Category: Business News

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Talks are under way with Spain about easing quarantine rules for the Balearic and Canary Islands, a UK government source has confirmed.

The potential move would mean people arriving in the UK from the islands would not have to self-isolate for 14 days after rules changed this weekend.

The travel industry is hoping ministers make a decision by Friday.

A government source said there will not be an immediate decision, while No 10 said “no travel is risk free”.

One travel industry source said the government had told them it wanted to study more data from Spain’s islands before making a decision.

The rate of infection in Spain is 35.1 cases per 100,000 people, while the UK is at 14.7, according to the latest figures from the European Centre for Disease Prevention and Control.

Data up to 19 July suggested there were lower rates of infection in the Balearic and Canary Islands than in mainland Spain.

Meanwhile, Cabinet Office Minister Michael Gove said he cancelled a holiday to the Balearics after the change in quarantine rules was announced on Saturday.

Among the thousands of British holidaymakers affected was Transport Secretary Grant Shapps, who flew to Spain on Saturday despite knowing a decision on the policy was due.

James Middleton, a receptionist from Weston-super-Mare, is due to return home from his holiday in Tenerife on Tuesday.

His employer is looking at what it can do to help, but the 49-year-old said he now risks going without pay in order to observe the quarantine rule.

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James Middleton

“I will have credit card bills to pay at the end of the month and with no income for two weeks, I will not be able to pay them and will invite interest on them,” Mr Middleton said.

He said he has “no problem” with the quarantine rule as the government “has to act on the information” it has – but he thinks it should “support” those who are affected.

“They have said before no one should suffer as a result of following these rules so they should stand by it. The minimum support on offer should be sick leave pay,” he said.

Concern has grown among employers about what to do if their staff cannot immediately return to work after holidaying in Spain.

Debbie Pearson runs small catering businesses in the West Midlands. Staff at her business that caters for weddings and events are furloughed, but staff at two firms that supply meals for the elderly are still working.

Ms Pearson said she will not be able to claim statutory sick pay for workers who must isolate for two weeks upon returning for holiday for either of those businesses.

“If I have to pay to pay them, I would pay them,” she said.

Because one of her businesses only has three staff, it will also pile pressure on the remaining two staff if they have to cover the extra work for two more weeks.

“We pride ourselves on being a good employer,” she said. “If somebody had been abroad and told to isolate, I’d want to make sure they weren’t asked to work.”

Cancellations

Holiday companies have responded to the imposition of the quarantine for people arriving from Spain.

EasyJet said it would operate its full schedule of flights to Spain, but it is cancelling holidays to all Spanish destinations for the next few weeks. It said it only offered holidays where there was no known requirement to self-isolate on arrival or return.

Ryanair said its schedules “remain in place” and it will continue flights in and out of Spain as normal, as did airline and holiday firm Jet2.

But package holiday firm Tui cancelled all mainland Spanish holidays until 9 August.

It said customers due to travel to all areas of Spain between 27 July and 9 August would be able to cancel or amend holidays and receive a full refund or the option to rebook their holiday with an incentive.

However, there will be uncertainty for those with holidays due to depart from 10 August as the company said it will be update passengers with future bookings on 31 July.

The UK Foreign Office currently advises against “all but essential travel” to countries without air bridge agreements in place.

Blanket measures

Tui has urged the UK government not to slap blanket quarantines on whole countries.

Andrew Flintham, managing director of TUI UK and Ireland, said the government should have a “regionalised” policy.

That would mean only travellers returning from coronavirus hotspots should be forced to quarantine.

The UK imposed the restriction over the weekend after a spike in infections in some Spanish regions, including Catalonia, where Barcelona is located, and Aragon.

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The French government has been telling its nationals to stay away from Catalonia, while Norway has imposed a new 10-day quarantine on all travellers arriving from Spain.

Mr Flintham told the BBC that the government was “rightly nervous” about people’s ability to move “relatively unchecked” around countries which had a spike of cases in certain areas.

However, he said most holidaymakers stayed in one place when they got there and should be safe if they were not in high-risk areas.

“They do not go travelling around wider Spain and then they come home again,” he said.

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AFP

A further seven people with coronavirus have died across all settings in the UK, according to latest government figures – bringing the UK’s death toll to 45,759.

