Mastercard to push up fees for UK purchases from EU

Credit card giant Mastercard is to raise the fees it charges merchants when UK cardholders buy goods and services from the EU by fivefold.

It has sparked fears that consumer prices could rise if merchants choose to pass on those costs, especially on items not available from UK retailers.

Transactions with airlines, hotels, car rentals and holiday firms based in the EU could all be affected.

Mastercard attributed the move to the UK’s decision to leave the EU.

It added that “in practice” UK consumers would not notice the move.

The change affects the “interchange” fees Mastercard sets on behalf of big banks, so that its customers can use their payment networks.

From October, Mastercard said it would increase these fees to 1.5% on every transaction, up from 0.3%.

The EU introduced a cap on such fees in 2015 after concerns they pushed prices up for consumers and unfairly burdened companies with hidden costs.But Mastercard said that since the end of the Brexit transition period, the cap no longer applied to many payments between the UK and European Economic Area (which also includes Iceland, Liechtenstein and Norway).

It said its new policy was in line with a deal it made with the EU on fees for purchases from outside the EEA.

“As a result of the UK leaving the EEA, Mastercard will adapt interchange rates on UK cards to the commitments it gave the European Commission in 2019 for non-EEA card transactions,” the company said.

“In practice, only EEA merchants making e-commerce sales to UK cardholders will see a change.”

Kevin Hollinrake, chair of the parliamentary group on Fair Business Banking, told the Financial Times, which first reported the story, that the move “smacks of opportunism”.

And Callum Godwin, chief economist at CMSPI, the global payments consultancy, said airlines, hotels, car rentals and travel groups would be hit.

“[This will happen] anywhere the consumer is in the UK and the merchant is in the EU,” he said.

He added that many firms in these industries were already struggling due to the pandemic. Companies in the UK and EU are already facing added costs and delays due to post-Brexit trade rules brought in on 1 January.

Some EU exporters have already stopped deliveries to the UK because of new VAT related charges.

Meanwhile, UK consumers who have bought goods from firms based in the bloc have found themselves facing hefty charges to cover customs duties, taxes and administrative costspaperwork.

Bank of England criticised for financing carbon-intensive firms

The Bank of England has been criticised by MPs for providing finance to carbon-intensive companies without attaching environmental strings.

The Environmental Audit Committee (EAC) has written to the Bank’s governor, urging him to ensure any firms receiving Bank finance should disclose their climate-related activities.

The letter adds to the drumbeat for change in the financial sector.

The Bank said it was committed to reducing its impact on the climate.

It added it would reply to the MPs in due course.

The MPs focus on two areas of investment: Covid emergency funding and long-term corporate bonds.

The committee says about 230 large companies are said to have been granted financial help to weather the Covid crisis.

Many of them have a high impact on the climate or the environment. The list includes BASF chemicals, British Airways, Nissan, Rolls Royce, and EasyJet.

A pressure group, Positive Money, estimates that by June last year 56% of Covid funding had been allocated to high-carbon sectors. It wants the Bank to withdraw completely from fossil fuel firms.

The chancellor is due shortly to publish a revised remit for the Bank to align its investments with climate targets, and the UK government will be pushing the issue in the run-up to the forthcoming UN summit in Glasgow in November.

The EAC’s chairman, Philip Dunne, said: “We are at a crunch point not only to mitigate the effects of climate change, but to rescue vast swathes of the economy from the impacts of coronavirus.

“It makes sense to tackle both together. (But) the Bank’s corporate bond purchases are currently aligned with a catastrophic 3.5°C temperature rise by 2100.

“We are calling on the Bank to show leadership on climate change. It has a moral responsibility to align its corporate bond purchasing programme with the goals of Paris Agreement; and it should require companies receiving millions of pounds of taxpayers’ money to publish climate-related financial disclosures.”

A Bank of England spokesperson told the BBC: “We have an ambitious work programme on climate change, from the stress testing of the largest UK banks and insurers against climate-related financial risks through to working internationally with the central bank network for greening the financial system.

“Work to consider how best to take account of climate considerations in our corporate bond portfolio is already underway at the Bank.”

The EAC’s intervention comes as the Bank is considering how to implement a change in mandate that will enable it to “green” its policies. The chancellor is expected to dictate changes in his March Budget.

