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Monday's Business and Politics round-up

24 Jul 2017

Smart devices resting on a Business paper

IoD in the news

CityAM - Firms drag their heels over mandatory publication of gender pay gap data
Daily Star - Business world activates Brexit plans as fears grow
Re:locate Magazine - PM pledges to listen to businesses' EU concerns

Good morning,

Parliament may be in recess, but the political wheels will not stop turning. While Theresa May departs for her Alpine holiday (yes, I am also hoping she doesn't do too much walking and decision-making at the same time), the Trade Secretary Liam Fox is in Washington today beginning discussions with his US counterpart Amb. Robert Lighthizer, to 'prepare the ground' for a post-Brexit trade deal.

Under current rules in Brussels, member states cannot negotiate deals with third parties on a bilateral basis, but Dr Fox has maintained that there is nothing to stop the Government 'scoping out' how a future relationship with the U.S. might look before we leave the economic bloc in 2019.

The Foreign Secretary, Boris Johnson, finds himself in New Zealand today in the second stage of a three country trip on trade, foreign policy and international security, after holding two days of talks in Japan last week and is expected to travels to Sydney, Australia later this week.

In other news, the International Monetary Fund (IMF) has said the UK and US economies will expand more slowly in 2017 than previously predicted. It said "weaker-than-expected activity" in the first three months of the year meant the UK would grow by 1.7%, compared with an earlier 2% forecast. Similarly, it revised down its US outlook from 2.3% to 2.1%.

Meanwhile, and some might say ironically, the outlook for several eurozone economies is brighter than initially thought, with countries including France, Germany, Italy and Spain seeing growth forecasts revised up.

Overall global predictions remain unchanged for this year and the next.

Recharging Britain

Consumers in the UK could save billions of pounds thanks to major changes in the way electricity is made, used and stored, the government has said.

Under new proposed rules, as part of the Industrial Strategy, it will be made easier for people to generate their own power with solar panels, store it in batteries and sell it to the National Grid. If all goes to plan, consumers will save £17bn to £40bn by 2050, according to the Government and energy regulator Ofgem.

Among the first to gain from the rule changes will be people with solar panels and battery storage. At the moment they are charged tariffs when they import electricity into their home or export it back to the grid. The Government has said this must change as it deters the public from using power more flexibly.

Other cost saving measures include people allowing their washing machines to be turned on by the internet to maximuse use of cheap solar power on sunny days, as well as agreeing to have their freezers switched off for a few minutes to smooth demand at peak times.

Amongst the enthusiasm for the schemes, some will urge a degree of caution on cyber security. The more the energy industry embraces the digital age, the more vulnerable it will be to hacking.

The rules are due to come into effect over the next year and will also benefit businesses that allows its air-conditioning to be turned down briefly to help balance a spell of peak energy demand on the National Grid.

The Business Secretary, Greg Clark, will today outline further a £246m investment in the UK's industrial strategy, with energy at its heart. He will offer details of a competition for innovation in battery technology, which he says will help make the UK a world leader in battery design and manufacture.

Broken promises 2.0 

Labour are facing accusations of rowing back on a key election pledge after leader Jeremy Corbyn was forced to clarify his comments on dealing with student debt while interviewed by Andrew Marr this weekend.

During the recent election, Corbyn had vowed to "deal with" the issue of graduates burdened with debt - perceived by some to be a promise to wipe out all student. Whether linked to student fees or not, Labour certainly did benefit from an increased youth turnout at the elections with 61.5% of under 40s backing them at the ballot.

When pushed by Marr, Corbyn attempted to clarify that his remarks did not amount to a commitment to erase the £70bn+ in historic student debt. He said as a result of a snap election, Labour were unaware of the size of the problem  and were in no position to make such a promise, but added the party would be looking at ways to reduce the debt burden.

A few Tory MPs have accused Corbyn, who has been emboldened by a better election result than expected, of misleading students. Those struggling with student debt will no doubt see parallels with the 2010 Liberal Democrat pledge to abolish tuition fees. The party faced widespread condemnation and protest when a matter of months after making the promises to the NUS, leader Nick Clegg took the party into a coalition government which significantly raised fees. At the following general election the Liberal Democrats saw their share of the youth vote reduced massively and in June's election this year Nick Clegg lost his Sheffield seat.

Whether students and graduates themselves will see Corbyn's clarification as a similar betrayal remains to be seen. Universities Minister Jo Johnson called the move a 'switch and bait'.

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