Month: February 2023

A cross-party committee said he had not given them the “full facts” two years ago when they were considering his suitability for the BBC role.

He should consider how this affected trust in him and the BBC, it said.

Mr Sharp apologised if MPs had not had all the details they needed.

His involvement in the then-Prime Minister Mr Johnson obtaining an £800,000 loan guarantee has come under scrutiny since the Sunday Times first reported the claims last month.

Businessman Sam Blyth, a distant cousin of Mr Johnson and Mr Sharp’s friend, had reportedly raised the idea of acting as a loan guarantor for Mr Johnson in 2020.

When he appeared before MPs on the Commons Digital, Culture, Media and Sport (DCMS) Committee this week, Mr Sharp said he did not help arrange this guarantee or give Mr Johnson financial advice.

He was named as the government’s preferred candidate for the BBC job in January 2021 and at the time the DCMS Committee backed his appointment. The government’s choice is ultimately decided by the prime minister, on the advice of the culture secretary, who is in turn advised by a panel.

In its report published on Sunday, the DCMS Committee is highly critical of Mr Sharp’s failure to mention any involvement he had in events surrounding the loan when they were considering his suitability for the job.

The report said his decisions to “become involved in the facilitation of a loan to the then-prime minister while at the same time applying for a job that was in that same person’s gift” and failure to disclose this to the committee undermined confidence in the public appointments process.

Earlier this week Mr Sharp had told the committee he had met Cabinet Secretary Simon Case in December 2020 to get permission to pass on Mr Blyth’s details to him.

However, at the same meeting he had told Mr Case that he had applied for the BBC job, and therefore agreed he would have “no further participation” in order to avoid any conflict of interest or perception of conflict given his application to the BBC.

In is highly critical report, MPs said Mr Sharp had recognised the need to be “open and transparent” by bringing it to the attention of the cabinet secretary, but “failed to apply the same standards of openness and candour in his decision not to divulge this information during the interview process or to this committee during the pre-appointment hearing”.

“Mr Sharp’s failure to disclose his actions to the panel and the committee, although he believed this to be completely proper, constitute a breach of the standards expected of individuals applying for such public appointments,” the report added.

The report concluded: “Mr Sharp should consider the impact his omissions will have on trust in him, the BBC and the public appointments process.”

A spokesperson for Mr Sharp said he did not facilitate an introduction between Mr Johnson and Mr Blyth and he was not involved in the arrangement of a loan between them.

“Mr Sharp appreciates that there was information that the committee felt that it should have been made aware of in his pre-appointment hearing. He regrets this and apologises.

“It was in seeking at the time to ensure that the rules were followed, and in the belief that this had been achieved, that Mr Sharp acted in good faith in the way he did.”

The spokesperson added: “Mr Sharp believed he had dealt with the issue by proactively briefing the cabinet secretary that he was applying for the role of BBC chair, and therefore beyond connecting Mr Blyth with Mr Case, he recused himself from the matter.”

The DCMS Committee report was also critical of ministers who had defended the decision to endorse Mr Sharp in 2021 after the row over the loan broke, despite the fact they had not been told about the situation.

“The fact that ministers have cited this committee’s original report on Mr Sharp’s appointment as a defence of the process was followed, when we were not in full possession of all the facts that we should have had before us in order to come to our judgement, is highly unsatisfactory,” the report said.

Prime Minister Rishi Sunak said Mr Sharp was made as BBC chairman following two “transparent and rigorous” appointment processes, adding the appointment was made by his predecessor.

According to the Sunday Times, a leaked memo from Mr Case allegedly warned Mr Johnson to “no longer” ask for financial advice from Mr Sharp.

But the MPs in this new report said there was an “unresolved issue” as to why the cabinet secretary had believed Mr Sharp had been giving financial advice to Mr Johnson and called on the Cabinet Office to “clear up the confusion” given that Mr Sharp had said this was not the case.

Acting Chair of the DCMS Committee Damian Green MP said: “The public appointments process can only work effectively if everyone is open and transparent, yet Richard Sharp chose not to tell either the appointment panel or our committee about his involvement in the facilitation of a loan to Boris Johnson.”

For those of us following this story in detail, a fascinating element is the memo written by the Cabinet Office to Boris Johnson on 22 December 2020.

Mr Sharp is about to be announced as BBC chairman, a role appointed by the then-prime minister. So Boris Johnson is told he must “no longer ask him advice about your personal financial matters”.

Mr Sharp says he never gave Mr Johnson advice about his finances. So why is the memo phrased in that way? The committee has called upon the Cabinet Office to clear up the confusion immediately.

