The Institute for Public Policy Research (IPPR) has produced a report claiming covid lockdowns created 900,000 “missing workers” at a cost of £5bn in lost tax receipts this year alone, and that the problem is so bad, “disease and bankruptcy beckon” under the new Labour Government.  Growing worklessness and a soaring benefits bill mean the Prime Minister must act, the IPPR warned, or he will preside over an even bigger increase in the number of people not in work or looking for a job as the population ages and an increasing number of both older and young workers find themselves living with multiple health conditions. The IPPR report called for more support to get people back into work, saying a “crisis” in the welfare system has trapped millions in a life on benefits, and that could turn Britain into the literal “sick man” of Europe: nearly 4m people are already paid jobless benefits without ever having to look for work, and that the number is expected to keep rising. The IPPR advocates focusing on ways to keep people in the workplace by adapting to their needs. “A greater supply of appropriate work, fit for purpose employment support, and more accessible built environments could all reduce the individual risk associated with impairment or long-term conditions,” it said, arguing that Government should set up a “Fair Work” charter that gives bosses who support staff with health needs more tax breaks. Penalties, meanwhile, could be levied to “disincentivise insecure work,” it said, suggesting a 20% premium for uncontracted hours. Another measure recommended was a “right to try” work for anyone on sickness, disability or incapacity benefits. This would tackle the problem of benefit claimants being reluctant to engage with the job centre for fear of losing their entitlements by guaranteeing “a right to return to previous benefit award within six months of entering work or training” as well as a tapering away of benefits rather than a cliff-edge halt. Other recommendations included higher taxes on tobacco, alcohol and unhealthy foods to “raise more than £10bn a year by the end of the parliament”. The report argued that getting to grips with the issues highlighted – including reforms recommended at a cost of £15bn - would save the government £18bn a year by the mid-2030s. The IPPR’s cross-party commission, chaired by surgeon and Lord Darzi and Dame Sally Davies, England’s former chief medical officer, also spoke of the “clear links” between “health and wealth,” but another of those involved, former health minister Lord Bethell, said pumping more money into health spending was not the answer. “For too long, the default political answer to this country’s health crisis has been more of the same: more doctors, more hospitals, rinse and repeat,” he said, adding: “This commission now proves that disease and bankruptcy beckon if we unthinkingly continue with this ineffective approach”.

Prime Minister Sir Keir Starmer promised yesterday that Chancellor Rachel Reeves’ first budget will not include any policies that harm economic growth, but would focus on “economic growth and wealth creation”. That, however, did not mean she would not deal with the £22bn “black hole” in the public finances Reeves claims she did not know about before the General Election, he added. “I’m well aware that I’ll be judged in five years’ time on whether I’ve delivered the change I’ve promised to the country in relation to the economy, living standards, the health service, public services and whether people feel better off,” he said while talking to reporters on his trip to Italy. This is why the Labour government is going to do “the tough, difficult things up front,” he added, and why “everything is guided by the principle: economic growth and wealth creation is the number one priority”. He took a swipe at former PM Liz Truss, saying: “We’ve just passed legislation to make sure that we never, ever, get to the situation that Liz Truss got us into before. What I’ve said to my team is Liz Truss had unfunded commitments for tax cuts. Unfunded commitments for spending are just as bad and likely to have the impact on the economy, which is why the stability piece applies just as much to a Labour government as it does to a Tory government in my view.” However, "I've always thought it's important to borrow to invest," Starmer also said.

London retail business missed out on a some £220m in the first half of 2024 because of the so-called tourist tax, despite the number of international visitors to London having increased by 3% since covid lockdowns, according to data from New West End. The ‘tax,’ which is in fact the removal by former Prime Minister Rishi Sunak of a previous scheme in which overseas visitors could reclaim VAT paid on their purchases, led to a 12% reduction in spend in the West End in the first half of this year, when compared to 2019, the business body said. In comparison, international spending in continental Europe has risen sharply since 2019, up by 36% in the first half of 2024 versus 2019, according to data from Global Blue, reported by City A.M. New West End CEO Dee Corsie said: “It is bittersweet for the West End that, whilst London remains a highly desirable global travel destination, the absence of tax-free shopping continues to act as a drag on overall spending growth. Critically, the loss of £400m in unrealised sales last year in the West End alone is just a small part of this story; fewer sales on the shop floor means fewer tourists in restaurants and hotels, and a knock-on impact on our entire tourism ecosystem”.

Electric vehicles (EVs) are losing value at an “unsustainable” rate, The British Vehicle Rental & Leasing Association (BVRLA) has warned, meaning fleet operators are having to stomach large losses when selling them because of “accelerated, exceptional depreciation”.  Car leasing and rental firms calculate their over a typical three year period, and include estimates of how much a vehicle is expected to depreciate but, in the past two years, the typical amount of “residual value” left over at the end of a car’s lease has plunged from 60% to 35%, the BVRLA said. This means a car worth £50,000 when new will now drop to £17,500 in value over three years, instead of £30,000. BVRLA CEO Gerry Keaney said at a Parliamentary event yesterday that this trend is “not sustainable”. The reality is that EV residual values in the last two years have dropped by 50%,” he said. “That is the evidence of the accelerated depreciation write-off that we’ve seen. And again, when we look forward two years, the rate of used EVs coming back to the market is about to double”. He blamed the accelerated drop in used values on a recent slump in consumer demand, and called for market stimulus measures to be brought in, including potentially a VAT cut or grants for used car buyers. The Society for Motor Manufacturers and Traders has also called for tax breaks to boost EV demand, The Telegraph notes. It warned earlier this month that the industry is on course to miss the targets set by the Government’s zero emission vehicle mandate, which requires 22% of sales to be electric from this year, rising to 80% by 2030.

