Brexit: ‘I don’t want to struggle with the mortgage’

“We are heading for instability.”

Ian Rutter is a healthcare worker at a hospital in Harrogate, and he is very worried about the economic effects of Brexit.

So much so, he has taken on more weekend agency work to set money aside, and has cut his spending.

With the prospect of a no-deal Brexit and increased trade tensions with the US, along with recession warning signs in other economies, he believes the UK economy is “almost heading for the perfect storm”.

“Jacob Rees-Mogg [the Brexit-supporting leader of the House of Commons] has said we will be better off in 50 years time. I’ll be dead in 50 years time, I’d rather be better off tomorrow,” Mr Rutter says.

The 54-year-old lives in Huddersfield, and commutes to work in Harrogate by car, an 80 mile round trip.


He normally gets a new car, via financing, every two years, but has held off due to concerns about repayments.

“I sound like Frazer from Dad’s Army – ‘We’re doomed! – but I really am genuinely worried about the future,” he says.

He is not going on holiday this year, has not upgraded his phone, and has put buying a new television on hold. The one luxury he still grants himself is a season ticket for Leeds Rhinos rugby league club.

Mr Rutter is also concerned about the effects of Brexit on his work in terms of finding staff.

“My support workers are Polish, Italian, Lithuanian. The house-keeping staff are from Spain and Portugal,” he says. “I work in Harrogate, which is an affluent area, and we struggle to recruit people for low-income posts.”

Richard and Emma Ward
Image captionRichard and Emma Ward have postponed a short holiday this year due to concerns about Brexit and the pound.

Richard Ward, a 29-year-old project manager from Leicester, has also put some of his spending on hold.

He and his wife Emma, a children’s nurse, put off booking a short holiday to Poland or Hungary due to Brexit being postponed.

They are concerned about the pound dropping while they are away, and the holiday becoming more expensive.

‘No-one knows’

“We were thinking about going within the next month. We’ve put it off,” he said. “When the referendum result came in, the pound crashed against the euro. We worried that would happen again.”

Mr Ward works in the construction industry. The company he works for, which imports goods from Europe, has already raised prices due to the drop in the pound.

He is concerned a no-deal Brexit will lead to queues of lorries at Dover, disrupting his firm’s work.

“If we get a deal, I don’t think too much will change. I don’t see that happening,” he said.

“The reality of the situation is no-one knows what will happen if we leave [the EU] without a deal.”

Saving more

Some argue that the economic risks of a potential no-deal Brexit have been exaggerated by those who do not want to leave the EU.

But just under a third of UK consumers have changed their spending habits due to Brexit uncertainty, and just under a quarter have put off making major purchases, a survey by KPMG suggested.

People are also delaying booking holidays and making stock market investments, the accountancy firm said.

Paula Smith, head of banking at KPMG UK, said: “It is clear people are uncertain about the future, spending and investing less while saving more.

“However, while people work to protect their finances from Brexit uncertainties, interest rates remain stubbornly low, so savings aren’t really working for people.

“The business world has been cautious about investing for growth since the referendum and that’s clearly playing through into the real economy and people’s financial confidence.”

Younger people tend to be more concerned about the economic effects of Brexit, with 46% of 18 to 34-year-olds delaying big purchases or putting more money into savings, said KPMG.

People aged 35 and over have put more money into savings, while the over-55’s tend to be least worried, with only one in five changing their spending habits, it said.

In London, one in 20 people even delayed their wedding due to Brexit, the accountancy firm found.

Consumer spending growth in the UK fell to a record low in July, according to the British Retail Consortium and KPMG, due to Brexit uncertainty and slow real wage growth.


General Electric: Madoff investigator alleges $38bn fraud

A private financial investigator who flagged warnings about Bernard Madoff’s $65bn Ponzi scheme is now targeting one of America’s blue chip companies.

In a 175-page report Harry Markopolos claimed General Electric (GE) was hiding an accounting scandal.

