Connect with us

Business

The big problem facing whoever wins the election

Published

on


Getty Images  Former Honda site in Swindon in the middle of deconstructionGetty Images

The former Honda site in Swindon will become a warehousing and logistics facility

Amid a vast expanse of rubble, dust and noise, a green crane yanks away at a corrugated roof like a frustrated dentist attempting to extract a particularly stubborn wisdom tooth.

Swindon’s Honda factory – once one of the world’s most advanced car factories – is being demolished, three decades after it opened.

This used to be one of the fastest-growing towns in Europe. It was one of the jewels in the crown of investments attracted to the UK by Margaret Thatcher’s brand of 1980s enterprise. Swindon voted for her, John Major, Tony Blair, David Cameron, Theresa May and Boris Johnson. It was also one of the first towns to declare for Brexit, by 55%.

But last year, its council changed hands to Labour. The council has had to continue to accelerate cuts to local services, passing a budget with record cuts in order to stave off bankruptcy.

Inflation, rising care expenses, and central government grant squeezes meant cuts to libraries, the Dial-a-Ride community transport service and dimmed street lights. There has been an almost 5% rise in council tax. The council leader has warned any further cuts will affect frontline services.

What is happening in Swindon is a visible consequence of sluggish long-term economic growth. Government spending cuts, low private investment, deindustrialisation and shrinking disposable income have left scars even on what was one of the UK’s famous boom towns.

A couple of women walk down a Swindon street, with a man in white hoody and using a crutch on the right in front of a boarded up shopa boarded up shop in the foreground

A view of shuttered shops on a Swindon street

The Honda site is set to become a warehousing and logistics facility. In another world, it would have been replaced by another major global manufacturer. Tesla, for example, was invited. Whereas five years ago the promise was to level up left-behind Northern towns, places like Swindon feel levelled down.

The question about growth arising in this town is vital to whoever wins Thursday’s election.

Elsewhere in the world, sites like this are being repurposed for electric car manufacturing. The Americans are pouring public money into their factories to try to compete with China, who will soon be confirmed as the world’s biggest car exporter. Emerging economies from Indonesia to Vietnam to Turkey are also investing in and growing their car industries.

Indeed it was to Turkey that the entire Honda production line, including dozens of never-used industrial robots, was packed up and shipped off via the M4 and Bristol port last year.

Swindon is not just about Honda. It is part of the M4 corridor where there are plenty of jobs in the knowledge sectors, and in finance, for example at the headquarters of Nationwide. The overall unemployment rate is just 2.6%, but the number of people not in work and not looking for work is 18%.

Faisal Islam and Gary Huett riding bikes down a path

Faisal Islam joined Gary Huett, who contacted the BBC as part of the Your Voice, Your Vote election project, for a bike ride around Swindon

Marcus Kittridge, a former Honda engineer who now runs a cafe in the centre of town with his wife Tracey, accepts there are still “good employment prospects” but says many are at or “50p above” minimum wage, and says this has contributed to a decline in disposable income in the centre of town. “It’s like a Northern town that lost its industry in the 1970s,” he tells me.

They now shut the cafe at 14:00 every day because of the high price of energy. He expects to be passing on his rising costs in higher prices for the next year or two. They have also stopped selling smoothies, after a notable decline in the availability and quality of fresh fruit, which they blame on post-Brexit changes.

“We were told the quality of food was going to go up after Brexit, I can tell you now it has not. I’ve barely heard any politician mention it, but it definitely has had an impact on us,” Tracey says.

Might she have been a bit unlucky with her purchases of fresh produce? “If I’m unlucky, I’m getting unlucky every single day and I’m probably the unluckiest person on earth,” she says.

Their experience shows that some of the undercurrents of sluggish long-term growth – high energy prices, low disposable income, low investment, and new trade barriers can combine in unusual ways.

