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CITY WARMS UP TO RISHI
GRANDEES SAY PM HAS STEADIED THE SHIP – BUT THE REAL TEST IS YET TO COME JESSICA FRANK-KEYES CITY BIGWIGS reckon Prime Minister Rishi Sunak has restored competence to government, but he will need to show more of a ‘pro-growth’ agenda in the run-up to next year’s election. A host of grandees contacted by City A.M. said Sunak, a former hedgie and holder of a Stanford MBA, had impressed them since taking the job in the immediate aftermath of the collapse of Liz Truss’ ill-fated administration. “I think the consensus is that Sunak is
a breath of fresh air,” Shard Capital’s Bill Blain told City A.M. “[He’s a] highly competent ‘details man’ who has gone into the job with an approach we haven’t seen from a UK premier for too long.” Top fund manager Martin Gilbert said: “What I would say is there’s an air of competence about [this current government]. They’ve steadied the ship – to use that dreadful term. “I think amongst the electorate, there’s a desire to have someone competent running the country and
the economy.” However, Gilbert did warn that “it would be nice to see more of a pro-growth agenda” from the government, which is currently overseeing the highest tax burden for some 70 years. The recent turbulence at Credit Suisse and the collapse of SVB UK also appear to have reminded City figures of the value of having a money
man at the helm of UK plc. Sunak’s – and Hunt’s – “swift action” and all-night phone calls were praised by Innovate Finance chief executive Janine Hirt for displaying their “commitment to the tech sector”. “The government’s rapid response, and its willingness to engage with industry throughout, showed that it is serious about supporting the UK’s tech and The PM has won plaudits for cool competence
startup economy,” she said. However, not all agree Sunak has turned around the Tory ship sufficiently. Hotel magnate and party donor Sir Rocco Forte told GB News yesterday he would no longer be donating, criticising a “social democratic” party that hasn’t “delivered good growth”. And Martin Sorrell, the advertising supremo who founded WPP, told The Times this weekend that the party would need to go further on taxation reductions to win back voters before next year’s general election.
Energy windfall tax holding back bank lending to North Sea oil and gas operators NICHOLAS EARL AND CHRISTOPHER DORRELL BANKS are slashing their support for North Sea oil and gas firms as the windfall tax begins to impact firms’ ability to secure more favourable financing deals for future projects.
After the Energy Profits Levy (EPL) was first introduced last May, banks didn’t factor in the EPL when making decisions about loaning oil and gas firms money – via a process known as ‘reserve-based lending’ – because it was considered to have a limited time span, set to conclude by 2025 at the latest.
But Hunt has since expanded its lifespan to six years, saying the government “will no longer consider phasing out the levy ahead of its end date of March 2028”. Most UK banks no longer fund projects in the North Sea, leaving European banks to pick up the slack.
The big three banks seen as the main supporters of North Sea firms are ING, BNP Paribas and DNB Group, while the likes of Deutsche Bank, Credit Agricole and Societe General are also frequent lenders. All declined to comment. But one source at a major European bank told City A.M. they
now regard the temporary tax as permanent and it is now factored into loan agreements for North Sea companies – making the terms of the loan less generous, meaning oil and gas firms inevitably borrow less from banks. £ CONTINUED ON PAGE 3
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