Business news 14 April 2025
MPs vote to seize control in Scunthorpe Steel works. Buy British, trade war, tariffs, export finance, markets, insolvencies & more business news that we thought would interest our members.
James Salmon, Operations Director.
Please note: on the 19/3/25 CPA moved after 45 years on King Street, to new offices a couple of miles down the road at Profile West, 950 Great West Road, Brentford, TW8 9ES.
MPs vote to seize control in Scunthorpe Steel works
MPs on Saturday passed legislation giving ministers the power to take British Steel into Government hands and keep the company’s Scunthorpe plant open. British Steel’s Chinese owners, Jingye, were accused by Business Secretary Jonathan Reynolds of trying to close down primary steelmaking in the UK. The Steel Industry (Special Measures) Bill cleared both houses in a matter of hours. The move stops short of nationalising British Steel, but allows ministers to instruct the company to keep the plant running. EY is being lined up to play a role in a nationalisation process. The Sunday Times reports that ministers are considering sending the Royal Navy to escort a fuel shipment to Scunthorpe’s blast furnaces.
PM recalled Parliament to save British Steel
Parliament sat for an emergency session on Saturdat as the Prime Minister looked to pass legislation to seize control of British Steel. Sir Keir Starmer said the prospect of the company’s Scunthorpe plant shutting down posed a threat to the economy and national security. The Steel Industry (Special Measures) Bill will provide the Government “with the power to direct steel companies in England, which we will use to protect the Scunthorpe site,” Sir Keir said. The move stops short of complete nationalisation, but the PM said that remains on the table. It comes after reports that British Steel’s Chinese owner, Jingye, had cancelled orders for iron ore, coking coal and other raw materials needed to make steel putting the plant at risk of closure within ten days. Closure would have left the UK as the only G7 country unable to make steel from scratch. Restructuring experts at EY are reportedly being readied to oversee any state-backed rescue of the company. The decision to intervene has broad political support, but Reform UK wanted the PM to bring British Steel back into public ownership immediately.
Kemi Badenoch leads call to ‘Buy British’
Kemi Badenoch, the Conservative leader, has urged the public to “Buy British” to safeguard local businesses from Labour’s tax policies and President Trump’s tariffs. She said: “We can’t buy British if British jobs are going and if British companies are closing because of the jobs tax and because of the terrible decisions that Labour is making on the economy, inflation is up, growth has halved and business confidence is down, and that’s what really worries me, that we won’t be able to buy British because of what is happening to our economy.” The UK faces a 10% tariff on goods entering the US, which threatens British exporters and economic growth. Chancellor Rachel Reeves dismissed the idea of a “Buy British” campaign, fearing it could lead to an inward-looking economy. However, Prime Minister Sir Keir Starmer is contemplating changes to procurement rules to favour British firms in government contracts. Farmers have echoed Badenoch’s sentiments, stressing that buying British is crucial for food security and supporting local agriculture. Mo Metcalf-Fisher from the Countryside Alliance stated: “Buying British food and drink is a fantastic way of supporting our farmers.”
Trade war fears grip UK businesses
A survey by Deloitte has revealed that, at the end of March, concerns about geopolitical risks among FTSE 350 finance chiefs were at their highest level since the onset of the Ukraine conflict. Concern has only grown since US President Donald Trump started his trade war. Amanda Tickel, head of tax and trade policy at Deloitte UK, said: “This is still a rapidly evolving environment and businesses will need to be proactive in mitigating the effects of tariffs. However, they will be unlikely to actually reconfigure their global supply chains or production until they see the results of negotiations or responses by other nations.” However, despite the uncertainty caused by Trump’s trade policies, a YouGov survey commissioned by Price Bailey indicated that UK businesses are more concerned about upcoming tax increases than US tariffs.
Reeves calls for global trade reform
Writing in the Observer, Rachel Reeves warns of the “profound” impact Donald Trump’s tariffs will have on the UK and global economies. In her column, the Chancellor says she plans to advocate for a “more balanced global economic and trading system” at the upcoming International Monetary Fund meeting, stressing the importance of free trade over protectionism. She aims to secure a strong bilateral economic deal with the US while also pursuing an ambitious relationship with the EU and a trade deal with India.
GDP grew 0.5% in February
The UK economy experienced growth of 0.5% in February, according to the Office for National Statistics, defying expectations of stagnation following a flat January. Chancellor Rachel Reeves described the figures as an “encouraging sign,” highlighting improvements in both the services and manufacturing sectors. Notably, areas such as computer programming, telecoms, and car dealerships thrived within services, while electronics and pharmaceuticals led manufacturing growth. However, the data predates Labour’s tax hikes on businesses coming into effect and Donald Trump’s trade moves.
