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Dyson to cut 1,000 jobs in the UK; chancellor launches national wealth fund –as it happened

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Dyson to cut 1,000 jobs in the UK

Vacuum cleaner manufacturer Dyson has told employees it plans to cut 1,000 jobs in the UK, more than a quarter of the British workforce.

Staff were told of the job cuts on Tuesday morning, in news first reported by the Financial Times.

Hanno Kirner, Dyson chief executive, said jobs cuts were “always incredibly painful”, in comments to the FT. He said:

Dyson operates in increasingly fierce and competitive global markets, in which the pace of innovation and change is only accelerating. We know we always need to be entrepreneurial and agile.

We have grown quickly and, like all companies, we review our global structures from time to time to ensure we are prepared for the future.

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Key events

Closing summary

The vacuum cleaner and air-filter maker Dyson is cutting about 1,000 jobs in the UK as part of a global restructure, reducing its British workforce by more than a quarter.

Staff were told on Tuesday morning about the cuts as part of moves to reduce the business’s 15,000-strong workforce around the world amid a wider cost-cutting drive.

Dyson, which is known for its bagless vacuum cleaner as well as hand-dryers and bladeless fans, has 3,500 UK employees, with offices in Wiltshire, Bristol and London. The review that led to the decision began some time before the general election was announced in May.

The job cuts come on the day that the new business and trade secretary, John Reynolds, hosted a call with 170 leaders from businesses and trade associations to set out his priorities and answer questions.

Also today, the chancellor Rachel Reeves launched a £7.3bn national wealth fund, as part of a drive by the newly elected Labour government to attract billions of pounds of private sector cash for major infrastructure projects across the UK.

The NWF, which Reeves said would be established “in less than a week”, is designed to help the likes of ports, gigafactories, hydrogen and steel projects attract a mix of investment, aiming for roughly £3 of private funds for every £1 of taxpayer cash.

Reeves told reporters that the fund would essentially operate as a “concierge service for investors and businesses that want to invest in Britain, so they know where to go”.

The investments will then be managed by the existing UK Infrastructure Bank, headed by ex-HSBC chief executive John Flint, with support from a British Business Bank, which ran the Covid business loan schemes.

Reeves made the announcement at 11 Downing Street on Tuesday, after meeting with top City bosses who made up specialised taskforce spearheading the project. Participants included Aviva CEO Amanda Blanc, NatWest chief executive Paul Thwaite, and Barclays CEO CS Venkatakrishnan and former Bank of England governor Mark Carney.

Our other main stories today:

Thank you for reading. We’ll be back tomorrow. Bye!- JK

The chancellor, Rachel Reeves, is launching a £7.3bn national wealth fund, as part of a drive by the newly elected Labour government to attract billions of pounds of private sector cash for major infrastructure projects across the UK, our banking correspondent Kalyeena Makortoff is reporting from 11 Downing Street.

The NWF, which Reeves said would be established “in less than a week”, is designed to help the likes of ports, gigafactories, hydrogen and steel projects attract a mix of investment, aiming for roughly £3 of private funds for every £1 of taxpayer cash.

Reeves told reporters that the fund would essentially operate as a “concierge service for investors and businesses that want to invest in Britain, so they know where to go”.

The investments will then be managed by the existing UK Infrastructure Bank, headed by ex-HSBC chief executive John Flint, with support from a British Business Bank, which ran the Covid business loan schemes.

Reeves made the announcement at 11 Downing Street on Tuesday, after meeting with top City bosses who made up specialised taskforce spearheading the project. Participants included Aviva CEO Amanda Blanc, NatWest chief executive Paul Thwaite, and Barclays CEO CS Venkatakrishnan and former Bank of England governor Mark Carney.

Labour has been crafting the fund for months, having appointed the taskforce back in March to start thrashing out exactly how it will deliver what became a core manifesto pledge for the party in the run-up to last week’s election.

