UK Media Alerts - 12 October 2023
Israel - Gaza Conflict
Politico reported that Foreign Secretary James Clevely was in Israel in order to show the UK’s
unwavering support for the Israeli people.
The Financial Times reported that the UK education secretary has written to university vicechancellors asking them to act “swiftly and decisively” to stamp out “implicit or explicit” threats to
Jewish students following reports that some pro-Palestinian groups have expressed support for
Hamas. In her letter to vice-chancellors, which was also signed by skills minister Robert Halfon,
Keegan said many Jewish students were being made to feel they needed to hide their identity,
which she claimed was compounded by a “grossly insensitive and unhelpful statement” put out
by UCU, the union representing lecturers and university staff. The UCU on Tuesday said it was
“utterly horrified” by violence by both Hamas and the Israeli military and called on the British
government to call for an “immediate ceasefire and de-escalation” of violence including an end to
the blockade of Gaza by the Israeli military and a halt to further violence against civilians by
Hamas. The British government proscribed Hamas as a terrorist organisation in 2021.
BBC News reported that antisemitic incidents in the UK have more than quadrupled since
Hamas's attack on Israel. The Community Security Trust (CST) recorded 89 "anti-Jewish hate"
incidents from 7 to 10 October. That marked a more than four-fold rise on the 21 antisemitic
incidents recorded in the same period last year. Security minister Tom Tugendhat said he was
"very concerned" at reports of an increase in antisemitism.
Social Care Sector Employment Trends
The Financial Times reported that the English care sector has become extremely dependent on
overseas hiring. Skills for Care, the workforce planning body for the sector, said an estimated
70,000 people took up care jobs in England after arriving in the UK in the year to March 2023,
following the loosening of visa criteria for these roles, and a further 30,000 to 40,000 between
April and August. Their arrival helped lower the vacancy rate in the adult social care sector to 9.9
per cent, from a peak of 10.6 per cent the previous year — though it remains higher than before
the pandemic, and much higher than the average of 3.4 per cent for the UK economy as a whole.
Meanwhile, unions have received daily reports from migrant workers in care homes who describe
conditions “verging on modern slavery”, but cannot leave their job because employers say they
must repay relocation and training costs running into thousands of pounds.
Economy
The Times reported that the UK economy returned to growth in August prompting economists to
roll back the chances of a recession. GDP expanded by 0.2 per cent in August, according to the
Office for National Statistics (ONS), in line with City analysts’ expectations. Although output
returned to growth, August’s expansion did not recoup losses generated in July, when the
economy contracted by a worse-than-feared 0.6 per cent, mainly due to the unusually wet
weather. Across the three months to August growth came in at 0.3 per cent.
The Financial Times reported that, after adjusting for inflation, average real house prices were no
higher than they were in late 2015 with many regions and nations of the UK no better off in real
terms housing wealth than on the eve of the 2008 financial crisis. The residential research director
at Savills said property owners may not have felt the loss of value since the nominal value of their
homes may have gone up or not fallen significantly in the past few years, but inflation had done
its work of eroding underlying value, leading to the adjustment in real terms. Higher inflation has
led the Bank of England to raise its official rate of interest from 0.1 per cent to 5.25 per cent since
December 2021 and pushed up mortgage rates, damping demand in the housing market. The
average five-year mortgage fix rate stood at 5.93 per cent, compared with 2.55 per cent in October
2021.
Israel - Gaza Conflict
1) UK foreign secretary runs for cover as sirens go off in Israel
‘I’m here in Israel today to show that the UK’s support for the Israeli people is unwavering,’ James
Cleverly said.
By Laura Hülsemann
Politico, 11 October 2023
British Foreign Secretary James Cleverly and Israeli counterpart Eli Cohen ran for shelter in
southern Israel as sirens went off Wednesday.
The two politicians — alongside many other people — ran to take shelter, as seen in a video
reposted by Israel’s foreign ministry on X, formerly Twitter. According to former diplomat David
Saranga, who originally posted the video, Cleverly and Cohen were visiting the town of Ofakim in
Israel when “a siren goes off warning of incoming Hamas rocket fire.”
