The owners of Britain’s fourth-biggest supermarket chain are drawing up plans to identify a new chief executive a year after acquiring it in a £7bn deal.
Sky News has learnt that Morrisons‘ controlling shareholder, the US-based private equity firm Clayton Dubilier & Rice (CD&R), has retained Egon Zehnder International to strengthen the grocer’s executive ranks.
Retail industry sources said this weekend that Egon Zehnder had been approaching potential recruits “with one eye” on finding a successor to David Potts, who has run Morrisons since 2015.
Mr Potts is not expected to leave until at least 2024, and is focused on improving the Bradford-based company’s performance after it was recently displaced as Britain’s third-biggest supermarket chain by the German discounter Aldi.
A number of internal candidates are expected to vie for the opportunity of replacing Mr Potts, according to insiders.
One said that CD&R was “continuously” working on succession planning at Morrisons and its other portfolio companies.
Sir Terry Leahy, the former Tesco chief executive who has a long-standing relationship with CD&R, will play a key role in the succession planning process as Morrisons’ chairman.
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Earlier this year, Trevor Strain, Morrisons’ chief operating officer and previously its finance chief, left the company, having long been regarded as Mr Potts’ inevitable successor.
Morrisons delisted from the London Stock Exchange last year, ending a 54-year run as a publicly traded company.
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Recent industry data showed that Morrisons had been usurped by Aldi in market share terms – a milestone in a sector which rarely demonstrates change in the membership of its top ranks.
Morrisons struck a deal earlier this year to rescue the convenience chain McColl’s, the market share of which was not included in that data.
The government has agreed to have an independent IT expert review of a Post Office software system predating Horizon, amid claims dozens more sub-postmasters may have been wrongly convicted.
The Capture software was rolled out across branches in the 1990s, years before the notorious Horizon system was introduced.
Post Office minister Kevin Hollinrake has met with a former sub-postmaster and a lawyer representing 35 people who believe they were wrongly accused of stealing.
It was agreed between MPs and the Post Office minister that an independent IT expert would assess evidence claiming to “prove” Capture software was prone to glitches.
Steve Marston, 68, believes he was wrongly convicted of theft and false accounting after errors caused by Capture accounting software.
Auditors found shortfalls of £79,000 at his branch in Greater Manchester in 1998. He subsequently pleaded guilty to theft and false accounting.
A predecessor to Horizon, the Capture software was developed by the Post Office and rolled out from 1992.
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‘Extremely happy’
Mr Marston, representing numerous others claiming to be victims, met with Post Office Minister Kevin Hollinrake in Central London.
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He tearfully told Sky News after the meeting that he was “overwhelmed” and “extremely happy” with the way the meeting went.
He presented a copy of the original Capture software, also shown to Sky News, which Mr Marston describes as “definitive proof” of wrongful convictions.
Campaigners discovered floppy disks with the software on them, dating back to the 90s.
Mr Marston says they show that errors in the system could generate false shortfalls in accounts, and believes Capture evidence was used in his prosecution.
A ‘significant meeting’
Neil Hudgell, who is representing 35 former sub-postmasters who used Capture, said it was a “significant meeting” with the Post Office minister.
“What we are going to do now, with the consent of the government and agreement of the Department for Business and Trade,” he said, “is run that past an independent person to stand up what we say is the case.
“It is a very similar pattern of IT glitches that predate the Horizon system by a number of years.”
Former sub-postmasters say that it appears errors occurred when upgrades were made to the software in the 90s.
Other factors such as power cuts are also thought to be another possible reason for faults.
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Steve Lewis lost his job in 2000, after raising concerns about shortfalls and Capture software glitches.
“I’ve always been looked on as being the man who robbed the post office,” he said. “I lost my post office, the commercial buildings that I had moved my office to, and was forced to sell my family home.”
Mr Lewis claims he was warned “not to be a troublemaker” and told the issues were only happening to him.
It wasn’t until he watched the ITV drama Mr Bates Vs The Post Office that he “realised” similarities between Horizon victims and himself such as “unexplained losses”.
‘Mirror image of what Post Office did with Horizon’
Documents seen by Sky News also show that the Post Office knew Capture was prone to glitches which could cause accounting issues.
In January the government ordered the Post Office to investigate the claims related to Capture.
Labour MP Kevan Jones has taken up the cause and describes one case as being “a mirror image” of what “the Post Office did with Horizon victims”.