He accused GE of concealing $38.1bn in potential losses and alleged the company’s cash situation was far worse than disclosed.

GE called it “meritless, misguided and self-serving speculation”.

Chief executive Lawrence Culp also accused Mr Markopolos of “false statements of fact” and said he had not checked his facts with GE before publishing.

Mr Markopolos’s analysis of GE’s financial position, called General Electric: A Bigger Fraud Than Enron, claims: “The $38bn in accounting fraud amounts to over 40% of GE’s market capitalization, making it far more serious than either the Enron or WorldCom accounting frauds.”

The report highlights the conglomerate’s exposure to long-term care insurance in the US and its oil industry services business.

Mr Markopolos’s referencing of two of corporate America’s most notorious frauds in the report was seen as potentially serious, as both led to criminal prosecutions.

GE hard hats
Image captionIn the past two years GE has announced more than $40bn in writedowns

GE’s share price fell 15% on Thursday following news of the report and an appearance by Mr Markopolos on the CNBC television network. The stock closed down 11%, GE’s worse one-day fall in 11 years. As a sign of faith in his company, Mr Culp bought $2m worth of GE shares, according to reports.

Mr Markopolos disclosed that he had given an advance copy of his report to an unnamed hedge fund, and would receive a percentage of the profits from any share price movement.

Some analysts dismissed the report, with John Hempton, co-founder of the Bronte Capital hedge fund calling it “silly”. However, Reuters noted that there are Wall Street analysts who have long been concerned about claims of GE’s low cash flow, charges and asset writedowns, and alleged opaque financial reports.

In the past two years GE has announced more than $40bn in writedowns and accounting charges. The company has also disclosed that its accounting is being investigated by the Securities and Exchange Commission and the Department of Justice.

‘Financially motivated’

Mr Culp told reporters in the US that Mr Markopolos’ report contained factual errors and constituted “market manipulation – pure and simple”, because the investigator stood to profit from short-selling tied to its release.

Earlier, GE issued a robust response to Mr Markopolos: “We remain focused on running our business every day and… will not be distracted by this type of meritless, misguided and self-serving speculation.”

The company said it “stands behind its financials” and operates to the “highest-level of integrity” in its financial reporting.

“Mr Markopolos openly acknowledges that he is compensated by unnamed hedge funds. Such funds are financially motivated to attempt to generate short selling in a company’s stock to create unnecessary volatility.”

He is best known for alerting regulators in the early 2000s to signs that money manager Bernard Madoff’s investment firm was a Ponzi scheme, a deception in which unusually high returns for early investors are generated with money from later investors.

Madoff was arrested in 2008 and later sentenced to 150 years in prison for the fraud.


Ted Baker dumps Debenhams for Next on children’s clothing

Ted Baker is ending its partnership to sell children’s clothing through Debenhams and is switching to Next.

It has signed a five-year deal with Next, who will “create and sell” Ted Baker-branded clothes, shoes and accessories for babies and children.

The news comes just months after Debenhams, which has sold Ted Baker’s children’s line for more than a decade, announced plans to shut 22 stores.

But Ted Baker said it still had a profitable tie-up with Debenhams.

The brand said it “retains an established and mutually profitable relationship with Debenhams”, which still sells Ted Baker lingerie and nightwear.

However, it will stop selling Ted Baker’s children’s line through Debenhams at the end of February next year.

The Next collection will launch in spring 2020 and will be created by the High Street chain “in collaboration with” the creative team at Ted Baker, the brand said.

It will be available through Next’s stores and the Ted Baker website.

Next already sells Ted Baker’s clothes through its website under the Label brand.

The High Street chain’s boss, Simon Wolfson, said: “We have worked with Ted Baker for a number of years through Label and recognise the power of their brand.”

In a statement, Ted Baker boss, Lindsay Page, thanked Debenhams for “establishing and developing” the childrenswear line.

