Connect with us

Published

on

Rishi Sunak has hinted he will ignore recommendations for public sector pay rises, saying workers “need to recognise the economic context we are in”.

Reports surfaced over the weekend that the prime minister planned to block upcoming proposals from public sector pay bodies in an attempt to tackle soaring inflation in the country.

And health minister Helen Whately refused to commit to the uplift during an interview with Sky News on Monday morning.

Unions and opposition parties have hit out at the rumoured decision, saying inflation was not being driven by the wages of nurses and teachers, but by the economic decisions taken by the Conservatives over their 13 years in power.

Politics live: ‘Seriously?’ – Labour responds to lack of commitment on pay rises

Last week, the Office for National Statistics confirmed inflation was stuck at 8.7% and the Bank of England raised interest rates to 5% – a 15-year high.

Asked by broadcasters today whether public sector pay was a major driver of that inflation, Mr Sunak said: “Government borrowing is something that would make inflation worse, so the government has to make priorities and decisions about where best to target our resources.

More on Inflation

“And that’s why when it comes to public sector pay, we need to be fair, but we need to be responsible as well.”

Pay review bodies or PRBs take evidence from across sectors like the NHS and education each year, as well as submissions from government, before saying what wage rises should be introduced for the following 12 months.

Amid anger from unions about the figures failing to match inflation last year, Health Secretary Steve Barclay insisted it was right for ministers to “continue to defer to that process to ensure decisions balance the needs of staff and the wider economy”.

The PRBs’ recommendations are expected to be published next month, alongside formal pay offers, with reports claiming they could be around 6% for the health service and 6.5% for teachers.

But while being questioned on public sector pay, Mr Sunak said: “It is important that we don’t make the inflation situation worse and it is important we prioritise the things that are right.

“I am making the decisions that are right for the long term and that is what I am going to continue doing.”

Please use Chrome browser for a more accessible video player

Un-named Video

TUC general secretary Paul Nowak accused the government of “playing politics with working people’s incomes”, adding: “It risks permanent economic harm – and will undoubtedly damage recruitment and retention of staff in our vital public services.

“Instead of blaming workers who can’t afford to put food on the table or petrol in their cars to get to work, ministers should focus on a credible plan for sustainable growth and rising living standards.”

The joint general secretary of the National Education Union, Kevin Courtney, also claimed Mr Sunak was “laying the groundwork for a further real-terms pay cut and one that flies in the face of the recommendations of the pay review body”, demanding the reviews be published as soon as possible.

Labour’s shadow health secretary, Wes Streeting, did not commit to his party accepting the recommendations were they to win power at the next election, but he did say he wanted PRBs “back up and running with the full confidence of everyone involved”.

He added: “It is not working people that have driven our economy off the cliff, it is the Conservative Party. We are still paying through the nose for that disastrous mini-budget that all of those Conservative MPs cheered on.

“People are paying through the nose on their mortgages, paying through the nose with their bills going up and their weekly shop, paying through the nose with rising energy bills, and Britain is an outlier when you look at other economies.

“That’s why we need a serious plan to get growth back into the economy.”

Government pay position offers Labour opportunity and challenge


Tamara Cohen

Tamara Cohen

Political correspondent

@tamcohen

The government’s wavering position on NHS pay presents Labour with both an opportunity and a challenge.

On the plus side, they can point to the fact the position of ministers seems at odds with what they were saying back in December.

Then, the government argument went that it was not for them to decide how much nurses, teachers, or police officers should be paid because this is determined by independent pay review bodies.

Now, they are suggesting the opposite – with health minister Helen Whately the latest to refuse to commit to following recommendations if the government judges they are not affordable.

Labour’s Emily Thornberry was withering in her interview with Sky News this morning: “I mean, seriously – do they really have a policy at all?”

Highlighting government inconsistency on political issues of this sort is exactly what you would expect an opposition party to do.

But it’s not entirely straightforward for Labour. They know there are questions that follow which could be challenging for the party.

Would they commit, for example, to following all pay review body recommendations in power?

Around half of public sector workers are covered by them (civil servants are not), but they are not binding, although Conservative governments have ignored their recommendations more than Labour did in power.

And given Labour agrees with the government that inflation needs to come down, and agrees with the Bank of England that interest rates needed to rise – how comfortable will they be supporting potentially inflationary public sector pay hikes?

The reports come while strike action by junior doctors over pay and conditions continues, with unions planning a five-day walkout next month.

Calling for pay restoration equating to a 35% rise, the British Medical Association (BMA) said wages had decreased by more than a quarter since 2008 when inflation was taken into account, and many doctors were burnt out from an increasing workload.

But when asked why he wouldn’t pay the profession more, the prime minister hit out at the industrial action and called the BMA’s demands “totally unreasonable”.