Financiers have been criticised for largely ignoring the seismic change being wreaked on governments due to the need to slash carbon emissions.

Positive Money said: “It’s currently unclear exactly what this will mean in practice, but groups like Positive Money are putting pressure on the Treasury and the Bank for it to at the very least translate into fossil fuel assets being excluded from bond purchases, as central banks such as the Swiss National Bank have recently announced.”

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Boohoo buys Debenhams brand and website for £55m

Boohoo has bought the Debenhams brand and website for £55m.

However, the fast fashion retailer will not be taking on any of the company’s remaining 118 High Street stores or its workforce.

Boohoo said it was a “transformational deal” and a “huge step”.

The 242-year-old Debenhams chain is already in the process of closing down, after administrators failed to secure a rescue deal for the business, with the likely loss of 12,000 jobs.

A closing down sale at 124 Debenhams stores began in December, as administrators continued to seek offers for all, or parts of the business.

The company announced recently that six shops would not reopen after lockdown, including its flagship department store on London’s Oxford Street.

Boohoo has already bought a number of High Street brands out of administration. It snapped up Oasis, Coast and Karen Millen, but not the associated stores.

Debenhams has struggled for years with falling profits and rising debts, as more shopping has moved online. It called in administrators twice in two years, most recently in April.

However, its position became untenable during the coronavirus pandemic as non-essential retailers were forced to close for prolonged periods.

The firm had already trimmed its store portfolio and cut about 6,500 jobs since May, as it struggled to stay afloat.

China takes new foreign investment top spot from US

China has overtaken the US as the world’s top destination for new foreign direct investment, according to UN figures released on Sunday.

New investments into America from overseas companies fell by almost half last year, leading to the loss of its number one status.

In contrast, UN figures show direct investment into Chinese firms climbed 4%, putting it number one globally.

The top ranking shows China’s growing influence on the world economic stage.

China had $163bn (£119bn) in inflows last year, compared to $134bn attracted by the US, the United Nations Conference on Trade and Development (UNCTAD) said in its report

In 2019, the US received $251bn in new foreign direct investment while China received $140bn.

While China may be number one for new foreign investment, the US still dominates when it comes to total foreign investments.

This reflects the decades it has spent as the most attractive location for foreign businesses looking to expand overseas.

But experts say the figures underline China’s move toward the centre of the global economy which has long been dominated by the US, the world’s biggest economy.

China, currently involved in a trade war with the US, has been predicted to leapfrog it to the number one position by 2028, according to the UK-based Centre for Economics and Business Research (CEBR).

Foreign investment in the US peaked in 2016 at $472bn, when foreign investment in China was $134 billion.

Since then, investment in China has continued to rise, while in the US it has fallen each year since 2017.

The Trump administration encouraged American companies to leave China and re-establish operations in the US.

It also warned Chinese companies and investors that they would face new scrutiny when investing in America, based on national security grounds

While the US economy has been struggling since the Covid-19 outbreak last year, China’s economy has picked up speed.

China’s economic growth, measured in gross domestic product (GDP), grew 2.3% in 2020, official data showed this month.

This makes China the only major economy in the world to avoid a contraction last year. Many economists have been surprised with the speed of its recovery, especially as it navigated tense relations with the US.

Overall, global foreign direct investment (FDI) dropped dramatically in 2020, falling by 42%, according to the UNCTAD report. FDI normally involves one company taking control of an overseas one, typically through a merger or acquisition.

Boeing 737 Max cleared to fly again too early

A former senior manager at Boeing’s 737 plant in Seattle has raised new concerns over the safety of the company’s 737 Max.

The aircraft, which was grounded after two accidents in which 346 people died, has already been cleared to resume flights in North America and Brazil, and is expected to gain approval in Europe this week.

But in a new report, Ed Pierson claims that further investigation of electrical issues and production quality problems at the 737 factory is badly needed.

Regulators in the US and Europe insist their reviews have been thorough, and that the 737 Max aircraft is now safe.

In his report, Mr Pierson claims that regulators and investigators have largely ignored factors, which he believes, may have played a direct role in the accidents.

He explicitly links them to conditions at the company’s factory in Renton, near Seattle at the time. Boeing says this is unfounded.