The government also said in the 24-hour period up to 09:00 BST on Monday, there had been a further 685 lab-confirmed cases. The UK’s total is 300,111.

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Gold hit a record high on Monday as increasing numbers of nervous investors sought a safe place to put their money.

Rising political tensions between the US and China joined the ever-present worries over the continuing coronavirus pandemic to boost the spot price to $1,943.93 an ounce,

Covid-19 cases have risen to more then 16 million globally.

Many investors shun gold as it doesn’t pay dividends or interest rates but it tends to rise in troubled times,

Interest rates are currently near zero and dividend returns from companies are uncertain at best, with so many struggling.

So far this year, gold prices have risen 28%.

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As well as lacking in returns, investing in gold brings costs.

Adrian Ash, director of research at precious metals trader BullionVault, says storage (with insurance included) is 0.12% of the size of your investment per year (US$4 per month minimum, so most customers are paying at least £3.10 per month.

Each bar weighs 400 Troy ounces (12.5kg) and is currently worth £600,000 at today’s prices. It’s trading in these large bars which creates the “spot” price everyone is suddenly talking about.

They’re how the wholesale industrial and investment gold markets move metal around, and any other form of gold you buy – whether a bracelet or a coin or the microchips in your smartphone – starts out in this large bar form, adding costs at every stage of manufacture.

He says though if you fancy visiting your haul, you can’t: “It’s hard to over-state the level of security at professional bullion vaults, and for the vast majority of people, being shown a shiny yellow brick wouldn’t prove much anyway.

Mr Ash says his customers can though take their metal out from the vault if they wish: “We would arrange delivery, most usually in the form of smaller bars, although that necessarily triggers the extra manufacturing and shipping costs you otherwise avoid by owning wholesale bullion inside secure storage.”

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A fall in the dollar is another factor that boosts the price of gold, which is quoted in the US currency. It means that buyers using other currencies can, in fact, be paying the same for their gold, as they are able to buy more dollars for their money.

In the latest development between the US and China, China took over the premises of the US consulate in the south western city of Chengdu. The move was in retaliation for the US closing down China’s diplomatic base in Houston, Texas.

This sent the dollar index to its lowest since September 2018.

The US central bank, the Federal Reserve, is meeting this week to decide on monetary policy.

Mihir Kapadia, head of Sun Global Investments, thinks that could also help boost the price further: “With eyes on the upcoming Fed policy meeting later this week and more concerns over geopolitical tensions, further gains can be expected with these factors likely to weigh heavily on the stock markets for a few more weeks to come.”

Fellow precious metal silver was also higher, It rose more than 6% to $24.36, its highest since September 2013.

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The UK economy could take until 2024 to return to the size it was before the coronavirus lockdown, according to analysis from the EY Item Club.

The forecasters, who use a similar economic model to the Treasury, suggest unemployment will rise to 9% from 3.9%.

They also estimate the economy will shrink by 11.5% this year, worse than the 8% they predicted only a month ago.

Consumers have been more cautious than expected, they said, while low business investment will dampen growth.

As a result, they now expect the post-coronavirus economic recovery to take 18 months longer than previously forecast.

However, the Item Club says it is early days and useful data has only recently been made available.

“Unsurprisingly, without hard data, a wide range of views on the performance and outlook for the UK economy emerged,” said Mark Gregory, UK chief economist at EY.

• Retail sales near pre-lockdown levels in June
• Rules v fear: What’s delaying economic recovery?

Last week, the Bank of England’s chief economist Andy Haldane told MPs the UK economy had “clawed back” about half the fall in output it saw during the peak of the coronavirus lockdown in March and April.

There had been a V-shaped “bounceback”, he said, referring to the shape that indicates a rapid economic recovery.

Last month, Mr Haldane said the economy was “on track for a quick recovery”.

‘Past its low point’

However, other economists have expressed doubts about the potential for such a swift recovery in activity.

“Even though lockdown restrictions are easing, consumer caution has been much more pronounced than expected,” said Howard Archer, chief economic adviser to the EY Item Club.

“We believe that consumer confidence is one of three key factors likely to weigh on the UK economy over the rest of the year, alongside the impact of rising unemployment and low levels of business investment.

“The UK economy may be past its low point but it is looking increasingly likely that the climb back is going to be a lot longer than expected.”

