TAX

Hammond to launch review into problem with VAT

Philip Hammond is to launch a review to look at ways of tapering the introduction of VAT, so small companies do not face a disincentive to increase their turnover beyond the £85,000 threshold. The FSB has urged Mr Hammond to abandon plans to reduce the sales threshold, warning that lowering the figure from £85,000 a year to as little as £25,000 would pile more pressure on firms already battling rising business rates and labour costs. Changing the threshold to £25,000 is predicted to catch an extra million firms and generate £1bn more in tax for the Treasury from higher VAT receipts. Meanwhile, the Telegraph’s leader calls on the chancellor to lower taxes as a way of spurring enterprise.

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Restaurants call for business rates reform

A group of restaurant bosses is warning the government it must act to avoid “damaging closures and job losses”. In a letter to Philip Hammond, they have asked for “root and branch” reform of business rates. The chief executive of Bills and the chairman of pub and restaurant chain Mitchells and Butlers are among the 15 who signed the letter. The business leaders described a “perfect storm” that has hit their sector and blamed “soaring business rates, rising employment costs and Brexit-fuelled inflation” for the difficult trading conditions.

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TECHNOLOGY

Digital improvements for rural firms would boost economy

A report commissioned by Amazon suggests that rural firms adopting digital tools and services could add between £1.2 and £2.5bn to the economy. Doug Gurr, UK country manager for Amazon, said: “Over the past 20 years, we’ve seen opportunities for rural entrepreneurs transformed through e-commerce, better delivery services and growing access to fast broadband. But, as the report shows, there’s much further to go before anyone can say the rural-urban divide has closed.” Brian Wilson, the chairman of Rural England, said rural firms’ ability to go digital “has been held back by constraints which have included connectivity but also extend to a lack of skills, training and resources”. Separate research by Clydesdale and Yorkshire Bank has found Britain’s SMEs are facing a “triple whammy” of threats, comprising of skills shortages, rising costs and a lack of confidence.

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EXPORTS

Exports at strongest since 2000

A new report has found that UK exports are at their strongest position since 2000 despite threats posed by Brexit. The value of non-EU export goods increased by 150%, with Heathrow holding a 30% share in this cargo. Heathrow’s export climate index tracks factors including the consumer confidence of the UK’s main trade partners by their share of UK exports and effective exchange rate.

City AM

FINANCE

McDonnell promises long-term finance for SMEs

John McDonnell has pledged that a Labour government would ensure SMEs get the long-term investment and start-up risk capital they need. In a speech at the British Chambers of Commerce annual conference in London, the Shadow Chancellor promised to make finance “the servant of the real economy”. He backed state intervention, citing Japan and Germany, where the governments are helping to develop robotics and manufacturing industries. “The economy has to start to work for the people who produce the wealth, the designers to the technicians to the care workers to the entrepreneurs to the business people. Not only for those who accumulate the wealth,” he said.

The Times

SMEs still suffering from late payments

New research from Close Brothers Invoice Finance shows almost a quarter of SMEs are still suffering from late payments from customers. The barometer also found that 25.2% of businesses suffering reported that they were owed more than £40,000, almost twice as many as the 13.2% of SMEs suffering to this extent in March 2015. David Thomson, CEO of Close Brothers Invoice Finance, said: “This is an issue causing real hardship for many firms and has negative implications for the performance of the economy as a whole.”

Yorkshire Post

ECONOMY

BoE to consult more with public

Andy Haldane, the Bank of England’s chief economist, has revealed that the Bank plans to consult the public more in order to understand the economy better and give Britons more confidence in its decisions. Mr Haldane said trust in the central bank, along with other public institutions, weakened after the 2008-09 financial crisis, and maintaining public confidence was essential for it to be effective. “Our view of the economy, and our setting of economic policy, will be greatly enhanced by this wider panorama. It will give the Bank a new lens on the economy’s hidden corners, a new set of often-quieter voices to listen to and learn from,” he said.