Lion Air flight JT610 crashed into the sea off Indonesia in October 2018. Five months later, Ethiopian Airlines flight ET302 came down minutes after take-off from the Ethiopian capital Addis Ababa.

Investigators believe both accidents were triggered by the failure of a single sensor. It sent inaccurate data to a piece of flight control software, called MCAS.

This automated system then repeatedly forced the nose of the aircraft downwards, when the pilots were trying to gain height. Ultimately each aircraft was pushed into an unrecoverable dive.

Efforts to make the 737 Max safe have focused on redesigning the MCAS software, and ensuring it can no longer be triggered by a single sensor failure.

For Ed Pierson, this does not go nearly far enough. A US Navy veteran, who had a senior role on the 737 production line from 2015-2018, he was a star witness during congressional hearings into the disasters involving the Max.

He told lawmakers he had become so concerned about conditions at the factory, he had told his bosses that he was hesitant about taking his own family on a Boeing plane.

He testified that during 2018, the factory was in a “chaotic” and “dysfunctional” state as, he claimed, staff there struggled under pressure from managers to build new planes as quickly as possible.

Now, he is worried that these issues have been overlooked in the rush to get the 737 Max back in the air.

His report draws on material from the official investigations. It claims that both of the crashed aircraft suffered from – what he believes – were production defects, almost from the moment they entered service.

These included intermittent flight control system problems and electrical anomalies that occurred in the days and weeks before the accidents.

He claims these may have been symptoms of flaws in the aircrafts’ highly complex wiring systems, which could have contributed to the erroneous deployment of MCAS.

He also points out that sensor failures contributed to both accidents and asks why such failures were happening on brand new machines.

In the case of the Lion Air plane, a faulty sensor was replaced with another part that was not properly calibrated.

All signs, Mr Pierson says, “point back to where these airplanes were produced, the 737 factory”.

However, he insists that the possibility of production defects playing a role in the accidents has not been addressed by regulators.

He claims this could lead to further tragedies, involving the Max or even a previous version of the 737.

Mr Pierson’s concerns are supported by the celebrated aviation safety campaigner Captain Chesley Sullenberger.

Best known as “Sully”, one of the pilots who safely ditched a crippled and engineless Airbus plane in the Hudson river off Manhattan in 2009, he too believes that modifications to the Max do not go far enough.

He believes changes are needed to warning systems aboard the plane, which were carried over from a previous version of the 737 and are “not up to modern standards”.

“Ed Pierson’s report is very disturbing, about manufacturing issues in the Boeing factories that go well beyond just the Max, and also affect… the previous version of the 737,” says Capt Sullenberger.

“There are many critically important unanswered questions that must be answered.

“Boeing and the Federal Aviation Administration (FAA) must finally become more transparent, and begin to provide information and data, so that independent experts can determine the worthiness of the work that’s been done.”

The BBC has also spoken to a former senior inspector with the UK’s Air Accident Investigations Branch (AAIB), who now works as a safety specialist. He warns that Mr Pierson’s findings should be viewed in a wider context.

The report, he says, does make some “valid observations” about the pressures on Boeing’s production line and quality control, and concerns about specific components.

Howeverm he adds that “taking the limited information in any accident report… and making fresh interpretations of it, is not the same as conducting a new investigation”.

The issues highlighted, he adds, “may have been investigated and dismissed already, for good reason”.

The FAA, meanwhile, insists it only approved the return to service of the Max, following a “comprehensive and methodical safety review process”.

It adds: “None of the many investigations of the two accidents produced evidence that a production flaw played a role”, and emphasises that “every aircraft leaving the factory is inspected by a team of FAA inspectors before it is cleared for delivery”.

Boeing itself will not comment on whether the electrical and flight control problems highlighted by Mr Pierson may have played a factor in the two accidents, on the grounds that this is a matter for the investigating authorities.

It has, however, described suggestions of any link between conditions at Renton and the two accidents as “completely unfounded”, emphasising that none of the authorities investigating the crashes has found any such link.

Patrick Ky, the head of Europe’s aviation safety agency, EASA, has previously told the BBC he is “certain” the plane is safe to fly.

But relatives of those who died aboard ET302 are continuing to urge the agency not to allow the 737 Max to operate in Europe, “until continuing concerns about the aircraft’s safety have been fully and openly addressed”.

