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European Edition
19th September 2023
EU plays down chance of improved Brexit deal
Brussels has played down the prospect of a significantly improved trade agreement with the UK following claims by Labour leader Sir Keir Starmer that he would negotiate a better Brexit deal with the EU. One EU source told the Times that Labour would ned to change its position on the customs union to have any hope of renegotiating the deal, something Starmer has ruled out. The reaction from Brussels comes ahead of a trip to Paris where Starmer will meet with Emmanuel Macron. Writing in the Telegraph, Lord David Frost says the current Tory government has opened the door to talk of a return to the EU’s orbit, having failed to cement the advantages of leaving. Kier Starmer will not please hardline Europhiles with a new veterinary agreement, for example, Frost continues, and will agree one deal after another to ultimately leave Britain under the control of the EU with no say at all.
CMA proposes guiding principles for AI market
The Competition & Markets Authority (CMA) has proposed guiding principles for the AI market to ensure responsible development and consumer protection. The principles include accountability for AI developers, access to services, diversity, fair dealing, and transparency. The CMA warns that without proper principles, a few companies could gain market power and harm consumers. The report highlights the potential benefits of competitive and responsible AI markets, such as new products, easier access to information, and lower prices. However, it also raises concerns about misinformation and AI-enabled fraud. The regulator warned that consumers are at risk of scams, misinformation, and manipulation as new AI tools, such as large language models, continue to evolve. Sarah Cardell, CMA chief executive, said: "The speed at which AI is becoming part of everyday life for people and businesses is dramatic. There is real potential for this technology to turbo charge productivity and make millions of everyday tasks easier – but we can't take a positive future for granted. "There remains a real risk that the use of AI develops in a way that undermines consumer trust or is dominated by a few players who exert market power that prevents the full benefits being felt across the economy."
Major report on City reform delayed
A new report on City reform has been delayed until next year, City A.M. reports. L&G boss Sir Nigel Wilson began an investigation in May for the Capital Markets Industry Taskforce, headed by London Stock Exchange chief Julia Hoggett, and the findings were due to be published in the autumn. However, sources say more time is needed to distil feedback into the plans. The Capital Markets of Tomorrow report was looking to roll up a number of reviews of the capital markets ecosystem into a cohesive plan for the City. But delays to the latest report could fuel concerns about the pace of reform in the capital. Charles Hall, head of research at investment bank Peel Hunt said the industry was now “keen to see a faster pace of change” to regulation to solve the malaise facing London. “Regulators need to be clear that regulating a declining market is in no-one’s interest, including their own,” he added.
Charities can use social media for campaigning and political activity, says regulator
Charities can now use social media for campaigning and political activity, according to new guidance from the Charity Commission. The guidance clarifies that charities can engage in campaigning and political activity on social media, as long as they support their purpose, remain independent, and do not support a political party.
UK regulator finds no evidence of politicians being ‘debanked’ over views
A probe into debanking by the Financial Conduct Authority has found no evidence that politicians are being denied bank accounts because of their views.
National Trust loses millions to green investments
The value of the National Trust’s investment portfolio has slumped by millions after a portion of its assets were handed over to a climate-focussed fund. Robeco Climate Global Credits Fund was selected in 2021 to take on a 6.1% slice of National Trust assets, the Telegraph reports. However, the allocation has lost 11.7% between March 2022 and February this year costing the charity £11m. The Rotterdam-based firm boasts having the first ever investment strategy that is fully compliant with the 2015 Paris Agreement on climate change. The National Trust’s fortune is £1.5bn, down £49m in the year to February 28, 2023, after a number of its investments gave negative returns, its annual statement of accounts shows.
