In today’s trade headlines, UK prime minister Andy Burnham has continued to build his new-look business department, alongside announcing business rate cuts for social venues.
There’s also a resurgence in shipping attacks by the Houthi rebels in the Red Sea, and the news that the 21st EU package of Russia sanctions has passed.
Burnham's cabinet
New prime minister Andy Burnham has continued to build his cabinet, with further business and trade appointments announced.
Scottish Labour leader Anas Sarwar will be heading south to Westminster to take up a peerage and enter parliament as a trade minister.
He wrote that he was “delighted and honoured” to have been asked to take on the role, and that he’s “motivated by public service” and supports Andy Burnham as he leads the fight against “an emboldened new right”. You can see our public affairs lead Grace Thompson’s reaction to the appointment here.
Three further new ministers have been appointed in the Business, Innovation, Science and Trade (BIST) department: Baroness Liz Lloyd and Baron Sonny Leong, with Scottish MP Blair McDougall also working across both BIST and Department for Energy Security & Net Zero.
Business rate cut
Today's headlines also focus on Burnham’s latest policy announcement – a 20% cut to business rates for pubs, live music venues and social clubs.
The cuts will be funded by reviewing relief in place for so-called “anti-social businesses” like vape shops, according to the government's release on the measure. The exact details of the funding will be set out in chancellor John Healey’s first Autumn Budget, similar to the £2 bus cap also introduced this week.
Politico notes that, in addition to vape shops, warehouses supporting e-commerce sellers are also a possible target for increased rates. Logistics UK previously warned against putting pressure on warehouses, which it said would increase inflation, increase costs paid by venues protected by the relief on goods like food and drink, as well as jeopardise jobs in the Midlands and North, where Burnham is aiming to spur economic activity.
Iran inflection point
Having announced on Monday they would instigate a naval blockade of Saudi Arabia in response to the end of the US-Iran ceasefire and renewed US missile attacks, the Houthis have struck two Saudi oil tankers. Reuters reports that the Iranian-backed rebel group have claimed attacks on two Saudi oil tankers.
Shipping expert Lars Jensen described the attack as “a clear worsening of the maritime situation in the region”. He noted that the Houthis have also claimed to have stopped three tankers from passing through the Strait of Hormuz yesterday.
Oil prices have neared the US$100-mark again following the Houthi intervention, having previously fell to $80. US President Donald Trump has threatened to destroy a piece of Iranian civil infrastructure every time a ship was attacked by its forces.
Russia sanctions package passes
The EU has today agreed to implement its 21st round of sanctions on Russia in response to its war in Ukraine.
Politico report that this round of sanctions will see Brussels freeze its price cap on Russian crude oil for a year. The cap, which currently stands at US$44.10 a barrel, was set to rise in response to oil price hikes stemming from the US/Israeli war on Iran.
Another point of uncertainty, now resolved, is the bloc’s decision to ban the shipping of gas to third countries. Previously Greece had challenged this proposal, arguing that it would be ineffective as vessels could re-register abroad.
The FT reports that objection was designed to protect its shipping industry, with Greek firm Dynagas specialising in transporting Russian LNG in the Arctic. The publication writes that the Greek ambassador to the EU told other envoys that the sanctions package would “ruin” the firm – a third of its 27-strong fleet are built for handling Arctic conditions.
Elsewhere in the headlines
· The US has agreed to export nuclear materials to Saudi Arabia as part of a deal announced yesterday, with the US Department of Energy describing it as a “decades-long, multi-billion-dollar partnership”, Politico reports
· Another outing for the EU’s Digital Markets Act, as Brussels fined Google €890m for breaches in competition law due to how its search and app functions operate, something sure to provoke Trump as new tariffs are set to be imposed on trading partners
Yesterday in Trade
· More Burnham appointments included Hamish Falconer as the new minister for international and EU relations
· Foreign policy challenges for Burnham in the form of strained US-UK relations and US opposition to his new foreign secretary Ed Miliband
· Interim US tariffs enabling the 10% levy on imports are set to expire, with the outcome of Section 301 investigations into forced labour in trading partner supply chains expected
