Your commercial news round-up: Amazon and Microsoft, rental properties, new A levels, HS2 cancelled

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Ofcom is due to investigate Amazon and Microsoft, there’s been an increase in the average number of people requesting to view rental properties, and Rishi Sunak shares plans to make changes to A levels and cancels High Speed 2 (HS2). Find out more with LCN’s commercial news round-up. 

• Ofcom is investigating Amazon and Microsoft following concerns that the companies are dominating the cloud computing market. The two companies make up 70-80% of the UK sector, with Ofcom fearing that a lack of competition makes it hard for businesses to swap providers. Cloud computing is how people store data, stream and use software remotely. One of Ofcom’s concerns is the potential for software to vary in price depending on compatibility with cloud platforms and, therefore, a lack of competition giving two companies too much control over the software chosen.

Nicky Stewart, head of ICT at the Cabinet Office, said: “All credit to Ofcom for addressing the anti-competitive issues such as data egress fees, technical and commercial lock-ins that have damaged and distorted the UK's growing cloud infrastructure market for too long.” In response, Amazon claims that Ofcom has misunderstood the sector because “only a small percentage of IT spend is in the cloud, and customers can meet their IT needs from any combination of on-premises hardware and software”.

• According to Rightmove data, the average queue of people requesting to view rental properties in Britain has increased from 20 to 25 in just five months. This is a significant increase from previous years – for example, in 2019 on average six people made viewing requests per property. The average rent has also increased to a new record of £1,278 per month outside of London. Although Rightmove noted that an increasing number of rentals are becoming available, the real estate company also said it’ll take a long time to correct the imbalance. Ben Beadle, chief executive of the National Residential Landlords Association, said: "Landlords are taking home their lowest profits and margins since 2007. There's no winners here."
   
• Prime Minister Rishi Sunak shared plans for changes to be made to A levels and T levels at the Conservative Party conference on Wednesday, proposing to replace them with the study of five subjects, including maths and English. As reported by the BBC, this change will bring the British education system more in line with international education, where a wider range of subjects are offered.  However, the proposed new qualification isn’t set to come into place for several years – in fact, it’s expected that the first students to experience the new qualification will be those just starting primary school. Sunak also said: "In order to attract and retain more teachers, those who teach key subjects in schools – and, for the first time, in our further-education colleges too – will receive special bonuses of up to £30,000, tax-free, over the first five years of their career.”

While more varied study is an exciting prospect for some, Geoff Barton, the Association of School and College Leaders' general secretary, expressed concerns regarding the changes in light of the teacher recruitment and retention crisis. Barton said the “problem requires a much broader strategy to improve pay, conditions and education funding”, and added “without this commitment, the prime minister's plans for an Advanced British Standard are likely to prove a pipe dream".

• Another announcement made at the Conservative Party conference was the cancellation of HS2 between Birmingham and Manchester. The prime minister confirmed that “given how far along construction is”, the Birmingham to Euston line will be finished (under new management) but the Birmingham to Manchester line has now been cancelled. Initially, HS2 was introduced with the aim to increase Britain’s rail capacity but faced a number of financial issues in delivery. Cancelling the plan aims to save billions to spend elsewhere.

However, Tony Travers, professor at the London School of Economics, believes that cancelling won’t “help deliver cost control on the first phase of the project”. The Conservative Party plans to invest £36 billion into proposed schemes, which include connecting Manchester and Liverpool, £2.5 billion to deliver a new mass transit system in West Yorkshire and more investments in roads. However, the Labour Party has said that most of the proposed schemes are pre-existing so can’t be described as “new investments”. 

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