Business groups call for ‘softer’ Brexit

Five business groups, including the Confederation of British Industry (CBI), the Federation of Small Businesses (FSB) and the British Chambers of Commerce (BCC), have called for the government to secure continued access to the European single market until a final Brexit deal can be struck with the EU.

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The letter to Business Secretary Greg Clark calls for the government to ‘put the economy first’, and to ‘prioritise an early agreement on guarantees for EU citizens’ already residing in the UK.

A final agreement between the UK and the EU should guarantee certain economic principles, as outlined in the letter. These include securing tariff-free goods trade between the UK and the EU, establishing a flexible system for the movement of labour and skills between the UK and the EU, and protecting the benefits of free trade agreements currently delivered through the EU.

The letter, which is also signed by the Institute of Directors (IoD) and manufacturers’ organisation the EEF, comes as Brexit Secretary David Davis enters into formal Brexit negotiations with the EU.

Commenting on the negotiations, Mr Davis said: ‘I want to reiterate at the outset of these talks that the UK will remain a committed partner and ally of our friends across the continent. And while there is a long road ahead, our destination is clear – a deep and special partnership between the UK and the EU. A deal like no other in history.’

The UK is set to leave the EU by the end of March 2019.

Business groups react to General Election result

With the 2017 General Election resulting in a Hung Parliament, the UK’s leading business groups have been giving their reactions.

The Institute of Directors (IoD) has warned that businesses have now been ‘thrown into political limbo’.

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The Confederation of British Industry (CBI) is urging politicians to form a functioning government which offers security and places the economy at the heart of its agenda.

CBI Director-General Carolyn Fairbairn said:

‘For the next government, the need and opportunity to deliver an open, competitive and fair post-Brexit economy that works for everyone across all our nations and regions has never been more important.’

Meanwhile, the Federation of Small Businesses (FSB) has called for a delay to the beginning of Brexit talks.

FSB National Chairman Mike Cherry said:

‘It is important to go into the Brexit talks from a position of strength, focused on getting the best deal possible for trade and access to workers and skills. Negotiations should be led by a government and a Prime Minister that will be in place for the duration, and so we call for a delay to the scheduled start of negotiations rather than a rush to begin in 11 days’ time. The need for a transition period now becomes even stronger, providing the time to get Brexit right.’

The British Chambers of Commerce (BCC) also emphasised the ongoing uncertainty for business communities, and echoed the FSB‘s call for a delay to Brexit negotiations.

Dr Adam Marshall, BCC Director General, said:

‘Whilst companies have for many months done their best to screen out political noise in order to focus on their own operations, this result will prove much harder for UK businesses to ignore.

‘No business would walk into a negotiation without clear objectives, an agreed starting position, and a strong negotiating team. It is hard to see how Brexit negotiations could begin without answers on these important questions.’

Half of businesses believe artificial intelligence will ‘transform their industry’

A survey carried out by the Confederation of British Industry (CBI) in association with IBM has revealed that 49% of businesses believe artificial intelligence is set to ‘fundamentally change’ the industries and markets they operate in.

The survey, which quizzed 160 UK businesses, found that 73% of respondents have invested in cloud systems over the past 12 months, 79% have invested in mobile technology and 71% in security.

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42% of firms also plan to invest in artificial intelligence in the next five years, the CBI found.

However, the business group warned that a ‘growing digital gap’ exists between firms that are championing artificial intelligence and those that are falling behind.

Josh Hardie, Deputy Director-General of the CBI, stated: ‘Innovation in business is essential for advanced economies such as the UK.

‘British businesses are directing resources into new technology, with cloud, mobile and security investments forming the UK’s digital backbone.

‘The digital gap risks becoming a chasm with artificial intelligence set to transform the face of UK businesses.’

CBI calls for next government to create a ‘business Brexit taskforce’

The Confederation of British Industry (CBI) has called for the next government to set up a ‘business Brexit taskforce’ in the 50 days following the General Election.

Business has the ‘evidence, ideas and solutions’ to help the UK gain an advantageous deal from Brexit negotiations, the CBI stated. It also suggested that a business Brexit taskforce would help solve the most complex Brexit issues.

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The business group claims that such a taskforce would help the next government to garner information about what businesses require from Brexit.

This information, it said, would serve as a compass for the next government to use in order to navigate through the details of the negotiations. Businesses would, in turn, get reassurance that the government is listening to their concerns.

However, the CBI also warned of the ‘dangers of the next government going it alone’. It stated that business needs a say in Brexit negotiations, because ‘even when the politics have been forgotten, we’ll have to live with the effects for decades to come’.

Paul Drechsler, President of the CBI, said: ‘At this time of unprecedented challenge, we need unparalleled co-operation between companies and the next government.

‘My message to the next government, whoever they may be, is you don’t need to ‘wing it’.

‘If you work with us, Britain will get a better deal.’

Businesses urged to create ‘more inclusive workplaces’

The Confederation of British Industry (CBI) has urged UK businesses to create ‘more inclusive workplaces’, and to not allow the creation of such workplace environments to ‘slip down’ their agendas.

In a report entitled ‘Time for Action’, the CBI discovered that employees are 83% more likely to innovate and are more than twice as engaged within both diverse and inclusive workplaces.

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The business group argued that increased workplace diversity is not just a matter of fairness: it is a ‘hard-nosed business case’ standing in the way of major changes in demographics and technology.

Commenting on the issue, Carolyn Fairbairn, Director General of the CBI, said: ‘Progress towards inclusive workplaces must pick up the pace. And I’m not just talking about gender. I’m talking about every kind of diversity – ethnicity, social background, sexual orientation, age.

‘At times of great change, and we are most certainly in one, priorities compete and things can go backwards. It can be too easy to let things slip down a list, perhaps even to seek comfort in the familiar, people like you and not different from you.’

UK manufacturers report ‘strong growth’ in domestic and export orders

A survey carried out by the Confederation of British Industry (CBI) has revealed that, in the three months to April, UK manufacturers’ domestic orders improved at the ‘fastest pace since July 2014’.

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Meanwhile, export orders recorded the strongest growth in six years, according to the CBI’s latest Industrial Trends Survey. This was conducted before the announcement of a General Election.

However, the CBI also revealed that the weak pound pushed up costs, with manufacturers reporting the strongest rise in unit costs in six years.

Rain Newton-Smith, Chief Economist at the CBI, commented: ‘UK manufacturers are enjoying strong growth in demand from customers in the UK and overseas, and continue to ramp up production.

‘Exports have surged and firms are at their most optimistic about selling overseas in over four decades. Even so, the combination of the weak pound and recovering commodity prices means that cost pressures continue to build, and manufacturers report no sign of them abating over the near-term.’

Growth in UK private sector slows

The latest Growth Indicator published by the Confederation of British Industry (CBI) has revealed that growth in the UK’s private sector slowed in the three months to March.

Across the manufacturing, distribution and service sectors, the pace of output growth eased to +11%, down from +15%.

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Additionally, while manufacturing output growth expanded in the three months to March, consumer services and retail growth slowed. Activity among business and professional services firms remained unchanged.

The Growth Indicator also suggested that firms remain optimistic: +25% of the businesses surveyed expect growth to pick up over the next quarter.

Rain Newton-Smith, Chief Economist at the CBI, commented: ‘Momentum eased towards the end of the first quarter, particularly among consumer service and retail companies. However, expectations for the quarter ahead are healthy across all sectors.

‘But headwinds are strengthening, as higher inflation drives up costs for businesses and eats into household incomes, particularly against the backdrop of subdued wage growth.’