Monday 11 September 2023

RETAILERS URGE HUNT TO SLASH TAX

HUNT FACES CALLS TO SCRAP BUSINESS RATES HIKE

SOME of Britain’s biggest retailers have piled pressure on the Chancellor to scrap a planned hike in business rates today as the sector faces down a £400m bill next year.

A group of 44 retail bosses, including the chiefs of Tesco, M&S and B&Q, have written to Jeremy Hunt urging him to shelve a planned hike in business rates in April next year, which they say could choke off the industry’s ability to invest.

Business rates –the rate of tax that firms pay on their property –are due to be hiked next year in line with September’s inflation print, which analysts are predicting will come in at around six per cent.

In the letter, co-ordinated by the British Retail Consortium (BRC), retail chiefs warned the rise could threaten “the viability of many shops”.

CHARLES TYRWHITT SHIRTS BOSS CALLS FOR AN END TO THE TOURIST TAX P9

GO WEST London no place for ambition, says US-bound Tevva boss

“Global supply chain issues are already likely to increase costs in the months ahead, including Russia’s withdrawal from the Black Sea Grain Initiative and targeting of Ukrainian grain silos, plus restrictions on Indian rice exports and ongoing labour market challenges,” they wrote.

“Against this backdrop, the government should not make the situation worse by adding significantly to our cost base – freezing the business rates multiplier at its current level would avoid this,” they added.

Bosses, including Tesco’s UK and Ireland chief executive officer Jason Tarry, Sainsbury’s chief executive Simon Roberts and Greggs chief executive Roisin Currie, are among those who have backed the calls.

The BRC warned that the tax hike would add more than £400m a year to their business rates bills annually and would likely force them to raise

prices in their stores.

A warning of further price rises is likely to unsettle the government as the Prime Minister and Chancellor aim to hit their target of halving inflation this year.

The government has frozen planned hikes in business rates multiple times before. An inflation-linked rise to business rates was due to take place in April this year, but the plan was ultimately shelved by the government.

Responding to the fresh calls to for a freeze, a spokesperson for the Treasury told City A.M.: “The multiplier has been frozen for three consecutive years at an overall cost of £14.5bn.

“We have also provided 75 per cent relief for retail, hospitality and leisure properties, a tax cut worth over £2bn for around 230,000 businesses”. However, the spokesperson added that “all taxes are kept under review”.

GUY TAYLOR

THE CHAIR of electric truck supplier

Tevva Motors has bemoaned London markets as “risk averse” as the firm looks to head across the pond via a merger with the Nasdaq-listed carmaker Electra Meccanica.

“If you want to get capital, you've got to go west, you really have got to go west,” David Roberts, who helped found the business as its first investor over a decade ago, told City A.M.

“London as a place is very risk averse, it always looks at the downside model, it always looks at the risk significance,” he said, while in America, “you find in the main people saying, well, how big can you grow

this business? How much capital do you need to be really, really big… the whole culture is built around this big ambition.”

Tevva, a taxpayer-backed UK startup that produces electric and hydrogenpowered trucks, announced the merger plans last month.

Talking about the move, Tevva’s outgoing chair commented on London’s investment climate, which he believed had become increasingly inhospitable for tech companies and startups.

“If Elon Musk had been born a Brit, he wouldn’t have raised a penny,” Roberts said.

£ CONTINUED ON PAGE 3

CHARLIE CONCHIE

CHALLENGE P10 UK’S SOLAR DREAMS AT RISK P12 MARKETS P13 OPINION P14-15 SPORT P19-20

A case for cutting business rates? Just look at our high streets

ASK most people about the health of the economy, and they’ll think about their pocket and their high street. Both are being bludgeoned by the Treasury, and it’ll do little to burnish the Tories’ electoral prospects.

STANDING UP FOR THE CITY THE CITY VIEW

The assault on the former has been well publicised; fiscal drag in particular has taken the value out of pay rises across the economy, and at the lowest and

highest ends of the salary scale, marginal rates are now comedically high.

The high street, faced with a bruising new competitive environment, has also been bruised. The planned hikes to

business rates will only add to the pain of the so-called “tourist tax” in our biggest cities, and particularly the West End. The pain is doubled thanks to the government’s inability to properly modernise rates for the twenty-first century; warehousebased retailers continue to have an extraordinary competitive advantage over those with city centre premises. It’s a failure of leadership, and

it’s short-sighted too. This isn’t about protecting old industries from new competition; plenty of weak physical operators have gone to the wall in good old fashioned creative destruction. But an uneven playing field is exactly that. High streets matter; urban centres and vitality matters. It matters in cities like London and it matters in smaller towns and villages, too.

LORDING IT UP Sunny weather was welcomed at Lord’s Cricket Ground over the weekend, but this time for its new food festival, launched by Michelin star winning chef Tommy Banks

A fair few years ago, this column offered the view that the success of “levelling up” would be defined by the health of high streets struggling against the tide. Years after that pledge was made, there are more charity shops and empty storefronts than there were there back then. There has been precious little innovative thinking, and a tax system that’s become even more punitive. One does wonder.

WHAT THE OTHER PAPERS SAY THIS MORNING

THE FINANCIAL TIMES

PWC

TO CURTAIL CONSULTING WORK FOR US AUDIT CLIENTS

PwC is planning to give up tens of millions of dollars of consulting work for its US audit clients to reduce the risk of conflicts of interest, challenging its rival Big Four firms to follow suit.

THE GUARDIAN BARCLAYS SEEKS CLIMATE DIRECTOR AFTER PROTESTS OVER FOSSIL FUEL FINANCE Barclays has kicked off a search for a director to champion its climate efforts, after a bruising year in which the UK bank was targeted by campaigners over its environmental record.

THE TIMES

NEWS PUBLISHERS ‘FACE A TSUNAMI OF JOB CUTS’ AS AI EMPOWERS BIG TECH AI is poised to hand more power to the biggest technology companies, such as Google, and will create a “tsunami” of job losses at publishes, the chief exec of News Corporation has warned.

Economists divided on whether UK economy will avoid a recession

CHRIS DORRELL

THE UK economy has avoided a recession so far this year, to the surprise of many analysts and experts in the field, but that does not mean it is out of the woods yet.

The economy grew just 0.2 per cent in the second quarter, and with the impact of the Bank of England’s rate hikes still yet to have fully filtered through, experts are divided about whether the UK will be able to steer clear of a recession –two consecutive quarters of contraction.

Here is what four of the UK’s top economics think tanks predict will happen to the UK economy over the coming months:

CEBR –RECESSION

“We currently see two quarters of contraction starting in Q4 this year (at -0.3 per cent in Q4 and -0.2 per cent in Q1 2024). We expect that tighter financial conditions and a more pronounced downturn in the housing market will exert a stronger drag on growth.”

CAPITAL ECONOMICS –RECESSION

“While CPI inflation is falling, the persistence of core inflation suggests that the Bank of England will have to raise interest rates from 5.25 per cent now to a peak of 5.50 per cent to weaken economic activity and cool the labour market. That’s why we still think there will be a recession later this year.”

NIESR –NO RECESSION, BUT ONLY JUST

“We expect the UK to steer clear of a recession in 2023 despite the challenging economic outlook as growth remains sluggish and the BoE struggles to tame high inflation. We expect growth in this year and next of 0.4 and 0.3 per cent, respectively.”

OXFORD ECONOMICS –NO RECESSION, BUT ONLY JUST

“The UK economy has been resilient so far, but we think it will struggle to generate momentum due to the effects of higher interest rates ratcheting up, persistent inflation, and tight fiscal policy. We expect GDP growth of 0.5 per cent over 2023 and just 0.4 per cent in 2024.”

MCC/JED LEICESTER

Labour market starts to slow as rate hikes kick in

CHRIS DORRELL

THE LABOUR market is beginning to slow down as rising interest rates take their toll on hiring activity, new data out today shows.

According to the latest research from accountancy firm BDO, demand for workers slowed for the second consecutive month in August bringing BDO’s employment index down by 0.81 points to 110.92.

The previous monthly dip in hiring intentions in July was the first fall in six months, suggesting that higher rates are finally starting to cool the labour market.

“Businesses are reacting to the higher interest rate environment with conservative decisions about hiring,” Kaley Crossthwaite, partner at BDO, confirmed.

The survey comes ahead of crucial labour market figures for July, set to be released on by the Office for National Statistics on Tuesday, as the Bank of

England considers whether to hike interest rates again.

The Bank has been surprised by the strength of wage growth over recent months, which has raised the prospect of a wage-price spiral, which is when workers demand higher wages to keep up with inflation, forcing firms to hike prices to cover wage demands.

In June, annual pay growth excluding bonuses hit 7.8 per cent, the highest level since records began in 2001. There was also a rise in the unemployment rate, which climbed to 4.2 per cent from 3.9 per cent.

July’s pay growth figures are expected to show average earnings increased by around 7.6 per cent, slower than last month but still fast.

Paul Dales, chief UK economist at Capital Economics, said that while the data will likely show that the labour market likely became “less tight”, it won’t be a “big easing in wage growth, which probably remained too high for comfort for the Bank of England”.

ECB tipped for ‘pregnant pause’ as slowing growth ties rate-setters’ hands

CHRIS DORRELL

SLOWING European growth is likely to lead rate-setters at the European Central Bank (ECB) to leave interest rates on hold, economists expect. When it meets on Thursday of this week, inflation in the eurozone will stand at 5.3 per cent, unchanged from the month before but down from a peak of over 10 per cent last year.