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Outward M&A at 17-year high

Outward mergers and acquisitions have hit a 17-year high, driven by big ticket purchases of US firms by UK companies, ONS figures show. UK companies spent £76.6bn buying foreign businesses last year, up from £17.6bn in 2016. The value of inward mergers and acquisitions fell from £190bn to £35.3bn last year, but this is due to a small number of high value sales of UK businesses to foreign buyers in 2016. Deloitte’s Cahal Dowds said there’s “a heck of a lot of dry powder” while James Fillingham of PwC said favourable conditions for dealmaking were “driving pricing rather than volume”.

The Daily Telegraph

FUNDING

New £50m life sciences fund launched

A new £50m venture capital fund has launched with a plan to invest in the UK’s flourishing life sciences sector. NCL Technology Ventures’ fund, which is backed by Kent County Council, will invest in high-growth SMEs with a focus on game-changing medical technologies and advanced therapeutics. Jonathan Synett, investment director at NCL, said: “Britain is an innovation nation; supporting and growing the UK life sciences sector is vital if we want to thrive after Brexit.”

City AM

NPIF invests £31m in SMEs

The Northern Powerhouse Investment Fund has invested £31m in 207 northern-based SMEs during the first 12 months of its operation. The £400m fund, which is supported by the European Regional Development Fund, the Government and the European Investment Bank, was launched by the British Business Bank.

Yorkshire Post

ENTREPRENEURS

Government urged to boost female entrepreneurship in Britain

Hundreds of business leaders, entrepreneurs, MPs and academics are calling on the Government to improve opportunities for female entrepreneurs in Britain. In an open letter to the Telegraph, whose signatories include Brenda Trenowden, the Global Chairman of the 30% Club, they say they want to see better access to funding in particular, citing figures which show just 9% of funding into UK startups currently goes to women-run businesses annually. The letter said it was up to Government to address the funding gap, and, with “Brexit on the horizon, it has never been more important to back British businesses.” The paper runs a section called Women Mean Business, carrying stories about how women have struggled to access finance.

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Learning to fail prepares you for success

Wikipedia creator Jimmy Wales has said young people need to be taught how to handle failure so they feel more comfortable about taking risks in their careers. “The normal case for an entrepreneur is failure,” he said. “Jimmy Wales is good at failure. It is important to learn how to fail because it is only when you feel comfortable with the idea that you might fail that you can take a risk. That is very hard for people to get their heads around.”

The I

INFRASTRUCTURE

Construction output in biggest fall since 2012

A slowdown in housebuilding in January contributed to the biggest monthly decline in construction output since June 2012. Construction output fell by 3.4% in January from December, the ONS said, adding that the construction sector remained “a weak spot” in the economy. Separate ONS data showed growth in the manufacturing sector slowed in January, to 0.1%, while the UK’s deficit in goods and services widened the trade deficit by £3.4bn to £8.7bn for the final three months of last year. Meanwhile, the latest BDO output index, which tracks GDP growth, rose to 99.78 in February from 99.63, driven by a sharp rise in manufacturing output.

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EMPLOYMENT

Brain drain fears over Brexit

The new head of the CBI in Scotland has warned that the country could lose skilled workers to other parts of the UK because of Brexit-fuelled labour market shortages. Tracy Black highlighted these worries as she flagged the importance of “friction-free trade” with the EU. She also underlined the importance of boosting Scottish productivity and growth, and encouraging more companies to export. Ms Black said businesses welcomed the prospect of a transition deal between the UK and EU, but declared this should be “put out in writing, put out now”.

The Herald

Government response to gig economy review poor

Matthew Taylor, the leader of an independent review into the gig economy, has rated the Government’s response to his proposals at just four out of 10. He told the British Chambers of Commerce annual conference yesterday: “There is a recognition that flexibility has to be balanced with other objectives like social inclusion, social justice and fiscal sustainability. That’s the important moment; that we move away from [the idea that] all flexibility is great and it doesn’t involve any trade-offs.”

The Independent

OTHER

Lady Judge resigns amid race row

Lady Barbara Judge has resigned as chairwoman of the Institute of Directors after allegations of racism, sexism, and bullying. She had been suspended pending an investigation into the claims. Deputy chairman Sir Ken Olisa has also resigned, citing “powerful forces” within the organisation. Lady Judge stated: “The continuing failure to follow the most basic of principles of natural justice demonstrates that individuals within the Institute have no understanding as to what amounts to good governance, which only serves to utterly undermine any credibility the organisation may lay claim on such issues.”

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