The prime minister said army drivers would be prepared to help deliver fuel to affected petrol stations on a short-term basis amid the crisis. The decision was made on Monday at a meeting of cabinet ministers as the industry said that consumer panic buying — not real shortages of petrol and diesel — was the main cause of the problem. However, despite government warnings of panic buying only worsening the situation, many continue to queue at fuel stations.
Business secretary Kwasi Kwarteng has said, “The UK continues to have strong supplies of fuel. However, we are aware of supply chain issues at fuel station forecourts and are taking steps to ease these as a matter of priority. If required, the deployment of military personnel will provide the supply chain with additional capacity as a temporary measure to help ease pressures caused by spikes in localised demand for fuel.”
The government has released a joint statement from the fuel industry, announcing that companies expect the problem to ease off within the coming days as many drivers will now have full tanks of fuel.
The Prime Minister is expected to reveal a rise in National Insurance that will see approximately 25 million people pay extra tax. In return, he will promise to introduce a cap to the amount an individual will ever pay in social care costs – a figure that will likely come in at between £60,000 to £80,000 – and will vouch to better protect individuals from having to sell their homes to pay off care bills. However, how large the tax rise should be is yet to be decided.
According to the Telegraph, the government is currently favouring a 1% rise in National Insurance, although there are talks about a higher figure, possibly up to 1.25%.
The introduction of any tax increase is likely to be seen as a breach of the Conservative manifesto for the December 2019 election, which promised there would be no increases to the rate of National Insurance: “We will not raise the rate of income tax, VAT or National Insurance”, the manifesto reads.
The social care package will involve two moves. Firstly, it will introduce new measures to ease the impact of the UK’s social care crisis. Secondly, it will provide extra funding for the NHS to tackle soaring waiting lists. In England, 5.5 million people are currently waiting for NHS hospital treatment and it is feared that this figure could increase to 13 million in the coming months. The government says that the increased funds from a tax hike would help clear the NHS backlog built up during the pandemic.
The Chancellor of the Exchequer has written to Prime Minister Boris Johnson warning of the impact that the UK’s strict border controls is having on the country’s economic recovery.
Last month, England lifted the requirement for fully vaccinated citizens to complete the quarantine period when returning from medium-risk destinations. From 2 August, visitors from the EU and US with the same vaccine status will also be exempt from the quarantine period. However, travellers are still required to take costly tests before departure and soon after arrival. Sunak’s letter to the Prime Minister comes ahead of Thursday’s meeting of ministers to consider changes to the current coronavirus travel restrictions. However, many believe that the restrictions should remain in place to prevent a further increase in cases or the outbreak of a new variant.
The warning from Nigel Green, chief executive and founder of deVere Group, follows the landslide victory for Mr Johnson’s Conservative party in the UK’s general election last week in which he secured an 80-seat majority, and as stocks rose across Europe on Monday.
The Queen will officially open Parliament on Thursday, outlining her new government's legislative programme.
It is expected that the Withdrawal Agreement Bill on leaving the EU could be put before MPs as early as Friday. Nigel Green affirms: “The decisive win for the Conservatives triggered one of the pound’s biggest ever rallies, the FTSE 250 index of UK shares climbed by 3.6% and the FTSE 100 rose 1.3%.
“On Monday, European stock markets reached all-time highs.
“This has been driven in part by investors’ relief that a hung parliament had not been delivered, meaning years of uncertainty and indecisions over the UK’s way out of the EU is coming to an end. Also, perhaps, because the Conservatives promised a more pro-business agenda.”
He continues: “But Boris Johnson now has the daunting task of turning his powerful election campaign slogan of ‘Get Brexit Done’ into reality.
“When Britain leaves on January 31, there will be only 11 months to thrash out the basics of the future relationship with the European Union.
“The self-imposed end of December 2020 deadline is a mammoth challenge or Britain will fall through the ‘trap door’ of no-deal Brexit on January 1 2021.”
The Prime Minister could request another extension for the transition period. The government has until 1 July 2020 to agree with the EU a one-off extension, until the end of 2021 or 2022.
But, says Mr Green, this is unlikely. He notes: “I don’t believe that Johnson will use his significant majority to slow down or soften - the Brexit process.
“Instead, his assumption from the election outcome will be that people want quick, easy answers.
“Indeed, in an interview on Sunday, Michael Gove guaranteed that the Brexit transition period will not be extended.”
He goes on to add: “The task ahead is monumental. The time frame in which to complete it is narrow. Failure to agree a free trade deal by the end of next year will mean the UK crashing out of the EU and all the far-reaching negative economic implications, including the likelihood of a recession.
“With such uncertainty, following the election bounce, in 2020 investor confidence in the UK is likely to remain subdued and Boris Johnson’s Brexit stance could be a major source of volatility in financial markets.”
The deVere CEO concludes: “Despite the markets currently surging, investors must avoid complacency.
“2020 promises to be a year in which political factors – including Boris Johnson’s Brexit plan and the U.S. presidential election, amongst others – could potentially spook markets.
“Investors should assess and, where necessary, rebalance their portfolios to take advantage of the potential opportunities and to mitigate the risks.”
So, how will the 2019 general election affect business? We take a look at the predictions and what they could mean for commerce.
It’s an election that prime minister Boris Johnson had been chasing for weeks in an attempt to break the Brexit deadlock, but the vote has come sooner than expected for business leaders and the public.
Pundits are calling it a once-in-a-lifetime ‘Brexit election’ and, given those stakes, the impact on British business could be seismic.
