Chancellor Jeremy Hunt yesterday rejected calls by oil and gas producers for respite from the windfall levy that has driven up the tax on oil profits to 75%. Industry leaders told Hunt that there was “one last chance” to halt a “catastrophic” decline in investment in UK waters that risks reducing oil and gas output by at least 50%, the Telegraph says, but that he would make no promises to change tack. It is said he instead highlighted how much worse things could be under Labour’s policies.

The Cost of Net Zero: American international investment bank Stifel has conducted research into the effects of the Labour’s tax plans for the oil and gas sector, including those outlined by Ed Miliband, the Shadow Secretary of State for Energy Security and Net Zero to increase from 75% to 78% total taxes on oil profits until 2029, as well as block any new licences. The bank found that:

·      An increase in the windfall tax to 78% and the removal of investment allowances would yield an extra £6.5 billion by 2029, not the expected £11 billion

·      From 2030 onwards, tax revenue would drop significantly, with a projected loss of £20 billion in tax income over the remaining life of the North Sea energy fields

·      The industry is likely to see a £20 billion reduction in capital investment by 2035 which leads to a 50% drop in production by 2030

·      Around 100,000 jobs could be lost in the sector by the next general election in 2029

·      The UK would become increasingly reliant on imports, with 80% of its gas demand met by imports by 2030, up from the current 55%.

As reported by online political news site Guido Fawkes, the bank also concludes that apart from the loss to energy security, without the North Sea, Britain’s Co2 emissions would in fact be higher, because while production of oil and gas is not highly carbon intensive, the transportation/import of it is.

Chevron is selling off it its remaining North Sea oil and gas assets, exiting the basin after more than 55 years, it has confirmed in a statement to Reuters. The process includes Chevron's 19.4% stake in the BP-operated Clair oilfield in the West of Shetland region, the largest in the British North Sea, with production of 120,000 barrels per day. The process is expected to be formally launched in June, and follows a review of Chevron's global portfolio initiated by CEO Mike Wirth who is looking to focus on the firm's most profitable assets, Chevron said. Chevron had already sold many of its North Sea assets in 2019 to Ithaca Energy. Chevron said the North Sea sale process is not related to a 35% windfall tax the British government imposed on North Sea producers following the surge in energy prices in 2022, but related to its $53bn acquisition of rival Hess which it has already said will include up to $20bn in assets sales worldwide.  Chevron was not at yesterday’s meeting with Hunt, reported above.

Car salesmen face a shortage of petrol vehicles because of Prime Minister Rishi Sunak’s net zero crackdown, the Telegraph reports. One of Britain’s largest dealership chains, Vertu Motors, says sales of electric cars had “stalled” in the UK, raising the risk that manufacturers will miss sales targets mandated by law. Under the zero emissions vehicle (ZEV) mandate, 22% of carmakers’ sales must be electric this year. That target will rise annually until it reaches 80% in 2030. Manufacturers risk fines of £15,000 per car for breaching the rules, meaning many might simply throttle supplies of petrol and diesel cars to artificially boost their compliance, according to Vertu. CEO Robert Forrester said: “The issue you’ve got is fleet demand for battery electric vehicles is very strong due to tax incentives, but retail demand [among private consumers] is weak. So if you can’t grow the battery electric vehicles to hit the percentage, the logical thing to do is to reduce the petrol and diesel supply. If you choke off petrol and diesel supply, then clearly I think prices probably will go up and actually used car prices definitely will go up”. “We could get to the situation where somebody walks through the door wanting to buy a petrol car and we might not be able to supply one,” he added.

The Independent Schools Council (ISC) has unveiled research showing that private schools have already hiked their prices ahead of Labour’s pledge to levy VAT on school fees. Average day-school fees have reached £18,060 and boarding fees have risen by 9% to an average of almost £42,500, the ISC says. The Times calculates that fee increases plus Labour’s VAT will push the average fee up by over a third since 2021. Last month, the newspaper reported that 26% of British parents plan to remove their children from private schools because of Labour’s plans, a move Guido Fawkes points out will result in private schools educating foreign pupils instead of British ones, the highest and rising number of which are Chinese. Labour, however, insists that by year 6th the new tax will be cost-negative for the Treasury and raise £1.6 bn.

Holiday let owners say they will increase the price of bookings ahead of Jeremy Hunt’s £300m tax raid on second homes, the Telegraph reports. A survey of 500 owners concluded that 87% will have to up prices in an attempt to offset the cost of a crackdown by Chancellor Jeremy Hunt. From April next year, holiday homeowners in England will no longer be able to offset their mortgage interest payments from profits and will lose various capital gains allowances: higher rate taxpayers face the prospect of paying 24% tax on profits from a sale rather than the 10% they currently benefit from via Business Asset Disposal Relief. Meanwhile, HM Revenue & Customs (HMRC) launched nearly 2,000 enquiries into holiday lets in 2023-24, the newspaper reveals, up from 375 the prior year and just 95 the year before that. The figures, obtained by The Telegraph in a freedom of information request, show there was a 20-fold increase in investigations between 2021-22 and 2023-24. The tax office said it was investigating holiday home investors suspected of failing to declare income following a post-pandemic boom in staycations.

Business Secretary Kemi Badenoch has warned Royal Mail bosses that she won’t allow it to be sold to a foreign buyer until guarantees over the protection of vital services are put in place, the Daily Mail reports. This week, Royal Mail’s parent company, International Distribution Services (IDS) said it was minded to accept a £3.5bn buyout offer from Czech billionaire Daniel Ketínský, whose EP Group already holds a roughly 27.6% stake in IDS through its affiliate group Vesa Equity.  Ketínský has said he will maintain the one-price-goes-anywhere service across the UK and first-class deliveries six days a week. He has also promised that Royal Mail will keep its headquarters in the UK. Sky News says Badenoch will hold talks today with IDS CEO Martin Seidenberg.

