IoD Week in Policy 31 July - 4 August 2023

Sorry, did I say Autumn? I meant summer. It’s hard to tell with these grey clouds. Anyway, while MPs are kicking their feet up somewhere in the Turks and Caicos, we have been very busily policy-ing away.

For this week’s theme, I’ve gone with the ‘art of decision making’. Should we invest in this economic climate? Should we increase interest rates? Should we postpone Brexit checks? Should we take annual leave in the middle of the summer holidays?

Decidedly low

Directors’ confidence in the economy is still at a bit of a slump. Inflation is stubbornly sticking around and more firms are feeling the rising interest rates pinch. As a result, investment intentions are lower due to increased awareness of external economic risk. Find our full analysis here, and media coverage here: The Times, The Telegraph and City AM.

Decidedly high

The Bank of England has increased interest rates by 0.25 percentage points to 5.25% in an effort to tame the inflation-breathing dragon. This is the highest the base rate has been since 2008. The Bank expects inflation to fall below 5% in the final quarter of 2023, and the government has pledged this will be the case. We have our fingers crossed. Meanwhile our Chief Economist could be heard on the Times Radio offering the IoD’s view (from 02.21 minutes).

A marked success

The UK government has confirmed an extension to the use of CE marking indefinitely beyond the 2024 deadline. CE marking is used within the EU to indicate that a product meets the required health and security standards. When the UK left the EU, the government was planning to phase in UKCA marking to replace CE marking. The extension will be welcome across industry as a move that will cut unnecessary duplication of administration.

Post-poning-Brexit checks

The government has made the decision AGAIN to delay post-Brexit import border controls on animal and plant products from the EU, fearing that extra bureaucracy will further fuel inflation. These import controls were due to come in this October, but now apparently the plan is to publish the full details “very soon”. Thanks for the specificity… While less admin is never a bad thing, businesses will be frustrated at the lack of certainty in this decision. Or lack thereof.

Trend setters

Speaking of unnecessary administration, Parliament has now passed a Bill which gives electronic trade documents the same legal status as physical trade documents. There has been a significant drive towards digitalisation of customs red-tape, so this is a welcome development. And, since Westminster-derived legislation is often used as the legal basis for international trade transactions, we’re hoping this Bill can pave the way towards global reform.

Too close for comfort

The latest in our series of governance explainers takes a look at director independence, including recent cases that have landed some boards in very hot water. Most large UK and US companies are now overwhelmingly composed of directors that self-identify as ‘independent’ – but has this really made a difference? Or are some board members perhaps still too closely entwined with the CEO or major shareholders to effectively govern? You decide: read the explainer here.

Uncalled for…

HMRC has set a target in its 2022-23 annual report to reduce the volume of calls it receives by 30% between 2022 and 2025. We know that small businesses in particular value access to person-to-person advice and so this decision will hamper their ability to navigate complex tax affairs, as we told the Financial Times on Thursday.

Updated

We have listened to feedback from our members and have created a Policy Voice Data Hub where we share the data collected from our surveys and demonstrate how we use it for influence. Going forwards once all Policy Voice data has been used, and the results widely published, we will update this page on a monthly basis.

Next week watch out for…

Friday 11 August

• ONS will release the GDP monthly estimate for June 2023
• ONS will release monthly UK trade statistics for June 2023
• Our latest Policy Voice survey will be going live. We will be asking members about investment priorities, occupational health and economic confidence.