Recent political events have thrown any decision on UK airport expansion further into doubt. Even before the referendum and subsequent resignation of David Cameron, it was tough to pin down exactly what the government was minded to do about the pressing need to expand capacity in the south east.
Throughout the debate (which looks set to rumble on into the autumn) this paper has consistently made the case for a smaller yet nevertheless vital element of expansion strategy: approving the development of London City Airport. Plans to expand the terminal, build seven new stands and a larger taxiway to accommodate bigger, quieter aircraft were backed by Newham Council last year but scuppered by former London Mayor Boris Johnson, who chucked the full weight of City Hall behind blocking the project.
Thankfully, one of Sadiq Khan's first decisions as Johnson's successor was to lift City Hall's objection. This is a rare example of a politician's actions matching his rhetoric, with Khan having pledged to make London more open to the world than ever before. His decision, which deserves praise from the City, paved the way for the new government to give the green light to the £344m expansion scheme. New jobs will be created, more passengers will be attracted and every City worker's favourite airport will benefit from investment in transport links and improved facilities.
Yesterday's news came as the FTSE100 hit a 12 month high and the FTSE250 soared back to pre-referendum levels. Chancellor Philip Hammond toured the east London airport yesterday, determined to associate the announcement with evidence of wider economic success.
Positive GDP figures provided the backdrop for Hammond, along with the skyline of Canary Wharf, but in truth the airport decision that British business really wants made concerns expansion at either Heathrow or Gatwick. With so much uncertainty surrounding the UK's post-Brexit role in the world and relationship with the EU, the government can make no bigger statement of confidence than to get off the fence and get behind expansion.
A green light for either Gatwick or Heathrow (not forgetting the optimists who favour expansion at both) would reassure businesses and investors at home and abroad. Business groups are crying out for such an announcement from government and they should not be kept waiting any longer.
Alistair Meadows has been appointed head of UK Capital Markets at JLL where he will oversee the strategic direction of investment for the firm’s UK clients. Alistair has over 20 years of international real estate experience in Asia Pacific and Europe and heads up the firm’s International Capital Group. In this role he specialises in cross border capital transactions and is responsible for importing and exporting real estate capital into and out of Asia Pacific through the JLL Capital Markets network. Prior to joining JLL Singapore in 2010, he was previously based in Sydney (2000-2010) and London (1995-2000) where he was responsible for major cross border investment transactions totalling over $3bn.
Criticaleye, the peer-to-peer board community, has appointed Alastair Lyons, chairman of insurance provider Admiral Group, as a board mentor. Alastair, who is also deputy chairman of Bovis Homes Group and chairman of Glas Cymru (Welsh Water), joins the UK’s leading group of almost 50 executive mentors. In addition to his current non-executive roles, he was previously chairman of Serco Group, chairman of specialist insurance broker Towergate Partnership and senior independent non-executive director at Phoenix Group. He has also been a non-executive director of both the Department for Transport (DfT) and the Department for Work and Pensions (DWP), as well as its predecessor, the Department of Health and Social Security (DHSS).
Weetabix Food Company
Weetabix Food Company has appointed Stuart White as head of brand for Alpen in a move designed to strengthen engagement and grow its market share with millennials. Having worked for the past 10 years at L’Oréal and Omega Pharma, Stuart will work to grow the value of Alpen, as Weetabix continues to expand its breakfast on-the-go offering appealing to a younger demographic. Torben Sherwood has also joined the Weetabix marketing team as senior brand manager, responsible for the Weetabix Flavours and Oatibix portfolios. Previously he worked at InterContinental Hotels Group and Silver Bullet Machine, before becoming group strategy manager for the Weetabix Food Company.
MOO, the digital print and design company, has appointed Meri Williams to its executive team. Meri joins MOO in August from the M&S digital team, where she held the position of head of engineering. Having spent the first 10 years of her career at Procter & Gamble, Meri joined the Government Digital Service, where she scaled up the team to deliver the website GOV.UK. During her career, Meri has led global teams ranging from 30 to 300. A published author and international speaker, she also co-curates and hosts The Lead Developer, an international conference for technical leaders.