“Our childrenswear collections – which are small in size but big in style – have already proven incredibly popular with Ted Baker customers.”

Mr Page replaced Ted Baker’s founder and chief executive, Ray Kelvin, who resigned earlier this year following allegations of misconduct, including “forced hugging”.


Harland and Wolff: ‘Positive talks’ over shipyard future

There have been “positive discussions” regarding the sale of Belfast shipyard Harland and Wolff, according to the administrators.

The business entered administration earlier this month, with accountancy firm BDO overseeing the process.

The move places 120 jobs at risk and could spell the end of the firm, best known for building the Titanic.

BDO said it hoped the ongoing talks may lead to “credible offers”.

“In light of this, the administrators, in tandem with the unions and workforce, are intending to continue the unpaid temporary lay-off initiated on our appointment beyond today,” it added.

“The limited retained team of workers are continuing to maintain the site and assist the administrators in carrying out their duties.”

Media captionThe history of the Belfast shipyard

Unions representing workers have previously called for the shipyard to be renationalised.

They argue it would be cheaper for the government to keep the shipyard open.

However, the government has said the crisis is “ultimately a commercial issue”.

At its peak, the firm employed more than 30,000 people. The firm had been up for sale amid serious financial problems at its Norwegian owner.

Before the yard went into administration, workers took control of the site and established a rota to ensure their protest continued around the clock.

The Northern Ireland Office has previously said Northern Ireland Secretary Julian Smith “understands the impact” uncertainty over the shipyard will have for workers and their families.

The Titanic in dry dock at the Harland and Wolff shipyard, Belfast, February 1912
Image captionThe Titanic in dry dock at Harland and Wolff in February 1912

After the administration announcement, Democratic Unionist Party (DUP) leader Arlene Foster said she and the party’s East Belfast MP Gavin Robinson had met GMB and Unite.

She said they had a “shared vision” for the yard.

Shadow Chancellor John McDonnell said Labour would have nationalised the shipyard and he accused the government of betraying the workers.

Harland and Wolff’s best known vessel is the Titanic, which was built at the yard between 1909 and 1911.


Ferguson shipyard nationalised by Scottish government

The Ferguson shipyard in Port Glasgow has been nationalised by the Scottish government.

Ministers will now operate the yard under a management agreement with administrators, which will see the Scottish government buy the facility if no private buyer is found within four weeks.

Ferguson has been involved in a dispute with the Scottish government over the construction of two ferries for CalMac.

About 300 people work at the yard.

The deal means the yard will no longer be owned by industrialist Jim McColl, who could not persuade ministers to pay more than the £97m contract price for the disputed ferries.

Ferguson shipyard
Image captionFinance Secretary Derek Mackay visited the Port Glasgow yard on Friday

The agreement also means work on the CalMac ferries, and other contracts, can continue while efforts to find a commercial buyer get under way.

Administrator Deloitte described the ferry contract as being “materially behind schedule and over budget”.

Finance Secretary Derek Mackay said: “We have always been clear that we want to complete the vessels, secure jobs and give the yard a future.

“Public control will provide much-needed continuity of employment now and ensure the completion of the ferry contracts at the lowest possible cost to the taxpayer.

“It is absolutely essential that the outstanding contracts to build these two ferries are completed.”

Mr Mackay said the alternative was for the government to “stand aside” while the company went into administration, with jobs being lost and the vessels not being completed.

“That was not an outcome I was willing to consider,” he said.

Workers at the yard in 2014
Image captionA deal was struck to save the yard in 2014

From a bright future to a bitter dispute

When Ferguson Shipbuilders went bust in the summer of 2014 it seemed the last shipyard on the lower Clyde was heading for oblivion.

But within weeks a deal had been brokered for billionaire tycoon Jim McColl to save the Port Glasgow yard.

He was adamant that Scottish shipbuilding could have a bright future. The workforce at Ferguson Marine Engineering Ltd, as it became known, rose from about 70 to 350.

