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Windfall tax could force oil pull-out EXCLUSIVE
NICHOLAS EARL
CITY A.M. REPORTERS THE COST of living crisis is beginning to be felt in the pockets of ordinary punters – with more than one in three turning towards own brand products to keep the kitchen cupboard stocked. New research from KPMG suggests more than half of UK consumers have reduced ‘non-essential’ spending, with eating out top of the list of sacrifices. Though the jury remains out on whether the UK will enter a technical
recession, the country is undergoing its most painful squeeze on real incomes in decades, due in large part to runaway inflation. More than four in ten have not undertaken any ‘big ticket’ purchases this year, and a third are using their savings to help meet essential household expenditure. Alongside the rise of own brand and value products, others higher up the financial ladder are increasingly ‘swapping out’ restaurant meals for premium home cooked dinners.
Brits are also set to feel even more pressure on their household finances this week, with a range of tax changes set to hit paycheques. Linda Ellett, UK head of consumer markets for KPMG, said the costconscious mood might be good news for discounters. “With energy, mobile, and broadband costs set to rise for many households from April, a number of consumers will likely have to further cut back their discretionary spending,” she said.
“Buying behaviour also continues to change as shoppers look to lower costs – including switching to discounters, buying more own brand and value produce and searching out promotional prices.” Lidl and Aldi, the discount grocers, have continued to pick up market share from their bigger competitors. The nation’s largest grocer, Tesco, has managed so far to resist competition from the two German outfits, and actually picked up market share over the past year.
LONDON-LISTED Ithaca Energy has warned that the UK’s energy tax regime could jeopardise its involvement in a major North Sea oil field. The FTSE 250 firm has a 20 per cent stake in the project, called Rosebank, which has the potential to produce up to 500m barrels of oil – roughly equivalent to eight per cent of the UK’s entire oil output between 2026 and 2030. Rosebank was expected to get final approval from the government last week, but an announcement never came through. Gilad Myerson, executive chairman of Ithaca Energy, told City A.M. he was still “optimistic” a deal could be reached, saying that the firm was engaged in “very constructive” talks with the government over the project and working on solutions that “support the industry as well as tax collection”. However, Myerson warned that the current windfall tax, and the uncertainty surrounding it, could force it to look at its role in the project. Ithaca is seeking reassurances over a mooted ‘floor’ attached to the windfall tax, meaning it would not be applicable if prices fall to more historically ‘normal’ levels. £ CONTINUED ON PAGE 2
Tell Sid 2.0: M&S chair Archie Norman bids to bring shareholding into 21st century CITY A.M. REPORTERS M&S CHAIR Archie Norman wants digital AGMs and a more streamlined approach to investor communications as part of an effort to bring shareholder capitalism into the digital age. Norman has written to business secretary Kemi Badenoch on behalf
of the ‘share your voice’ campaign, supported by the Quoted Companies Alliance and shareholder lobby groups. The City grandee wants the requirement for physical AGMs to be ditched in favour of hybrid or digital events which he believes would encourage wider participation by investors.
The letter also calls for improved links between companies and their shareholders who use nominee accounts. “In the 1980s... people were encouraged to ‘Tell Sid’ about the virtues of shareholding, creating The M&S chair wants to open up markets to the public
a nation of investors. Today, however, that level of shareholder capitalism would not be possible,” the letter reads. “The current outdated legislation means that ordinary people who have
invested in the UK’s listed businesses struggle to hear from and communicate with them,” the letter reads. The business department said it would respond in due course and that a digitisation review was already underway. The Mail on Sunday first reported the letter.
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