EQ Weekly Roundup 2-10-18

This week’s roundup includes news that Mike Ashley has sacked all senior management at House of Fraser (only weeks after buying the chain), the Chancellor has called for a reform on how big tech firms pay tax and restaurants will soon be barred from taking a cut from waiting staff tips.

This week’s roundup includes news that Mike Ashley has sacked all senior management at House of Fraser (only weeks after buying the chain), the Chancellor has called for a reform on how big tech firms pay tax and restaurants will soon be barred from taking a cut from waiting staff tips. 

Ashley sacks House of Fraser management

Mike Ashley’s firm has sacked the senior management at House of Fraser just weeks after it bought the department store chain.

In a one-sentence announcement to the stock market, Sports Direct said it had ‘dismissed the former directors and senior management of House of Fraser’. Those departing the chain will include Chief Executive Alex Williamson.

The move followed ‘calls for an investigation’ into the retailer’s collapse, the statement added.

Sports Direct paid £90m for House of Fraser’s 58 UK stores in August.

It is not yet clear who will replace the management team at House of Fraser, or how many people are affected by the decision.

Richard Lim of Retail Economics, a consultancy, said the new owner had taken ‘drastic action following a series of woeful management decisions, clumsy execution and an outdated perception of the UK market’.

Restaurants face ban on taking tips

Restaurants will be legally barred from keeping tips from staff under plans announced by the government.

The move follows a public outcry in 2015, when it emerged that many high street chains routinely took up to 10% of tips paid by credit and debit card.

Most chains have since stopped this practice, typically charging a much lower fee of 2.5% on tips paid by card. Trade body UK Hospitality said the fact restaurants had acted voluntarily meant new legislation was actually unnecessary.

‘We developed a Code of Practice – together with Unite – which deals with the fair distribution of tips among all staff, not just waiters,’ said UK Hospitality Chief Executive Kate Nicholls.

‘As a result, best practice has been promoted across the sector and we see no evidence of tips being withheld across restaurant chains.’

Chancellor calls for tax reform for big tech firms

Urgency is needed in talks to reform the way big technology firms are taxed, the Chancellor of the Exchequer, Philip Hammond, has warned.

Google, Facebook, Apple and Amazon have been criticised for paying only modest amounts of tax in the UK on huge sales. Technology firms have argued they follow tax rules and have an obligation to shareholders to be tax efficient.

Hammond said international agreements were needed to tackle the problem, but ‘the time for talking is coming to an end’.

He added: ‘The stalling has to stop. If we cannot reach agreement the UK will go it alone with a “Digital Services Tax” of its own.’

The OECD, which co-ordinates economic policy among rich nations, is trying to tackle the problem but is struggling to reach a consensus among its 36 members.

Trump hails new trade deal as ‘most important ever’

Donald Trump has said a new trade deal struck with Canada and Mexico is ‘the most important’ ever agreed by the US.

The President said the United States-Mexico-Canada Agreement (USMCA), which replaces Nafta, would bring thousands of jobs back to North America.

The new deal covered trade between the three countries worth $1.2trn and was ‘truly historic’, he said.

However, Mr Trump said it was too soon to talk to China, on which the US has imposed three rounds of tariffs this year, about a trade deal.

‘China wants to talk, very badly … [we] can’t talk now because they’re not ready,’ Mr Trump said.

Other trading partners had been tough on the US, he said, including the European Union, which introduced retaliatory tariffs on US goods in June.