- Prime Minister seeks to break Brexit deadlock
- Home Secretary unveils immigration reforms
- Access to finance least likely obstacle for SME growth
Stat of the day
£214,922 – the average price of a house in September, up 0.3 per cent on the previous month, according to today’s Nationwide House Price Index.
Prime Minister seeks to break Brexit deadlock
The Times (p1, £) reports that Prime Minister Theresa May is seeking to break the deadlock in Brexit negotiations by offering a “grand bargain” to the EU. The UK will offer to remain in the customs union, tying Britain to EU tariffs and the common commercial policy, but only until a deal is struck over the Irish border problem. This concession is likely to anger Conservative Brexiteers, however Chancellor Philip Hammond has offered a “deal dividend” to Eurosceptic MPs, with the promise of lower taxes and higher public spending if they back Theresa May (The Financial Times, p1, £). The chancellor asserted that while leaving the EU without an exit agreement would not be a ‘good outcome’, the UK economy does have the ‘fiscal capacity’ to withstand the effects of a ‘no deal’ Brexit, reports Sky News (online only).
Meanwhile, the City of London Corporation has warned the prime minister to stop ‘playing chicken’ with Britain’s financial stability (Evening Standard, p1). City leaders fear that the UK and EU are risking economic turmoil due to an impasse in agreeing a deal. UK Finance Chief Executive Stephen Jones said: “Politicians from all parties should focus on avoiding a damaging no-deal scenario and securing an agreement that ensures consumers and businesses can continue accessing vital cross-border services.”
Home Secretary unveils immigration reforms
The Home Secretary Sajid Javid will unveil the biggest immigration reform for decades, reports the Daily Mail (p1). The proposals will end preferential access for EU citizens, with EU citizens treated the same as citizens from elsewhere. It’s reported the system will prioritise skilled workers while making it harder for lower-skilled workers to come to the UK. Commenting on the plans, Theresa May said the reforms will allow the UK to take greater control of its borders, according to The Times (p8, £).
These reforms reflect the recommendations made in the Migration Advisory Committee’s recent report on EEA migration. In response to the report, Stephen Jones, Chief Executive of UK Finance, said:
“As we leave the EU, it will be crucial for both the finance sector and the wider economy that firms can maintain access to the brightest and best workers from Europe and around the world.
“Any future immigration system needs to ensure that businesses can recruit and retain the highly skilled talent they need, with a streamlining of the visa process to make the system work better in practice.”
Access to finance least likely obstacle for SME growth
The latest BDRC SME Finance Monitor for Q2 2018 reveals that 85 per cent of SMEs who applied for finance were successful in the year to June 2018.
The survey also revealed that in the first half of 2018, 31 per cent of SMEs rated one or more of the following as a major obstacle to their business going forward: legislation and red tape; political uncertainty; and the current economic climate. Access to finance was the least likely to be mentioned as a major barrier (five per cent).
Responding to the report, Stephen Pegge, Director of Commercial Finance, UK Finance, said:
“These figures show SMEs should be confident in approaching their bank for finance, as 85 per cent of applications are successful. It is encouraging to see six in ten SMEs have a high level of trust in their main bank, which UK Finance and its members are working hard to improve further.
“However, overall appetite for finance amongst SMEs remains subdued, with many reluctant to borrow amid uncertainty over future trading conditions. Legislation and red tape, political uncertainty and the current economic climate are all increasingly cited as issues holding SMEs back, while only one in 20 see access to finance as a major barrier.
“This underlines the importance of the government, finance industry and regulators continuing to work together to address these issues and help SMEs grow and prosper.”
Latest from UK Finance
News in Brief
The average Briton will accrue £14,300 of unsecured debt this year through credit cards, loans and overdrafts, overtaking the amount of personal debt that preceded the 2008 economic crash, according to the Glasgow Centre for Population Health (The Times, online only, £).
The collapse of the budget airline Primera Air has left passengers unable to travel to certain destinations. Those who paid by credit card may be protected by Section 75 of the Consumer Credit Act 1974 and are being advised to check with card issuers, reports BBC News (online only).
The European Commission’s anti-money laundering chief, Věra Jourová, will today tell EU finance ministers a lack of political enforcement stands in the way of a more effective fight against dirty money sloshing around the EU (Politico, online only).
Ireland is planning to issue a new sovereign green bond before the end of 2018, making it the eighth country to join the sustainable finance market for ethically-labelled debt (The Financial Times, p, £).
Officials in Paris are opening a new English-speaking international school as part of efforts to attract financial workers from London after Brexit, reports The Times (p40, £).
Large companies could be required to nominate a board member to ensure that invoices are paid properly, as part of a crackdown on late payments to small businesses announced yesterday by Business Secretary Greg Clark (The Times, p41, £).
What the commentators say
Economic Editor Philip Aldrick writes in The Times (p37, £) that Chancellor Philip Hammond has been left with little room for manoeuvre at this year’s Budget on Monday October 29. As the government has already announced £20 billion of additional funding for the NHS in June, Aldrick remarks that tax rises and spending cuts will now be required to pay for this. The piece concludes that the chancellor’s main ambition will be to get through the budget “unscathed”, which may lead him to ditching the planned cut to corporation tax rather than proposing any new controversial tax rises.
Former Chancellor of the Exchequer, Michael Heseltine, writes in the Evening Standard (online only) that Brexit is not in the national interest. He describes how Brexit has distracted the government from addressing other domestic issues such as frozen living standards and the economy. These problems will remain as long as Whitehall is ‘paralysed into inactivity’ because of Brexit. Heseltine concludes that no one knew what the original referendum meant, but now that we have a clearer idea, the only way to decide if Brexit is still in the nation’s interest is to have another general election or referendum.
- Nationwide House Price Index Published
- Sajid Javid, Michael Gove and Boris Johnson address Tory Conference
- SME Finance Monitor report published
- ECOFIN meeting of EU finance ministers
For a full list of upcoming UK Finance statistics releases, please click here.