Tevva: London markets still too ‘conservative’

CONTINUED FROM PAGE 1

“America is the place for tech companies, and it’s the place for growth capital. London is still, you know, rather conservative in how it looks at market opportunities.”

Tevva’s departure marks just the latest in a slew of companies that have pursued a listing in the US over the UK, with notable snubs this year including gambling giant Flutter and building supplier CRH.

There are also major draws for electric vehicle makers in the form of subsidies offered by Biden’s Inflation Reduction Act (IRA), although Roberts was at pains to insist companies were after the “the whole culture”, rather than just moving for incentives.

On top of threats from overseas subsidies, Roberts also warned that the UK’s EV sector is also well behind in its domestic production of gigafactories, which produce vital batteries for electric models.

As of this summer, the UK currently has only two battery plants in the works, while the US and china have 34 and 283 respectively.

“Any automaker will tell you, they’re only as good as their supply chain,” Roberts said.

While the rate of inflation is still far above the ECB’s two per cent target, economists pointed to recent data which suggests that the central bank’s nine consecutive rate hikes–- which have brought the main refinancing rate to 4.25 per cent –are beginning to slow the economy.

Revisions to the EU’s GDP figures between April and June showed that the bloc grew at just 0.1 per cent,

down from a previous estimate of 0.3 per cent. In addition, revisions to the eurozone wide purchasing managers’ index for August saw it come in at 46.7, far below the 50-no change mark and lower than the estimate of 47.0.

Paul Hollingsworth, chief europe economist at BNP Paribas, said the ECB will deliver a “pregnant pause” as the growth outlook is “deteriorating more than the ECB expected” in June.

ECB chief Christine Lagarde will deliver the central bank’s next rate decision on Thursday

THE RESTAURANT GROUP has said it in “advanced discussions” to sell its leisure business, which includes casual dining chains Frankie & Benny’s and Chiquito’s, to Cafe Rouge operator The Big Table Group, though cautioned the deal could fall through.

FRANKIE & BENNY’S TRG in talks to sell ailing dining chains to Cafe Rouge owner

Fever-Tree looks to woo investors with US growth

CHARLIE CONCHIE

FEVER-TREE is hoping a US growth drive will prove a tonic for investors this week as the mixing giant prepares to update the City on its performance to start the year.

Shares in the London-listed firm have surged some 36 per cent over the past 12 months despite jitters over whether it could ramp up its bottling capacity to meet demand.

Investors will be keen to see whether bosses have ironed out its supply issues and whether the firm has been able to widen margins after a cost cutting drive over the past year when it updates the City tomorrow.

City analysts have predicted its pre-tax profit margins will take a dip despite the cost-cutting measures. Analysts are

pricing in pre-tax profits of £7.7m and full year profits of £28.7m. The firm made £31m last year.

Hargreaves Lansdown analyst Matt Britzman said the City would be scoping out the success of its international growth plans and whether it could justify its hefty valuation.

“First and foremost is overseas expansion, specifically in the US, arguably the main reason for the high growth valuation,” he said in a note.

Profit margins would also be under the microscope, he added, with costcutting exercises “expected to yield some results”.

Fever-tree floated in 2018 and has weathered a tricky time on the public markets. Shares have rebounded this year but are trading at a 66 per cent discount on their IPO price.

Primark owner ABF to reveal if digital push paid off

LAURA MCGUIRE

INVESTORS will turn their focus to Primark owner Associated British Food’s (ABF) full-year trading update tomorrow to see if the budget fashion brand has continued to rack in hefty earnings for the firm.  The consumer goods giant, which also owns brands such as Twinings, has performed well in recent months,

with retail like-for-like sales growing seven per cent in the three months to June.

During the term, the fast fashion brand reached sales of £1.99bn as it worked on improving its website for customers in mainland Europe and the US and continued to trial clickand-collect services.  Shares in ABF are up by around 30 per cent  over the past year.

“This has been fuelled by a rally in the pound from last autumn’s lows, a fall in sea freight costs and improved consumer sentiment, as all three have fed into improved trading at both the food and ritual arms,” Russ Mould, investment director at AJ Bell, said.  Investors would be particularly keen for comment on Primark’s extentend click-and-collect trial, as well as expansion plans, Mould added.

‘Pensions time bomb’ ticking, says City veteran

CHARLIE CONCHIE

A “PENSIONS time bomb” is set to explode in the UK if firms do not ramp up their contributions to pension pots and boost the amount of money flowing into UK equities, a top investor has warned.

UK companies have faced growing calls in recent weeks to boost the sums they give to defined contribution (DC) pensions schemes, in which employers and employees both pay a set amount into the pot.

Veteran fund manager Richard Buxton, who ran cash for clients for more than four decades until he retired from Jupiter Asset Management this year, has now warned of a looming crisis facing UK savers as pension funds fail to deliver the returns needed to support retirees.

“Unless we do this, there will be a pensions time bomb coming down the road, which will fall on the shoulders of our children,” he told The Mail

on Sunday.

Buxton’s comments come after top think tank New Financial last week called for a national hike in pension pots from the current eight per cent to 12 per cent, in partnership with City and Abrdn. Currently, three per cent of the eight per cent is made up by employers and the remaining five per cent by employees.

Abrdn chief Stephen Bird called for pension contributions to double to 16 per cent to allow fund greater pools of capital.

Buxton added that the UK should push ahead with so-called pension superfunds made up of consolidated schemes that could give investors greater freedom to pump cash back into the stock market.

Pension funds’ holding of UK equities has plummeted in recent years. Just four per cent of the UK stock market is now held by pension funds — down from 39 per cent in 2000, according to New Financial.

Astrazeneca boss Pascal Soriot mulling stepping down next year

GUY TAYLOR

THE CHIEF executive of Astrazeneca, Sir Pascal Soriot, has privately told friends and advisers that he is looking to leave the firm, according to The Mail on Sunday. Soriot, 64, has discussed leaving the firm with a number of people, but has not yet spoken to the company board or chairman, according to the report.

Glencore’s climate plans rejected by Blackrock and host of investors at AGM

CHARLIE CONCHIE

BLACKROCK has criticised “inconsistencies” in the climate policy of mining giant Glencore and voted against the firm’s green strategy at its annual general meeting earlier this year, according to new filings.

The world’s biggest asset manager, the third biggest shareholder in Glencore with a stake worth some

New Natwest chair scrutinised over former role

CHRIS DORRELL

NATWEST’s new chair Rick Haythonthwaite (pictured) has attracted attention over his work for Geneva-based oil firm Petrosaudi. According to a report in The Observer, Haythornthwaite worked for Petrosaudi’s UK arm for eight years in roles including president and chair of the operating businesses –both of which are advisory roles. His roles were focused on the production activities of the UK subsidiary.

The wider group is alleged to have been involved in a scheme to embezzle billions from 1MDB, Malaysia’s sovereign wealth fund.

The report added that Soriot, who is currently the most well paid boss on the FTSE 100, is considering leaving next year, although no firm decisions have been made. His departure would bring an end to his 11 year stint at the helm, which included developing one of the very first Covid-19 vaccines as well as tripling the firm’s market value, which now stands at £168bn.

The Observer clarified that there is no suggestion that Haythornthwaite was involved in any wrongdoing, but said the roles raises questions about his judgement. He was not charged as part of any authorities’ investigations into the 1MDB scandal.

A Natwest spokesperson said: “At no time has Rick Haythornthwaite been a director of Petrosaudi International (UK) Limited (now PSI Group Services Limited), as is clear from disclosures on Companies House.”

$9bn, was among a host of investors to reject Glencore’s climate policy at its shareholder gathering in May.

“While the UK-listed mining company has improved their disclosure of climate-related risks and opportunities and has continued to deliver on their Climate Action Transition Plan, BIS is concerned that aspects of the report and recent developments have pointed to

inconsistencies in the company’s stated strategy,” Blackrock said in its stewardship report.

According to new US securities filings, some 30 per cent of Glencore’s shareholders rejected the firm’s climate report, up from 24 per cent in 2022, the Financial Times first reported. The firm has faced growing criticism over its coal business. Glencore was contacted for comment.

Soriot has sat at the helm of the pharmaceutical giant for 11 years

Mining giant Glencore has faced scrutiny over its highly profitable coal business

Labour forced to put business chiefs on waiting lists for party conference

CITY A.M. REPORTER

THE LABOUR Party is reportedly turning away business chiefs who want to attend a host of events at its upcoming party conference as firms rush to connect with politicians whom they believe will form part of the country’s next government following a general election.

The Observer reported that 200 senior business people have signed up at a cost of £2,520 each to attend a special business forum on the Monday

of the conference, which will take place in Liverpool next month, with Labour leader Sir Keir Starmer, shadow chancellor Rachel Reeves and shadow business secretary Jonathan Reynolds.

Another 180 have been put on a waiting list and will only be able to attend if others drop out. Last year only 130 business chiefs attended, the paper reported.

The news demonstrates that Labour’s business charm offensive has paid off.

UK chip giant: We’d be better off in the States

THE CHIEF executive and founder of one of Britain’s most prominent semiconductor companies has warned red tape and planning delays are holding back the UK’s chip industry – with potentially serious consequences for the economy and national security.

