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Monday's Business and Politics round-up

20 May 2019

Person reading the news on their smartphone on a train

Good morning,

It's highly contentious, costly, and in recent months there have been increasing calls for it to be scrapped entirely - HS2 has been under the spotlight of late.

This morning, The Times reports that a group of  civic and business leaders, including West Mids mayor Andy Street, have urged the Government not to renege on the flagship infrastructure project.

This follows the news last week of a committee of Lords urging work to be paused until the economic case for going ahead was clearer. Previously, the head of the National Audit Office commented that it would be 'very difficult' not to build at least to Birmingham, due to sunk costs. Expect the debate to heighten as the Spending Review comes more and more into sight.



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Blown Huawei

Google has announced it will stop Huawei from making changes to its Android operating systems, which will block it from certain apps.

Last week, President Trump mandated that only firms with a particular licence could trade with the Chinese tech firm. Google said it was 'complying with the order and reviewing its implications'.

The Financial Times reports that leaders of the intelligence services in the US have been privately briefing companies on the perceived threats of trading with China, such as cyber security.

The Democratic vice-chair of the Senate's intelligence committee, who helped arrange the briefings, said, 'While many folks in Washington understand the gravity of the threat, that’s not true across the country'.

Last month, the government decided that Huawei could be allowed to install non-core parts of the UK's 5G network, while countries such as Australia and New Zealand have banned it outright. In February, the National Cyber Security Centre concluded that the risk involved could be managed.

Off the rails 

2018 was the worst year for rail delays since records began, according to a report by Which?, as passengers lost an estimated four million hours in journey times.

The news comes as this year's summer timetables are brought into action, with up to 1000 new services being introduced.

The Rail Delivery Group, which comprises rail companies and Network Rail, commented that the changed schedule 'to meet demand on a congested network poses a significant challenge but we are working together to ensure improvements are introduced with the absolute minimum of disruption.'

Commuters will hope that this year does not see a repeat of 2018's schedule debacle, which saw the rail system - particularly in the North West and on the Thameslink - hit by widespread delays. Hundreds of trains were affected every day.

An official report later blamed a lack of accountability, pointing the finger at all parties involved. Govia Thameslink was hit with a fine of £5m.

Is is too late now to say Sorrell?

Advertising guru Sir Martin Sorrell could be facing the heat from shareholders over his pay package at his new venture, S4 Capital.

Two leading proxy advisory companies, Glass Lewis and ISS, have raised concerns over the company's executive pay policy ahead of its first annual meeting this month.

Sorrell could receive 15 per cent of the five-year growth if targets are met. The lack of a ceiling on the possible pay and the 'complex vesting conditions' are among the complaints from the proxy firms. S4 argue the policy is in line with the Corporate Governance Code and will incentivise performance.

Sir Martin was famed for receiving bumper pay packets at his previous firm WPP. After receiving $100m in 2016, he defended himself, pointing to the fact that he had build WPP from nothing.

The action at S4 follows notable unrest on executive pay at other firms, for instance Lloyds Bank and Standard Life Aberdeen.


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