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Staff have become the casualties of the fierce competition and tough economic conditions facing the retail sector.
The number of full-time jobs in retail fell by 2.4 per cent compared to the same quarter last year, according to a survey by the British Retail Consortium (BRC).
Workers in food stores were particularly badly hit. Food retailers reported a decline in full-time employment, whereas non-food retailers reported an increase in employment. Store numbers were down by 0.4 per cent year-on-year, driven by a decrease in the number of food outlets, the BRC said.
Helen Dickinson, chief executive of the BRC, said: "This continues to show the dramatic structural changes that are underway in the retail industry.
"As an industry we are working to ensure that the jobs that remain in UK retailing are higher skilled and more productive. Challenging economic conditions, fierce competition between retailers, customers' ever-changing shopping preferences, the lightning expansion of digital technology and external demands placed on retailers by government have all put pressure on the UK's retail businesses."
The figures come after a series high-profile store closings at BHS, which went into administration in April. The administrators announced in June that the business would be wound down. Austin Reed also shut its stores earlier this year, leading to nearly 1,000 job losses.
Many of those workers who haven't left their jobs are facing pay cuts due to the introduction of the National Living Wage. City A.M. has learned that employees at M&S are being threatened with dismissal if they do not accept contracts which cut pension contributions and perks for working at anti-social times.
Assuming its unions have not succeeded in stopping it, the board of EDF is today expected to wave through a decision on Hinkley C, the first new nuclear power station in the UK for 20 years and, at £18bn, the world’s most expensive power station.
It’s easy to forget, Hinkley C was the future once. After a decade of dithering, in 2006, the Blair government laid out the case for nuclear new build, estimating its cost of power generation at £38 per MWh. They promised the first new nuclear power station could start operation in 2017, in time to fill a supply gap caused by the retirement of the UK’s ageing nuclear plants and filthy coal plants.
The Conservatives agreed with the need for nuclear, but stated explicitly “we rule out subsidies and special favours.” Despite this, seven years later, in 2013, the price UK electricity consumers would pay for Hinkley C’s power was revealed: £92.50 per MWh – more than double the wholesale power price, adjusted for inflation and guaranteed for 35 years. And the earliest possible commissioning date, assuming no further delays, would be 2026.
The obvious question is why this train-wreck of a project was not killed long ago. To answer this, you have to delve into the politics of the Conservative Party. In 2010, Tory support was being hit by defections to Ukip, whose average member was an older white guy: implacably anti-EU and hence anti-renewable energy, and very keen indeed on nuclear. A strong pro-nuclear position was seen as one way of shoring up the party’s right flank.
It was not enough: the Tories failed to win an outright majority, and had to form a coalition with the Lib Dems. Although they conceded the Department of Energy and Climate Change (DECC) to their coalition partners, the condition was that new nuclear power would be built, despite the Lib Dems’ historic opposition.
What follows should be taught for generations as a case study in how not to run a procurement process. Between them, chancellor George Osborne and DECC secretary Ed Davey agreed that the private sector would bear the risk of constructing and operating the project, at a stroke doubling its cost of capital and cost of power. They shoehorned it into the Electricity Market Reform process in order to maintain the pretence that it was being given no special treatment, slowing it for years. When all the bidders bar one dropped out, they doubled down: agreeing to extend the CfD’s lifetime 20 years beyond that enjoyed by renewable energy. Osborne provided a £2bn debt guarantee, and then brokered a controversial deal to bring in the Chinese as part owners.
The irony is that, all the while, the underlying logic for the project was being undermined. As soon as news broke of the Fukushima nuclear accident, the Tory right all but forgot its support for nuclear power, instead adopting fracking as its cause célèbre. The costs of renewable energy were plummeting to the point where wind projects could be built with little or no subsidy. And the cost of natural gas was falling too, driving down wholesale power prices. The National Audit Office this month released an updated calculation of the lifetime value of the subsidy to Hinkley: a mind-bending £37bn.