“We get approached by the US frequently. Whether it’s Arizona, whether it’s Indiana, whether it’s North Carolina, we’re constantly being approached and they’re putting things on the table: ‘We can offer you this, we can offer you that’,” he explained.

By contrast, Paragraf’s chief highlighted the firms’ struggles against local planners and electricity companies in the UK just to bring in a new power cable at its manufacturing facility in Huntingdon, Cambridgeshire.

“It would surprise you, I tell you, what has to be done just to plug something in,” Dr Simon Thomas, who founded Paragraf in 2017, said.

Dr Thomas made the comments in an interview with The Telegraph, whilst noting that Paragraf had received multiple international approaches from the United States.

The Cambridge-based chipmaker has

become one of the most prominent companies in the UK semiconductor sector, and is the only firm globally to utilise graphene in its computer chips.

The material is expected to have a transformative impact across a number of different industries, with its qualities including conductivity and strength.

But Paragraf’s boss has previously threatened to leave the UK due to what he describes as a “paralysis” and lack of clarity in the government’s industrial strategy.

His comments come as the importance of the semiconductor sector shoots up the political agenda of governments around the globe, after pandemic-related supply chain shortages pummelled numerous industries.

Geopolitical tension between China and Taiwan, who are responsible for 60 per cent of the global supply, has also fuelled a race to secure domestic manufacturing capacity.

The UK published its own £1bn national strategy on semiconductors in May, but this was criticised for a lack of ambition amid major funding packages from international competitors such as the US, EU, South Korea and Japan.Dr Thomas described the strategy’s content as “flaccid” at the time.

Reynolds told The Observer that companies were increasingly turning their backs on the Conservative Party. Reynolds added that firms were interested in the party’s industrial strategy, which includes ‘making Brexit work‘, overhauling the country’s onerous planning regulations to allow more homes to be built, and changes to the apprenticeship levy, enabling companies to spend up to 50 per cent of their levy contributions on nonapprenticeship training.

Rents could rise four times as fast as house prices

VICKY SHAW

RENTS could rise more than four times as fast as house prices between the end of 2022 and the end of 2026, according to a forecast.

Across Britain, rents could rise by 25 per cent over the four-year period, compared with 5.5 per cent growth in house prices, estate and lettings agent Hamptons predicts.

As mortgage rates gradually fall and households benefit from real income growth, Hamptons said it expects house price falls to come to a halt in

2024, with growth picking up in 2025 – which is thought likely by Hamptons to be the year when a new housing market cycle starts.

It expects just under a million house sales to take place across Britain in 2023, which would be down on 1.2m completions last year.

Slightly lower mortgage rates and improved affordability in 2024 will encourage 1.1m completions next year, it predicts.

Meanwhile, a build-up of long-term supply issues combined with rising landlord costs will continue to put

pressure on rents, Hamptons suggested.

A combination of lower rental yields and more landlords being reliant on finance will put added pressure on investor profits on London in particular, it added.

Aneisha Beveridge, head of research at Hamptons, said: “On paper, the house price falls we forecast are minor in nominal terms. But high inflation for other goods and services means that in real terms, the average price of a home will have fallen around 11 per cent between 2022 and 2024.”

Government urged to introduce mandatory ethnicity pay gap report

ALAN JONES

THE GOVERNMENT is being urged to introduce mandatory reporting on the ethnicity pay gap for all companies employing over 250 workers.

The Runnymede Trust and Shareaction, the charity campaigning for responsible investment, suggested legislation to end the “deep-rooted

inequality” in pay identified over the last four years.

A policy document published by the two organisations said making it mandatory to publish ethnicity pay gap differentials was the first step to measuring and addressing the scale of racial disparities and tackling structural racism in companies.

Senior campaigns officer at

Shareaction, Kohinoor Choudhury said: “The evidence is clear – there is a structural wage differential in far too many companies. Not only is this is bad for those who suffer from it, it is bad for our economy.

“Mandatory transparency is the only way to begin to fix this.” Only 18 FTSE 100 companies currently report the pay gap, he added.

GUY TAYLOR

Low supply and rising landlord costs will continue to drive rents up over the years ahead, estate agent Hamptons said

Some 200 business execs have paid to attend a special event with Keir Starmer and co

FUELLING UP Morrisons in talks to sell petrol forecourts to Motor Fuel Group in £2bn deal

MOTOR Fuel Group is in talks with Morrisons to acquire 340 of the supermarket’s petrol forecourts in a deal that could be worth around £2bn, Sky News first reported. Both firms are owned by private equity firm Clayton, Dubilier & Rice.

Trainline results: Strike impact in focus as ticket giant readies to report

GUY TAYLOR

TRAINLINE investors will be looking ahead with anticipation to Thursday’s trading update, to see whether the ticketing business can continue this year’s stellar performance.

Despite shares being down 10 per cent, the firm has cashed in on booming post-pandemic demand for travel.

May’s annual results saw the company report record ticket sales of £4.3bn, up 72 per cent yearon-year and 16 per cent higher than before the Covid-19 pandemic.

European demand has simultaneously prompted a surge in revenues, with Spain and Italy a key success, benefiting from fourfold and threefold rises in ticket sales respectively.

But it has not been a year free from turbulence, with industrial action plaguing

the UK’s rail networks and no end currently in sight.

Trainline reported in March that rail walkouts had left a £6m hole in its profits, in a strong indication of the ongoing impact of Britain’s rail chaos on the company’s bottom line. The FTSE-250 listed firm noted in the same announcement that annual ticket sales had fallen short of market expectations, despite the record performance.

In a note earlier in the year, Deutsche Bank analysts warned that Trainline’s UK outlook remained “clouded by strike action” and the situation has hardly changed since. However, it also noted the firm’s international unit has been “gaining market share in a buoyant market, benefiting from the introduction of competition on some key lines” and said it had scope to be “highly profitable within five years”.

TUC to report UK government to UN watchdog over new strikes law

ALAN JONES

THE TUC is reporting the government to the United Nations workers’ rights watchdog over the controversial new law on strikes, it has been announced.

General secretary Paul Nowak said the union body will be lodging the case at the International Labour Organisation because the

legislation on ensuring minimum levels of service during industrial action “falls far short” of international legal standards.

Speaking on the opening day of the TUC Congress in Liverpool, Nowak described the new law as “dreadful”.

Unions will attack the legislation during a debate today, saying the new law is unnecessary and

unworkable and will do nothing to resolve disputes.

A government spokesman said: “The legislation does not remove the ability to strike, but people expect the government to act in circumstances where their rights and freedoms are being disproportionately impacted, and that’s what we are doing with this Bill.”

Sunak confronts Chinese premier over meddling

SAM BLEWETT

RISHI SUNAK has confronted China’s premier over his country’s “unacceptable” interference in British democracy after the arrest of a parliamentary researcher on suspicion of spying for Beijing.

The Prime Minister raised his concerns with Li Qiang at the G20 summit in India yesterday, in a meeting that was still being arranged as news emerged of two arrests in the UK under the Official Secrets Act.

One of those swooped on by police is a researcher who has had links to several senior Tory MPs, including security minister Tom Tugendhat and foreign affairs committee chairwoman Alicia Kearns.

The Briton was arrested along with another man by officers on 13 March on suspicion of spying for Beijing, it was first revealed by The Sunday Times. Sunak, who has faced criticism from

some senior Conservatives of seeking a relationship with a China they see as increasingly a threat, met Li on the margins of the international summit in New Delhi yesterday morning.

Downing Street said Sunak “conveyed his significant concerns about Chinese interference in the UK’s parliamentary democracy”, as he kicked off what was characterised as a business-like 20minute conversation.

The Chinese PM is understood to have responded by saying the two leaders obviously have “differences in opinion” during the conversation, which also touched on Ukraine and trade.

Sunak cited his confrontation with Li as an example of the benefits of his policy of engagement rather than “shouting from the sidelines”.

Downing Street and the House of Commons both declined to comment on the matters, citing their policies on security matters.

Regulators urged to check Hong Kong’s ties to LME

NICHOLAS EARL

CITY regulators have been asked to review the Hong Kong government’s ties to the London Metal Exchange (LME) following China’s breaches of human rights and diplomatic agreements with the UK.

In a new paper, shared exclusively with City A.M., campaign group Hong Kong Watch has called on the Financial Conduct Authority and

Bank of England to extend their ongoing probes into the exchange.

Both authorities are reviewing the conduct of the LME during last year’s nickel crisis, when the exchange took the unprecedented step to suspend trading amid a record price rally.

But Hong Kong Watch wants the regulators’ reviews to be expanded into whether its owner, Hong Kong Exchanges and Clearing (HKEX), is a suitable owner of the metals

exchange. The group argues that the Hong Kong government, which is HKEX’s largest shareholder, no longer meets the so-called fit and proper person criteria to run the exchange.

Peter Dowd, a Labour MP, said: “It is worth asking whether it continues to make sense for this UK strategic asset to be indirectly owned by the Government of Hong Kong.”

The Bank, FCA, HKEX and the LME declined to comment.

THE NOTE BOOK

Ditch the tourist tax to support London’s rebound

Ialways think London feels super busy, but the bods at the tourism board are forecasting the opposite. Fewer visitors spending their money in Britain is bad for the high street, bad for hotels and bad for restaurants.

My fellow retailers from Mulberry to Burberry to Jigsaw think they have diagnosed the problem. We are the only country in Europe that doesn’t refund VAT to international tourists who have come to the UK to shop. The result? Fewer tourists choosing to come here, and data showing places like Madrid, Milan and Paris hoovering up their spending.