Labour MPs face backlash over welfare cuts
At least 80 Labour MPs are at risk of losing their majorities due to proposed welfare cuts, which “pose a real electoral risk,” according to data shared among party members. The analysis indicates that nearly 200 Labour MPs have majorities smaller than the number of personal independence payment (Pip) recipients in their constituencies, particularly in northern England’s “red wall” seats. Labour rebels are mobilising to oppose the changes, with a vote anticipated in June. The Department for Work and Pensions has promised a £1bn support package, but critics warn that the cuts could push 350,000 disabled individuals into poverty, exacerbating the existing crisis affecting 4.8m disabled people in the UK.
Tariff suspension to boost UK firms
Sir Keir Starmer has announced the suspension of import tariffs on 89 products, including electric vehicle battery inputs and fruit juice, to support British businesses affected by Donald Trump’s trade war. The intervention aims to alleviate financial pressure on firms, with the Government estimating annual savings of £17m. However, concerns remain regarding whether these savings will be passed on to consumers and the potential impact on Treasury revenues. The tariff cuts will last until July 2027, with the hope of reducing costs for everyday essentials in supermarkets and restaurants.
UK announces extra £20bn in export finance support
The UK Government has announced a £20bn increase in financing support for exporters, particularly those impacted by US tariffs. The move raises the UK Export Finance’s (UKEF) lending capacity to £80bn, with £10bn allocated for those most affected in the short term. The British Business Bank will also be able to hand out loans of up to £2m to small businesses.
The last thing the UK needs is a ‘Netflix tax’
The UK economy is facing stagnation, with job vacancies declining and businesses closing. In response, reports Matthew Lynn in the Sunday Telegraph, MPs are advocating for a “Netflix tax” – a levy on streaming services like Netflix and Disney+ to fund domestic productions. Caroline Dinenage, chair of the Commons’ culture, media and sport committee, said: “Unless the Government urgently intervenes… there will be countless distinctly British stories that never make it to our screens.” Lynn argues that this tax is unnecessary, especially given the existing licence fee for the BBC, and could harm trade relations with the US. The proposal is seen as another example of politicians relying on taxation to solve problems, rather than addressing the underlying issues in the economy.
Reeves must resist calls to introduce a wealth tax
Chancellor Rachel Reeves is facing pressure to introduce a wealth tax, with campaigners suggesting a 2% levy could generate £24bn for the Treasury. However, Tom Clougherty, executive director at the Institute of Economic Affairs, warns that such a tax would be detrimental, stating: “Wealth taxes are a bad idea, economically and practically.” He argues that a wealth tax could lead to an effective tax rate of over 80% for wealthy investors, discouraging investment and potentially driving millionaires out of the UK. Clougherty highlights that the UK relies on the wealthy for public revenue, with the top 0.1% contributing around £34bn in income tax annually. Separately, the Mail talks to German-born billionaire David von Rosen who says the Government should reverse its “stupid” decision to end the non-dom scheme for foreign-domiciled UK residents. He adds that the super-rich are also likely to avoid investing heavily in Britain because of changes to capital gains tax on assets. His comments come after figures showed around 10,000 millionaires have left London in the last year, with the capital now losing its millionaire residents at a similar rate to Moscow.
Markets
On Friday, the FTSE 100 closed up 0.64% at X and the Euro Stoxx 50 closed down 0.66% at 4787.23. Over in the US the S&P 500 rose 1.81% to 5363.36 and the NASDAQ rose 2.06% to 16724.46 as a Federal Reserve official signaled that the central bank was ready to help stabilize the market if needed.
China retaliated against US President Donald Trump’s country-specific tariffs by raising its levies on US goods to 125% from 84%, the Chinese Finance Ministry said. “Even if the US continues to impose higher tariffs, it will no longer make economic sense and will become a joke in the history of world economy,” the ministry said in a statement.
Donald Trump’s fast-evolving and chaotic trade policy is starting to threaten the US status as the world’s safe haven with investors moving to assets in Europe and around the world and the US dollar continues to fall.
The Trump Administration exempted a raft of consumer electronics from its import tariffs on Friday, offering relief to US tech firms and partially dialing down the trade war with China. A Chinese government said the US decision to exempt certain consumer electronics from its so-called reciprocal tariffs is a small step toward rectifying its wrongdoings and urged Washington to do more. But then Donald Trump said over the weekend that he will still apply tariffs to phones, computers and popular consumer electronics, counteracting the exemption he had given as he continues to try and destroy international trade with the US and baffle US companies.
Elsewhere, the EU is said to be in talks with China about removing EU tariffs on Chinese cars.