Reeves said the new Labour government was in a prime position to attract investment, amid ongoing political uncertainty other major western economies. That includes the US, where Donald Trump will run in the November presidential elections, and France, where parliamentary elections resulted in a hung parliament.

“I think for the first time in a long time, investors will look at Britain and say it’s a country with a stable government. It’s got a clear plan, but clear mandate in the election. And that’s different from some other countries around the world today,” she told journalists.

Tulip Siddiq appointed City minister – Bloomberg

Tulip Siddiq has been appointed Britain’s City minister, responsible for overseeing the financial services sector, Bloomberg News is reporting.

Labour won a landslide election victory last week. Siddiq, 41, has led Labour’s efforts to develop policies for the financial services industry, known as “the City,” in the past three years. Her appointment has not been formally announced by the government.

In May, she told the Financial Times that Labour would push the Financial Conduct Authority, Britain’s markets regulator, to do more to remove barriers to competitiveness and growth.

She would take over from Bim Afolami, a former HSBC banker who held the role under the previous Tory government.

Rachel Reeves, the new chancellor, on Monday launched a new “national mission” to drive economic growth, setting out plans to ramp up housebuilding and unblock infrastructure projects. Today, she launched the national wealth fund to unlock billions of pounds in private investment.

Tulip Siddiq posing for a selfie with Keir Starmer and his wife. Photograph: TS/Tulip Siddiq posing for a selfie with Keir Starmer and his wife after Starmer’s count

Reynolds hosts call with 170 business leaders

Jonathan Reynolds, the new business and trade secretary, hosted a call with more than 170 senior leaders from businesses and trade associations around the UK this morning.

He set out his four key priorities: delivering an industrial strategy, which will be the cornerstone of the government’s growth mission; supporting small businesses, described as the “beating heart” of our high streets, communities and economy; resetting trade relations and championing British exports; and making work pay, according to a departmental source.

Reynolds told business leaders that decarbonisation did not mean de-industrialisation. He is aware that a key challenge for businesses is connectivity and the grid, and promised a cross-government focus on tackling this. Sarah Jones’ joint role with the Department for Energy Security and Net Zero, as minister for industry and decarbonisation, will be part of delivering on this agenda.

Business leaders asked about streamlining their engagement with Whitehall, opportunities to increase exports, and the importance of digitalisation. Reynolds is understood to have pledged to be “the most accessible” business secretary, with an email address coming shortly to “Tell Jonathan”.

UK chancellor says ‘Britain open for business’ as National Wealth Fund unveiled

The Labour government has announced plans to align key institutions under a new National Wealth Fund aimed at boosting growth, with hopes of mobilising billions of pounds in private-sector investment.

The chancellor, Rachel Reeves, and the business secretary, Jonathan Reynolds, have today instructed officials to immediately begin work to bring together the UK Infrastructure Bank and the British Business Bank under the National Wealth Fund that will invest in the new industries of the future.

It comes as Reeves and Ed Miliband, Secretary of State for the Department for Energy Security and Net Zero, convene a meeting of the National Wealth Fund Taskforce at No 11 Downing Street to kickstart this work.

Chaired by the Green Finance Institute, the taskforce includes former Bank of England governor Mark Carney, Barclays chief executive C.S Venkatakrishnan, Aviva chief executive Dame Amanda Blanc and large institutional investors.

About £7.3bn of funding will be allocated through the UK Infrastructure Bank so investments can start being made immediately, in addition to existing UKIB funding.

Reforms will be made to the British Business Bank, which is overseen by the Department for Business and Trade, to ensure it can mobilise the UK’s deep pools of institutional capital, as the UK’s largest investor in venture capital.

“Britain is open for business – and the work of change has begun,” declared Reeves.

This new government is getting on with the job of delivering economic growth. I have been clear that there is no time to waste.

I have previously committed to establishing a National Wealth Fund. I am now going further by bringing together key institutions.

We need to go further and faster if we are to fix the foundations of our economy to rebuild Britain and make every part of our country better off.