Tourism is a cash cow for this country — raking in billions in revenue that supports the economy, as well as paying for the government to do its job.

The government might be saying they want to do whatever they can to support businesses and drive

Student loans to broaden young people’s horizons?

growth — but making us an international outlier on tourist taxes only leads us down one path, putting us at a huge disadvantage to every country on our doorstep.

Visit Britain’s data on this is clear.

Half of Chinese and US tourists have said they are significantly reducing their spending in the UK because of a lack of taxfree shopping –with many now not coming here at all. This has to change.

As the Chancellor plans his Autumn budget, going out to bat for British retailers, restaurateurs and hoteliers that depend on tourism is something he should consider carefully. If everyone from socialist governments in Spain, conservatives in Italy, through to the government’s own tourism agency can see the madness of taxing tourists, a new policy must be worked up, and fast.

Last year my youngest left school and chose to skip university. She is becoming a pop star instead. Good on her. It certainly made the dreaded results day a little less stressful. Whether it’s A-Levels or university degrees, young people worry that this one day will define the rest of their life. Anyone in business will tell you it won’t.

Research just out from charity Teach

First shows how unprepared young people are for the world of work when they leave school and universities have no clue either about how to prepare students for what comes next. Instead of loaning thousands to students who get little out of their degree, why can’t we loan that same money to young people to attend the ‘University of Life’? Businesses are looking for well-rounded young people with the right attitude, skills and experience. Three months learning Spanish in Peru, building a school in Costa Rica, crewing a supertanker across the Pacific and working in a kibbutz is a far better way of demonstrating this than three years in lecture halls downing a few thousand pints.

FASHION ISN’T JUST ABOUT TRENDS

Fashion isn’t just driven by what’s on trend. Take the rise of casual wear. At Charles Tyrwhitt we used to sell 80:20 in favour of formal shirts and suits. It’s now 50:50. Home working is a major factor. So too is temperature. Warmer summers see spikes in linen sales. Comfort has consigned the suit and tie to ‘big days’ only. But through it all, the shirt remains the constant in a man’s wardrobe. My bet is it will never become passé. But I would say that, wouldn’t I?

£ Highly Desirable: Tales of London’s super-prime property from the Secret Agent. Anonymous. Funny. Cutting. The madness of the London property market. Great for the beach.

Where the City’s movers and shakers get a few things off their chest. Today, it’s Charles Tyrwhitt founder Nicholas Wheeler

Adrenaline junkies scale the City in Skyscraper Challenge

CITY A.M. REPORTER

YESTERDAY saw the second of two waves of adrenaline junkies bringing new meaning to the words “what goes up, must come down” as part of the Skyscraper Challenge.

Just shy of 800 adrenaline junkies climbed 42 floors of the Cheesegrater this weekend, only to then abseil or zipwire their way back down.

The London Landmarks Skyscraper Challenge, the first of its kind in the world, saw participants raising funds for a host of charities, including Tommy’s, the baby loss charity, Guide Dogs UK and Alzheimer’s Research.

Among the participants were a host of City workers, with the City of London Corporation, Aviva and the Leadenhall Building’s management team some of the event’s sponsors.

The first part of the task – a 42-storey tower run – involved 1,096 steps, before the 200m abseil or 120m zipwire across to the Gherkin.

Among the participants was City A.M.’s editor Andy Silvester – who described it as “terrifying and thrilling in equal measure”.

Chelsea Watkins, investor relations analyst at asset manager Sona, whose team participated, said it was “rewarding to continue to support Tommy’s baby charity” through the challenge.

Stansted reports second busiest month on record despite NATS chaos

GUY TAYLOR

LONDON Stansted Airport has reported its second busiest month on record, soaring ahead of prepandemic passenger levels as it continues to outpace other major UK hubs’ recovery.

Over 2.5m passengers passed through the airport in August, up 12 per cent year-on-year and just pipping the same month in 2019.

It takes the total number of passengers served at the airport for

the year to over 27m, an increase of 40 per cent on last year, with the peak summer period taking up almost a third of the total.

Stansted has shot ahead of Heathrow and Gatwick’s more laboured post-pandemic recovery and became the first major UK airport to reach pre-pandemic levels of passenger traffic in July.

Stansted has been one of the biggest beneficiaries of a rebound in travel demand this year, with Spain, Italy and Turkey the hub’s three most

popular destinations over the summer.

The figures come despite a month marred by one of the biggest air traffic control failures in living memory at NATS, the UK’s airspace operator, which resulted in the cancellation of thousands of flights and widespread disruption throughout the following week.

The UK’s aviation watchdog is currently undertaking an independent review of the incident, the results of which will be revealed by the end of September.

UN shipping rules poised to hit oil giants

GUY TAYLOR

OIL GIANTS are set to face a major hit from new climate regulations on shipowners, which will eventually stop them from using high-polluting shipping fuels, analysts have warned.

Under agreements made in July, the International Maritime Organisation (IMO) –the UN agency which sets legally binding regulations on international shipping –ruled that nearly every ship

will need to operate with zero emissions within the next 15 years.

This, experts said, will drastically reduce the sector’s demand for oil, which uses over 200m tonnes of oil per year.

Speaking to City A.M., Dr Tristan Smith, an expert in energy and transport at UCL, warned of a “brutal decade” ahead for shipowners and groups with large investments in the sector.

The result of these rule changes will be “toxic bottom line shocks” for oil

companies, traditionally seen as reliable consumers of oil, he said, adding that there was “no good evidence they are at all prepared” for this rule change.

However, while Oddmund Føre, head of shipping and offshore at Rystad Energy, agreed that the IMO’s July emission targets would slash demand for oil, he argued this “only accounts for 7-8 per cent” of the total demand for oil.

“The energy majors are well underway in the energy transition, and they have

already shifted a lot of their focus towards greener sources of energy," he told City A.M.

“The bottom line is that we need to see stricter regulation in the shipping industry to make sure that we see alternative fuel adoption at a higher level than is the [current] outlook,” he said.

City A.M. contacted a number of big oil giants, including Shell and BP, about the issue, but they declined to comment.

Other green rules from the IMO are also causing a shake-up in the sector.

In January, the IMO introduced a Carbon Intensity Indicator, which grades ships on their green credentials from A to E, with ships ranked at the lower end of the scale forced to pay a penalty. But this change has sparked a row between ship owners and commodity groups, who often charter ships in large numbers, over who should pay up if a ship’s emissions standards slip.

UK climate tech sector set to receive £4bn boost from Qatari investment

CHARLIE CONCHIE

A PLANNED £4bn Qatari investment splurge on the UK’s climate tech sector could deliver a major boost to the UK’s green ambitions, but the government must now create the right environment for it to thrive, a top think tank has warned. State-backed non-profit the Qatar

Foundation, is reportedly set to pump some £4bn into a new campus that will look to fuel a wave of energy research and green tech development, The Sunday Times reported yesterday. As part of the plans, the foundation will reportedly set up a £1.5bn fund to channel cash into early stage companies developing technologies to help tackle climate change, as well as

working alongside Rolls Royce to deliver a technical programme. Sites are reportedly being scouted out in London, Oxford and Cambridge. The news was welcomed by leading tech group the Start-Up Coalition, though it warned there was “work to do” to ensure the investment could be well utilised, including the need for a robust government strategy.

The planned funding will be channelled into startups focused on climate tech

Stansted Airport is one of the first UK airports to reach pre-pandemic levels for July

UK’S SOLAR DREAMS TAINTED BY CHINA

Rlifting a de-facto moratorium on new turbines –might help turn around a chronic lack of investment that saw fewer of them installed in England last year than in Ukraine.

But that doesn’t mean the political rows are over, even as the energy bill passed its third reading last week.

GOVERNMENT FEELS HEAT FROM SOLAR ROW

There was also a fresh chapter in the protracted back and forth over solar farms, with the prospect of new panels planted on Britain’s sunlit uplands a lightning rod for controversy around food security, community consent and even international relations, with the UK scrambling to obtain vital minerals for projects from all around the world.

Alicia Kearns, Conservative MP for rural constituency Rutland and Melton, was at the centre of the debate, trying to push through multiple amendments to the legislation. This included proposals to limit the scope of solar farms, so they could no longer be installed on 500-acre plus farms in a bid to shore up food security –reflecting that while one wing of the Tories pushes to lift planning restrictions, another looks to shackle projects in development hell. Thankfully, this amendment was not successful, with concerns over crops mixing with renewable projects consistently overblown – with panels and farmland able to co-exist without any issues.

Foreign Affairs Select Committee, Kearns also pushed to block companies engaged in or benefitting from Uyghur forced labour from building large-scale projects in the UK, a much more substantive concern.

This amendment has also not been attached to the Energy Bill – which raises fresh worries over how robust the government’s stance on Chinese investment is.

HUMAN RIGHTS CONCERNS

The industry has been plagued with concerns over forced labour from internment camps in the Xinjiang province of China, where the country’s government has suppressed over a million people since their construction six years ago.

This includes imprisoned labour for the unearthing and grounding up of polysilicon (the main raw material for photovoltaic panels used across the solar industry), with the region home

with eight of the world’s largest ten companies of Chinese origin, alongside estimates 40 per cent of the UK’s solar industry has been using panels built by the country’s companies.

