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ANALYSTS SUGGEST ENERGY PACKAGE COULD COST £125BN NICHOLAS EARL AND JACK BARNETT ONE OF the UK’s big five energy suppliers has called for a historic government intervention to avoid tens of millions of Brits plunging into fuel poverty this winter. Phillipe Commaret, managing director of customers at EDF, told City A.M. the government needed to think about consumers, and that rising bills risked reaching a point where they were “not durable.” He called on the government to intervene in the market to protect energy users, including an expansive fourstage plan to ease energy bills. This included VAT cuts, the £400 discount for energy users pledged by former Chancellor Rishi Sunak, a deficit tariff fund from January next year and a nationwide insulation scheme. The energy regulator will announce the level of the price cap – what providers can charge for a default tariff – for October at 7am this morning. Commaret warned that the UK has
some of the least energy efficient housing stock in Europe, and highlighted that even simple measures such as loft insulation and cavity wall insulation could shave £600 off consumer energy bills. EDF is the latest supplier to back a deficit fund, with Scottish Power, Octopus Energy, EON UK and Ovo Energy also supporting the concept. This is where suppliers would freeze energy bills at their current levels for two years and take out state-backed loans from banks which would be repaid by customers. However, calls to cap bills have gained momentum due to the huge surge in wholesale energy prices, following a Russian squeeze on European gas supplies. This now likely means most households will struggle to pay bills without cutting back elsewhere, with Cornwall Insight forecasting the price cap will climb above £3,500 per year from October. Gas prices climbed a fifth in just a
week at the beginning of August, the Office for National Statistics said yesterday morning. Reflecting the scale of the crisis, Wall Street firm Bank of America warned that if the government intervened in the market and held bills at their present level of around £1,900 for two years, “support would run to £125bn”, around double the cost of the furlough scheme. Meanwhile, Harbour Energy increased its share buyback programme by 50 per cent to £254m yesterday, with a cash flow of £1.2bn for the first half of the year amid soaring oil and gas prices. Boss Linda Cook said “our strategy to build a global, diversified oil and gas company focused on safe and responsible operations, value creation and shareholder returns remains valid”. Harbour’s profits will inevitably restart a debate about a further windfall tax on North Sea operators. £ SHELL FINED: PAGE 4
FRANK DALLERES PREMIER League football clubs are flexing their financial muscle by smashing spending records in the current transfer window, according to Deloitte. The £1.5bn spent by English topflight teams is already more than in any previous window, with a week still to go until the 1 September transfer deadline. Clubs are also on track to make more signings than ever before and double the number of deals worth
£30m or more, analysis by the business advisory firm shows. “This summer’s transfer spend has already surpassed the previous record, set in the summer 2017 window, and is far higher than last summer’s total transfer spend of £1.1bn,” said Chris Wood of Deloitte’s Sport Business Group. “The record levels of spending that we’ve seen in this summer transfer window so far provides a sign that the business models of Premier League clubs are rebounding postCovid-19,” he said.
Nexperia delay the ‘elephant in the room’ for UK chip industry’s future EXCLUSIVE
MILLIE TURNER THE GOVERNMENT’s failure to complete the security review of Nexperia’s takeover of Newport Wafer Fab risks hurting the UK’s semiconductor industry, CEO of British semiconductor startup
Paragraf told City A.M. “Not making the decision is more damaging than making the wrong decision sometimes,” boss Simon Thomas said. Thomas described the looming national security review as the “elephant in the room” as industry waits for the government to publish
its national semiconductor strategy. “Every day that goes by at the moment, we are falling behind the rest of the world. Look at the rate at which they’re pushing the Chips Act in the US. They’re going hell for leather on it, and we’re not even making a decision on a single company,” Thomas said.
“I cannot understand how they will make a strong strategy if they haven’t even sorted out simple things like national security decisions,” he continued. “We’ve still got this elephant in the room that we’ve still not made a decision on and that is a major part of the supply chain,” Thomas said.
Westminster launched an investigation into the takeover in May using powers given by the National Security and Investment Act. Nexperia is a subsidiary of Chinese firm Wingtech Technology. £ CONTINUED ON PAGE 3
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