James Dyson with early versions of his Dyson vacuum cleaners. Photograph: Garry Weaser/The Guardian

Sir James Dyson founded his company in 1991, after years of trying to persuade other companies to build a vacuum cleaner to his design.

The success of the business made Dyson into one of the wealthiest people in the UK, and one of the most prominent inventor-entrepreneurs. The company has branched out from vacuum cleaners into other household appliances, including fans, hand dryers, heaters, hair straighteners and dryers – and even a pair of headphones that doubled as a portable air purifier.

But as his prominence grew, Dyson also became increasingly outspoken about the UK economy. That culminated in his backing for the leave campaign in June 2016 during the referendum on the UK leaving the EU.

Dyson claimed that the idea that Brexit would harm the UK’s international trade was “absolute cobblers”. In 2016 he said:

We will create more wealth and more jobs by being outside the EU. We will be in control of our destiny. And control, I think, is the most important thing in life and business.

Yet before the UK had actually left the EU, Dyson made his own exit: he switched his company’s headquarters from the UK to Singapore in 2019, saying he wanted the company to be closer to its growth markets and factories in east Asia.

Jim Rowan, Dyson’s former chief executive (and now Volvo Cars boss), said that the decision had “nothing to do with Brexit” but was about “future-proofing” the business.

However, it prompted criticisms for alleged hypocrisy by Dyson. Liberal Democrat MP Layla Moran said it was “staggering hypocrisy” and “a vote of no confidence in the idea of Brexit Britain.”

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Dyson intends to continue with its research and development of products in the UK.

It will also continue to run the Dyson Institute in Malmesbury, Wiltshire, which employs 160 undergraduate on Dyson projects for three days a week. The Dyson Institute will continue to offer a master of engineering course to all new undergraduates starting this September.

Dyson has not indicated how many of its global workforce it is considering cutting. It has about 15,000 employees worldwide.

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The Dyson job cuts were decided as part of a review that was started before the UK general election was called in May, according to a person with knowledge of the plans.

The UK cuts will be subject to consultation with affected workers.

Dyson was founded by Sir James Dyson, a billionaire who was once counted as the UK’s richest person. His fortune was estimated to be worth £20.8bn in May, according to the Sunday Times.

Dyson has been outspoken on political issues, including being one of the few prominent businesspeople to come out in favour of Brexit.

Chief executive Hanno Kirner said:

Decisions which impact close and talented colleagues are always incredibly painful. Those whose roles are at risk of redundancy as a result of the proposals will be supported through the process.

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Dyson to cut 1,000 jobs in the UK

Vacuum cleaner manufacturer Dyson has told employees it plans to cut 1,000 jobs in the UK, more than a quarter of the British workforce.

Staff were told of the job cuts on Tuesday morning, in news first reported by the Financial Times.

Hanno Kirner, Dyson chief executive, said jobs cuts were “always incredibly painful”, in comments to the FT. He said:

Dyson operates in increasingly fierce and competitive global markets, in which the pace of innovation and change is only accelerating. We know we always need to be entrepreneurial and agile.

We have grown quickly and, like all companies, we review our global structures from time to time to ensure we are prepared for the future.

Share

Updated at 

Number of non-doms rose in 2023 ahead of crackdown

The number of non-doms in the UK rose in 2023, ahead of what is expected to be a crackdown by the new Labour government.

There were an estimated 74,000 individuals claiming non-domiciled taxpayer status in the UK on their self assessment tax returns in the tax year ending 2023, up from 68,900 in the tax year ending 2022, HM Revenue and Customs said on Tuesday.

Labour has promised to end the non-dom regime to raise billions of pounds for free breakfast clubs in schools and more hospital and dental appointments. That – and the Conservatives’ copying their plans – prompted some wealthy people to claim they would leave if the status is abolished.

The non-dom regime was introduced under King George III in 1799 to allow subjects who lived part of the time in far-flung colonies to avoid paying tax in the UK. However, since then it has become more associated with ultra-wealthy people spending much of their time in the UK while paying less tax than they would if they were “domiciled” in Britain.

