Business news 25 November 2021
James Salmon, Operations Director.
UK to put up £1.7bn to support Bulb in special administration. PM only delivering high taxes, high prices and low growth .Higher insurance costs could be last straw for SMEs. And more business news.
UK to put up £1.7bn to support Bulb in special administration
The Government has put up nearly £1.7bn to support energy firm Bulb in supplying energy to customers after it was put into special administration on Wednesday. Bulb will be run by administrator Teneo until a buyer can be found or until its customers have moved. It is the first time the special administration process has been deployed in the energy sector. Bulb will remain in the mechanism until it can be sold, restructured or its customers transferred to an alternative provider. Interpath Advisory, the insolvency business sold by KPMG to private equity group HIG Capital this year, said it had been appointed as administrator of Simple Energy, Bulb’s parent company.
PM only delivering high taxes, high prices and low growth, says Starmer
Sir Keir Starmer attacked Boris Johnson’s social care reforms during PMQs on Wednesday, claiming they amounted to a “working-class dementia tax” because they would mean that poorer individuals would reach the cap on lifetime care costs faster than those who were wealthier and would therefore see more of their assets eaten up. The Labour leader went on to say the only thing the PM is delivering on is “high taxes, high prices and low growth”.
Elsewhere, the Mail’s Stephen Glover says Mr Johnson’s bumbling speech to the CBI has been amplified by the press, but more notable were Lord Frost’s comments at a Centre for Policy Studies conference on Britain’s high tax burden. Lord Frost’s remarks have been echoed by other leading Tories alarmed at the fact that when increases in National Insurance are introduced next April, the tax burden will be the heaviest for more than 70 years.
Finally, Lord Bilimoria, the president of the CBI, has called on the PM to “stop hiking taxes and focus on boosting investment” in a rebuke over the increasing burdens being placed on business.
Higher insurance costs could be last straw for SMEs
Research by Marsh reveals that half of SMEs have seen increases in pandemic-related exclusions in their cover as insurers try to stop their £1bn bill from mounting further. A quarter of the firms surveyed by the insurance broker said they had been forced to shut their business, either temporarily or permanently, because of the pandemic and government guidelines. Martin McTague, vice-chair of the Federation of Small Businesses, commented: “With 2020 having seen the loss of around 400,000 small businesses, having to pay more for essential cover may well be the last straw for many firms who are already beset on all sides by rising costs.”
London house prices ‘to rise 25% by 2026’
A study from the property group JLL indicates that increased demand to live to the capital after the height of the pandemic, combined with the return of the overseas buyer, will boost the London housing market over the next five years. JLL predicts prices in London will rise 24.5% by 2026, out-acing national house price growth of 20% over the same period. “There is a bounce back in urban demand in London as people once again reset priorities around where they live and opt to stay and move within the city, rather than leaving,” says Nick Whitten, head of residential research for JLL. “In particular we are seeing people buy in those neighbourhoods which have a village feel as they balance convenience and transport with space and greenery,” he explains.
Half of Scottish SMEs expecting best ever Christmas
Scottish SMEs say digital acceleration during the pandemic has been crucial to their prospects of a profitable finish to 2021. Some 81% invested in their digital and online services during the Covid crisis, according to research by telecoms provider TalkTalk Business. The study found that 47% of SMEs are anticipating a record Christmas as customers start their festive shopping early and make use of online shopping services. Jonathan Kini of TalkTalk said: “Businesses have not only adapted for survival, but are now more robust, versatile and future ready. Part of that is in them being more digitally enabled and connected.”
Scotland’s economic recovery slows
New Scottish Government figures reveal that the country’s economy grew by 0.4% in September, slightly below the 0.6% growth figure for the UK as a whole, leaving Scottish output 1.1% below pre-pandemic levels. The monthly figures also revised down figures for July and August, with a 0.1% fall and 0.1% increase respectively downgraded to a 0.3% fall and 0.1% fall. Among the factors identified as contributing to the slowdown were low wind speeds impacting wind energy generation and coronavirus-related absences from schools.
Review calls for Premier League clubs to pay transfer tax
A fan-led review into English football governance has recommended that Premier League clubs should pay a 10% levy on top-flight transfers. The transfer tax would be used to distribute more cash to lower-league clubs and the grassroots of the game. Other recommendations in the report, led by the Conservative MP Tracey Crouch, include a call for an independent regulator to oversee finances and decide whether owners and directors were fit to hold their role.
US economy
In a busy day yesterday in the US, Annualized GDP figures came in at 2.1%, initial unemployment figures for the week fell to 199,000, the lowest since 1969 and consumer sentiment (measured by university of Michigan) rose to 67.4. meanwhile FED minutes showed officials were open to speeding up the withdrawal of expansive support measures in order to fight inflation. After a volatile day, the S&P 500 ended up 0.23% and the NASDAQ rose 0.44%.
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