EQ Weekly Roundup Jun 27, 2018

This week’s roundup includes news that MPs have voted in favour of a third runway at London’s Heathrow airport, investment in Britain’s car industry has fallen by half amid Brexit fears and retailer Carpetright has slumped to a loss of £70m.

This week’s roundup includes news that MPs have voted in favour of a third runway at London’s Heathrow airport, investment in Britain’s car industry has fallen by half amid Brexit fears and retailer Carpetright has slumped to a loss of £70m.

MPs vote in favour of Heathrow expansion

MPs have backed controversial plans to build a third runway at London’s Heathrow airport.

The government won a key vote in the Commons by 415 votes to 119 – a majority of 296.

Tory MPs were under orders to support the government – but Boris Johnson, a leading opponent of expansion, missed the vote because he was in Afghanistan.

Labour’s official position was to oppose expansion, but its MPs were given a free vote. The SNP abstained.

The vote was welcomed by business group, the CBI, as “a truly historic decision that will open the doors to a new era in the UK’s global trading relationships”.

But Greenpeace UK said it was ready to join a cross-party group of London councils and the city’s mayor, Sadiq Khan, in a legal challenge against the third runway.

Environmental activists earlier staged a “lie-in” over Heathrow in Parliament’s central lobby, just metres away from MPs preparing to vote on the proposals.

The government has pledged the airport will be built at no cost to the taxpayer, will create 100,000 jobs and will benefit the entire country, through guaranteed internal flights to the rest of the UK.

Car investment slumps as Brexit ‘uncertainty bites’

Investment in Britain’s car industry has fallen by half, according to figures from the motoring sector.

The Society of Motor Manufacturers & Traders (SMMT) said that Brexit uncertainty was “thwarting” decisions by major car companies to put more money into UK factories.

In the first six months of 2017, investment in new models and factory improvements stood at £647.4m. This year, the figure had fallen to £347.3m for the same period.

The trade body said that the government’s “red lines” on Brexit and “conflicting messages” were working “directly against the interests of the UK automotive sector”.

Supply chains which rely on millions of car and truck parts moving freely between the UK and the EU would face disruption.

The government said the UK’s car industry was a success story and that it was working for a deal that was mutually beneficial to both sides and as “friction free” as possible.

Trump blasts Harley plan to shift some production outside US

US President Donald Trump slammed Harley-Davidson’s decision to move some production of motorcycles overseas after Brussels retaliated against his tariffs.

The Milwaukee-based company said it would shift some production of bikes heading for customers in the European Union to its international production plants in Brazil, India and Thailand. The levy on Harley-Davidson bikes has increased to 31% from 6%, the company said.

Brussels imposed tariffs on a range of US-made products, including cosmetics, whiskey and cranberry juice, after Mr Trump imposed extra taxes on EU steel and aluminum.

Mr Trump tweeted: “I fought hard for them and ultimately they will not pay tariffs selling to the EU, which has hurt us badly on trade, down $151 Billion. Taxes just an excuse – be patient!”

In a regulatory filing, Harley-Davidson said: “To address the substantial cost of this tariff burden long-term, Harley-Davidson will be implementing a plan to shift production of motorcycles for EU destinations from the US to its international facilities to avoid the tariff burden.

“Harley-Davidson expects ramping-up production in international plants will require incremental investment and could take at least nine to 18 months to be fully complete.”

Struggling Carpetright slumps to loss

Carpetright has reported a full-year loss and falling sales as the retailer struggles to turn itself around.

For the year to 28 April, Carpetright posted a statutory loss of £70.5m, a figure that includes the cost of store closures and asset write-downs. Like-for-like sales in the UK fell by 3.6%, with the steepest decline coming in the second half of the year.

Carpetright agreed a Company Voluntary Arrangement (CVA) with its creditors in April which allowed it to shut stores. It has also raised an extra £65m from shareholders.

Stripping out one-off costs related to the restructuring, the company’s underlying loss before tax was £8.7m, compared with a profit of £14.4m a year earlier.

Carpetright’s troubles come amid a difficult period for High Street retailers. Electronics firm Maplin closed the last of its 200 stores on Monday, after going into administration in February, while last week creditors backed a plan by House of Fraser to close more than half of its shops.