NEWS – MONDAY 7TH DECEMBER 2020

NEWS ROUNDUP

TAX NEWS – MONDAY 7TH DECEMBER 2020

Rees-Mogg: Breaking promises on tax will cost Tories election

Eurosceptic Tory MP Jacob Rees-Mogg has cautioned the Chancellor against breaking a promise not to increase taxes, stating doing so will lose the party the next general election. Speaking on his fortnightly podcast on the Conservative Home website, Mr Rees-Mogg said: “No sensible party or government ever breaks manifesto commitments willy-nilly: it needs extraordinary circumstances and it also needs public consent.” The Tory manifesto pledged a tax triple-lock to freeze rates of income tax, national insurance and VAT for five years. Asked whether Mr Sunak could keep the promise by raising income tax thresholds instead of the rate itself, Mr Rees-Mogg warned: “It undermines trust in politics. It’s a mistake to think you can follow the letter of a manifesto promise but not the spirit of it.” He continued: “It’s not for me to try and influence what the chancellor’s going to do so it’s best if I talk about these things in general economic terms rather than the specifics. But I think most people would agree that at the point at which an economy is coming out of an extraordinarily deep slump, that is not the time when you want to slap the economy down with higher taxes.”

The Times, Page: 6

SMEs NEWS – MONDAY 7TH DECEMBER 2020

Treasury agrees to discuss support plan for directors

Business leaders and tax experts have drawn up a rescue scheme for two million business owners currently locked out of coronavirus support. The Directors Income Support Scheme – designed by the Federation of Small Businesses, the Association of Chartered Certified Accountants and campaign group Forgotten Ltd – would be a grant based on the trading profits of small, actively trading companies. The idea will be discussed at a meeting with Jesse Norman, the Treasury minister, according to the Telegraph. Craig Beaumont, of the FSB, said: “Directors have set themselves up the right way, and paid their taxes just like everyone else, but have not received the income support lifeline.”

The Daily Telegraph, Business, Page: 3

PPE glut leaves UK manufacturers fearful for their future

A revival in manufacturing PPE equipment “has been strangled almost at birth” after the Government awarded contracts to firms with no experience in the field, creating a stockpile that has destroyed domestic producers.

Financial Times, Page: 3

Government shakes up export finance support for small businesses

The UK Government is to provide extra financial help so exporters can apply for larger loans from the UK’s five high street banks after Brexit.

Financial Times, Page: 2

PERSONAL FINANCE NEWS – MONDAY 7TH DECEMBER 2020

Billions of unspent savings could spark explosive recovery

Bank of England chief economist Andy Haldane says British families have saved an additional £100bn during lockdown and have begun to spend it as Christmas approaches. Mr Haldane said that between April and June, the Office for National Statistics’ savings ratio rose to 29% compared with 6.8% for the same period last year. Laith Khalaf, an analyst at AJ Bell, commented: “There’s an awful lot of dry powder sitting in people’s bank accounts which could spark an explosive economic recovery.” But it’s not good news for everyone. Figures from the Institute for Fiscal Studies show that middleclass families had, on average, an additional £350 a month sitting in their bank accounts between March and September. The poorest households were typically £170 a month worse-off.

Daily Mail, Page: 4

EMPLOYMENT NEWS – MONDAY 7TH DECEMBER 2020

Over-50s illustrate Britain’s entrepreneurial spirit

The over-50s are responding to the pandemic job crisis by striking out on their own, setting up online businesses and typically working from home. Unemployment for this demographic jumped 33% in 2020, the biggest increase of any age and well above the average of 24% across all groups, according to job site Rest Less. The firm’s founder Stuart Lewis said over-50s offer decades of work experience. “They also have life skills – loyalty, resilience, empathy – and think laterally,” he added. Separately, the Independent looks at some of the high earning professionals who have used the chaos caused by the pandemic to kickstart a new career path, such as Amber Honey who left a £60,000 job at Deloitte to go into teaching. Ms Honey tells the paper that months of the lockdown and working from home provided lots of time for self-reflection and for a new perspective to develop.

