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The UK needs a strategy to meet growing demand for data centres or risk losing its advantage in the race to develop artificial intelligence (AI), one of the sector’s largest players has told Sky News.

Data centres – warehouses housing processors that power cloud computing – are central to the digital economy. They provide the power, connections and security required for the vast amount of processing power on which everything from personal device browsing to AI learning relies.

The UK is currently Europe’s largest data hub, with more than 500 data centres, the majority in the South East.

Slough in west London is the industry’s historic base, largely because of its proximity to both transatlantic connectors and the City of London, whose financial services and banks were initially the biggest customers for computation power.

Last month the government classified data centres as ‘critical national infrastructure’, putting them on a par with power stations and railways but the industry says a broader strategy is required as it moves to meet the growing demand driven by power-hungry AI chips.

High land prices, competition for grid connections and the resistance of local residents have put a premium on further expansion in the southeast, leading some companies to look beyond the industry’s traditional base.

Kao Data, which has an expanding campus in Harlow, Essex, is among those looking to beyond the South East, and broke ground this week on a £350m development at Stockport in Greater Manchester.

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Spencer Lamb, Kao’s chief commercial officer, said the UK industry is at a turning point.

Kao Data's site in Harlow
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Spencer Lamb is shown talking to Sky News

“We are under pressure to be able to provide capacity and create data centre buildings to fuel the demand from AI, that’s the challenge. Whether we as a country provide the environment for it is the big question mark,” he said.

“If we want to be part of the global AI opportunity we need to deploy these resources in locations that are suitable, sustainable and have the opportunity for growth. We didn’t really have a plan 10 years ago when cloud computing started, and by accident we’ve ended up where we are today which is in effect consuming all the power into the west of London.

“Now is the time to come up with a UK-wide data centre strategy and start deploying these facilities in other parts of the country, distributing them fairly.”

Kao’s expansion in Manchester exploits an existing industrial site – it will replace a concrete factory – and the availability of a grid connection, fundamental in a notoriously power-hungry industry in which a facility’s size is measured in megawatts not square feet. A 100MW data centre consumes the same amount of electricity as 100,000 homes, a town roughly the size of Ipswich.

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Mr Lamb said it is a model the government should heed. “A realistic opportunity would be to allocate two or three locations across the UK which have access to power as data centre planning zones, where the local authorities understand what a data centre is, are welcoming and we can develop these buildings simply and swiftly and remove a lot of the bureaucracy that exists.”

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The Stockport site also has the backing of the mayor of Greater Manchester, Andy Burnham, who sees data as part of the jigsaw of infrastructure required to boost economic development in the North West.

“This is now critical national infrastructure as designated by the new government, and it makes sense that all of that capacity is not just clustered in one part of the country. We now need to see the emergence of a large-scale data centre industry in the north of England,” Mr Lamb said.

The challenge of further expansion in the South East is evident on the outskirts of the expanding village of Abbotts Langley in Hertfordshire, where a patch of green belt has become a frontline in the debate over data centres and the new government’s commitment to growth.

The proposed site for the data centre in Abbots Langley
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The proposed site for the data centre in Abbotts Langley

The 31-hectare plot, once grazed by cows that produced milk for the nearby Ovaltine factory, has been bought by property developer Greystoke Land and earmarked for a data centre.

The local planning authority, Three Rivers Council, rejected it because of the loss of green belt, but on her first day in office, Angela Rayner, the housing minister, “called in” the application, beginning a process expected to end with her over-ruling the local authority.

Labour promised to back development in government but that does not make it popular. As well as concerns over the environmental impact of a data centre, residents believe the development will remove the only buffer between the village and the motorway.

Stephen Giles-Medhurst, Liberal Democrat leader of Three Rivers Council, 76% of which is made up of green belt, told Sky News communities need something in return.

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“I’m not a total nimby, I can see which way the wind is blowing, but we will make the best case possible to say no to this development because it is an inappropriate site, which causes very high harm to the green belt.

“Ironically we do have some brownfield sites that landowners won’t release, and we can’t compulsory purchase, let’s do something about that and bring them back into public ownership.

“But if at the end of the day we’re overruled then we will be demanding the infrastructure that’s for Abbots Langley and Three Rivers.”

A Ministry for Housing, Communities and Local Government spokesperson said: “Our reforms to the planning system will make it easier to build the key infrastructure this country needs – such as data centres – securing our economic future and giving businesses the confidence to invest.

“Development on the green belt will only be allowed where there is a real need and will not come at the expense of the environment.”

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Shrinkflation: It’s not your imagination, these products are getting smaller

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Shrinkflation: It's not your imagination, these products are getting smaller

KitKats, Gaviscon, toothpaste, and even Freddo have all fallen victim to shrinkflation, consumer group Which? has found.

As families struggle with the cost of a trip to the supermarket, a survey of shoppers revealed how many products are getting smaller – while others are being downgraded with cheaper ingredients.

Among the examples are:

• Aquafresh complete care original toothpaste – from £1.30 for 100ml to £2 for 75ml at Tesco, Sainsbury’s and Ocado

• Gaviscon heartburn and indigestion liquid – from £14 for 600ml to £14 for 500ml at Sainsbury’s

• Sainsbury’s Scottish oats – from £1.25 for 1kg to £2.10 for 500g

• KitKat two-finger multipacks – from £3.60 for 21 bars to £5.50 for 18 bars at Ocado

• Quality Street tubs – from £6 for 600g to £7 for 550g at Morrisons

• Freddo multipacks – from £1.40 for five bars to £1.40 for four bars at Morrisons, Ocado and Tesco

Which? also received reports of popular treats missing key ingredients, as manufacturers seek to cut costs.