The government has moved to cut taxes, support wages and offer incentives to spend in an effort to keep the economy going and encourage consumers to spend.

Earlier this month, Chancellor Rishi Sunak cut VAT on hospitality and promised to pay firms a £1,000 bonus for every staff member kept on for three months when the furlough scheme ends in October.

But he also conceded that not every job would be saved, and his £30bn package was criticised for helping certain sectors, such as restaurants and tourism, but ignoring others.

Last month, the Bank of England said it would pump an extra £100bn into the UK economy to help fight the “unprecedented” coronavirus-induced downturn.

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Ryanair has said it will continue its flights in and out of Spain as normal, despite the UK government’s decision to impose a 14-day quarantine on travellers arriving from the country.

Neil Sorahan, Ryanair’s chief financial officer, told the BBC: “The schedules remain in place.”

The travel industry has been plunged into confusion by the quarantine rule, which was announced over the weekend.

Airlines have called it a “big blow”, throwing travel plans into chaos.

But speaking on the BBC’s Today programme, Mr Sorahan said: “As things stand, the market remains open, the schedules remain in place and we continue to operate in and out of Spain as normal.”

He added, however, that Ryanair was keeping its entire operation “under consideration” as it builds back its route network post-lockdown.

‘Biggest fear’

Earlier, Ryanair revealed that it had fallen into loss in the first three months of the financial year after what it called the most challenging period in its history.

With more than 99% of its fleet grounded because of the pandemic, the airline reported a loss of €185m (£169m) over the April-to-June period, compared with a profit of €243m a year earlier.

Ryanair said it expected to clear more than 90% of refunds for cancelled flights by the end of July.

The airline said it was impossible to predict how long the coronavirus pandemic would persist.

“A second wave of Covid-19 cases across Europe in late autumn (when the annual flu season commences) is our biggest fear right now,” it added.

Airlines have been struggling because of global travel restrictions aimed at halting the spread of the coronavirus.

In May, Ryanair announced it was set to cut 3,000 jobs across Europe.

However, earlier this month, the company revealed that it had cut a deal with the Unite union, including temporary pay cuts, so that UK cabin crew jobs would be safeguarded.

The airline later said it was shutting its base at Frankfurt Hahn airport after German pilots voted to reject pay cuts.

Rivals slated

In its latest results statement, Ryanair repeated its criticism of rival airlines for receiving what it called “illegal state aid” to stay in business.

“Many other airlines are cutting capacity, with the result that air travel in Europe is likely to be depressed for at least the next two or three years,” it added.

“This will create opportunities for Ryanair… to grow its network and expand its fleet, to take advantage of lower airport and aircraft cost opportunities that will inevitably arise.”

The airline said the challenge of Brexit, and in particular a no-deal Brexit, remained high.

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It said it hoped that the UK and EU would agree a trade deal for air travel that would allow the free movement of people and the deregulated airline market between the UK and Ireland to continue.

“As an EU airline, the Ryanair Group should be less affected by a no-deal Brexit than UK registered airlines. We still, however, expect adverse trading consequences to arise,” the airline said.

“Ryanair has put the necessary measures in place to ensure that the group remains majority EU owned, including restricting voting rights of non-EU shareholders, in the event of a ‘hard Brexit’”.

Ryanair said it remained a committed supporter of the “game-changer” Boeing 737 Max plane, which was grounded last year after two crashes killed all 346 people on the flights.

It was due to take delivery of its first 737 Max planes more than a year ago and still hopes to do so before the end of 2020.

The US aviation regulator has started formal test flights for the troubled plane after Boeing overhauled its flight control system.

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Chinese technology giant Huawei starts a four-day online event today focussing on how technology can be used in the fight against the coronavirus.

The “Better World Summit” will also explore how to boost the world economy in the wake of the pandemic.

Meanwhile, HSBC has issued a statement defending its cooperation with the US in a case against Huawei.

It came after Chinese state media accused the London-headquartered bank of “setting traps to ensnare” Huawei.

The world’s biggest telecoms equipment maker said the summit will feature talks by technology industry executives and experts from around the world, including Huawei’s rotating chairman Guo Ping as well as South Africa’s telecoms minister Stella Ndabeni-Abrahams.

The event is being held against the backdrop of growing pressure on the company as tensions rise between Beijing and western governments.

