Government slashes business energy bills

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22nd September 2022

Bite-sized business news from the UK and beyond

Good morning How do you quantify the value of a CEO? One way is looking at what happens when they announced they're leaving. This week Zillah Byng-Thorne, boss of London-based global media publishing group Future plc, announced she was stepping down. During her 8 year tenure, Byng-Thorne steered the owner of Marie Claire and Country Life titles from the brink of extinction to a thriving digital business. Following the news, shares in Future dropped 17% — wiping out nearly £300m off its market value in the process.

Today's stories

Government slashes business energy bills
French billionaire takes £750m stake in Vodafone

ENERGY
Government slashes business energy bills

What happened?
Yesterday the government announced it would subsidise energy bills for businesses and public organisations by more than half this winter in a bid to avoid a flood of corporate collapses.

How did we get here?
Unlike households, companies don’t have a price cap to offer a level of protection from rising energy prices. Earlier in the month the government unveiled a new ‘Energy Price Guarantee’ that would limit bills for the average family to £2,500 a year until 2024, more than a quarter below the initial price cap announced by the regulator for this winter.

But details of the support for non-domestic customers was delayed due to the greater complexity and admin needed for corporate contracts. Companies and public bodies like schools and hospitals will get 50% discounts on bills from October until March but this could be extended for more ‘vulnerable’ industries.

Combined, the government package for homes and businesses is estimated to cost £150bn, more than any pandemic-related support. And with prime minster Liz Truss staunchly against tax rises, the funding for the package will likely mean even more government borrowing.

Zooming out: The business energy announcement comes the same day official data showed that the UK’s level of borrowing in August was twice the level forecast in March, due to runaway inflation driving debt-interest costs.

This creates a rather ominous backdrop to the government’s first 'fiscal event' aka mini-budget this week, raising questions about the sustainability of the public finances before the uplift in spending has even begun.

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US interest rates see third 0.75% rise to tackle inflation
Oxford Street candy stores to face tougher rules amid claims of ‘dirty money’ and tax evasion

TELECOMS
French billionaire takes £750m stake in Vodafone

What happened?
Yesterday French billionaire Xavier Niel announced he had bought a 2.5% stake worth £750m in telecoms giant Vodafone via his investment vehicle Atlas Investissement.

Who is Xavier Niel?
He’s the founder of French telecoms firm Iliad and has built a telecoms investment portfolio stretching nine countries with nearly 50m subscribers and more than €10bn of revenue. According to Forbes the 55 year-old has a personal fortune of $8bn.

What’s behind the move?
Vodafone is Britain’s third biggest mobile provider and has 300m customers spread across more than 20 countries including Germany, Italy and Spain. The company is also a major player in Africa and has a joint venture in India.

In recent years it’s faced criticism from investors for an overcomplicated business model and a lack of scale that has undermined shareholder returns.

Atlas says it sees an opportunity to streamline operations Vodafone and take advantage of "the solid underlying trends in the global telecommunications sector".

Back in May another industry player became a shareholder. Etisalat, the telecoms giant owned by the UAE government, bought a 9.8% stake in Vodafone for £3.6bn.

Vodafone is not the only UK telecoms company getting interest from overseas
Last year Altice, France’s second largest telecoms operator, bought a 12% stake in BT for £2bn, becoming BT’s largest shareholder. Since then, it’s steadily built up the position to 18%. Analysts say that Etisalat and Atlas could look to emulate Altice by slowing building up their ownership in Vodafone before launching a takeover bid.

Stat of the day

The Queen's funeral was watched by an average of 26.2m Brits with at least 250,000 people queuing to see her lying-in-state

Interesting links from around the web

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5 ways to deal with the post-vacation blues
Why adaptability is the number one soft skill you should master to excel at work

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new Energy Price Guarantee Country Life titles thriving digital business rising energy prices initial price cap business energy bills Bitesized business news

Government slashes business energy bills

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Older messages

Politics returns with busy week of announcements

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