What does UK business want from PM Boris Johnson

With an 80-seat majority, there is little doubt that PM Johnson will be able to get his party policies and campaign promises through the UK parliament without delays. This might be good or bad for UK businesses, time will tell.

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The major concern now for business is;

  • Get Brexit done

Getting Brexit Withdrawal Agreement through UK Parliament, paving the way for the UK to leave the European Union and negotiate a trade deal which will be the focus for businesses.

The prospect of an end to three years of to and fro over the issue is welcomed by the deputy director general of the CBI, Josh Hardie.

“Just the fact that we have a government with a strong majority and a mandate actually provides the opportunity to bring a bit more certainty,” he said.

But as the prime minister’s opponents were at pains to point out during the election campaign, the UK could still leave the EU without a trade deal at the end of next year unless a trade deal with the EU can be struck in record time.

Mr Hardie said British businesses would like see maximum alignment with the bloc, describing a relationship of frictionless trade very similar to EU membership, but the new government has promised an arms length arrangement, with the UK outside both the EU single market and the customs union.

Mike Cherry, the national chairman of the Federation of Small Businesses, said Brexit could provide an opportunity for British firms to expand into other overseas markets such as the US, Canada and Australia. But the UK’s relationship with the EU remains the first item on the agenda.

  • Improving Infrastructure and investment

Mr Johnson welcomed the election result with a promise to “repay the trust” of voters in the north of England who swung behind the Conservatives, many for the first time in their lives.

There is an expectation that the previous Conservative government’s Northern Powerhouse plans will get further backing. The Times has suggested the prime minister could be planning to pump as much as £80bn into projects in key northern seats in a bid to cement his new voters’ support.

“The Conservative manifesto recognised the role for vital infrastructure in supporting the economy, from Northern Powerhouse Rail to gigabit broadband.See the source image

“The Government now should go further and give clear backing to HS2 and Crossrail 2, as well as reaffirming support for airport expansion at London’s airports, putting in place the key building blocks needed to enable our regions to grow together.”

That kind of spending may help boost the UK’s flagging growth rates, says Yael Selfin, chief economist at accountancy firm KPMG.

She says “public spending will need to do the heavy lifting” when it comes to dispelling the cloud of uncertainty around an EU deal but it will take more than that.

“The new government must also turn its attention to some of the longer standing challenges facing the UK, such as poor productivity and declining regional opportunities, to help secure a better long term future, while addressing the challenges and opportunities presented by new technology and climate change.

 

  • Effective Immigration policy

Mr Johnson has pledged to introduce a points-based immigration system that would sort migrant workers into three categories.

The first tier, entrepreneurs, investors and people who have won awards in certain fields, would receive fast-track entry under the system.

Meanwhile, skilled workers, such as doctors, nurses and other health professionals, who have a confirmed job offer, would be placed in another category, with those eligible for an NHS visa also receiving fast-track entry and reduced fees.

For low-skilled or unskilled workers, sector-specific rules would be put in place, enabling British firms to fill gaps where UK workers cannot be found.

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But the plans have come under fire from business leaders who have said the proposed policy is too vague and would affect their ability to plan for the future.

The CBI’s Mr Hardie said while a points-based system could work if designed to respond to the needs of the economy, but more detail would be welcome.

Catherine McGuinness, policy chair at the City of London Corporation, the governing body of London’s financial district, said Mr Johnson should bear in mind that services were “the lifeblood” of the UK economy but relied on “attracting, retaining and developing high quality talent”

  • Reform of Business rates

Boris Johnson has pledged to reform business rates, which have been blamed for tough times on the High Street, with well-known chains shutting stores across the country over the past few years.

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But that could take time, according to Mr Cherry from the Federation of Small Businesses. Just a review of rates could take up to five years, he said.

At present, business rates are based on the size of a firm’s property as well as revenues, in most cases.

 

But Mr Cherry said the tax was charged “before you even turn over your first pound, let alone make any profit”.

Mr Hardie from the CBI said the business rates system was “fundamentally broken” and urged “radical reform”.

For many firms, especially in the retail sector, reform of business rates, which they have been calling for for several years, remains the top priority.

Source: BBC News

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UK annual house prices increase below 5% on average

Annual house price growth across the UK’s major cities increased to 2.9% in October as southern markets showed signs of recovery.

Property values in London rose by 1% in the past year, the strongest pace of growth for two years and reversing the 1.1% dip recorded during the previous 12 months.

There was also evidence of firmer pricing in cities across southern England, according to the latest Zoopla Cities House Price Index for October.

But it was not all good news, with the rate at which house prices are rising slowing to below 5% in the most buoyant cities for the first time since November 2012.

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The housing market is currently at an interesting crossroads. During the past two years, the market has been characterised by subdued or falling prices in London and southern regions, where affordability has become increasingly stretched, and rising property values in cheaper northern markets.

But there are signs the situation is now changing. House prices in London registered their strongest gains in two years, while less than a quarter of London postcodes suffered falls in October, compared with 85% a year ago.

The shift in house price momentum in the capital has been driven by a decrease in the number of new properties for sale, which has restricted supply.