Barclaycard customers face higher minimum payments

Some Barclaycard customers will see their minimum repayments rise from Tuesday, at a time when finances are already stretched owing to Covid and Christmas.

The new requirements are tailored to each customer, although some may see a significant rise in demands.

But the changes will also see charges for exceeding a credit limit scrapped.

January is a pinch point for many in debt and borrowers are being urged to seek help if they are in trouble.

Barclaycard signalled the changes to their pricing structures in November, although some borrowers may have missed the notice, which was titled “changes to your terms and conditions”.

The new repayment rates will affect those with Platinum, Initial, Freedom, Forward, Cashback, Littlewoods, Rewards and Hilton Honors cards, but not Premier or Woolwich cards.

For cardholders who started using their cards in the last decade, the minimum repayment each month has been calculated as the highest of 2.25% of the full balance, 1% of the balance plus interest, or £5. This differed slightly for longer-standing customers.

The new charges mean minimum repayments will be the highest of between 2% and 5% of the full balance, between 1% and 3% of the balance plus interest, or £5.

This means some people could see the minimum repayment rise, although some other charges – such as the late payment fee – will be limited.

The exact percentage depends on the customer and would have been outlined in the November message.

A Barclaycard spokesman said: “We are increasing minimum payments for some customers to help them pay off debt quicker and reduce the overall interest they pay.

“This is part of our ambition to ensure that no Barclaycard customer gets into persistent debt – where they pay more in interest and charges than reducing their debt and take a long time to pay this debt off – and is being put in place to support our customers.”

Sara Williams, who writes the Debt Camel blog, said that the higher minimum payment may well come as a “nasty shock”.

“January is always the tightest month for money for most people. December pay is often early, so the money has to stretch further, and if you put any Christmas presents or expenses on your Barclaycard, this month’s bill will be high anyway,” she said. 

“For people who were hardly managing before, the increase to the minimum payments may tip the bill over into being unaffordable.”

Debt charities had already warned that the coronavirus pandemic meant the UK was “sleepwalking into a debt crisis”.

The government-backed Money and Pensions Service – which offers free guidance – said it was expecting a call about debt at least every four minutes throughout January.

Barclaycard said the timing of the changes – which coincide with lockdown and many people on a reduced furlough income – was unintentional and had been signalled some time ago.

Any borrowers who feel the new repayment levels are unaffordable are being asked to contact the company.

More broadly, anyone struggling to make debt repayments of any kind is being urged to face their difficulties and seek help.

“Financial worries negatively affect our ‘cognition’, which are the thinking processes that support and maintain our mental health. When in a poor state, financial worries cause stress and our cognition fails,” said Keiron Sparrowhawk, a cognition expert from the Being Well Group, which runs the MyCognition app.

This could lead to depression and hasty, ill-thought-out decisions, he said.

“Together, depression and anxiety are distressing and disabling, causing us to spiral out of control and enter a pit of hell,” he said.

Source: Money and Pensions Service

How Covid turbocharged the QR revolution

“Our customers love it,” says Michael Schatzberg, the co-founder of a US restaurant group.

He is talking about using QR codes (quick response codes), a technology from the 1990s, which is proving to be very useful in the Covid era.

Many restaurants have turned to the tech, which allows customers to see a menu, order and pay just by pointing their smartphone at the black, barcode-like squares.

“They don’t have to wait. They can just pay and leave without asking for the bill,” says Mr Schatzberg, whose restaurants include Duke’s and Big Daddy’s in New York.

QR codes were invented in Japan in the mid-90s to track components in car production.

They can hold a massive amount of data compared to standard barcodes – up to 2,500 numeric characters compared to a barcode’s 43.

That means really useful information, including names, locations and website addresses can all be reliably and cheaply held in one small box.

And reports say that Apple could be giving the format an upgrade with dots, circles and colours, instead of the current blocks.

QR codes are enjoying their moment in the spotlight thanks to their ability to connect the digital world to the physical.

Since the outbreak of the pandemic, many pubs and restaurants moved quickly to install QR code systems.

“We saw how five years of a future technology was accelerating at a pace of five months,” says Mr Schatzberg.

Pharmacies are also using QR codes. In the US, CVS is offering touch-free payments through a partnership with PayPal and Venmo at 8,200 stores.