Marcus Kittridge sitting in his cafe wearing a black T-shirt that says Baristocats Cafe on it, with a glass of orange juice on the table in front of him

Former Honda worker turned cafe-owner Marcus Kittridge

Gary Huett, a retired graphic designer also from Swindon who got in touch as part of the BBC’s Your Voice, Your Vote project inviting you to tell us what matters, wanted to know why Swindon’s town centre looked like it was “rotting” and asked if anything could change.

“We’ve now got pound shops predominantly, and the thriving night scene, packed with the yuppy set in the 1980s and 1990s has gone and decayed.”

Gary Huett wearing a black baseball cap with sunglasses perched on top, a black T-shirt and a patterned scarf round his neck

Gary Huett wants to know why Swindon’s town centre looks like it is “rotting”

The Conservatives say green shoots are already here. The latest growth figures for January to March show the UK now has the fastest growing economy in the G7 group of advanced economies, after last year’s brief recession. Swindon’s jobs record remains strong. On the Honda site, new investment has come, and the jobs, albeit in warehousing rather than manufacturing, will return.

For Labour, Swindon – a bellwether town where residents have voted the same way as the eventual national winner for the last 40 years – shows that there are no quick fixes.

They are not competing with the US or European Union (EU) with big public investments in green energy. Council spending remains unprotected and subject to the same ongoing squeeze. A looser planning regime might help build more houses or expand the solar farms that dot the countryside around the town. But the job of transformation is very real. When asked what will happen if the economy does not grow, Labour has responded by saying some variation of “I’m not defeatist” or “we can do it”.

When I interviewed shadow chancellor Rachel Reeves in Swindon, I said that if she was relying on planning changes to transform growth prospects, they were going to have to be a revolutionary, almost Thatcher-style “Big Bang”. She told me: “It’s big reform we are offering… unless we grow the economy we’re going to be stuck in a doom loop of low growth, high taxes and poor public services.”

Labour’s hope is that there is a tsunami of private investment that has been held back from this country due to political and economic instability. That, the party says, can be unleashed by the tens of billions with a strong and stable pro-growth government.

When I met Chancellor Jeremy Hunt on the same day in Surrey, he said the party’s focus was now on bringing tax – which his party had hiked to seven-decade highs – down.

“We put up taxes because we were helping families in the cost-of-living crisis. We were very honest about that, it was the right thing to do.

“The difference is we don’t think it has to be permanent, and we are prepared to do the hard work to bring taxes down because we know a more competitive economy will see more growth and then more money for the NHS and schools.”

Whoever is in Number 11 after the election, Swindon shows the massive task facing them.

It shows what an economy not growing at normal rates looks like. A former boom town struggling. The challenge is not just to deliver robust economic growth here and well beyond, but to make sure this renewal is visible to the likes of Gary, Tracey and Marcus here in Swindon and to others like them across the country.

You can find a full list of candidates for the Swindon North constituency here, and those for the Swindon South constituency here.



Source link

Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Business

Macron’s ‘irresponsible’ snap election casts shadow over Olympics

Published

on


Unlock the Editor’s Digest for free

Emmanuel Macron’s move to call snap elections has cast a shadow over the Paris Olympic Games, raising the possibility of political unrest and a far-right government in charge of the world’s biggest sporting event.

The far-right Rassemblement National (RN) is projected to become the biggest parliamentary party after the run-off vote on Sunday. While a hung parliament appears the most likely outcome, if the RN were to win a majority, its 28-year-old party chief Jordan Bardella could be prime minister when the Games open on July 26, with his team greeting top athletes and dignitaries from across the world.

The timing of Macron’s decision to dissolve parliament was “catastrophic for the Games”, said Pascal Boniface, head of Paris-based think-tank Iris and an expert on the politics of sport. “We are in the thickest of fog over the future.”

Pierre Rabadan, a senior official responsible for Olympics planning in the Paris mayoralty of Socialist Anne Hidalgo, told the Financial Times he was “stupefied” by Macron’s “irresponsible” decision.

While he said the main strategic decisions had already been made, the move had raised “pragmatic and operational questions”, including deploying mayoral staff and city police for both the elections and the Games.

“We had thought about all the possible scenarios, except for the dissolution of the Assembly,” added Rabadan, a former professional rugby player with Stade Français.