The committee doesn’t call for him to resign, but it does come close to suggesting Mr Sharp considers his position when it says he should consider the impact his actions have had on trust in him and the BBC.

It is not at all certain that, even if he had declared this potential conflict of interest, somebody else would have been chosen as BBC chairman.

The process, though, is under scrutiny and we now await the investigation by the public appointments watchdog.

Shadow culture secretary Lucy Powell said the BBC chairman’s position was becoming “increasingly untenable” and it “throws into serious doubt the impartiality and independence that is so fundamental to trust in the BBC.”

The Liberal Democrats said Mr Johnson also needed to answer questions as part of an independent inquiry.

The watchdog that oversees how public appointments are made is also reviewing the process of how Mr Sharp was hired.

William Shawcross, the Commissioner for Public Appointments, recused himself from heading up that review last month after writing to the DCMS to say he had met Mr Sharp on “previous occasions”.

The BBC is also conducting its own internal review over any potential conflicts of interest Mr Sharp may have in his role as BBC chairman.

Europe’s poorest country was struggling with “multiple crises”, outgoing PM Natalia Gavrilita said on Friday.

With the war raging in neighbouring Ukraine, Moldova has been facing inflation, high energy prices, a refugee influx and Russian aggression.

The news came just hours after Russian missiles flew over Moldovan airspace.

Announcing her resignation on Friday, Ms Gavrilita said that when her government was elected in 2021, no one expected it would have to manage “so many crises caused by Russian aggression in Ukraine”.

Moldova is precariously close to the war – it shares a 1,222km (759 mile) border with Ukraine, and has suffered greatly from the fallout of Russia’s invasion.

“I took over the government with an anti-corruption, pro-development and pro-European mandate at a time when corruption schemes had captured all the institutions and the oligarchs felt untouchable,” Ms Gavrilita said at a news conference.

“We were immediately faced with energy blackmail, and those who did this hoped that we would give in,” she said, referring to the Kremlin.

An energy crisis was sparked last year when Russia suddenly reduced its gas supplies to Moldova, which relied 100% on Russia for gas. It caused inflation to skyrocket and there was public unrest over the high energy costs.

President Maia Sandu thanked Ms Gavrilita for her “enormous sacrifice and efforts to lead the country in a time of so many crises”.

“We have stability, peace and development, where others wanted war and bankruptcy,” the president said.

She has already nominated her former defence adviser Dorin Recean – who is also pro-EU – as the next prime minister. The Moldovan parliament will vote to confirm his nomination next week.

In the earlier days of the war in Ukraine, there were fears the conflict would spill over into Moldova, or that Russia might invade it too.

That concern has receded for now, but as Moldova moves ever closer to joining the European Union, pressure has increased from Russia – which has tried to undermine the former Soviet state, and the EU’s influence.

In a stark warning on Thursday, Ukraine’s President Volodymyr Zelensky said that Russia had a plan to “destroy” Moldova, according to Ukrainian intelligence.

“These documents show who, when and how Russia is going to break democracy of Moldova and establish control,” he told EU leaders at a summit in Brussels.

“I immediately warned Moldova about these threats,” he added.

Moldovan intelligence services later confirmed they had also identified “subversive activities” aimed at “undermining the state of the Republic of Moldova, destabilizing and violating public order.”

There are also renewed tensions in Transnistria, a breakaway territory controlled by pro-Russian separatists that runs along Moldova’s border with Ukraine, and where some 1,500 Russian soldiers are stationed.

Last week, Russian Foreign Minister Sergei Lavrov accused the West of trying to turn Moldova against Russia – as he claimed it had already done with Ukraine.

Natalia Gavrilita became prime minister in August 2021 when President Sandu’s pro-European Party of Action and Solidarity (PAS) won a landslide parliamentary election.

She previously served as finance minister from June 2019 to November 2019 in when Ms Sandu was prime minister.

John Tory’s announcement came shortly after the Toronto Star newspaper reported he had an affair with the 31-year-old woman – whom he did not name.

He said the affair started during the Covid-19 pandemic and was “ended mutually by consent this year”.

The 68-year-old called the relationship “a serious error in judgement.”

In a statement Mr Tory said: “I am deeply sorry, and I apologise unreservedly to the people of Toronto, and to all of those hurt by my actions.

“Most of all, I apologise to my wife, Barb and to my family who I’ve let down more than anyone else,” he added.

Mr Tory said he would work with city employees and deputy mayor Jennifer McKelvie to ensure an orderly transition to a new administration.

