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Petrol retailers hoping for a return to normal after motorists drained pumps over the weekend have faced yet more forecourt queues – as parts of the economy started to feel the strain.

In some areas, up to 90% of pumps ran dry, according to industry estimates – and there was little sign of the panic-buying diminishing on Monday, with consumers apparently ignoring pleas to stop.

That left industries from taxi drivers to the meat processing sector – and even non-league football – facing difficulties and prompted calls for healthcare workers to be given priority access to fuel.

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No plans for army drivers to ease fuel crisis

The British Medical Association said there was a real risk that some would not be able to get to work.

But the Petrol Retailers’ Association (PRA), representing two-thirds of all UK forecourts, said that with many drivers’ tanks now full after the weekend it was watching for an “easing of demand”.

The government said there were no plans to bring in the army to drive lorries to deliver fuel to petrol stations though environment secretary George Eustice said the military’s contingencies unit was always on standby.

Mr Eustice said: “There does come a point – as we saw during a previous episode of panic buying during the pandemic on food – where things settle down and people get used to it, and return to life as normal again.

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“The sooner people do that the better.

“The only reason we don’t have petrol on the forecourts is that people are buying petrol when they don’t need to.”

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5,000 extra drivers ‘just about scratches the surface’

The crisis mushroomed after the disclosure last week that a few petrol stations had seen supply disrupted, due to the nationwide shortage of HGV drivers, prompting widespread panic-buying.

It was still in evidence for a fourth day on Monday, with roads gridlocked as motorists queued for more than an hour in some cases, with lines of cars trailing out of forecourts onto the public highway.

Some petrol retailers – Asda and EG group – have been restricting fuel sales to £30 a time.

Even if the buying frenzy does abate, motorists face a further headache as the price of Brent crude on international oil markets continued to climb, reaching a three-year high of just under $80 a barrel – likely to result in higher prices at the pumps to come.

Meanwhile the RAC, the motoring organisation, said it was aware of “a small number of retailers taking advantage of the current delivery situation by hiking prices”.

The industry has pleaded with consumers to stop panic-buying and sought to assure the public that, with fuel stocks at refineries and terminals at normal levels, it is only a shortage of lorry drivers that has restricted deliveries of fuel.

Gordon Balmer, executive director of the PRA, which represents independent fuel retailers, said: “Delayed deliveries and unusual buying levels have led to supply pressure and a number of forecourts’ stockouts.

“It is unlikely that the vehicles filled over the weekend will need refuelling again soon.

“As a result, we will watch carefully for a possible easing of demand and normalising of forecourt stocks over the coming days.”

RAC spokesman Simon Williams noted however that the panic-buying over the weekend meant every forecourt in the country now needs to re-stock at the same time, putting “unbelievable pressure on the supply chain”.

He added: “We urge drivers to only take the fuel they really need.

“Stock piling in containers only makes the situation worse for those who desperately need fuel as well as potentially causing unnecessary fire risks if not stored correctly.”

Among industries feeling the knock-on effect was the beleaguered meat-processing sector – already buffeted by recent crises such as a shortage of the carbon dioxide used to stun animals for slaughter as well as an exodus of foreign workers.

The British Meat Processor’ Association (BMPA) told Sky News that the petrol crisis had resulted in some companies missing key staff such as vets and meat inspectors.

“So far it has not caused any plants to completely shut but we are monitoring the unfolding situation very carefully,” the BMPA said in a statement.

Meanwhile one private hire taxi firm emailed clients to say its services could be affected to up to 48 hours, warning of delays and that it would not be able to honour some long-distance bookings.

Make UK, the manufacturers’ organisation, said there were anecdotal reports of some firms starting to have problems with the delivery of finished products – though it was unclear whether that was to do with fuel or the wider HGV driver problem that lies behind it.

The crisis has even taken its toll on the sporting world. Non-league Lewes Football Club said that owing to the fuel shortage and the difficulty for players, coaches and officials to attend the game, its mid-week fixture against Carshalton Athletic would be postponed.

The government’s attempts to address the issue have included plans to allow 5,000 more lorry drivers into the UK under temporary three-month visas and the suspension of competition laws to allow fuel industry to work together to address shortfalls.

But they have received a lukewarm response from industry, with complaints that the moves fail to address long-term problems.

Rod McKenzie, head of policy for the Road Haulage Association – which says there is a shortage of 100,000 drivers – told Sky News that the temporary visa move “just about scratches the surface”.