Security experts had already warned of big policing challenges for the opening ceremony, in which thousands of athletes will sail down the River Seine watched by around 300,000 spectators along the quays. Pressure on security services would further be aggravated if anti-RN protesters were to take to the streets, they said.

People gather at Republique to protest against the far-right which came out strongly ahead in first round legislative elections
Demonstrators in Paris protest against the far right after Rassemblement National came out ahead in a first-round vote © Louise Delmotte/AP

Rabadan said his main concern now was the image of France that a far-right government, with an anti-immigration and nativist policy platform, would present.

“The Games are about welcoming the entire world and showing that we are an open country,” Rabadan said. “That clearly goes completely against what the Rassemblement National wants.”

Hidalgo told France 2 on Tuesday that “the party would not be spoiled” by an RN government.

But dozens of athletes have voiced concerns about the elections. Prior to the first round, French football star and captain of the national team Kylian Mbappé called on the electorate to vote “against the extremists”, while almost 300 sportspeople, including Rabadan, signed a column in French sports publication L’Equipe opposing the RN.

“In my memory, I have never seen athletes engage to this extent in the political field,” said Boniface.

Macron’s sports minister Amélie Oudéa-Castera told journalists ahead of the first round that despite the extensive preparations for the Olympics, an RN majority would mean far-right politicians with no experience in national government would still have to make important decisions “in a geopolitical context that is difficult, delicate and tense”.

Bardella has said he would not change the officials running the Games.

Guy Drut, a former 110m hurdles Olympic champion and sports minister under President Jacques Chirac, and one of the few athletes to publicly back the RN campaign, told Le Monde: “There is no reason the Games would go badly under an RN government.”

Scattered protests were held against the RN after the first-round vote. Paris police commissioner Laurent Nuñez told France Inter that the authorities were ready for further unrest but that this would not interrupt the Games.

“We’re preparing for this type of protest and we will have an extremely large [presence] in the Greater Paris region of 45,000 officers to manage [disorder],” he said.

In a further potential risk to smooth running, four unions representing airport management staff have threatened to strike in pursuit of “a uniform and fair bonus” for working during the event. Police, air traffic controllers, rubbish collectors and train and bus staff have already been promised bonuses.

Despite his confidence that policing and organisation were well in hand, Rabadan lamented the impact of the elections on the build-up. “There is very, very strong enthusiasm and popular support,” he said. “But the president’s decision . . . has put a stop to that rise in excitement we were hoping for, so that’s really quite disappointing.”



Source link

Continue Reading

Business

Hong Kong’s IPO market is set to improve over the next five years

Published

on


Hong Kong Exchanges and Clearing celebrates the 24th anniversary of its listing on June 21, 2024.

China News Service | China News Service | Getty Images

BEIJING — The market for initial public offerings in Hong Kong is set to improve significantly over the next five years, starting in the second half of this year, George Chan, global IPO leader at EY, told CNBC in an interview Wednesday.

“I think it will take a couple years to go back to the peak [in 2021] but the trend is there,” Chan said. “I can see the light at the end of the tunnel.”

High U.S. interest rates, regulatory scrutiny, slower economic growth and U.S.-China tensions have constrained Greater China IPOs in the last three years.

EY said in a report that while the volume of IPOs and proceeds in the U.S. increased significantly in the first half of 2024 compared to the same period a year ago, mainland China and Hong Kong saw a sharp decline in listings.

Many of the macro trends are now starting to turn around, which can support more IPOs in Hong Kong, said Chan, who is based in Shanghai.

“We are seeing a reversing trend,” he told CNBC. “We are seeing more of these [U.S. dollar] funds, they are moving back to Hong Kong. The main reason is that Hong Kong has already factored in these uncertainties.”

The Hang Seng Index is up more than 5% year-to-date after four straight years of decline — which was the worst such losing streak in the history of the index, according to Wind Information.