Early work came in the shape of a £97m Scottish government order for two new ferries for CalMac.

And that is where it all started to unravel.

CMAL, the company that owns and manages ferries and other assets on behalf of the Scottish government, was pushing Ferguson Marine hard to complete the ferries on time and on budget.

But Mr McColl was adamant CMAL had made repeated design changes, a claim denied by CMAL, and a bitter dispute ensued with Ferguson Marine last year revealing it expected to lose nearly £40m on the ferry deals.

The Scottish government has made two loans to Ferguson Marine, totalling £45m, and what happens to these, as well as when the ferries will eventually enter service, remains unclear.

Mr Mackay added that developing a revised cost analysis to establish the actions required to complete the two CalMac vessels would be one of the first task undertaken by a new management team.

As part of the agreement with the administrators, the Scottish government will acquire Ferguson Marine if there is no viable commercial offer within the next four weeks.

The GMB union said nationalisation would secure the immediate future of the yard.

The union’s Scotland organiser Gary Cook said: “That is a very welcome development, particularly after all the recent uncertainty.

“Our members were caught in the middle of a situation that had nothing to do with them and their relief will be palpable. It is five years since the yard went bust and the Scottish government has prevented that from happening again.”

Ferguson shipyard and Newark Castle

Scottish Conservative transport spokesman Jamie Greene MSP said: “The SNP Government’s decision to barge in and use ministerial powers to take over the yard simply covers up the true extent of how much they have messed up this bungled ferry contract.

“We all want to save the yard, save jobs and see these new ferries completed.

“But Derek Mackay has not explored all of the options available, and he has refused to compromise with the shipbuilders over the disputed costs.”

Michael Magnay, restructuring partners at Deloitte, said: “We are grateful for the support afforded to the business by Scottish ministers at what is undoubtedly a very challenging period for all stakeholders, and in particular its employees.

“With this support we will keep the yard operating whilst we proceed to actively market the business for sale, in order to secure its long term future.”


What has gone wrong with rail franchising?

The debate over the future of running Britain’s rail network flared up once more this week.

While the government tepidly defended its system, unions and passengers united to attack it as prices were hiked again above the government’s own preferred measure of inflation.

Even the Department for Transport called the current model “flawed” as it announced that FirstGroup was to take over the running of the London Euston to Glasgow Central route.

The Transport Secretary, Grant Shapps, hailed the deal as a shift to a new model for rail.

But the RMT union’s general secretary, Mick Cash, described it as a “another political fix by a government whose privatised franchise model is collapsing around their ears”.

It all comes as rail punctuality across the country languishes at a 13-year low.

And despite growing passenger anger, fares will rise next year in line with the abandoned Retail Prices Index at 2.8%, rather than the lower Consumer Prices Index.

“The system is clearly not working, everybody agrees that it’s not working,” rail writer Christian Wolmar tells the BBC.

What’s going wrong?

The Department for Transport maintains that privatisation has worked. It points out that passenger numbers have doubled, while the rail system has attracted £6.7bn of private investment and added 4,600 new daily services.

But the mounting criticism of the system was clearly not what the government had hoped for when it privatised the network in the 1990s.

Network Rail, then known as Railtrack, was set up to look after the tracks, tunnels and signalling. Meanwhile, private companies could compete to run the trains.

At the time, the government hoped that those private firms would compete on most routes through a system known as “open access”. Rather than bidding for entire lines, services themselves were on offer.

It also asked firms to bid to run subsided franchises on loss-making routes.

But that left the taxpayer to pick up the tab for all loss-making services. When the network was publicly-owned, these would have been subsidised by the profitable ones.

As a result, franchises for entire lines became the norm to stop the cornering of profitable services, and now less than 1% of passengers travel on open-access services.

‘Little control’

The effect of that has been a lack of competition among train operators which is bad for consumers, says Professor Mark Barry from Cardiff University.

