RENT INCREASES ARE INFLATIONARY

UK rent rises forecast to outpace wage growth for three years


Richard Partington Economics correspondent

THE GUARDIAN
Sun, 7 April 2024 

Rishi Sunak’s government last month watered down reforms to increase protections for renters Photograph: Yui Mok/PA

Rent rises in Britain are forecast to outpace wage growth, despite having already surged at the fastest pace on record after the Covid pandemic and the cost of living crisis.

The Resolution Foundation expects added pressure on millions of households and said average rents could increase by 13% over the next three years as current high growth in the private rental market work their way through existing tenancies.

Forecasting 4.2% growth in average rents in each year up to 2027, the thinktank said this rate was much faster than the 7.5% growth in average workers’ earnings (2.4% a year on average) predicted by the Office for Budget Responsibility over that period.


Rishi Sunak’s government last month watered down reforms to increase protections for renters against no-fault evictions, leading to accusations that the prime minister and the housing secretary, Michael Gove, had caved in to Tory MPs lobbying in favour of landlords’ interests.

Related: Ground rent not legally or commercially necessary, says UK watchdog

In a report titled Through the Roof, the Resolution Foundation said renters across the country had already been through an exceptional surge in new tenancy rent levels – up by almost a fifth over the past two years. It said the surge had affected more households in the past after a big increase in private renting, almost doubling from 11% of all households in the mid-1990s to 20%. This included a sharp increase in the number of families living in private rented accommodation headed by someone aged 30-49, meaning that renting was no longer solely the preserve of those in their 20s.

However, the report said record growth in rental costs was beginning to slow after a “bounceback from the pandemic”, with market rents for new tenancies having cooled from an annual growth rate in cost of 10.4% in June 2023 to 7.5% by March 2024.

But the thinktank warned that it could still take years for this burst of growth to work through the whole private rental sector.

While new renters were already paying higher monthly outgoings, it said existing tenants reaching the end of their tenancies, or those being forced to accept within-tenancy price rises, would face large rent increases in future.

The report found that the main factor driving up rental costs was the snapback from Covid lockdowns, when evictions and repossessions were halted and rents collapsed amid heightened economic uncertainty. More recently, it said fast-rising wages had also pushed up rents for new tenancies.

It said there had been “scare stories” about higher interest rate rises and tougher regulations, causing a mass exodus of landlords from the private rental sector. However, it dismissed this as having only a limited impact, highlighting Bank of England research showing the sector had only shrank by 1% since mid-2019.

The thinktank said rents tended to track wage levels over the longer term but had fallen to the lowest level on record relative to earnings amid the disruption of the pandemic. While they had risen back by early 2022, they still remained about 5% lower, indicating that they would continue to increase by 13% over the next three years to return the UK’s rent-to-earnings ratio to its long-term trend.

Cara Pacitti, a senior economist at the Resolution Foundation, said: “With more families renting privately, and renting for longer too, these rent surges are a bigger problem for Britain, and require bolder solutions from policymakers.

“Short-term solutions include regular uprating of local housing allowance to support poorer families, and the ultimate, longer-term solution is to simply build more homes.”

A government spokesperson said it was supporting households with help for bills amid the cost of living crisis. “Our Renters (Reform) Bill will give people more security in their homes and empower them to challenge poor practices. Through our long term plan for housing we are investing £11.5bn in the affordable homes programme and remain on track to build one million over this parliament.”

Farmers’ union boss hits out at Tories over rushed Brexit

Archie Mitchell
Sun, 7 April 2024 

The boss of the National Farmers’ Union (NFU) has hit out at Conservative ministers for rushing Brexit and said the government “got wrong” some aspects of Britain’s withdrawal from the EU.

Tom Bradshaw, who has replaced Minette Batters at the top of the NFU, which represents more than 46,000 farmers and growers across England and Wales, said ministers “should have taken some of our warnings [about Brexit] at face value”.

The arable farmer from Essex, who took over from Ms Batters in February, said members are traditionally “big supporters” of the Tories.

But he said “many are feeling let down” by post-Brexit trade deals and said the government “did not consult and did not listen” to farmers when leaving the EU.

A group of farmers in tractors descended on London to protest in March (AFP via Getty Images)

He said trade deals are undermining UK farms because supermarkets can sell foods produced to lower standards abroad.