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Chair candidates battle to check in at Premier Inn-owner Whitbread

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Chair candidates battle to check in at Premier Inn-owner Whitbread

Two chairs of FTSE-100 companies are vying to succeed Adam Crozier at the top of Whitbread, the London-listed group behind the Premier Inn hotel chain.

Sky News has learnt that Christine Hodgson, who chairs water company Severn Trent, and Andrew Martin, chair of the testing and inspection group Intertek, are the leading contenders for the Whitbread job.

Mr Crozier, who has chaired the leisure group since 2018, is expected to step down later this year.

The search, which has been taking place for several months, is expected to conclude in the coming weeks, according to one City source.

Ms Hodgson has some experience of the leisure industry, having served on the board of Ladbrokes Coral Group until 2017, while Mr Martin was a senior executive at the contract caterer Compass Group and finance chief at the travel agent First Choice Holidays.

Under Mr Crozier’s stewardship, Whitbread has been radically reshaped, selling its Costa Coffee subsidiary to The Coca-Cola Company in 2019 for nearly £4bn.

The company has also seen off an activist campaign spearheaded by Elliott Advisers, while Mr Crozier orchestrated the appointment of Dominic Paul, its chief executive, following Alison Brittain’s retirement.

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It said last year that it sees potential to grow the network from 86,000 UK bedrooms to 125,000 over the next decade or so.

Mr Crozier is one of Britain’s most seasoned boardroom figures, and now chairs BT Group and Kantar, the market research and data business backed by Bain Capital and WPP Group.

He previously ran the Football Association, ITV and – in between – Royal Mail Group.

On Friday, shares in Whitbread closed at £25.41, giving the company a market capitalisation of about £4.5bn.

Whitbread declined to comment this weekend.

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Bank chiefs to Reeves: Ditch ring-fencing to boost UK economy

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Bank chiefs to Reeves: Ditch ring-fencing to boost UK economy

The bosses of four of Britain’s biggest banks are secretly urging the chancellor to ditch the most significant regulatory change imposed after the 2008 financial crisis, warning her its continued imposition is inhibiting UK economic growth.

Sky News has obtained an explosive letter sent this week by the chief executives of HSBC Holdings, Lloyds Banking Group, NatWest Group and Santander UK in which they argue that bank ring-fencing “is not only a drag on banks’ ability to support business and the economy, but is now redundant”.

The CEOs’ letter represents an unprecedented intervention by most of the UK’s major lenders to abolish a reform which cost them billions of pounds to implement and which was designed to make the banking system safer by separating groups’ high street retail operations from their riskier wholesale and investment banking activities.

Their request to Rachel Reeves, the chancellor, to abandon ring-fencing 15 years after it was conceived will be seen as a direct challenge to the government to take drastic action to support the economy during a period when it is forcing economic regulators to scrap red tape.

It will, however, ignite controversy among those who believe that ditching the UK’s most radical post-crisis reform risks exacerbating the consequences of any future banking industry meltdown.

In their letter to the chancellor, the quartet of bank chiefs told Ms Reeves that: “With global economic headwinds, it is crucial that, in support of its Industrial Strategy, the government’s Financial Services Growth and Competitiveness Strategy removes unnecessary constraints on the ability of UK banks to support businesses across the economy and sends the clearest possible signal to investors in the UK of your commitment to reform.

“While we welcomed the recent technical adjustments to the ring-fencing regime, we believe it is now imperative to go further.

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“Removing the ring-fencing regime is, we believe, among the most significant steps the government could take to ensure the prudential framework maximises the banking sector’s ability to support UK businesses and promote economic growth.”

Work on the letter is said to have been led by HSBC, whose new chief executive, Georges Elhedery, is among the signatories.

His counterparts at Lloyds, Charlie Nunn; NatWest’s Paul Thwaite; and Mike Regnier, who runs Santander UK, also signed it.

While Mr Thwaite in particular has been public in questioning the continued need for ring-fencing, the letter – sent on Tuesday – is the first time that such a collective argument has been put so forcefully.

The only notable absentee from the signatories is CS Venkatakrishnan, the Barclays chief executive, although he has publicly said in the past that ring-fencing is not a major financial headache for his bank.

Other industry executives have expressed scepticism about that stance given that ring-fencing’s origination was largely viewed as being an attempt to solve the conundrum posed by Barclays’ vast investment banking operations.