This reflects its stranglehold across the wider industry, with China also holding a dominant role for mineral extraction and processing, meaning it has a huge influence on global supply chains for solar panels.

The domestic solar industry is alert to the problem and moral challenge and has teamed up with EU allies to develop the Solar Stewardship Initiative, which looks to tackle the risk of tainted products with transparency requirements across supply chains starting from December. However, the industry does not think further action from the government is needed, believing the private sector can regulate and act more swiftly than fresh legislation.

It also points to existing requirements in the Modern Slavery Act, which demands UK companies report on what they are doing to free their supply chains from slave labour.

But the problem is those rules place no duty on them to do anything other than to report the movements – with a recent letter signed by 15 human rights groups in the Coalition to End Forced Labour in the Uyghur Region warning that the UK risks becoming a dumping ground for products of forced labour to meet its target of boosting solar generation fivefold by 2035.

The UK’s approach also contrasts with the Uyghur Forced Labor Prevention Act in the US, which bars goods from the region due to the high risk of forced labour.

Last month, foreign secretary James Cleverly defended continued business with China ahead of his first frontbench visit to the country in five years.

He insisted he raised human rights issues, but publicly emphasised the need for China as a partner in the global push to mitigate climate change.

Former energy secretary Grant Shapps meanwhile defended “pure investments” from China in the stakes of nuclear projects – provided it didn’t involve data sharing or operational influence over the sites.

City A.M. has also highlighted the role of Dajin Offshore Heavy Industry, a Chinese private company with the explicit aim of investing in overseas projects, in a Scottish wind farm that could power over 1m homes.

Kearns’ unsuccessful attempt to toughen rules around Chinese investment in solar panels appears to expose the government’s softening approach.

It might even be possible that the government is hoping to buy time, that until alliances with Western allies and a domestic industry revival for key minerals emerges, it will have to do business with China.

Such a realpolitik approach might make sense, but it’s time the government is honest about the moral challenges involved in securing a greener future.

PREPAYMENT METER DEBATE SPARKS UP AGAIN

£ Rachel Fletcher, director of policy and regulation at Octopus Energy, believes forced prepayment meters should be permitted again if they are installed “responsibly” with “smart prepayment meters only”. Octopus has always installed fewer meters than its rivals, preferring over options for debt collecting. While the company told City A.M. the position did not reflect a policy change from Octopus, it remains to be seen if their less aggressive approach to tackling debt continues with the near doubling of its customer base following the Bulb and Shell acquisitions.

SEND US YOUR THOUGHTS

What can we do to improve energy security? Email energy editor Nicholas Earl at nicholas.earl@cityam.com

City A.M.’s energy editor Nicholas Earl delves into the sector’s challenges in his weekly column

Until a domestic industry revival, the UK may have to do business with China

CITY DASHBOARD YOUR

ONE-STOP SHOP FOR BROKER VIEWS AND MARKET REPORTS

LONDON REPORT BEST OF THE BROKERS

Week ahead: Retailers line up to update City

AFTERa flat week on the FTSE 100, investors will be hoping for a few more gains this week, with the corporate agenda to be dominated by retail results. It’s a big week for clothing retailers, with industry bellwethers H&M, Zara owner Inditex and Primark owner Associated British Foods (ABF) all reporting. ABF will be hoping to keep its share price rally going when it reports tomorrow, with the company’s star brand Primark likely to have benefitted from cash-strapped consumers trading down to its budget offering.

John Lewis Partnership might prove less fortunate when it publishes its half year results on Thursday, with the high street stalwart’s share price ailing after announcing a £234m annual loss in March. Chair Sharon White will need to prove the business’s diversification into property has been a good decision. Other results to look out for include

Fever-Tree and Trainline, which report tomorrow and Thursday respectively.

On the data front, UK employment figures out tomorrow will be of interest to the City, as the Bank of England scrutinises wage growth to evaluate the success of its war against inflation. July wages are expected to remain steady at 7.8 per cent.

Attention will then turn to GDP figures out on Wednesday. While growth proved buoyant in June at 0.5 per cent, a rather wet and miserable July could curtail that, with leisure spending tending to rise with sunny weather.

Across the channel, Thursday will be a major mood-setter as the ECB announces its next rate decision. The jury looks to be divided between a pause and a 25bps hike. Economic data since the last decision has not been too pretty, with Germany’s economy in particularly bad shape, which could dictate matters.

Fund manager Ashmore reported a six per cent drop in profit in its annual results and assets under management slumped, causing analysts to lower their profit forecasts. Peel Hunt analysts retained their ‘buy’ rating but lowered its target price to 230p.

Berkeley has had a challenging year amid a downturn in the UK’s housing market. Nonetheless, Peel Hunt argued shares have risen ahead of the sector and highlighted the “long term quality” of the business, giving a target price of 3,900p and ‘add’ rating.

NO ROOM FOR ERROR

“With the ECB kicking off a round of central bank meetings on Thursday, followed by the Federal Reserve and Bank of England next week, concerns are rising over the prospect of a policy mistake, which could undermine the prospect of an economic pickup into year end.

MICHAEL HEWSON, CMC MARKETS

OPINION

EDITED BY SASCHA O’SULLIVAN

A ‘spy clause’ to break encrypted texts while preserving privacy is still a dream

TOMORROW the govern-

ment’s Online Safety Bill comes back to the House of Commons. This measure is now a veteran of Westminster: it was introduced in March 2022 and has had a turbulent passage through Parliament. It was victim to brutal surgery during the committee stage, and another overhaul last week in the House of Lords. One of the most contentious parts of the bill is a clause dubbed by some campaigners as the “spy clause”. This would allow Ofcom to identify and take down content sent under end-toend encryption, on platforms like WhatsApp and Signal, if it related to terrorism or child sexual exploitation and abuse (CSEA), and has been stiffly resisted not only by the tech industry but by civil rights campaign groups like Amnesty International. Both Meta, which owns WhatsApp, and Signal have said that they would rather have their services blocked in the UK than submit to the intrusion on encrypted content. Governments are bad at regulating technology. Legislation is necessarily a blunt instrument—everything must be set down explicitly and precisely, and there is no room for nuance—and it is often the case that the drafters of

that legislation lack the depth of expertise of the industries which it is supposed to regulate. But a statement by a minister in the House of Lords last Wednesday demonstrated the fundamental weakness in the provisions of the bill.

Lord Parkinson of Whitley Bay tacitly admitted what campaigners had been arguing for months. “A notice [to scan encrypted data] can only be issued where technically feasible and where technology has been accredited as meeting minimum standards of accuracy in detecting only child sexual

abuse and exploitation content.” What this alludes to but does not say explicitly is that such technology does not currently exist, and is unlikely to be developed for many years, if at all.

The result is what Boris Johnson might have called a bugger’s muddle. The government insists its position “has not changed”, because to change one’s mind is now one of the highest crimes in politics, and the text of the clause remains in the bill. It will, however, be entirely declaratory, granting Ofcom the power to do something which is technologically not possible

(but could, hypothetically, be possible in the future). One could see this is a marvellously British compromise: the government can say that it has introduced tough measures to deal with terrorist and CSEA content online, while the tech companies do not need to change their practices or their relationships with their customers.

I am not blind to the value of compromise. Much of our constitutional settlement depends on an unspoken gulf between theory and practice. But on this occasion, it seems to me that the government has dodged an argument

The insurance industry must rise to the challenge of damage from climate change

ALMOST every day, we hear word of a new cyber attack that has threatened people’s safety and security, or a climate change disaster that’s claimed lives and livelihoods. One in ten businesses experienced cybercrime between 2022 and 2023. Meanwhile, the effects of climate change are wreaking havoc right across the globe - from the devastating Turkey-Syria earthquake to a horrific mudslide in China.

As world leaders and global organisations strive to tackle these issues, new challenges and opportunities emerge for the global insurance industry.

The City of London is - quite literally - the birthplace of the insurance market. It rose like a phoenix from the ashes of the city after the Great Fire of London devastated the capital in 1666. And, today, London is a key partner for insurance and reinsurance clients globally, with deep pools of expertise in specialty underwriting, risk management and claims handling for those large, challenging or developing

Nicholas Lyons

risks that local insurers either do not wish to - or cannot - underwrite.

Every one of the top 20 global insurance and reinsurance firms and brokers is based in London, and nearly 90 per cent of London’s insurance capital comes from overseas. We’re also home to the highest concentration of insurance talent - with 65 insurance and reinsurance companies sitting within just 500 metres of each other.

Hot off the launch of our new “Vision for Economic Growth” report - which sets out a roadmap for UK financial and professional services to drive economic growth - this week I will travel to the Rendez-Vous de September, the annual gathering of the global reinsur-

ance industry in Monaco.

In a reflection of our renewed focus on insurance, it will be the first time the Lord Mayor of London has participated in the Rendez-Vous. I’ll meet with chief executives of many insurers, reinsurers and brokers from around the world to hear their views about the global environment and London as the world's leading subscription market, and what we can do to make ourselves even more competitive. Especially important will be how the global market perceives London’s unique offer in managing climate and cyber risks.

London is the current leader in cyber insurance. And, as cyber becomes a growing threat, the global cyber insurance market is projected to grow from $7.01bn in 2020 to $20.56bn in 2025.

Climate change is - of course - another growing risk and opportunity for insurers, with the London & International Insurance Brokers Association estimating the London insurance market could double in size just by covering the global transition to green

energy for policyholders looking to achieve net zero.