The amount of cocoa butter in white KitKats has fallen below 20%, meaning they can no longer actually be sold as white chocolate.

It comes after Penguin and Club bars lost their legal status as a chocolate biscuit, as they now contain more palm oil and shea oil than cocoa – as reported in the Sky News Money blog.

Which? retail editor Reena Sewraz called on supermarkets to be “more upfront” about price changes to help households “already under immense financial pressure” get better value.

While keeping track of the size and weight of products can be tricky, Which? has two top tips for detecting shrinkflation.

The first is to be wary of familiar products labelled as “new” – because the only thing that’s new may end up being the smaller size.

Meanwhile, the second is to pay attention to how much an item costs per 100g or 100ml, as this can be an easy way of finding out when prices change.

What have the companies said?

A spokeswoman for Mondelez International, which makes Cadbury products, said any change to product sizes are a “last resort”, but it’s facing “significantly higher input costs across our supply chain” – including for energy.

A Nestle spokesman said it was seeing “significant increases in the cost of coffee”, and some “adjustments” were occasionally needed “to maintain the same high quality and delicious taste that consumers know and love”.

“Retail pricing is always at the discretion of individual retailers,” they added.

A spokesman for the Food and Drink Federation also pointed to government policy, notably national insurance increases for employers and a new packaging tax.

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Is inflation reaching its peak?

Fresh food prices on the rise

The Which? report comes as latest figures showed fresh food costs 4.3% more than it did a year ago.

The increase in October, reported by the British Retail Consortium (BRC) and market researchers NIQ, was up on the 4.1% year-on-year rise in September.

Overall food inflation was down slightly, though, to 3.7% from last month’s 4.2%.

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There has also been a slowdown in overall shop price inflation, which the BRC said was down to “fierce competition among retailers” ahead of Black Friday sales.

The annual shopping extravaganza will this year arrive in the same week as the chancellor’s budget, which is set for Wednesday 26 November.

BRC chief executive Helen Dickinson called on Rachel Reeves to help “relieve some pressures” keeping prices high, with the national insurance rise in last year’s budget having “directly contributed to rising inflation”.

“Adding further taxes on retail businesses would inevitably keep inflation higher for longer,” Ms Dickinson warned.

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Petrofac administration not a great start to the week for Ed Miliband though relief could come

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Petrofac administration not a great start to the week for Ed Miliband though relief could come

It’s not the start to the week that Ed Miliband, the energy secretary, would have been hoping for: more than 2,000 private sector jobs in Scotland at risk from the collapse of Petrofac, the London-listed oilfield services group.

Its slide into insolvency was triggered by last week’s cancellation of a major contract by its biggest customer, but the failure of a company once valued at more than £6bn has been a long time coming.

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Administrators at Teneo will now attempt to salvage what they can from Petrofac’s wreckage.

“The group’s operations will continue to trade, and options for alternative Restructuring and [sale] solutions are being actively explored with its key creditors,” Petrofac said on Monday morning.

“When appointed, administrators will work alongside Executive Management to preserve value, operational capability and ongoing delivery across the Group’s operating and trading entities.”

For thousands of employees, the future is now uncertain, although people close to the company say they are hopeful that a buyer can be found swiftly for its North Sea operations, with one suggesting that it could even happen in the coming days.

That would be a relief to Mr Miliband, whose energy policy has come under growing scrutiny in recent months amid dire warnings about the future of Britain’s offshore oil industry.

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More than 2,000 jobs at risk as oil and gas company enters administration

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More than 2,000 jobs at risk as oil and gas company enters administration

More than 2,000 Scotland-based jobs are at risk as oil and energy services group Petrofac has applied for administration.

The group’s operations will continue to trade, and options for restructuring of the company and a possible merger or acquisition are being actively explored with its key creditors, the company said on Monday.

People close to the company say they are hopeful a buyer can be found swiftly for its North Sea operations, with one suggesting that it could even happen in the coming days.

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Administrators will work alongside company management to “preserve value, operational capability and ongoing delivery”, its announcement read.

News of a possible insolvency announcement was first reported by Sky News.

Energy Secretary Ed Miliband and other ministers have been briefed on the situation.

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Not a great start to the week for Ed Miliband, though relief could come

It’s not the start to the week that Ed Miliband, the energy secretary, would have been hoping for: more than 2,000 private sector jobs in Scotland at risk from the collapse of Petrofac, the London-listed oilfield services group.

Its slide into insolvency was triggered by last week’s cancellation of a major contract by its biggest customer, but the failure of a company once valued at more than £6bn has been a long time coming.

Administrators at Teneo will now attempt to salvage what they can from Petrofac’s wreckage.

For thousands of employees, the future is now uncertain, although people close to the company say they are hopeful that a buyer can be found swiftly for its North Sea operations, with one suggesting that it could even happen in the coming days.

That would be a relief to Mr Miliband, whose energy policy has come under growing scrutiny in recent months amid dire warnings about the future of Britain’s offshore oil industry.

An advisory firm, Kroll, had been engaged by the Department for Energy Security and Net Zero to work with ministers and officials on the unfolding crisis for the company.

What is Petrofac?

Petrofac employs about 7,300 people globally, according to a recent stock exchange filing.

It designs, constructs and operates offshore equipment for energy companies.

The company has been valued at more than £6bn but has been struggling with debt.

It also faced a Serious Fraud Office investigation, which resulted in a 2021 conviction for failing to prevent bribery, and the payment of millions of pounds in penalties.

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Founded in 1981 in Texas, the business has been in talks about a far-reaching financial restructuring for more than a year.

A formal restructuring plan was sanctioned by the High Court in May this year with the aim of writing off much of its debt and injecting new cash into the business.

This was subsequently overturned, prompting talks with creditors about a revised agreement.

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