Ofakim, located about 25 kilometers away from Gaza, was one of the sites where hostages were
taken during the deadly Hamas attack on Israel on Saturday, the Times of Israel reported.
“I’m here in Israel today to show that the UK’s support for the Israeli people is unwavering,”
Cleverly said on X before the video was published.
Prior to the attack, a spokesperson from the UK’s Foreign Office announced that “the Foreign
Secretary has arrived in Israel today to demonstrate the UK’s unwavering solidarity with the Israeli
people following Hamas’ terrorist attacks. He will be meeting survivors of the attacks and senior
Israeli leaders to outline UK support for Israel’s right to defend itself.”
U.S. Secretary of State Antony Blinken is also on his way to the region, Sky News reported.
—
2) UK universities called on to act swiftly over expressions of support for Hamas
Education secretary Gillian Keegan writes to vice-chancellors over any ‘implicit or explicit’
threats against Jewish students
Anna Gross and Robert Wright
Financial Times, 11 October 2023
The UK education secretary has written to university vice-chancellors asking them to act “swiftly
and decisively” to stamp out “implicit or explicit” threats to Jewish students following reports that
some pro-Palestinian groups have expressed support for Hamas.
“We have seen evidence of a number of student societies that support Palestinians sending out
inflammatory messages that show support for Hamas, which is, as you know, a proscribed
terrorist organisation,” Gillian Keegan wrote in a letter seen by the Financial Times.
She calls on university leaders to use the government’s anti-terrorist “Prevent” system to deal with
any suspected incidents of support for terrorism, including keeping a particular eye out for any
invitations issued to speakers on the subject that may provide a “platform for illegal speech”.
Keegan’s intervention comes as many prominent western leaders have sought to show clear
support for Israel following the attack by Hamas over the weekend, and in the wake of Israel’s
siege of Gaza, where power and supplies have been cut off.
Earlier this week, home secretary Suella Braverman wrote to police and crime commissioners to
inform them that it was a criminal offence to express support for Hamas or wear clothing or carry
articles in public that could “arouse reasonable suspicion that an individual is a member or
supporter of Hamas”.
She also called on police chiefs to “consider” whether chants such as “From the river to the sea,
Palestine will be free” should be understood as “an expression of a violent desire to see Israel
erased from the world” and thus as a racially aggravated criminal offence.
Technology secretary Michelle Donelan also convened a meeting with leaders of social media
companies Google, Meta, TikTok and Snapchat on Wednesday to ensure they were working to
remove any antisemitic or extremely violent content on the war between Israel and Palestine.
Earlier this week, some university leaders warned students they could face criminal charges if
they expressed support for Hamas.
The British government proscribed Hamas as a terrorist organisation in 2021, and anyone who
“arouses reasonable suspicion” that they support the group can be prosecuted and sent to prison.
In her letter to vice-chancellors, which was also signed by skills minister Robert Halfon, Keegan
said many Jewish students were being made to feel they needed to hide their identity, which she
claimed was compounded by a “grossly insensitive and unhelpful statement” put out by UCU, the
union representing lecturers and university staff.
The UCU on Tuesday said it was “utterly horrified” by violence by both Hamas and the Israeli
military and called on the British government to call for an “immediate ceasefire and de-escalation”
of violence including an end to the blockade of Gaza by the Israeli military and a halt to further
violence against civilians by Hamas.
The union also noted recent events were “part of a continuing cycle of violence that has been the
result of decades of brutal occupation” by Israel that would have to end before lasting peace could
be achieved.
And London’s Metropolitan Police, the force in charge of the UK’s counter-terrorism policing,
appealed on Wednesday evening for anyone with direct information about the attacks in Israel to
pass it on to them.
The Met noted some UK nationals had died or been injured in the Hamas attack and it was
preparing for future inquests on those killed, as well as seeking to repatriate the dead and injured.
“This appeal is directed at anyone who may have already returned from Israel in the past few
days and has footage or images of the terrorist attacks,” the Met said. “There may also be people
in the UK who have friends, relatives or loved ones in Israel and have been sent direct messages,
images or videos.”