China’s Exports actually jumped more than expected in March as businesses front-loaded outbound shipments to avoid prohibitive US tariffs, while imports extended declines as sluggish domestic Chinese demand persisted. Exports jumped 12.4% last month in US dollar terms from a year earlier, according to data released by customs authority on Monday, significantly outpacing Reuters’ poll estimates of a 4.4% growth and marking the biggest jump since October last year.
This morning on currencies, the pound is currently worth $1.318 and €1.156. On Commodities, Oil (Brent) is at $65.3 & Gold is at $3224. On the stock markets, the FTSE 100 is currently up 1.8% at 8107 and the Eurostoxx 50 is up 1.9% at 4878.
Shein’s London float gets green light
Fast fashion retailer Shein has received preliminary approval from the Financial Conduct Authority (FCA) to float on the London Stock Exchange. Initially aiming for a $50bn listing, Shein’s plans come amid scrutiny over its environmental impact and labour practices. The company reported a nearly 40% drop in net profit for 2024, generating $1bn instead of the projected $4.8bn. Concerns have been raised by a human rights group threatening legal action against the FCA regarding Shein’s supply chain practices. Additionally, the impact of Trump’s 125% tariff on Chinese imports poses further challenges for the retailer, which primarily sources from China.
More CFOs are stepping up to lead
Traditionally, chief financial officers (CFOs) have been overlooked for chief executive roles, with only 13% of CEOs in the Forbes 2000 having previously served as CFOs, according to a 2015 Korn Ferry survey. However, recent trends indicate a shift, particularly in the UK, where nearly one-third of FTSE 100 CEOs have held CFO positions, up from 21% in 2019. Writing in the Times, Ian King cites the “route to the top” survey by Heidrick & Struggles, which highlights this change, with notable examples including Margherita Della Valle at Vodafone. The Spencer Stuart analysis reveals that while CFOs may be slower to drive top-line growth, they excel in improving operating margins, a crucial skill in today’s challenging market. King notes that the evolving role of CFOs, who are now more adept in technology and risk management, is paving the way for their ascent to CEO positions.
Record high for UK home prices
The average asking price for homes in Britain reached a record high of £377,182 in April, marking an increase of £5,312 or 1.4%. Rightmove’s latest house price index indicates that regions such as Scotland, Wales, and the Midlands experienced above-average demand and price increases. Colleen Babcock, a property expert at Rightmove, said: “We’ve seen our first price record in nearly a year, despite the number of homes for sale being at a decade-high.” However, the South West and South East saw smaller increases in demand. The market remains resilient, with new buyers and sellers feeling confident, although sellers are advised to price homes realistically to attract buyers quickly. The impact of recent interest rate changes and the end of the stamp duty concession is being closely monitored, with experts suggesting that further reductions could stimulate market activity.
Universities seek help to survive
Universities in the UK are increasingly hiring management consultants to address financial difficulties, with many facing potential collapse. Major firms like EY and PwC are assisting institutions such as Kent and the University of Dundee, which recently announced over 600 job cuts due to a £35m deficit. The Department for Education and the Office for Students are developing an insolvency regime prioritising student interests, as Susan Lapworth, chief executive of the OfS, warned: “The trajectory for a small number of large universities is worrying.” With 35% of English universities reporting deficits in 2022-23, the situation is critical. The OfS is reviewing all universities’ finances, stressing the need for sustainable practices to avoid failures in the next few years.
Independent cinemas on the brink
Research by the Independent Cinema Office (ICO) reveals that nearly a third of independent cinemas in the UK could close within three to five years without significant investment. The survey indicated that 31% of cinemas are uncertain about their future viability, with 41% confident of surviving the next three years. The total capital funding required exceeds £79m, primarily for upgrading equipment and enhancing sustainability. The ICO’s director, Catharine Des Forges, warned that a wave of closures would “devastate local cultural provision” and harm the economy. The Commons culture committee has recommended government funding to support independent cinemas.
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Why you should become a member of CPA!
The Credit Protection Association (CPA) has been assisting thousands of UK businesses to get paid, since 1914. We have supported our members through all sorts of difficult trading environments. With high interest rates and a struggling economy and elevated insolvencies, our services can help your business navigate these difficult waters.
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CPA eases cash from tardy debtors – Efficiently, Effectively, Economically and Ethically. And we provide credit information so you can monitor and assess your key customers and be warned of any potential risks. CPA has been improving business cash flow for over 100 years, by tackling late payers and campaigning against the late payment culture in the UK.
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The Credit Protection Association – Prompting Punctual Payments – Ethical, Effective, Efficient, Economical collections
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The Credit Protection Association – Prompting Punctual Payments – Ethical, Effective, Efficient, Economical collections.
Get compensated for previous late payments
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