Daily Express, Page: 16 The Independent, Page: 12

CORPORATE NEWS – MONDAY 7TH DECEMBER 2020

Nando’s in talks with lenders

An additional £20m bill to make its restaurants Covid secure has pushed Nando’s into crisis talks with Barclays as bosses look to secure potential waivers to the covenants on £300m of loans. Auditor KPMG said: “The group is reliant upon agreeing waivers of covenants in May 2021 with the bank. If this is not successful further financing would be required.” Talks are also continuing with landlords to secure rent holidays and deferrals.

The Daily Telegraph, Business, Page: 1 The Times, Page: 45

PROPERTY NEWS – MONDAY 7TH DECEMBER 2020

House prices remain stable despite second lockdown

Research from estate agency Knight Frank shows the UK property market largely shrugged off the second UK Covid lockdown with prices remaining stable, in contrast to the dip during the first national lockdown. However, pressure is growing ahead of the end to the stamp duty holiday in March. Tom Bill, head of UK residential research at Knight Frank, said: “Nerves are rising ahead of the end of the furlough scheme. The struggle faced by the conveyancing system to process the high number of deals agreed this year looks likely to continue, and calls to extend and taper the stamp duty holiday will grow louder at the start of 2021.”

The Daily Telegraph, Business, Page: 3

FINANCIAL SERVICES NEWS – MONDAY 7TH DECEMBER 2020

Britain’s fintech industry will continue to boom post-Brexit

John Collison, the billionaire co-founder of payments titan Stripe, has said that the City’s fintech firms will continue to flourish post-Brexit as the industry raises its sights beyond the EU. The London market outstrips the US in terms of sophistication, Collison adds, and with London also home to the centres of the banking, political and technology sectors, start-ups are easily able to lobby for better regulations while also raising capital.

The Daily Telegraph

ECONOMY NEWS – MONDAY 7TH DECEMBER 2020

Covid vaccines boost hopes of recovery

With vaccines set for mass roll-outs in the UK, business confidence is soaring to levels not seen since the lockdown in March, according to a survey by the Institute of Directors (IoD). Net optimism rose by 16 points but pessimism about the long-term prospects for the British economy remains with only one in four business leaders feeling upbeat about the economy next year. Tej Parikh, chief economist at the IoD, said: “The arrival of the vaccine provides some light at the end of the tunnel.” However, he added: “The prospect of a recovery makes it all the more important to support businesses for the time being. It would be a crying shame to see viable companies collapse just as the vaccine was round the corner.” Brexit remains a worry for business, with half of companies surveyed saying the lack of clarity over trading rules with the EU after Brexit was causing concern. Elsewhere, John Harris in the Guardian cites the OECD which says the recovery in activity is “becoming increasingly hesitant” and an economist in the New York Times who suggests that “the very concept of normalcy now seems open to question”. The pandemic is “the largest of a long chain of setbacks and calamities that date back decades,” Harris concludes. Roger Bootle offers a more “glass half-full” vision in the Telegraph, predicting a surge in consumer demand to kick off the recovery followed in time by a hike in corporate investment.

The Times, Page: 39 Daily Mail, Page: 67 The Guardian, Journal, Page: 1, 2 The Daily Telegraph, Business, Page: 2

OTHER NEWS – MONDAY 7TH DECEMBER 2020

PM’s Green Revolution a “crazy” distraction from the pandemic

Lord Lawson, a former Conservative Chancellor, has described Boris Johnson’s Green Revolution as “absolutely mad” and a “crazy” project designed to distract the British public from the pandemic. He cautioned against what he called the PM’s “suicidal commitment” to going green at a time when the UK economy enters its biggest recession in 300 years as a result of coronavirus shutdowns. Lord Lawson goes on to say that the enthusiasm for shutdowns is “misguided” adding that “the evidence is accumulating that the harm done by the lockdown is greater than any good.”

Daily Mail

Contact Paul Southward

Paul Southward