The code is scanned during checkout, and customers simply open either the PayPal or Venmo mobile app and click the “Scan” button, then select the “Show to pay” option. Customers need to be PayPal or Venmo users, or they can pay using their debit and credit cards, or bank accounts.

The QR code checkout process pulls funds needed for the purchase from the customer’s PayPal or Venmo account balance, bank account or from a debit or credit card, in a similar way to an online transaction.

Several start-ups are using the QR code for retail storefronts. Stockholm-based Ombori invented its Grid technology, which allows retailers to have a digital screen displaying QR codes, and offers passers-by the opportunity to purchase items right from the street after viewing photos and videos of them.

The system is used by firms in more than 24 countries, including clothes store H&M, Danish furniture chain BoConcept and hotel group Radisson Blu.

Andreas Hassellhof, founder and chief executive of Ombori, argues it is a good way for retailers to create extra online relationships with customers.

Public health agencies have also seen value in taking advantage of QR codes to assist with contact-tracing efforts.

In the UK, through the NHS, designated venues in certain sectors have a legal requirement to display NHS QR code posters so that customers with the NHS Covid-19 app can “check in” using this option as an alternative to providing their contact details to the venue.

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If someone tests positive for Covid-19 at that venue, then other visitors to the location are alerted by an app thanks to the data accumulated from QR code scans.

The NHS notes the app will retain information about which users have frequented the location for 21 days.

QR codes are also being used for contact tracing in countries such as Australia, Singapore and South Korea.

Scanning food items and paying for them via QR codes is also trending, due to new technologies changing how we pay for everyday essentials. Grabango bills itself as “checkout-free technology”, which will be familiar to anyone who uses Amazon Go.

Similar to Amazon’s bricks-and-mortar stores, Grabango’s technology allows grocery shoppers to simply take items off the shelf and leave without paying for them at the cashier. Instead, shoppers scan their unique QR code at a kiosk when they’ve finished shopping.

So far, Grabango has secured a deal with Giant Eagle’s supermarkets and convenience stores across the US.

“I don’t see a reason why QR codes won’t be pervasive in all of retail at some point in the future,” says Andrew Radlow, chief business officer at Grabango.

Then there’s the high-tech shopping cart that could usher in a new era of contactless shopping. Veeve’s Smart Cart pairs shoppers with a QR code on their phone, which lets the store identify the individual shopper.

Placing items in the Smart Cart will add a tally to the trip’s bill and then the shopper can head to a dedicated checkout lane where they only need to scan their QR code to make an automatic payment.

The system is currently being tested in two grocery stores, one in Seattle and one in California.

“Check-in is the new checkout,” says Shariq Siddiqui, chief executive of Seattle-based Veeve. He credits the popularity of QR codes to their convenience. “They can give you the consumer a lot of control, as long as privacy concerns are met.”

But privacy concerns still worry some, including Graham William Greenleaf, a professor of law and information systems at the University of New South Wales Sydney.

In his home country, his concerns revolve around “attendance tracking” technology enabled through QR codes so Australian companies can monitor capacity levels at their businesses. The innovation is also being used to help with contact tracing.

“These QR code systems have been established without any new protective legislation,” he says, “in contrast with the strict privacy-protective ‘CovidSafe Act’ enacted to control the use of the CovidSafe app for Bluetooth-based proximity tracking. The solution to these problems lies with governments enacting protective legislation, not with the QR providers.

“Attendance tracking, a form of location surveillance, is a serious interference with privacy, and is only justified for so long as it is necessary for Covid-19 contact tracing. It must be terminated once no longer necessary.”

Asos joins race for Topshop, Topman and Miss Selfridge

Asos has joined the race to buy Topshop, Topman and Miss Selfridge out of administration.

However, the online retailer only wants to buy the brands and not their shops, suggesting any deal would cost jobs.

Sir Philip Green’s Arcadia Group, which also owns Burton and Dorothy Perkins, fell into administration last November putting 13,000 jobs at risk.

Asos, which according to Sky News is now frontrunner to buy the three brands in question, declined to comment.

It comes after a consortium including fashion chain Next dropped its bid to buy Topshop and Topman last week because it could not meet the price tag.

Others interested in some or all of Arcadia include Mike Ashley’s Frasers Group, a consortium including JD Sports, and the online retailer Boohoo.