He continued: “Added to that, we’ve now got the original computer floppy disks where I think it proves that it does throw up shortfalls.
“I think that’s quite a compelling case for these cases to be looked at again and compensation awarded.”
‘We continue to investigate’
A Post Office spokesperson said: “We are in contact with Steve Marston and other past users of Capture and are grateful to them for all the information they have so far shared with us.
“We continue to actively investigate a number of lines of inquiry relating to Capture and throughout this we have regularly kept the Department for Business and Trade and Kevan Jones MP up to date with our findings.
“We have now shared a recommendation with the Department about what should happen next and hope to provide further information with past users of Capture as soon as we’re able to.”
A Department for Business and Trade spokesperson said: “As soon as these accusations came to light, we asked the Post Office to investigate the Capture system.
“We are now reviewing all the materials provided to us, including those from postmasters and Post Office, and we will set out next steps shortly.”
Mr Hunt said: “I think the economy, we are seeing, has turned the corner, people are beginning to feel that.”
“That will continue during the course of this year. But the fundamentals for the UK economy, yes, are very strong indeed,” he added.
The cost of living crisis, brought about by months of double-digit inflation last year, has been tough, Mr Hunt said.
But sticking to his economic plan, along with the Bank of England’s work to control interest rates, will bring about “better times”, he insisted – in a sign of the likely economic messaging from the Tories ahead of the coming general election.
“If we stick to that plan we can see that we will have better times ahead,” he said.
He added: “We don’t pretend that it hasn’t been tough, it’s been very tough in the UK and in many other countries.
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“We now have the biggest technology industry in Europe. That is a big positive for families up and down the country in the years ahead.”
Sanctions warning for Iran
When asked about sanctions on Iran, following its strikes on Israel last weekend, Mr Hunt said he will be pushing for more to be added in his meetings with leaders of the G7 group of nations and with US Treasury Secretary Janet Yellen.
“What I would say is this: The talk ten days ago was of the West drifting away from its support for Israel. But when Iran attacked Israel, Western support was rock solid.
“And if Iran takes action that destabilises the global economy through what it does in the Middle East then they will face a concerted response from Western countries,” he said.
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‘I don’t want to say anything negative about Liz Truss’
Mr Hunt declined to speak ill of former prime minister Liz Truss when asked if she was harming the Conservative Party.
“I think Liz will be the first to accept that during her time as prime minister, mistakes were made,” he said of her 49-day tenure.
During her premiership government borrowing costs soared; the pound hit a 37-year low against the dollar – making imports more expensive; mortgage rates soared and the Bank of England made an unprecedented intervention to stop pension funds collapsing.
“She appointed me as chancellor. And so, you know, I don’t want to say anything negative about Liz Truss,” Mr Hunt said.
Almost one million private renters in England have been handed no-fault evictions since the Conservative government promised to abolish them, new data has shown.
Research carried out by YouGov on behalf of homelessness charity Shelter – and shared exclusively with Sky News – showed that since April 2019 a total of 943,000 people had been given Section 21 notices, which is the equivalent of more than 500 renters every day.
The figures also showed unwanted moves were costing private renters in England £550m a year, with 830,000 people having to move in the last 12 months alone due to either their fixed tenancies coming to an end, being priced out by rent increases or being served with a Section 21.
Add in the soaring upfront costs for rents and deposits and unwanted moves are costing more than £1bn a year – or an average of £1,245 per person.
Polly Neate, Shelter’s chief executive, said tenants were “bearing the cost of the government’s inaction” and warned any further delays to banning no-fault evictions would see more people “tipped into homelessness”.
But Levelling Up minister Jacob Young defended the government. He said abolishing Section 21s was “the biggest change to the private rented sector in more than 30 years” so it “takes time to make sure we get it right”.
A Section 21 notice is the legal mechanism allowing landlords to evict tenants without providing a reason, which creates uncertainty for those who rent their homes.
The government first promised to ban them five years ago this week– back when Theresa May was still in Number 10.
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Yet despite subsequent Conservative leaders pledging to see through the policy, it still hasn’t come into law – with the housing secretary announcing an indefinite delay to the Renters Reform Bill last month.
‘I had a meltdown’
Natalie was served with two Section 21 notices within 18 months.
The 47-year-old from Brighton told Sky News she received the first one just after COVID and she took it in her stride. She said: “It wasn’t an ideal rental, it was quite dilapidated… but I had got into quite a good relationship with the landlord and I wasn’t freaking out. They just wanted to sell their flat and get out of the rental market.”