He added: “I deeply regret having to step away from a job that I love in a city that I love even more.

“I believe, in my heart, it is best to fully commit myself to the work that is required to repair these most important (family) relationships as well.”

He took office in December 2014 having beaten Doug Ford and Olivia Chow in the election.

Mr Tory was re-elected in 2018 and clinched a third term in office four years later.

A by-election at a later date will be held to determine an elected successor to Mr Tory.

The body which represents train firms and Network Rail had described the proposals as their “best and final”.

RMT boss Mick Lynch branded the offers “dreadful”, while the transport secretary called the move “a kick in the teeth for passengers”.

The rejection was made by the national executive committee but the industry and government want a members’ vote.

Twenty officials and representatives sit on the body but the RMT said the decision was made following a wide-ranging consultation with every level of the union involved in the national rail dispute.

Mr Lynch said the offers did not meet members’ expectations “on pay, job security or working conditions”.

The RMT said it would now seek further meetings with Network Rail and the Rail Delivery Group (RDG) – which represents train operating companies – to try to work towards a settlement.

But it will start preparing to re-ballot its members when the existing strike mandate runs out in late May.

It is a significant moment in the ongoing national rail dispute – not just because the RMT has rejected what were billed as final offers from the employers, but because the union is now talking explicitly about seeking an “unconditional” pay deal.

The government and industry have said all along that a pay increase would have to be funded by “reforms”.

There had been movement in the dispute in recent months and on all sides the tone had become less antagonistic. But it is clearly not as close to a resolution as some onlookers had hoped.

The RDG said on Friday that passengers and “many hard-working RMT members will be deeply dismayed that the union leadership has opted to reject our fair proposals without putting out a vote to their full membership in a democratic referendum”.

It said it had made “substantial changes” to its offer after recent negotiations, including a minimum 9% pay increase over two years which rail workers “will now miss out on, without even having had an opportunity to have their say”.

“We removed driver-only operation and gave an improved job security offer,” the group said, adding: “The railway’s financial crisis is not going away.”

“The RMT leadership must now accept the urgent need to make the railway fit for the future for both our people, and the communities the railway serves,” it said.

Last month, the RDG put forward a list of changes to working practices which it said could fund a 5% pay rise for 2022 and a further 4% this year.

Separately Network Rail, whose employees include maintenance and signalling staff, offered a package including a 5% pay increase last year and 4% for 2023, plus other benefits such as discounted travel for family. Members rejected this in December.

Network Rail recently put forward a slightly updated offer, but kept the pay element the same.

The RMT said it was seeking “an unconditional pay offer, a job security agreement and no detrimental changes being imposed on members terms, conditions and working practices”.

The transport secretary echoed the rail industry’s position that RMT members should be given a vote on the deals on the table.

Mark Harper said workers are “being blocked from having a say on their own future” and that a decision had been made for them behind closed doors.

Planned changes to how maintenance teams at Network Rail work are a particular point of contention for the RMT.

The union said it viewed proposed plans as “unsafe” and unworkable. Network Rail has always insisted safety would not be compromised.

Mr Lynch said: “We have carried out an in-depth consultation of our 40,000 members and the message we have received, loud and clear, is to reject these dreadful offers.

“Our members cannot accept the ripping up of their terms and conditions or to have safety standards on the railway put into jeopardy under the guise of so-called modernisation.

“If our union did accept these offers, we would see a severe reduction in scheduled maintenance tasks, making the railways less safe, the closure of all ticket offices, and thousands of jobs stripped out of the industry when the railways need more investment, not less.”

Network Rail’s chief negotiator Tim Shoveller claimed employees want to accept the offer and said the RMT “is condemning its members to continuing a fruitless, pointless and costly dispute for everyone involved”.

“Our rank-and-file employees are telling us they want to take the current improved offer that’s on the table and to end this dispute but the RMT leadership refuses to listen and instead takes soundings from the echo chamber of its most active members,” he said.

This is separate to the train drivers’ dispute. The drivers’ main union, Aslef, says it hopes to have more talks next week.

A smaller union, the TSSA, said on Friday that thousands of its members would be given a vote on the offers from the train companies.

This is despite a sharp 0.5% fall in economic output during December, partly due to strike action, the Office for National Statistics (ONS) said.

Chancellor Jeremy Hunt said the figures showed “underlying resilience” but said “we are not out of the woods”.

The Bank of England still expects the UK to enter recession this year.

But it thinks it will be shorter and less severe than previously forecast.

The Bank of England is the UK’s central bank. The BBC included its view as it has a central role in managing the overall state of the economy.

