Get updates delivered to you daily. Free and customizable.
The Guardian
Thames, Tata, Shein – it won’t be business as usual for Labour’s Jonathan Reynolds
By Alex Lawson,
21 hours ago
Jonathan Reynolds in Downing Street last Friday before his appointment as business secretary. Photograph: Andy Rain/EPA
If Jonathan Reynolds was expecting a honeymoon period as the new business secretary, a glance at the mounting list of issues that require his attention will quash that idea. From a potential renationalisation to angry steelworkers and posties, Reynolds has an overflowing in-tray.
So acute are some of the problems that Keir Starmer’s chief of staff, Sue Gray, prepared an internal dossier, described as “Sue’s shit list” by some, which included the potential collapse of Thames Water among other issues including failing councils and prison overcrowding. Here, we examine some of Reynolds’s most pressing priorities.
Tata Steel’s job losses
Reynolds is expected to meet executives from Indian-owned Tata Steel as early as Monday. In an awkward twist of timing, the first of two blast furnace closures at its vast Port Talbot steelworks took place on Friday, with the second due in September – after strike action was narrowly avoided – putting 2,800 jobs under threat.
Tata hopes Labour will honour a £500m subsidy , part of £3bn pledged to the industry, raising hopes that jobs can be protected as a new electric arc furnace is built on the site, to be finished in 2027.
Chris Rowley, an emeritus professor at Bayes business school, is not optimistic. “The recent threat of strike action ended maybe because of a belief and hope that the election of Labour will persuade the owners to keep a furnace operating until the future one is actually built,” he says.
“Sadly, without the new government offering serious amounts of new money, it seems more likely that the best the talks will result in is shifting deckchairs on the deck.”
By calling a surprise July election, Rishi Sunak has inadvertently ensured that the unfolding troubles at Thames Water – and its potential temporary nationalisation – will receive significant focus during Labour’s first week.
Investors and executives had been keenly awaiting a draft view on water companies’ five-year business plans from the industry regulator, Ofwat, in June but its price-review announcement was delayed by the election and will now take place on Thursday.
The review will indicate by how much Thames will be allowed to raise bills, and whether its £19.7bn investment plan, intended in part to fix leaky pipes and prevent sewage spills, will be approved.
Before that, Thames will announce its annual results on Tuesday, laying bare the state of its tattered finances. Its chief executive, Chris Weston, may face questions over the board’s handling of the situation, after the Guardian revealed that it had approved a £150m dividend just hours before announcing that shareholders had U-turned on £500m of pledged funding.
Labour could soon be forced to decide whether to temporarily nationalise Britain’s biggest water company, which is creaking under £15.6bn of debt, the bulk of which could be added to the public purse . Reynolds has said there “should be a solution” that avoids nationalisation, without specifying what – although it could involve a mixture of public and private money.
Royal Mail takeover
Labour has appeared relatively passive about the news that the biggest shareholder in Royal Mail’s parent company, the Czech billionaire Daniel Křetínský, is planning to take the 508-year-old postal group private.
International Distributions Services’ board recommended shareholders accept the 370p offer from Křetínský’s EP Group, just weeks after saying that his original 320p offer significantly undervalued the group. The £3.57bn bid represents a premium to the price before the takeover interest emerged, and to the 330p the group was privatised at in 2013, but is far lower than highs witnessed during the pandemic.
Reynolds will be under pressure to show the government has carefully considered the deal before allowing it to proceed.
Shein’s £50bn listing
Donald Tang, the executive chairman of the China-founded online fashion retailer, could be in the UK this week as the company prepares to list in London. Its executives have already met Labour MPs and received an indication of support for its listing , stating that “raising investment” is among its “missions for government”.
Reynolds will need to make it clear that Labour will not simply wave any listing through, while at the same time the City fights to protect its status on the world financial stage in the face of an exodus of stock-market big names.
Industrial action
Labour’s traditional union-friendly stance could point to some resolution in long-running public sector pay disputes. A standoff in the rail industry has dragged on for more than two years, with train drivers in the Aslef union the remaining holdouts. While there are no immediate strikes planned, further action could be called unless there is a swift resolution.
Get updates delivered to you daily. Free and customizable.
Welcome to NewsBreak, an open platform where diverse perspectives converge. Most of our content comes from established publications and journalists, as well as from our extensive network of tens of thousands of creators who contribute to our platform. We empower individuals to share insightful viewpoints through short posts and comments. It’s essential to note our commitment to transparency: our Terms of Use acknowledge that our services may not always be error-free, and our Community Standards emphasize our discretion in enforcing policies. We strive to foster a dynamic environment for free expression and robust discourse through safety guardrails of human and AI moderation. Join us in shaping the news narrative together.
Comments / 0