Category Archives: Business

PMQs: Universal credit families risk Christmas eviction, says Corbyn

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Hundreds of families have been issued with eviction notices by a landlord concerned about the impact of universal credit, Jeremy Corbyn has claimed.

The Labour leader, speaking at Prime Minister’s Questions, said the families, in Lincolnshire, risk losing their homes over Christmas.

He urged Theresa May to “pause” the rollout of the controversial benefit while problems with it are fixed.

Mrs May said rent arrears had fallen by a third over the past four months.

But she would look at the case he had raised, adding that she had still not received details from him about a previous universal credit case he had raised at a past Prime Minister’s Questions.

The exchange came amid unconfirmed reports that the standard six-week waiting time for claimants to receive their first universal credit payment is to be reduced by at least a week.

Sky News reported that it could be lowered to a month depending on how successful efforts were to speed up the time taken to process payments.

Speaking in the Commons, Shadow Work and Pensions Secretary Debbie Abrahams called for a government statement on the subject, saying it was “an affront” to MPs and the public that nothing had been done since the government was defeated on the issue of universal credit rollout in an opposition day debate last month.

Labour claims the families in North East Lincolnshire have received the “Section 21” notices from a property firm ahead of next month’s rollout of universal credit in the area.

Such notices give tenants notice that they may be evicted without further warning during a six month period.

‘Cruel and unrealistic’

Mr Corbyn said the letter said the property company “cannot sustain arrears at the potential levels universal credit could create”.

“Will the prime minister pause universal credit so it can be fixed or does she think it is right to put thousands of families through Christmas in the trauma of knowing they’re about to be evicted because they’re in rent arrears because of universal credit?”

Universal credit, which merges six benefits for working-age people into one new payment, is being rolled out across the UK in stages but its implementation, particularly the six-week wait, has caused controversy.

MPs are set to debate proposals for a maximum monthly wait for recipients on Thursday on a backbench motion brought by Labour’s Frank Field, which commands cross-party support.

Mr Field, chair of the Commons Work and Pensions select committee, warned the government faced defeat again, which he said would send a “clear signal” ahead of next week’s Budget.

“The baked-in wait for payment is cruel and unrealistic and government has not been able to offer any proper justification for it,” he said.

The Department for Work and Pensions says universal credit will boost employment by about 250,000 once it is fully rolled out.

A spokeswoman said: “Under universal credit, people are moving into work faster and staying in work longer than the old system.”

Brexit: Ministers see off early EU Withdrawal Bill challenges

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Ministers have seen off challenges to their authority on the first of eight days of scrutiny of a key Brexit bill.

MPs backed plans to repeal the 1972 European Communities Act, which will end the supremacy of EU law in the UK, by 318 votes to 68.

Calls for Scotland, Wales and Northern Ireland to have a veto over the process were rejected by 318 votes to 52.

But several Tories criticised plans to specify an exact date for Brexit and hinted they will rebel at a later date.

The Daily Telegraph reported that up to 15 Conservative MPs could join forces with Labour on the issue when it is voted on next month, threatening defeat for the government.

The MPs, including a number of former cabinet ministers, are angry at a government plan to enshrine in law the Brexit date and time – 23:00 GMT on 29 March 2019 – as announced by Theresa May last Friday.

The newspaper described the group of Tories as “Brexit mutineers”, but one of those named – ex-business minister Anna Soubry – told MPs the front page was a “blatant piece of bullying that goes to the very heart of democracy”.

She said she regarded her inclusion as a badge of honour and insisted “none of those people named want to delay or thwart Brexit” but rather sought “a good Brexit that works for everybody in our country”.

Responding to the Telegraph story, Brexit minister Steve Baker said he regretted “media attempts to divide the Conservative Party”.

He tweeted: “My parliamentary colleagues have sincere suggestions to improve the bill which we are working through and I respect them for that.

Although the issue was not formally debated on Tuesday, it dominated the early skirmishes in the Commons as MPs began considering the EU Withdrawal Bill in depth for the first time.

Former Conservative Attorney General Dominic Grieve said he could not support the “mad” proposal which he said would “fetter” the government’s hands if the negotiations dragged on longer than expected and would prevent any extension to the talks to get a deal in both sides’ interests.

