TRADE

UK-India tech partnership to boost trade

Indian Prime Minister Narendra Modi has championed the importance of the City of London to India. He met with Theresa May last week as part of a series of bilateral engagements for the Commonwealth Heads of Government Meeting (CHOGM) in London, and welcomed a new UK-India Tech Partnership which will create thousands of jobs and generate significant investment for both country’s economies. Digital Secretary Matt Hancock said: “We’re determined to see this incredible success continue, and this ambitious UK-India Tech Partnership will bring together some of the best minds working in tech to unlock its future potential and deliver high-skilled jobs and economic growth in both countries.”

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Exporters underpin rising confidence

The majority of UK companies, particularly exporters, foresee their businesses expanding over the next three years, according to a survey by Santander. The bank said that two thirds of UK companies were expecting to grow between now and 2021, with only 10% pessimistic. Meanwhile, in what’s billed as a push to improve the quality of figures to boost post-Brexit strategy, Delphine Strauss profiles new ONS tools which better break down complex economic data sets.

The Times Financial Times

Small companies’ exports more than double estimates

There are more than double the number of SMEs trading internationally than official estimates suggest, according to research by Wyelands Bank. Almost one in three companies are exporters or importers, against government estimates of slightly more than one in ten. Wyelands said it had analysed more sources enabling it to get “closer to the actual picture” of small business trade.

The Times

OUTLOOK

UK brands responding well to Brexit challenge

Aston Martin’s brand value has grown more rapidly than any other British brand over 2017 – rising 261% to £2.7bn, according to Brand Finance, which found overall that classic British car brands have rapidly gained value in the past year, despite fears that Brexit could damage the industry. David Haigh, chief executive of Brand Finance, said: “Project Fear predicted that Brexit would be the end of the world as we know it, with catastrophe for UK businesses and UK brands. It is becoming clear that the UK economy is far more resilient than predicted and that UK brands are responding well to the challenge posed by Brexit.” Oil company Shell was named the most valuable brand in the UK, worth £29.7bn.

City AM

Britain sets out Brexit deal demands for a bespoke deal

The UK has set out its demands for a bespoke Brexit deal. Oliver Robbins, the government’s chief Brexit negotiator, said that the UK needed a detailed and substantive agreement that set out the future trade and economic partnership. Meanwhile, the total cost of the Brexit “divorce” bill remains uncertain, auditors say, as much depends on future events. The National Audit Office said the £35bn-£39bn range put forward by the government was “a reasonable estimate”. But even “relatively small changes” to things such as inflation, the exchange rate and the UK’s future economic performance could push it up or down.

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FINANCE

Small banks and fintechs squabble over RBS windfall

Challenger banks remain furious that Santander could bid for a slice of the Royal Bank of Scotland’s £775m alternative remedies package, designed to increase competition in the small business market and put in place as part of a deal with the EU over the bank’s rescue by the British taxpayer in 2008. The leader of one challenger bank said, “all hell will break loose” if funds that should help them take on their larger rivals go to Santander, already a dominant player in the UK market. Small grants from the fund to fintech firms will generate the most innovation, says Ricky Knox, chief executive of Tandem, but the whole process will lead to a long-lasting row amongst the bidders.

The Sunday Times

Late payment commissioner off to slow start

The Federation of Small Businesses questioned the effectiveness of the government’s small business commissioner after officials revealed Paul Uppal is currently only investigating two cases of late payment to small businesses. The commissioner had “entered into dialogue” with companies on 14 occasions, officials said, but the FSB warned that with late payment costing the economy an estimated £2.5bn every year: “Things have to change, and fast.”

The Times

LEGAL

Calls for new tribunal for disputes involving small firms

Over 100 entrepreneurs who borrowed from Dunbar Bank and were subsequently bankrupted when it was unwound are hoping a new tribunal system will allow them to seek redress. The small business customers were persuaded to put their homes up as guarantees, which they later lost. The Mail on Sunday says a tribunal system operating without the current six-year time limit has the backing of MPs on the All Party Parliamentary Group on Fair Business Banking. Dunbar was owned by insurer Zurich which denies the bank behaved improperly in recovering debts.

The Mail on Sunday

TAX

Confusing tax policy holds back business

A report by the Office of Tax Simplification (OTS) calls for tax policy for small business owners to be overhauled to tackle widespread confusion among entrepreneurs. The OTS is critical of the “complex patchwork” that owners of private companies face, and said that the system needed to be simplified to make tax reliefs “more accessible and to better enable businesses to fulfil their potential”. Issues highlighted include the structure of tax reliefs for investors in SMEs, such as the enterprise investment scheme. Paul Morton, tax director of the OTS, said that EIS was complicated for individual investors to negotiate and that simplification would help companies and their backers. He added that there should be a goal to make tax for small business owners closer to the experience of regular employees via PAYE.