On Friday, an article in China’s official People’s Daily newspaper said HSBC had “framed” Huawei and played a role in the arrest of the company’s finance chief Meng Wanzhou.

The following day HSBC posted a statement on the Chinese social media platform WeChat which said it was not involved in Washington’s decision to investigate Huawei or arrest Ms Meng.

It also said “HSBC has no malice against Huawei, nor has it ‘framed’ Huawei”. In response, another Beijing-controlled newspaper, The Global Times, said: “Chinese observers called HSBC’s statement ‘not persuasive’ at all”.

Meanwhile, the US has been calling on members of the Five Eyes intelligence sharing alliance – which also includes the UK, Canada, Australia and New Zealand – to avoid Huawei kit.

The campaign against Huawei by President Donald Trump’s administration has led to the UK and Australia banning the company from building their 5G networks.

Earlier this month the British government banned the country’s mobile providers from buying new Huawei 5G equipment after the end of this year.

The companies were also told they must remove all of the Chinese firm’s 5G kit from their networks by 2027.

It follows sanctions imposed by the US government, which claims Huawei poses a national security threat – something the company denies.

Also this week a court in Canada will open a hearing into what evidence should be made public in proceedings on whether to extradite Ms Meng to America.

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London-listed companies are more profitable when women make up more than one in three executive roles, according to new research.

Listed firms where at least one-third of the bosses are women have a profit margin more than 10 times greater than those without, it suggests.

Of the 350 largest companies listed, just 14 are led by women, according to gender diversity business The Pipeline.

15% of companies in the FTSE 350 have no female executives at all.

The group’s co-founder Lorna Fitzsimons said having more women in the decision-making room means businesses are better able to understand their customers.

The Pipeline’s Women Count 2020 report “shows the stark difference in net profit margins of companies that have diverse gender leaderships compared to those who do not,” she said.

The Pipeline says London-listed companies with no women on their executive committees have a net profit of 1.5%, whereas those with more than one in three women at that level reach 15.2% net profit margin.

The report also points out that in the largest 100 London-listed companies, the total number of female chief executives is the same as the number of bosses named Peter – six.

When it comes to chief financial officers in those firms, fewer than two out of 10 are women, while men make up 96% of investment managers.

The sectors with the lowest number of women in executive roles are construction and retail.

“If you look at retail, entry level jobs are usually 80% women,” Ms Fitzsimons said. “But they don’t make it to the executive level.”

Former Prime Minister Theresa May, who contributed to the report, said there can be no good explanation for the massive underrepresentation of women at the top of British business.

“Every single male CEO who looks around his boardroom table to see nine out of 10 male faces staring back at him needs to ask himself what he is doing to make his business one which his daughter or granddaughter can get on in,” she wrote.

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VANDA MURRAY

Vanda Murray OBE led Blick PLC in the early 2000s. She currently chairs the board at Marshalls PLC, a FTSE 250 construction firm.

While she welcomes recent moves to encourage women to make up 30% of company boards, she says it’s in executive, decision-making roles where women are still underrepresented.

“There are talented females out there, no-one could really argue against this,” she said.

Leadership groups with people from mixed backgrounds, ethnicity and gender do better because “they challenge more, and they have more discussion and debate and that leads to better decision-making,” she said.

Ms Murray said Marshalls has a female HR director, but the rest of the executive committee members are men.

“We have plans in place. We have talent management programmes and training and development so that we can make sure the younger female managers come through.”

July
26, 2020

2 min read

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Black, Asian and minority ethnic figures (BAME) are set to feature on British notes and coins for the first time.

Chancellor Rishi Sunak is considering proposals from a campaign group for legal tender to be more inclusive, according to the Sunday Telegraph.

Mr Sunak has asked the Royal Mint to come up with new designs honouring BAME figures.

Military nurse Mary Seacole and spy Noor Inayat Khan are being considered.

The former Conservative parliamentary candidate Zehra Zaidi is leading the Banknotes of Colour campaign.

She says no non-white person has ever been featured on British currency.

“Who we have on our legal tender, our notes and our coins, builds into a narrative of who we think we are as a nation,” she told BBC News.

“People from all backgrounds helped build Britain.”

BAME people who have served the nation – such as military figures and nurses – have been put forward for the proposed set of coins.

