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UK Edition
1st May 2024
 
THE HOT STORY
London employers are letting more staff work entirely from home
Over a fifth of white-collar jobs in London are now fully remote, as employers in the UK capital embrace working from home to attract staff seeking higher pay without the high living costs. A survey by recruiter Hays found that the proportion of remote jobs in London has risen from 18% to 22%, making it equal to the east of England as the UK region with the highest number of fully remote jobs. Lorraine Twist, a finance director at Hays, says remote contracts are attractive to candidates who can enjoy a London salary without the commute and high property prices. The survey also revealed that the proportion of London staff working entirely in the office has decreased, while hybrid jobs have also declined. The findings suggest that parts of the UK labour market remain tight as firms compete for talent.
HIRING
Visa curbs bring fall in immigration
Visas issued to skilled workers, health and care staff, and students have fallen by a quarter compared with last year, leading to a decline in Britain's record levels of immigration. The number of visas granted to these groups decreased from 184,000 to 139,100 in the first three months of this year. The tightening of rules on foreign students bringing family members has led to an 80% fall in dependant visas while the number of study visas issued also decreased significantly. The decline in visas for health and care workers is attributed to measures to strengthen the rules for companies sponsoring visas in the sector. Experts suggest that most of the decline would have happened even without the new policies. Labour said the policy changes had come too late and that they lacked accompanying measures to boost skills in the domestic workforce to fill labour shortages.
Rishi Sunak to crack down on foreign student visas
Rishi Sunak is expected to announce a crackdown on foreign student visas amid concerns that they are being used as a means to claim asylum in the UK. The prime minister is likely to restrict access to the graduate visa route, potentially reducing the time foreign graduates can stay in the UK without a skilled job. The Migration Advisory Committee is currently reviewing the graduate visa route. Home Office sources have observed a rise in migrants using visitor, student, or seasonal worker visas to enter the UK and then apply for asylum. Last year, the Illegal Migration Act introduced a permanent ban on those who entered the UK illegally from gaining asylum. Figures reveal a significant increase in asylum claims from foreign students, with 6,136 cases lodged in the 12 months to March last year.
WORKFORCE
Employers urged to increase pension contributions for better retirement prospects
Employers are being advised to consider increasing their defined contribution (DC) pension default arrangements to enrol employees at higher contribution levels. A white paper by WTW explores steps that need to be taken to protect workers' retirement prospects. Many employers currently enrol employees at minimum levels by default, leading to lower retirement savings and the risk of pensions inadequacy. WTW recommends implementing a higher default contribution rate under auto-enrolment with an 'opt down' option. The paper also highlights the importance of maximising returns and making better retirement choices. WTW calls for the implementation of Mansion House reforms and the use of collective DC decumulation models to provide additional income options for retirees. Helen Gilchrist, WTW head of DC consulting, states that by saving more, maximising returns, and making better retirement choices, retirement outcomes can be significantly improved for millions of people.
UK workers suffer the longest pay squeeze in more than 200 years
The Trades Union Congress (TUC) says millions of workers in the UK are currently experiencing the longest pay squeeze in over 200 years. TUC analysis of official statistics shows that real terms average pay has decreased in 212 out of 340 local authority areas this year. The TUC blames this wage stagnation on the austerity policies implemented after the 2008 financial crisis. The research indicates that if wages had grown at pre-crisis levels, the average UK worker would be £10,400 a year better off, equivalent to £200 a week. TUC general secretary Paul Nowak said the figures were “a damning indictment” of the Conservatives’ economic record and called for a new approach to achieve decent pay growth.
Households see rise in disposable incomes
Households in the UK have experienced a year of growing disposable incomes, indicating that the cost of living crisis is being alleviated by falling inflation and rising wages. According to a report by Asda and the Centre for Economic and Business Research (CEBR), average family budgets have improved by 10.1% over the past year, with a weekly increase of £21.50. The sustained rise in disposable income can be attributed to a decrease in inflation and a record-high growth in nominal wages. While the UK economy fell into recession last year, recent data suggests that the downturn ended in the first quarter of this year. Economists predict that the UK economy will gain momentum as households increase their spending due to improved budgets.
STRATEGY
Elon Musk lays off entire Tesla charging network team
Elon Musk has shut down the division that runs Tesla’s electric vehicle charging business, dismissed two senior executives and fired hundreds more staff, The Information has reported, citing an e-mail sent by Musk to senior executives. “Hopefully these actions are making it clear that we need to be absolutely hard core about headcount and cost reduction,” Tesla's chief executive wrote in the e-mail, the report said. Any manager “who retains more than three people who don’t obviously pass the excellent, necessary and trustworthy test” should resign, he added. Reuters says the decision blindsided automakers gearing up to equip new electric vehicles for customers to use the Tesla Supercharger network, industry officials and analysts said. Tesla’s public policy team will also be dissolved, according to the report.
Haleon to shut UK factory with loss of 435 jobs
More than 400 jobs are to be axed at Haleon as the group revealed plans to shut its only manufacturing site in the UK. The consumer healthcare group, which was spun out of GSK in 2022, is shutting its factory in Maidenhead, Berkshire, which will affect the 435 staff at the site. Haleon produces Sensodyne toothpaste and Advil painkillers at the plant.
