FINANCE

MPs call for tough action on bullying banks

Members of the All Party Parliamentary Group on Fair Business Banking (APPG) will lead a call for tougher action to ensure small firms are protected from bullying banks at a debate next week. A statement from the APPG said: “It is acknowledged that SMEs are the lifeblood of the economy. However, productivity is at a standstill and SMEs are reluctant to borrow from financial institutions. The ongoing financial scandals that continue to headline the business papers do nothing to encourage confidence in the system.” Kevin Hollinrake MP, the co-chairman of the APPG, is calling for the creation of an independent tribunal to oversee complaints about the banks from SMEs. Separately, the Sunday Times suggests that small firms are starting to see alternative finance providers as a better bet than banks. It notes the value of new loans to small businesses came to £5.6bn in the final quarter of last year – down 11% on a year earlier, according to UK Finance.

Yorkshire Post The Sunday Times

Greater choice frustrates finance decisions

Over one in five UK small businesses are frustrated by a lack of independent data when choosing financial products, according to a survey for the Business Banking Insight service. The Federation of Small Businesses said the findings highlighted the continued challenges firms faced in accessing affordable finance. “While a much wider range of options now exist, this research clearly shows that navigating less-traditional sources of finance is time consuming and sometimes baffling to busy entrepreneurs working hard to run their businesses,” said the FSB’s chairman Mike Cherry.

The Herald

SME lender gets investment boost

Investors have ploughed £57.5m into Liberis, a firm which eases SMEs cashflow problems by lending against future debit and credit card transactions. The British Business Bank also put cash in, stating the investment was part of its commitment to boosting competition and increasing the supply of finance to small companies.

The Times

LEGAL

EU proposes tough new laws for consumers

The European Commission has proposed new laws that will give consumers greater power to challenge large companies in the courts. The plans would see consumer groups granted powers to sue corporations for collective redress on the behalf of those affected by unfair commercial practices. The New Deal for Consumers rules would also target online market places, demanding that goods for sale are clearly labelled whether they are being sold by a trader or a private individual. The European Commission is also proposing that every EU member state sets up a national watchdog that can protect farmers against unfair trading practices like last-minute order cancellations or late payments.

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TAX

Big data tax hunt could bring in £7.5bn a year

The International Monetary Fund has said Britain could recover as much as £7.5bn of unpaid taxes every year by digitising government. Using big data to identify VAT fraud on imports and track down taxes on wealth sheltered in offshore financial centres could recover about 0.75% of GDP a year and close the tax gap by 20%. Low income countries could gain even more, the IMF said. Digital government could also simplify tax and benefit payments; however, the downsides are increased exposure to cyber-attacks and the use of digital currencies to avoid tax, the IMF added.

The Times

R&D on the radar?

City AM reports that many small businesses remain unaware that they can claim money back for research and development. Figures show that businesses across the UK have claimed £16.5bn in tax relief since the scheme’s launch in 2000. And in the 2015/16 tax year alone, £2.9bn was paid out across all industries. But take-up remains low across certain industries, with analysis from Smith & Williamson indicating that real estate, financial services, and insurance account for only 1% to 2% of the total claims. Peter Alderson, managing director at business finance provider LDF, comments: “R&D tax relief should be something on every small business’ radar.”

City AM

OUTLOOK

Business optimism hits 12-month high

A poll by the Institute of Directors found business leaders are more confident than at any time since Theresa May triggered Article 50 in March. Sentiment was boosted by the Brexit transition deal agreed last month, reflecting findings of a Deloitte report which found Brexit was no longer business leaders’ biggest fear. A separate survey by Bibby Financial Services found that confidence at SMEs rose to its highest level since the second quarter of 2015.

The Times Daily Mail The Independent

FUNDING

Failed energy firm highlights crowdfunding risks

Energy technology company Sustainable Power has been accused of misleading investors when it pitched for crowdfunding in 2014. The firm raised £1.8m but is now due to be liquidated. The company made false claims about prospective contracts, but Crowdcube failed to conduct any checks. The episode raises fresh questions about due diligence standards, says the Times’ James Hurley, and comes as the Financial Conduct Authority prepares new rules for crowdfunding and peer-to-peer lending.

The Times

INVESTMENT

Business travel to northern England rises ahead of Brexit

The north of England has seen a sharp rise in business travel. Experts says companies are spreading their bases outside London and focusing on the domestic market ahead of Brexit.

