Corbyn considers tax cuts for companies that curb pay
Jeremy Corbyn has proposed several measures for curbing boardroom pay, including a corporation tax cut for companies that show restraint on executive pay. Other options to be considered by Labour include increasing income tax for the top earners and giving remuneration committees a veto on pay packages. Under a future Labour government, Mr Corbyn said the chief executive of any company awarded a government contract would not be paid 20 times more than the company average. But he proposed going further by introducing measures across the private sector. Labour will also consider corporate governance reforms, such as giving pay committees on which workers have a majority a binding say on pay awards.
Reported in: The Guardian, Financial Times, The Times, The Daily Telegraph, Independent I, The Independent
Connect system let loose
The Telegraph details how HMRC’s Connect system, which the paper says has been fully deployed for the first time, gathers data from a wide range of sources to help the Revenue identify those who may have paid too little tax. HMRC was able to get information from banks and financial organisations in British Overseas Territories from September last year and from this year will gather data from 60 more countries. Information from the Land Registry, Airbnb, credit card transactions and myriad other sources is also gathered. "Connect broadly deals with information spontaneously available in government departments or as part of the digital footprint that people leave when they use the internet," said George Bull, senior tax partner at RSM.
Reported in: The Daily Telegraph
Pound falls on May's Brexit comments
The value of the pound has fallen to a two-month low against major currencies after Theresa May signalled the UK would pursue a so-called "hard Brexit" from the EU. Sterling fell about 1% across the board. The only currency against which it gained ground was the Turkish lira. The Prime Minister told Sky News on Sunday that she wanted the best possible deal for leaving the EU. However, she dismissed the idea that the UK could "keep bits of membership".
Reported in: The Times, Financial Times, The Guardian, Evening Standard
Productivity remains down on pre-financial crisis levels
UK productivity growth remained well below its pre-financial crisis levels in the three months following June's Brexit vote, new figures show. The Office for National Statistics said British workers are producing 15.5% less than they would have been if productivity growth had returned to its pre-crisis trend. The amount each UK worker produces rose by an annualised rate of 0.4% in the three months to September 2016 - far below its average of 2.1% for the decade before 2008, with manufacturing experiencing a particularly acute fall off – to 0.8% from a pre-2008 rate of 4.3% a year.
Reported in: The Independent, The Daily Telegraph
Government boost to Funding Circle
Funding Circle has secured an extra £40m from the government to lend to small firms. The company said the state-owned British Business Bank will lend directly through its platform alongside other backers including more than 50,000 individuals. Catherine Lewis La Torre, chief executive of the British Business Bank’s investment arm, said peer-to-peer lending was “becoming an increasingly important source of finance for smaller businesses”. Analysis by industry body AltFi shows that between 2014 and 2015 peer-to-peer lending in the UK grew from £749m to £1.4bn.
Reported in: The Daily Telegraph, Financial Times
Start-ups need talent, not Government funds
Jan Hammer of venture capital firm Index Ventures believes that the Government should focus on ensuring an adequate supply of talent for UK start-ups rather than providing investment capital. This comes after Chancellor Philip Hammond's first Autumn Statement included plans for an extra £400m in venture capital funds. Mr Hammer cites a 2015 study by the UK Commission for Employment and Skills which shows that 43% of STEM roles are hard to fill because of a shortage of qualified applicants – before adding that skilled workers are also needed in product, design, operations, marketing and sales.
Reported in: The Sunday Telegraph
UK businesses lack export ambition
Research by the ICAEW suggests the share of UK companies selling goods and services abroad has stagnated over the past two years, with 53% of businesses exporting in 2016, unchanged from 2014. Stephen Ibbotson, the ICAEW’s director of business, called for more incentives for companies to export in a post-Brexit world.
Reported in: The Daily Telegraph
FRC seeks further oversight powers
The Financial Reporting Council has asked the government for more oversight powers in order to tackle corporate governance issues. As it published its annual report on corporate culture, the FRC said that although compliance with the UK Corporate Governance Code was high, some companies are still “paying lip service” to their shareholders' complaints about boardroom bonuses and governance rules. It also said that public trust in business is continuing to fall.