In addition, the Issa brothers, who recently bought supermarket chain Asda, and Chinese fast fashion giant Shein are said to have made bids for Topshop.

Asos has seen strong sales in the pandemic and is already one of the biggest wholesalers for Topshop, Topman, Burton and Miss Selfridge.

Administrators from Deloitte requested that final bids be submitted last Monday, with the auction expected to conclude at the end of January.

Sir Philip Green is under pressure to use his own money to plug an estimated £350m hole in Arcadia’s pension fund, which has about 10,000 members.

Last year the retail tycoon had an estimated fortune of £930m, according to the Sunday Times Rich List.

Arcadia employed about 13,000 people and had 444 shops at the time of its collapse.

Can a Nudge or two make us better savers?

A company part-owned by the UK government is looking at ways of making people put more money aside for a “rainy day”.

The Behavioural Insights Team (BIT) – which uses psychological techniques known as “Nudge” theory to encourage good “habits” – wants more employees to sign up to payroll saving.

It is trialling an “easier-to-join” scheme on all 45,000 UK employees of consulting firm Capita, run by the tech company Level, starting later this month.

They will be able to sign up via a mobile phone, involving only a couple of clicks.

Pantolis Solomon, head of household finance at BIT, argues that currently there are “too many things that you need to do to set up an account”, with take-up often around just 5% where firms offer saving schemes.

Slow systems and tedious form completion involve a “cognitive effort” that becomes a “bit of a pain”, he adds.

Conversely, BIT will also look at introducing obstacles or warnings – or “soft friction” – to make leaving harder or less desirable.

This could involve requiring more clicking and form completion, or more subtle methods.

In a previous experiment, savers joining a scheme wrote a “letter” to themselves, setting out their reasons for putting money aside in the first place, such as a buffer for their family in case of redundancy.

This was sent to them when they asked to quit – the emotional effect reducing their likelihood of going.

BIT – co-owned by its own employees, the Cabinet Office and the Nesta “innovation foundation” – uses Nudge theory, a branch of behavioural economics.

This is designed to get people to do the “right thing” by making it easier, more normal and more obvious.

If the Capita scheme works, it could be offered more widely over the next few years, with its backers hopeful that other large firms – and even the government, which has many contracts with Capita – could take it up.

Many households, despite sometimes high disposable incomes, live in a financially precarious position.

The Nationwide Building Society estimated in late 2019 that about 12.1 million adults in the UK had no money put aside for hard times. Of those who did have a savings product, 24% did not put anything in it.

“In this current climate a lot of people are dipping into their savings,” Mr Solomon says.

“A lot of people can’t save in this environment but there’s a lot of middle-income people who are just bad at handling credit. There’s a lot of scope for people to save.”

Interest rates are currently very low, which would appear to act as a disincentive to saving.

But Level, which is handling the software needed for the Capita-BIT scheme, promises to look for the highest level of interest available, the size of its total deposits helping it negotiate with banks.

Another part of the experiment involves savers sharing spending data, which will be collated and shown to them in more digestible – perhaps graphic – form.

This means “holding up a mirror” rather than “telling you how to live your life”, says Stephen Holliday, Level’s chief executive.

“If you ask people what they spend on food every month or what their total bills are, they have no idea”, he adds.

“But it’s not a difficult thing to add up and look at in a piece of data. We would see a £12 bill from Sainsbury’s. Whether you spend it on quinoa or cider, we wouldn’t know.”

Mr Holliday thinks a 15% take-up for the Capita scheme, when it is reassessed later this year, would count as a success.

He would one day like to reach a “tipping point” where joining a work savings scheme becomes the norm.

So could it ever get to the point that – as happens with pensions auto-enrolment – people have to opt out of, rather than into, payroll savings?

“I’d like to see wider take-up across large corporates,” he says. “Government can take a lead in that, whether that’s through encouragement or adoption or they make auto-enrolment easier.

“Everyone who joins the Army at 17 could sign up, for instance.”

Bank of England chief economist Andy Haldane has estimated that UK households spending less on commuting, childcare and other outgoings during the pandemic have saved an extra £100bn.

But Scott Corfe, research director at the Social Market Foundation think tank, says Covid is likely to have increased inequality, with lower-paid workers – such as those in hospitality and retail – unable to save.