So now, as Greg Clark takes up his role as secretary of state of the newly-created Department for Business, Energy and Industrial Strategy (BEIS), the most urgent item in his in-tray is Hinkley C. There are at least three ways in which he could potentially replace its supply contribution more cheaply, more quickly, and with more impact on UK industry and exports.
He could mandate more renewable generating capacity, paired with interconnections and a range of technologies to manage intermittency. He could push through a fleet of new gas power stations and get serious about carbon capture and storage. Or he could spend a lot less than £37bn on energy efficiency, simply removing the demand for 3.2 GW of base-load power.
Alternatively, if the government still has a nuclear itch, Clark needs to ask why Hinkley C is the right way to scratch it. After decades of technological stagnation, new nuclear technologies are approaching commercialisation, offering passive safety, so they can’t melt down in the event of a power failure, and smaller scale, so they shouldn’t take 15 years to see the light of day. In 2015, Osborne announced a £250m fund to accelerate the deployment of these innovative nuclear technologies in the UK. But how about £2.5bn? Or if the UK wants to be a world leader, £25bn?
Even if EDF’s board gives Hinkley C the go-ahead today, Clark needs a Plan B. EDF is facing a funding challenge so ferocious that, in March, its chief financial officer resigned. Over the next 15 years, the company has to fund safety upgrades, life extensions or the decommissioning of all its French nuclear plants, plus completion of Hinkley and four other reactors at various stages of construction around the world, as well as the potential remediation of faults in some of its plants and a huge pension liability. Without an explicit French government guarantee, it would surely be unwise to bet the UK’s power supply on Hinkley C.
Theresa May’s first act as PM was to sack Osborne. Will Clark’s first act as secretary of state at BEIS be to do the same to Osborne’s highest profile project?
An independent report published this week shows that the Prince’s Trust, the charity of which I am chairman, has returned £1.4bn in social value over the last 10 years. It is a figure of which we are immensely proud. Behind it lies a myriad of human stories. We have helped to transform thousands of young lives, enabling young people from disadvantaged backgrounds to get into some form of employment, education or training.
From my work at the Trust and on the boards of other charities, I have seen the landscape for the sector become increasingly complex and challenging in recent years. The good news is that charities are better equipped today. My early experience of the charitable world was that it was well-meaning and altruistic, but sometimes lacked rigour. But increased risk and governance have forced the sector to professionalise in a big way.
There are some prevailing challenges for charities which demand attention.
First, they need to demonstrate and measure their impact. At the Trust, we are constantly thinking about our own impact. Since we were founded by the Prince of Wales 40 years ago, we have helped 825,000 young people get a job or start a business or have assisted in some other way. We now support almost 60,000 young people every year.
But we cannot rest on our laurels. While it is a tremendous result that we have returned £1.4bn in value through, for example, reducing re-offending and getting young people off welfare benefits, with nearly 900,000 16-24 year olds not in education, training or employment, there is much still to do. That is why we are running the One Million Young Lives campaign to expand our work four-fold.
Second, charities face a whole range of regulatory and other risks, such as reputational, health and safety, as well as safeguarding for those looking after young people. It is crucial that charitable boards have the right blend of skills for management to draw on and to help with this greater oversight burden. This will include financial, legal, creative and other expertise relevant to the particular work of the charity. This escalating complexity will only add to the regulatory burden and costs, so charities will have to work harder just to stand still.
A third element in the new terrain relates to fundraising. There have been concerns about over-aggressive public fundraising, as well as the endorsement of uncompetitive commercial deals. At the same time, charities need to think commercially to make their assets sweat.
Economic pressure and uncertainty following Brexit could result in a further reduction in public sector funding and a softening of donor bases. At the Prince’s Trust, we work in partnership with businesses, large and small, to boost employability. Where we can, we try to demonstrate innovation with social benefits. Another example of this I was involved with was the Travelex cheap tickets scheme with the National Theatre.
