Business groups react to Brexit deal vote delay

Business groups have responded to the postponing of the vote on the draft Brexit deal.

Prime Minister Theresa May intends to meet EU officials and European leaders in order to ‘discuss with them the clear concerns’ MPs have in regard to the deal.

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The Confederation of British Industry (CBI) said that the delay is ‘yet another blow’ for businesses seeking clarity. Carolyn Fairbairn, Director General of the CBI, said: ‘Investment plans have been paused for two and a half years. Unless a deal is agreed quickly, the country risks sliding towards a national crisis.’

Meanwhile, the British Chambers of Commerce (BCC) stated that business is ‘intensely frustrated’ by the delay. Dr Adam Marshall, its Director General, commented: ‘Businesses are clear that time is rapidly running out. With just over 100 days to go until 29 March, many are already enacting contingency plans in the absence of clarity from Westminster.

‘Businesses need clarity and precision on the UK’s future relationship with the EU and with other key trading partners. Businesses are clear that they do not want a messy and disorderly exit, which both government and far too many firms are under prepared for.’

The Institute of Directors (IoD) called for the government to be ‘clearer’ on its contingency plans. Stephen Martin, Director General of the IoD, said: ‘Many companies are still in the dark about what HMRC and border agencies would require the day after Brexit if there is no transition period. Partly because of a lack of information, only 14% of IoD members say they are fully prepared to manage no deal, highlighting the scale of the challenge if a withdrawal agreement isn’t ratified.’

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Business groups react to draft Brexit deal

Business groups have reacted to the government’s draft Brexit deal with the EU.

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Following a five-hour debate on the matter, Prime Minister Theresa May secured her Cabinet’s backing for the deal. However, a handful of MPs have resigned following the agreement, with some stating that they cannot support the draft deal, including Minister of State at the Northern Ireland Office, Shailesh Vara, and Brexit Secretary Dominic Raab.

Commenting on the deal, Carolyn Fairbairn, Director General of the Confederation of British Industry (CBI), said: ‘The UK has had many months of discussion and division. A long journey still lies ahead, but now is the time for decisions. And the first decision is to avoid no deal.’

The Federation of Small Businesses (FSB) said that the deal is a ‘welcome step back’ from the ‘no deal cliff edge’. Mike Cherry, National Chairman of the FSB, commented: ‘Many small businesses will be relieved to finally see some progress being made.

‘If this deal passes Parliament, small businesses will be given the security of a transition period which will allow them to carry on operating as they do now from 29 March 2019 until at least the end of 2020.’

Meanwhile, the British Chambers of Commerce (BCC) stated that firms need ‘clarity and precision’ on the terms of trade. Dr Adam Marshall, Director General of the BCC, said: ‘Businesses will be looking carefully and deliberately at the real-world implications of this agreement over the coming days, and expect their elected representatives to do the same.’

Providing nothing ‘extraordinary’ happens, the EU will hold an ’emergency’ summit on 25 November, in order to ‘finalise and formalise’ the deal.

Businesses ‘frustrated by lack of progress in Brexit talks’

A survey carried out by the Confederation of British Industry (CBI) has suggested that ‘patience is now threadbare’ amongst UK businesses in regard to the government’s progress in its Brexit negotiations with the EU.

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Businesses report that the lack of progress is having an adverse effect on many of their business decisions.

The survey revealed that 80% of firms believe that Brexit uncertainty is having a ‘negative impact’ on their investment decisions. The majority of businesses polled stated that they may have to implement ‘damaging’ contingency plans if no further progress is made by December.

Firms’ contingency plans include altering supply chains outside the UK; cutting jobs; relocating production and services overseas; and stockpiling goods.

Carolyn Fairbairn, Director General of the CBI, said: ‘The situation is now urgent. The speed of negotiations is being outpaced by the reality firms are facing on the ground.

‘Unless a Withdrawal Agreement is locked down by December, firms will press the button on their contingency plans. Jobs will be lost and supply chains moved.

‘As long as ‘no deal’ remains a possibility, the effect is corrosive for the UK economy, jobs and communities.’

Business group proposes overhaul of tax regime for financial services sector

The Confederation of British Industry (CBI) has proposed an overhaul of the tax and regulatory regime for the financial services sector so that the industry can effectively deal with the ‘challenges and opportunities presented by a rapidly changing technological landscape’.

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In a new report, the CBI stated that the financial services sector is ‘grappling’ with the challenges of technological change, as well as dealing with ‘shifting tax and regulatory expectations’.

The business group argued that the financial services sector requires regulations that are ‘fit-for-purpose in a new technological age’.

Some of the proposals put forward by the CBI include creating a new Treasury Select Committee sub-committee for financial services, in order to ‘scrutinise regulations and taxes’; strengthening engagement with the Financial Stability Board; and establishing a cross-sector financial services technology ‘hub’, supported by both the Treasury and the Financial Conduct Authority (FCA), to share best practice, knowledge and the latest technologies.

