Unlock the Editor’s Digest for free

Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.

Airbus is nearing a deal with Spirit AeroSystems to take over parts of the aerospace supplier’s work on some of its key aircraft programmes, paving the way for Boeing to purchase the rest of the group.

Under the agreement, Airbus would take over the work that Spirit does for its A220 and A350 aircraft programmes at several sites around the world, including in Belfast in Northern Ireland, said several people familiar with the discussions.

Talks are “moving in the right direction”, these people said. An announcement could come as early as next week although they cautioned that it could yet slip as discussions continue on what is a complex agreement between the three companies. Boeing is expected to take over the bulk of Spirit’s operations, including its main facility in Kansas.

Boeing has been in talks with Spirit since March as the US plane maker seeks to improve the supplier’s manufacturing processes after the mid-air blowout of a section of the main body of one of its 737 Max aircraft in January. Spirit supplies Boeing with the fuselages and both companies are undergoing an audit by the US’s aviation safety regulator.

News of the talks comes days after Boeing and Airbus acknowledged they included parts in their jets, purchased from Spirit, that were made with titanium whose certification documentation was counterfeit.

An agreement, however, has been complicated by the fact that the Kansas-based group is also a key supplier to Europe’s Airbus from sites including in Northern Ireland, Scotland and the US.

Spirit’s Belfast facilities build the wings and mid-fuselage sections for the A220 passenger jets. Some other A220 work is done at a site in Casablanca, Morocco. Spirit builds sections for the A350 wide-body jet in Kinston, North Carolina and Saint-Nazaire, France.

Airbus, which previously confirmed it was in talks with Spirit about potentially acquiring some of the activities the supplier carries out for it, has been focused on carving out the work for the A220 and A350 programmes, said the people briefed on the talks.

The Belfast facilities are lossmaking. Analysts have suggested Airbus could agree to pay a nominal sum to take over the work on the A220 programme subject to due diligence.

Spirit also does work for other aviation customers at its sites. Belfast manufactures the fuselage sections and other critical components for a range of business jets built by Canada’s Bombardier.

Unions in Northern Ireland have raised concerns over a break-up of the Belfast operations, which span six sites and employ more than 3,000 people. They are integral to the region’s thriving aerospace industry and are part of the historic Short Brothers factory.

Unite, the union representing the vast majority of Spirit workers across the UK, said it was seeking urgent assurance that the Belfast and Prestwick operations would be acquired intact with no loss of jobs.

“The livelihoods of workers must not be put at risk as corporate giants carve up the future of this company,” Unite general secretary Sharon Graham said. “It is vital that all workers are quickly given cast iron guarantees over their futures.”

Spirit reported a net loss of $617mn in the first quarter after Boeing slowed operations at its 737 Max factory in Washington state and stopped accepting flawed fuselages from the Kansas supplier, in an effort to improve the quality of Boeing’s own manufacturing processes. The supplier last reported an annual profit in 2019.

Boeing declined to comment. Spirit said the company remained “focused on providing the best-quality products for our customers”.

Airbus said it was in discussions with Spirit “to protect the sourcing of our programmes and to define a more sustainable way forward, both operationally and financially, for the various Airbus work packages that Spirit AeroSystems is responsible for today”.

Reuters first reported that talks were nearing an agreement.

Additional reporting by Jude Webber in Belfast.

NORTH TEXAS — Mid-June 2024 is likely a time members of the Gateway Church won’t soon forget. The megachurch cringed at a different revelation of founding pastor Robert Morris.

Congregants from six locations head back into the sanctuary for healing and answers.

In a message posted on the church’s website, the elders reached out to members.

“This is an unthinkable and painful time in our church. Our church congregation is hurt and shaken, and we know that you have many important questions,” Elders said. “We want to answer as many of your questions as we can at this point, and we ask that you continue to extend us grace as we navigate through the most challenging time in Gateway’s history.”

The Watchburg Watch published Cindy Clemishire’s recollection of sexual abuse by Morris. She said it started on December 25, 1982, and continued until March 1987. The story gained steam in The Christian Post.

Gateway was not a church at the time. Morris was an evangelist on the road with his wife. According to an initial statement from the nine elders at Gateway, “Pastor Robert has been open and forthright about a moral failure he had over 35 years ago when he was in his twenties and prior to him starting Gateway Church.”

The elders said Morris had spoken openly in the pulpit about the proper steps he took for restoration, including a two-year hiatus from ministry to get professional and freedom ministry.

“I was involved in inappropriate sexual behavior with a young lady in a home I was staying,” Morris said. “It was kissing and petting and not intercourse, but it was wrong.”

The former Gateway leader said the relationship continued into March 1987 and came to light when he said he confessed, repented, and submitted to elders of Shady Grove Church in addition to the young lady’s father.

Clemishire pushed back in an interview with CBS News Texas.

“Young lady? I was not a young lady. I was a little girl. I was 12,” she said.

The alleged victim said he told her not to tell anyone or it would ruin everything.

By June 18, Morris had resigned from running the church, which is said to have as many as 100,000 members. He also stepped down as chancellor and the Board of Trustees of Kings University. The preacher also gave up his spiritual oversight over his daughter and son-in-law’s church in Houston.

“…Please be praying for those affected, including Cindy Clemishire, her family, the Morris family, Gateway members, staff, and others,” Elders said in the latest statement. 

Services at six of the church’s campuses are on Saturday at 4 p.m.