The introduction of ring-fencing forced UK-based lenders with a deposit base of at least £25bn to segregate their retail and investment banking arms, supposedly making them easier to manage in the event that one part of the business faced insolvency.

Banks spent billions of pounds designing and setting up their ring-fenced entities, with separate boards of directors appointed to each division.

More recently, the Treasury has moved to increase the deposit threshold from £25bn to £35bn, amid pressure from a number of faster-growing banks.

Sam Woods, the current chief executive of the main banking regulator, the Prudential Regulation Authority, was involved in formulating proposals published by the Sir John Vickers-led Independent Commission on Banking in 2011.

Legislation to establish ring-fencing was passed in the Financial Services Reform (Banking) Act 2013, and the regime came into effect in 2019.

In addition to ring-fencing, banks were forced to substantially increase the amount and quality of capital they held as a risk buffer, while they were also instructed to create so-called ‘living wills’ in the event that they ran into financial trouble.

The chancellor has repeatedly spoken of the need to regulate for growth rather than risk – a phrase the four banks hope will now persuade her to abandon ring-fencing.

Britain is the only major economy to have adopted such an approach to regulating its banking industry – a fact which the four bank chiefs say is now undermining UK competitiveness.

“Ring-fencing imposes significant and often overlooked costs on businesses, including SMEs, by exposing them to banking constraints not experienced by their international competitors, making it harder for them to scale and compete,” the letter said.

“Lending decisions and pricing are distorted as the considerable liquidity trapped inside the ring-fence can only be used for limited purposes.

“Corporate customers whose financial needs become more complex as they grow larger, more sophisticated, or engage in international trade, are adversely affected given the limits on services ring-fenced banks can provide.

“Removing ring-fencing would eliminate these cliff-edge effects and allow firms to obtain the full suite of products and services from a single bank, reducing administrative costs”.

In recent months, doubts have resurfaced about the commitment of Spanish banking giant Santander to its UK operations amid complaints about the costs of regulation and supervision.

The UK’s fifth-largest high street lender held tentative conversations about a sale to either Barclays or NatWest, although they did not progress to a formal stage.

HSBC, meanwhile, is particularly restless about the impact of ring-fencing on its business, given its sprawling international footprint.

“There has been a material decline in UK wholesale banking since ring-fencing was introduced, to the detriment of British businesses and the perception of the UK as an internationally orientated economy with a global financial centre,” the letter said.

“The regime causes capital inefficiencies and traps liquidity, preventing it from being deployed efficiently across Group entities.”

The four bosses called on Ms Reeves to use this summer’s Mansion House dinner – the City’s annual set-piece event – to deliver “a clear statement of intent…to abolish ring-fencing during this Parliament”.

Doing so, they argued, would “demonstrate the government’s determination to do what it takes to promote growth and send the strongest possible signal to investors of your commitment to the City and to strengthen the UK’s position as a leading international financial centre”.

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Post Office to unveil £1.75bn banking deal with big British lenders

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Post Office to unveil £1.75bn banking deal with big British lenders

The Post Office will next week unveil a £1.75bn deal with dozens of banks which will allow their customers to continue using Britain’s biggest retail network.

Sky News has learnt the next Post Office banking framework will be launched next Wednesday, with an agreement that will deliver an additional £500m to the government-owned company.

Banking industry sources said on Friday the deal would be worth roughly £350m annually to the Post Office – an uplift from the existing £250m-a-year deal, which expires at the end of the year.

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The sources added that in return for the additional payments, the Post Office would make a range of commitments to improving the service it provides to banks’ customers who use its branches.

Banks which participate in the arrangements include Barclays, HSBC, Lloyds Banking Group, NatWest Group and Santander UK.

Under the Banking Framework Agreement, the 30 banks and mutuals’ customers can access the Post Office’s 11,500 branches for a range of services, including depositing and withdrawing cash.

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The service is particularly valuable to those who still rely on physical cash after a decade in which well over 6,000 bank branches have been closed across Britain.

In 2023, more than £10bn worth of cash was withdrawn over the counter and £29bn in cash was deposited over the counter, the Post Office said last year.

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A new, longer-term deal with the banks comes at a critical time for the Post Office, which is trying to secure government funding to bolster the pay of thousands of sub-postmasters.

Reliant on an annual government subsidy, the reputation of the network’s previous management team was left in tatters by the Horizon IT scandal and the wrongful conviction of hundreds of sub-postmasters.

A Post Office spokesperson declined to comment ahead of next week’s announcement.

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