Financial Times

REGULATION

FRC to expand monitoring

The Financial Reporting Council (FRC) is to enhance its monitoring of the six largest audit firms, PwC, Deloitte, EY, KPMG, Grant Thornton and BDO, tightening up on “systematic deficiencies within firms’ networks, disruption in the provision of statutory audit services and instability in the financial sector”. The FRC will focus its attention on five key pillars; leadership and governance, values and behaviours, business models and financial soundness, risk management and control, and also evidence on audit quality, including from the FRC’s annual programme of audit quality reviews. The regulator will also start vetting the suitability of senior appointments, including non-executive roles and heads of audit and ethics committees. Although it will not be able to veto appointments, the FRC said that it would be “looking for firms’ co-operation”.< /span>

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Andrew Tyrie to head up CMA

The former Conservative MP for Chichester, Andrew Tyrie, is to become chairman of the Competition and Markets Authority, the Government has announced. Tyrie sat as chairman of both the parliamentary commission on banking standards and the liaison committee. He was the chair of the Treasury select committee from 2010 to 2017. The business secretary, Greg Clark, said: “Andrew Tyrie is a proven consumer champion and competition advocate, with a strong record of independence as select committee chair, ideally suited to leading the CMA at this critical time.” Investigations that lie ahead for the CMA include a potential probe into the Big Four accounting firms in the wake of Carillion’s collapse and the possible introduction of new rules for the UK’s £1.6trn pension adviser industry.

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CBI calls for close regulatory alignment with EU

In its latest attempt to convince the Government to negotiate a soft Brexit, the CBI has said the economic benefits of diverging from EU rules and regulations will be “vastly outweighed” by the costs of Brexit. Carolyn Fairbairn, the CBI director general, said some areas would benefit from regulatory divergence after Brexit, such as defence and construction procurement, but the “opportunities are limited and are vastly outweighed by the costs” of increased trade friction.

The Daily Telegraph

Finance, energy and telecoms suppliers face performance scores

Business Secretary Greg Clark has unveiled the Government’s green paper Modernising Consumer Markets, which promises to name and shame banks, energy suppliers and telecoms companies if they are performing badly or charging more than rivals. They may also be required to offer discounts or compensation for poor service and supply customers with data they can use to find better deals.

The Times

MANUFACTURING

UK manufacturing output dips

The ONS has reported that UK manufacturing output dropped by 0.2% in February – the first dip in almost a year and down from revised growth of zero in January. Economists had forecast a 0.2% rise in industrial and manufacturing output for February. The ONS attributed the decline to falls in electrical appliance manufacturing and oil refining. Overall industrial output went up 0.1% in February, after a 1.3% rise the previous month. However, construction output dropped by 1.6% in February, on top of January’s 3.1% decline.

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TRADE

Britain must strengthen Commonwealth trade

Britain must look to increase trade with the Commonwealth, boosting exports to states and persuading them to formally commit to free trade, according to Lord Marland, chairman of the Commonwealth Enterprise and Investment Council. Failure to do so when coming out of the EU would be a “dereliction of duty” he said. Lord Marland’s comments come as the heads of the Commonwealth governments are due to meet this week at a London summit, where Theresa May will pledge to put the 52 other nations at the heart of a global Britain after Brexit.

The Times Financial Times

EMPLOYMENT

Employers ‘relabelling low-skilled jobs as apprenticeships’

British businesses are relabelling low-skilled jobs as apprenticeships to avoid paying a minimum wage, according to a report by the think-tank Reform. It says many firms have rebranded existing roles after being obliged to contribute cash to on-the-job training, and 40% of the apprenticeship standards approved do not meet the traditional definition of such skilled on-the-job training courses. The report calculates that £600m of public money, funded by the apprenticeship levy, would be spent on courses that were apprenticeships in name only. It also accuses employers of exploiting the scheme by sending senior staff on career development courses classified as apprenticeships. Meanwhile, a report by the OECD says English apprentices receive between 50 and 100 hours of general education over the course of their training, compared with 400 in Germany and Switzerland and almost 600 hours in Norway.

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UK workers see first pay rise for a year

Britons have been given their first pay increase since the start of 2017, as a year-long squeeze on real incomes comes to an end. Figures out on Tuesday are expected to reveal that average wages climbed 3% in February on a year earlier, above the inflation rate of 2.7% for the same month – the first time pay growth has outpaced the rise in consumer prices since January last year. “We shouldn’t get carried away with this latest improvement,” said Alan Clarke, UK economist at Scotiabank, adding “Inflation was running close to zero before Brexit, and we’re not going back to where we were.”

The Sunday Times

ECONOMY

BoE: Lenders rein in unsecured lending

A survey from the Bank of England has found that lenders reined in the availability of non-mortgage credit to households in the first quarter of 2018. The Bank’s latest Credit Conditions Survey said lenders reported that the availability of unsecured credit to households fell significantly in January to March. The decrease was “largely driven by a changing appetite to risk”, according to the report.

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