Read more: How entrepreneurs can gain from CSR
Given all this, charities certainly need to continue to adapt to the new world. They are facing more scrutiny than ever before and also a loss of public confidence in their work. As an indication of this, public trust in charities has dropped from a score of 6.7 in 2014 to 5.7 in 2016.
We should not be too downbeat. Charities like the Prince’s Trust have an enormous impact and benefit from public goodwill. Britain is still one of the most generous countries in the world, with three-quarters of people donating to charity. Another 4,000 or so new charities are registered every year, adding to the 165,000 already running.
It is vital that we at the Prince’s Trust and all other charities heed the lessons of the recent past. Hearing our young people talk about their troubled pasts and hopeful futures, however, is one of the most worthwhile and moving aspects of chairing the organisation. A common refrain is “if it weren’t for the Trust, I’d be in prison or dead.” Despite the more challenging external environment, it is these stories, as well as the statistics, that remind us why we do this work.
This has, so far, been the year of the underdog: Leicester won the Premiership, Hibernian the Scottish Cup, Portugal the European Football Championship, and the Leave camp the greatest bloodless political coup since the Glorious Revolution of 1688. This triumph of democracy has engendered a real sense of optimism and renewal. Unfortunately, things by their nature have a habit of returning to their mean.
Leicester might find it tough to replicate this season’s success; Hibs might wait another 114 years to win that cup again; Portugal will in all probability have to wait for a long while to win another international football trophy. And Leavers might well have to follow rather closely those whose task it is to deliver on Brexit.
It was a combination of the British electorate’s innate sense of optimism and deep-seated scepticism that delivered the thundering victory for Leave. These traits must be carried into the next phase of the withdrawal from the EU. Indeed, while the country’s majority rejoices at the multitudes of possibilities that have opened up, the sudden metamorphosis of hundreds of MPs from Remaining caterpillars into Leaving butterflies should lead to a few raised eyebrows.
“Brexit means Brexit” says our newly minted Prime Minister. With Boris Johnson, Liam Fox and David Davis in prominent positions, we dare to dream.
However, the sceptical reader cannot be sure about what the pledge truly means. Davis is starting to put some red meat on the bone. A timetable for exit is starting to take shape. But without the benefit of a leadership contest in the ruling party, we have had no real opportunity to understand the competing visions for our country’s future outside the EU. Neither do we have the tools to benchmark politicians against their own promises.
In the current circumstances, the public has no real insight into their new leader and what her plans are. They have even less of an idea about how she will cope under pressure. Mrs May didn’t choose to win without a contest. However, it is always advisable to give the top job to a person after a comprehensive interview process, in competition with others. She might well be great – and she seems to have started well – but we can’t be sure.
In the cold light of day, with fruits of endless possibilities within reach, it must be noted that there is a person, who campaigned to Remain, untested in the crucible of a leadership contest or general election campaign, leading overwhelmingly pro-EU Houses of Parliament to an ill-defined Brexit.
The wider public is asked to trust politicians. And with the three Brexit musketeers in charge of foreign affairs, trade and the EU, there is hope that this trust might well be repaid. Be that as it may, we are asked to believe that all the MPs who now call themselves Brexiteers really had a deep conversion to Brexit on the road to the Shires, the North and South.
To a sceptic, this looks nearly too good to be true. Already, readers will be hearing about the terrible complexity of future negotiations which will have to take place. The chancellor Philip Hammond reinforced the feeling by saying that the UK might not be able to leave the EU until 2022. Given the preponderance of Remainers in Cabinet, such claims could well become walls behind which the powerful and exhilarating Leave movement is quietly suffocated at the expert hands of our practised Sir Humphreys, for whom Brexit has always been anathema.
For Remainers, this opacity could well be the chance to dilute the will of the people to nothingness. The EU’s single most effective weapon is the relentlessness of its engine and the cynicism that drives it.
The first half of this year has given romantics and sceptics alike something to cheer about. It is imperative that the second half of 2016 and beyond is not remembered for the ruthless slaying of the hope and aspirations of millions. May seems to have heeded the call with some grace. But we must remember that in this life the big print giveth and the small print taketh away.