They also face a greater risk of losing their job. now or when furlough ends, he argues

While he thinks the BIT-Capita-Level scheme is a good idea, Mr Corfe goes further than Mr Holliday in saying a system of auto-enrolment is “vital” to expanding take-up.

Used for UK work pensions since 2012, this technique was itself inspired by Nudge theory – but might be described as more of a “shove”.

Mr Corfe says auto-enrolment could be backed up by government help – say putting in a few pence for every £1 saved – for those on the lowest incomes.

There could be restrictions on withdrawing the money for the first year – not-so-“soft” friction – so people don’t use the assistance as a day-to-day benefit.

This would all probably require legislation, Mr Corfe says, which will not happen in a hurry.

The BIT-Capita-Level scheme will be closely watched in government, and by opposition parties.

And Covid – as with so much else, in policy terms – could speed things up.

East West and Northumberland rail lines get £794m boost

Two railway lines, closed to passengers since the 1960s, are to get almost £800m funding from the government.

East West Rail, which will eventually connect Oxford and Cambridge, will get £760m to open new parts of the line.

The Northumberland Line, which still carries freight, will get £34m for initial work aimed at reintroducing passenger services.

Reopening closed lines like these would help connect “left-behind” communities, Transport Secretary Grant Shapps said.

“Restoring railways helps put communities back on the map and this investment forms part of our nationwide effort to build back vital connections and unlock access to jobs, education and housing,” he said.

These investments would return these routes “to their former glory” and was part of the government’s “levelling up” agenda, Mr Shapps added.

Diesel engines will initially run on the lines, but Mr Shapps said he hoped more environmentally friendly trains, for example powered by hydrogen or new battery technology, would replace them in the future.

When asked by the BBC why the lines wouldn’t be electrified, he said these lines might potentially bypass the overhead wire technology altogether.

“We’re building it in such a way that we can use, probably, the very latest technology, potentially, in the future,” he said.

“The most important thing is the infrastructure,” he said. “It’s about building the stations, things you need to do no matter what kind of train you’re going to run on there, if it’s going to take passengers.”

But Labour MP Daniel Zeichner, who represents Cambridge, said: “Every rail expert will tell you it will cost more later to electrify a line.”

“In a time of climate emergency, we really shouldn’t be building railway lines for diesel, it’s got to be electric.”

The line connecting Oxford and Cambridge would serve new housing developments, he said., and rail was “the right way to get people in and out of a city like Cambridge”.

“It’s very important for the UK economy, but it’s got to be done in an environmentally sustainable way,” he said. “It seems crazy to be building new railways which aren’t electrified in the first place, and I really hope the government will reconsider.”

The East West Rail investment will rebuild a train line between Bicester and Bletchley which was closed in 1968.

The project is being delivered by a publicly-owned body called the East West Company.

The first phase of East West Rail, which was completed in 2016, connected Oxford and Bicester.

But at the moment, rail passengers wishing to go from Oxford to Bletchley have to take a detour via Coventry.

The aim is to get trains running between Oxford and Bletchley by 2025, with new stations at Winslow and Bletchley.

The Department for Transport said the works will create 1,500 jobs, and have a wider economic benefit for the area.

The eventual aim of the project, which the government expects to be completed by the end of the decade, is to connect Oxford and Cambridge by rail via Bedford, taking in Milton Keynes and Aylesbury on branches.

The Northumberland Line was closed to passengers in 1964 as part of a rationalisation of the railway network known as the Beeching cuts.

Henri Murison, director of the Northern Powerhouse Partnership, said the Northumberland Line was “a really critical piece of local infrastructure” that would help bring people in south east Northumberland and north Tyneside closer to Newcastle city centre, and closer to well-paid jobs.

“Having better connectivity will help attract businesses to that area, and it will help to deliver genuine levelling-up,” he said.

The new £34m investment, which aims to reopen the line between Newcastle-upon-Tyne and Ashington, will include funds for preparatory works and land acquisition.

There are plans for new stations at at Ashington, Bedlington, Blyth, Bebside, Newsham, Seaton Delaval, and Northumberland Park, in North Tyneside, as well as upgrades to the track and changes to level crossings where new bridges or underpasses were needed, the Department for Transport said.