And Mr Bradshaw criticised the “short term” focus of the current government, with a general election expected later this year hampering longer-term decision-making.

In an interview with The Sunday Telegraph, he said: “Historically our members would have been big supporters of the Conservative Party, but many are feeling let down, particularly by the international trade deals [which they believe disadvantage British farmers]. They are not going to forget about that quickly.”

He added: “The Brexit deal got delayed but our ministers at Defra were not willing to delay the transition and so put themselves under huge time pressure to deliver a scheme,” he says. “Their department was the most impacted by withdrawal from the EU and it became a totem pole.”

“They didn’t consult and they didn’t listen. They delivered a scheme under a restricted timescale and there are areas of it that I think they got wrong. They should have taken some of our warnings at face value.”

And, in a dig at some of Britain’s post-Brexit trade deals such as with Australia and New Zealand, Mr Bradshaw said: “If we are expected to produce to standards here then we should expect all the food sold in this country to be produced to that standard. And if as a country we don’t care about those standards, then our members should have the competitive advantage to produce to lower standards. You can’t have it both ways.”

Losing the support of British farmers would be a hammer blow for the Conservatives, who have enjoyed the support of rural voters for generations.

A poll for the Country Land and Business Association (CLA) suggested the Tories would lose 53 of their 96 rural seats at the general election, with high-profile Conservatives such as Jeremy Hunt at risk.

And in March Tractor-riding farmers descended on Westminster to protest against trading arrangements they claim will “decimate” British farming and jeopardise UK food security.

In March, protesting farmers called for ‘a radical change of policy and an urgent exit from these appalling trade deals which will decimate British food’ (Gareth Fuller/PA Wire)

Campaign groups Save British Farming and Fairness for Farmers of Kent organised the demonstrations at which farmers called for “a radical change of policy and an urgent exit from these appalling trade deals which will decimate British food”.

Mr Bradshaw did say recently appointed environment secretary Steve Barclay is “doing a good job so far”, but said “I don’t think [ministers] can be clear about their plans when you are only planning for six months’ time”.

And, with Labour on course for a landslide majority, he added: “At the NFU we are proudly apolitical, but in the four years I’ve been in the NFU team, I have built up a strong relationship with shadow farming minister Daniel Zeichner, who has been in post throughout that period.”

UK
What is National Nail Tech Price Increase Day and what does it mean for your manicure?

Ellen Manning
Updated Sun, 7 April 2024

The price of getting your nails done could go up this week as part of a campaign by nail technicians. (Stock image: Getty)

Thousands of nail technicians are set to put their prices up this week as part of a national campaign to ensure they earn less than the minimum wage.

National Nail Tech Price Increase Day is set to take place on Monday (8 April), when technicians and salons across the country have agreed to raise the amount they charge in order to cover growing costs.

The campaign has been organised by The Nail Tech Org, which says its data suggests the average nail technician earns less than £7-an-hour - while the minimum wage is £11.44 an hour.

The cost of having your nails done can vary, depending on where you are in the country and what treatment you are having, but it is believed that prices could increase by up to 50% in order to ensure salons and technicians aren't charging less than they are paying out in various costs.

The idea to put prices up across the country on the same day is in a bid to normalise higher prices and raise awareness, organisers have said.

Here, Yahoo News UK looks at what National Nail Tech Price Increase Day is and what it means:-

What is National Nail Tech Price Increase Day?

National Nail Tech Price Increase Day will take place on Monday (8 April), when thousands of nail technicians across the country have agreed to collectively raise their prices.

It has been organised by The Nail Tech Org, which said research gathered from its members had revealed that many are only earning around £7 an hour after deducting all the costs they need to pay out.

In an Instagram post, it said: "We gathered insights & data from our NTO members over the last few weeks to gain a snapshot into the financial world of nail techs…& we couldn’t believe what we found. After being shocked by some of the stats we found, we realised change needed to happen & in support of our National Nail Tech Price Increase Day we’re ready to do just that!!

"Join us, and hundreds of other nail techs from across the industry, as we come together to support each other in educating ourselves on the costs of running a nail tech business and empower each other to raise them appropriately."

In another post, it added: "We already know that pricing is a huge issue within our industry, but the only way that we are going to tackle this, is to do what we do best… to do it together."

