 billion in revenue in the US alone. By 2021 however, sales had dipped to $9.8 billion and 2012 remains its best year to date. Subway could still be valued at up to $10 billion. The chain boasts 37,000 restaurants in over 100 countries. Investment bank JP Morgan has been appointed to advise on the sale.
7. INFLUENCERS TARGETED BY HMRC
Social media influencers are in the crosshairs of the UK tax collector over unpaid taxes. HM Revenue & Customs (HMRC) is writing to over 2300 social media content producers as it suspects they have not paid the right amount of tax. HMRC is also writing to 2000 online marketplace sellers on Etsy and Facebook who may have paid insufficient tax. Many of these are not intentional tax avoiders but rather they are unaware of the tax that needs to be paid. Anyone earning over £1000 gross per year must register with HMRC and complete a self-assessment tax return. According to Adobe, the 2.8 million influencers in the UK earn £120 per year on average.
8. FLYBE COLLAPSE
Regional airline Flybe is to be wound down as it failed to find a buyer. Flybe collapsed into administration last month and has been desperately seeking a buyer. Air France-KLM and Lufthansa are thought to have been in discussions to rescue the company but talks soon collapsed. Flybe has been struggling since the pandemic and was rescued in 2020 by Cyrus Capital. Last month however, Flybe ran out of cash and 277 employees were made redundant. Last week, the 44 remaining employees were told of the decision to wind down the business. Flybe covered many regional routes between the southwest, Midlands and the north,
9. COUNCILS LAUNCH LEGAL ACTION AGAINST ULEZ
Five Conservative London councils have launched a legal challenge against Sadiq Khan’s planned expansion of the ultra low emission zone (Ulez). The expansion will see the whole of London caught within Ulez charging area, as far as the borders of Kent, Surrey and Hertfordshire, Surrey, Buckinghamshire. From August 29, drivers of high polluting vehicles face a £12.50 daily fee for entering the expanded zone.
The London councils of Bexley, Bromley, Harrow, Hillingdon and Surrey County Council launched a judicial review against the plans. They claim that statutory requirements were not complied with when finalising the plans and there was an improper consultation period and cost benefit analysis. They argue that the Ulez expansion will not improve air quality and will only serve to harm the pockets of residents. The Mayor will defend the Ulez expansion, arguing that it is vital to improve air quality in London and get highly polluting cars off the roads.
10. ALDI NEW JOBS
Aldi is set to create 6000 new UK jobs as it eyes rapid expansion. Most new roles will be at its distribution centres and its new stores. These form part of its rapid expansion plans. Last year, Aldi already spent £700 million in new investment.
Aldi has been praised for being one of the first to adopt a living wage. London store staff receive at least £12.75 per hour while staff outside of London start at £11.00 per hour. Warehouse staff start at £13.18 per hour. Store managers can earn up to £63,000 per year. The supermarket currently employs 40,000 workers across 990 stores. It is currently the UK’s fourth largest supermarket after overtaking Morrisons.