Mr Sunak said: “I think everyone can see the economic context we are in, with inflation higher than we’d like it, and it is important in that context that the government makes the right and responsible decisions in things like public sector pay.

“It is very disappointing that junior doctors have taken the decision that they have done. Over half a million people’s treatments have already been disrupted and I don’t think anyone wants to see that carry on – it’s just going to make it harder to bring waiting lists down.”

He added: “And I think people need to recognise the economic context we are in, and I am going to make the decisions that are the right ones for the country.

“That’s not always easy, people may not like that, but those are the right things for everybody, that we get a grip on inflation, and that means the government not excessively borrowing too much money and being responsible with public sector pay settlements.

“That is what I am going to do and I would urge everyone to see that is the right course of action.”

Labour’s Mr Streeting said he understood the “pain junior doctors are feeling in their pockets”, and while pay restoration for doctors could not happen “overnight”, staff understood that – and it was for Mr Sunak to fix it.

“I think the important thing is the prime minister has now got to grip this and get around the negotiating table to negotiate an end to this strike action,” he added. “Because every time we see strikes in the NHS we see delays and cancelled operations.

“The real risk to the NHS now isn’t just that staff walk out for another five days of strike action, but they walk out of the NHS altogether.

“If Rishi Sunak can sit there for an hour negotiating gongs and peerages for Conservative Party donors, supporters and MPs, he can sit around the table for an hour with junior doctors and put patients out of their misery.”

Continue Reading

Business

ITV back in spotlight as suitors screen potential bids

Published

on

By

ITV back in spotlight as suitors screen potential bids

Potential suitors have again begun circling ITV, Britain’s biggest terrestrial commercial broadcaster, after a prolonged period of share price weakness and renewed questions about its long-term strategic destiny.

Sky News has learnt that a number of possible bidders for parts or all of the company, whose biggest shows include Love Island, have in recent weeks held early-stage discussions about teaming up to pursue a potential transaction.

TV industry sources said this weekend that CVC Capital Partners and a major European broadcaster – thought to be France’s Groupe TF1 – were among those which had been starting to study the merits of a potential offer.

The sources added that RedBird Capital-owned All3Media and Mediawan, which is backed by the private equity giant KKR, were also on the list of potential suitors for the ITV Studios production arm.

One cautioned this weekend that none of the work on potential bids was at a sufficiently advanced stage to require disclosure under the UK’s stock market disclosure rules, and suggested that ITV’s board – chaired by Andrew Cosslett – had not received any recent unsolicited approaches.

That meant that the prospects of any formal approach materialising was highly uncertain.

The person added, however, that Dame Carolyn McCall, ITV’s long-serving chief executive, had been discussing with the company’s financial advisers the merits of a demerger or other form of separation of its two main business units.

More from Money

Its main banking advisers are Goldman Sachs, Morgan Stanley and Robey Warshaw.

ITV’s shares are languishing at just 65.5p, giving the whole company a market capitalisation of £2.51bn.

The stock rose more than 5% on Friday amid vague market chatter about a possible takeover bid.

Bankers and analysts believe that ITV Studios, which made Disney+’s hit show, Rivals, would be worth more than the entire company’s market capitalisation in a break-up of ITV.

People close to the situation said that under one possible plan being studied, CVC could be interested in acquiring ITV Studios, with a European broadcast partner taking over its broadcasting arm, including the ITVX streaming platform.

“At the right price, it would make sense if CVC wanted the undervalued production business, with TF1 wanting an English language streaming service in ITVX, along with the cashflows of the declining channels,” one broadcasting industry veteran said this weekend.

“They would only get the assets, though, in a deal worth double the current share price.”

Takeover speculation about ITV, which competes with Sky News’ parent company, has been a recurring theme since the company was created from the merger of Carlton and Granada more than 20 years ago.

ITV said this month that it would seek additional cost savings of £20m this year as it continued to deal with the fallout from last year’s strikes by Hollywood writers and actors.

It added that revenues at the Studios arm would decline over the current financial year, with advertising revenues sharply lower in the fourth quarter than in the same period a year earlier because of the tough comparison with 2023’s Rugby World Cup.

Allies of Dame Carolyn, who has run ITV since 2018, argue that she has transformed ITV, diversifying further into production and overhauling its digital capabilities.

The majority of ITV’s revenue now comes from profitable and growing areas, including ITVX and the Studios arm, they said.

By 2026, those areas are expected to account for more than two-thirds of the group’s sales.

This year, its production arm was responsible for the most-viewed drama of the year on any channel or platform, Mr Bates versus The Post Office.

In its third-quarter update earlier this month, Dame Carolyn said the company’s “good strategic progress has continued in the first nine months of 2024 driven by strong execution and industry-leading creativity”.

“ITV Studios is performing well despite the expected impact of both the writer’s strike and a softer market from free-to-air broadcasters.”

She said the unit would achieve record profits this year.