Stock Chart IconStock chart icon

hide content

“Our HK cap markets team is very busy and has a strong pipeline for H2.  We expect to see many HKSE listings,” Marcia Ellis, global co-chair of private equity practice at Morrison Foerster in Hong Kong, said in an email Wednesday.

Many companies that were waiting for a listing in mainland China’s A share market have decided to switch to one in Hong Kong, she said. “Previously [China Securities Regulatory Commission] approval was slowing things down but recently our team has gotten CSRC approvals pretty quickly.” 

In June, China issued new measures to promote venture capital, and authorities spoke publicly about supporting IPOs, especially in Hong Kong. Investors and analysts said they are now looking at the speed of IPO approvals for signs of a significant change.

Chan said another supportive factor for Hong Kong IPOs is that many of the companies listed in the market are based in mainland China, where economic growth is “quite satisfactory.”

He expects consumer companies could be among the near-term IPO beneficiaries.

“As the economy slowly recovers, a lot of people in China are willing to spend,” he said, noting that was especially the case in less developed parts of the country.

Official national-level data have showed that retail sales are growing more slowly in China — up by just 3.7% in May from a year ago versus growth of nearly 10% or more in prior years.

Also significant for global asset allocation, the U.S. Federal Reserve and other major central banks are pulling back from aggressive interest rate hikes. High rates have made Treasury bonds a more attractive investment for many institutions instead of IPOs.

“I would say if the interest rate can be further cut down, 1% maybe, that would have a significant effect on the IPO market,” Chan said.

Hong Kong IPOs raised $1.5 billion during the first half of the year, a 34% drop from a year ago, EY said in a report released late last month. Back in 2021 and 2020, the Hong Kong Stock Exchange saw nearly 100 or more IPOs a year raising tens of billions of dollars, according to the report.

In comparison, mainland China IPOs raised $4.6 billion in the first six months of 2024 — a drop of 85% from the year-ago period, according to EY.

HKEX CEO aims for more large-scale IPOs this year

Bonnie Chan, CEO of Hong Kong Exchanges and Clearing Limited, said during a conference last week that so far this year, the Hong Kong exchange has received 73 new listing applications — a 50% increase compared to the second half of last year. She is not related to EY’s George Chan.

“The pipeline is building up nicely,” she said, noting about 110 IPOs in total are in line for a Hong Kong listing. “All we need is a set of good market conditions so these things get to launch and price nicely,” she added.

Improving post-IPO performance

“What we need is a strong pipeline,” EY’s Chan said. “We need an interested investor with the money to invest, and we need a good aftermarket performance.”

Hong Kong IPO returns are improving. The average first-day return of new listings on the Hong Kong stock exchange in the first half of 2024 was 24%, far more than the average of 1% in the same period last year, according to EY.

“The aftermarket performance of Hong Kong IPOs has been doing quite good compared to the past five years,” Chan said. “These things added together are projecting an upward trend for the Hong Kong market [in the] next 5 years.”

Chan said he expects the number of deals to pick up in the second half of 2024.

Goldman Sachs says it remains positive on Hong Kong capital markets activity

He said those will likely be medium-sized — between 2 billion Hong Kong dollars to 5 billion Hong Kong dollars ($260 million to $640 million) — but added he expects better market momentum in 2025.

Slowing economic growth and geopolitical uncertainty have also weighed on early-stage investment into Chinese startups.

Total venture funding from foreign investors into Greater China deals plunged to $19 billion in 2023, down from $67 billion in 2021, according to Preqin, an alternative assets research firm.

U.S. investors have not participated in the largest deals in recent years, while investors from Greater China have remained involved, the firm said in a report last month.

U.S. IPO outlook

As for IPOs of China-based companies in the U.S., EY’s Chan said he expects current scrutiny on the listings to be “temporary,” although data security rules would remain a hurdle.

In early 2023, the China Securities Regulatory Commission formalized new rules that require domestic companies to comply with national security measures and the personal data protection law before going public overseas. A China-based company with more than 1 million users must pass Beijing’s cybersecurity review to list overseas.

