Britain’s energy policy is threatening investment, The Telegraph reports, quoting David Latin, the chairman of Serica Energy, who says the UK tax regime has now become too unstable to support offshore energy producers. Serica is one of the North Sea’s largest producers. It provides 5% of Britain’s gas supply and drills around 600,000 barrels of oil a day. Now, however, it is preparing to shift future investment to Norway instead. The UK is “fiscally more unstable than almost anywhere else on the planet” when it comes to drilling, Latin said, because successive raids have pushed taxes on oil and gas profits up from 40% to 78% in three years, making business already unsustainable, even before the fresh hikes planned by the new Labour Government. “The consequences of being a purely British-based company are horrific at the moment,” Latin notes, pointing out that on the day the Labour manifesto was announced, Serica’s share price fell 11%. The document confirmed Labour’s intent to levy an extra 3% in windfall levies against oil and gas companies and remove their investment allowances. Politicians’ ideological dislike of fossil fuels fails to take account of the country’s long-term needs, or the jobs destroyed on the way, Latin told the newspaper.

The cut in interest rates has helped to trigger a “buzz” in the housing market, according to Rightmove, which says enquiries by potential home buyers have jumped by almost a fifth this month, compared with a year earlier. Estate agents have received 19% more enquiries about homes for sale so far, while the number of agreed sales has risen by 16% compared to last year, when mortgage rates were near their peak. The Bank of England cut rates to 5% from 5.25% earlier in August, and is widely expected to cut rates again in November.

More train strikes could be on the way: Aslef, the train drivers union, has called for industrial action every weekend until November on the east coast main line between London and Edinburgh, citing “bullying by management, and persistent breaking of agreements” by train firm LNER over at least the last two years. Alsef says this dispute is “entirely separate” from the one about pay, which was reportedly settled this week after more than a year of disruption. Aslef General Secretary Mick Whelan said: “The company has brutally, and repeatedly, broken diagramming and roster agreements, failed to adhere to the agreed bargaining machinery, and totally acted in bad faith. When we make an agreement, we stick to it. This company doesn’t. And we are not prepared to put up with their boorish behaviour and bullying tactics”. LNER was nationalised in 2018 and is currently run by the Department for Transport. An LNER spokesperson told City AM: “We are surprised and disappointed to hear this news following recent constructive conversations. We will continue to work with ASLEF to find a way to end this long running dispute which only damages the rail industry.” Transport Secretary Louise Haigh has called on both parties to “get around the table and work in good faith to resolve this dispute and as quickly as possible.”

The Competition and Markets Authority says it will continue looking into the historically high price of infant formula and follow-on baby milk, but will not carry out a full-scale investigation "at this stage," but will develop recommendations to governments to improve market outcomes instead. The CMA has warned that suppliers lack incentives to offer infant formula at competitive prices, however there are strict restrictions on advertising infant formula, as well as on other promotional and commercial activities to avoid inducing infant formula purchases. This, the CMA noted, means there is “softening competition” on price because price reductions cannot be promoted. The current regulatory framework, the behaviour of manufacturers and suppliers and the needs and reactions of people buying formula, combine to result in “poor market outcomes," it said.

Ted Baker is closing its last 31 high street stores this week, putting around 500 jobs at risk. There are hopes the chain will be rescued by retail tycoon Mike Ashley’s Frasers Group, but a potential licensing deal is said to have stalled.  Ted Baker’s UK holding company, No Ordinary Designer Label, fell into administration in March, leading to the closure of 15 stores and the loss of 245 jobs. Neither Ted Baker’s administrators at advisory firm Teneo or Frasers Group were prepared to comment when approached by The Telegraph.

PwC has been fined £15m by the Financial Conduct Authority (FCA) for failing to alert the regulator about suspicions London Capital & Finance (LCF) might be involved in fraudulent activity. The fine is the first ever issued by the FCA to an audit firm. Separately, PwC is also facing a lawsuit from Revelan, a UK commercial property developer, which alleges the firm provided “negligent” tax advice that caused Revelan to face a £3m tax bill. In a statement, PwC told City A.M.: “We will be robustly defending this claim.”