“We’ve got a system that was meant to bring competition to railways post-privatisation and provide some means for companies to innovate, take a risk in return to procure some value.

“The reality is though, there isn’t a lot of competition on the railway – apart from the franchising system itself.”

This might suggest that train operators are having an easy ride and raking in profit, but the opposite is often the case.

As Mr Wolmar points out, in reality rail companies have very little control over their revenues. They can introduce wi-fi on their trains and launch advertising campaigns but much of their fortune depends on factors beyond their control, such as employment levels and economic growth.

Person taking train tickets out of a ticket machine
Image captionFares will rise by up to 2.8% next year

In a competitive tendering environment, that can mean that the rail firms make a loss over the course of rail franchise, which typically lasts seven years.

And that explains, in part, the failure of Stagecoach and Virgin Trains’ East Coast Main Line franchise, which was handed back to the government last year.

Prof Barry thinks the franchising model should change so that the franchisee is not left with the revenue risk.

Instead, he argues, the government should award contracts by telling the bidders how much money is available and asking them to compete on quality.

He said Transport for Wales had experimented with that model successfully.

The man charged with reviewing the franchise system, former British Airways boss Keith Williams, may have an even more radical suggestion.

Passengers queue to board a train
Image captionPunctuality on UK trains is at a 13 year low

He has said a “Fat Controller” type figure, independent from government, should be in charge of day-to-day operations.

Mr Williams has also said he believes that, in the future, rail franchises should be underpinned by punctuality and other performance-related targets.

The government launched the review after passengers in northern and southern England experienced chaos over several weeks last summer following the introduction of a new timetable.

His review of the rail system will be published this autumn.

A Department for Transport spokesperson said: “The recently awarded West Coast Partnership represents a decisive shift towards a new model for rail. It is a partnership supported by Keith Williams, built with the flexibility to respond to his recommendations and deliver fundamental reform to a flawed system.

“The transport secretary has asked Keith to produce his recommendations for a White Paper, with fearless proposals that will deliver a consumer focussed railway system fit for the 21st Century.”


Huawei gets caught up in China territory controversy

China’s Huawei, the tech giant under scrutiny for its alleged links to the Chinese government, has become caught up in a controversy surrounding the representation of Taiwan.

Huawei has come under fire for allegedly implying in its smartphone settings that Taiwan is independent.

Despite a backlash on social media, Huawei has declined to comment.

It is the latest firm – and an unexpected one – to get caught up in this kind of controversy.

Global brands such as Versace, Coach, Givenchy, and Swarovski all faced similar criticism this week for listing Hong Kong, Macau, and Taiwan as a separate countries or regions – not part of China – on their official websites or branded T-shirts.

It comes at a time of heightened sensitivities, as Hong Kong has faced weeks of unrest, with pro-democracy protestors clashing with police.


Until now, Huawei has been in the spotlight for allegedly posing a national security risk, which the firm denies.

But now users on Chinese social media Weibo have expressed anger that Taiwan was listed as its own country when the default language in Huawei’s smartphone setting was set to traditional Chinese – the script used in Taiwan and Hong Kong. Mainland China mostly uses simplified Chinese.

“This is outrageous. This is how Huawei repays China?” one user said on Weibo.

While some users said the issue had been fixed, many remained angry that the company had failed to address the issue publicly.

“Are you just ignoring [this] and [you’re] not going to explain why this happened? As a user of Huawei products… I am disgusted,” one user said.

Huawei saga

It is a new kind of controversy for Huawei, which for months has been under scrutiny for its alleged close links with China’s government.

The US blacklisted the firm in May saying it posed a national security risk. The company vehemently denies this and has repeatedly said it is independent from the Chinese government.

Huawei has also come to symbolise the tensions between the US and China that have been playing out in trade and, more recently, the technology sector.

The US has targeted Huawei with trade restrictions, while also pushing to persuade allies to ban the Chinese company over the potential risks of using its products in next-generation 5G mobile networks.