ITV and CVC declined to comment, while TF1, RedBird and Mediawan did not respond to requests for comment.

Continue Reading

Business

Ann Summers’ family owners to explore options for lingerie chain

Published

on

By

Ann Summers' family owners to explore options for lingerie chain

The family which has owned Ann Summers, the lingerie and sex toy retailer, for more than half a century is to explore options for the business which could include a partial or majority sale.

Sky News has learnt that the Gold family is close to hiring Interpath, the corporate advisory firm, to work on a strategic review which could lead to the disposal of a big stake in the chain.

Retail industry sources said this weekend that Ann Summers had been in talks with Interpath for several weeks, although it has yet to be formally instructed.

The chain, which was founded in 1971 and acquired by David and Ralph Gold when it fell into liquidation the following year, trades from 83 stores and employs over 1,000 people.

The family continues to own 100% of the equity in the company.

Sources said that some dilution of the Golds’ interest was probable, although it was far from certain that they would sell a controlling stake.

In a statement issued in response to an enquiry from Sky News, Vanessa Gold, Ann Summers’ chair, commented: “We, like many other retailers, are dealing with the unhelpful backdrop to business of the decisions announced by the government at the Budget and the rising cost to retail.

More from Money

“As a family-owned business, we are in a fortunate position and have committed investment for over 50 years.

“This has created a robust and resilient business.

“We are exploring a number of options to further grow the brand into 2025 and beyond.”

Ms Gold is among many senior retail figures to publicly criticise the tax changes announced in the Budget unveiled by Rachel Reeves, the chancellor, last month.

The British Retail Consortium published a letter last weeks signed by scores of its members in which they warned of price rises and job losses.

Private equity firms and other retail groups are expected to express an interest in a takeover of Ann Summers.

One possible contender could be the Frasers billionaire Mike Ashley, who already owns upmarket rival Agent Provocateur.

Any formal process is unlikely to yield a result until next year, with the key Christmas trading period the principal focus for the shareholders and management during the next month.

Ann Summers is one of Britain’s best-known retailers, with a profile belying its relatively modest size.

In the early 1980s, Jacqueline Gold, the then executive chairman who died last year, conceived the idea of holding Ann Summers parties – a key milestone in the company’s growth.

At its largest, the chain traded from nearly twice the number of shops it has today, but like many retailers was forced to seek rent cuts from landlords after weak trading during the COVID-19 pandemic.

This week, The Daily Telegraph reported that the Gold family had stepped in to provide several million pounds of additional funding to Ann Summers in the form of a loan.

Vanessa Gold – Jacqueline’s sister – also asked bankers to explore the sale of part of the family’s stake in West Ham United Football Club last year.

That process, run by Rothschild, has yet to result in a deal.

Interpath declined to comment.

Continue Reading

Business

Thousands of jobs to go at Bosch in latest blow to German car industry

Published

on

By

Thousands of jobs to go at Bosch in latest blow to German car industry

Bosch will cut up to 5,500 jobs as it struggles with slow electric vehicle sales and competition from Chinese imports.

It is the latest blow to the European car industry after Volkswagen and Ford announced thousands of job cuts in the last month.

Cheaper Chinese-made electric cars have made it trickier for European manufacturers to remain competitive while demand has weakened for the driver assistance and automated driving solutions made by Bosch.

The company said a slower-than-expected transition to electric, software-controlled vehicles was partly behind the cuts, which are being made in the car parts division.

Demand for new cars has fallen overall in Germany as the economy has slowed, with recession only narrowly avoided in recent years.

The final number of job cuts has yet to be agreed with employee representatives. Bosch said they would be carried out in a “socially responsible” way.

About half the job reductions would be at locations in Germany.

Read more:
Son’s anger after mum jailed in second Post Office scandal
The ‘double life’ of people-smuggling car wash bosses

Bosch, the world’s biggest car parts supplier, has already committed to not making layoffs in Germany until 2027 for many employees, and until 2029 for a subsection of its workforce. It said this pact would remain in place.

The job cuts would be made over approximately the next eight years.

The Gerlingen site near Stuttgart will lose some 3,500 jobs by the end of 2027, reducing the workforce developing car software, advanced driver assistance and automated driving technology.

Other losses will be at the Hildesheim site near Hanover, where 750 jobs will go by end the of 2032, and the plant in Schwaebisch Gmund, which will lose about 1,300 roles between 2027 and 2030.

Bosch’s decision follows Volkswagen’s announcement last month it would shut at least three factories in Germany and lay off tens of thousands of staff.

Its remaining German plants are also set to be downsized.

While Germany has been hit hard by cuts, it is not bearing the brunt alone.

Earlier this week, Ford announced plans to cut 4,000 jobs across Europe – including 800 in the UK – as the industry fretted over weak electric vehicle (EV) sales that could see firms fined more for missing government targets.

Continue Reading

Trending