Inviting members to take part in the Price Increase Day on Monday, it said: "Our studies have found a lot of nail techs are working for less than minimum wage. We have created this day, so nail techs feel empowered and supported and come together to raise our prices (if needed) correctly at the same time, we create a new normal.

"A normal that pays us a fair wage for the work that we do and the services that we provide. This isn’t just a campaign; it’s a movement towards empowering nail technicians like yourself to run not just a successful, but also a sustainable business!"


What is a nail technician?

Nail technicians are trained to carry out various treatments for nails, from applying different kinds of polishes and extensions to repairing and removing extensions, nails and polish.

Training and what different nail techs do can vary from place to place, but can require education on: how to apply and remove different polishes; nail artistry; sanitisation and hygiene practices; health and safety; nail anatomy and physiology and nail diseases and disorders.

According to the government careers website, the average annual salary for a nail technician can range from £15,500 for a starter to £22,000 for an experienced nail technician. But many suggest they actually earn less than minimum wage by the time they have paid out all the associated costs involved in doing their job.
Who is supporting National Nail Tech Price Increase Day?

The campaign has received support from nail technicians across the country, with many saying they will join in the price increase day, as well as explaining to their clients why they are taking the step.

One said they charge £40 for the application of gel nails but gets complaints that she is too expensive, while another said she had been absorbing rising costs but could no longer afford to do so.

Another said: "It's typically one of our least profitable treatments".

As well as urging nail technicians to join its campaign, the Nail Tech Org has produced a free pricing course for its members, which includes a current income calculator, pricing calculator and two masterclasses in a bid to help them initiate their own price rises.

Photo with copy space of a manicurist polishing the nails of a client

What other changes have happened around employment this week?

The campaign around nail technicians comes amid other changes in the world of work based on employment.

Three major new laws came into effect on Saturday - all revolving around employees' rights in the workplace.

They changed how employers deal with flexible working, unpaid leave for staff who are carers and redundancy during pregnancy.

For Flexible Working, the change in the law means you have the right to ask if you can work flexibly from the first day of your employment, rather than only when you have worked for your employer for 26 weeks or more.

In addition, under the Carer’s Leave Act, which came into force on Saturday, employees who are carers can take up to a week of unpaid leave every 12 months – equating to five days for most people.

Workplace protection for pregnant women has now been extended as of Saturday too, as part of the Protection from Redundancy (Pregnancy and Family Leave) Act 2023.

UK
Activists call on Barclays to close ‘fracking loophole’ in energy finance policy


Rebecca Speare-Cole, PA sustainability reporter
Sun, 7 April 2024 

Campaigners are calling on Barclays to close what they see as a “loophole” in its energy policy that allows the financing of fracking companies.

The UK’s biggest bank amended its climate change statement in February, pledging to focus capital on supporting energy companies to decarbonise.

The bank said it would no longer finance new oil and gas projects and would restrict its financing of “pureplay” companies – those that focus exclusively on fossil fuel extraction and exploration.

But ShareAction, which campaigns for responsible investment, pointed out that pureplay companies working on short-term extraction projects are exempted from this commitment.

The charity added that fracking activities – a controversial process that involves making large cracks in underground rocks to extract oil and gas – are typically short-term.

To explore the potential impact of continued financing to fracking firms, ShareAction looked at Barclays’ recent history of energy financing.

Its financing of pureplay firms decreased by 42% from an average of 1.9 billion dollars between 2016-2020 to 1.1 billion dollars between 2021-2022 – the latest year for which figures are available.

But ShareAction also found that companies specialising in fracking on average made up the majority share of Barclays’ financing to pureplay firms during this period, at 57%.

The share was 80% for fracking firms in the most recent year of 2022, it added.

Barclays argues that the financing of fracking does not lock in long-term emissions since most projects have a short-term lifecycle (Tim Goode/PA)

Elsewhere, ShareAction said Barclays has committed to restrict fracking financing in the UK and Europe, where the practice is mostly banned or suspended.

Meanwhile, the bank’s fracking client base is largely located in the US.

The charity said many of Barclays’ peers such as HSBC and BNP Paribas have applied restrictions to financing for fracking in North America as well as the UK and Europe.

Barclays argues that the financing of fracking does not lock in long-term emissions since most projects have a short-term lifecycle and that more widely, investment is needed to support existing energy assets while clean energy is scaled.

