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The new boss of business lobby group the CBI says she is confident it will win back the trust of ministers and members within six months, but will have to “completely change” to survive allegations of sexual misconduct and a toxic culture.

Rain Newton-Smith started work as CBI director general this week with its future in doubt following allegations that two employees were raped by colleagues.

The claims prompted government and opposition parties to pause engagement with the organisation, and scores of major companies to end or suspend their membership, including Tesco, NatWest and John Lewis.

Speaking on her first day Ms Newton-Smith told Sky News: “I am really confident the CBI can survive. It’s not going to be the same CBI that we’ve seen over the past few weeks for sure, it’s not going to be the same organisation. We have to completely change and we will.

“I’m determined we’ll definitely be at that table in six months’ time and we need to be, because that’s what our members want from us, and we have to be able to have those conversations with government,” she said.

Ms Newton-Smith was appointed from a role at Barclays to replace former director general Tony Danker, who was sacked earlier this month following separate misconduct allegations.

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CBI boss Tony Danker sacked

She previously served as the CBI’s chief economist for seven years, including the period when the most serious misconduct is alleged to have happened, but rejected concerns that made her unable to pursue reform.

“I think if I’ve ever seen wrongdoing, I’ve always addressed it. And if anyone’s come to me with any issues, I’ve always let their voice been heard, and I’ve acted on it.”

“When I was here, if people raised issues with me, I supported them.

“This is really challenging, the stories we have heard are so harrowing and everyone feels them really deeply. They’re shocking and they’re painful,” she said.

“There are many things [that] happened at some time while I was here, but I am determined that we don’t allow those things to happen again, and that voices and stories are heard and acted on.”

Following an external investigation by employment lawyers the CBI will adopt 35 recommendations to improve its employment culture.

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Which companies have quit CBI?

Ms Newton-Smith said she would canvas members to hear what they wanted from the organisation in future to try to win back their trust.

She also said the organisation was “too hierarchical” and would work to address the structure to improve the culture for more staff, who she said, had been “broken” by the allegations.

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“I think it starts with listening, right, and I think it starts with humility. What’s really hard coming into this job, as a leader, is I have to come into this job and I’ve got a staff who are broken, who’ve gone through a really, really terrible time.”

The crisis at the CBI has led some to question the viability of a group that represents 190,000 companies with disparate agendas.

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CBI president acknowledges failures

This week the prime minister convened a meeting with 200 business leaders in London at which Chancellor Jeremy Hunt said that engaging with a voice for business was helpful, but added there was “no point” in talking to the CBI in its current turmoil.

Ms Newton-Smith pointed to the CBI’s role in facilitating the furlough scheme during COVID, and recent lobbying for business-friendly measures in the recent budget, as signs of its value, particularly going into an election.

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“What we are focused on is, what does a brilliant business organisation look like that can stand toe-to-toe with the chancellor, the leader of the opposition, with the prime minister and tackle the big issues of the day?

“We have got a general election next year and business wants a strong voice to set out the case for what they want to see in those manifestos.

“And I haven’t seen another organisation that has over 100 economists, policy specialists across the whole spectrum, and knowledge that goes deep across the regions and the devolved nations in the UK.

“So I think the government will need us, I think they have acknowledged that in the past, and I think they will going forward.”

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Woman and three teenagers arrested over M&S, Co-op and Harrods cyber attacks

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Woman and three teenagers arrested over M&S, Co-op and Harrods cyber attacks

Four people have been arrested by police investigating cyber attacks targeting M&S, Co-op and Harrods.

A 20-year-old woman and two males, both aged 19, and a male aged 17, were detained in London and the West Midlands this morning as part of a National Crime Agency (NCA) operation.

They were arrested at their homes on suspicion of Computer Misuse Act offences, blackmail, money laundering and participating in the activities of an organised crime group.

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Electronic devices were seized from the suspects and are currently being analysed by forensic experts.

M&S halted online orders, and shelves were empty in shops after the cyber attack on the retailer earlier this year.

The initial hack into the retailer’s systems took place in April through “sophisticated impersonation” involving a third party.

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Disruption is expected to continue at the retailer until the end of this month.

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Mickey Carroll in May answered why M&S cyber attack was so bad.

The Co-op and Harrods were also subsequently targeted by hackers.

Paul Foster, head of the NCA’s National cybercrime unit described the arrests as a “significant step” in their investigation, which remains “one of the Agency’s highest priorities”.

He added: “…our work continues, alongside partners in the UK and overseas, to ensure those responsible are identified and brought to justice.”

The National Crime Agency is keen to “signal” to “future victims” the “importance of seeking support and engaging with law enforcement”, stating that “the NCA and policing are here to help”.

The NCA has also thanked M&S, Co-op and Harrods for their support in their investigations.

The arrests, which took place early on Thursday morning, were supported by officers from the West Midlands Regional Organised Crime Unit and the East Midlands Special Operations Unit.