Thames Water's largest shareholder has withdrawn its representative from the utility's board. Michael McNicholas represents the Ontario Municipal Retirement System, or Omers, and sat on the board as a non-executive director. Omers holds a near 32% stake in Britain’s largest water utility, which supplies millions of homes with water and sewerage services across London and the south east. On Wednesday, Sky News reported that a number of board members were likely to resign in the coming days, having rejected calls to reinvest in the struggling and debt-laden firm. In a statement, Thames Water said it “continues to meet Ofwat's expectation that independent non-executive directors form the largest single group on the board."

The Sunday Times Rich List features for the first time an Essex businessman who won a ten-year Government contracts paying his firm £3.5m a day for transporting and accommodating asylum seekers. Graham King is the founder and majority owner of a business empire that includes Clearsprings Ready Homes, and is estimated to have amassed a £750m fortune from “holiday parks, inheritance and housing asylum seekers for the government”.  He was ranked 221^st on the list of Britain’s wealthiest people, which also features King Charles III and Sir Paul McCartney, who has become the first musician to rich billionaire status. Prime Minister Rishi Sunak and his wife Akshata Murty came in at 245th on the annual list with a collective value of £651m, an increase from £529m in 2023. Formula One driver Sir Lewis Hamilton and Tony and Cherie Blair’s son Euan, whose apprenticeship firm Multiverse is said to be worth £1.4bn also feature, as do the Hinduja brothers, who retained the title of the UK’s richest people with an estimated fortune of £37.2bn, up from £35bn last year, and the largest fortune ever recorded in the newspaper’s 36 years of publishing the list. However, this year’s list reveals the largest fall in the number of billionaires – from 177 to 165 – in its history. Sir Jim Ratcliffe, the founder of the petrochemicals company Ineos, who this year bought a 27.7% stake in Manchester United FC, is named as ‘the biggest loser’ on the list, with a £6.2bn decline in his fortune to £29.7bn. Together, the richest 350 individuals and families together hold a combined wealth of £795.4bn, a sum larger than the annual GDP of Poland. You have to be worth at least £350m to get on the list these days.

Reality television stars are among nine people charged in Britain with promoting unauthorised trading schemes on Instagram in the first crackdown on "finfluencers", the Financial Conduct Authority said yesterday. They will appear before Westminster Magistrates' Court on 13^th June. Read the full story at https://www.reuters.com/world/uk/uk-charges-nine-crackdown-finfluencers-2024-05-16/?taid=66469f3ab1e0420001866eb1&utm_campaign=trueAnthem:+Trending+Content&utm_medium=trueAnthem&utm_source=twitter

The Bank of England says it will increase the number of staff working in Leeds as part of a plan to rely less on London for hiring workers. The central bank plans to have at least 500 workers based in Leeds by 2027, equivalent to around one in 10 staff. Its office in the city currently accommodates up to 70 staff.

Land Securities (Landsec) has seen an 18% jump in workers tapping into its offices across London over the past year, it said as it produced its full-year results today. The FTSE 100-listed British real estate investment trust (REIT) saw 1.4% net income growth in its London offices, with overall occupancy jumping to 97.3%, and reletting or renewals 15% above their previous rental contracts. 81%  of its tenants in the capital either expanded into the office space they wanted or kept it the same. The trust’s portfolio of properties is now increasingly concentrated, with 72% of its offices in London now in the West End, up from 48% three years ago. However, the trust still reported a loss before tax of £341m, though this was down from a loss of £622m the year before.

Woundcare technology developer AOTI is said to be planning a London stock market flotation next month. According to Sky News, AOTI - or Advanced Oxygen Therapy Inc - is drawing up plans to raise roughly $50m (£39.5m) from an initial public offering on the junior AIM market. A source told the broadcaster the IPO is likely to value AOTI at around 160m. Based in California, AOTI says its medical technology reduces the need for amputations in patients by more than two-thirds. A spokesman for AOTI declined to comment to Sky on its IPO plans.

GSK (GlaxoSmithKline) has sold its remaining 4.2% stake in consumer health business Haleon, which it spun off in July 2022, raising about £1.25bn.

Meta Platforms’ social media sites Facebook and Instagram are to be investigated by the European Commission (EC) for potential breaches of online content rules relating to child safety. Tech companies are required to do more to tackle illegal and harmful content on their platforms under the European Union's landmark Digital Services Act (DSA), which kicked in last year. "The Commission is concerned that the systems of both Facebook and Instagram, including their algorithms, may stimulate behavioural addictions in children, as well as create so-called 'rabbit-hole effects'," the EU executive said in a statement, adding that it was also “concerned about age-assurance and verification methods put in place by Meta." Meta said: "We want young people to have safe, age-appropriate experiences online and have spent a decade developing more than 50 tools and policies designed to protect them". It added: "This is a challenge the whole industry is facing, and we look forward to sharing details of our work with the European Commission."

The Dow Jones Industrial Average hit a record 40,000 yesterday afternoon. The equity index tracks 30 of America’s top companies.

Trade tariffs clapped on China by the US are boosting imports from Vietnam, Reuters reports. The surge has “vastly widened” trade imbalances, with the Southeast Asian country last year posting a surplus with Washington close to $105bn - 2.5 times bigger than in 2018 when the Trump administration first put heavy tariffs on Chinese goods, the news agency says. Vietnam now has the fourth-highest trade surplus with the United States, lower only than China, Mexico and the European Union.

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