Two years ago Ms Zaidi started a petition for the British World War Two secret agent Noor Inayat Khan, who was also a descendant of Indian royalty, to be featured on a coin, but the campaign fell on deaf ears.

“She was the first female radio operator to be sent to enemy-occupied France,” said Ms Zaidi.

“She was one of only four women in history to receive the George Cross.”

The Jamaican-born nurse Mary Seacole is also being considered. She was born in the Caribbean to a Scottish father and a Jamaican mother.

At the outbreak of the Crimean War she travelled to England hoping to join Florence Nightingale’s team of nurses.

When she was turned down, she travelled to the Crimea herself and established the “British Hotel” – somewhere the soldiers could rest and enjoy a good meal.

In May, a community hospital was named after the pioneering nurse.

BAME figures such as Walter Tull, the British Army’s first black officer, have been featured on commemorative coins in the past.

“But commemorative coins are not the same as legal tender because legal tender acts as a passport, an ambassador,” says Ms Zaidi.

“We must tell the story of inclusive representation as it matters for cohesion and it matters in the narrative of who we are as a nation.”

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The government’s decision to impose a 14-day quarantine on travellers arriving in the UK from Spain has caused a great deal of “uncertainty and confusion”, as one holiday firm has put it.

Here are some of the issues it raises and what you can do about them.

Why is the Foreign Office advice different from that of the Department for Transport?

Essentially, they serve different purposes. The Foreign Office applies to the whole of the UK and tells people which countries “no longer pose an unacceptably high risk for British travellers”.

In other words, the FCO is assessing whether coronavirus poses a threat to UK travellers’ well-being, as part of its wider remit to warn people of dangerous areas and trouble-spots around the world.

However, the Department for Transport advice applies only to England. It is designed to offer a list of countries from which travellers may be able to return without self-isolation.

The devolved administrations in Scotland, Wales and Northern Ireland have their own views and are entitled to offer different guidance. In this case, they have also decided to take Spain off the list of countries exempt from quarantine.

Is my insurance valid if I’m already there?

The Association of British Insurers has advised holidaymakers that if they were already in Spain when the government’s advice changed, their insurance was likely to cover them until they returned home.

But it added: “Travelling to countries against FCO advice is likely to invalidate your travel insurance and this would apply to those yet to travel to mainland Spain.

“Customers looking to change or cancel their travel plans should speak with the airline provider, tour operator or travel agent in the first instance.

“If you booked your trip or took out your travel insurance after Covid-19 was declared a pandemic, you may not be covered for travel disruption or cancellation. In either circumstance, we’d advise checking with your insurer.”

What about if I’m not there but plan to go? Can I get a refund?

Again, the best thing to do is consult your airline, tour operator or travel agent. The issue is complicated because it depends on when and where you are booked to go. Besides, the government’s advice could change again with very little notice.

Tui, for one, has said that customers due to travel to all areas of Spain between 27 July and 9 August will be able to cancel or amend holidays and will be able to receive a full refund or the option to rebook their holiday with a booking incentive.

However, it adds that people with holidays from 10 August will be updated on 31 July.

Jet2 says it is advising customers to arrive for their flights as normal as it is continuing to operate its scheduled programme to and from mainland Spain, the Balearic Islands and the Canary Islands.

“Because the FCO travel advice to these destinations remains unchanged, our usual terms and conditions apply. As always, we advise customers to purchase appropriate travel insurance before travelling,” Jet2 says.

“This is a fast-moving situation, which we will continue to monitor very closely.”

British Airways and easyJet have also said they are maintaining their flight schedules. But airlines have expressed frustration with the government’s approach, complaining of the “uncertainty and confusion” that has resulted.

People whose trips are cancelled should get a refund within two weeks, but with the travel industry under so much pressure, that deadline may well be missed.

What are the quarantine rules for when I return?

When you arrive back in the UK, you must go straight home or to other suitable accommodation. You are allowed to travel by public transport.

Your 14-day period of self-isolation starts from the day after you arrive.

You cannot leave home except for medical assistance, to attend court or go to a funeral – or to go shopping for essentials, if no-one else can do this for you.

Leaving home for work, exercise or socialising is not allowed.

What are my rights with my employer if I have to self-isolate?

Employees or workers are not automatically entitled to statutory sick pay if they are self-isolating after returning from holiday or business travel and they cannot work from home.

That only applies if they have the virus or symptoms of it, or if there are other medical reasons.

