More on impact of Midas closure

“Midas was Teignbridge District Council’s main contractor and also had contracts to build nine affordable homes in Paignton and improve a school in Torquay.”

Business leaders react to Midas closure

Philip Churm, local democracy reporter www.radioexe.co.uk

Business leaders in Devon have been reacting to the news that one of the UK’s biggest privately owned construction companies has gone out of business – affecting a number of public sector projects in the county.

Midas Group Limited has offices across south west England and Wales including in Exeter in Newton Abbot.  

A contract with Torbay Council to build an £11 million Premier Inn is now threatened but the council said it will work with stakeholders to make sure it is delivered.

Over 300 people are expected to lose their jobs with the closure of Midas Construction, although its housing division Mi-Space has been acquired by commercial decorating firm Bell Group, saving 46 jobs.

Midas had a turnover of almost £300 million last year, with many smaller firms around Devon being subcontractors and suppliers for the group. 

CEO of Devon and Plymouth Chamber of Commerce Stuart Elford said it is very sad news.

“The Midas group, Midas construction and Mi-Space, are large companies that have been around in this region for a long time and been a staple part of the economy,” he said.

“It’s very sad also that over 300 redundancies have been announced, although the positive news for those poor people who’ve been made redundant is that the jobs market is incredibly buoyant and there are massive shortages in the construction industry. 

“So I’m confident that with the support of the local authorities and chambers of commerce, they will find other employment.”

But Mr Elford explained that many small companies in Devon would also be hit by the closure.  

He said: “One of the major concerns will be about the supply chain because this will have a knock on effect, especially to small businesses that were supplying products or contracts into Midas. 

“And so the knock on effects of this could go on for some time.”   

The company recently posted a loss of over £2 million for its last financial year, blaming its troubles on the pandemic, ongoing shortages of materials and labour, and a significant rise in costs because of inflation.

Mr Elford said there were many factors which led to the company’s collapse. 

“It’s not really a shock in some ways that Midas is going under in that we’ve seen huge price rises.

“The effect of Brexit and the pandemic have caused the price of raw materials, of construction materials, to go through the roof. And so where large contracts may have been taken on on a fixed price basis, they just couldn’t be delivered for the sort of price that may have been quoted.

“I’m not saying that’s definitely what’s happened here, but you can see how supply chain difficulties, costs of materials for buildings and labour shortages – increased prices across the range – will, of course, have a dramatic effect, and sadly, I suspect it won’t be the last we’ll see.

Mr Elford explained that large sections of the construction industry have reported significant increases in costs. 

“And this is a sector, a business, that has been struggling with the effects of the pandemic; unable to operate fully, staff shortages, shortage of raw materials and so forth, exacerbated by the Brexit situation where again, more staff who were perhaps EU citizens have returned home and raw materials have been difficult to get hold of,” he said. 

“So sadly, this has been a bit of a perfect storm. 

“Businesses that have borrowed to survive the pandemic are now having to pay that borrowing back. And if there are cash flow shortages, that will mean they don’t have the reserves to survive. 

“So I unfortunately think we will see further firms going under.”

However, Mr Elford said that workers who had lost their jobs because of the closure of Midas should not lose hope.

“You know, I really feel for those people who’ve been made redundant and they must be concerned, of course.

“But my message to them is there are loads and loads of companies recruiting, who’re doing well, who are desperate for good talent. 

“So don’t lose heart. You will be employed because business is desperate for good people.”

Earlier this month the Liberal Democrat leaders of Torbay, Teignbridge and North Devon Councils wrote to Michael Gove, asking for help.  

Midas was Teignbridge District Council’s main contractor and also had contracts to build nine affordable homes in Paignton and improve a school in Torquay.

Editorial: Raise income tax – not national insurance

Whether Boris Johnson, Rishi Sunak, Keir Starmer or someone else is at the helm, the government is going to face some unenviable and unpalatable choices. Paul Johnson, director of the Institute for Fiscal Studies, has told The Independent the country must choose between higher taxes for the next 20 years or cutting back the welfare state because it faces a spending black hole of £60bn each year.

www.independent.co.uk 

He said an ageing population would force politicians to choose between the approach of other western European countries – increasing taxes by another 2-3 per cent of national income – or paring back basic education, health and social care services.

A rise in national insurance contributions, together with increasing energy and council tax bills, will provide a “triple whammy” for many already hard-pressed households in April. The word “crisis” is overused by politicians and the media, but on this occasion it is no exaggeration: the cost-of-living crisis looks set to become the dominant political issue of this year.

Almost two in three workers expect their pay to rise by less than the cost of living this year, according to a Britain Thinks poll for the TUC published today. Three in 10 do not believe their wages will increase at all and only one in 10 expects a rise that will exceed living costs.

As if the government did not have enough on its plate, the British Chambers of Commerce is warning the Treasury of a “cost of doing business crisis”. Its survey of more than 1,000 businesses found that 73 per cent say they are raising prices in response to increasing costs, which the organisation warned would fuel the cost-of-living crisis for households. 

