FINTECH

Hammond says Britain is world’s best for fintech

Philip Hammond has championed Britain’s £5bn fintech sector ahead of Brexit by arguing that UK start-ups attract far more funding than firms in Germany, France and Sweden. The Chancellor told a meeting of financiers in London that investment in UK fintech more than doubled last year and far outpaced the funding of EU rivals, and that the UK’s “doors will always be open to the innovators and inventors” in this space. The speech coincided with the launch of a ‘crypto assets task force’ aimed at protecting UK investors against the risks of volatile digital currencies. Meanwhile, Mark Tucker, chairman of HSBC, and Nigel Wilson, chief executive of Legal & General, said that there was no room for complacency in Britain’s fintech industry, warning that China may challenge Britain’s supremacy in the sector. This comes as David Duffy, the chief executive of Clydesdale Bank parent group CYBG, was appointed “fintech envoy” for England by the UK government. Lastly, the Bank of England is to set up a fintech base to monitor developments that could help to spur growth of the UK’s weak productivity levels. Deputy governor Dave Ramsden commented: “We have set up a new fintech hub that will sit at the heart of the Bank, to consider both how the Bank understands and how it applies fintech, relevant to its mission”.

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Hogan Lovells backing fintech start-ups

Hogan Lovells is backing start-ups through its Global Fintech Mentors Program, which has a £250,000 support fund. Emily Reid, the firm’s head of fintech and innovation, said: “We offer fintechs much more than just legal advice.” The scheme “allows the sharing of our extensive industry knowledge to help companies launch, expand across borders and succeed”.

The Times

OUTLOOK

SMEs feeling confident

Confidence among small businesses is picking up, according to the FSB, with companies reporting improved trading and fresh plans for expansion and investment. More than seven in ten companies expected their performance to improve or remain the same over the next three months, it said. However, the federation also warned that the affordability of finance for small companies was deteriorating. The proportion of applicants describing credit as “unaffordable” hit a two-year high in the first three months of the year, and a quarter of small companies said that lenders were demanding rates of 6% or higher. Although high street banks insist that credit availability is good, the number of businesses describing the availability of finance as “poor” is at a one-year high.

The Times Aberdeen Press and Journal

EMPLOYMENT

CBI calls for apprenticeship levy rethink

The CBI claims the government’s apprenticeship levy has not worked and ministerial tinkering with the initiative is failing to fix it. Currently, companies that want to train apprentices must pay the levy but then claim back funds to help with training. But in a speech yesterday, Josh Hardie, deputy director general of the CBI, said the levy needs to be recalibrated, focusing on quality not quantity and introducing flexibility so that it does not exclude companies. When it was unveiled in 2015, it was hoped the levy would raise £3bn a year, with the promise of three million new apprentices by 2020. However, in its six months in operation from May to October 2017 it provided just 162,000 new apprenticeships – down from 273,000 in the comparable 2016 period.

The Times

REGULATION

Morgan supports small firms’ tribunal service

Nicky Morgan has backed proposals from the all-party parliamentary group on fair business banking to create a permanent tribunal service for small companies with complaints against financiers. The chair of the Treasury select committee also said the Financial Ombudsman Service needs to put its house in order before it can be given more responsibilities, after claims that the service has issued flawed judgments in favour of banks. Ms Morgan said: “It might be better to accelerate looking at creating a tribunal, certainly as far as SME lending is concerned, while the ombudsman is able to sort out the problems that have been uncovered.”

The Times

SMEs unconvinced by Small Business Commissioner

Small firms facing problems such as late payments and disputes with large companies are sceptical that a new government-backed ombudsman will have any positive impact on their business, according to new research from Close Brothers Invoice Finance. Paul Uppal began work as the Small Business Commissioner three months ago, but just 16.2% of SMEs consider it likely Mr Uppal’s appointment and the launch of the Small Business Commissioner will strengthen their hand. David Thomson, CEO Close Brothers Invoice Finance, said: “Mr Uppal needs to be given time to prove that the Small Business Commissioner really can make a difference on some of the difficult issues that threaten SMEs’ potential to thrive and grow. However, there is a great deal of work to do to prove this scheme really is going to help SMEs secure the support they need.”

Yorkshire Post

TAX

Lowering VAT threshold could increase red tape

The Times considers what the Treasury select committee’s investigation into VAT policy means for small businesses. The Treasury is currently consulting on whether the VAT threshold should be lowered, amid concerns that it discourages growth as small businesses legitimately keep their sales below the £85,000 mark. The OTS has estimated that reducing the threshold at which small companies become liable for VAT to £25,000 would mean up to 1.5m more businesses collecting the tax. The ATT has expressed concerns that any adjustment could pile more pressure on small firms, which are already dealing with the contentious introduction of a new approach to digital tax records and reporting requirements, as well as uncertainty surrounding Brexit.

The Times

MANUFACTURING

Manufacturing growth dips but remains strong

Manufacturing growth slowed in the three months to March, but remained ahead of long-term averages, according to the CBI. The survey found that 29% of manufacturers reported total order books to be above normal while 25% said that they were below normal, giving a balance of +4%, above the negative long run average of -14%. Output continued to grow in the three months to March but at a slower rate than in the three months to February.

City AM The Times

Pilot mentoring scheme established

A new pilot mentoring scheme developed by trade body Be The Business, bringing together some of the UK’s biggest companies with business leaders from the manufacturing sector, has been launched by the Greater Birmingham & Solihull Local Enterprise Partnership’s Growth Hub business support service. Mentors from firms such as BAE Systems, Siemens and GSK, will pair up with regional business leaders from the manufacturing sector.

The Birmingham Post

INVESTMENT

Global investors braced for shrinking UK returns

Global investors are reasonably confident that Brexit negotiations will end in a trade deal, according to new research from trade body the CFA Institute, but 80% fear Brexit will hit returns from UK investments. Some 67% of investors surveyed expect their firms to reduce their UK presence, while 64% of UK respondents expect Brexit to negatively impact their firm’s ability to attract the best talent.

City AM

Angel investor looks for tax relief

The Sunday Times interviews angel investor Michael Tobin. He says he “almost always” chooses investments that qualify for the EIS, as “you’re constantly getting rebates and they go into the next investment.”

The Sunday Times

TECHNOLOGY

SMEs embrace IoT

Research by Analysys Mason shows that 28% of small businesses are embracing the internet of things (IoT). Irene McAleese, co-founder of the tech firm See.Sense, comments: “We see huge opportunities for SMEs to make use of IoT. They can offer innovations and speed to market that larger corporates find difficult.”

The Times

Scots tech firms help generate $4.5bn

Data from GP Bullhound shows the 100 fastest-growing tech firms in Scotland and the north of England generated £4.5bn in 2017, more than double the previous year’s £1.9bn.

The Scotsman

SUPPORT

From gangs to start-ups

The Sunday Times highlights the work of Street2Boardroom, one of a number of initiatives across Britain seeking to harness the power of business to change lives. Projects such as Street2Boardroom are looking to develop entrepreneurs who can improve the diversity of Britain’s start-up scene. Its four-week course teaches young adults with a history of gang- related crime to take some of the attributes that have seen them survive on the street and apply them to business. Other projects include the London Youth Support Trust and Nottingham-based NBV Enterprise.

The Sunday Times

ECONOMY

Wages up, unemployment down

Wages grew by 2.6% in the three months to January, according to new data from the ONS, which also said employment was at a record high of 32.25m, with unemployment at a 43-year low of 4.3% – just half the jobless rate in the eurozone. The number of unemployment benefit claimants rose by 9,200 to 838,000 in February however, its highest level in more than three years.

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