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The government doesn’t think Donald Trump will impose trade tariffs on the UK, but is “prepared for all scenarios”, a cabinet minister has said. 

Darren Jones, the chief secretary to the Treasury, told Sky News’ Sunday Morning with Trevor Phillips that the former president’s return to the White House “could be an enormously positive thing with lots of opportunities”.

Mr Trump has threatened to impose tariffs on all imports into the United States, singling out Canada, Mexico, and China as countries that could face steeper measures within hours of his inauguration on Monday.

Asked what the government will do if that happens to the UK, Mr Jones said that was a “hypothetical” question and to wait and see “what actually happens”.

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“If that were to happen, I will come back and lay out the details for you. But the point is, is that I don’t think we’re going to be in that scenario,” Mr Jones said.

Darren Jones is asked the same quesion eight times by Kay Burley
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Darren Jones

He said there is a narrative in the UK that Mr Trump’s presidency poses “a big risk for Britain”, when this isn’t the case.

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“Britain is a brilliant country with huge capabilities and assets which are valued not just to the British people, but to the American economy and other parts of the world,” he said.

“I have no doubt whatsoever that under the Trump administration there are going to be plenty of opportunities that we can seize, and we should be positive about that and be strong about securing this deal.”

Mr Jones confirmed there is ultimately a plan if tariffs are imposed, but said it isn’t for him “to lay out the details in advance of something actually happening on TV”.

“It’s not breaking news that the government prepares for all scenarios,” he added.

“My broader point is that we shouldn’t be looking at president-elect Trump’s inauguration as a risk, or a bad thing for the UK. It could be an enormously positive thing with lots of opportunities.”

President-elect Trump will be sworn in to a second term in office on Monday, following his election victory in November, and there have been concerns over what his pledged tariffs could mean for economies around the globe.

The former businessman has been clear he plans to pick up where he left off in 2021 by taxing goods coming into the country, making them more expensive, in a bid to protect US industry and jobs.

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Shadow foreign secretary Dame Priti Patel, who is in Washington DC for the inauguration, said Mr Trump is “within his rights to make the statements that he wants around tariffs… but as ever this is a discussion and a negotiation”.

Priti Patel in Washington DC
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Priti Patel in Washington DC

She said the Labour government should resume her party’s talks over a post-Brexit free trade deal with the US and “not even enter into these discussions around tariffs”.

A trade deal with the US had been set as a priority in the Conservative’s 2019 manifesto but was not achieved by the time of the general election in July last year, which they lost.

Ms Patel went on to call Reform UK leader Nigel Farage a “pop-up act” and “not relevant” when asked if her party should make peace with him to get on well with Mr Trump, given the close relationship of the pair.

She said the Conservatives and Republicans are “sister parties” with “enduring, long-standing ties”.

“We’re not a pop-up act in the way in which they [Reform UK] are… so I don’t think that’s particularly relevant,” she said.

However, the Lib Dems accused the former home secretary of “competing with Reform to be most submissive toward Trump”.

Confidence in Mandelson’s appointment

Mr Trump’s inauguration has also caused a stir after reports in the Sunday papers suggested he could reject Lord Peter Mandelson as Sir Keir Starmer’s nomination for the UK’s ambassador to the US.

The Labour grandee has been critical of Mr Trump in the past, and was last month branded an “absolute moron” by a Trump campaigner.

Lord Mandelson. Pic: PA
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Lord Mandelson. Pic: PA

However Mr Jones signalled he was confident that the Blair-era minister would take up his position, telling Sky News he “doubts very much” the media reports are true.

“It’s probably being propagated by some politicians that would like to cause a bit of a nuisance. I doubt that will be the case.”

Govt ‘doesn’t agree’ with Khan’s Trump comments

Mr Jones was also forced to distance himself from comments made by Labour’s Mayor of London Sadiq Khan.

Mr Khan has warned of a century-defining battle against “resurgent fascism”, writing in The Observer that “these are deeply worrying times, especially if you’re a member of a minority community”.

Mr Jones said he does not associate with that language and questions about it “are for Sadiq to answer.”

He later told the BBC: “I speak on behalf of the government and we don’t agree with it.”

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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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