Your commercial news round-up: Starbucks CEO, two-child benefit, pay restoration, windfall taxes

Are you up to date on this week’s commercial news? The new Starbucks CEO is facing backlash over his use of the company jet, Rachel Reeves faces pressure to end the two-child benefit, trade unions are pushing for the government to compensate for a decade of pay cuts, and oil and gas firms have expressed concern about plans to increase windfall taxes. Read on to discover more.

• Starbucks' newly appointed CEO Brian Niccol has faced criticism after it was revealed that he’ll use the company jet to commute to headquarters. In the offer document, Starbucks stated that it’ll set up a small remote office in Newport Beach, where Niccol lives. However, the new CEO, who’s due to start his role on 9 September, will commute 1,000 miles to the California office when required to perform  “duties and responsibilities”. Niccol's job offer states that he can use the company's aircraft for business-related travel and commuting to the company’s headquarters. Social media users have expressed their disapproval, questioning the company's commitment to sustainability. Others have also raised concerns about the CEO’s pay, as Niccol is set to receive a base salary of £1.2 million, with the potential for additional bonuses and shares. Niccol’s appointment comes as Starbucks aims to boost its sales, following a decline in recent months. Starbucks is yet to respond to the backlash.
   
• Onto UK politics, pressure is mounting on Chancellor of the Exchequer Rachel Reeves to end the two-child benefit cap in the upcoming budget. The current law stipulates that parents are unable to claim benefits for any third child born after April 2017. Reeves is reportedly considering keeping the benefit limit in place, as well as limiting departmental spending rises to an average of just 1% above inflation per year, which would result in significant cuts to unprotected departments. The Labour MP for Liverpool Riverside, Kim Johnson, said: “It is disappointing that Labour is not leaping at the opportunity to axe the two-child cap and immediately lift 400,000 children out of poverty.” The Institute for Fiscal Studies estimates that lifting the limit would cost between £2.5 billion and £3.6 billion per year, but campaigners argue that the cost is justified to improve the lives of affected children.
   
• Meanwhile, oil and gas firms across the UK’s supply chain have expressed concern over government plans to:
  • increase windfall taxes on oil and gas profits from 75% to 78%;
  • extend the tax until 2030; and
  • abolish tax incentives for further investment.

In an open letter to HM Treasury, 42 companies warned that these plans could jeopardise £200 billion of investment in all forms of domestic energy, including renewables. The signatories, which include manufacturing, engineering and technology companies, also argued that reduced investment and uncertainty would have impact the jobs “and the communities this industry supports”. However, the treasury maintains that "plans for a new National Wealth Fund and [establishing] Great British Energy will create thousands of new jobs in the industries of the future”.

• The Trades Union Congress (TUC) is expected to push the new Labour government for a “pay restoration” to compensate for a decade of salary cuts in the public sector. Matt Wrack, head of the Fire Brigades Union and current TUC president, anticipates that delegates at the TUC's annual meeting will demand above-inflation pay rises. The motion, led by the Public and Commercial Services Union, argues that pay levels have fallen by an average of 1.5% per year since 2011 and calls for pay restoration to be “a key focus of campaigning with the new government”. However, these demands clash with the government's efforts to manage public finances. Economists estimate that every 1% rise in public sector pay would cost taxpayers approximately £2.5 billion. Raising pay to the same level as 2011, which would require a 21% increase, would cost £50 billion. The TUC has previously backed motions for pay restoration but these calls were ignored by the previous Conservative government.

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