“As time goes on, when people are more familiar with the Chinese [securities regulator] approval process and they are more become comfortable with geopolitical tensions, more of the large companies … would consider [the] U.S. market as their final destination,” Chan said.

“When the time comes I think the institutional investors would be interested in these sizeable Chinese companies, as they pretty much want to make money.”

He declined to comment on specific IPOs, and said certain high-profile listing plans are “isolated incidents.”

Chinese ride-hailing company Didi, which delisted from New York in 2021, has denied reports it plans to list in Hong Kong next year. Fast-fashion company Shein, which does most of its manufacturing in China, is trying to list in London following criticism in the U.S., according to a CNBC report.



Source link

Continue Reading

Business

Microsoft hack affected Veterans Affairs and State Departments, government says

Published

on



The US Department of Veterans Affairs and an arm of the US State Department are among a growing list of Microsoft Corp. customers that have acknowledged they were impacted by a breach of the technology giant that was blamed on Russian state-sponsored hackers.

The US Agency for Global Media, part of the State Department that provides news and information in countries where the press is restricted, was notified “a couple months ago” by Microsoft that some of its data may have been stolen, a spokesperson said in an emailed statement. No security or personally identifiable sensitive data was compromised, the spokesperson said.

The agency is working closely with the Department of Homeland Security on the incident, the spokesperson said, declining to answer additional questions. A State Department spokesperson said, “We are aware that Microsoft is reaching out to agencies, both affected and unaffected, in the spirit of transparency.”

Microsoft disclosed in January that a Russian hacking group it calls Midnight Blizzard had accessed corporate email accounts and later warned that they were attempting to use secrets shared between the technology giant and its customers. The company has declined to identify the customers who were impacted.

“As our investigation continues, we have been reaching out to customers to notify them if they had corresponded with a Microsoft corporate email account that was accessed,” a Microsoft spokesperson said on Wednesday. “We will continue to coordinate, support and assist our customers in taking mitigating measures.”

In addition, the Department of Veterans Affairs was notified in March that it was impacted the Microsoft breach, officials for the agency said.

A one-second intrusion

The hackers used a single set of stolen credentials — found in the emails they accessed — to break into a test environment in the VA’s Microsoft Cloud account around January, the officials said, adding that the intrusion lasted for one second. Midnight Blizzard likely intended to check if the credentials were valid, presumably with the larger intention of breaching the VA’s network, the officials said. 

The agency changed the exposed credentials, along with log-in details across their Microsoft environments, once they were notified of the intrusion, they said. After reviewing the emails that the hackers accessed, the VA determined that no additional credentials or sensitive email was taken, the officials said.

Terrence Hayes, the VA’s press secretary, said an investigation is continuing to determine any additional impact.

The Peace Corps was also contacted by Microsoft and notified about the Midnight Blizzard breach, according to a statement from its press office. “Based on this notification, Peace Corps technical staff were able to mitigate the vulnerability,” according to the agency. The Peace Corps declined further comment.

Bloomberg News asked other federal agencies for comment, and none of the others disclosed that they were impacted by Midnight Blizzard’s attack on Microsoft. Bloomberg previously reported that more than a dozen Texas state agencies and public universities were exposed by the Russian hack.

Midnight Blizzard, also known in cybersecurity circles as “Cozy Bear” and “APT29,” is part of Russia’s foreign intelligence service, according to US and UK authorities. 

In April, US federal agencies were ordered to analyze emails, reset compromise passwords and work to secure Microsoft cloud accounts amid fears that Midnight Blizzard may have accessed correspondence. Microsoft has been notifying some customers in the months since then that their emails with the tech giant were accessed by the Russian hackers.

The Midnight Blizzard breach was one in a series of high-profile and damaging security failures at the Redmond, Washington-based technology company, which has drawn strong condemnation by the US government. Microsoft President Brad Smith appeared before Congress last month where he acknowledged security failures and vowed to improve the company’s operations. 



Source link

Continue Reading
Advertisement

Trending

Copyright © 2024 World Daily Info. Powered by Columba Ventures Co. Ltd.