Business

UK pays EU £2.3bn after losing trade dispute

Published

2 years ago

February 9, 2023

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The UK has paid £2.3bn to the EU after losing a long-running trade dispute, with the amount including £1bn in interest.

The government announced the figure in a Written Ministerial Statement before recess next week.

The payments relate to a disagreement over the importation of Chinese textiles and footwear between 2011 and 2017 – when the UK was still part of the European Union.

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It was claimed the UK had failed to prevent the undervaluing of these goods, letting criminals evade customs duties by making false claims about the clothes and shoes.

In March last year, the Court of Justice of the EU (CJEU) found against the UK “on most liability points”, according to John Glen, the chief secretary to the Treasury.

It found that more than half of all textiles and footwear imported into the UK from China were below “the lowest acceptable prices”.

The European Commission has been seeking £1.7bn in compensation from the UK to the EU budget.

In June last year, the government made an initial payment of €678,372,885.63 – which it says was the “minimum, indisputable amount the UK considered due at that time in light of the CJEU judgment”.

Last month, the government forked out another €700,351,738.31 – the rest of the headline amount owed, minus the share the UK was due back having been a member state.

But Mr Glen went on to say that a final payment of more than a billion was made this week – of €1,227,884,519.53.

This was the interest due on the amounts already paid so in total, the bill was €2,606,609,143.47 – equivalent to more than £2.3bn.

Mr Glen said: “These are substantial sums but represent the final payments and draw a line under this long-running case, with the UK fulfilling its international obligations.”

The UK left the EU customs union in 2021.

Downing Street says payment ‘right thing to do’

Asked if the bill was a good use of taxpayer money, a Downing Street spokesperson said: “It is a legacy issue from our time as part of the EU.

“The payment brings a long-running case to an end and protects UK taxpayers from the risk of further legal proceedings and a potentially bigger bill – so it was the right thing to do.

“Now we are out of the EU and can make our own laws.”

Mr Glenn said that taking into account the financial settlement, “the government has determined how an additional £14.6bn of spending by 2024-25 can be allocated to its domestic priorities, rather than be sent in contributions to the EU.”

“This additional spending was already included in the overall spending plans that the government set out at previous spending reviews.”

Business

Chelsea co-owner Boehly goes into bat with Lords cricket bid

Published

24 mins ago

November 2, 2024

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Chelsea co-owner Boehly goes into bat with Lords cricket bid

The joint owner of Chelsea Football Club has joined forces with one of his fellow board members to bid for the most valuable team in English cricket’s Hundred competition.

Sky News has learnt that Todd Boehly is backing a bid spearheaded by Jonathan Goldstein, a British property entrepreneur, in an offer for a large stake in London Spirit, the Lords-based franchise.

The bid represents the latest move by Mr Boehly, a billionaire financier, to gatecrash the British sporting elite, following his takeover of Chelsea in 2022 alongside Behdad Eghabli, the founder of Clearlake Capital.

Recent reports suggest the pair have fallen out and are looking at ways to buy each other out of the club.

Mr Boehly’s interest in the London Spirit franchise puts him and Mr Goldstein on a shortlist of a handful of bidders for – at least – a 49% stake in it.

Sources said this weekend that the other contenders to buy the interest as part of a process run by the England and Wales Cricket Board were Sanjiv Goenka, an Indian billionaire who owns the Indian Premier League’s (IPL) Lucknow Super Giants; the owners of the IPL’s Chennai Super Kings; India’s ultra-wealthy Ambani family; and possibly members of the Glazer family, which retains the largest stake in Manchester United Football Club.

The London Spirit franchise is expected to command the highest price of the eight teams being auctioned, with one of Chelsea’s lenders, Ares Management, plotting the purchase of a stake in the Oval Invincibles, Sky News revealed on Friday.

CVC Capital Partners, one of the most prolific backers of global sport with stakes in the men’s professional tennis tour and rugby union’s Six Nations Championship, is also bidding for the Oval Invincibles.

Insiders said CVC had also submitted offers for two other Hundred franchises.

In total, roughly 35 bids are said to have been shortlisted for the eight teams, with the respective host counties able to decide whether they offload part of their 51% stake in order to give new investors control of the franchise.

Those 35 proposals are, in turn, said to have come from 15 separate investor groups.

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The teams are in aggregate understood to have been valued at more than £600m in the first round of the auction, with the proceeds distributed across the recreational game, the 18 first-class counties and the MCC, which owns Lords.

The eight host venues play home to teams including the Northern Superchargers, Manchester Originals and Southern Brave.

A bigger-than-expected windfall from the process could offer a financial lifeline to a number of cash-strapped counties, with part of the proceeds likely to be used to pay down debt.

Concerns have been raised, however, that windfalls from the Hundred auction will not deliver a meaningful improvement in counties’ long-term financial sustainability.