Insurance carriers and government and supranational bodies need to find a way to progress the models of private-public partnership and provide cover for the global impact of the major risks we are facing.

Cyber, climate and pandemic risks are of such scale that they cannot be covered by the private sector alone, but we haven't yet found the best and most capital efficient way to pool exposures and share risk between the public and private sectors. Solving these challenges should play to London's strengths.

As the City burned in 1666, it would have been difficult for residents to imagine a future beyond the flames.

As cyber threats and climate change threaten life as we know it, we must ensure London - and the London insurance and reinsurance industry - is part of the solution.

£ Nicholas Lyons is Mayor of the City of London Corporation

which will have to be faced sooner or later: where is the border between “safety” (whether for children or potential victims of terrorism) and privacy? Let us suppose, for a moment, that the technology Ofcom would require (“magical thinking”, as tech expert Heather Burns sharply described it) did indeed exist. Would it be right for Ofcom to have the power to monitor end-to-end encrypted content?

No one wants child abuse or terrorism to flourish. The government knows that, and has used the emotional leverage to boost support for this ill-fated clause. But that cannot be an unanswerable argument. At some point, if we do not want to live in a society of perpetual and pervasive surveillance, we have to draw lines, and I think we are entitled, as citizens, to have means of communications which the government cannot intercept or monitor. Even if there was clear, unambiguous evidence—and there is not— that giving Ofcom these powers would make a real difference to these dreadful offences, it would not justify the violation of our fundamental rights.

Section 122 of the Online Safety Act 2023 (as the clause will become) may become a strange, ghostly dead letter, an instrument of a policy which was dreamed but never realised. That is the right result. How much it matters that it has been reached in the wrong way is personal taste, but one hopes that the government has noted the fierce reaction to its legislative overreach, and lodges that fact in Whitehall’s collective memory.

£ Eliot Wilson is co-founder of Pivot Point and a columnist at City A.M.

NO NEED FOR SPEED

Rishi Sunak spent the weekend in New Delhi for the G20 summit, and while he met with Indian PM Narendra Modi on the side of the main talks, the Prime Minister refused to rush a UKIndia trade deal. He said ‘we can’t rush it and I won’t rush it’ as Indian officials asked for better visas

Eliot Wilson

WhatsApp and Signal threatened to leave the UK if end-to-end encryption is at risk of being broken

WE WANT TO HEAR YOUR VIEWS

LETTERS TO THE EDITOR

Getting rid of the old boys club

[Re: We still have a ‘class’ ceiling in City firms, Aug 16]

Tulip Sadiq and Sophie Hulm are absolutely correct that the City needs more people like Tracy Garrad – and others from diverse backgrounds – in the financial sector.

Despite its meritocratic reputation, the truth is the City has not properly harnessed the wider talent pool in the UK. In November 2006, at 18 years old, I joined the client services team for the CREST settlement system – a Financial Market Infrastructure responsible for finalising securities transactions. This year, I accepted the role of COO of Euroclear while still under 40-years-old. In my time here, I have worked with HR colleagues to ensure that our hiring practices are not restricted by old-

fashioned ideas about what will make for a successful employee.

It is important that the financial sector focuses on value set and capability, as opposed to specific experience or degree requirements. It is also crucial that the industry equips employees with skills that will be essential for the modern economy, such as management experience or developing computer programming language. Euroclear strives to be a diverse and inclusive employer, ensuring our workforce and workplace reflect society and the communities we support, and our actions reflect our aspirations for inclusion.

Leaders in our society should look closely at recruiting practices to ensure an inclusive hiring process and that employees from all backgrounds feel that their thoughts and input are valued.

Craig Clayton Euroclear

Local authorities must dodge the fate of Birmingham City Council and fix their finances

Claire Corbett

LAST Week, Birmingham City Council declared itself bankrupt over £760m in unpaid equal pay claims. It followed in the footsteps of Hackney, Thurrock, Woking and Northamptonshire, which have all filed similar notices.

CLOSE IT DOWN

Wandsworth jail under fire as terror suspect re-captured

Local authorities, as we know all too well, are a fragile sector, and they are currently battling both growing demand and reduced funding. Tough choices will need to be made, with services likely to be heavily impacted, affecting everyone in the community.

According to the Local Government Association, local authorities across the country are dealing with financial challenges, with many facing the threat of insolvency – partly due to outdated funding models and depleted reserves.

These pressures are not going away any time soon. Facing systemic problems that need the appropriate time, resources, and funding to be properly taken care of, it’s understandable why many are in trouble and are desper-

EXPLAINER-IN-BRIEF: WHY IS CHINA BANNING APPLE IPHONES?

Last week, US$200 was wiped off of the value of Apple following China’s plans to expand a ban on iPhones to government-backed agencies and companies.

It is a particularly interesting hitch in the relationship between the tech giant and Beijing with Apple chief exec Tim Cook called “symbiotic” earlier this year. China is one of the biggest markets for Apple, and most of the hardware for its devices is manufactured in factories there. According to TechInsights, a market research firm, secondquarter shipments to China was

a greater market than the US.

But China is increasingly irritated at Western governments for banning technology owned by its own home-grown firms like Huawei and ByteDance, owner of TikTok. Huawei in particular is under sanctions which prevent it accessing the most advanced semiconductor chips from the US. Analysts have noted that the ban comes in the wake of a new Huawei phone being developed. There are concerns in the US that the firm managed to bypass the chip ban in order to develop the new smartphone.

ately trying to find long term sustainable solutions with the constraint of capacity and funding to do it.

But if there is a silver lining to all this, it is that lessons can - and must belearnt.

Firstly, we need to provide investment and support to our local authorities to move away from short term planning. Too often, budgets and targets are set on a year-by-year basis using historical information, looking in the rear view mirror without really challenging future demand assumptions. At the same time, the political cycle means decision makers are at risk of changing every three to four years, leading to shorter term approaches or plans being changed.

Supporting local authorities to put in

place long term business planning and funding models that will meet the needs of their areas is one solution.

Local authorities hold large swathes of data and insights on the services they provide. If they use this data effectively, analysing it to identify where issues lie based on both historical and real-time information, local authorities can take strategic and knowledge-based approaches to better target where funds are spent.

Local authorities often have large legacy system landscapes which prove expensive to integrate and use. These investments into big, bespoke technologies have frequently ended up locking them into costly maintenance contracts and inflexible technology roadmaps. Thinking that large, one off technology systems are a quick fix or a way to streamline processes needs to end. Adopting a user centred, digitally minded approach to understand needs makes local authorities smarter commissioners of future digital and technology solutions, providing a better understanding of the benefits and risks of different platforms is a way forward.

Leveraging the existing technology ca-

pabilities with the introduction of the lo-code platforms, AI and robotics capabilities can accelerate service innovation, reduce costs and avoid pricey vendor lock-ins.

Many authorities face the same challenges and they need to work together to share and learn from each other.

There are already systems in place to allow them to do this, such as community platforms. Groups like this provide a hub for local authorities across the country to come together and share their projects, successes and ideas for building better public services. They can then take what they've learnt away and replicate it in their area, which could be at a much lower level of investment than what they were planning when working individually.

There’s never been a more important time for brave and bold leadership in local government. By taking a longer term approach, being people centred and working together, local authorities up and down the country can take important steps in the right direction.

£ Claire Corbett is Managing Partner of Local Government at TPXimpact

Birmingham City Council declared bankruptcy last week

Even after the escaped prisoner Daniel Khalife was arrested, Wandsworth prison is facing an existential crisis over its future with top police bosses investigating if it was ‘pre-planned’ and others suggesting it should be closed down.

GOING OFF-PISTE IN KITZBÜHEL

Kitzbühel hosts the maddest, most prestigious downhill ski race in the world but has plenty of cruising pistes as well. It has stunning restaurants and more than a few infamous party venues. And unusually in the Alps, it is equally popular in the summer as it is in winter.

Let’s start with a little winter exhilaration. Winning the Hahnenkamm downhill race is in many eyes a higher accolade than an Olympic gold medal. The best skiers in the world fear the course like no other. Peter Zaß, my guide, gave me a close up inspection of the steep fareway a week before race day but warned me to stay off the blue racing line while I was skiing, as it is injected with water days ahead of the event to provide a strip of ice from start to finish. Only pros with ultra sharp racing edges are allowed on many sections. No thank you: I think

I’ll stick with the gentle powdery stuff…

Having seen the race on TV I felt I knew what to expect. I was nowhere near. The sheer chutzpah to even think about setting off down the track deserves a mountain of admiration. Winners are immortalized with their names emblazoned on a Hah-

nenkamm telecabine, and for the first time in over 80 years you will be able to ride up in gondola bearing the name of a British skier after Dave Ryding’s triumph in the 2022 slalom event.

The famous race returns this January between 15 and 21st, so now's a great time to book to watch the pros, or to

take part, but if hitting 85mph isn’t for you, Kitzbühel has some fantastic rolling red and blue runs. They’re ideal for accessing wonderful mountain restaurants. With luck you will find your way across the impressive 3S lift to the Jochberg area to the Bärenbadalm Hut where Ossie will regale you with stories of his pride herd of

Angus beef cattle, which are transformed into one of the finest goulashes I have ever tasted. Perhaps you’ll bump into the Lissi - the legendary woman and famed local who for years has held court at the Hahnenkammstübel.

While lunch was certainly on the agenda, so was working up an ap-

Why this low-key resort is perfect for testing your limits, and eating well too.