And former Chancellor Kenneth Clarke signalled he would be opposing the government when the matter came to a vote, telling MPs that – as a pro-European – “he was the rebel now” and Eurosceptics in his party now represented the “orthodoxy” within his party.

Under current EU laws, the UK will leave two years to the day after it triggered Article 50, which was on March 29 2017, unless the UK and all 27 other EU members agree to an extension.

Labour said the amendment was therefore a “desperate gimmick” that was “about party management not the national interest”, arguing it increased the chance of the UK crashing out of the bloc without an agreement.

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Ministers said being “crystal clear” about the precise moment of the UK’s departure would maximise certainty for businesses and citizens and prevent the risk of “legal chaos”.

The European Union (Withdrawal) Bill is a crucial piece of legislation paving the way for the UK’s withdrawal by essentially copying all EU law into UK law.

After a marathon eight-hour session, the government also won three votes on clauses and amendments relating to how British courts will interpret retained EU law after the UK leaves and the role of the European Court of Justice during a transition period expected to last about two years.

Ministers did make one concession by agreeing to make a statement to the Commons about how compatible any new Brexit legislation is with existing equalities laws, before they introduce that legislation.

Debate will resume on Wednesday, with MPs expected to consider Labour’s calls for guarantees on workers’ rights and the environment.

MPs have tabled more than 470 amendments – running to 186 pages – for changes they want to see before the bill is passed into law by both the Commons and the Lords.

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Brexit Secretary David Davis, who did not speak in Tuesday’s debate, earlier told City executives that he hoped to get agreement on a time-limited Brexit implementation phase “very early next year”.

He told an audience at the Swiss investment bank UBS that he envisaged a new partnership with the EU that protects the mobility of workers and professionals across the continent.

The BBC’s business editor Simon Jack said his assurances may come too late for some companies which have already begun to trigger their contingency plans.

Deliveroo claims victory in self-employment case

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Deliveroo riders have been ruled self-employed by labour law body the Central Arbitration Committee (CAC).

The test case was brought against the delivery company by the Independent Workers Union of Great Britain (IWGB) .

The IWGB said the ruling showed a majority of Deliveroo riders wanted workers’ rights and union recognition.

But the CAC found they were self-employed because of their freedom to “substitute” – allowing other riders to take their place on a job.

The case follows a number of claims brought by workers in the “gig” economy demanding rights such as holiday pay, the minimum wage and pensions contributions.

Drivers at Uber won a victory a week ago when the company lost an appeal at the Employment Appeal Tribunal against an earlier decision to grant them workers’ rights.

Workers’ rights

IWGB brought the case after it had asked Deliveroo to recognise it as a union representing drivers in Camden and Kentish Town and to start collective bargaining over workers’ rights.

Deliveroo refused and the case was taken to the CAC.

The company said its turquoise-and-grey clad “Roomen” and “Roowomen” wanted to keep flexibility of being self-employed.

But the IWGB said the ruling showed that Deliveroo riders were not satisfied with their current terms and conditions and wanted worker rights, including holiday pay and the minimum wage.

IWGB General Secretary Dr Jason Moyer-Lee said: “It seems that after a series of defeats, finally a so-called gig economy company has found a way to game the system.”

“On the basis of a new contract introduced by Deliveroo’s army of lawyers just weeks before the tribunal hearing, the CAC decided that because a rider can have a mate do a delivery for them, Deliveroo’s low paid workers are not entitled to basic protections.”

Crowley Woodford, employment partner at law firm Ashurst said: “This will be a significant blow to the unions who are trying to expand their membership within the gig economy by challenging the basis on which such employers engage and use their labour.”

A decision by the CAC can be challenged in the High Court on a point of law.

Flexibility

Dan Warne, Managing Director for Deliveroo in the UK and Ireland said: “This is a victory for all riders who have continuously told us that flexibility is what they value most about working with Deliveroo.

“As we have consistently argued, our riders value the flexibility that self-employment provides. Riders enjoy being their own boss – having the freedom to choose when and where they work, and riding with other delivery companies at the same time.”

Deliveroo said it was pushing to have employment law to be changed so it could offer its self-employed riders injury pay and sick pay.

Diamond fetches $33.5m at Christie’s auction in Geneva

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A diamond necklace featuring a flawless 163-carat diamond – the largest of its kind to be auctioned – has fetched $33.5m (£25.5m) at a Christie’s event in Geneva.