The force stressed that it was not seeking material that members of the public had found via “open
source” means such as social media.
—
3) Israel Gaza: Antisemitic incidents 'quadruple in UK' since Hamas attack
By Emily McGarvey
BBC News, 12 October 2023
Antisemitic incidents in the UK have more than quadrupled since Hamas's attack on Israel, says
a charity which helps Jewish people in the UK.
The Community Security Trust (CST) recorded 89 "anti-Jewish hate" incidents from 7 to 10
October.
That marked a more than four-fold rise on the 21 antisemitic incidents recorded in the same period
last year.
Security minister Tom Tugendhat said he was "very concerned" at reports of an increase in
antisemitism.
The CST says six of the 89 incidents recorded were assaults, three referred to damage to Jewish
property and 66 were related to abusive behaviour, 22 of which happened online.
In examples of incidents given by the group:
A Jewish person walking to a synagogue in London on Sunday morning was called a "dirty Jew"
by a stranger, who said "no wonder you're all getting raped"
Also in London, a car slowed down outside a synagogue before the occupants of the vehicle
shouted "Kill Jews" and "Death to Israel" while waving a Palestinian flag
The CST said: "Make no mistake: these are anti-Jewish racist incidents and hate crimes in which
Jewish people, property and institutions are singled out for hate, including death threats and
abuse.
"In many cases, the perpetrators of these disgraceful incidents are using the symbols and
language of pro-Palestinian politics as rhetorical weapons with which to threaten and abuse
Jewish people."
Hamas began its assault on Israel on Saturday, killing hundreds and taking up to 150 people
hostage.
Mr Tugendhat said he took the rise in antisemitism in the UK "extremely seriously" and urged a
crackdown on the spread of hate.
He compared the ideology of Hamas to that of the Nazis in the 1930s and 40s.
"What the Nazis were doing is exactly what Hamas is doing today," he told Sky News. "It is
preaching a blood libel, preaching a hatred for Jews and preaching a hatred that extends around
the world."
Earlier this week, Home Secretary Suella Braverman wrote to police chiefs to step up patrols to
prevent antisemitic disorder after the attacks on Israel.
Jewish schools in London and Manchester have stepped up security as concerns grow about a
possible rise in antisemitism directed at children.
Some pupils have been told blazers are optional in public places so they cannot be easily
identified as Jewish.
Social Care Sector Employment Trends
Overseas hiring props up England’s social care sector, data shows
Homes in Scotland and Northern Ireland, which pay higher wages, are less reliant on foreigners
Anna Gross and Delphine Strauss
Financial Times, 12 October 2023
England’s care sector would be haemorrhaging workers were it not for a surge in overseas hiring
that has raised widespread concerns over the exploitation of migrants in effect tied to their jobs,
data published on Thursday showed.
Care homes in England are also relying on overseas workers far more than higher-paying homes
in Scotland and Northern Ireland, according to separate figures released by the Home Office that
will add fuel to calls for an overhaul of Britain’s legal migration rules.
Skills for Care, the workforce planning body for the sector, said an estimated 70,000 people took
up care jobs in England after arriving in the UK in the year to March 2023, following the loosening
of visa criteria for these roles, and a further 30,000 to 40,000 between April and August.
Their arrival helped lower the vacancy rate in the adult social care sector to 9.9 per cent, from a
peak of 10.6 per cent the previous year — though it remains higher than before the pandemic,
and much higher than the average of 3.4 per cent for the UK economy as a whole.
But the surge in international recruitment has only just been enough to offset a continued outflow
of British and EU nationals from the sector, Skills for Care said.
Meanwhile, unions are receiving daily reports from migrant workers in care homes who describe
conditions “verging on modern slavery”, but cannot leave their job because employers say they
must repay relocation and training costs running into thousands of pounds, according to Gavin
Edwards, head of social care at Unison.
Growing concerns over exploitation — shared by employers, recruiters and enforcement agencies
as well as unions — are one reason why the government’s independent Migration Advisory
Committee called last week for the abolition of one of the main routes through which employers
can hire overseas workers in sectors facing chronic staff shortages, known as the “shortage
occupation list”.