By Simon Miller

petite. After a day of being blown around by a ferocious storm, the weather had somewhat recovered from its teenage, door-slamming petulance so we arranged to meet Andreas Manzenreiter - a mountain guide briefed to justify a hefty late lunch with some off piste skiing. Would today be the day to abseil down from the Roßgruber onto a face that had just one tantalizing line of S turns to scar an otherwise pristine descent?

When I went the weather wasn’t right, so Instead Andreas had our small group trekking into areas that without a guide we would never have ventured. Down gullies, well away from any pistes, along ridges, pitch after pitch, over blanketed meadows, through forests and finally, back on the skis, and gliding parallel to a stream until we finally reached the valley floor where miraculously a taxi was waiting to drive us back to the lift system. The perfectly guided ski.

Off-piste adventure is the best way to build memories and an appetite for an indulgent evening meal. The recently opened Auwirt by Grobeis is as stunning as the tasting menu at Kitzbühel's only 5 star resort hotel & spa – the Hotel Tennerhof. The modern interior at Auwirt bei Grobeis contrasts with the traditional décor at the Tennerhof, but both served spectacular, intriguing, always locally sourced course after course. I would need to check in with Andreas for another bout off piste skiing to justify my overindulgence.

If the winners of Kitzbuhel’s Big Race are modern day heroes, Alfons Walde (1891-1958) is arguably the father of today’s Kitzbühel. This polymath’s imprint is all over the place. He was an architect (many of the lift installations are based on his designs); a painter as well as a skier. His imaginings of meadows laden with snow are his most famous pieces including one that on second glance depicts Rubenesque nudes in the undulations of snow. I enjoyed a wonderful couple of hours with city tour guide Hilde Flack learning about the influence of Mr. Walde on Kitzbühel (including picking the pastel colour palette of the building in the old town) as well as the rich history of Kitzbühel itself.

He left quite an imprint on a town that is celebrating 750 years since it was granted city status by Ludwig II in 1271. Worthy of particular note on my historical tour was a statue that elegantly sums up the defiant pride Tiroleans (people from the Austrian state of Tyrol) have in their homeland.

A Freedom Fighter commemorating the 100th anniversary of the Tirolean struggle for independence. The statue showing a rifle-bearing young man captures a theme throughout the centuries that has been used to protect their way of life against intruders from Napoleon to the Nazis.

I have often wondered whether I could live somewhere like Kitzbühel. With its year round appeal those who do clearly love it. To sample a proper dose of mountain life I might cheekily ask Ossie for permission to stay in his “not-available-online” mountain hideaway. But failing that, the Kaiserhof Hotel where I stayed - the closest to a ski in, ski out luxury hotel Kitzbühel has to offer - is an outstanding way to see this Austrian alpine gem.

For more information go to kitzbuehel.com; rooms at the Kitz Kaiserhof hotel start from around £150 per night. Visit kitz.hotelkaiserhof.at to book or call +43 5356 20665. The Hahnenkamm downhill race returns this January between 15 and 21st

SKIING ON A PRIVATE MOUNTAIN

Why struggle through crowds when you can have

Gosling

Picture the scene: you exit the boot room and head to the hotel's exclusive ski lift, and minutes later, you’re alone on the wide, silent piste. There’s no queue for the chair lift. You fly down without seeing another skier, with a silly grin on your face, and every turn feels smooth and fast. Rinse and repeat all day long.

At the Tschuggen Grand Hotel Arosa, Switzerland, this is no fantasy, but a reality at their exclusive annual private mountain weekend. Each year, the day before the ski area opens to the public at the beginning of December, guests of the hotel who book the private mountain package have exclusive use of a large section of the resort. The package includes lift passes, ski rental, and a champagne greeting reception and apre ice skating party. It’s a fun and fabulous way to kick off the ski season, with everything organized for you.

The snow was compact, but soon softened and was perfect for the first turns of the season. With less than eighty skiers on the mountain, the snow stayed soft but not choppy beneath our skis. In fact, there were more staff on the mountain than

skiers, with hot toddies being handed out at the bottom of each lift, a DJ, and a team that kept stoking the fire pits and preparing a range of toasties for a between-runs warm snack.

Four lifts were open for the private guests which we spent the weekend gliding down. You’re certainly going to have ski holidays with a higher variety of runs, but there are other benefits to skiing on a private mountain. Mostly, it’s just so rare to have so much space that you can take the time to look around and appreciate the views and feel a buzz at the smoothness of each turn, without having to focus on dodging all the other skiers around you.

After the first day, and as part of the package, we were shuttled to the town’s ice rink for a private party. Champagne, crepes and ice skating do go down well together, it turns out, and it felt magical to glide around the rink under the Christmas lights. That night we dined at the recently refurbished Grand restaurant which offers the ‘Moving Mountains Menu’ – a seven-course signature vegan offering which included Tomato ravioli in a light balsamic sauce and a side of swiss chard, and perhaps the best Tiramisu I've ever tasted.

After the second day of skiing, this time with a few more folks out on the pistes (the cheek!) we headed to the spa. An aromatherapy massage soothed my aching legs and a dip in the ice plunge pool was invigorating.

Food, throughout, was superb. In fact, I didn’t venture further than our little bubble of alpine happiness at the hotel for the whole weekend. Our first dinner was in the property's basement restaurant, a perfectly

cooked rib eye steak with traditional Swiss rosti – a fried grated potato pancake. Afterwards a friend of mine spotted the vintage bowling alley in the corner and as soon as dinner was finished I enjoyed a competitive game between guests. We would always fuel up for the day of skiing ahead at the buffet and al a carte breakfast, which has a vegan and gluten free focus, but with all the usual options available. Ginger shot and sweet almond pancakes down, we were ready to put our boots on.

The long weekend trip with all the convenience and luxury was the ideal way to ease into the ski season. Yes, early December is, well, early to go, but luckily the snow was great, and perhaps more importantly, it isn’t being mashed up by hundreds of other skiers and there's almost zero risk of colliding.

I also realised my technique is better than I’ve given myself credit for. In this more relaxed environment, I

loved every run, could practise my technique better and because of this, I can honestly say the weekend is up there as one of the best ski weekends I’ve had.

The whole weekend was seamless with everything organised for us, as part of the package, and with everything included in the price it makes a weekend skiing a hassle-free pleasure. I’d like a mountain to myself for every ski trip now, please? Sigh.

Tschuggen Grand Hotel’s Private Mountain event takes place between 30 November and 3 December 2023. Included in the package are three overnight stays on a half-board basis, with exclusive private mountain access on one day, as well as ski passes and spa access. A basic double room for two starts from around £2,000. Go to https://tschuggencollection.ch/en/hotel/of fer/private-mountain to book or call +41 81 378 99 99. Swiss operate multiple flights per day to Zurich and Geneva

your own private mountain to ski on? Asks Justine

TENNIS

Coco win can open floodgates, says Martina

MARTINA Navratilova has backed Coco Gauff to reach double figures for Grand Slam titles after the American teenager broke her duck at the US Open on Saturday night.

Gauff, 19, came from a set down to beat new world No1 Aryna Sabalenka 2-6 6-3 6-2 and delight a rapturous home crowd at Flushing Meadows. It saw her fulfill the promise she showed when reaching the fourth round of Wimbledon as a 15-year-old and Navratilova believes there is far more major success to come.

“I think she was just groomed for this from so far back but you still have to be the person that can handle it and she handles it with grace, humility,” said the 18-time Grand Slam winner.

“She’s just getting started. That’s the beauty of it. There were so many expectations put on her when she first came on tour, she burst through at Wimble-

Navratilova backs new US Open champion Gauff to reach double figures for Grand Slam titles, writes Frank Dalleres

don and people thought she’d be top five in a minute.

“I don’t know who those people were who were doubting her because it certainly wasn’t me.

“She’s not stopping so watch out world. If she doesn’t go into double digits for majors I would be surprised, if she stays healthy.”

INSPIRATION

Inspired by the Williams sisters, Gauff became a junior world No1 and turned pro while still at high school before her breakthrough run at Wimbledon in 2019.

Her rise since then has been steady rather than meteoric, reaching her first Grand Slam final last year in

Paris, where was soundly beaten by Iga Swiatek. She lost in the first round of Wimbledon this year but won two hard court tournaments in the run-up to the US Open, where she enjoyed silencing her doubters.

“Thank you to the people who didn’t believe in me,” Gauff told fans in Arthur Ashe Stadium during the trophy presentation.

“I tried my best to carry this with grace. To those who thought you were putting water on my fire, you were really adding gas to it and now I’m burning so bright.”

Gauff added later: “I felt like I lost a little bit of the dream as this journey has gone on – for sure after the Wim-

bledon loss. I felt like people were saying ‘Oh, she’s hit her peak and she's done. It was all hype’.

I SEE THE COMMENTS

“I see the comments. People don’t think I see it but I see it. I know who’s talking trash. So this means a lot to me.

“I wish I could give this trophy to my past self so she can be like ‘All those tears are for this moment’.”

Gauff, the first Ameri-

Navratilova has backed Gauff for major success

can teenager to win the US Open since Serena Williams in 1999, has flourished since teaming up with veteran coach Brad Gilbert in July. Gilbert, who helped Andre Agassi win six majors and Andy Roddick to his sole Slam, is officially a consultant to Gauff alongside Spanish coach Pere Riba. The results have been spectacular. Gauff immediately won in Washington, followed it up with her biggest title in Cincinnati, and now her first Slam.