At the same time, there are signs that demand is picking up, which, combined with the falling supply, is pushing prices higher.

By contrast, although growth in property values is still strongest in northern cities, there are signs that the pace of gains is beginning to slow, with no city posting annual house price inflation of above 5%.

Meanwhile, the announcement of the General Election on December 12 is expected to bring forward the traditional seasonal slowdown seen in the run up to Christmas
Source: Zoopla Property News

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Remortgaging soars by about 13% with competitive rates

The number of people remortgaging has soared to a two-year high as homeowners take advantage of lenders’ end-of-year price war to lock into a good deal.

A total of 37,769 mortgages were approved for people switching to a new deal in October, 12.7% more than in the same month of last year, according to industry body UK Finance.

Mark Harris, chief executive of mortgage broker SPF Private Clients, said: “As we head towards the end of the year, and lenders jostle for what business there is out there, there are some incredible deals on the market to attract borrowers.”

There was also an increase in the number of mortgages approved for house purchase, with these rising 3% year-on-year to 46,631, despite the uncertainty caused by the General Election and Brexit.

End of year competition among lenders is great news for anyone looking to remortgage.

Halifax is currently offering a two-year fixed rate mortgage of 1.08% for people with a 40% deposit, while NatWest is offering a two-year deal of 1.25% for those with a 25% deposit.

Rates ate only slightly higher for homeowners who want to fix for five years, with Virgin Money offering a deal of 1.46% for people borrowing 65% of their home’s value.

Nationwide, Halifax, NatWest and Royal Bank of Scotland all have five-year fixed rate loans with rates below 1.6%

Source: Zoopla Property News

 

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Dennis Bebo – MSC, BSC, DEA, CeMAP

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Brexit continue to slow down UK housing market

The number of homes being put up for sale fell to a three-year low in September as Brexit uncertainty continued to hit consumer confidence.

Inquiries from potential buyers also dropped during the month, while agreed sales fell too, with activity slipping in nearly all parts of the UK, according to the Royal Institution of Chartered Surveyors (RICS).

The subdued market left the level of properties estate agents had on their books close to record lows, while they also reported that appraisals were lower than a year earlier, suggesting little prospect of a pick-up in the immediate future.

Simon Rubinsohn, RICS chief economist, said: “There are good reasons for thinking the latest dip in both buyer enquiries and vendor instructions is a response to the endless wrangling about Brexit, as the October 31 deadline approaches.

“Unless there is a speedy resolution to the ongoing impasse it does seem inevitable that the standoff between purchasers and sellers will deepen making it harder to complete transactions.”

Source: Zoopla Property News

 

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Dennis Bebo – MSC, BSC, DEA, CeMAP

TA DenEco Consultancy – www.deneco.co.uk

UK Greetings card chain Clintons in survival talks with Landlords

Greetings card chain Clintons is considering shop closures and rent cuts as part of a survival plan.

The retailer, which has about 2,500 staff, is in restructuring talks with landlords in another sign of the High Street crisis.

A spokeswoman told the BBC no decisions have yet been made.

Clintons was responding to reports on Sunday that it wanted to close 66 out of 332 shops, with landlords slashing rents on most of the other stores.

The restructuring would involve a controversial scheme known as a company voluntary arrangement (CVA), an insolvency process that allows companies to continue trading while pushing through closures and rent cuts.

A Clintons spokeswoman said “discussions are continuing with our landlords but no decisions have been made”.

But she declined to comment on a Sunday Telegraph report that the company told landlords 90 of its shops were loss-making and that sales were expected to continue to decline.

Source: BBC News

UK Election 2019: Is Climate Change a deal breaker for you?

Sian Berry  Co-leader of the Green Party on the launch of their general election campaign said: “Some things are even bigger than Brexit. This must be the climate election. The future won’t get another chance.”

The party says it would fund their climate change pledge of £100bn a year by borrowing £91.2bn a year, with an extra £9bn from “tax changes”.

The party also set out plans to make Britain carbon neutral by 2030.

Conservative party  has already committed to cut carbon emissions to net zero by 2050, a move announced by former Prime Minister Theresa May before she left office earlier this year.

Boris Johnson led Conservatives on his election campaign said they have “a proper plan to continue reducing carbon emissions” which will build on the “400,000 low carbon jobs we’ve already created (while in government)”.

Labour has also set out some of its own environmental pledges, including a promise to cut UK carbon emissions by 10% through a home improvement programme.

A Labour government would fund £60bn of energy-saving upgrades, such as loft insulation, enhanced double glazing and new heating systems, by 2030.

The question now is which party and who do you trust to deliver on climate change and will it be a deal breaker for you?

 

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Dennis Bebo – MSC, BSC, DEA, CeMAP

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UK government suspends fracking indefinitely

The government has called a halt to shale gas extraction – or fracking – in England amid fears about earthquakes.

The indefinite suspension comes after a report by the Oil and Gas Authority (OGA) said it was not possible to predict the probability or size of tremors caused by the practice.

Business Secretary Andrea Leadsom said it may be temporary – imposed “until and unless” extraction is proved safe.

Labour, Lib Dems and the Green Party want a permanent ban.