The colourless diamond was taken from a 404-carat stone found in Angola.

The finished piece is made from white gold, diamond and emeralds.

The necklace was designed by Swiss jewellery maker de Grisogono and took more than 1,700 hours to make, Christie’s said.

It went under the hammer at Geneva’s Four Seasons Hotel following a series of public viewings in Hong Kong, London, Dubai and New York.

The necklace, named The Art of de Grisogono, sold for $33.5m – $29.5m plus $4m premium – exceeding pre-sale predictions of $30m.

The buyer’s identity has not been revealed.

On Monday a diamond known as the Pink Star sold for a record $83m (£52m) at auction in Geneva.

That diamond measures 2.69cm by 2.06cm (1.06 inches by 0.81 inches) and was set on a ring.

Previously, Christie’s set an auction record in May 2016 with the sale of a 14.62-carat diamond known as the ‘Oppenheimer Blue’ for $50.6m (£34.7m).

Cleaner ‘blocked’ and fined £25 for being ill

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When Polly Mackenzie heard her cleaner was ill and unable to work her normal day, she was hoping to reschedule through the Handy site that supplied her.

But that was not how the system worked. When her cleaner was unable to attend on her regular day, Handy offered to send a replacement.

But the app blocked the cleaner from working for her again.

The story took a further turn the next day: the cleaner was reinstated – but was also docked £25.

Ms Mackenzie herself, from south London, was sent what she described to the BBC as “a grovelling email – as if they’d killed my firstborn”, then found her account had been credited with £5 to compensate for the inconvenience.

She said that meant Handy had “profited £20 from her illness, about twice as much as they’d make if she turned up”.

New York-based Handy told the BBC the cleaner was automatically blocked by its system as she had appeared as a “no show”.

Handy said at no point was the cleaner banned and that it was now “reviewing its policy regarding waiving fees for emergencies such as this”.

It added that the fine was cancelled after the firm learned the reason for her not attending.

The cleaner has since been made available to Ms Mackenzie once more, but the incident has ignited a debate on social media about the use of app-based services and the gig economy.

In the gig economy, instead of a regular wage, workers get paid for each job, such as a food delivery or a car journey. One of the best-known examples is driving for Uber.

Proponents of the gig economy claim that people can benefit from flexible hours, with control over how much time they can work as they juggle other commitments. Those against say its simply another form of employment – without rights or in-work benefits.

Work but no pay

It is not unheard of for gig economy workers to be charged for days they do not work.

Earlier this year, the Guardian reported that Parcelforce couriers who make deliveries for Marks & Spencer, John Lewis and Hamleys could be charged up to £250 a day if they were off sick and could not find someone to cover their shift.

The debate also came to the boil last week when a tribunal ruled that Uber should give drivers the same rights as workers, rather than treat them as self-employed.

Handy added: “While there was initial confusion, any fees have been waived and the [cleaner] can continue to work for customers on the platform as a valued member of the Handy community.

“After reviewing the incident in question we can confirm that the professional was never banned from the platform and has completed bookings since the incident in question.”

Brexit no-deal could stop Aston Martin production

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Aston Martin has said it may have to halt production if the UK fails to strike a Brexit deal with the EU.

All new cars in the UK must have Vehicle Certification Agency (VCA) approval, which is valid in the EU.

Without a UK-EU deal, that validity would cease for new cars from March 2019.

Mark Wilson, Aston Martin’s finance chief, said it would have the “semi-catastrophic effect of having to stop production”.

“We’re a British company. We produce our cars exclusively in Britain and will continue to do so,” he said.

“Recertifying to a new type of approval, be that federal US, Chinese or even retrospectively applying to use the EU approval, would mean us stopping our production.”

However, Mr Wilson added: “We suppose there will be a transitional arrangement. During that transition we would have to look to see how Aston Martin could recertify under a non-VCA approval structure.”

Transition

Mr Wilson was giving evidence to the Business Select Committee along with Mike Hawes, Society for Motor Manufacturers and Traders chief executive, and Patrick Keating, Honda Motor Europe’s government affairs manager.

All three called for clarity on a transition deal with the EU.

Mr Keating told the MPs that Honda would take 18 months to get its systems ready for new customs procedures for exporting to Europe.