Shipbuilder Harland & Wolff has gone into administration, as predicted yesterday. The AIM-listed firm, which has a 1,500-strong workforce, said headcount would now be reduced in “non-core” and certain “central support areas” of the business, and that its status as a London-listed company will “likely come to an end in the near future”. Administrators from Teneo will be appointed this week, it added, while advisers Rothschild and Co. are assessing on strategic options amid interest from a number of potential buyers, among them Babcock, Spain’s Navantia and former CEO John Wood. The announcement comes after the new Labour government refused to guarantee a £200m UK Export Finance loan Harland & Wolff needed to prepare to fulfil a key £1.6bn Ministry of Defence contract to build three new Royal Navy warships, and puts that project in doubt. Shares in the Belfast-based firm have been suspended since July, after it failed to publish audited annual accounts; shareholders would likely receive “no return” from the administration process, the board confirmed.

Airbus is reviving plans to build a new helicopter factory in the UK, The Telegraph reports. Last month, Airbus pulled out of the bidding to replace the RAF’s Puma helicopter fleet, saying the terms of the Ministry of Defence (MoD) tender were not sufficiently attractive for it to proceed, but now it has indicated it could push ahead with the plant, which would help it secure the £1bn contract.

BP Wind Energy is looking to sell its US onshore wind energy business, which has interests in 10 onshore wind farms across seven US states. William Lin, BP’s natural gas and low carbon chief, said: “We believe the business is likely to be of greater value for another owner” but committed to BP’s renewables strategy, saying it was aiming only to “simplify” its portfolio by concentrating on Lightsource BP, its solar energy business.

Energy supplier Ovo has agreed to pay a £2.4m penalty for failures over how it handled customer complaints. Ofgem has announced that 1,395 Ovo customers will receive compensation totalling £378,512 after being subjected to long delays getting complaints addressed - in some cases up to 18 months – and that the firm has also paid £2m to the Energy Industry Voluntary Redress Scheme “in recognition of the severity of consumer detriment caused”.

Barclays has backed the abolition of stamp duty on share purchases in a bid to “revive” the London stock market; make it “internationally attractive;” and encourage unlisted companies to float, a report produced by the bank said. Stamp duty was removed from junior AIM and Aquis market transactions in 2014. The 0.5 per cent levy raises about £3.8bn a year for the Treasury, but a report from earlier this year from consultancy Oxera found it could increase investment in the FTSE by up to £6.8bn annually, City A.M. says.

Playtech has agreed to sell its Italian business, Snaitech to Flutter Entertainment for £2.3bn in cash. Once the deal completes, the FTSE 250 gambling technology firm said that after completion, it plans to return up to £1.8bn to shareholders by way of a special dividend.

Edinburgh Council has been forced to backtrack on a ban on trade it put on more than 450 holiday-let owners in the city, after they threatened legal action, claiming the ban was “unlawful”. The Council put three-month suspensions on the landlords after they applied for letting licences under new rule as they had not first received planning permission. However, the legal challenge submitted by campaigners argued there is “no rational basis” to ban holiday-let owners from having their licence applications considered, and that the council’s “blanket and arbitrary approach” did not consider individual circumstances. The Scottish B&B Association said it is “deeply shocking” that the council was operating an allegedly “illegal policy,” while Fiona Campbell, of the Association of Scotland’s Self Caterers, said Edinburgh’s regulations were an example of how the country’s holiday-let policy has turned into “an international laughing stock”. A “control area” was set up in Edinburgh in 2022, forcing second-home owners letting out their property to gain a licence and planning permission, The Telegraph explains. Edinburgh’s climbdown means short-term let operators are now able to apply for a licence before planning applications are determined.

London Mayor Sadiq Khan is planning to pedestrianise Oxford Street. The proposal is part of a bid to regenerate the wider shopping destination via the creation of a Government-backed Mayoral Development Corporation (MDC) which would have planning powers to deliver the scheme, which City Hall claims will attract more shoppers, and boost jobs and growth across London and the UK “for decades to come”. “I want Oxford Street to once again become the leading retail destination in the world,” Khan added. City A.M. explains that banning traffic from Oxford Street - which attracts some 500,000 visitors a day - was a pledge in Khan’s 2016 mayoral manifesto but it was blocked by Conservative-run Westminster City Council in 2018, after consultations with residents. However, the London borough came under Labour majority control in 2022, for the first time since 1965.

Dame Alison Rose, the former NatWest chair forced to resign in the wake of the Nigel Farage ‘debanking’ row, has been appointed as a new adviser to City solicitors Mishcon de Reya, the law firm which is said to have helped her navigate last year’s scandal. She will steer its equality, diversity and inclusion efforts and mentor a small number of partners. Mishcon partner and chief people officer Vanessa Dewhurst said: “Advisors of Alison’s calibre and leadership are rare and we couldn’t be happier that we will enjoy the benefit of her expertise”. Rose also joined private equity firm Charterhouse Capital earlier this year.

Ruth Todd, the former programme director of the UK Vaccine Task Force has been hired by Rolls-Royce to progress development of the British manufacturer’s first commercially viable nuclear small modular reactors (SMRs). Todd takes up the role of operations and supply chain manager at Rolls-Royce SMR as the company challenges four rivals to secure funding from the Government’s Great British Nuclear to demonstrate its reactor design.