Navigating major change from inside the C-suite is rarely a smooth ride. It means creating a backup plan for your backup plan, then running the numbers for each.
Fortunately, corporate speakers and expert journalists were on-hand to offer their insight just as the possibility of an election descended on the City of London at a night aptly called ‘Preparing for Unprecedented Change’.
At the event, former BBC business correspondent Declan Curry stressed that Brexit is just one of the big changes Britain could face in the fallout from the election.
The business and economics speaker said executive teams are also busy making plans for the possibility of a Corbyn-led Labour government.
“Businesses are hearing the commentary that we’ve had since 2017 – that polls indicate that he has absolutely no chance whatsoever of being the next prime minister,” he told the crowd of corporate guests in Barbican, central London.
“But then they remember the polls running up to the Brexit vote were wrong, the polls running up to the 2017 election were wrong, and in 2015 they weren’t exactly models of prediction either.
“And business leaders like to be prepared,” he adds. “So in most major companies there will be someone somewhere – an executive in an office with the door closed – drawing up the plans for ‘what if’.
“What if John McDonnell is the chancellor, what if the idea of having trade union representatives forcibly on boards is enacted? What if there are bans and restrictions on bonuses?”
As we speak, many businesses are preparing for this possibility just as they are preparing for Brexit. Declan added: “This is being mapped out as a theoretical enterprise.”
The event was organised by international speaker bureau Speakers Corner, whose 7500-strong portfolio of orators and experts have already been called on many times to help businesses navigate the uncertainty of Brexit.
In fact, Declan Curry revealed he himself takes professional guidance on the levels of Brexit fatigue in a given audience before taking to the stage.
He was also keen to point out change can bring opportunities as well as risk. Near the Irish border in Donegal, people are “excited for the return of the ancient art of smuggling,” he joked.
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“Brexit will throw up opportunities, too,” said Declan, pointing to law firms currently profiting from all the uncertainty. The former On the Money radio show host said economies are suffering and pondered the idea that another financial crash could be looming – something that could magnify the risk to British business.
This speculation comes as both major parties enter a public spending bidding war that the Institute of Fiscal Studies has said may be undeliverable.
General elections often make markets unstable, but the combined uncertainty around Brexit and the UK’s economic direction is heightening the impact on shares – especially for companies like BT, which could even be partly nationalised under Labour plans.
Still, some business leaders see the vote as an imperfect path to preventing the damage of a hard Brexit. Sonia Sodha, chief leader writer at the Observer, also spoke at the Knowledge Guild event – and she is sympathetic to this view.
“You can see a path to a Labour-led coalition government with Lib Dem and SNP support if Boris Johnson loses a significant number of seats,” she said, but feels an election is not the best way to deal with the Brexit question.
Business owners and C-suite executives have expressed concerns about the risks of a chaotic Brexit since 2016 – and despite continued delays, the risk of no deal remains. The implications could include increased taxes on imports and exports, supply chain delays and staffing supply problems.
“We are going to be talking about Brexit for years to come, whichever outcome,” Sonia told the crowd of central London executives.
For executives concerned with risk management, the turbulence runs in many directions. The only certainty is the election result will spark significant change – whatever the result.
The comments come ahead of the recent TV debate between Boris Johnson and his rivals to be the next leader of the Conservative party and British Prime Minister.
Mr Johnson has been publicly open about a no-deal Brexit, which has weighed heavily on the pound.
The deVere CEO’s observation also comes at a time as Bitcoin, the world’s largest cryptocurrency, hit a 13-month price high on Sunday above $9,300, with predictions of the next crypto bull run making headlines. Bitcoin prices have soared more than 200 per cent over the last several months.
Mr Green comments: “It looks almost certain that Boris Johnson will be Britain’s next Prime Minister. His vow to leave the EU in October — deal or no-deal — has prompted a decline in the value of the pound.
“Sterling has lost almost 5% of its value against the US dollar since the start of May. Similarly, it continues six straight weeks of falls against the euro.
“As Mr Johnson’s campaign moves up a gear – as it moves into the next phase to win over the party’s grassroots – we can expect him to also up his hard Brexit rhetoric and this will likely drive sterling even lower.”
He continues: “We are already seeing that UK and international investors in UK assets are responding to the Brexit-fuelled uncertainties by considering removing their wealth from the UK.
“One such way that many are looking to diversify their portfolios and hedge against legitimate risks posed by Brexit is by investing in crypto assets, such as Bitcoin.
“Crypto assets are often used around the world as alternatives to mitigate geopolitical threats to investment portfolios.”
He goes on to add: “The no-deal Brexit issue might be the catalyst for new investors in this way, but they are likely, too, to be aware that many established indicators and analysts are pointing towards a currently new crypto bull run.
“As such, they might think this is now the time to jump into cryptocurrencies - which are almost universally regarded as the future of money.”
In May this year, deVere carried out a global survey that found that more than two-thirds of HNWs - classified in this context as having more than £1m (or equivalent) in investable assets - will be invested in cryptocurrencies in the next three years.
The poll found that 68% of participants are now already invested in or will make investments in cryptocurrencies before the end of 2022.
Of the survey’s findings, Nigel Green commented at the time: “Crypto is to money what Amazon was to retail. Those surveyed clearly will not want to be the last one on the boat.”
The deVere CEO concludes: “As Boris and Brexit continue to dominate the agenda, Bitcoin and the wider cryptocurrency sector could experience a boost as investors seek to protect – and build – their wealth by hedging against the geopolitical risks they pose.”
(Source: deVere Group)