Reported in: Financial Times, Financial Times, The Daily Telegraph, Daily Mail
Manufacturing firms remain optimistic
Research by the EEF has found that only 25% of factory bosses expect UK economic conditions to improve this year while 47% are steeling themselves for a decline. However, manufacturers are much more optimistic about their own businesses with 56% expecting to become more productive and 50% forecasting increased sales. The EEF added that the proportion of manufacturers seeing the UK as a competitive place to do business following the Brexit vote has risen from 56% a year ago to 61% today.
Reported in: Financial Times, Daily Mail, Daily Express, The Guardian, The Times
Rolls-Royce commits to UK after Brexit vote
Rolls-Royce Motors says it will keep its headquarters in the UK, despite the uncertainty engendered by the Brexit vote. The news came as the firm reported a 6% rise in annual sales, having sold 4,011 cars last year.
Reported in: Financial Times
Bovis boss ousted by board
David Ritchie, who has led Bovis Homes for eight years, has been ousted by the board after issuing a shock Christmas profit warning. Mr Ritchie, who earned £1.54m in 2015, is understood to have received a payoff and has no new role immediately lined up.
Reported in: Evening Standard, Financial Times, The Times,
Many SMEs back scrapping auto-enrolment opt-outs
Almost half of SMEs would support a move to make contributing to a workplace pension mandatory for all employees, according to a YouGov survey commissioned by The People's Pension, which revealed 43% of businesses that had already entered the auto-enrolment regime would support taking away the opt-out element of workplace pensions. The People's Pension's director of policy and market engagement Darren Philp said: "Those that have already staged are more positive, which might be because having been through the process they know it’s not as hard as they expect and can see how beneficial it is for their employees".
Reported in: FT Advisor
Jobs revival continues
The number of permanent jobs being sought rose for a fifth month in December, according to the Recruitment and Employment Confederation. At the same time, the number of available candidates fell, helping to push up pay and starting salaries, REC said.
Reported in: The Times
Tech entrepreneurs recover from Brexit shock
Some 49% of more than 2,000 people working in tech and digital, including founders and chief executives, surveyed by Tech City UK, are now positive about business for the year ahead, compared to just 8% polled in June after the Brexit vote. Fintech start-up GoCardless's head of legal Ahmed Badr said: "We're hiring for lots of positions right now and are not seeing any decline in interest in working here." Tech City UK chief executive Gerard Grech said the results "reflect the resilience and underlying strength of our digital sector, which continues to grow and create jobs at a far faster rate than the wider economy".
Reported in: City AM, Evening Standard
Tube walkout could cost economy £300m
The FSB estimates the capital’s 24-hour tube strike could have cost the economy as much as £300m. Sue Terpilowski, London policy chair of the FSB, warned that the strike had added to existing pressures on businesses, stating: “Our businesses that rely on discretionary spend are losing revenue that can never be replaced and with high overheads, such as business rate increases, this is causing serious hardship.”
Reported in: The Daily Telegraph, Evening Standard
UK income inequality gap narrows but divide between rich and old grows
The Office for National Statistics' latest batch of income data reveals that the poorest British householders saw incomes rise by 5.1% (£700) in 2015/16, while the richest fifth experienced a 1.9% drop. At £26,300, the ONS added, the average UK disposable income rose by £600 over the last 12 months and is now £900 higher than its pre-crisis value of £25,400 in 2007.
Reported in: Financial Times, The Times, Independent I
Buy-to-let mortgage deals dry up
The number of buy-to-let mortgages available is falling in light of new taxes for landlords and new regulations for lenders. According to Moneyfacts, the number of loans available has fallen 5% in the past four weeks, from 1,482 to 1,408, marking the steepest decline since the banking crisis. Since January 1 lenders have been limited by new affordability regulations imposed by the Prudential Regulatory Authority, and from April this year higher-rate taxpayers will not be able to deduct their mortgage costs from their income before calculating their tax bill.
Reported in: The Daily Telegraph
OIL & GAS
UK faces £24bn bill for shutting North Sea fields
New estimates suggest decommissioning oil and gas fields in the North Sea could cost £24bn, threatening to wipe out remaining tax revenues from the industry.
Reported in: Financial Times