Revolut has secured a $45bn (£34.9bn) valuation in a share sale by employees, making it one of Europe’s most valuable private tech company. An app-based financial services provider, Revolut has very recently been granted a UK banking licence after a three-year wait. It generated record pretax profit of £438m in 2023 on the back of higher interest rates and attracting almost 12m new retail customers over the year. Its global user base recently passed 45m. City minister Tulip Siddiq is now said to be keen to meet with Revolut officials, with a view to encouraging the firm to list on the London Stock Exchange, a source close to the ministry told City A.M. Previously, the Financial Times reported Revolut favours a possible listing on the Nasdaq in New York.  

Housebuilders Barratt and Redrow are pushing ahead with their planned £2.5bn merger, saying the deal should complete later this week, despite the deal being subject to an investigation by the Competition and Markets Authority (CMA). Barratt and Redrow said in a statement earlier that they are looking to agree "suitable undertakings" to address the CMA's concerns about just one new build private residential housing development out of the more than 400 countrywide where the two companies overlap. The CMA is likely to prevent the two companies from integrating fully until they agree on conditions to settle competition concerns.

While I was away last week…

The British economy grew in the three months to June, with GDP up 0.6% compared to the previous quarter, according to data from the Office for National Statistics (ONS). ONS director of economic statistics Liz McKeown said: “The UK economy has now grown strongly for two quarters, following the weakness we saw in the second half of last year. Growth across the three months was led by the service sector, where scientific research, the IT industry and legal services all did well”. However, in June growth was flat with services falling, “due to a weak month for health, retailing and wholesaling, offset by widespread growth in manufacturing,” she added. Commenting on the data, Chancellor Rachel Reeves said: “The new Government is under no illusion as to the scale of the challenge we have inherited after more than a decade of low economic growth and a £22bn black hole in the public finances. That is why we have made economic growth our national mission and we are taking the tough decisions now to fix the foundations, so we can rebuild Britain and make every part of the country better off.” Shadow Chancellor Jeremy Hunt however, said the GDP growth was “further proof that Labour have inherited a growing and resilient economy,” and that Reeves’ attempt to “blame her economic inheritance on her decision to raise taxes – tax rises she had always planned – will not wash with the public”.

Criminals are planning to exploit incoming fraud refund rules, a City A.M. exclusive claimeds. From 7^th October, the Payment Systems Regulator (PSR) is enforcing new rules which mean banks and other payment firms will be forced to refund victims of authorised push payment (APP) fraud up to a limit of £415,000, with the cost would be split between the companies used to send and receive the payment. There has already been considerable push-back against the proposal, but analysts are also now voicing concerns that a combination of unprepared firms, less cautious consumers and new ways of claiming money could encourage organised criminal groups to target the UK. “There’s a plan for 7 October,” an industry figure with knowledge of fraud activity told the newspaper. “Fraudsters have got it in their diaries,” and are discussing the incoming regime on the dark web, he said, while warning that the rules could drive fraud to add up to 50% of all crime in England and Wales, up from a current level of some 38%, according to the Home Office. Former fraudster Tony Sales, who went on to co-found anti-crime consultancy We Fight Fraud after leaving prison, also said an active criminal had told him recently he was planning to “totally exploit” the PSR’s rules and had “found people who would be willing to do it”. “It’s totally something I would have exploited – it’s a no-brainer,” Sales added. Some £459.7m was lost to APP fraud last year, according to banking trade body UK Finance. However, some experts believe the true figure is likely closer to £700m as around a third of scams are estimated to go unreported.

HMRC issued mobile network operator Lycamobile with a winding-up petition at the High Court. The provider of international pay-as-you-go SIMs, founded by businessman Subaskaran Allirajah, donated £2.1m to the Conservatives, but was revealed in 2020 to be embroiled in three disputes with HMRC over at least £60m in allegedly unpaid tax. Last month, the first-tier tribunal, a tax specialist tribunal, ruled in favour of the taxman in a dispute amounting to £51m in VAT payments; and in June, the Financial Times reported that auditors PKF Littlejohn had been unable to sign off the Lycamobile’s accounts as it had “not been able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion”. In France last year, a criminal court in Paris convicted the company’s French entity of committing fraud with respect to VAT and money laundering and fined them €10m.