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Tuesday's Business and Politics round-up

12 Dec 2017

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Good morning and welcome to a decidedly chilly Tuesday.

Christmas has come early over at the Serious Fraud Office after the organisation appeared to have avoided plans by the Prime Minister for it to be dissolved. Instead Home Secretary Amber Rudd has announced the Government is to set up a National Economic Crime Centre which will direct the SFO to carry out investigations.

Meanwhile sighs of relief could also be heard emanating from HSBC as they drew a line under a ongoing money laundering scandal. Shares in the bank rose after the announcement that a deferred prosecution arrangement with the US Department of Justice had expired. This comes 5 years after the bank was fined over £1bn for failing to prevent Mexican drug cartels using the bank to launder the proceeds of crime.

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Elementary my dear Watson

Labour Deputy Leader Tom Watson this week published his Future of Work Commission report outlining targeted proposals seeking to ensure that technological opportunities benefit the whole economy and workforce. In the report Watson calls on society to ‘embrace the android’ and argues that the rise of automation does not necessarily need to lead to large levels of job losses. The report suggests that with targeted government investment the ongoing technological revolution should create as many jobs as it takes away.

Recommendations in the report which was convened and chaired by Watson include developing a artificial intelligence curriculum for secondary schools and measures to ensure that workers have career long access to retraining to meet shifting workplace demands.

Responding to Tom Watson’s Future of Work Commission report, Seamus Nevin, Head of Policy Research at the Institute of Directors, said:

“Many of the key recommendations within Tom Watson’s Future of Work report will resonate with employers up and down the country. The instinct to be techno-positive, whilst making targeted proposals for ensuring that the rising digital tide really does lift all boats, is the right one.  This will ensure the UK makes the most of the opportunities technology is creating for everyone.

“The IoD has long campaigned for measures to help employees back into training without compromising their living standards or ability to work. Watson’s proposals will help bring our skills system into the twenty-first century by developing the culture of lifelong learning that we desperately need. Similarly, encouraging employers to make use of new innovations that can help people work more flexibly is also one of the key benefits to reap from the age of automation.

“However, on his proposals to establish a ‘new representative body for entrepreneurs’, we suggest that the UK already has one well established. The IoD’s entrepreneurship network (the IoD99) is the fastest growing group for entrepreneurs, with a strong voice in the public debate, both at home and internationally. Last week the group was named as the UK’s official representative for young entrepreneurs within the G20.

Also included in the report was a push for the UK’s corporate governance framework to put greater emphasis on stakeholder representation and engagement on UK boards. The paper suggests that by shifting priorities from shareholders to stakeholders some headway could be made on the UK’s productivity problem.

NY resolution: transitional arrangement 

The IoD has urged the government to secure a transitional arrangement by the end of the first quarter of 2018 now that the first phase of the Brexit negotiations are concluded. The push from the IoD came after Prime Minister Theresa May gave her first update to the House of Commons following her agreement last week with Jean-Claude Junker to move to phase 2 of negotiations.

Speaking to CityAM, IoD Director General Stephen Martin said that securing a transition deal was the “biggest priority for us now that phase one is out of the way. We need it to happen at the very latest, by the end of the first quarter,”. Stephen went onto emphasise that government should continue to engage with business as talks move forward, saying that “the IoD has continuously stressed to the government that engaging with business on its objectives will not jeopardise its negotiating position.”

Talking to the House of Commons on Monday, May confirmed that agreeing transition arrangements in quarter 1 of 2018 fitted within the current timetable. The reported exit bill figure of £35-39bn was also confirmed by the Prime Minister. Meanwhile Labour leader Jeremy Corbyn made the surprise move yesterday of backing calls to drop the exit date deadline from the EU Withdrawal Bill. Corbyn called for a delay to Brexit beyond the April 2019 deadline if it meant that a better deal could be secured. This come ahead of a crucial vote on the bill next week.

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