Increasing numbers of wealthy foreigners say they are leaving the UK in response to the abolition of the “non-dom” regime that allowed them to avoid paying tax on overseas income. 

The change — backed by both the Conservative and Labour parties — has contributed to a relative decline in the UK’s attractiveness, according to over a dozen interviews with wealthy foreigners and their advisers. Other deterrents cited include Brexit, fiscal and political instability, and concerns around security. 

“Brexit happened and the Conservatives promised to make the UK like Singapore and instead they turned this place into Belarus,” said a billionaire businessman who has lived in London for 15 years and is now moving his tax residency to Abu Dhabi. “Security is now a major issue and another contributing factor to the tax reasons for why people are wanting to leave.”

In March chancellor Jeremy Hunt stole one of the opposition Labour party’s flagship fiscal policies when he announced the abolition of the non-dom regime. 

Labour shadow chancellor Rachel Reeves followed with proposals to toughen the planned crackdown, notably reversing a Tory decision to permit non-doms who will lose benefits from next April to shield foreign assets held in an offshore trust from inheritance tax permanently. 

Polls have put Sir Keir Starmer’s Labour party on track for victory in the general election on July 4. 

“The UK’s inheritance tax of 40 per cent on your global assets is a real problem,” said a European non-dom businessman in his 50s, who is moving his family from London to Switzerland after more than a decade in the UK. “It’s the overall instability that has been the nail in the coffin for me. If there was a more balanced, less punitive inheritance tax I might have considered staying.” 

While Starmer has sought to position Labour as the “party of wealth creation”, the non-dom changes mark one of several potential tax increases under a Labour government. 

While Labour has committed not to raise income tax, national insurance, corporation tax or VAT, the party insists it has “no plans” to raise capital gains tax or inheritance tax or levy any form of wealth tax, but refuses to rule them out. Rachel Reeves, shadow chancellor, told the Financial Times this week: “We’re not seeking a mandate to increase people’s taxes.”

A party official said “nobody has seen” a supposed Labour memo, reported by the Guardian, which outlined that the party was mulling plans to increase the rate of CGT in line with income tax and cap business and agricultural land inheritance tax relief. Labour officials said the report appeared to be based on research by the Institute for Fiscal Studies and Tax Policy Associates.

Trevor Abrahmsohn, director of Glentree Properties, a London estate agent, said there had been a steady decline in inquiries for £10mn properties, which he attributed to “higher interest rates and anticipated changes to the non-dom regime”. He added: “As more high-end property comes on to the market, I expect there to be fewer buyers and for prices to fall.” 

Indian vaccine billionaire Adar Poonawalla last month told the FT that the non-dom change had harmed the UK. “Some people are willing to pay that cost like I am, but most others aren’t,” said Poonawalla, head of the Serum Institute of India. “They can easily move out.”

There were 68,800 individuals claiming non-dom status on their tax returns in 2022, according to the most recent estimates from HM Revenue & Customs, the UK tax agency, but a lag in the data makes it impossible to gauge recent moves.

“There is no hard and fast data on non-dom departures but there’s a real buzz at the moment around people both considering leaving and actually going,” said Fiona Fernie, a partner at tax and accounting firm Blick Rothenberg. “There’s been a definite marker put down by both parties that non-doms are targets and whatever benefits perceived to be given to them is going to be significantly reduced. This is a catalyst for departures.”

One French investor in his 40s said that “any foreigner in the UK who has the option to leave is doing so because of the end of the non-dom regime”. He is moving from London to Milan early next year, lured by a system that was announced by Italy in 2017 that exempts foreign income from Italian tax in exchange for the payment of €100,000 a year. Returning to France was “out of the question”, he added, given the current political situation. 

A crackdown on the non-dom regime began eight years ago under then Conservative chancellor George Osborne. He tightened the regime so that from April 2017 foreign residents who had lived in Britain for more than 15 of the past 20 years were deemed domiciled in the UK.

Since then other European jurisdictions — including France, Italy and Portugal — have gone in the opposite direction, launching comparable non-dom or impatriation regimes to attract wealthy families, increasing competition with traditional havens such as Monaco and Switzerland.

Italy, Switzerland, Malta and the Middle East are currently the most popular destinations for those leaving the UK, according to advisers.

While non-doms do not pay tax on their offshore earnings, they are taxed on their UK income. Proponents of the regime argue that non-doms bring skills, jobs and investment to Britain.

The American School in London is concerned about future enrolment as a result of the non-dom abolition, according to two people familiar with the situation. The American School declined to comment.

A French businessman in his 50s who is resident in Switzerland said he had started the process of moving part of his business to the UK but backtracked after the government announced it would abolish the non-dom regime. 

“The Conservatives have sent a very strong signal that they don’t want foreigners here any more and Labour won’t do anything to change that. I’m 100 per cent sure I’m not going to come back.” 

He added: “Was the non-dom regime a fair system? No it wasn’t. Was it efficient? Yes it was.” 

Fears of a tougher tax regime are also causing some UK nationals to look at leaving the country. Henley & Partners, which advises on residence and citizenship, said it had received a three-fold increase in inquiries from UK nationals between 2022 and 2023 and a 25 per cent year-on-year increase in the first half of this year.

“A lot of the inquiries we’re getting at the moment in the London office are based on the fact that Labour will come in and what might happen on the back of that,” says Dominic Volek, group head of private clients at Henley & Partners.