The bank’s energy policy update came after a period of engagement with a coalition of investors including ShareAction.

The charity and other campaign groups welcomed the move and withdrew a resolution asking shareholders to vote for change at the bank’s annual general meeting in May.

But they also said the changes did not go far enough to a make significant impact on the bank’s fossil fuel financing.

Kelly Shields, campaign manager at ShareAction, said: “Barclays’ energy policy contains loopholes that allow the bank to continue to financially support fracking – a risky activity that contributes to climate change and can destroy habitats and contaminate water supplies.

“Barclays’ stance on fracking leaves it out of step with other large banks that have listened to the concerns of investors and customers and started taking steps to cut off support for this fossil fuel.

“We’re calling on Barclays’ shareholders to ask the bank to close these loopholes and rule out financing for all pureplay oil and gas companies, including fracking clients, wherever they are in the world.”

Katharina Lindmeier, senior responsible investment manager at Nest, said: “We have been clear that we think Barclays can and should go further on their climate commitments, particularly in strengthening its fracking policy.

“We will continue working with Barclays over the coming years to help develop their policy, with fracking a key area of engagement.”

A Barclays spokesperson said: “With a target to provide one trillion dollars of Sustainable and Transition Finance by 2030, Barclays continues to support an energy sector in transition, focusing on the diversified energy companies investing in low-carbon and with greater scrutiny on those engaged in developing new oil and gas projects.

“We are committed to financing current energy needs, while financing the scaling of the clean energy system of tomorrow, to ensure that energy is secure, affordable and reliable.

“Barclays’ absolute financed emissions for the Energy sector reduced by 44% since 2020, exceeding our 2030 target.”

UK retail sector lost £11.3bn to payments fraud last year, figures suggest

NOT SHOP LIFTING

Josie Clarke, PA Consumer Affairs Correspondent
Sun, 7 April 2024 


More than a third of UK businesses (35%) fell victim to fraudulent activity, cyber attacks or data leaks over the last 12 months, up 37% on 2022, according to the report for financial technology platform Adyen by the Centre for Economic Business and Research (Cebr).

Retail businesses lost an average of £1,394,518 each to fraudulent activity over the last 12 months, the report said.

Luxury fashion retailers lost an average of £2.8 million, clothing and accessory businesses £2.6 million and health and beauty brands £1.1 million each.

In an effort to improve online sales, many retailers have opted for more lenient online returns policies.

However, many now battle high rates of chargeback fraud. If a retailer receives a fraud-related chargeback for a transaction, it means that the cardholder claims they did not authorise or participate in the transaction.

Fraud is also impacting shoppers, with 33% of UK consumers becoming a victim of payments fraud over the past year, up from 23% in 2022, a survey found.

Payment fraud is defined as a fraudster stealing someone’s credit or debit card number, or checking account data, and using that payment information to make an unauthorised purchase.

Consumers who fell victim to payments fraud in 2023 lost an average £311.09, an increase of 16% on the year before.

Adyen chief operating officer Roelant Prins said: “Fraud is a pervasive challenge for retailers, and today’s findings demonstrate how it can significantly impact profits.

“Criminals are deploying more sophisticated methods when they attack businesses, including the application of AI, and it’s therefore critical to invest in the right defence mechanisms to protect the company and customers.

“With technology in place, such as machine learning tools, retailers should be able to recognise genuine customers and spot fraudulent activity across their sales channels.”

Censuswide polled 2,002 consumers in the UK from January 15-2

‘Empowering’ brand Sweaty Betty among the UK's biggest gender pay gaps

Daniel O'Boyle
Sun, 7 April 2024

The business, which says it is “on a mission to empower all women", pays female staff 43p for every £1 earned by men (Sweaty Betty)

Sweaty Betty - the female-focused London athleisurewear brand that says it is “on a mission to empower all women" - has one of the biggest gender pay gaps of any company of its size in the UK, the Standard can reveal.

The figures show Sweaty Betty has the 90th-largest median gender pay gap out of more than 10,000 firms in the Government database, or the 11th-largest gap of any company with more than 1,000 employees.

The median woman at the company makes 46.2p for every pound made by men there, or 53.8% less. That puts Sweaty Betty in the bottom 0.4% of companies of its size for pay equality.