He said Honda imported two million components every day from Europe on 350 trucks and had just one hour of stock on its shelves.

Every 15 minutes of delay at customs would cost the company £850,000 a year, although Mr Keating admitted the figure was not “scientific”.

“We’re thinking about increasing the amount of warehousing and the amount of stock we would have to hold if friction entered the border,” he said. “March 2018 is where we would want clarity around transition.”

Integration

Mr Hawes added that the UK motor industry’s integration into European supply chains could make it harder to benefit from any free trade agreement with non-EU countries after Brexit.

Free trade agreements require that about 60% of goods must originate from within the countries making the agreement.

Mr Hawes said: “The average car made in the UK has 44% of its components from UK suppliers. How much of that 44% actually comes from the UK, bearing in mind those suppliers are buying in supply chains from all over the world? The figure is more like 25%, which is a long way from the 60% threshold you would need to qualify for a free trade agreement.”

The problem could be overcome through a “cumulation” agreement with the EU, he said. That would allow EU content to count as being of UK origin and vice versa – but would need to be part of the Brexit trade deal.

Over-50s caught in ‘unemployment trap’

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The over-50s are more likely to be out of work than other age groups and to struggle to get another job, according to new research.

Nearly a third of 50 to 65-year-olds are unemployed, about 3.6 million people, the charity the Centre for Ageing Better said.

About a million of them had to leave jobs because of redundancy, caring responsibilities or ill-health.

The charity said this age group was caught in an “unemployment trap”.

The increase in the state pension age will exacerbate the problem, it added.

Just over a quarter (27%) of the unemployed in this age group are recorded as “economically inactive”, which means they are not engaged in the labour market at all.

Among out of work 35 to 49-year-olds the number classed as economically inactive falls to just 3%.

About 38% of unemployed over-50s have been out of work for more than a year, compared with 19% of 18 to 24-year-olds.

“Once they have lost their job, over-50s struggle much more than any other age group to get back to work, which is costly personally and financially for them, with impacts lasting well into later life,” said Jemma Mouland, senior programme manager at the Centre for Ageing Better.

“Given that we are all working for longer and our workforce is ageing, we need urgent action to break this vicious circle,” she added.

‘Skills development’

The charity said the numbers in the report were based on recent official figures.

It worked with two think tanks – the Centre for Local Economic Strategies and the Learning and Work Institute – to gather anecdotal evidence from those out of work and aged over 50 in Greater Manchester.

The centre said government, local authorities and employers needed to better co-ordinate efforts to help over-50s return to work, including skills development and job opportunities.

“Our research finds that changes are needed at every level, said Ms Mouland.

“Poor health and caring responsibilities are some of the most common barriers experienced by older workers, so it is important that health and benefits systems are more joined up and focused on helping those over-50 stay in work, or get back into employment.

“Employers too need to value their older workers more, offer them greater support and flexibility and stamp out ageist employment practices.”

IPPR calls for guaranteed public sector pay rise

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The government should guarantee public sector pay rises to ease the wages squeeze on vital public services employees, the IPPR has said.

Public sector pay should either rise in line with inflation or private sector pay, the centre-left think tank added.

The GMB union backed the call, saying the policy would encourage public sector staff retention.

The Treasury said the public sector pay cap was scrapped in September, and pay was being reviewed.

Alfie Stirling, IPPR senior economic analyst, said: “It is vital that the public sector does not get left behind.

“Public goods, such as health, education and law and order, are the foundations upon which successful private commerce is built.”

The cost of raising public sector pay in line with Consumer Prices Index inflation over the next two years would be £5.8bn, with the cost dropping to £3.55bn after taxes and lower welfare payments, according to the IPPR analysis.

Higher spending in the economy would reduce the figure further – to £3.3bn by the end of the 2019/20 financial year, said the report.

To bump public sector pay in line with the private sector would cost about £8bn, or about £5bn after tax receipts, Mr Stirling said.

The value of public sector pay has been “significantly eroded” by a seven-year pay squeeze, IPPR added.

Funding

In September the government announced that the cap on public sector pay rises in England and Wales was to be lifted, and that ministers would get “flexibility” to breach a longstanding 1% limit.

