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10th July 2024
 
THE HOT STORY
Campaigners prepare new pilot project for four-day working week
Campaigners for a four-day working week are launching a new pilot project to explore flexible working options. The project, which will start in November, aims to present its findings to the government in 2025. The campaign for a four-day working week, without a loss of pay, has been gaining momentum since the Covid lockdowns. The pilot project will also examine other flexible working policies, such as shorter working weeks and flexible start and finish times. The project will be run by the UK's 4 Day Week Campaign and the consultancy Timewise, with support from academics at the University of Cambridge, Boston College, and the Autonomy Institute. The campaign hopes that a Labour government will be more receptive to changing working practices. The pilot project has already attracted the support of businesses, including Welsh social landlord Bron Afon Community Housing. Advocates of the four-day working week argue that it can improve productivity and staff retention while reducing worker absences. The South Cambridgeshire trial found positive results, with improved performance in several areas of council work. The campaign believes that the traditional five-day working week is outdated and in need of an update.
WORKFORCE
Greece's new six-day working week policy sparks mental health concerns
Greece's new six-day working week policy has sparked concerns about mental health. However, one expert insists that Brits have no reason to worry about a similar system being introduced in the UK. The policy allows certain sectors in Greece to extend their employees' working week by an extra day, offering a choice to those who can manage a maximum of 48 hours instead of the usual 40. Workers are expected to receive a 40% increase in pay for the added time. While the policy has raised concerns about worker rights and wellbeing, the expert emphasises the importance of downtime to reduce burnout and stress. Greece previously had the longest working hours in Europe, and adding more hours could lead to fatigue, decreased morale, and diminished productivity. The expert urges employers to monitor the wellbeing of their employees during this change. In the UK, the current trend suggests a move towards a four-day working week instead.
Dyson to cut 1,000 UK jobs in global restructure
The vacuum cleaner and air filter maker Dyson is cutting about 1,000 jobs in the UK as part of a global restructure, reducing its British workforce by more than a quarter. Dyson's CEO, Hanno Kirner, stated that the company operates in increasingly fierce and competitive global markets and needs to be agile. The job cuts are part of the company's moves to reduce its 15,000-strong global workforce. Dyson, known for its bagless vacuum cleaner, hand-dryers, and bladeless fans, has 3,500 UK employees. The company will continue to conduct research, development, and design in the UK.
TECHNOLOGY
Governments explore AI chatbots for efficient public service
As government chatbots evolve from basic automated tools to more sophisticated generative AI systems, they promise more efficient public services but also raise concerns about accuracy and reliability. Initiatives like the UK's GOV.UK Chat and Portugal’s Justice Practical Guide illustrate the potential and pitfalls of these advanced systems. While they can handle simple inquiries effectively, complex questions often reveal their limitations, highlighting issues of trust and accuracy. Experts emphasise that while AI can enhance service accessibility, it should not replace human workers, but rather complement them. Accountability remains a crucial challenge, as AI cannot be responsible for its actions, necessitating human oversight in public administration. Estonia offers a contrasting model by using Natural Language Processing (NLP) rather than generative AI. This approach limits errors but also restricts the chatbots’ conversational abilities. Estonia's Bürokratt initiative demonstrates a controlled integration of chatbots, prioritising reliability over conversational depth. As AI in government services continues to advance, maintaining a balance between innovation and the need for human judgment and accountability is crucial. This ensures that enhancements in service delivery do not compromise public trust or ethical standards.
PRODUCTIVITY
GS: Blair wrong to claim AI is going to save UK economy
Goldman Sachs has challenged the notion that artificial intelligence (AI) will provide significant productivity boosts to the economy. The bank’s paper states that AI's productivity benefits will be more limited than anticipated, while its power demands will require utility companies to spend almost 40% more in the next three years. MIT economist Daron Acemoglu, who was interviewed for the study, believes that truly transformative changes won't happen quickly and may not occur within the next 10 years. Jim Covello, head of global equity research at Goldman Sachs, believes that AI technology is exceptionally expensive and not designed to solve complex problems. If important use cases for AI don't become more apparent in the next 12-18 months, investor enthusiasm may fade. Meanwhile, the Tony Blair Institute's report on AI's potential in the public sector has already been criticised for basing its argument on answers from Chat GPT.
HIRING
Hiring slump continues, Page Group warns
One of Britain's biggest recruiters, Page Group, has warned that the hiring market is not improving and may even be getting worse. The company experienced a slower June than expected, with weak confidence among employers and candidates worldwide. Page Group had anticipated an upturn in the market before summer, but now believes hiring may not pick up until next year. As a result, the company expects its annual operating profits to be around £60m, a third less than previously guided.
