In his 2019 Spring Statement, Chancellor Philip Hammond outlined detailed plans to tackle the issue of late payments in the UK.
The Chancellor reiterated the government’s commitment to combat the ‘scourge of late payments’ for UK small businesses. Mr Hammond announced that, going forward, company audit committees will be required to review payment practices and report on them in their annual accounts.
Commenting on the announcement, Edwin Morgan, Interim Director General of the Institute of Directors (IoD), said: ‘We are delighted the government has taken forward the IoD’s specific proposal to tackle late payments. This is a thorn in the side for many small firms, and the reform will ensure the issue gains the board-level attention it deserves at big companies, without compromising good corporate governance.’
A full response to last year’s call for evidence on the issue will be published by the government ‘shortly’.
A survey conducted by the Institute of Directors (IoD) has found that nearly a third of IoD members are looking to move their operations abroad due to the uncertainty surrounding Brexit.
The survey of 1,202 company directors also revealed that more small firms are looking to relocate than previously anticipated. 15% of small firms are ‘actively considering’ setting up operations outside of the UK. Furthermore, 8% of small businesses have already relocated overseas, while 4% plan on doing so.
Of those looking to relocate, 69% stated that they plan on setting up operations in the EU; 22% are considering setting up in both EU and non-EU countries; and 7% are seeking to relocate to non-EU countries.
Commenting on the survey, Edwin Morgan, Interim Director General of the IoD, said: ‘While the actions of big companies have been making headlines, these figures suggest that smaller enterprises are increasingly considering taking the serious step of moving some operations abroad.
‘We still have a chance to stem the flow, and provide enough certainty to the firms that are considering moving but haven’t yet done so.
‘The UK’s hard-won reputation as a stable, predictable environment for enterprise is being chipped away. Our political leaders must keep this in the front of their minds as we enter this critical phase of negotiations.’
Five of the leading business groups in the UK have warned MPs that the UK is ‘not where it should be’ in regard to its Brexit plans.
The government recently confirmed that it has decided to prioritise preparing for a ‘no deal’ Brexit, and intends to advise UK businesses to begin implementing their contingency plans.
In a joint letter, the Confederation of British Industry (CBI), the Institute of Directors (IoD), the Federation of Small Businesses (FSB), the British Chambers of Commerce (BCC) and manufacturers’ organisation the EEF stated that UK firms have been ‘watching in horror’ as politicians have focused on ‘factional disputes’ rather than the practical steps that need to be taken to secure an advantageous Brexit deal.
The letter also said that firms are ‘pausing or diverting investment’ in order to prepare for a potential no deal Brexit scenario.
The business groups believe that there is ‘not enough time’ to prevent the ‘severe dislocation and disruption’ that will come hand-in-hand with a no deal Brexit scenario. They have called for MPs to ‘talk to their local business communities’ over the festive break in order to help ‘find a way forward’ when they return to Parliament.
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.
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.’
The Institute of Directors (IoD) has stated that UK businesses have been ‘left in the dark’ in regard to the government’s Brexit plans.
An IoD survey of 800 business leaders revealed that less than a third of firms have conducted Brexit contingency planning.
According to the survey, half of businesses do not intend to create contingency plans.
A fifth of firms, however, do intend to create Brexit plans, but three quarters are waiting for ‘more clarity’ in regard to the future relationship between the UK and the EU.
The survey also suggested that only one in ten businesses are currently seriously considering relocating to the EU. The IoD warned that this could rise to one in five, depending on the outcome of the government’s Brexit negotiations.
‘Many companies are still unprepared for Brexit, and it’s hard to blame them,’ said Stephen Martin, Director General of the IoD.
‘When it comes to knowing what to plan for and when, firms have been left in the dark. As long as no-deal remains a possibility, it is essential that the government steps up to the plate and provides advice on preparing for such an outcome.’
The IoD has urged the government to ‘speed up’ its publication of its no-deal Brexit guidance for UK firms.
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 Bank of England’s decision to raise interest rates for the second time in a decade.
Members of the Bank’s Monetary Policy Committee (MPC) voted to raise interest rates from 0.5% to 0.75% – representing the highest level since March 2009. Bank of England Governor Mark Carney has suggested that additional ‘gradual’ rate rises could be implemented in the future.
Commenting on the rise, Alpesh Paleja, Principal Economist at the CBI, said: ‘The case for another rate rise has been building, with inflationary pressures being stoked by a tight labour market and many indicators now suggesting that weak activity in the first quarter of 2018 was a blip.’
Meanwhile, the BCC did not welcome the rise, and called for a ‘sustained period of monetary stability’. In its statement, the business group said: ‘The decision to raise interest rates, while expected, looks ill-judged against a backdrop of a sluggish economy. While a quarter point rise may have a limited long-term financial impact on most businesses, it risks undermining confidence at a time of significant political and economic uncertainty.’
The IoD also warned that the rise in interest rates could have an impact on confidence levels. Tej Parikh, Senior Economist at the Institute, stated: ‘The rise threatens to dampen consumer and business confidence at an already fragile time.
‘The MPC would have done well to hold off until its November meeting, allowing it to account for October’s all-important Brexit deadlines. But in reality, the Bank had tied its hands with recent communications, and the rate hike will come as little surprise.’
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.
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.’