Whitbread to cut 1,500 jobs in UK workforce
Premier Inn owner Whitbread is set to cut about 1,500 jobs, or 4% of its UK workforce, as it plans to exit 126 under-performing branded restaurants. Whitbread's food and beverage division has experienced a 2% sales dip due to lower demand at its branded restaurants. Despite this, Whitbread reported a 36% increase in annual profit, driven by strong demand in the UK and Germany. The company also announced a 26% rise in its final dividend and a share buyback worth £150m. 
CORPORATE
Foreign investment in UK financial services halves
Foreign investment in Britain's financial and professional services halved to £1bn in 2023. The US was the largest source of funding, accounting for more than 40% in 2023 across 222 projects that created nearly 7,000 jobs. Investment management firms were the primary drivers of inward investment projects, comprising a third of all investments last year. These were worth £227m. The sector is facing tough competition in capital markets, particularly for listings from New York and, since Brexit, EU financial centres. About 7,000 jobs left the UK for new post-Brexit hubs opened in the EU by banks, insurers and asset managers to avoid disruption from Britain's departure from the bloc.
LEGAL
Labour set to unveil weakened package of workers’ rights
Labour is to unveil a weakened package of workers’ rights in the coming weeks in its latest softening of radical policies ahead of the general election, the FT has learnt. 
Inviting a woman to a work meeting because she's ‘pretty' is sex discrimination, tribunal rules
A tribunal in Leicester has ruled that calling a female colleague a "pretty woman" at work constitutes sex discrimination. The case involved an accounts manager, Emma Nunn, who sued her employers after her boss invited her to a meeting because a male client liked "pretty women." The judge said that the comments reduced Nunn's value to the business and would not have been made to a male colleague. Nunn, who felt humiliated and undermined, resigned from her job and is now set to receive compensation. The tribunal heard that Nunn and her boss had a longstanding friendship, which led to a blurring of their working relationship. While the tribunal found that this dynamic was encouraged by both parties, it upheld Nunn's complaint about the "pretty woman" comment. The judge concluded that the comment was sexual in nature and made because of Nunn's gender. A further hearing will determine the compensation to be awarded.
Great-grandmother wins £25,000 in unfair dismissal case
A great-grandmother has been awarded nearly £25,000 in compensation for unfair dismissal after being told to give a child a "good slap" by her bosses at Exquisite Displays in Leicester. Stephanie Lee-Shields, who had worked at the company for almost 20 years, resigned following an argument about her caring commitments. An employment tribunal heard that she had become the carer of a four-year-old child, which placed great strain on her. The tribunal judge agreed that there had been aggressive criticism of Mrs Lee-Shields and frustration at her caring commitments, leading to the compensation award. The judge also noted comments made by the directors suggesting that the child needed a slap. Mrs Lee-Shields was awarded £24,725 in compensation.
DIVERSITY, EQUITY & INCLUSION
Health Secretary tells NHS to focus on patient care, not DEI
The Health Secretary, Victoria Atkins, has cautioned the NHS against employing diversity, equity, and inclusion staff, stressing the need to prioritise spending on frontline healthcare. Atkins announced changes to the NHS constitution, defining sex as "biological sex" for patient rights, so allowing patients to request treatment in same-sex wards. She urged the NHS to move away from focussing on social issues and instead concentrate on treating patients. Meanwhile, Kemi Badenoch, the Equalities Secretary, will call on the public to provide examples of public bodies, including the NHS, of allowing transgender individuals to access single-sex spaces so those organisations can have their guidance rectified.  
MANAGEMENT
HSBC boss steps down unexpectedly
HSBC’s chief executive Noel Quinn has unexpectedly stepped down after five years in charge. Quinn said he needed to find a better balance between his personal and professional life, but he would remain at the bank until a successor was found. Mark Tucker, the chairman of HSBC, is due to step down in 2026 – at the end of the nine-year recommended term limit. Insiders say Quinn’s departure was partly triggered by the desire not to have the two top roles falling vacant at around the same time. HSBC is considering internal and external candidates for Quinn’s successor and hopes to have the formal hiring process completed by the second half of this year.  
INTERNATIONAL
KFC Malaysia temporarily closes outlets
KFC Malaysia has temporarily shut local outlets, citing challenging economic conditions. The move came following media reports that the closures were due to boycotts over the fast food chain's perceived links to Israel. Some Western fast-food brands in Malaysia, a majority-Muslim country, as in some other Muslim nations, have been targeted over Israel's military offensive in Gaza. "QSR Brands and KFC Malaysia has taken proactive measures to temporarily close outlets as means to manage increasing business costs and focus on high engagement trade zones," QSR Brands (M) Holdings Bhd, which operates KFC and Pizza Hut franchises in Malaysia, said in a statement, which did not address the media reports and did not specify how many stores were affected. Local media has reported that more than 100 stores were temporarily closed. Staff from the affected outlets were offered the opportunity to relocate to areas with higher customer engagement, QSR Brands said.
 


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