Looking at the mean instead of median, there were still only 21 companies with a larger gender pay gap than Sweaty Betty — and 13 of them were football clubs. Sweaty Betty’s mean pay gap was 56.4%.

Official figures show that lower-paid roles at the company are almost entirely held by women. Among the top quarter of jobs by pay at Sweaty Betty, most are also held by women, but this group includes a much higher share of men than its lower-paid roles.

Sweaty Betty’s large gender pay gap does not appear to be an inevitable consequence of the sector it’s in. Rival athleisurewear brand Lululemon, its most direct competitor, had a median gender pay gap of just 6%. Lululemon’s mean gap was closer though, at 38%.

None of the other companies of similar size with larger gender pay gaps operated in the fashion or retail sectors.

In figures published just two years ago, the gender pay gap at the brand was lower than the UK average, at just 10p per pound.

However, it rocketed in last year’s figures and continued to climb in the ones published this year. The rocketing pay gap came in the first year that the data covered Sweaty Betty’s takeover by US fashion firm Wolverine Worldwide, who bought the brand from its founders, Tamara and Simon Hill-Norton, for £300 million.

According to the Sweaty Betty website, the brand - which was founded in Notting Hill in 1998 - is “on a mission to empower all women through fitness and beyond”.

“This means finding more sustainable ways of working, making sure inclusivity is at the heart of everything we do, and investing in our community through the Sweaty Betty Foundation,” the website continues.

It is known for championing body positivity. Last month it launched a new campaign and brand goals that are “designed to lift women up”.

Sweaty Betty and Wolverine Worldwide did not respond to a request for comment.

Banker bonus gap widens as men awarded more variable pay than women at top financial firms


Simon Hunt
Fri, 5 April 2024 

(Victoria Jones/PA) (PA Wire)

The gender pay gap has worsened across many of the City’s biggest banks in signs that men are reaping an increasingly large share of bonus pools, new figures reveal today.

The difference in average bonuses between men and women has widened in 11 out of 18 banks, according to government gender pay data analysed by the Standard.

Men now get more than 10 times the median bonuses that women do at NatWest, a deterioration on last year, while at Lloyds, the median bonus pay gap has widened by 21 percentage points such that women now earn 59% less than men. At Barclays, the bonus gap has worsened to 61%, and at HSBC it contracted slightly to 74% but remains among the highest.

Almost all US investment banks have seen their bonus pay gap worsen in the UK compared with last year — while at Goldman Sachs it widened to its worst in six years.

Supermarket-owned banks have also fared poorly, with the median bonus gap at Sainsbury’s Bank increasing by 25 percentage points to 71%, and Tesco Bank reversing a zero bonus gap last year to a 50% differential this year.

The EU’s bonus cap rule — which restricts the size of banker bonuses as a proportion of fixed pay — was axed in the UK at the end of October last year, after the move was announced by Kwasi Kwarteng during his short stint as Chancellor in 2022. That suggests men are disproportionately benefiting from the lifting of restrictions and the gender gap in bonuses could get even larger next year.

City Comment: Scrapping the bonus cap has only widened the City’s gender inequality

By contrast, London’s biggest fintechs and digital banks showed signs of significant improvement. The bonus pay gap at Monzo was zero for the second consecutive year, while at Revolut it was reduced from 49% to zero. At Starling, the first British bank to have been founded by a woman, the bonus pay gap skewed slightly in favour of women.

Revolut said its improvement was driven by an increased representation of women in the highest pay quartiles. That was the result of a new promotion policy, which elevated women’s representation from 35% in 2022 to 44% in the 2023 promotion cohort.

Janine Hirt, CEO of Innovate Finance, said: “It is fantastic to see that fintechs are leading the charge in closing the gender pay gap. This commitment to equality within their own organisations is directly in line with their drive to foster a financial services sector that is more inclusive and democratic with diverse customers and consumers at its heart.

“By championing gender parity, fintechs set a powerful example for the broader financial services sector about how greater diversity is key to innovation, progress and success.”

Councils failing to deal with equal pay claims could lead to disaster – union


Ryan McDougall, PA Scotland
Fri, 5 April 2024 

The First Minister has been warned that local councils’ refusal to engage with equal pay claims could have “disastrous” consequences for Scottish communities.

GMB Scotland has called on Humza Yousaf to support the creation of a new specialist body to decide on such claims across the country and to enforce awards.