But Joe Dromey, IPPR senior research fellow, told the BBC that “the government has so far not confirmed that additional funding would be available to meet any pay rise over and above the 1% that had been budgeted for”.

“This means that in the absence of additional funding, a pay rise of above 1% would have to be covered by the department concerned, leading to further cuts.

“This will in effect limit the pay rises that are recommended, and it will represent a continuation of the pay squeeze,” he added.

However, a Treasury spokesperson said the government would not want to pre-empt the work of independent pay review bodies looking public sector pay.

Pay awards will recognise workers’ contributions, the spokesperson added.

“Public sector workers do a fantastic job and the government is committed to ensuring they can continue to deliver world-class public services,” the spokesperson said.

“Public sector pay packages will continue to recognise workers’ vital contributions, while also being affordable and fair to taxpayers as a whole.”

The GMB union, which supported the IPPR research, said the findings proved that raising public sector pay was affordable.

National officer Rehana Azam said: “Recruitment and retention problems are impairing public services for everyone as staff are pushed to breaking point. The public sector pay pinch is hurting but it isn’t working.”

US leads world in oil and gas production, IEA says

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International energy markets are set for “major upheaval” as the US cements its status as the world’s largest oil and gas producer, while China overtakes it as the biggest oil consumer.

The predictions come from the International Energy Agency’s annual energy forecast.

It believes that global energy demand will rise 30% by 2040, driven by higher consumption in India.

At the same time, the renewable energy sources will become more important.

The IEA, which tracks the energy for 29 countries, said the US – once reliant on imports – is becoming the “undisputed global oil and gas leader”.

It expects the US to account for 80% of the increase in global oil supply to 2025, driven by increases in shale.

That will keep prices down and help make the US a net exporter of oil – in addition to gas – by the late 2020s.

The US Energy Information Administration estimated that the US became the world’s top petroleum and natural gas producer in 2012.

The emergence of the US “represents a major upheaval for international market dynamics”, said Dr Fatih Birol, IEA executive director.

China changes

US oil and gas output is projected to surpass that of any other country in history, due to “a remarkable ability to unlock new resources cost-effectively”.

The agency said renewable sources such as solar and wind are expected to meet 40% of the new demand.

In the EU, renewable energy will represent 80% of new capacity.

Growth in energy demand is half what it would have been without improvements to efficiency.

In China, for instance, government focus on renewable energy has led energy demand to increase by an average of 2% annually since 2012, down from 8% between 2000 and 2012.

China is still on track to have higher per-capita energy consumption than the EU by 2040, it added.

Lawyers seek group suit over alleged Uber sex assaults

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Uber is facing group litigation over its safety practices after complaints of sexual assault committed by drivers.

The suit accuses Uber of creating “a system for bad actors to gain access to vulnerable victims”.

It says the firm has resisted changes, such as more stringent background checks, that would improve passenger safety.

An Uber spokesperson said: “These allegations are important to us and we take them very seriously.”

The lawsuit was filed by two anonymous women, including a Florida woman who police say was raped by an Uber driver after he took her home.

The law firm working on the case, Wigdor, is seeking to broaden it out into group litigation – a class action suit.

It wants to represent any individuals who have suffered abuse at the hands of drivers, which it estimates could exceed 100.

“Uber must make drastic changes to prevent another female rider from harm,” said Jeanne Christensen, a partner at Wigdor.

Longstanding issue

Concerns about Uber’s screening procedures for drivers have dogged the company for a number of years.

Wigdor brought a similar lawsuit on behalf of two women in 2015, which was later settled. Morewomen have come forward this year.

Reviews of Uber driver applications by two US states, Maryland and Massachusetts, have led to rejections of thousands more applications than under Uber’s own system.

Last year, the firm reached settlements in at least two cases over its safety claims, including one brought by prosecutors in Los Angeles and San Francisco.

The firm this month announced it would donate $5m over five years to organisations working to prevent sexual violence.

Tuesday’s lawsuit says Uber has made the profit-motivated decision to “look the other way” when it hires and supervises drivers.

It says Uber has skirted regulators by classifying itself as a technology company but it is essentially a taxi company with drivers that should be considered employees.

“Court orders are needed to force change that Uber should have taken voluntarily,” it says.

An Uber spokesperson said: “Uber received this complaint today and we are in the process of reviewing it. These allegations are important to us and we take them very seriously.”