It said the list, which allows visa conditions to be loosened for some roles, was liable to drive down
wages and leave workers open to abuses.
Speaking on the sidelines of the Labour party conference this week, shadow home secretary
Yvette Cooper told the Financial Times that “pay and conditions seem to be the problem” causing
shortages in many occupations.
She set out Labour’s plan, which is similar to a proposal made by the advisory committee, to
create a task force that could identify causes of workforce shortages in specific sectors and
suggest ways to tackle them beyond the migration system, including by improving pay and
training.
According to data provided by the Home Office via a freedom of information request made by the
FT, health and care visas represented 35 per cent of all skilled worker visas issued in England in
the first six months of 2023, but only 22 per cent in Scotland and 14 per cent in Northern Ireland.
Scotland and Northern Ireland increased care worker pay earlier this year to rates above the UK’s
statutory minimum and Scotland announced it would increase its rate further to £12 an hour in
April of next year.
Scotland is home to 8 per cent of the UK’s population, but took about 5 per cent of all non-care
sponsorship visas issued in Britain, and only 2.5 per cent of those issued for care in the first half
of the year.
Edwards said pay was only “marginally” better in Scotland but that Scottish local authorities were
more likely to employ care workers directly — on better terms than in the private sector — than
English counterparts, who had a legal obligation to create a local market in care.
“Low pay and poor conditions are the major driver of shortages in the care sector,” said Madeleine
Sumption, director of the Migration Observatory at Oxford university. “The Scottish data are
interesting because they suggest that paying care workers above the minimum wage has been
associated with lower use of the care visa there.”
Economy
1) UK economy grows 0.2% in August despite drag from higher interest rates
Services the main driver for expansion in GDP
By Jack Barnett
The Times, 12 October 2023
The UK economy returned to growth in August after the wet weather in July delivered a blow to
output, prompting economists to roll back the chances of a recession, official figures revealed this
morning.
GDP expanded by 0.2 per cent in August, according to the Office for National Statistics (ONS), in
line with City analysts’ expectations.
Although output has returned to growth, August’s expansion does not recoup losses generated
in July, when the economy contracted by a worse-than-feared 0.6 per cent, mainly due to the
unusually wet weather in the month deterring consumer spending and construction activity.
Across the three months to August growth came in at 0.3 per cent. Experts tend to focus on the
quarterly estimates as they provide a more accurate snapshot of the strength of the economy.
Thomas Pugh, economist at RSM UK, said the return to expansion in August should “allay fears
that the UK is slipping into a recession.”
Darren Morgan, the ONS’s director of economic statistics, said: “Our initial estimate suggests
GDP grew a little in August, led by strong growth in services, which was partially offset by falls in
manufacturing and construction.”
Services businesses, which generate about £2 in every £3 of Britain’s GDP, were the main
contributors to the economy’s summer turnaround, providing growth in the sector of 0.4 per cent.
Construction output, plagued by a reduction in house building in response to the Bank of England
raising interest rates aggressively, contracted 0.5 per cent in August. Industrial production was
also weaker as it was drawn into a weak global manufacturing cycle.
Britain’s economy has outperformed analysts’ expectations this year, dodging a much-touted
recession, but GDP is growing at a historically slow rate, leading to fears that the country is in the
early stages of a prolonged period of stagnant economic activity.
Earlier this week the International Monetary Fund said in fresh forecasts that the UK would be the
worst performing economy next year among the G7, growing only 0.6 per cent. Germany is poised
to be the laggard this year, contracting 0.5 per cent.
The UK economy has grown faster than Germany and France since the onset of the Covid-19
crisis, however, with GDP 1.8 per cent larger compared with the final months of 2019, revisions
to ONS estimates showed last month. Germany, Europe’s largest economy, has performed the
worst since the pandemic, with output just 0.2 per cent higher.
Inflation, which has gripped households and businesses for two years, fell unexpectedly to 6.7
per cent last month and is tipped to decline to around five per cent by the end of the year.
Jeremy Hunt, the chancellor, said inflation needs to fall back to the Bank of England’s two per
cent target to “unlock sustainable growth”.