Commenting on the report, the CBI’s Head of Financial Services, Flora Hamilton, said: ‘The challenges and opportunities presented by the rapid pace and tremendous scale of technological change come in equal measures for financial services firms. To fully embrace this change, firms are clear that they need the right regulatory and tax framework in which to operate, so they can innovate and grow.’

CBI publishes wishlist for 2018 Autumn Budget

The Confederation of British Industry (CBI) has published its wishlist ahead of the Autumn Budget, which is set to be delivered on Monday 29 October.

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Within its Budget submission, the CBI outlines ways to ‘unlock enterprise, increase the country’s competitiveness and attract more investors’.

Carolyn Fairbairn, Director General of the CBI, has urged Chancellor Philip Hammond to focus on three key areas in order to ‘unlock growth’:

  • Overhaul the UK’s business rates model to ensure firms can invest and grow
  • Make the Apprenticeship Levy ‘work effectively’ by raising the limit on transfers and reducing the cap for small and medium-sized enterprises (SMEs) from 10% to 5%
  • Review the capital allowances regime, with a focus on new technology, and with a view to increasing the Annual Investment Allowance (AIA) to £500,000 from its current figure of £200,000.

The CBI’s Budget submission also puts forward several policy recommendations, including delivering the world’s ‘most competitive’ R&D tax credit; delaying the introduction of new tax rules, such as the off-payroll working rules in the private sector, until April 2020; and creating an online ‘one-stop shop’ for firms’ Brexit queries.

Commenting on the wishlist, Ms Fairbairn said: ‘As we near the end of Brexit negotiations, the world’s gaze is fixed on these shores. This Budget is a pivotal moment and a chance to showcase the UK as an open, collaborative and confident nation.’

Government urged to ‘pick up the pace’ in regard to Apprenticeship Levy reform

Government urged to ‘pick up the pace’ in regard to Apprenticeship Levy reform

The Confederation of British Industry (CBI) has urged the government to ‘pick up the pace’ in regard to its reform of the Apprenticeship Levy initiative.

Introduced in April 2017, the Apprenticeship Levy has changed the way in which apprenticeships are funded: larger employers are required to invest a percentage of their annual pay bill in apprenticeships. The Levy is 0.5% of the pay bill, but there is an annual allowance of £15,000. It is reported and paid using the Pay as You Earn (PAYE) process.

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The CBI’s statement comes following the recent publication of the latest Apprenticeship Levy statistics, which have revealed that, between August 2017 and April 2018, there were 290,500 apprenticeship starts – a fall of 34% when compared to 2016/17’s figure of 440,300.

The government is committed to achieving its target of creating three million apprenticeships in England by 2020.

Commenting on the statistics, John Cope, Head of Education and Skills at the CBI, said: ‘This stark drop in apprenticeship starts serves as a reminder that the Apprenticeship Levy is not working as intended. If we don’t significantly reform the Levy quickly, companies will find it harder to invest in the quality apprenticeships and skills training they value so highly.’

Meanwhile, the Institute of Directors (IoD) also warned that, if take-up of the Levy continues to be low, it ‘does not look possible for the government to meet its target’. The IoD added that ‘it’s now time for the government to rethink its approach and work with businesses’ in order to successfully reform the Levy.

Business groups respond to publication of Brexit White Paper

Business groups respond to publication of Brexit White Paper

Business groups, including the Confederation of British Industry (CBI), the British Chambers of Commerce (BCC) and the Institute of Directors (IoD) have responded to the government’s recent publication of its Brexit White Paper.

The 104-page document is divided into four chapters, which focus on security, economic partnership, co-operation and institutional arrangements.

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A commitment to build a ‘new relationship that works for both the UK and the EU’ has been outlined by the government within the White Paper, alongside proposals for future trade arrangements.

Responding to the publication of the Paper, the CBI stated that many of the government’s intentions in regard to Brexit are ‘reassuring’. Carolyn Fairbairn, Director General of the CBI, said: ‘The Brexit White Paper reflects much of the evidence that business has been highlighting since the Referendum.

‘Businesses on both sides have been asking for frictionless trade between the UK and the EU, and shared rules could go a long way towards delivering that. It is now the EU’s turn to put economics before ideology on these proposals.’

Meanwhile, Stephen Martin, Director General of the IoD, said that EU negotiators ‘now have specific details to build upon’, and urged them to ‘respond constructively’.

The BCC, however, gave a decidedly lukewarm response. Dr Adam Marshall, its Director General, commented: ‘Businesses still need clear and detailed answers on many of the practical, real-world questions they face. Many of these answers can only emerge through negotiations – so it’s time for the two sides to crack on and get to a deal.’