These short-term pressures will require a more proactive and generous response than the government has managed to date; spreading the rise in gas and electricity prices over five years will bring only small comfort, and bills could rise again in the autumn.

In the medium term, the pressures on households and business from higher taxes are likely to grow. The IFS’ warning is underlined by a study today by the Resolution Foundation think tank which suggests demographic pressures will add £24bn to state pension spending, and rising health costs a further £52bn to the health budget by 2030. The transition to net zero could cost another £12bn. Overall, the size of the state could rise from 42 per cent to 44 per cent by the end of this decade.

Such gloomy but realistic predictions should act as a reality check when Mr Johnson dangles the prospect of tax cuts before the next general election in front of Tory MPs as part of his struggle to hang on to his job. And when Mr Sunak plays along, knowing he might soon be contesting a Tory leadership election in which he would parade his credentials as a fiscal conservative and instinctive tax-cutter despite his recent actions. Whatever the state of the public finances, the Tories seem to have foolishly locked themselves into pre-election income tax cuts in an attempt to wrong-foot Labour.

The political debate on tax is dishonest. National insurance has shouldered the burden of tax rises since 2000 and has more than doubled as a share of GDP since the Second World War. At the same time, Tory and Labour governments have announced headline-grabbing cuts in income tax, knowing that voters are more willing to support higher national insurance for health and social care because of its original contributory principle.

Given the inevitable demands on vital public services in future, it would be fairer to raise income tax for higher earners than to increase the burden of national insurance, which starts to bite when workers earn £9,568 a year.

Alternatively, politicians should be ready to raise more from taxes on wealth, which has grown from three to almost eight times the value of national income in the past 40 years. Labour has dipped a toe in this water but is wary of Tory attacks on a single “wealth tax”. However, if the UK is to have the public services it needs and to avoid deeply damaging, regressive cuts to the welfare state, it is a route down which politicians of all hues will probably need to go sooner or later.

The significance of the “new” partygate photo and why the Met are now looking at it.

Why wasn’t this spotted before? – Owl

The new photograph shows the prime minister with three members of staff around a table with what appears to be an open bottle of champagne and crisps. One staff member has a garland of tinsel round his neck, while another is sporting a red and white Santa hat. Source www.independent.co.uk .

Downing Street previously said the quiz, held on 15 December 2020, took place virtually but with some members of staff taking part in the office.

It took place during a period when indoor social mixing was banned in London, which was under tier two Covid restrictions.

Official guidance also stated: “You must not have a work Christmas lunch or party, where that is a primarily social activity and is not otherwise permitted by the rules in your tier.”

Education secretary Nadhim Zahawi previously suggested no rules were broken because “no alcohol” was consumed.

“He’s on a virtual call, no alcohol, thanking his staff for 10 minutes before he goes back to work, is that really a terrible crime?” the minister asked in a TV interview last December.

And the prime minister himself said at the time: “I can tell you once again that I certainly broke no rules.” [Owl’s emphasis]

Postcard from Papua New Guinea

“Back to Blighty where Boris Johnson, money launderer to the Tsars, clings to his position as Rishi Sunak’s house-sitter.”

How the other side of the world sees Boris Johnson, his government and ultimately us. – Owl

See Tweet here. [Full text reproduced below for clarity.]

Text reads:

Letter from London

from Our Own Correspondent

Back to Blighty where Boris Johnson, money launderer to the Tsars, clings to his position as Rishi Sunak’s house-sitter.

The natives are as oblivious to the never-ending decline of this erstwhile superpower as they were when they first watched Zulu. But since Partygate, it has begun to dawn that electing a rococo gigolo to guide them through a pandemic, imminent world war, economic crisis and environmental systems collapse, was not the smart move the metric-averse once thought it to be.

Some of Johnson’s henchmen are buckling too. When 8-bit shaman Dominic Cummings invoked the sacrament of moral conscience, several MPs who hitherto had been labouring to disenfranchise refugees, disability claimants and the working poor, suddenly felt unable to follow a nonce-bantering PM and began the brutal defenestration rite of licking Basildon Bond envelopes and giving them to Graham Brady.

Only the hardcore remain: those for whom employment in another Cabinet would be inconceivable, the likes of Nadine, Grant/Michael, and Jacob, counsellors to a man who has never known friendship, a gang of acolytes so sycophantic as to make Mugabe blush. These bunker girls and boys speak only in platitudes, severing words from meanings and reciting cliched phrases in the hope that nobody will notice how stupid they are. In such a climate ‘vaccine rollout’ becomes ‘your living costs are going through the roof’, ‘levelling up’ means ‘we partied while you watched your mum die on Zoom’ and ‘sorry’ translates as ‘fuck you’. The great classicist needs them. But they may prove to be his Achilles elbow.

Downing Street, where near-hourly resignations are spun as decisive leadership, is giving off strong Downfall energy. It seems increasingly likely that unless they can lure him out with a crate of Estrella, Boris Munchhausen will be supergluing himself to the Lulu Lytle wallpaper before anyone is found with the special skills needed to convince him to go quietly. That’s OK though. Rishi can afford to redecorate.