The union, which represents low-paid women workers across the public sector, said retrospective claims for hundreds of millions of pounds could bankrupt local authorities.

The warning came as Falkirk council home care workers, who are mostly women on low wages, begin four days of strikes on Friday.


They will also strike next Wednesday alongside Renfrewshire and West Dunbartonshire council care staff.

The strikes come after the workers rejected internal reviews of their pay grade, stating their role and responsibilities have increased significantly since last being assessed.

GMB Scotland secretary, Louise Gilmour, wrote to Mr Yousaf, asking for a new specialist body to decide on equal pay claims across the country, stating local authorities are not doing so.

She said: “Scotland’s councils are approaching equal pay claims like the Titanic approaching the iceberg.

GMB Scotland Secretary Louise Gilmour (Andy Cawley/PA)

“Councillors have their heads in the sand and executives have their fingers in their ears but these equal pay claims will come, will be won, and will need to be settled.

“It is understandable that our councils are refusing to acknowledge the reality because the reality is unthinkable and the scale of these claims unimaginable for local authorities already being forced to cut services.

“Women who have been underpaid for far too long will still win these claims, however, and, unless that process is properly managed now, the impact on our councils and the communities they serve could be disastrous.”

Many of the women striking have said their roles and responsibilities have been undervalued for decades when compared to their male colleagues.

They have argued a higher pay grade could be retrospectively applied, allowing them to claim up to five years’ back pay.

GMB has estimated this could cost councils hundreds of millions of pounds in compensation.

GMB Scotland already has equal pay campaigns underway in Dundee, Perth and Kinross, Angus, Fife and Moray councils, with a process expected to lead to pay reviews in more than a dozen other local authorities across Scotland.

Glasgow City Council has sold multiple assets, including Kelvingrove Art Gallery and the City Chambers, to settle an initial £770 million equal pay bill.

Ms Gilmour warned against any suggestion that low-paid women are somehow responsible for the possible financial emergency.

She said: “Blaming equal pay claims instead of the systematic pay discrimination that has prevailed in our councils for generations is as dishonest as it is disgraceful.

“It is an attempt at emotional blackmail to persuade women workers that they are somehow being greedy and risking men’s jobs by simply asking for what they are due and have been due for years and years.

“The financial crisis facing Scotland’s local councils is not about women, it is about fairness and has been too long coming.

“Equal pay is not going away. It is incumbent on trade unions and politicians of all parties to learn the mistakes of the past so they are never repeated.”

A spokesperson for Falkirk Health and Social Care Partnership said: “We are advising those receiving care, and their families, that our care and support at home service will operate on a reduced capacity during any industrial action by GMB Scotland.

“We are in the process of communicating directly with people supported by our service to advise of likely disruption to their care.

“Falkirk Council is committed to upholding equal pay and continues to engage with GMB. We will seek to minimise disruption for those in need of our care and support at home services”.

A Scottish Government spokesperson said: “Councils are responsible for meeting their legal obligations to their employees, including on equal pay.

“In the face of a profoundly challenging financial situation, the Scottish Government is making available record funding of more than £14 billion to councils in 2024-25 – a real-terms increase of 2.5% compared with the previous year”.

A Renfrewshire Council spokesperson said: “We are actively engaged in discussions with trade unions to seek a resolution to the ongoing dispute and remain committed to ensuring the safety and wellbeing of all of our service users.”

West Dunbartonshire Council has been contacted for comment.

RBC fires finance chief over secret relationship with employee who enjoyed promotions and pay rises


Lars Mucklejohn
Sun, 7 April 2024 

Royal Bank of Canada (RBC) headquarters in the financial district of Toronto, Ontario, Canada. 

Photographer: Cole Burston/Bloomberg via Getty Images

Royal Bank of Canada, the country’s largest bank, has fired its chief financial officer after finding that she was in a secret personal relationship with another employee who received promotions and pay rises as a result.

The Toronto-based bank said on Friday that Nadine Ahn’s employment was “terminated”, alongside the unnamed employee, after it discovered evidence that she violated RBC’s code of conduct.

The bank said it launched an internal review and hired outside legal counsel after becoming aware of allegations involving Ahn, finding that she had an “undisclosed close personal relationship with another employee which led to preferential treatment of the employee including promotion and compensation increases”.