Earlier this week, the chairman of M&S told MPs that the hack had been “traumatic” and like an “out-of-body experience”.

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Archie Norman, however, refused to be drawn on whether the retailer had paid any ransom.

“We are not discussing any of the details of our interaction with the threat actor, including this subject, but that subject is fully shared with the NCA,” he said.

It is estimated that the cyber attack will cost M&S up to £300m this year.

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Days after M&S was attacked, the Co-op was targeted and forced to shut down some internal systems.

Harrods was then hacked, and also had to shut some systems despite its website and shops continuing to operate.

Of those arrested, a 17-year-old British male and a 19-year-old Latvian male were from the West Midlands.

A 19-year-old man was from London and a 20-year-old woman from Staffordshire.

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US-listed Ulta Beauty swoops on high street chain Space NK

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US-listed Ulta Beauty swoops on high street chain Space NK

A New York-listed company with a valuation of more than $21bn is to snap up Space NK, the British high street beauty chain.

Sky News has learnt that Ulta Beauty, which operates close to 1,500 stores, is on the verge of a deal to buy Space NK from existing owner Manzanita Capital.

Ulta Beauty is understood to have registered an acquisition vehicle at Companies House in recent weeks.

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The exact price being paid by Ulta was unclear on Thursday morning, although one source said it was likely to be well in excess of £300m.

Manzanita Capital, a private investment firm, engaged bankers at Raymond James to oversee an auction in April 2024.

The firm has owned Space NK for more than 20 years.

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Manzanita has also owned the French perfume house Diptyque and Susanne Kaufmann, an Austrian luxury skincare brand.

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Founded in 1993 by Nicky Kinnaird, Space NK – which is named after her initials – trades from dozens of stores and employs more than 1,000 people.

It specialises in high-end skincare and cosmetics products.

Manzanita previously explored a sale of Space NK in 2018, hiring Goldman Sachs to handle a strategic review, but opted not to proceed with a deal.

None of Ulta, Manzanita, Space NK and Raymond James could be reached for comment.

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Royal Mail to scrap second-class post on Saturdays and some weekdays

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Royal Mail to scrap second-class post on Saturdays and some weekdays

Royal Mail is to be allowed to scrap Saturday second-class stamp deliveries, under a series of reforms proposed by the communications regulator.

From 28 July, Royal Mail will also be allowed to deliver second-class letters on alternate weekdays, Ofcom said.

The post will still be delivered within three working days of collection from Monday to Friday.

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The proposals had already been raised by Ofcom after a consultation was announced in 2024, and the scale back was proposed early this year.

Royal Mail had repeatedly failed to meet the so-called universal service obligation to deliver post within set periods of time.

Those delivery targets are now being revised downwards.

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Rather than having to have 93% of first-class mail delivered the next day, 90% will be legally allowed.

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The sale of Royal Mail was approved in December

The target for second-class mail deliveries will be lowered from 98.5% to arrive within three working days to 95%.

A review of stamp prices has also been announced by Ofcom amid concerns over affordability, with a consultation set to be launched next year.

It’s good news for Royal Mail and its new owner, the Czech billionaire Daniel Kretinsky. Ofcom estimates the changes will bring savings of between £250m and £425m.

A welcome change?

Unsurprisingly, the company welcomed the announcement.

“It is good news for customers across the UK as it supports the delivery of a reliable, efficient and financially sustainable universal service,” said Martin Seidenberg, the group chief executive of Royal Mail’s parent company, International Distribution Services.

“It follows extensive consultation with thousands of people and businesses to ensure that the postal service better reflects their needs and the realities of how customers send and receive mail today.”

Citizens Advice, however, doubted whether services would improve as a result of the changes.

“Today, Ofcom missed a major opportunity to bring about meaningful change,” said Tom MacInnes, the director of policy at Citizens Advice.

“Pushing ahead with plans to slash services and relax delivery targets in the name of savings won’t automatically make letter deliveries more reliable or improve standards.”

Acknowledging long delays “where letters have taken weeks to arrive”, Ofcom said it set Royal Mail new enforceable targets so 99% of mail has to be delivered no more than two days late.

Changing habits

Less than a third of letters are sent now than 20 years ago, and it is forecast to fall to about a fifth of the letters previously sent.

According to Ofcom research, people want reliability and affordability more than speedy delivery.

Royal Mail has been loss-making in recent years as revenues fell.

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In response to Ofcom’s changes, a government spokesperson said: “The public expects a well-run postal service, with letters arriving on time across the country without it costing the earth. With the way people use postal services having changed, it’s right the regulator has looked at this.

“We now need Royal Mail to work with unions and posties to deliver a service that people expect, and this includes maintaining the principle of one price to send a letter anywhere in the UK”.

Ofcom said it has told Royal Mail to hold regular meetings with consumer bodies and industry groups to hear their experiences implementing the changes.

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