Slowing price growth alongside rapid wage increases of more than eight per cent have
strengthened families’ living standards, a trend which economists think will power an economic
recovery over the coming months.
Samuel Tombs, chief UK economist at Pantheon Macroeconomics, the consultancy, said: “Our
base case remains that GDP rises gradually in Q4 and into 2024. Prices now are rising
substantially less quickly than wages, and households’ disposable incomes will be squeezed only
gently by higher interest rates.”
Others questioned that assessment, highlighting that a deluge of homeowners have yet to shift
on to new mortgages with much more punitive rates. Unemployment also rose quicker than
expected to 4.3 per cent, according to latest data.
Ruth Gregory, deputy UK economist at Capital Economics, another consultancy, said: “The
economy is not in recession, but it doesn’t have much underlying momentum either. And the drag
from higher interest rates will continue to grow.”
Steeper interest rates have held back economic growth after the Bank of England sent the UK’s
base rate up to a 15-year high of 5.25 per cent to tame inflation. Economists think the damaging
effects of the Bank’s rate rises will increase over the next year, weighing on consumer spending
and business investment.
—
2) UK house prices drop 13.4% from peak in real terms
Inflation masks extent of decline from March 2022 record level
By James Pickford
Financial Times, 12 October 2023
Inflation has masked the true extent of recent falls in UK house prices, with many regions and
nations of the UK no better off in real terms housing wealth than on the eve of the 2008 financial
crisis, research has found.
UK house prices have fallen by a modest 2.8 per cent in nominal terms since their peak in March
2022, but 13.4 per cent in real terms, according to analysis of the Nationwide house price index
by estate agent Savills. After adjusting for inflation, average real house prices are no higher than
they were in late 2015, Savills said.
“Because of high inflation, the adjustment in the average price of a UK home has been much
more significant in real terms,” said Lucian Cook, residential research director at Savills. The
analysis suggests the average buyer will have seen a real-terms loss in the value of their home if
they bought after December 2015.
Across some regions and nations of the UK, house prices have yet to recover to 2007 levels after
adjusting for inflation. Prices in north-west England, Yorkshire and the Humber and West
Midlands, as well as Wales, Scotland and Northern Ireland, are substantially below their peak
before the 2008-09 financial crisis, Savills found.
Real-terms prices in the north of England have fallen by 27 per cent since their peak in the third
quarter of 2007. Over the same period, Yorkshire and the Humber is 21 per cent down; the East
Midlands by 11 per cent; and Wales by 18 per cent.
Cook said property owners may not have felt the loss of value since the nominal value of their
homes may have gone up or not fallen significantly in the past few years, but inflation had done
its work of eroding underlying value, leading to the adjustment in real terms. To find the last time
house price growth exceeded inflation over any sustained period one had to go back to the period
between the mid-1990s and 2007, he added.
UK consumer price inflation — excluding housing — was running above 10 per cent in the seven
months from September 2022 to March 2023. It has since fallen to 6.7 per cent in the year to
August, but remains elevated.
Higher inflation has led the Bank of England to raise its official rate of interest from 0.1 per cent
to 5.25 per cent since December 2021 and pushed up mortgage rates, damping demand in the
housing market.
While lenders have competed more vigorously on mortgage rates in recent weeks, prompting a
decline in fixed rates, the average five-year fix is at 5.93 per cent, compared with 2.55 per cent in
October 2021, according to data provider Moneyfacts.
Rachel Springall, finance expert at Moneyfacts, said the average two- and five-year fixed rates
had fallen for the second month running, offering borrowers potentially cheaper deals. “These are
encouraging signs for borrowers who may be looking for a new fixed-rate deal, but they still may
be on the fence about locking in, hoping rates will fall further in the weeks to come.”
A “gradual normalisation” of Bank of England interest rates, which Cook expected to take place
from next year, would ease pressures on mortgage affordability, he said. But it remained hard to
see the market emerge into a new period of “inflation-plus” house price growth.
“That raises the question of whether that golden age of asset price inflation, well above the
underlying rates of inflation, has passed. When will it return? The answer will greatly depend upon
what happens to interest rates from here.”
UK Media Alerts 12/10/2023