If we are all Brexiteers now, we must have the means to gauge what is being done in our name. This implies the creation of a structure to keep a friendly pressure on our leaders to make sure we can understand clearly what Brexit implies and how it is going to be delivered as efficiently as possible. This suggests the creation of a shadow negotiation team to provide a helpful benchmark against which the broader population can judge the quality of the official Brexit delivery. Without it, we can expect a slow reversion to the mean. And allowing that to happen would be a dereliction of duty.
Corbyn versus Smith is the least inspiring leadership spat in living memory. On one side, a man who looks like he wandered out of the 1970s, a beardy, lefty version of Austin Powers, always saying stuff that’s decades out of date. And on the other, an edge-free technocrat whose selling point is that he’s “normal”. Incredibly, this “man called Owen Smith”, as the Beeb referred to this unknown, could prove worse for Labour, and politics, than the Corbynistas. For he’s being pushed by Labour bigwigs precisely because he’s dull. Apparently he’s the “safe pair of hands” Labour needs right now, to drain it of the mad passion and principles Jeremy Corbyn rudely introduced. He’s the anti-politics candidate, sent to leech the party of ideology. This clash cannot disguise the fact that the Labour Party no longer knows what it’s for or who it represents. It is in existential meltdown, and neither Corbyn nor Smith, neither the throwbacks nor the dullards, can arrest that.Atul Hatwal, editor of Labour Uncut, says No.
Owen Smith and Jeremy Corbyn are as different as day and night. Two dividing lines define the chasm between the two: competence and ideology. Corbyn is so incompetent that even former supporters among his parliamentary colleagues have turned against him. Lilian Greenwood MP, who was shadow transport minister and a Corbyn backer, resigned recently from the Shadow Cabinet saying “he’s not a team leader, let alone a team player.” She and the overwhelming majority of the Parliamentary Labour Party are backing Smith. In terms of ideology, Corbyn’s priorities are a world away from those of most Britons. Giving the Falklands to Argentina, defending tyrants in Venezuela and Cuba, and scrapping nukes might matter to Corbyn’s cabal, but do nothing to generate jobs and wealth in the UK. In contrast, Smith has set out a plan to invest £200bn in UK infrastructure, driving growth and protecting British jobs from the post-Brexit crunch. Corbyn revels in his position as a hero to hard left trolls; Smith is the man who would lead for all of Britain.
London's investment banks are continuing to take a wait and see approach to the UK’s decision to quit the European Union more than one month after the vote.
Of the 20 biggest investment banks in the UK, 40 per cent have so far expressed a view on the vote. Half of those institutions that have voiced an opinion are neutral, while only 15 per cent said the impact of the vote will be negative, according to a survey by accountancy giant EY.
Both of the countries two largest trading indices, the FTSE 100 and the FTSE 250, have now breached their pre-referendum levels. The FTSE 250 yesterday closed down under the mark however.
Omar Ali, UK financial services leader at EY, said:
While businesses are considering their options for certain elements of their operations, there isn’t one location that is the logical alternative to London or one single location that has capacity to absorb the City.
For now the majority are continuing with a prepare but wait and see approach with a continued focus on serving their clients.
Meanwhile, wealth and asset management firms have been the most vocal firms in the City regarding the impact of Brexit on their businesses, with 60 per cent making public pronouncements since 24 June.
By comparison, 48 per cent and 44 per cent of insurers and investment banks have voiced their thoughts on how the vote to leave will affect them.
Just three per cent of the largest financial services firms that have operations in the UK have made public soundings that they may relocate operations, analysis by EY’s Financial Services practice has found.
By comparison, seven per cent have reaffirmed their commitment to the UK.
As expected, the changes to the economic outlook have prompted asset managers and life insurers into some action, but for the most part businesses are waiting for the negotiations to start in earnest before they make any big decisions.
The lack of public announcements does not, however, mean the sector is not reacting.