However, the relationship soon soured and turned into a “nasty environment” as she struggled to find a new home in a market with soaring costs and poor quality places.
“You couldn’t even see a property without having a £35k guarantor or you would have to have a whole year’s rent in advance and it just turned into a figures game,” said Natalie.
“If you don’t look good on paper, you are not going to get to see a flat, you are not going to be considered for it. You are not going to tick all the boxes. It is financial discrimination.”
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Natalie faced two no-fault evictions within 18 months
After staying with friends for two months, Natalie found a new property, but in the first three weeks, it had flooded, and she noticed day by day the “shoddy workmanship”.
And after a year, again through no fault of her own, she got a call from the estate agent to say the rent was going up by £150 a month and she would need to leave.
Natalie said she had a “meltdown”.
“It’s an awful thing, not feeling like you’re an adult and not being able to support yourself or find space in a location you have decided is home – finding out that it doesn’t mean anything that you have been living there for 21 years,” she said.
She added: “I’d like people to be able to have a home if we are living in a so-called civilised society. How’s anybody supposed to get anywhere without having their home? It should just be like water and air – we all need that to function.
“Something really drastic needs to be done.”
Tories criticised for ‘excuse’ holding back change
Mr Young, the Levelling Up minister, told Sky News his “hope” and “primary focus” was to see the bill passed, banning Section 21s for new tenancies before the next general election – which must take place before the end of January 2025.
But he couldn’t “give a commitment on a solid date” for the ban to also apply to existing tenancies, meaning millions – including Natalie – would continue to be at risk of losing their homes.
“We have to do this in a proportionate and phased way, working with the sector to make sure our reforms are actually effective,” he told Sky News.
“If we were to abolish everything straightaway, that would create a lot of uncertainty in the sector.”
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However, Shelter’s Ms Neate argued the reason for the delay was not about getting the legislation right, but about “bowing to backbench landlords”.
A group of Tory MPs – a number of whom are landlords themselves – raised concerns the courts were not prepared for the legal cases that could result from the simpler mechanism being outlawed.
As a result, the government said Section 21s would remain in place until an assessment had been made of whether the legal system could handle the changes.
But Ms Neate called it an “excuse”. She said: “The reason why they’re delaying is because they’re under pressure from their own backbenchers, many of whom are landlords, who just don’t want to see no-fault evictions ending.
“Why you would want the right to evict somebody for absolutely no reason is beyond me, frankly.”
She added: “Our frontline services every single day are seeing the worst effects of this.
“Section 21 no-fault eviction is one of the leading causes of homelessness in this country. And that’s why we’re so eager for the government to end it.”
Government still ‘committed’ to abolishing no-fault evictions
Mr Young denied there were “vested interests” in his party and said he did not “begrudge” his colleagues for having rental properties.
He said: “We can’t just listen to one side of the sector in this argument. It has to be that we’re delivering a bill that benefits both tenants and landlords.
“This bill is about protecting good tenants and landlords, and pitting them against the rogue actors in the system.”
Revealing his own aunt had been subject to a Section 21 just before Christmas, Mr Young added: “It takes time to make sure that we get it right. There are 11 million renters in the country. If we get it wrong for those 11 million renters, that doesn’t help them at all.
“I know the uncertainty that [Section 21s] can provide to families. That’s why I’m committed to abolishing it. That’s why I’m focused on delivering this.”
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Conservative minister Jacob Young defended the government, despite his aunt being subject to a Section 21 before Christmas
Matthew Pennycook, Labour’s shadow minister for housing and planning, said his party is committed to ending the “ever-present fear” of Section 21s “immediately” if it gets into power – and would put forward amendments for government legislation to speed up the process.
He told Sky News the abolition of no-fault evictions could be done “overnight” if the Conservatives chose to, leading to “a stable private rental system… [where] families can live and thrive in what should be their homes, not just an asset that can just be taken back at a moment’s notice”.
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Labour promises ‘immediate’ end to no-fault evictions
Mr Pennycook also said he believed the court system could “cope” with the changes, but added: “I think what private tenants would argue is [the government has] had five years to get to the point where that they can introduce a system to honour this commitment to abolish Section 21 notices, and they’ve played around for far too long.
“We think they’re selling out to vested interests in bringing these changes forward.”