Under 61-year-old Gilbert and Riba, her record reads 18-1. Not bad for a coach who admits she thinks he is “an old dude”.

SOME have dubbed it the “Miracle of Marseille”; for others it was the minimum England needed to show. But in Saturday night’s 27-10 win over Argentina in their opening match of the Rugby World Cup only one thing mattered: the result.

It had been a long time coming and in the south of France England delivered against a strong Pumas outfit. Down to 14 men for over 75 minutes, George Ford’s drop goals inspired England to victory to the surprise of many. Here’s what we have learned from their first match at the tournament.

TICKING THE SCORE BOARD

Twenty years ago, the drop goal became synonymous with an England World Cup triumph and though Saturday’s match was just a pool game, the same three-pointer did similar for the class of 2023.

Ford’s three drop goals were key in swinging the momentum from Argentina towards England, and his 27 points in total were a masterclass in keeping the scoreboard ticking and ensuring his side were never on the back foot.

It would have been easy – or cocky –to kick to the corner and bank on maul attack to score against the Pumas, but it was very mature to take the three points when they were on offer and build the score.

It may not always be the right option in future but England have shown that their armoury is stocked with another weapon – and other sides will need to learn to deal with that.

DISCIPLINE, DISCIPLINE, DISCIPLINE

Tom Curry’s early red card may very well be overturned. It looked accidental at best and there did not appear to be any malice in it.

ALIVE AND KICKING

That said, England need to front up to the fact they've had three players sent off for high tackles or head contact in the space of four games.

It was Owen Farrell against Wales, Billy Vunipola against Ireland and now Curry against Argentina.

Despite their gallant defensive display in Marseille, it is an area of the game England will need to improve upon.

The last thing they’ll want is a needless card against the other pool challengers and the risk of having their big guns out for the knockout rounds, but that’s the risk England continue to take.

RETURN OF ENGLAND’S EDGE

Maro Itoje, Ellis Genge, Jamie George and others looked to be on it over the weekend, in a way they haven’t for the last 12 months.

It was an England character not seen for a long period of time and one which has made a welcome return to

the international set-up.

Steve Borthwick’s side were always at their best when Itoje was causing a nuisance, and with a front row eager to dent the Pumas’ defence they looked powerful.

Even the likes of Dan Cole and Manu Tuilagi, probably in their last World Cups, were astonishing on Saturday.

England’s defence held firm and impressed throughout, but the same couldn’t be said for their attack.

TRY, TRY AND TRY AGAIN

No matter the buzz England and their fans will be feeling after a brilliant win – which puts them in pole position to finish top of Group D – they did not cross the whitewash.

England will need to use their remaining matches, against Japan, Chile and Samoa, to begin working on their attack.

It’s one thing getting the scoreboard ticking but it is another to run away with a game, and England will be conscious of the attacking threats the likes of Australia, France, Ireland and South Africa could provide in the latter stages of this tournament.

England won, and that is all that matters at this stage, but there will be concerns around the lack of variation in their attack.

But with Ford on fire with the boot, England will be looking to use that to take them as far as possible over the next two months.

Borthwick’s side surprised with Pumas win, but what did we learn, asks Matt Hardy

RUGBY UNION

Ford slotted 27 points, a new record for the fly-half

Man Utd place Antony on leave amid multiple assault claims

FRANK DALLERES

MANCHESTER United have placed

Antony on indefinite leave “in order to address” a series of allegations of assault on women.

Antony was withdrawn from the Brazil squad last week after his former partner alleged that he had physically assaulted her on multiple occasions.

Since then two more women have come forward to accuse the 23-year-old former Ajax forward of violence. He has denied the allegations.

It comes after United were severely criticised for their handling of Mason Greenwood, who also faced claims of domestic abuse.

Antony has not been suspended and it is understood that he will continue to earn his £10.4m salary despite not training or playing with the team.

“Manchester United acknowledges the allegations made against Antony,” the club said on Sunday.

“Players who have not participated in international matches are due back in training on Monday.

“However, it has been agreed with Antony that he will delay his return until further notice in order to address the allegations.

“As a club we condemn acts of violence and abuse. We recognise the importance of safeguarding all those involved in this situation, and ac-

ATHLETICS

Gauff Grand Slam breakthrough just the start, says Martina

BOK TO SQUARE ONE Promising Scotland beaten 18-3 in opener

knowledge the impact these allegations have on survivors of abuse.”

Antony described the move as a “mutual decision”, adding: “I have agreed with United to take a period of absence while I address the allegations made against me.

“I want to reiterate my innocence of the things I have been accused of, I will fully cooperate with the police.”

Antony is under investigation by Greater Manchester Police and authorities in Brazil in relation to the claims made by his former partner Gabriela Cavallin.

Cavallin says he threatened to throw her from a moving car while

pregnant last year and then headbutted and punched her in a Manchester hotel in January.

Antony described their relationship as “turbulent” in an interview last week but insisted he had never been violent towards her.

A second woman came forward last week to allege he injured her in a car in Brazil, while a third accused him of pushing her against a wall and trying to have sex with her at his home in England last year.

Antony – full name Antony Matheus dos Santos – said last week: “I am 100 per cent certain that I never touched any woman.”

‘I just enjoyed what I did’: Farah bows out with final race

FRANK DALLERES

MO FARAH brought down the curtain on one of the most glittering careers in athletics yesterday and declared: “I just enjoyed what I did.”

The 40-year-old laced up his spikes for the last time for a farewell appearance at the Great North Run, finishing fourth in the halfmarathon race. Farah, who retires with four Olympic gold medals and six World Championships, highfived the crowd as he completed the final stretch.

“It’s been an amazing journey when I look back, there’s been so

many messages from people all over the world saying thank you,” said the Briton.

“It’s a joy to see that because I just enjoyed what I did and I committed and continued to push myself to win medals again and again.

“To look back from the other side now and see people saying to you, ‘this is what you’ve given us, this is what you’ve done’ is incredible.”

Farah’s crowning achievement was becoming the first British man to win the 5,000m and 10,000m Olympic double at London 2012.

He retained his titles four years later in Rio.

Scotland began their Rugby World Cup campaign with a 18-3 defeat at the hands of defending champions South Africa. The Springboks looked lucky to finish the game with 15 men on the pitch after Jesse Kriel made contact with the head of Jack Dempsey but they managed to grind out a 6-3 half-time lead before PieterSteph du Toit and Kurt-Lee Arendse scored to leave the scoreline at 18-3. The result leaves South Africa second in Pool B behind Ireland with Tonga above Scotland in fourth.

Finn Russell’s Scotland just couldn’t get going in Marseille but have the chance to go again on Sunday 24 September when they face Tonga.

World Cup chiefs apologise for stadium farce

FRANK DALLERES

RUGBY World Cup organisers have apologised to supporters for the chaotic scenes which sparked fears of a deadly crush ahead of England’s match against Argentina. Limited access points and insufficient staffing led to a potentially dangerous situation outside the Stade Velodrome in Marseille on Saturday night. Former England international Brian Moore called it “beyond shambolic”, while thousands with tickets missed the start of their 27-10 win.

World Rugby, which announced on Saturday that it had launched an investigation, yesterday said sorry to

those who attended the match.

“Fans are the heartbeat of the tournament and we would like to apologise to fans impacted by yesterday’s access challenges,” the governing body said.“We are working hard to enhance the experience for all visiting.”

World Rugby insisted the crowd trouble had not led to any incidents and that all 63,000 ticketholders were able to take their seats eventually.

Any issues appeared to have been addressed by Sunday, when the venue hosted the Pool B fixture between South Africa and Scotland.

French officials were already in the spotlight over their hosting of

major sporting events following the mishandling of football’s Champions League final in 2022. Kettling of Liverpool supporters outside the Stade de France, which will host the Rugby World Cup final next month, could have led to a “mass fatality catastrophe”, an investigation concluded.

With Paris also staging next summer’s Olympic Games, French sports minister Amelie OudeaCastera insisted last week that they had “learned lessons”. But fans at Saturday’s game reported “potentially dangerous” scenes and “worrying crowd surges”.

ENGLAND ALIVE AND KICKING: P19

Livingstone shines as side complete rescue mission

MATT HARDY

ENGLAND recovered from a sloppy start with the bat yesterday to beat New Zealand by 79 runs in Southampton as Liam Livingstone starred. Jos Buttler’s side fell to 8-3 and 55-5 inside 13 overs with Jonny Bairstow, Harry Brook, Joe Root and Ben Stokes dispatched for six, two, zero and one respectively.

Buttler added 30 runs but Livingstone’s unbeaten 95 rescued England alongside Sam Curran’s 42 runs –Moeen Ali added 33 and David Willey scored seven.

England had set a target of 227 for New Zealand to take a 2-0 series lead

but the visitors saw Finn Allen fall in the second ball.

Daryl Mitchell put up the most resistance in the reduced 34-over per side match with a respectable 57 but his departure was the first of four inside just 10 balls as England romped home to a 79-run win.

Player of the match Liam Livingstone said: “I wouldn't quite say it was a rescue mission.

“We pride ourselves on depth in our batting and getting out of situations like today. I thought Sammy [Curran] batted really well. We needed that depth today.”

England captain Jos Buttler said: “I am delighted.”

Antony has denied ever being violent towards the three women

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