The outcome of the auction, which will become clear in the coming months, is also likely to intensify other searching questions about the future of cricket, as the Test format of the game struggles for international commercial relevance against shorter-length competition.

The Hundred auction is being handled by Raine Group, which also oversaw the sale of Chelsea to Mr Boehly and Mr Eghbali two years ago after Roman Abramovich was sanctioned by the government.

Mr Goldstein, CVC and the ECB declined to comment on the process.

Business

Investment giant KKR wades into Thames Water survival battle

Published

3 hours ago

November 2, 2024

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One of the world’s largest investment firms has waded into the fight over the future of Thames Water, the water utility which is racing to stay afloat.

Sky News has learnt that KKR is in talks with Thames Water and its advisers about participating in a £3bn share sale which forms part of a wider recapitalisation plan.

City sources said this weekend that KKR, which has more than $550bn of assets under management, was among a handful of parties which had accessed a data room for potential investors.

Rothschild, the investment bank, is running a process to raise around £3bn from the sale of an equity stake in Thames Water, which is grappling with a debt mountain of as much as £19bn.

Other investors which have expressed interest in acquiring newly issued shares in the water company include Carlyle and Castle Water, the latter of which is controlled by Graham Edwards, the Conservative Party treasurer.

Global Infrastructure Partners, which is owned by BlackRock, Brookfield and Isquared are also reported to have lodged an interest, although sources said that the latter two were unlikely to play any further role in the process.

The crisis at Thames Water is presenting Sir Keir Starmer’s administration with a challenge as the debt-laden company attempts to avert temporary nationalisation.

Insiders said that KKR was “a serious player” in the equity process being run by Thames Water, although its outcome hinges on a final determination by Ofwat, the industry regulator, which is due by January at the latest.

Thames Water – and other suppliers across Britain – wants to hike bills and is demanding leniency from Ofwat on fines for past transgressions.

One obstacle to KKR buying a big stake in Thames Water, which has more than 15m customers, may be its 25% holding in Northumbrian Water.

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Under Ofwat’s mergers regime, the Competition and Markets Authority would need to review the deal, although there would not be an automatic prohibition.

The share sale process is being run in parallel to an attempt to raise up to £3bn in debt financing from hedge funds and other investors.

A battle has broken out between the holders of Thames Water’s class A bonds, which account for the bulk of its borrowings, and its riskier class B debt.

Both sets of bondholders have submitted proposals to the company, with the class A’s arguing that theirs is more certain and the class B’s arguing that theirs will save the company £380m or more in fees and interest over a 12-month period.

Thames Water has already endorsed the class A group’s offer, with an initial £1.5bn of funding to be delivered immediately.

The class A bondholders are now trying to secure backing for their proposal within the next fortnight.

Their group, which includes the American hedge funds Elliott Advisers and Silverpoint, would earn in the region of £650m during the first year of the financing.

One area of controversy is likely to be any incentive plan for Thames Water bosses, led by chief executive Chris Weston, as part of a deal to give the company a stay of execution.

Last month, the environment secretary, Steve Reed, established an independent review of the industry that will look at far-reaching reforms.

It was unclear this weekend which of KKR’s funds was participating in the Thames Water equity-raise.

The firm owns John Laing, an infrastructure investor, which it took private in 2021.

It has also owned South Staffordshire, another water company, selling its 75% interest in 2018.

KKR declined to comment.

Business

Reynolds to hold talks with bosses amid business budget backlash

Published

1 day ago

November 1, 2024

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Reynolds to hold talks with bosses amid business budget backlash

The business secretary will next week hold talks with dozens of private sector bosses as the government contends with a significant corporate backlash to Labour’s first fiscal event in nearly 15 years.

Sky News has learnt that executives have been invited to join a conference call on Monday with Jonathan Reynolds, in what will represent his first meaningful engagement with employers since Wednesday’s budget statement.

Rachel Reeves, the chancellor, unsettled financial markets with plans for billions of pounds in extra borrowing, and unnerved business leaders by saying she would raise an additional £25bn annually by hiking their national insurance contributions.

An increase in employer NICs had been trailed by officials in advance of the budget, but the lowering of the threshold to just £5,000 has triggered forecasts of a wave of redundancies and even insolvencies across labour-intensive industries.

Sectors such as retail and hospitality, which employ substantial numbers of part-time workers, have been particularly vocal in their condemnation of the move.

On Friday, the Financial Times published comments made by the chief executive of Barclays in which he defended Ms Reeves.

“I think they’ve done an admirable job of balancing spending, borrowing and taxation in order to drive the fundamental objective of growth,” CS Venkatakrishnan said.

His was a rare voice among prominent business figures in backing the chancellor, however, with many questioning whether the government had a meaningful plan to grow the economy.

Mr Reynolds held a similar call with business leaders within days of general election victory, and over 100 bosses are understood to have been invited to Monday’s discussion.