The Times

HMRC investigating one in ten small firms

HMRC is currently investigating one in ten small businesses in an attempt to get back the £34bn tax it failed to collect in 2015-2016. The Revenue told the Treasury Select Committee that small businesses are responsible for 46% of this tax gap. However, MPs accused HMRC of making it harder for businesses to file correct returns by shutting down local tax offices. Mike Cherry, the National Chairman of the FSB, said: “While small businesses have a duty to comply fully with their tax obligations, HMRC also has a duty to make that process as clear and straightforward as possible. Unfortunately, the system is very complicated and the average small business loses three working weeks a year to tax compliance.”

The Daily Telegraph

FUNDING

End of the crowdfunding party?

The future of the UK’s crowdfunding industry has become less certain, after the Financial Conduct Authority said it was looking to address “areas of concern” in the industry. UK crowdfunders collectively ploughed more than £320m into start-up businesses last year alone, and the sector’s popularity has ballooned as a result of tax-incentivised investment schemes such as the Enterprise Investment Scheme (EIS) and Seed Enterprise Investment Scheme (SEIS). But, according to the Telegraph’s Bradley Gerrard, the riskiness of crowdfunding means a regulatory crackdown could be on the cards. Henry Whorwood, from start-up industry research firm Beauhurst, said there was “basically no protection” for crowdfunding investors, with more than £31m raised between 2011 and 2017 by companies which ultimately failed.

The Daily Telegraph

INVESTMENT

Lower taxes and scrap regulations to boost productivity, says TaxPayers’ Alliance

The TaxPayers’ Alliance has called for a raft of policy changes to stimulate UK productivity. The campaign group says easing planning restrictions, scrapping stamp duty, reducing taxes for both the lowest and highest-paid workers and devolving more tax powers to the regions would provide “huge gains” and “give the nation a pay rise”. The Alliance also called for CGT to be scrapped to boost entrepreneurship and investment and for it to be made harder for zombie firms to raise finance. The group also said being outside the customs union would boost productivity as it ultimately protects unproductive firms. John O’Connell, chief executive of the TaxPayers’ Alliance, said: “By scrapping burdensome regulations and lowering the tax burden on families and businesses, the UK could significantly increase productivity and give everyone a much-deserved pay rise.”

The Times

More work needed to bolster uni spin-outs

Writing in the Sunday Telegraph, Nigel Wilson, the chief executive of Legal and General Group, says the UK needs to take lessons from the US on how academia can attract investment and create successful corporate spin-outs. He says that following the Treasury’s “outstanding work on the Patient Capital Review, the British Business Bank can start assembling billions of pounds of long-term money from government and institutions to back hi-tech start-ups, including from universities. We need to take a long, hard look at how the US does this. Then we can copy the best of the best.” Elsewhere, the Sunday Times’ Sian Griffiths reports on the soaring numbers of young people setting up businesses while studying.

The Sunday Telegraph The Sunday Times

Scots firms ramping up investment

Scottish businesses are stepping up investment as confidence in the economy rebounds. According to the latest Scottish Chambers of Commerce quarterly economic indicator, firms are looking to invest in capital and training to improve their prospects despite an “uncertain economic environment”. However, Scottish business failures rose during the first three months of 2018, compared to the same period last year, according to figures from KPMG. The total number of business insolvency appointments during the first quarter of 2018 was up by 38%, to 233. Despite this, the firm said the long-term trend suggests the business landscape remains stable.

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WORKFORCE

MPs urge faster action to protect low-paid workers

MPs have accused the government of being too slow to introduce measures to protect low-paid workers from exploitation. The chairs of the work and pensions select committee and the business, energy and industrial strategy committee called on ministers to urgently bring forward proposed laws. Their comments come after the government said further consultation was required before introducing new rules such as a guaranteed premium to the legal minimum wage for zero-hours workers.

The Guardian

Apprenticeship levy ‘confusing and frustrating’

The apprenticeship levy introduced in England last year is causing “confusion and frustration” among employers and must be reformed, according to the British Chambers of Commerce. Jane Gratton, head of skills at the BCC, is due to tell a conference on apprenticeships that the scheme is currently “unfit for purpose”. Since its introduction the number of new apprenticeships has fallen by 25%. The government said it had put employers “at the heart” of the scheme.

BBC News

ECONOMY

Inflation lowest in a year

UK consumer price inflation fell in March to 2.5%, from 2.7% in February, according to the ONS, the lowest rate in a year. Prices for clothing and footwear, in particular womenswear, rose at a slower rate compared to this time last year, while alcohol and tobacco also helped ease inflation pressures. The new data may raise doubts over predictions that the Bank of England is set to raise interest rates in May.

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