The number of non-doms in the UK (red line) rose in 2023, according to HM Revenue and Customs. Photograph: HM Revenue & Customs

The non-doms were liable for £8.9bn in UK income tax, capital gains tax and national insurance contributions for 2023, or about £120,000 per person.

The non-doms were liable for £474m in extra tax compared with the year before, likely because of the temporary health and social care levy, which charged an additional 1.25 percentage points in national insurance from 6 April 2022 to 6 November 2022.

The number of non-domiciled taxpayers was still 3,600 short of the total before the coronavirus pandemic.

BP shares fall after oil company predicts lower profits and oil production

Wind turbines turn on top of a dump next to the ‘BP Refinery Scholven’ in Gelsenkirchen, Germany. Photograph: Michael Sohn/AP

BP is the biggest faller on the FTSE 100 today after it said that it will produce less oil than expected and refinery profits will drop by as much as $700m.

Shares in the oil supermajor fell by 4% after it warned that the fall in output and declining profits from its refineries would hurt second-quarter profits.

Its oil trading performance will also be “weak” compared with a strong first quarter.

The warning will be a blow to chief executive Murray Auchincloss’s hopes to persuade investors that it can close a valuation gap with US rivals. Auchincloss last month froze hiring on offshore wind projects to try to placate investors who are apparently concerned about the company’s green targets. Although BP officially recognises the climate crisis and the need to shift to zero emissions, Auchincloss has slowed its transition away from fossil fuels.

BP will also have a charge of up to $2bn as it reviews the future of its refinery in Gelsenkirchen, Germany.

Reuters reported that analysts cut profit forecasts:

Citi analysts lowered their Q2 earnings per share estimate by 9% while Jefferies analysts expected the update to result in a 20% earnings downgrade.

Sandra Laville

A drone view shows Mogden sewage treatment works, owned by Thames Water, with Twickenham Stadium seen in the background, in west London. Photograph: Toby Melville/Reuters

Sewage pollution from ageing Thames Water treatment works that have not been upgraded increased last year, causing the company to again fail to meet its legal targets, according to its financial report.

Across the Thames Water area, the number of incidents of pollution from treatment works and the pipe network increased to 350, compared with 331 in 2022. The rise was attributed to delays in investment to create more capacity at many of the company’s 400 ageing sewage treatment works. Chris Weston, Thames Water’s chief executive, said the works could not cope with a 40% increase in rainfall and exceptionally high levels of groundwater.

Asked why Thames had failed for many years to invest in upgrading treatment works, Weston repeated that the works were “old”. He said: “They require a lot of development, a lot of investment into things like putting in storm tanks. All of that takes time and requires a lot of investment on top of what we have done already.”

The company said there had been a “significant increase in sewage treatment works pollutions” in the year, caused by delays to pollution improvement engineering programmes, as well as the installation of more monitoring at works.

You can read the full report here:

The Liberal Democrats – buoyant after their surge in seats at the general election – have described Thames Water as a “rogue firm”, and called for blocks on dividends or bill hikes from the company.

Thames Water has long argued that it needs to raise bills in order to pay for investments to upgrade its creaking pipes.

However, the Lib Dems found the UK’s polluted waterways to be a strong campaign issue. Many of its election gains also happen to map onto areas supplied by Thames Water – notably the affluent towns up the Thames and into Oxfordshire.

Sarah Olney, speaking to the media at College Green, Westminster, in March. Photograph: Jordan Pettitt/PA

Sarah Olney, the Lib Dem Treasury spokesperson whose Richmond Park constituency is bordered by the Thames, said:

This is a complete mess and it’s time the regulator started blocking Thames Water’s planned dividend payouts and eye-watering bill hikes.

Years of inaction from Conservative Ministers has lead to these bill increases and firms getting away with endless sewage dumps and insulting bonuses.

It is clear the public want action to be taken to finally crackdown on this rogue firm. The government and regulator should listen to this call.

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