‘How I lost £25,000 when my cryptocurrency was stolen’

It’s bad enough realising that somebody’s nicked £25,000 of your hard-earned cash. It’s even worse when you realise there’s little chance of getting it back.

This is the story of how I got my fingers burned in the murky of world of cryptocurrency investment.

Be warned.

After a decade as a tech journalist, I liked to describe myself as a “lunchtime-adopter”, somebody who acted faster than many, but would never be as smart as the early adopters.

So it was with cryptocurrencies. I had heard about Bitcoin, but it was one of those technologies where I nodded my head sagely whenever I was in the same room with those talking about it.

As for investing or speculating, I had absolutely no intention of doing so.

But as the Bitcoin price made its merry way to a peak of nearly $20,000 (£16,500) at the end of 2017 – a rise of more than 100,000% in seven years – my curiosity got the better of me.

Image captionThe problem with passwords – or private keys – is that they can be stolen

And it wasn’t just Bitcoin, other cryptocurrencies interested me, such as Ethereum. I chose it not for any other reason than it was second to Bitcoin by valuation and looked like it could emulate that 100,000% rise.

So in the middle of 2017, I made some investments, figuring that it was a long-term plan and might even become a nest egg for a pension.

But doing so was utterly terrifying.

Even after a lot of tutorials from very patient friends, I pulled out three times from completing my initial transaction. One wrong press of the key and I thought I’d lose my money.

How prophetic that turned out to be.

There seemed to be two options: to store my crypto on an exchange, or in an encrypted digital storage wallet.

cash and markets
Image captionEthereum and other cryptocurrencies, can be moved in seconds

When I researched the subject, there were stories of exchanges being hacked for millions of pounds and going bust, so I decided to store it in a wallet –

I was given two keys, one private and one public, both of 40 random numbers and letters. If I wanted to transfer money to my wallet, I used the public key; to access my wallet I used my private key.

I was told to write down my private key and store it securely with other financial documents. I was never to reveal it to anyone, or lose it.

So I printed it out, but also made the fateful decision to store it in my Gmail drafts, so I could copy and paste it when I needed to make a transaction rather than laboriously typing it out each time.

I deleted my internet history after every check of my wallet for extra security.

cash and statements
Image captionConsumer protections aren’t available to Bitcoin or Ethereum buyers

When the price of Ethereum rocketed, I was soon sitting on a decent pile of money.

Then that decent pile of money disappeared.

I hadn’t used my private key to access my account for some time and was getting the jitters when the price of all cryptocurrencies began to fall in 2018. Maybe it was time to take some out.

But when I tried to do so, I saw with horror that all of my Ethereum – about £25,000’s worth – had already been taken out; the cupboard was bare.

It had been moved to another private key address and there was absolutely nothing I could do about it. There seemed to be no-one to complain to.

A transaction on Ethereum cannot be reversed and there is no safety net – nothing like the Financial Services Compensation Scheme (FSCS) that guarantees up to £85,000 on UK bank accounts.

After contacting people in my extensive crypto network, I found out that my Ether money had been taken to the Binance cryptocurrency exchange and, according to Binance, moved again within 60 minutes.

Trying to get information from Binance was a Kafkaesque nightmare – just an automated message saying it would respond within 72 hours when 72 seconds would have been more useful.

Image captionBinance only got involved once the police had contacted them

Binance wouldn’t disclose anything anyway until it has been contacted by law enforcement, so I went to the Action Fraud website, reported my case, and obtained a crime number.

But six months passed with no news on my stolen investments, so I went on the offensive and contacted US bounty-hunters CipherBlade who work with the FBI in Philadelphia to pinpoint thieves and track them down – in exchange for a percentage of the bounty.

They discovered that my money had been deposited by the thief (or thieves) in a “consolidation wallet” then divided up in to chunks and sent to four different deposit addresses on the Binance exchange.

The police would need to contact Binance, they said, to find out who owned these accounts, using email and IP addresses and any other personal details the thieves may have given.

