The Week in Policy 28th June - 2nd July
July leapt upon us in the click of a finger – where has this year gone? This week graced us with a variety of spectator sports. England beat Germany (in football that is, not EU politics); Murray won a second round match in the tennis (also against a German, but let’s not rub it in); and Matt Hancock stirred up a new round of the political soap opera.
But in policy…
Monday brought with it the launch of negotiations with Singapore on a Digital Economy Agreement. Some are calling ‘digital trade’ the fourth industrial revolution (we’re really getting through them), and this agreement will represent Britain’s ambitious aim of becoming a leader in the global technology arena. That is once we have all worked out what digital trade actually is.
Finance is not just going digital, it’s going green, and the UK’s new Green Financing Framework will boost expenditure in environmental policy. The IoD was pleased to have been able to have a hand in influencing this document.
Importantly for businesses this week, government support began to be tapered off, with the aim of stopping completely in September. Very quickly, 19th July is approaching, and then the fully reopened economy should provide some relief to UK businesses.
Turning off the tap
- This week, the government began to taper off business support schemes such as furlough and business rates relief, due to end completely in September.
- The government announced today that more than one million workers came off furlough in the four weeks between the end of April and the end of May alone, which coincided with the start of restrictions being lifted and non-essential retail, restaurants and pubs reopening.
- The IoD will continue to advocate for businesses as their employees re-enter the workforce, and as reliefs continue to wind down.
It’s virtually trade…
- On Monday, the UK launched negotiations with Singapore for a Digital Economy Agreement, that could see the removal of barriers to digital trade, and access for UK exporters into high-tech markets.
- Digital trade encompasses financial and legal services, streaming services, e-books, and in a world where technology has become ingrained in the human DNA, this trade agreement marks a significant milestone for the UK in its global endeavours as a tech leader.
- Negotiations will focus on opening digital markets to exporters, ensuring cross border data flows while upholding high standards of GDPR, cutting virtual red tape, deepening cooperation on future growth sectors like fintech and lawtech, and strengthening cybersecurity measures. All very technical.
- The aim is to make the UK the world leader in services and digital trade, says Liz Truss, who will meet with her Singaporean counterpart Mr S. Iswaran on a (of course) virtual call to kick-off negotiations.
- The Treasury has published a new UK Green Financing Framework with the help of the IoD’s expert insight, which outlines how ‘the UK Government plans to finance expenditures through the issuance of green gilts and the retail Green Savings Bonds that will be critical in tackling climate change and other environmental challenges, funding much-needed infrastructure investment, and creating green jobs across the UK’.
- The document highlights the UK’s commitments as a global leader in climate and environmental policy.
- Sustainability is an important priority for the IoD and our members, and we are very happy to have collaborated with HMT on this publication.
- 20210630_UK_Government_Green_Financing_Framework_Final.pdf (publishing.service.gov.uk)
Going it a-loan
- This week Parliament introduced a new Subsidy Control Bill, that would replace the EU State Aid scheme. However we should be more aligned to EU State Aid according to the withdrawal agreement.
- Brussels wants a level playing field in terms of how subsidies impact competition, but Boris wants to ‘get rid of the bureaucratic red tape’.
- Under the new Bill, the government says businesses will be able to benefit from quicker and more agile financial support, and, in line with the Levelling Up agenda, the devolved nations and local authorities would receive more power to issue subsidies.
- But the Scottish and Welsh governments are sceptical of the government’s new plans, and want to be closer aligned to the State Aid scheme, while Northern Ireland finds itself in the sticky position of being stuck in the middle of both schemes.
- The IoD’s priority is to ensure security and consistency for businesses across the UK, and as yet, the government is still due to produce the finer details of the new plan.
- Although the Industrial Strategy was scrapped in March, there still needs to be some clarity in long term economy policy in order for businesses to be able to plan.
- New subsidy system to support UK jobs and businesses, boost the economy and strengthen the union - GOV.UK (www.gov.uk)
How do businesses rate this consultation?
- The government is proposing to increase the frequency of business rates revaluation from five years to three years, a change that reflects the greater need to account for fluctuating economic conditions.
- They have issued a consultation on this, which will close on 24th August, and will ask respondents to address specific proposals on how the change will work in practice.
Week ahead in Policy
As we await 19th July, the IoD will continue to advocate for businesses as we transition to the open economy. Along with many other businesses across the country, the IoD will be returning to the office, where we can share in the excitement of being surrounded by more people than screens. Adjusting to life without lockdown is definitely a reason to be optimistic.
Thankfully, we still have Wimbledon and the Euros to keep up occupied next week. The Brits rarely get anywhere in tennis, but we can be more hopeful in the football!
Friday 9th July
- Coronavirus and the impact on output in the UK economy for May.
- GDP monthly estimate for May.
- UK trade statistics, showing the total value of imports and exports by goods and services for May.
Monday 5th July
- Treasury Committee oral evidence on COP26, and financing the battle against climate change.
Tuesday 6th July
- APPG for business in a pandemic world, which will focus on the hospitality sector, and will feature a presentation from a representative of Coca-Cola.
- Oral Questions for the Department for Business, Environment, and Industrial Strategy, including topics such as the Levelling Up agenda, support for high street businesses, sustainable policy, and reaching Net Zero.
Wednesday 7th July
- Westminster Hall Debate on eligibility for government support during the COVID-19 pandemic.
- International Trade Committee oral evidence on UK trade negotiations, with Liz Truss representing the Department for International Trade.