Ahn had worked for the bank for more than two decades, becoming its CFO in November 2021. RBC has appointed Katherine Gibson, another 20-year company veteran, as its interim finance chief.

RBC added that the investigation found no evidence of misconduct by Ahn or the other employee in regards to its financial statements, strategy, or financial and business performance.

In the case that one of its top executives is terminated for cause, RBC will not pay severance and the employee could be denied other bonus awards, according to the bank’s annual proxy circular.

City A.M. could not reach Ahn for comment.

The news comes after several high-profile corporate relationship scandals in recent times, mostly involving male executives.

Bernard Looney, chief executive of BP, was dismissed last year for failing to disclose personal relationships with employees, later forfeiting £32m in pay and share awards for his “serious misconduct”.

The US financial watchdog fined former McDonald’s CEO Steve Easterbrook $400,000 last January for misleading investors about his firing in 2019, which came after several inappropriate personal relationships with employees.

London Stock Exchange owner faces potential shareholder revolt over plans to double chief’s pay

Lars Mucklejohn
Sun, 7 April 2024 a

David Schwimmer, chief executive officer of London Stock Exchange Group Plc, at the Ukraine Recovery Conference in London, UK

 Photographer: Chris J. Ratcliffe/Bloomberg via Getty Images

The owner of the London Stock Exchange is facing shareholder dissent after a key proxy advisor opposed plans to double its chief’s pay amid a debate over how the Square Mile can compete with US-style remuneration deals.

The London Stock Exchange Group plans to boost its chief executive David Schwimmer’s pay to a reported £13.2m from £6.3m, citing its diversification into a global financial markets infrastructure and data services firm under his leadership.

The firm said in its latest annual report that changes to its remuneration policy would “enable LSEG to secure the calibre of talent and new skill sets required for LSEG’s continued transformation in a highly competitive global market”.


However, proxy advisor Glass Lewis has urged shareholders to vote against LSEG’s plans for Schwimmer’s pay at its annual general meeting on 25 April, The Sunday Times reported.

While not opposing the increase in his salary to £1.4m from £1m, Glass Lewis raised concerns over sharper rises elsewhere in his pay package.

It calculated that Schwimmer’s short-term bonus opportunity would rise to £4.1m from £2.25m under LSEG’s proposals, while his long-term bonus potential would jump to £7.5m from £3m. Glass Lewis said Schwimmer’s pay rise should be phased in over a number of years.

Schwimmer, an American, joined LSEG in 2018 after two decades at US investment banking giant Goldman Sachs.

He has overseen a period of bumper growth for the firm, transforming it into a data and analytics behemoth with some 25,000 staff and operations in more than 60 countries. LSEG’s share price has more than doubled since Schwimmer joined.

However, fears have grown over its flagship exchange, which saw just 23 new firms list last year – a 49 per cent slide from the 45 registered in an already quiet 2022.

City grandees have recently argued that London risks losing listings and top talent to the US if bosses cannot receive the larger pay deals that are available across the pond.

Julia Hoggett, the CEO of the London Stock Exchange, said last May that the UK needed a “constructive discussion” on pay to stop top bosses fleeing to New York.

Glass Lewis said that although LSEG now has more exposure to the US market, its chief “is currently UK-based, and in a UK context, his remuneration is already significant”.

ISS, another influential proxy advisor, has backed Schwimmer’s pay rise but warned it would be “significant and unusual in the UK market”.

William Vereker, who chairs LSEG’s remuneration committee, told Glass Lewis that the company consulted almost 100 shareholders representing nearly 80 per cent of the voting rights and found they were supportive of the changes to Schwimmer’s pay.

He added that the idea of “excessive” pay was an “outdated ideological position that does not reflect the realities companies face in attracting world-class talent in a global marketplace”.

An LSEG spokesperson told City A.M.: “LSEG has transformed into a highly successful, complex, global organisation since our remuneration policy was last materially reviewed in 2020, delivering strong performance and significant shareholder value.”

They said the company was “focused on securing and retaining the calibre of talent required in a highly competitive global market whilst ensuring delivery of strong performance is rewarded” and that it had “aligned executive compensation with the median of our global sector peer group and reinforced a pay-for-performance philosophy”.