TAX
PE execs “bag ready” to leave the UK, and France
Following reports that private equity executives in the UK are considering leaving the country to avoid Labour's carried interest policy, which would tax the tool as income rather than a capital gain. The move has raised concerns in the industry, with lawyers receiving more calls than ever about a potential move away. Some executives have already spent money to be "bag ready" to leave. While Labour has clarified that the policy would not apply to managers and investors putting their own capital at risk, industry figures claim that more advice is being sought now than when Corbyn was leader. It’s unlikely they’ll be heading for France, however, as an extreme left alliance threatens a 90% income tax on high earners. The Mail reports that lawyers in Paris are inundated with calls from high-end clientele worried about a wealth tax. This comes as finance minister Bruno Le Maire warned of an “immediate financial crisis” after the New Popular Front scored its narrow victory over Emmanuel Macron's centrists and the right wing National Rally. Moody's has warned it could downgrade its credit score for France’s more than €3trn debt pile over the NFP’s plans.
Billionaire hotelier sued by his former solicitor
Hong Kong-based hotelier Sir Michael Kadoorie and his family have been accused of tax evasion by a former employee, British lawyer Samantha Bradley, who claims she blew the whistle on “potential tax evasion” in the US, UK, Canada and Australia and misconduct by other lawyers. Bradley claims to be the victim of unfair dismissal because she is a whistleblower, victimisation, and age, race and sex discrimination. Thomas Croxford KC, acting for the Kadoorie family, t an employment tribunal in south London: “[Bradley] is not a whistleblower and has been subjected to no retaliation or detriment in response to any disclosures she has made.”
Jeremy Vine battling HMRC over tax
BBC presenter Jeremy Vine is facing a court battle with HMRC over a tax bill. The tax office is chasing Vine for income tax and National Insurance contributions on money he earned from the BBC between 2013 and 2015. While this type of set up is legal, HMRC believes that Vine should be treated as an employee and payments should have been made for tax and National Insurance. Vine has been appealing against HMRC's decisions and the amount owed is not revealed. Vine is the latest star to be caught up in HMRC's clampdown on TV stars who are not paid as staff members. Other stars, including Gary Lineker, Eamonn Holmes, Adrian Chiles, and Lorraine Kelly, have also faced tax battles with HMRC. Jeremy Vine's representative declined to comment.
CORPORATE GOVERNANCE
First Group boss to receive £800k bonus despite train cancellations
The CEO of First Group, Graham Sutherland, is set to receive an £800,000 bonus, nearly double his salary, despite the company's train cancellations. Over the past year, First Group's three rail companies have cancelled tens of thousands of trains. Sutherland's performance targets included diversity and environmental, social, and governance concerns. However, train cancellations have increased by 19.8% compared to the year before the pandemic. First Group defended the bonus, stating that it was the fifth-best performing company in the FTSE 250 and had recorded profits of £200m. The company also highlighted its investments in electric buses and infrastructure.
Thames Water chief takes £195k bonus in first 3 months on the job
The boss of Thames Water, Chris Weston, has received a £195,000 bonus for his first three months in post, while simultaneously urging regulators to allow the utility to increase customer bills by almost 60%. Campaigners have criticised the company for using its £15.2bn debt to pressure the government and regulator Ofwat into approving its plans to raise funds. Thames Water's chief financial officer, Alastair Cochran, also received a bonus of £446,000. Ofwat is investigating the bonus payments to determine if they comply with new rules on executive pay. Thames Water is seeking approval for a five-year business plan that would raise average household bills by 59% between 2025 and 2030.

 
I
CORPORATE
Blackstone hires new lead for credit and insurance unit
Blackstone has hired Tyler Dickson, the former global head of investment banking at Citigroup, to lead client relations for its credit and insurance unit. Dickson, a 30-year veteran at Citi, will oversee Blackstone Credit & Insurance's Institutional Client Solutions team and partner on BXCI's origination efforts with borrowers worldwide.
BNP Paribas hires Richard Newman as managing director
BNP Paribas has hired Richard Newman as managing director of its UK-based advisory team. Newman joins from M&A boutique Perella Weinberg Partners, where he held the same position. Prior to that, he worked at Moelis & Company and Citigroup. The appointment is part of BNP Paribas' efforts to expand its private equity clientele.

 
I
Wells Fargo appoints new co-head of leveraged finance
Wells Fargo has appointed Alexandra Barth as the co-head of its leveraged finance business, as part of its efforts to expand its investment banking operations. The bank has been making several hires to its corporate and investment banking unit, adding over 50 senior bankers and traders since 2020. Alexandra Barth, who previously co-led leveraged finance at Deutsche Bank for nearly 25 years, will now lead Wells Fargo's leveraged finance team alongside Trip Morris.
 


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