Image captionUK authorities got more involved once Monty had a report made by US bounty hunters

I sent CipherBlade’s report to Action Fraud and things finally began to move.

The following morning I was contacted by Sussex’s cybercrime unit, my local force, and within a week they had received useful information from Binance. The unit tracked IP addresses to a telecoms company in the Netherlands, but there weren’t any personal identification details to be had – perhaps unsurprisingly.

The investigations continue, and my money remains stolen.

Of course, I should never have stored my password anywhere on my computer.

Malware can scan keystroke movements and sniff out a private key – even if, as I had done, you chop it up into separate blocks and store it in different places.

But writing down a private key on paper can be just as hazardous. A house fire, flood, hungry pet – simply a bad memory – can mean that huge amounts of cryptocurrency are lost forever.

You could hammer out your private key on to a fire and corrosion proof titanium tag – check out Cryptotag‘s solution – and then store it in a bank vault, but this is hardly convenient if you want to access your crypto wallet regularly.

So I’m left with my fingers burned, feeling like I wandered in to a savage bazaar where criminals can pick your pocket at will. And get away with it.

Please learn from my mistakes.


Turkish army pension fund to buy British Steel

Turkey‘s military pension fund has reached a tentative deal to buy British Steel out of insolvency.

The Turkish Armed Forces Assistance Fund (known as Oyak) says it plans to take over British Steel, which employs 5,000 people, by the end of the year.

British Steel owns the Scunthorpe steel works where 3,000 people work and it employs another 800 on Teesside.

But the firm was put into compulsory liquidation in May after rescue talks with the government broke down.

Another 20,000 jobs in the supply chain were put at risk by the collapse of the talks between the government and British Steel’s owner, Greybull, prompting a parliamentary inquiry.

The company was transferred to the Official Receiver because British Steel, its shareholders and the government were not able to, or would not, support the business.

British Steel's Scunthorpe plant
Image captionBritish Steel employs 3,000 people at its plant in Scunthorpe

The news was welcomed by trade association UK Steel.

“British Steel’s production facilities in Scunthorpe and elsewhere in the North East represent one third of the UK’s steel production and are a major strategic asset to our country,” the body’s general secretary, Gareth Stace, said.

“Their loss would leave our manufacturing, construction and infrastructure capability in a considerably poorer state.”

But he called on the government to partner with the steel industry “to help deliver a level playing field” by subsidising energy prices and lowering business rates.

The Business Secretary, Andrea Leadsom, described the news as an “important step” to secure the future of British Steel.

“The UK has a long and proud history of steel manufacturing and I am committed to a modern and sustainable future for the industry,” she said.

But Ross Murdoch from the GMB union said: “Our members are staring redundancy in the face as uncertainty continues to hang over the company.

“This dedicated and loyal workforce must not be an afterthought amidst all of the speculation,” he said, adding that they were put in the position “through no fault of their own”.

Steelworkers’ union Community said the deal was “hugely encouraging” and an “important milestone”.

“As we have said from the outset, we believe the business must be kept together and the future of steelmaking at Scunthorpe secured,” said the union’s general secretary, Roy Rickhuss.

“We will want to be assured that Ataer has a long-term strategy to invest in the assets and develop the business going forward.”

Exclusive rights

The Official Receiver said it had received “several” bids for the firm, but described Ataer, Oyak’s investment arm, as its “preferred buyer”.

Ataer’s accountants have exclusive rights to the insolvent firm’s books, so that they can examine the state of its finances.

“Following discussions with a number of potential purchasers for the British Steel group over the past few weeks, I am pleased to say I have now received an acceptable offer from Ataer,” the Official Receiver said, adding that the focus was now on finalising the sale.

“I will be looking to conclude this process in the coming weeks, during which time British Steel continues to trade and supply its customers as normal.”

Ataer owns nearly 50% of Erdemir, Turkey’s biggest steel producer, which employs 11,530 people.