Tesco accused of "greenwashing" as Brazilian meat found on shelves
Tesco has been accused of "greenwashing" after it was found selling Brazilian meat despite promising to ban it over deforestation concerns. The supermarket, which has positioned itself as a leader in supply chain reform, pledged in 2020 to no longer sell Brazilian beef, chicken, or pork. However, campaigners have discovered Brazilian chicken on Tesco's shelves, leading them to refer the supermarket to the Competition and Markets Authority (CMA) for investigation. The CMA has been asked to determine whether Tesco made misleading claims to consumers and violated the Green Claims Code. Tesco's commitment to banning Brazilian meat came after widespread fires in the Amazon in 2019, which contribute to deforestation.
Over half of UK shoppers ready to boycott brands over misleading green claims
More than half of UK shoppers are prepared to boycott brands over misleading green claims, according to a poll by KPMG. The survey found that 54% of consumers would stop buying from a company if it was found to have made misleading sustainability claims, while 38% said they would stop investing in the company. The research also revealed that 18% of UK shoppers have changed their mind about a company due to misleading green claims. Richard Andrews, head of environmental, social and governance at KPMG in the UK, warned that firms risk their reputations by sharing misleading information on sustainability. The poll also showed that two-thirds of UK shoppers try to seek out green or sustainable options, but a third are sceptical of green labels and struggle with inconsistent labelling. The energy and fashion industries were seen as the most likely to engage in greenwashing, according to the poll.
UK offers wrongfully convicted Post Office workers £600,000 each
Post Office workers who have had wrongful convictions for theft and false accounting overturned are to be offered £600,000 each in compensation, the Government has said. More than 700 people were wrongly prosecuted for theft between 2000 and 2014 owing to flaws in the state-owned Post Office’s Horizon computer system. To date 86 postmasters have had their wrongful convictions overturned and £21m has been paid out in interim compensation packages and four have received a final settlement. “This is about righting a wrong and providing some form of relief to those wrongfully caught up in this scandal,” said Kevin Hollinrake, the business department minister with responsibility for the Post Office.
German banker with links to Scholz charged in €280m tax fraud
Christian Olearius, the co-owner and former chair of MM Warburg, has been charged in relation to €280m in illicit tax refunds derived from cum-ex trades. Olearius could be sentenced to up to 10 years in jail.
Santander consolidates retail and commercial activities
Spain's Santander is consolidating its retail, commercial, and consumer activities under two new global businesses to improve performance and add customers. The new Retail and Commercial unit and Digital Consumer Bank will join Santander's other global operations in Corporate and Investment Banking, Wealth Management and Insurance, and Payments. The restructuring aims to help Santander achieve its strategic goals, including adding 40m customers by 2025 and increasing its return on tangible equity.
Société Générale to spend €100m to close gender pay gap
Société Générale has announced plans to spend €100m over the next two years to close its gender pay gap. The French bank is unusual in publicly allocating a budget and pledging to spend it. The money will be used to boost the remuneration of female employees in the same or similar roles as men, where there is no reasonable explanation for a discrepancy. The bank also announced a target of having 35% of senior leadership roles held by women by 2026. SocGen's 2022 gender pay gap report in the UK showed a median pay gap of 26.2% for hourly pay, higher than the average UK employer but lower than the average across 20 of the biggest finance firms.
Volotea considers listing shares on Madrid stock market
Spanish airline Volotea has hired Morgan Stanley and Barclays to prepare for a possible listing of its shares on the Madrid stock market. While the decision to list the shares has not been made yet, Volotea's management wants to be ready for when a market opportunity arises, according to reports.
A third of workers are reducing or stopping pension contributions
A third of UK workers have looked into reducing or pausing their pension contributions in the past two years, as the cost-of-living crisis continues to bite, Royal London research has revealed. The survey found that, for those aged 18-34, this rose to 49%. The main two reasons behind this move were the cost of living (55%) and rising mortgage costs (15%). Royal London argued this may result in a short-term boost for home pay, but can also “have a dramatic impact on people’s future wealth”. The pensions provider added that stopping pension savings may increase take home pay by £1,404 per year but means losing out on £4,092 pension savings a year for workers earning £35,000.

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