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Friday's Business and Politics round-up

18 Jan 2019

Person reading the IoD's news round up with breakfast

Good morning!

Events of this week have left us no clearer about the road ahead but in just three days the Prime Minister is due to reveal her so-called Brexit ‘Plan B’.

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Party favours

As Theresa May holds cross-party talks, Britain’s business groups have urged politicians to agree on a Brexit ‘Plan B’ and conveyed concern about the possibility of a no-deal outcome. 

Following the defeat of the Brexit deal and the vote of confidence earlier this week, the Prime Minister has been holding discussions with opposition parties to find a way through the impasse. Labour leader Jeremy Corbyn, however, has refused to meet her, asserting she must first rule out the option of no-deal. 

Some opposition parties are calling for a delay in the UK’s exit from the bloc, but Theresa May’s spokesman said there are no plans to extend Article 50. 

Stephen Martin, Director General of the IoD, observed “For each passing day without clarity either about the government’s intended next moves or comprehensive information about day one plans for no-deal, it becomes more and more difficult for businesses to be ready”. 

Josh Hardie, Deputy Director General at the CBI, said “If there were to be an extension [of Article 50], there needs to be a change in position [at Westminster] so that it can deliver for the UK”. 

The Prime Minister is scheduled to unveil her Plan B on Monday and MPs will vote on it on January 29. 

Rachel Reeves' pet peeve 

Rachel Reeves, chair of the Business, Energy and Industrial Strategy Select Committee, has accused the government of “making a nonsense” and dragging its feet over efforts to close the gender pay gap.

Last year the BEIS committee published a report which found median pay in the UK is 18% in favour of men. Its recommendations include compelling businesses to publish justifications for gender pay gaps and explain how they intend to tackle the divide.

This week the government published its response to the report, arguing instead that such obligations can be of little benefit to companies. 

Women and Equalities Minister Penny Mordaunt said the government was “aware that including [the BEIS committee proposals] as a mandatory requirement might result in a prescriptive format with limited value to employers and employees”. 

She added the government’s approach would grant firms “freedom to produce an action plan that is relevant to their individual situation which they can truly commit to and embrace.”

Roger Barker, Head of Corporate Governance at the IoD, commented “The extent of reporting requirements on companies has significantly increased during the last year”. Roger added the government should “allow time for these new requirements to bed in before introducing a raft of new mandatory disclosures.”

A nuclear waste

Japanese conglomerate Hitachi has confirmed it will suspend work on a £16 billion nuclear power plant in North Wales, prompting concern from the UK business community about future energy supply.

Duncan Hawthorne, chief executive of Hitachi subsidiary Horizon Nuclear Power, said “I am very sorry to say that despite the best efforts of everyone involved we’ve not been able to reach an agreement to the satisfaction of all concerned”.

Energy Secretary Greg Clark told parliament that the plans were halted despite continued talks with the government and a “generous” offer that Hitachi would earn £75 per megawatt. He noted the “economics of the energy market have changed significantly in recent years.”

IoD Director of Policy Edwin Morgan said “This latest announcement will add further to [businesses'] jitters regarding the security of our future energy supply”. 

The suspension of the project in Wylfa – which was expected to produce 6% of the UK’s electricity – comes at a time when nuclear is under increasing pressure from renewables. 

The Energy and Climate Intelligence Unit notes the British government is slowly turning away from plans to rely on nuclear in order to meet carbon emissions targets. 

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