But to a certain extent, it is at your employer’s discretion.

The industrial relations body Acas advises employees to check their workplace’s policy to see whether their employer pays statutory sick pay or a higher rate of sick pay if anyone needs to self-isolate after returning to the UK.

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The coronavirus outbreak has been followed by a massive decline in economic activity in many countries, often blamed on the lockdowns aimed at stopping the spread of the disease and limiting the deaths it causes.

In fact, there are two forces at play.

Government rules being one, and voluntary action taken by individuals and businesses is the other.

If you want to know how quick the recovery will be, you need to know the extent of each.

To the extent that it’s driven by official restrictions, lifting them would do the trick.

But it will take more than that to reverse personal choices and habits.

Consumer bounce-back?

That would need real progress to be made in reducing the risk of infection. Consumers, workers and employers would also have to be confident in that progress.

There is ample survey evidence of a reluctance to go back quickly to the pre-pandemic way of life.

IPSOS-Mori found a majority of Britons said they were still uncomfortable about a wide range of activities, including going to a bar or restaurant, large public gatherings, using public toilets or public transport.

This may be one reason why some venues that could reopen are choosing not to – although the restrictions they would have to operate under make it harder to earn a profit even if the customers were to return.

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A substantial amount of what consumers spend is what is called social consumption, where buyers are physically close to each other – eating out, live entertainment and travel, for example.

When the virus is circulating those activities expose people to the risk of infection.

The Oxford economist Simon Wren-Lewis, who looked at the possible impact of a pandemic more than a decade ago, says the sectors concerned covered more than a third of consumer spending.

There is ample anecdotal reporting that as restrictions have eased this social consumption has resumed to a significant degree.

Declining cases

But is it just because the measures have been eased?

The reason they have been eased in many countries is because cases, hospital admissions and deaths have declined.

Some people – though not all – will have concluded that it is relatively safe to go out. So that might be the reason that economic activity is picking up.

Some economists have tried to disentangle the two elements.

There are some strikingly different conclusions about the balance between the two.

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Research done at the investment bank Goldman Sachs looked at the relationship between stricter lockdown measures and the impact on economic activity.

Tougher lockdown measures did correlate with evidence pointing to sharper economic declines, although that research did not separate the contribution from fear of infection.

In the US one group from the Universities of Texas, California and Chicago concluded that it was mostly the lockdown.

Infection rate

They used data from a series of household surveys. They found that spending by the average American household fell by $1,000 between January and April.

They came to the view that lockdowns accounted for 60% of the decline in employment and that households under lockdown were spending on average 31% less than others.

They concluded “the declines in employment and spending can be largely attributed to lockdowns rather than to the share of the population infected by the coronavirus.”

But others, looking at different evidence, have come to different conclusions.

Two economists at Chicago University looked at mobile phone data on customer visits to more than two million businesses.

The fact that different state and county authorities imposed different restrictions gave them a way of estimating how much of the downturn was due to those rules.

Denmark and Sweden

They found overall a decline in consumer traffic to these businesses of 60%.

But their analysis suggested that a little more than a ninth of that was due to legal restrictions.

They also found that the extent of the declines was linked to the number of coronavirus deaths in the area.

Their overall conclusion: “Individual choices were far more important and seem tied to fears of infection”.

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Others at Copenhagen University used data on bank transactions to compare Denmark and Sweden, which they say were similarly exposed to the pandemic, with only the former imposing significant restrictions.

They estimated that total spending fell by 25% in Sweden and by 29% in Denmark.

They write: “This implies that most of the economic contraction is caused by the virus itself and occurs regardless of whether governments mandate social distancing or not.”

Global Trade

More from the BBC’s series taking an international perspective on trade:

All that said, Sweden was one of the few developed countries to manage some economic growth in the first quarter of 2020, albeit just 0.1%.

Denmark’s economy shrank by 2.1% in that period.

In spite of the differences these studies all point to a contribution from both rules and choices that is substantial.

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To take the Sweden-Demark study – the four percentage-point additional fall in spending attributed to the lockdown in Denmark even on its own would be seen as a substantial downturn.

Perhaps we will get a clearer picture as more data emerges with, probably, different patterns of recovery.

So far it seems clear that both factors, fear and lockdown, have contributed to the undoubted economic damage.