One of the ways it does that is by changing interest rates. Recently, it has been raising rates in a bid to tackle the soaring cost of living.

Mr Hunt, who the BBC spoke to for the government’s position, said that high inflation remains a problem and continues to cause “pain for families up and down the country”.

Inflation – or the rate at which prices are rising – is slowing but at 10.5% remains close to a 40-year high.

The ONS, which published the economic output figures, said there was no growth in the final three months of 2022.

This is the first estimate for the period and figures are often revised later on.

On Friday, the ONS revised up its figures for the July to September quarter, to show that the economy shrank by 0.2% instead of the previous estimate of a 0.3% fall.

A recession is typically defined as when the economy shrinks for two consecutive three-month periods. This usually means it is performing badly and companies may make less money and cut jobs, leaving the government with less tax revenue.

The figures for December, however, were worse than expected, and there will be no celebrations at the Treasury.

Darren Morgan from the ONS said there was a fall in health services with fewer operations and GP visits, while school attendance also dropped in the week before schools broke up for Christmas.

He explained that in terms of public services, the ONS measures things like teachers’ wages, and how much investment is made in schools and the health services. “The services they provide are a really important part of the economy so we include it in our measurement,” he said.

He also said that sporting activities, particularly football, were impacted because of the World Cup.

He said people were not “able to enjoy top-flight football due to the absence of Premier League football until Boxing Day, as the World Cup continued”.

Mr Morgan added that rail and postal industries “had a poor month”. “We certainly saw the impact of strikes as both fell heavily in December.”

Strike action on trains caused disruption on the railways and on the roads in December. Postal workers also went on strike on a series of days in the run-up to Christmas.

The year-on-year comparison is not the same as adding up the quarterly growth figures.

It is a comparison of the full year with the full previous 12 months, which in 2021 included the lockdown at the beginning. When compared against that low base, the UK’s economy was 4% bigger in 2022 than in 2021.

That was the biggest increase of all G7 nations for last year.

But the UK is also still the only G7 country where the economy is smaller than pre-pandemic levels.

Labour and the Liberal Democrats, who we’ve included to explain opposing parties’ point of view, warned the latest figures make for grim reading.

Rachel Reeves, Labour’s shadow chancellor, said they show the economy “is stuck in the slow lane”.

She added: “We must bring in urgent measures to prevent yet more harm from the cost of living crisis, using a proper windfall tax on oil and gas giants to stop the energy price cap going up in April so that people have more money in their pockets.”

Liberal Democrat MP Sarah Olney said: “Britain is dangling on over the edge of a recession after months of economic vandalism and chaos in government.

“The blame for these gloomy figures lies squarely with the government, who have botched budgets, failed to tackle inflation and have no plan for growth.”

Antonia Sanchez-Toomey runs Tailormade Living in Enfield, north London, a company selling items such as scented candles and accessories for the home.

The BBC spoke to Ms Sanchez-Toomey ahead of the data to understand how a typical small business is faring in the current economic climate.

She says it is businesses like hers that suffer when the economy shrinks and people cut back on luxuries.

“We sell non-essential products,” she says.

“People are cutting back on those sorts of things. So they might still come in for a gift, but if they would buy a gift and then something for themselves, it’s the ‘something for themselves’ that’s not happening anymore.”

She says in 2022, sales were down year-on-year and down by about 40% over Christmas, which she says was a shock.

“And then we’ve just had our quietest January ever,” she says. “So we’ve had to make lots of cuts within the business. And that has affected some of my team members. And I’ve just got this real sense that consumer confidence is at an all-time low.”

Most forecasters now predict 2023 will see a milder downturn than previously expected because of a fall in energy prices. But some think the UK will avoid a technical recession completely.

There was an upbeat take from the National Institute of Economic and Social Research, an economic think tank, which forecast that the UK will swerve a recession.

But both the Bank of England and the International Monetary Fund were gloomier, expecting the UK economy to shrink in 2023.

The UK economy is more sensitive to gas prices, to rising interest rates and has a specific issue about the failure of the workforce to return to its pre-pandemic size.

The latest numbers and the early evidence from this year could still pile on the pressure for the government to do more over the workforce and over the further rise in domestic energy bills coming in the spring.

Mr Hunt will outline his plans for taxation and spending in the Budget on 15 March.

Separate statistics from the ONS showed that the UK’s annual trade deficit for goods and services widened by £85bn to £108bn in 2022 when compared with the year before mainly due to a rise in the value of imports.

This was largely driven by the soaring cost of food and fuel.