Together, Ataer-owned companies make about a quarter of Turkey’s steel, making it the third-largest producer in Europe, according to the firm’s site.


Cathay Pacific boss Rupert Hogg quits after protest row

The chief executive of Hong Kong flag-carrier Cathay Pacific has quit after the airline became embroiled in the controversy over protests there.

Rupert Hogg said he was taking responsibility as these had been “challenging weeks” for the airline.

Some of its employees took part in the protest, but China ordered the airline to suspend staff who did so.

Cathay’s chairman, John Slosar, said it was time to put “a new management team in place who can reset confidence”.

Paul Loo is also leaving as chief customer and commercial officer.

Mr Hogg said: “These have been challenging weeks for the airline and it is right that Paul and I take responsibility as leaders of the company.”

Growing pressure

Last week, Cathay Pacific had told its staff it would not stop them joining the pro-democracy demonstrations currently sweeping Hong Kong.

But on Monday, Mr Hogg warned staff they could be fired if they “support or participate in illegal protests”.

Cathay faced pressure online after China’s state-run press fuelled a #BoycottCathayPacific hashtag, which trended on Chinese social media.

Beijing’s aviation regulator, the Civil Aviation Administration of China (CAAC), required Cathay to submit lists of staff working on flights going to the mainland or through its airspace.

It also had to submit a report on planned measures to “strengthen internal control and improve flight safety and security”.

Cathay Pacific said that Mr Hogg had been replaced by Tang Kin Wing Augustus and Mr Loo by Ronald Lam.

Cathay Pacific aircraft

The airline is currently majority-owned by the Swire investment company, while Air China has a 30% stake. Qatar Airways also owns a stake.

Cathay’s new chief executive Mr Tang was the head of Hong Kong Aircraft Engineering Company, which is also owned by Swire. Mr Lam was head of Cathay’s low-cost service Hong Kong Express.

Mr Slosar said that while Mr Hogg and his team had carried out a three-year turnaround plan, “recent events have called into question Cathay Pacific’s commitment to flight safety and security and put our reputation and brand under pressure”.

“This is regrettable as we have always made safety and security our highest priority,” he said.

The new bosses “have the experience and depth of knowledge of aviation and our people to be strong and effective leaders of Cathay Pacific at this sensitive time”, he added.

Meanwhile, Hong Kong’s richest man, Li Ka-shing, has taken out a series of full-page newspaper ads in an attempt to calm rising tension within the territory, urging people to “love China, love Hong Kong and love yourself”.

But the Chinese star of the upcoming Disney live-action remake of Mulan has expressed support for Hong Kong police in the wake of the pro-democracy protests.

In a post on the Chinese social media platform Weibo, actress Liu Yifei wrote: “I support Hong Kong police. You can attack me now,” adding in English: “What a shame for Hong Kong.”

Anti-government protestors at Hong Kong's airport
Image captionHong Kong’s airport has been a target for anti-government protestors

Hong Kong International Airport has been closed at times this week in the wake of the massive anti-government protests that have paralysed one of Asia’s key transport hubs.

The airport is one of the world’s busiest, and the Airport Authority has obtained a temporary injunction banning protesters from entering certain areas.

The protests began over plans that would have allowed extradition from Hong Kong to mainland China, but they have broadened into a pro-democracy movement concerned about China’s growing influence in the city.

Mr Slosar said Cathay was “fully committed to Hong Kong under the principle of ‘one country, two systems’ as enshrined in the basic law”.

This is a reference to the fact that despite being part of China, Hong Kong receives “a high degree of autonomy, except in foreign and defence affairs”.

“We are confident that Hong Kong will have a great future,” he added.

Mr Hogg was born in Portsmouth, has a degree from Edinburgh University, and joined John Swire & Sons – part of the Swire conglomerate of businesses – in 1986. He has worked in Sydney, Hong Kong and South East Asia.