The Times - UK (2022-05-17)

the times | Tuesday May 17 2022 2GM 39

Business

Tens of thousands of apprenticeships
could be created and hundreds of
millions of pounds saved if the flawed
apprenticeships levy were reformed,
according to a survey of members by
the British Retail Consortium.
Five years on from the levy’s
introduction, 26 national retailers
have told the business lobby group that
they could each create about 1,000
new apprenticeships if changes were
made.
Millions of pounds of levy support is
being wasted every month as the rules
surrounding the scheme are so rigid
that businesses have found them un-
suitable and irrelevant, critics have
claimed. During the HGV driver crisis,
companies complained that the levy

Retailers demand changes to apprenticeship levy

Ashley Armstrong Retail Editor

War forces

EU to slash

its growth

forecasts

Bruno Waterfield Brussels

The European Union has downgraded

its growth forecasts as soaring energy

and food costs caused by Russia’s war

against Ukraine hit economies across

the Continent.

Eurozone and EU growth estimates

have been slashed from 4 per cent to

2.7 per cent as inflation is forecast to

average 6.1 per cent, up from 3.5 per

cent. Next year’s growth is expected to

be even more subdued at 2.3 per cent,

although inflation is predicted to fall

back to 2.7 per cent.

Paolo Gentiloni, the European

economics commissioner, said Presi-

dent Putin’s invasion was testing the

EU’s resilience, against a backdrop of

energy dependency on Russia and huge

increases in the costs of food commodi-

ties. “Russia’s invasion of Ukraine is

causing untold suffering and destruc-

tion, but is also weighing on Europe’s

economic recovery,” he said. “The war

has led to a surge in energy prices and

further disrupted supply chains, so that

inflation is now set to remain higher for

longer.”

Despite the cut to growth forecasts,

the European Commission and gov-

ernments within the bloc fear that the

situation could become worse than pre-

dicted, as the war drags on and if Russia

cuts off gas supplies to key economies

such as Germany. “This forecast is sub-

ject to high uncertainty and risks that

are closely linked to the development of

Russia’s war,” Gentiloni said.

Headline inflation in the eurozone

hit 7.5 per cent in April, the highest rate

since the creation of the euro single

currency, driven by increases in energy

costs of 44 per cent. Disruption to

supplies from Ukraine and Russia is

pushing up food prices, with a 65 per

cent increase in the cost of soft wheat

and a 78 per cent rise in the cost of rape-

seed, used in cooking oil.

The Commission’s analysis warns

that “the baseline scenario is extreme

and the balance of risks is skewed heav-

ily towards unfavourable outcomes.

“The EU is first in line among

advanced economies to take a hit, due

to its geographical proximity to Russia

and Ukraine, heavy reliance on import-

ed fossil fuels, especially from Russia,

and high integration in global value

chains. An escalation of the war, a

sudden stop of energy deliveries or a

further deceleration of economic activ-

ity in the US and China could result in

a much grimmer outlook.”

The EU forecasts growth in the UK at

3.4 per cent this year, higher than in

Europe, but falling back to 1.6 per cent

in 2023, “increasing inflationary pres-

sures and heightening risks of a wage-

price spiral”.

European energy ministers yester-

day continued talks over banning Rus-

sian oil imports, amid growing expecta-

tions that Hungary will agree to a pack-

age of compensation and exemptions

to wean it off Russia’s Druzhba pipeline.

The EU’s plan to largely end depen-

dency on Russian oil this year while

phasing out gas imports by 2027 is

expected to further drive up global

energy prices in the months to come.

T

om Cruise isn’t the only
one making a comeback:
the release this month of
Top Gun: Maverick more
than 35 years after the
original Top Gun comes as the big
cinema chains kick-start investment
in new theatres (Dominic Walsh
writes).
A year after Britain’s cinemas
were allowed to reopen, Odeon has
announced plans to open its latest
upmarket Odeon Luxe venue this

summer in Acton, west London. The

opening, its first this year, will have

nine screens with reclining seats

that have three times the standard

legroom. Films will be shown on

cutting-edge technology, while the

food and drink offering has been

upgraded.

The opening, part of a £70 million

investment in the expansion and

refurbishment of its Luxe format,

launched in 2010, also marks a

return to Acton for Odeon after a

gap of 45 years. Since reopening in

May last year, Odeon has attracted

24 million customers, with

attendance now running at 71 per

cent of pre-pandemic levels in 2019.

The chain, founded in 1930 and

owned by AMC Theatres, the

world’s biggest cinema group, has

110 venues in the UK.

Also expanding its British estate

is Cineworld, despite financial

problems. Two weeks ago the

quoted operator opened a ten-

screen cinema in Hounslow, west

London, lifting its number of venues

to 128. It also has refurbished and

reopened sites in Ashford, Brighton,

Boldon and Wolverhampton. Vue

International opened a new site in

Glasgow last year and converted

several sites to recliner seating.

The investment by the operators

is supported by a strong line-up of

films for the rest of this year, which

includes Jurassic World Dominion

and Avatar: The Way of Water.

7.5%

Headline inflation rate in the eurozone

in April

Source: Times research

did not support retraining staff as lorry

drivers.

Two thirds of retailers polled by the

consortium said that more than 40 per

cent of their levy was unspent each

month, while one business said that it

had lost up to £12 million in unspent

levy funds since it was introduced in

2017 largely because the rules were too

restrictive and counterproductive for

retraining its workforce.

Helen Dickinson, chief executive of

the British Retail Consortium, said the

system “is not fit for purpose and in des-

perate need of reform. Hundreds of

thousands of pounds are being wasted

every month. This is not just a financial

issue: it represents missed employment

opportunities, missed training and

missed career progression.”

Retailers said the biggest barriers to

hiring more apprentices were that the

scheme required them to take 20 per

cent of time off, additional costs, the

length of the programmes and unsuita-

ble courses.

Research by the Chartered Institute

of Personnel and Development found

that nearly £2 billion of employers’ levy

funds had expired and been returned to

the Treasury between 2019 and 2021

because they were unable to spend the

pot.

The BRC said that more people could

be helped back into work if the govern-

ment proposed a defined list of high-

quality shorter courses.

Last year Ken Murphy, Tesco’s chief

executive, called on the government to

overhaul the levy and said that reforms

could create 8,000 new Tesco jobs

alone. The supermarket said that full

apprenticeship schemes were unat-

tractive to those who wanted to learn

new skills while still working.

It also has proven tricky for smaller

shops, which have to fund staffing cover

while an apprentice is absent for train-

ing.

The levy was introduced by George

Osborne when he was chancellor and

came into effect in 2017. However,

research has found that since then

apprenticeships have fallen and far

fewer have gone to younger people.

“If government is serious about its

‘levelling up’ agenda, the levy must be

made more flexible so retailers can

use the funds for high-quality pre-em-

ployment courses, short in-work devel-

opmental courses and to cover other

costs related to training their people,”

Dickinson said.

The latest Odeon Luxe

venues, which have

extended legroom, aim

to entice customers to

big-budget sequels

including the new

Top Gun movie

PARAMOUNT PICTURES/AP