World Bank’s funding of ‘hog hotel’ factory farms under fire over climate effect


Jon Ungoed-Thomas

THE GUARDIAN
Sun, 7 April 2024 

Young pigs in a lift at Guangxi Yangxiang's high-rise pig farm at Yaji Mountain in southern China.Photograph: Dominique Patton/Reuters

The private sector arm of the World Bank is facing claims that it contributes to global heating and the undermining of animal welfare by providing financial support for factory farming, including the building of pig farming tower blocks in China.

A coalition of environmental and animal welfare groups is calling on the World Bank to phase out financial support for large-scale “industrial” livestock operations. More than $1.6bn was provided for industrial farming projects between 2017 and 2023, according to an analysis by campaigners.

The International Finance Corporation (IFC), part of the World Bank Group, is owned by 186 member countries including the UK, which has a 4.5% shareholding. Andrew Mitchell, the minister for development, is a governor of the IFC.

Kelly McNamara, a senior research and policy analyst at Friends of the Earth US, said there was a “mismatch” between the World Bank’s commitments on the climate crisis, sustainable development and animal welfare, and its financing of intensive farming. “Expanding industrial livestock production is a threat to climate, sustainable development and food security,” she said, adding that investing in such projects put smallholders out of business and increased meat consumption, fuelling global heating.

In June last year, the IFC approved a $47.3m (£37.4m) loan to the Chinese company Guangxi Yangxiang providing capital for four multistorey industrial pig-rearing complexes and a feed mill. “There are big advantages to a high-rise building,” a company manager told Reuters during early construction of the blocks at Yaji Mountain in southern China in 2018. “The land area is not that much, but you can raise a lot of pigs.” The farms, known as “hog hotels”, can be 13 floors high.

The Yangxiang group says it has combined “internet technologies such as artificial intelligence [and] cloud computing” with the traditional pig-rearing business. The company says on its website: “Yangxiang has created an industrial model with multifloor pig farming as the core and strives to build a high-end intelligent ‘meat factory’.”

Peter Stevenson, chief policy adviser at Compassion in World Farming (CIWF), said: “I’m appalled by some of these developments, which have limited space and barren conditions. They are not just damaging for animal welfare, but also for food security and the environment.”

Stevenson said intensive agriculture undermined food security because animals converted cereal feed inefficiently into meat and milk. He said it would be better to produce more crops for direct human consumption and reduce the amount of cereals used for animal feed.

Related: Behind China’s ‘pork miracle’: how technology is transforming rural hog farming

Other IFC-funded projects include intensive chicken production in India and Uganda, pig production in Ecuador and dairy production in Pakistan. In June 2022, the IFC granted a loan of up to $200m to agribusiness giant Louis Dreyfus Company to purchase soy and corn in Brazil. IFC said it would only source crops from farmers committed to zero deforestation, but campaigners said it should “stop funding the wasteful use of such crops as animal feed”.

Friends of the Earth US, CIWF and other groups will be signing a letter to Ajay Banga, the World Bank’s president, for the bank’s spring meeting later this month. It will say the organisation must acknowledge that industrial farming is a “major contributor to the twin crises of climate change and biodiversity loss” and phase out the funding.

World Bank officials say the environment and animal welfare are central to the IFC’s financing of farming projects, with policies and guidelines to ensure sustainable businesses. They say large-scale projects can be used to develop more efficient, environmentally friendly practices. Officials also say they strive to reduce greenhouse emissions in every project for which finance is provided. The Yangxiang group and Louis Dreyfus Company were contacted for comment.

Thames Water owner Kemble defaults on £400 million of bonds


Bloomberg
Fri, 5 April 2024 

Thames Water signage at a pumping station (PA) (PA Wire)

The holding company of Thames Water Ltd. says it defaulted after failing to make some interest payments due on its debt.

Kemble Water Finance Limited has sent a formal notice of default to the holders of its £400 million bonds due in 2026 as it didn’t pay interest due on Tuesday on some of its other debt, according to a statement.

Consultants at Alvarez & Marsal are advising the UK water and sewage company as it seeks to start talks with creditors over its debt structure.

The company is requesting creditors not to take any action, so that it can have the stability to explore “all options,” according to the filing. Kemble expects to be able to provide a further update in the coming weeks.


Read more: London's great stink: Sewage flowed into capital's rivers for almost 10,000 hours last year

Comment: Thames Water wants to raise prices 40%, spill more sewage and not be fined - after lining shareholders' pockets